SMTC Corp. (SMTX) Says Red Oak Partners Will Limit Voting Rights
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On January 5, 2012, SMTC Corporation (Nasdaq: SMTX) entered into an agreement with Red Oak Partners, LLC, whereby Red Oak agreed to limit its voting rights in certain instances.
Under the terms of the agreement, with respect to any vote regarding the approval of the purchase of the majority of SMTC's assets or shares in a transaction in which Red Oak is part of the buying group, Red Oak will limit its votes to the same number of votes to which SMTC’s next largest stockholder (after Red Oak) is entitled, with the balance of the SMTC shares hold by Red Oak voted in the same proportion as all of all other shares of SMTC were voted for or against the transaction (excluding from this calculation the shares held by Red Oak). The agreement and its voting restrictions shall remain in effect so long as (a) Red Oak remains the largest shareholder of SMTC, (b) the NOL Plan remains in effect and Red Oak's ownership stake exceeds the Plan's limit, and (c) a Red Oak employee is serving or has served on SMTC's Board of Directors in the prior six months. Red Oak has not requested any compensation or rights in return for giving-up these and other voting rights, and has agreed to extend this Agreement without any termination date provided none of the termination events in (a), (b) and (c) has occurred.
Under the terms of the agreement, with respect to any vote regarding the approval of the purchase of the majority of SMTC's assets or shares in a transaction in which Red Oak is part of the buying group, Red Oak will limit its votes to the same number of votes to which SMTC’s next largest stockholder (after Red Oak) is entitled, with the balance of the SMTC shares hold by Red Oak voted in the same proportion as all of all other shares of SMTC were voted for or against the transaction (excluding from this calculation the shares held by Red Oak). The agreement and its voting restrictions shall remain in effect so long as (a) Red Oak remains the largest shareholder of SMTC, (b) the NOL Plan remains in effect and Red Oak's ownership stake exceeds the Plan's limit, and (c) a Red Oak employee is serving or has served on SMTC's Board of Directors in the prior six months. Red Oak has not requested any compensation or rights in return for giving-up these and other voting rights, and has agreed to extend this Agreement without any termination date provided none of the termination events in (a), (b) and (c) has occurred.
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