Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
On December 17, 2020, TESSCO Technologies Incorporated ("TESSCO" or the
"Company") notified The Nasdaq Stock Market LLC ("Nasdaq") that, as a result of
the removal of a member of the Company's Audit Committee (the "Audit Committee")
from the Board of Directors of the Company (the "Board"), effective as of
December 11, 2020, and the resignation of another member of the Audit Committee
on December 16, 2020, and after giving effect to certain committee appointments
for the Newly Elected Directors (as defined below), the Audit Committee consists
of only two members and not at least three members as required by Nasdaq Rule
5605(c)(2)(A); and that, as a result of the removal of one member effective as
of December 11, 2020, and the resignation from the Board effective December 16,
2020 of another member of the Company's Compensation Committee (the
"Compensation Committee"), the Compensation Committee no longer consists of at
least two members as required by Nasdaq Rule 5605(d)(5). Under Nasdaq Rules
5605(c)(4)(B) and 5605(d)(4), the Company has until the earlier of (i) the
earlier of the Company's next annual meeting of stockholders or December 11,
2021, or (ii) within 180 days of December 11, 2020 (if the Company's next annual
meeting of stockholders is held no later than 180 days following December 11,
2020), to cure these non-compliances. The Board intends to assess all committee
assignments and cure the temporary non-compliances promptly.
The disclosure in Items 5.02 and Item 5.07 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 14, 2020, the Company's proxy solicitor, Innisfree M&A Incorporated
("Innisfree"), reported the final tally of legally valid, unrevoked consents by
TESSCO stockholders delivered to the Company on December 11, 2020, with respect
to the consent solicitation (the "Barnhill Consent Solicitation") by Robert B.
Barnhill, Jr. and certain affiliates (the "Barnhill Group").
Removal of Directors
Effective as of December 11, 2020, stockholders of the Company holding a
majority of the Company's common stock, par value $0.01 per share (the "Common
Stock"), acted by consent in lieu of a stockholder meeting under Section 228 of
the General Corporation Law of the State of Delaware (the "DGCL") to remove John
D. Beletic from the Board. Mr. Barnhill asserted that the removal of any
director had the further effect of removing both Cathy-Ann Martine-Dolecki and
Ronald D. McCray. The Company determined not to challenge the validity of Mr.
Barnhill's consents. As a result, John D. Beletic, Ms. Martine-Dolecki, and Mr.
McCray were removed from the Board with immediate effect.
Election of Directors
Effective as of December 11, 2020, stockholders of the Company holding a
majority of the Company's Common Stock acted by consent in lieu of a stockholder
meeting under Section 228 of the DGCL to elect J. Timothy Bryan and Kathleen
McLean (together, the "Newly Elected Directors") to the Board as directors.
Biographical information for the Newly Elected Directors is included on Exhibit
99.1 attached hereto and incorporated herein by reference. The Board has since
appointed Mr. Bryan to serve on the Audit Committee and Ms. McLean to serve on
the Board's Nominating and Governance Committee. The Board also made the
affirmative determination that (i) each of Jay G. Baitler and Mr. Bryan
qualifies as an "audit committee financial expert" as such term is defined under
Item 407(d)(5) of Regulation S-K under the Securities Exchange Act of 1934, as
amended, and (ii) Mr. Bryan and Ms. McLean do each qualify as an "independent
director" within the meaning of such term as established by the rules applicable
to corporations having shares trading on the Nasdaq.
Director Resignations
On December 16, 2020, Morton F. Zifferer, Jr. honored his commitment to resign
from the Board upon the conclusion of the Barnhill Consent Solicitation and
resigned from the Board, effective immediately. Mr. Zifferer's resignation from
the Board is not the result of any disagreement with the Company on any matter
relating to its operations, policies or practices, but instead is a continuation
of the Board's ongoing evolution and refreshment process that is focused on
identifying and appointing individuals with the right skills and experience
necessary to build lasting Company value, as well as to increase diversity
amongst the members of the Board.
The disclosure in Item 5.07 of this Current Report on Form 8-K is incorporated
herein by reference.
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
Effective as of December 11, 2020, stockholders of the Company holding a
majority of the Company's Common Stock acted by consent in lieu of a stockholder
meeting under Section 228 of the DGCL to (i) repeal any provision of the Sixth
Amended and Restated By-Laws of the Company, as amended (the "Bylaws"), adopted
after August 7, 2020 without the approval of stockholders; and (ii) repeal the
Third Amendment to the Bylaws by amending Section 1.2 of the Bylaws to reduce
the percentage of stockholders that may cause the Company to call a special
meeting of stockholders to holders of 25% of the votes outstanding and entitled
to vote at a special meeting (such amendment, the "Bylaw Amendment"). There were
no provisions of the Bylaws adopted after August 7, 2020 without stockholder
approval so Proposal No. 3 (as defined below) had no effect.
The description of the Bylaw Amendment is qualified in its entirety by reference
to Exhibit 3.1 attached hereto, which is incorporated herein by reference. The
disclosure in Item 5.07 of this Current Report on Form 8-K is also incorporated
herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On December 14, 2020, the Company's proxy solicitor, Innisfree, reported the
final tally of legally valid, unrevoked consents by TESSCO stockholders
delivered to the Company on December 11, 2020, with respect to the Barnhill
Consent Solicitation. Under Section 228 of the DGCL, the Barnhill Proposals
became effective if legally valid, unrevoked consents signed by the holders of a
majority of the outstanding shares of the Company's Common Stock entitled to
vote at a meeting of stockholders, as of the close of business on the record
date, October 13, 2020 (the "Record Date"), were delivered to the Company within
60 days of the earliest dated written consent delivered to the Company. The
Barnhill Proposals provided for the removal of five members of the Board
("Proposal No. 1"), the election of the Barnhill Group's four nominees to serve
as directors of the Company ("Proposal No. 2"), the repeal of any post-August 7,
2020 amendments to the Bylaws ("Proposal No. 3"), and amending the Third
Amendment to the Bylaws to make the percentage of votes required to request the
calling of a special meeting 25% of the Common Stock outstanding ("Proposal
No. 4"). As of the close of business on the Record Date, there were 8,760,562
shares of Common Stock outstanding.
Based on the tabulation of Innisfree, set forth below is the final tally of
unrevoked consents delivered to the Company with respect to the Barnhill
Proposals.
Proposal No. 1 - Removal of Directors. This proposal was not approved with
respect to the removal of Messrs. Baitler, Gaffney, Shaughnessy, and Zifferer
and was approved with respect to the removal of Mr. Beletic based on the
following results from Innisfree. Mr. Barnhill asserted that the removal of any
director had the further effect of removing both Cathy-Ann Martine-Dolecki and
Ronald D. McCray. The Company determined not to challenge the validity of Mr.
Barnhill's consents. As a result, Mr. Beletic, Ms. Martine-Dolecki, and Mr.
McCray were removed from the Board.
Director Unrevoked Consents Withhold Abstain
John D. Beletic 5,959,391 3,755 1,555
Jay G. Baitler 4,250,152 1,712,994 1,555
Paul J. Gaffney 4,191,179 1,771,967 1,555
Dennis J. Shaughnessy* 4,191,179 1,771,967 1,555
Morton F. Zifferer, Jr. 4,191,179 1,771,967 1,555
* Mr. Shaughnessy resigned from the Board, effective November 9, 2020. Thus, a
consent in favor of Mr. Shaughnessy would only have the effect of consenting to
removing Ms. Martine-Dolecki and Mr. McCray from the Board.
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Proposal No. 2 - Election of Barnhill's Nominees. This proposal was not approved
with respect to the election of Ms. Boss and Mr. Diercksen and was approved with
respect to the election of Mr. Bryan and Ms. McLean based on the following
results from Innisfree.
Nominee Unrevoked Consents Withhold Abstain
Emily Kellum (Kelly) Boss 4,251,363 1,711,783 1,555
J. Timothy Bryan 5,901,629 61,517 1,555
John W. Diercksen 4,192,390 1,770,756 1,555
Kathleen McLean 5,960,602 2,544 1,555
Proposal No. 3 - Repeal Bylaws adopted after August 7, 2020. This proposal was
approved based on the following results from Innisfree.
Unrevoked Consents Withhold Abstain
5,956,237 3,755 4,055
Proposal No. 4 - Repeal Third Amendment to the Bylaws. This proposal was
approved based on the following results from Innisfree.
Unrevoked Consents Withhold Abstain
5,955,891 3,755 5,055
Item 8.01 Other Events.
On December 14, 2020, the Company issued a press release (the "Press Release")
relating to the preliminary tally of the consents delivered pursuant to the
Barnhill Consent Solicitation. A copy of the Press Release is filed as
Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by
reference.
The disclosure in Item 5.07 of this Current Report on Form 8-K is incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
3.1 Fourth Amendment to the Sixth Amended and Restated By-Laws of TESSCO
Technologies Incorporated.
99.1 Biographical Information for Newly Elected Directors
99.2 Press release of TESSCO Technologies Incorporated, dated December
14, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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