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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
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Retirement of Kevin Murai and Appointment of a New Chief Executive Officer
On January 9, 2018, SYNNEX issued a press release regarding the appointment of Dennis Polk as SYNNEX’ President and Chief Executive Officer, with such appointment becoming effective on March 1, 2018. Mr. Polk will remain on the board of directors. At such time that Mr. Polk’s appointment becomes effective, Mr. Murai will cease to serve as President and Chief Executive Officer of SYNNEX, but will remain an employee of SYNNEX and on the board of directors. Mr. Murai’s retirement as President and Chief Executive Officer was not caused by any disagreement with SYNNEX. The full text of SYNNEX’ press release is filed herewith as Exhibit 99.1 and incorporated herein by reference.
Effective March 1, 2018, Mr. Murai will become Chairman of the Board of SYNNEX and Dwight Steffensen will become Lead Director. In addition, the nominating and corporate governance committee of the board of directors approved an annual compensation of $80,000 for the Lead Director.
Mr. Polk, age 51, has served as a member of the board of directors since February 2012. Mr. Polk joined SYNNEX in February 2002 as Senior Vice President of Corporate Finance and in the same year became Chief Financial Officer. In July 2006, he was promoted to Chief Operating Officer. Mr. Polk also serves on the board of directors of Terreno Realty Corporation. SYNNEX believes Mr. Polk’s leadership experience and industry knowledge qualify him to serve as President and Chief Executive Officer and as a member of SYNNEX’ board of directors.
There is no arrangement or understanding between Mr. Polk and any other person pursuant to which Mr. Polk was elected as SYNNEX’ President and Chief Executive Officer or as a director. Except as described herein, there are no existing or currently proposed transactions to which SYNNEX or any of its subsidiaries is a party and in which Mr. Polk has a direct or indirect material interest. There are no family relationships between Mr. Polk and any of the directors or officers of SYNNEX or any of its subsidiaries.
In connection with Mr. Polk’s appointment, SYNNEX entered into an employment agreement with Mr. Polk (the “Employment Agreement”). Pursuant to the terms of his Employment Agreement, Mr. Polk will receive a starting base salary at the rate of $675,000 per year and will be eligible to receive an annual cash bonus targeted at 2.5 times his base salary, with the actual amount of the bonus based on the achievement of performance goals established by the board of directors or compensation committee of the board of directors. In addition, the compensation committee of the board of directors has approved the grant of two equity awards to Mr. Polk to occur on or about his start date as President and Chief Executive Officer: (a) a non-statutory stock option to acquire common stock of SYNNEX with a fair market value of approximately $1,050,000, and (b) restricted stock of SYNNEX with a fair market value of approximately $375,000, in accordance with SYNNEX’ 2013 Stock Incentive Plan, as amended. Separately, the compensation committee of the board of directors awarded Mr. Polk a cash bonus of $630,000, payable in a single sum, in recognition of his additional responsibilities and support of Kevin Murai through the end of 2017.
The Employment Agreement also provides for certain payments to Mr. Polk in the event of a termination without “cause” (as such term is defined in the Employment Agreement), following a change of control of SYNNEX. In addition, the Employment Agreement contains certain restrictive covenants, including a non-competition and confidentiality provision, for the benefit of SYNNEX. The foregoing summary of certain terms of the Employment Agreement is qualified in its entirety by the terms of the Employment Agreement, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.