Under the Agreement, the Company and Elliott also have agreed that if the Strategic Review has not resulted in an announced Strategic Transaction and the Company is no longer in good faith pursuing a Strategic Transaction as part of the Strategic Review at any time following the Company’s 2022 Annual Stockholder Meeting and prior to the filing with the Securities and Exchange Commission of the definitive proxy statement for the Company’s 2023 Annual Stockholder Meeting, and provided that a minimum condition with respect to Elliott’s ownership of the Company’s common stock (the “Minimum Condition”) is met and, in the case of clause (i) below, certain conditions with respect to the selection of the Elliott Director (as defined below) are met, (i) Elliott will have the right to appoint one director (the “Elliott Director”) to the Board who shall be an individual acceptable to the Company (with the Company’s consent not to be unreasonably withheld, conditioned, or delayed) who will serve on the executive committee of the Board (the “Executive Committee”), and (ii) Elliott and the Company will appoint one director to the Board to be mutually agreed upon between the parties (the “Additional Director,” together with the Elliott Director, the “Appointed Directors”). If any Appointed Director is unable or unwilling to serve as a director, resigns as a director, is removed as a director or ceases to be a director for any other reason prior to the Company’s 2023 Annual Stockholder Meeting, subject to the Minimum Condition being satisfied, Elliott and the Company will appoint a substitute director to the Board to be mutually agreed upon between Elliott and the Company. If Elliott has exercised its right to appoint the Elliott Director and the Additional Director to the Board (or is eligible to exercise or would be eligible to exercise but for the Minimum Condition) or if the Company is still in good faith pursuing a Strategic Transaction as part of the Strategic Review, the Standstill Period will be extended until the Company’s 2023 Annual Stockholder Meeting. The Standstill Period also is subject to certain potential fall-away events, as specified in the Agreement. A “Strategic Transaction” is a merger, consolidation, acquisition or sale of all or substantially all assets of the Company, or a sale, spinoff, splitoff, carve-out IPO or other similar separation of the Company’s Flash or HDD business units, or a merger with or acquisition of Kioxia Holdings Corporation (or any successor thereof).
The foregoing description of the terms and conditions of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On June 7, 2022, the Company issued a press release announcing that the Board is reviewing its strategic options and with the assistance of its Executive Committee is formally undertaking a Strategic Review and is entering into the Agreement, a copy of which is attached hereto as Exhibit 99.1 (the “Press Release”). All of the information in the Press Release is incorporated by reference herein.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The information disclosed under Item 7.01 of this Current Report on Form 8-K is incorporated by reference into this Item 8.01 to the extent required herein.
