UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐		Preliminary Proxy Statement
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☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to §240.14a-12

SYKES ENTERPRISES, INCORPORATED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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		SYKES ENTERPRISES, INCORPORATED

July 26, 2021

To our Shareholders:

You are cordially invited to attend a special meeting of the shareholders of Sykes Enterprises, Incorporated (“Sykes”) to be held at the Rivergate Tower, 400 N. Ashley Drive, Suite 320, 3rd Floor, Conference Room A, Tampa, FL 33602 on August 24, 2021 at 8:00 a.m., Eastern Time (the “Special Meeting”).

At the Special Meeting, shareholders of record of our common stock (“Sykes common stock”), at the close of business on July 23, 2021 (the “record date”), will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of June 17, 2021 (as it may be amended or modified from time to time, the “Merger Agreement”), by and among Sykes, Sitel Worldwide Corporation, a Delaware corporation (“Parent”) and Florida Mergersub, Inc., a Florida corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). Subject to the terms and conditions of the Merger Agreement and the applicable provisions of the Florida Business Corporation Act (the “FBCA”), Merger Sub will be merged with and into Sykes and Sykes will survive the merger as a direct wholly-owned subsidiary of Parent (the “Merger”). Parent and Merger Sub are wholly-owned subsidiaries of Sitel Group SA (“Sitel Group”), a global provider of customer service (CX) products and solutions.

If the Merger is completed, each share of Sykes common stock outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares of Sykes common stock held by Parent, Merger Sub or Sykes (including treasury shares) at the Effective Time) will, at the Effective Time, automatically be converted into the right to receive $54.00 in cash, without interest, subject to applicable withholding taxes, which represents a premium of 31.2% to Sykes’ closing share price of $44.17 on June 17, 2021, which was the last trading day prior to the execution of the Merger Agreement. The proposal to adopt the Merger Agreement requires the affirmative vote of the holders of at least a majority of the outstanding shares of Sykes common stock entitled to vote thereon in accordance with the applicable provisions of the FBCA.

Sykes common stock is listed on the NASDAQ Stock Market (the “NASDAQ”) under the symbol “SYKE”. The closing sales price of Sykes common stock on the NASDAQ on July 23, 2021, the most recent practicable date prior to the date of the accompanying proxy statement, was $53.74 per share.

The Sykes board of directors (the “Board”) has reviewed and considered the terms and conditions of the Merger Agreement and the Merger and has unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the best interests of, the Company and the Company’s shareholders; (ii) approved and declared advisable the Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that the Merger Agreement be submitted to a vote of the Company’s shareholders for adoption at the Special Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of the Merger Agreement in accordance with the FBCA. The Board made its determination after consultation with its outside legal counsel and financial advisor and consideration of a number of factors more fully described in the accompanying proxy statement. The Board unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement.

At the Special Meeting, shareholders will also be asked to vote on (i) a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid or become payable to Sykes’ named executive officers by Sykes based on or otherwise relating to the Merger, as required by the rules adopted by the U.S. Securities and Exchange Commission (the “SEC”) and (ii) a proposal to approve an adjournment of the

Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the proposal to adopt the Merger Agreement or in the absence of a quorum. The Board unanimously recommends that you vote “FOR” each of these proposals.

The Board is soliciting your proxy to assure that a quorum is present and that your shares are represented and voted at the Special Meeting and any postponement or adjournment thereof. In considering the recommendations of the Board, you should be aware that certain of Sykes’s directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our shareholders generally, as further described in the accompanying proxy statement.

If your shares are held in “street name,” you should instruct your bank, brokerage firm or other nominee how to vote your shares on each proposal in accordance with your voting instruction form.

The Merger cannot be completed unless Sykes shareholders adopt the Merger Agreement. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the Special Meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the Special Meeting. If you attend the Special Meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you fail to return your proxy card and you are a shareholder of record on the record date, unless you attend the Special Meeting in person, the effect will be that your shares of Sykes common stock will not be considered present at the Special Meeting for the purpose of determining whether a quorum is present at the Special Meeting and will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement. Similarly, if you hold your shares in “street name” and fail to instruct your bank, brokerage firm or other nominee how to vote your shares, your shares will not be counted for purposes of determining whether a quorum is present and will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement.

The accompanying proxy statement contains detailed information about Sykes, the Special Meeting, the Merger Agreement, the Merger, the Merger-related named executive officer compensation proposal and the adjournment-related proposal. A copy of the Merger Agreement is attached as Annex A to the accompanying proxy statement and incorporated therein by reference. We urge you to, and you should, read the entire proxy statement carefully, including the Merger Agreement and the other annexes and the documents referred to or incorporated by reference in the accompanying proxy statement. You may obtain additional information about Sykes from documents we have filed with the SEC.

If you have any questions or need assistance voting your shares of Sykes common stock, please contact our proxy solicitor OKAPI Partners by phone at 1-(877) 629-6356 or by email at info@okapipartners.com.

Thank you for your confidence in Sykes.

 

 

Neither the SEC nor any state securities regulatory agency has approved or disapproved of the Merger, passed upon the merits or fairness of the Merger Agreement or the Merger or determined if the accompanying proxy statement is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated July 26, 2021 and, together with the enclosed form of proxy card, is first being mailed to Sykes shareholders on or about July 26, 2021.

SYKES ENTERPRISES, INCORPORATED

400 N. Ashley Drive, Suite 2800

Tampa, FL 33602

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 

DATE & TIME		August 24, 2021 at 8:00 a.m., Eastern Time
PLACE		The Rivergate Tower, 400 N. Ashley Drive, Suite 320, 3rd Floor, Conference Room A, Tampa, FL 33602
ITEMS OF BUSINESS		•   To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of June 17, 2021 (as may be amended or modified from time to time, the “Merger Agreement”), by and among Sykes Enterprises, Incorporated (“Sykes”), Sitel Worldwide Corporation, a Delaware corporation (“Parent”) and Florida Mergersub, Inc., a Florida corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) (the “Merger Proposal”); a copy of the Merger Agreement is attached to the accompanying proxy statement as Annex A and is incorporated therein by reference;   •   To consider and vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid or otherwise become payable by Sykes to its named executive officers that is based on or otherwise relates to the Merger (the “named executive officer Merger-related compensation proposal”); and   •   To consider and vote on a proposal to approve an adjournment of the special meeting of Sykes shareholders (the “Special Meeting”) from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal or in the absence of a quorum (the “Adjournment Proposal”).   Shareholders may also be asked to transact such other business as may properly be brought before the Special Meeting, or any adjournments or postponements of the Special Meeting, by or at the direction of the Sykes board of directors (the “Board”).
RECORD DATE		Only shareholders of record of Sykes common stock, par value $0.01 per share (“Sykes common stock”), at the close of business on July 23, 2021 (the “record date”) are entitled to notice of, and to vote at, the Special Meeting and at any adjournment or postponement of the Special Meeting.
VOTING BY PROXY		Your vote is very important, regardless of the number of shares you own. The Board is soliciting your proxy to assure that a quorum is present and that your shares are represented and voted at the Special Meeting in accordance with the applicable provisions of the FBCA. For information on submitting your proxy over the Internet, by telephone or by mailing back the traditional proxy card (no extra postage is needed for the provided envelope if mailed in the U.S.), please see the attached proxy statement and enclosed proxy card. If you later decide to vote in person at the Special Meeting, information on revoking your proxy prior to the Special Meeting is also provided.

RECOMMENDATIONS		The Board recommends that you vote:   •   “FOR” the Merger Proposal;   •   “FOR” the named executive officer Merger-related compensation proposal; and   •   “FOR” the Adjournment Proposal.
APPRAISAL		Under Section 607.1302 of the FBCA, appraisal rights will not be available to Sykes’ shareholders in connection with the Merger.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE SUBMIT A PROXY TO VOTE YOUR SHARES OVER THE INTERNET OR BY TELEPHONE PURSUANT TO THE INSTRUCTIONS CONTAINED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SUBMITTED. IF YOU DO NOT SUBMIT YOUR PROXY OR VOTE IN PERSON AT THE SPECIAL MEETING ON THE MERGER PROPOSAL, IT WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL. IF YOU HOLD YOUR SHARES IN “STREET NAME” AND DO NOT INSTRUCT YOUR BANK, BROKERAGE FIRM OR OTHER NOMINEE HOW TO VOTE YOUR SHARES, IT WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL.

Your proxy may be revoked at any time before the vote at the Special Meeting by following the procedures outlined in the accompanying proxy statement.

If your shares are held by a bank, brokerage firm or other nominee and you wish to vote in person at the Special Meeting, you must bring to the Special Meeting a proxy from the bank, brokerage firm or other nominee that holds your shares authorizing you to vote in person at the Special Meeting. Please also bring to the Special Meeting your account statement evidencing your beneficial ownership of Sykes common stock as of the record date. All shareholders should also bring photo identification.

The proxy statement of which this notice forms a part provides a detailed description of the Merger, the Merger Agreement, the Merger Proposal, the named executive officer Merger-related compensation proposal and the Adjournment Proposal and provides specific information concerning the Special Meeting. In considering the recommendations of the Board, you should be aware that certain of Sykes’s directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our shareholders generally, as further described in the accompanying proxy statement. We urge you to read the proxy statement, including any documents incorporated therein by reference, and its annexes carefully and in their entirety. If you have any questions concerning the Merger or the proxy statement, would like additional copies of the proxy statement or need help voting your shares of Sykes common stock, please contact Sykes’ proxy solicitor, OKAPI Partners by phone at 1-(877) 629-6356 or by email at info@okapipartners.com.

 

Tampa, FL

July 26, 2021

TABLE OF CONTENTS

 

SUMMARY TERM SHEET			1
The Parties			1
The Special Meeting			2
The Merger			6
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER			14
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			23
THE PARTIES TO THE MERGER			25
THE SPECIAL MEETING			26
Date, Time and Place			26
Purpose of the Special Meeting			26
Recommendation of the Board			26
Record Date; Shareholders Entitled to Vote			27
Quorum			27
Required Vote			27
Abstentions and Broker Non-Votes			28
Failure to Vote			28
Voting by Sykes’ Directors and Executive Officers			29
Voting at the Special Meeting			29
Revocation of Proxies			30
Solicitation of Proxies			30
Adjournment			30
Other Information			31
Questions			31
THE MERGER PROPOSAL (PROPOSAL 1)			32
Structure of the Merger			32
What Shareholders Will Receive in the Merger			32
Treatment of Sykes Equity Awards			32
Effects on Sykes if the Merger Is Not Completed			32
Background of the Merger			33
Recommendation of the Board and Reasons for the Merger			42
Opinion of the Transaction Committee’s Financial Advisor			47
Certain Unaudited Prospective Financial Information			53
Interests of Sykes’ Executive Officers and Directors in the Merger			55
Financing of the Merger			61
Antitrust Review Required for the Merger and Other Regulatory Filings			61
Material U.S. Federal Income Tax Consequences of the Merger			62
Appraisal Rights			62
Litigation Relating to the Merger			63
Delisting and Deregistration of Sykes Common Stock			63
THE MERGER AGREEMENT			64
Explanatory Note Regarding the Merger Agreement			64

 

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Structure and Effectiveness of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers			64
Closing			65
Merger Consideration			65
Exchange and Payment Procedures			65
No Transfers Following the Effective Time			66
Termination of Payment Fund			66
Lost, Stolen or Destroyed Certificates			66
Withholding Taxes			66
Treatment of Sykes Equity Awards			66
Representations and Warranties			67
Covenants Relating to the Conduct of Business Pending the Merger			69
Access			73
Company Takeover Proposal; Non-Solicitation			73
Company Shareholders Meeting			77
Financing and Financing Cooperation			77
Employee Matters			80
Efforts to Complete the Merger			81
Indemnification and Insurance			82
Coordination on Transaction Litigation			82
Other Actions			82
Delisting and Deregistration of Sykes Common Stock			83
Other Covenants and Agreements			83
Conditions to the Closing of the Merger			83
Termination			84
Termination Fees and Expenses			85
Limitation on Remedies			86
Amendment and Waiver of the Merger Agreement			87
Specific Performance			87
Governing Law			88
Jurisdiction			88
Required Vote; Recommendation of the Board			88
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION PROPOSAL (PROPOSAL 2)			89
THE ADJOURNMENT PROPOSAL (PROPOSAL 3)			90
MARKET PRICES OF SYKES COMMON STOCK			91
Market Information			91
Holders			91
Dividends			91
Stock Repurchases.			92
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			93

 

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			96
FUTURE SYKES SHAREHOLDER PROPOSALS			98
MULTIPLE SHAREHOLDERS SHARING ONE ADDRESS			99
WHERE YOU CAN FIND MORE INFORMATION			100
ANNEX A (Merger Agreement)			A-1
ANNEX B (Fairness Opinion)			B-1

 

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SUMMARY TERM SHEET

This summary highlights information contained elsewhere in this proxy statement and may not contain all the information that is important to you with respect to the Merger Agreement, the Merger and the other matters being considered at the Special Meeting of Sykes shareholders. We urge you to carefully read the remainder of this proxy statement, including the attached annexes, and the other documents to which we have referred you. For additional information on Sykes, see the section entitled “Where You Can Find More Information” beginning on page 100. We have included page references in this summary to direct you to a more detailed description of the topics presented below.

All references to “Sykes,” the “Company,” “we,” “us,” or “our” in this proxy statement refer to Sykes Enterprises, Incorporated, a Florida corporation. Sykes, following the completion of the Merger, is sometimes referred to in this proxy statement as the “surviving corporation.” In addition, unless otherwise indicated, or unless the context otherwise requires, a reference in this proxy statement to:

 

•

“Board” means the board of directors of Sykes;

 

•

“FBCA” means the Florida Business Corporation Act, Chapter 607, Part I, Florida Statutes (as the same is in effect and applicable on the relevant date or dates);

 

•

“Merger” means the merger of Merger Sub with and into Sykes on the terms and subject to the conditions set forth in the Merger Agreement, with Sykes surviving as a direct wholly-owned subsidiary of Parent;

 

•

“Merger Agreement” means the Agreement and Plan of Merger, dated as of June 17, 2021, as may be amended or modified from time to time, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein;

 

•

“Merger Sub” means Florida Mergersub, Inc., a Florida corporation and a wholly-owned subsidiary of Parent, formed solely for the purpose of entering into the Merger Agreement and engaging in the transactions contemplated by the Merger Agreement;

 

•

“Parent” means Sitel Worldwide Corporation, a Delaware corporation and the sole shareholder of Merger Sub; and

 

•

“Sykes common stock” means the common stock, par value $0.01 per share, of Sykes.

The Parties

Sykes Enterprises, Incorporated (see page 25)

Sykes is a full lifecycle provider of global customer experience management services, multichannel demand generation and digital transformation. SYKES provides full lifecycle customer experience management solutions and services primarily to Global 2000 companies and their end customers principally in the financial services, technology, communications, transportation & leisure and healthcare industries. The Company’s full lifecycle services platform effectively engages customers at every touchpoint within the customer journey, including digital media and acquisition, sales expertise, customer service, technical support and retention, many of which can be optimized through a suite of digital transformation capabilities under its SYKES Digital Services group, which spans robotic process automation, self-service, insight analytics and digital learning. In addition to digital transformation, SYKES also provides artificial intelligence solutions that can be embedded and leveraged across its lifecycle offerings. The Company serves its clients through two geographic operating regions: the Americas (United States, Canada, Latin America, Australia and the Asia Pacific Rim) and EMEA (Europe, the Middle East and Africa). The Company’s Americas and EMEA regions primarily provide customer management solutions and services with an emphasis on inbound multichannel demand generation, customer service and technical support to its clients’ customers. These services are delivered through multiple communication channels including phone, e-mail, social media, text messaging, chat and digital self-service. The Company also provides

 

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various enterprise support services in the United States that include services for its clients’ internal support operations, from technical staffing services to outsourced corporate help desk services. In Europe, the Company also provide fulfillment services, which include order processing, payment processing, inventory control, product delivery and product returns handling. Additionally, through the Company’s acquisition of RPA provider Symphony Ventures Ltd coupled with its investment in AI through XSell Technologies, Inc., the Company also provides a suite of digital transformation capabilities that optimizes its differentiated full lifecycle management services platform. The Company’s complete service offering helps its clients acquire, retain and increase the lifetime value of their customer relationships. The Company has developed global reach with customer experience management centers across six continents, including North America, South America, Europe, Asia, Australia and Africa. The Company delivers cost-effective solutions that generate demand, enhance the customer service experience, promote stronger brand loyalty, and bring about high levels of performance and profitability. For additional information please visit www.sykes.com.

Sykes is a corporation organized under the laws of the State of Florida and headquartered in Tampa, Florida. Sykes’ principal offices are located at 400 N. Ashley Drive, Suite 2800, Tampa, FL 33602 and our telephone number is (813) 274-1000. Sykes common stock is traded on the NASDAQ Global Select Market (the “NASDAQ”) under the ticker symbol “SYKE”. Our corporate web address is www.sykes.com. The information provided on, or that may be accessed through, the Sykes website is not part of this proxy statement and is not incorporated in this proxy statement by reference hereby or by any other reference to Sykes’ website provided in this proxy statement.

Additional information about Sykes is contained in our public filings with the U.S. Securities and Exchange Commission (the “SEC”). See the section entitled “Where You Can Find More Information” beginning on page 100.

Sitel Worldwide Corporation (see page 25)

Parent is a Delaware corporation and the sole shareholder of Merger Sub. Parent is a subsidiary of Sitel Group. Sitel Group is a global provider of customer service (CX) products and solutions. Upon completion of the transactions contemplated thereby, Sykes will be a wholly-owned subsidiary of Parent.

Florida Mergersub, Inc. (see page 25)

Merger Sub is a Florida corporation and a wholly-owned subsidiary of Parent that was formed solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated thereby. Merger Sub has not conducted any business operations other than in connection with the transactions contemplated by the Merger Agreement and related agreements. Upon completion of the Merger, Merger Sub will merge with and into Sykes, and Merger Sub will cease to exist.

The Special Meeting

Date, Time and Place (see page 26)

The special meeting of Sykes shareholders (the “Special Meeting”) is scheduled to be held at the Rivergate Tower, 400 N. Ashley Drive, Suite 320, 3rd Floor, Conference Room A, Tampa, FL 33602, on August 24, 2021 at 8:00 a.m., Eastern Time.

Purpose of the Special Meeting (see page 26)

The Special Meeting is being held in order for Sykes shareholders to consider and vote on the following proposals:

 

•

To adopt the Merger Agreement (the “Merger Proposal”);

 

2

•

To approve, on a non-binding, advisory basis, certain compensation that will or may be paid or become payable by Sykes to its named executive officers that is based on or otherwise relates to the Merger (the “named executive officer Merger-related compensation proposal”); and

 

•

To approve the adjournment of the Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal or in the absence of a quorum (the “Adjournment Proposal”).

Shareholders may also be asked to transact such other business as may properly be brought before the Special Meeting, or any adjournments or postponements of the Special Meeting, by or at the direction of the Board.

The Board has reviewed and considered the terms and conditions of the Merger Agreement and the Merger. After consulting with its outside legal counsel and financial advisor and after consideration of various factors more fully described in this proxy statement, the Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the best interests of, the Company and the Company’s shareholders; (ii) approved and declared advisable the Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that the Merger Agreement be submitted to a vote of the Company’s shareholders for adoption at the Special Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of the Merger Agreement in accordance with the FBCA.

The holders of at least a majority of the outstanding shares of Sykes common stock entitled to vote on the Merger Proposal must vote to approve the Merger Proposal as a condition for the Merger to occur. If Sykes shareholders fail to approve the Merger Proposal by the requisite vote, the Merger will not occur.

The Board unanimously recommends that Sykes shareholders vote “FOR” the Merger Proposal, “FOR” the named executive officer Merger-related compensation proposal and “FOR” the Adjournment Proposal.

For a discussion of the material factors that the Board considered in determining to recommend the adoption of the Merger Agreement, please see the section entitled “The Merger Proposal (Proposal 1) – Recommendation of the Board and Reasons for the Merger.”

Record Date; Shareholders Entitled to Vote (see page 27)

Only shareholders of record of Sykes common stock at the close of business on July 23, 2021, the record date for the Special Meeting (the “record date”), will be entitled to notice of, and to vote at, the Special Meeting or any adjournments or postponements of the Special Meeting. On the record date, 39,796,017 shares of Sykes common stock were issued and outstanding, held by approximately 694 holders of record.

Holders of record of Sykes common stock are entitled to one vote on each matter submitted to a vote at the Special Meeting for each share of Sykes common stock they own of record on the record date. A complete list of shareholders entitled to vote at the Special Meeting will be available for inspection for any purpose germane to the Special Meeting during regular business hours at the Company’s principal place of business, 400 N. Ashley Drive, Suite 2800 Tampa, FL 33602, for a period of no less than 10 days before the Special Meeting, and also at the Special Meeting.

Quorum (see page 27)

Under our bylaws and the FBCA, the holders (as of the record date) of a majority of the outstanding shares of Sykes common stock entitled to vote on a matter at the Special Meeting, whether represented in person or by

 

3

proxy, will constitute a quorum on that matter at the Special Meeting. There must be a quorum for business to be conducted at the Special Meeting. If there is less than a quorum present at the Special Meeting, the shareholders present may adjourn the meeting from time to time without further notice other than announcement at the meeting in accordance with the FBCA, until a quorum shall be present or represented.

If you submit (and do not thereafter revoke) a properly executed proxy card, even if you abstain from voting, your shares of Sykes common stock will be counted for purposes of determining whether a quorum is present at the Special Meeting. In the event that a quorum is not present at the Special Meeting or additional votes must be solicited to approve the Merger Proposal, the meeting may be adjourned or postponed to solicit additional proxies.

As of the record date, there were 39,796,017 shares of Sykes common stock issued and outstanding.

Required Vote (see page 27)

The approval of the Merger Proposal requires the affirmative vote of at least a majority of all votes entitled to be cast by the holders of shares of Sykes common stock outstanding on the record date.

The approval of the named executive officer Merger-related compensation proposal (on a non-binding, advisory basis) requires the affirmative vote of the holders of at least a majority of the votes cast at the Special Meeting (assuming a quorum is present).

The approval of the Adjournment Proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Special Meeting.

As of the record date, there were 39,796,017 shares of Sykes common stock issued and outstanding.

Voting at the Special Meeting (see page 29)

If your shares of Sykes common stock are registered directly in your name with Computershare, our transfer agent, you are considered a “shareholder of record.” Shareholders of record can vote their shares of Sykes common stock in the following four ways: (i) by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the prepaid reply envelope provided to you, (ii) by submitting your proxy by telephone by dialing the toll-free number 1-800-690-6903 and following the voting instructions provided on the proxy card, (iii) by submitting your proxy over the Internet by going to www.proxyvote.com and following the voting instructions provided on the proxy card or (iv) by attending the Special Meeting and voting your shares in person. Even if you plan to attend the Special Meeting, Sykes encourages you to submit a proxy in advance by Internet, telephone or mail so that your vote will be counted even if you later decide not to attend the Special Meeting. Votes cast in person or by proxy at the Special Meeting will be tabulated by the inspector of election appointed for the Special Meeting, who also will determine whether a quorum is present.

If your shares are held by your bank, brokerage firm or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your bank, brokerage firm or other nominee seeking instruction from you as to how your shares should be voted. You should instruct your bank, brokerage firm or other nominee how to vote your shares of Sykes common stock on each proposal in accordance with your voting instruction form. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, brokerage firm or other nominee on how to submit voting instructions. Shareholders who own their shares in “street name” are not able to vote at the Special Meeting unless they have a legal proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares at the Special Meeting.

 

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You may revoke your proxy at any time prior to the vote at the Special Meeting by (i) sending a written statement to that effect to Sykes, at 400 N. Ashley Drive, Suite 2800, Tampa, FL 33602, Attention: James T. Holder, Corporate Secretary, bearing a date later than the date of the proxy, that is received prior to the Special Meeting, (ii) voting again by Internet or telephone, so long as you do so before the deadline of 11:59 p.m. Eastern Time on August 23, 2021, (iii) submitting a properly signed proxy card with a later date and mailing it to the address set forth therein so that it is received prior to the Special Meeting, or (iv) attending the Special Meeting and voting in person. Attendance at the Special Meeting will not, in and of itself, result in the revocation of a proxy or cause your shares of Sykes common stock to be voted. If you hold shares in “street name,” you may submit new voting instructions by contacting your bank, brokerage firm or other nominee. You may also change your vote or revoke your proxy in person at the Special Meeting if you obtain a signed proxy from the shareholder of record (bank, brokerage firm or other nominee) giving you the right to vote the shares.

Sykes recommends that you submit a proxy to vote your shares as soon as possible, even if you are planning to attend the Special Meeting to ensure that your shares are represented and voted at the meeting and so that the vote count will not be delayed.

Abstentions and Broker Non-Votes (see page 28)

An abstention occurs when a shareholder attends a meeting, either in person or by proxy, but abstains from voting. At the Special Meeting, abstentions will be counted as present for purposes of determining whether a quorum exists. Abstaining from voting will have the same effect as a vote “AGAINST” the Merger Proposal, the named executive officer Merger-related compensation proposal, and the Adjournment Proposal.

Broker non-votes are shares held in “street name” by banks, brokerage firms or other nominees that are present or represented by proxy at the Special Meeting, but with respect to which the bank, brokerage firm or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such bank, brokerage firm or other nominee does not have discretionary voting power on such proposal. Because, under NASDAQ rules, banks, brokerage firms or other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of Sykes common stock held in “street name” does not give voting instructions to the bank, brokerage firm or other nominee, then those shares will not be counted as present in person or by proxy at the Special Meeting. As the vote to approve the Merger Proposal is based on the total number of shares of Sykes common stock outstanding and entitled to vote on the Merger Proposal on the record date, not just the shares that are counted as present in person or by proxy at the Special Meeting, if you fail to issue voting instructions to your bank, brokerage firm or other nominee, the shares of Sykes common stock that you own will not be counted for purposes of determining whether a quorum is present at the Special Meeting and it will have the same effect as a vote “AGAINST” the Merger Proposal.

The approval of each named executive officer Merger-related compensation proposal and the Adjournment Proposal requires the affirmative vote of the majority of the votes cast at the meeting (and, in the case of the named executive officer Merger-related compensation proposal, subject to a quorum being present). Accordingly, shares deemed not in attendance at the special meeting, whether due to a record holder’s failure to vote or a “street name” holder’s failure to provide any voting instructions to such holder’s bank, broker or other nominee, and broker non-votes will have no effect on the outcome of the named executive officer Merger-related compensation proposal (assuming a quorum is present) and no effect on the outcome of the Adjournment Proposal.

Solicitation of Proxies (see page 30)

The Board is soliciting your proxy, and Sykes will bear the cost of soliciting proxies. OKAPI Partners has been retained to assist with the solicitation of proxies and provide related proxy advisory services. OKAPI Partners will be paid a fee of $18,500 plus reasonable and documented out-of-pocket expenses for these services

 

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in connection with the Special Meeting. Sykes will also indemnify OKAPI Partners for certain losses arising out of these services. OKAPI Partners will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders.

Adjournment (see page 30)

In addition to the Merger Proposal and the named executive officer Merger-related compensation proposal, Sykes shareholders are also being asked to approve the Adjournment Proposal, which will enable the adjournment of the Special Meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal or in the absence of a quorum.

Although it is not currently expected, if a quorum is not present at the Special Meeting, the shareholders holding a majority of the shares of Sykes common stock present in person or by proxy at the Special Meeting and entitled to vote thereat may adjourn the Special Meeting from time to time until a quorum shall be present. All proxies will be voted in the same manner as they would have been voted at the original convening of the Special Meeting, except for any proxies that have been validly revoked or withdrawn prior to the time such proxies are voted at the reconvened meeting. If a new record date is or must be fixed under law, a notice of the adjourned meeting must be given to each shareholder of record as of the new record date and who is otherwise entitled to notice of and vote at such meeting. In addition, the Special Meeting could be postponed before it commences, subject to the terms of the Merger Agreement. If the Special Meeting is adjourned or postponed, shareholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you return a proxy and do not indicate how you wish to vote on the Adjournment Proposal, your shares will be voted in favor of the Adjournment Proposal.

The Merger

The rights and obligations of the parties to the Merger Agreement are governed by the specific terms and conditions of the Merger Agreement and not by any summary or other information in this proxy statement. The information in this proxy statement regarding the Merger Agreement and the Merger is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated herein by reference. We encourage you to read the Merger Agreement carefully and in its entirety because it is the principal legal agreement that governs the terms and conditions of the Merger.

Structure of the Merger (see page 32)

If the Merger is completed, then at the effective time of the Merger (the “Effective Time”), Merger Sub will merge with and into Sykes, the separate corporate existence of Merger Sub will cease and Sykes will survive the Merger as a direct wholly-owned subsidiary of Parent.

Merger Consideration (see page 32)

Upon the terms and subject to the conditions of the Merger Agreement, at the Effective Time, each share of Sykes common stock outstanding immediately prior to the Effective Time (other than shares held by Sykes as treasury stock or held by Parent, in each case, immediately prior to the Effective Time (the “canceled shares”)) will automatically be converted into the right to receive $54.00 in cash, without interest, subject to any applicable withholding taxes (the “Merger Consideration”).

Treatment of Sykes Equity Awards (see page 32)

Pursuant to the Merger Agreement, as of the Effective Time, each Company Restricted Stock Unit (as defined in the Merger Agreement) or Company Performance Stock Unit (as defined in the Merger Agreement) that is outstanding under any Company Stock Plan (as defined in the Merger Agreement) immediately prior to the Effective Time (a “Company Restricted Share”) will vest at closing and be canceled and converted into the right to receive an amount in cash equal to the Merger Consideration for each share of Sykes common stock

 

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subject to such award immediately prior to the Effective Time, (with any such Company Performance Stock Units deemed achieved at one hundred percent (100%) of the Company Performance Stock Units granted), less applicable withholding taxes.

Additionally, at the Effective Time, each Company stock appreciation right (“Company SAR”) that is outstanding under any Company Stock Plan immediately prior to the Effective Time shall have all rights thereunder cancelled by virtue of the Merger and each former holder of any cancelled In-the-Money SAR (as defined in the Merger Agreement), in exchange therefor shall be entitled to an amount in cash, without interest, equal to the product of (A) the SAR Per Share Consideration multiplied by (B) the number of shares of Company Common Stock subject to such In-the-Money SAR, less any applicable withholding taxes. Each Company SAR that is not an In-the-Money SAR shall be automatically cancelled immediately prior to the Effective Time for no consideration. “SAR Per Share Consideration” means, with respect to a Company SAR, an amount equal to the difference between (a) $54.00, minus (b) the per share exercise price of such Company SAR. “In-the-Money SAR” means a vested Company SAR for which the SAR Per Share Consideration is greater than zero.

Recommendation of the Board (see page 42)

The Board has reviewed and considered the terms and conditions of the Merger Agreement and the Merger. After consulting with its outside legal counsel and financial advisor and after consideration of various factors, the Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the best interests of, the Company and the Company’s shareholders; (ii) approved and declared advisable the Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that the Merger Agreement be submitted to a vote of the Company’s shareholders for adoption at the Special Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of the Merger Agreement in accordance with the FBCA. Certain factors considered by the Board in reaching its decision to adopt the Merger Agreement and to recommend that shareholders approve the Merger Proposal can be found in “The Merger Proposal (Proposal 1) — Recommendation of the Board and Reasons for the Merger” beginning on page 42.

The Board unanimously recommends that Sykes shareholders vote:

 

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“FOR” the Merger Proposal;

 

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“FOR” the named executive officer Merger-related compensation proposal; and

 

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“FOR” the Adjournment Proposal.

Opinion of the Transaction Committee’s Financial Advisor (see page 47)

Goldman Sachs & Co. LLC (“Goldman Sachs”) delivered its opinion to the Transaction Committee (and indicated that it could be relied upon by the Board) that, as of June 17, 2021 and based upon and subject to the factors and assumptions set forth therein, the $54.00 in cash per share of Sykes common stock to be paid to the holders (other than Sitel and its affiliates) of shares of Sykes common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated June 17, 2021, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Transaction Committee and the Board in connection with their consideration of the transaction. The Goldman Sachs opinion is not a recommendation as to how any holder of shares of Sykes common stock should vote with respect to the transaction or any other matter. Pursuant to an engagement letter among the Transaction Committee, the Company and Goldman Sachs, the Company has agreed to pay Goldman

 

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Sachs a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $27 million, $2 million of which became payable at announcement of the transaction, and the remainder of which is contingent upon consummation of the Merger.

Interests of Sykes’ Executive Officers and Directors in the Merger (see page 55)

In considering the recommendation of the Board, Sykes shareholders should be aware that certain directors and executive officers of Sykes will have interests in the Merger that are different from, or in addition to, the interests of Sykes shareholders generally and which may create potential conflicts of interest. The Board was aware of these interests and considered them when it adopted the Merger Agreement and approved the Merger. These interests include:

 

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Sykes’ executive officers are entitled to severance protections and other benefits under their employment agreements with Sykes in the event of certain terminations of employment, including, in connection with or following the completion of the Merger;

 

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the accelerated vesting and payout of the equity awards held by Sykes’ directors and executive officers as of the Effective Time;

 

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Sykes’ directors and executive officers are entitled to the payout of all of the compensation they deferred, matching contributions and additional payments to offset tax obligations under the non-qualified deferred compensation plan maintained by Sykes;

 

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Sykes’ directors and executive officers are entitled to indemnification and insurance arrangements pursuant to the Merger Agreement and Sykes’ organizational documents (please see the section below titled “The Merger Agreement – Indemnification and Insurance”);

 

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As consideration for their services to Sykes in connection with the Merger, the Chair of the Transaction Committee will receive a one-time payment of $15,000 and each of the three other members of the Transaction Committee will receive a one-time payment of $10,000; and

 

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Certain Sykes’ executive officers as of the Effective Time may become executive officers of the surviving corporation.

These interests are discussed in more detail in the section entitled “The Merger Proposal (Proposal 1) — Interests of Sykes’ Executive Officers and Directors in the Merger” beginning on page 55.

Financing of the Merger (see page 61)

We anticipate that the total amount of funds necessary at closing to complete the Merger and the related transactions will be approximately $2.3 billion in cash. This amount includes the funds needed to: (i) make the payment of all amounts payable to shareholders of common stock and equity awards in connection with or as a result of the Merger; (ii) repay, prepay or discharge (after giving effect to the merger) the principal amount of and interest on all outstanding indebtedness of the Company required to be repaid at the Effective Time under the Merger Agreement; and (iii) pay all related fees and expenses required to be paid at the closing by Parent or Merger Sub under the Merger Agreement.

Parent has obtained debt financing commitments (in each case, pursuant to the Commitment Letter (as defined below)) for the purpose of financing the foregoing items related to the transactions contemplated by the Merger Agreement.

Pursuant to a debt commitment letter, dated as of June 17, 2021 (the “Original Commitment Letter”) and later amended and restated on June 23, 2021 (the “Amended and Restated Commitment Letter” together with the Original Commitment Letter, the “Commitment Letter”) certain financial institutions (in each case, acting directly or through their respective affiliates or branches, as appropriate, collectively, the “Debt Commitment Parties”) have committed to provide to Parent upon the terms and subject to the conditions set forth in the

 

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Commitment Letter, debt financing in the aggregate up to approximately $2,838 million, consisting of a U.S. dollar denominated term b loan tranche in an aggregate principal amount of $1,400 million, a Euro denominated term b loan tranche in an aggregate principal amount of €1,000 million, and a $250 million senior secured revolving credit facility. The consummation of the Merger is not subject to any financing condition.

Antitrust Review Required for the Merger and Other Regulatory Filings (see page 61)

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), we cannot complete the Merger until we have given notification and furnished information to the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”), and until the applicable waiting period has expired or been terminated. On July 9, 2021, Sykes and Parent each filed a premerger notification and report form under the HSR Act.

The obligation of the parties to the Merger Agreement to consummate the Merger is also subject to (a) the submission of an export classification request with the US Department of Commerce’s Bureau of Industry and Security (the “Commerce Department Notification”), (b) submitting notice and receipt of clearance from the Federal Cartel Office in Germany (Bundeskartellamt), (c) submitting notice and receipt of clearance from the Superintendence of Industry and Commerce in Colombia (Superintendencia de Industria y Comercio), and (d) (i) confirmation in writing that the UK Competition and Markets Authority (“CMA”) does not intend to request further information or open an investigation in relation to the Merger or any matters arising therefrom, after submission by Parent of a briefing paper to the CMA’s merger intelligence committee setting out the reasons why the CMA should not commence an investigation (provided that the CMA has not subsequently decided to open an investigation in relation to the Merger or any matters arising therefrom prior to Closing), or (ii) confirmation that the CMA does not intend to refer the Merger or any matters arising therefrom to the Chair of the CMA for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (Phase 2). On July 9, 2021, Parent and Sykes filed a notification to the Federal Cartel Office in Germany (Bundeskartellamt). On July 9, 2021, Parent filed a notification to the Superintendence of Industry and Commerce in Colombia (Superintendencia de Industria y Comercio) and one July 22, 2021 received an acknowledgment of receipt clearing the transaction. On July 9, 2021, Parent submitted a briefing paper to the CMA and on July 22, 2021 the CMA indicated that it had no further questions and therefore does not intend to open an investigation in relation to the Merger or any matters arising therefrom. On July 12, 2021, Sykes submitted the Commerce Department Notification.

While we have no reason to believe the applicable waiting period under the HSR Act will not expire or be terminated or that clearance from the Federal Cartel Office in Germany will not be received, there is no certainty that these will be completed within the period of time currently contemplated or that a regulatory challenge to the Merger will not be made.

Material U.S. Federal Income Tax Consequences of the Merger (see page 96)

In general, the exchange of Sykes common stock for cash in the Merger will be a taxable transaction to U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96) for U.S. federal income tax purposes and may also be taxable under state and local and other tax laws. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96. The tax consequences of the Merger to you will depend on your particular circumstances. You should consult your tax advisors regarding the U.S. federal income tax consequences of the Merger to you in your particular circumstances, as well as the tax consequences arising under other U.S. federal tax laws and the laws of any state, local or foreign taxing jurisdiction.

Appraisal Rights (see page 62)

Under Section 607.1302 of the FBCA, appraisal rights will NOT be available to Sykes’ shareholders in connection with the Merger.

 

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Litigation Relating to the Merger (see page 63)

Two lawsuits relating to the Merger, each filed by an individual shareholder, have been filed in the United States District Court for the Southern District of New York, captioned Shiva Stein v. Sykes Enterprises, Incorporated, et al., Case No. 1:21-cv-06043, and Matthew Whitfield v. Sykes Enterprises, Incorporated, et al., Case No. 1:21-cv-06163.

Sykes and individual members of the Board are named as defendants in each complaint. The complaints generally allege that the defendants violated the Securities Exchange Act of 1934 (the “Exchange Act”) by making untrue statements in, or failing to disclose material information in, Sykes’ preliminary proxy statement filed on July 12, 2021, and generally seeks, among other things, injunctive relief prohibiting consummation of the Merger and unspecified damages and attorneys’ fees.

The defendants deny the allegations made in the complaints. Additional complaints arising out of or relating to the Merger Agreement and the transactions contemplated thereby may be filed in the future. If additional similar complaints are filed, absent new or different allegations that are material, we will not necessarily announce such additional filings.

Expected Timing of the Merger

We expect to complete the Merger in the second half of 2021. However, the Merger remains subject to antitrust reviews, U.S. and foreign regulatory clearances and various other conditions, and it is possible that factors outside of the control of Sykes, Parent or Merger Sub could result in the Merger being completed at a later time, or not at all. There may be a substantial amount of time between the Special Meeting and the completion of the Merger. We expect to complete the Merger promptly following Company shareholder approval of the Merger Proposal and the receipt of all applicable regulatory clearances and approvals and the satisfaction or, to the extent permitted, waiver of the other conditions to the consummation of the Merger.

Company Takeover Proposal; Non-Solicitation (see page 73)

Pursuant to the Merger Agreement, Sykes will not, and will cause its subsidiaries and its and their respective directors, officers, employees not to, and shall direct and use reasonable best efforts to cause its and their respective representatives not to, directly or indirectly, solicit, initiate, propose or knowingly take any action to facilitate, encourage or induce the making, the submission or announcement of, any Takeover Proposal (as defined below) or the making of any proposal that would reasonably be expected to lead to any Takeover Proposal, or, subject to certain specified exceptions:

 

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conduct or engage in any discussions or negotiations with, disclose any non-public information relating to Sykes or any of its subsidiaries to any person or its representatives, or afford to any person or its representatives access to the business, properties, assets, books, records or other non-public information, or to any personnel of Sykes or its subsidiaries (other than Parent, Merger Sub or any designees of Parent or Merger Sub), in each case, which actions or circumstances would reasonably be expected to lead to, result in or facilitate or that is otherwise known to be relating to a Takeover Proposal, including the making, submission or announcement thereof;

 

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knowingly assist, participate in, facilitate or encourage any effort by, any third party that is seeking to make, or has made, any Takeover Proposal;

 

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except where Sykes’ Board makes a good faith determination that the failure to do so would be reasonably likely to be inconsistent with its fiduciary duties, amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of Sykes or any of its subsidiaries or any limit on making Takeover Proposals; or

 

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approve, recommend, or propose to approve or recommend, or execute or enter into any letter of intent, term sheet or other Contract or other agreement or understanding (whether binding or non-binding, written or oral, preliminary or definitive) relating to any Takeover Proposal (each, a “Company Acquisition Agreement”).

 

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If, at any time following the date of the Merger Agreement but prior to the receipt of Sykes Shareholder Approval, Sykes or any of its representatives receives an unsolicited bona fide written Takeover Proposal that did not result from a breach of the Merger Agreement, (i) Sykes and its representatives may engage in contact with the person or group of persons making the Takeover Proposal solely to clarify the terms and conditions thereof or to request that any Takeover Proposal made orally be made in writing and, (ii) if Sykes’ Board (or a committee thereof) has determined in good faith (after consultation with its independent financial advisor and outside legal counsel) that such Takeover Proposal either constitutes a Superior Proposal (as defined below) or would reasonably be expected to result in a Superior Proposal, then Sykes and Sykes’ Board (or a committee thereof) may, subject to certain specified exceptions, directly or indirectly through any representative: (A) participate in negotiations or discussions with any third party that has made a bona fide, unsolicited Takeover Proposal in writing; and (B) thereafter furnish to such third party non-public information relating to Sykes or any of its subsidiaries, subject to (x) first entering into an acceptable confidentiality agreement with such third party and (y) Sykes promptly (and in any event within 24 hours) providing to Parent any such non-public information in the event such information was not previously made available to Parent; but in each case referred to in the foregoing clauses (A) and (B), only if Sykes’ Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable Law.

Conditions to the Closing of the Merger (see page 83)

Each party’s obligation to complete the Merger is subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions:

 

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adoption of the Merger Agreement by the Company’s shareholders;

 

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the expiration or termination of the waiting periods applicable to the Merger under the HSR Act;

 

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no law, order or injunction having been enacted, issued, enforced or promulgated by a governmental entity having jurisdiction over the parties that is in effect and make illegal, enjoin, or otherwise prohibit consummation of the Merger or the other transactions contemplated by the Merger Agreement; and

 

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all consents, approvals, clearances and other authorizations from certain specified governmental entities shall have been obtained and any applicable waiting periods with respect thereto shall have expired or been terminated.

The respective obligations of Parent and Merger Sub, on one hand, and Sykes, on the other hand, to complete the Merger are subject to the satisfaction or waiver of certain additional conditions, including:

 

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subject to certain materiality and other qualifiers, the accuracy of the representations and warranties of the other party;

 

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the performance in all material respects by the other party of its covenants, obligations and agreements required to be performed or complied with under the Merger Agreement at or prior to the closing;

 

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in the case of the Parent’s and Merger Sub’s obligations, the absence of a Company material adverse effect having occurred since the date of the Merger Agreement (which term is described in the section titled “The Merger Agreement – Representations and Warranties”); and

 

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in the case of the Parent’s and Merger Sub’s obligations, the absence of a Substantial Detriment resulting from the required consents, approvals, clearances, and other authorizations or expirations related to the HSR Act or by certain specified governmental entities.

The consummation of the Merger is not conditioned upon Parent’s receipt of financing. Before the closing, each of Sykes, Parent and Merger Sub may waive any of the conditions to its obligation to consummate the Merger even though one or more of the conditions described above has not been met, except where waiver is not permissible under applicable law.

 

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Change in the Sykes Board Recommendation (see page 75)

The Board has unanimously recommended that Sykes shareholders vote “FOR” the Merger Proposal.

The Board generally is not permitted under the Merger Agreement to change its recommendation in favor of the adoption of the Merger Agreement. However, in certain circumstances, the Board is permitted to make a Company Adverse Recommendation Change (as defined below in the section titled “The Merger Agreement – Company Takeover Proposal; Non Solicitation”) in response to certain unforeseen, intervening events or to accept a superior proposal if, in either case, among other things, the Board determines in good faith that the failure to do so would be inconsistent with its fiduciary duties and negotiates in good faith with Parent (to the extent Parent desires to do so) for five business days (and for each revision in price or any material revision to the terms of a Superior Proposal, such period shall be extended, if applicable, to ensure that at least three business days remain in such period (it being understood that there may be multiple extensions)) to make adjustment to the Merger Agreement so that the Board’s fiduciary duties no longer require it to make a Company Adverse Recommendation Change in response to the intervening event or so that the Takeover Proposal no longer constitutes a Superior Proposal. Generally, the Board must not effect a Company Adverse Recommendation Change.

However, the Merger Agreement permits the Board to effect a Company Adverse Recommendation Change or terminate the Merger Agreement to enter into (or permit any subsidiary to enter into) a definitive written Company Acquisition Agreement in connection with such Company Adverse Recommendation Change, if:

 

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Sykes promptly notifies Parent, in writing, at least five (5) business days (the “Superior Proposal Notice Period”) before making a Company Adverse Recommendation Change or entering into (or causing a subsidiary to enter into) such definitive written Company Acquisition Agreement, of its intention to take such action with respect to a Superior Proposal;

 

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prior to effecting such Company Adverse Recommendation Change or such termination, Sykes and its representatives, during the Superior Proposal Notice Period, negotiate with Parent in good faith to make such adjustments to the terms and conditions of the Merger Agreement so that such Takeover Proposal ceases to constitute a Superior Proposal, if Parent, in its discretion, elects to engage in such negotiations;

 

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Sykes has complied in all material respects with its obligations pursuant to the Merger Agreement with respect to such Takeover Proposal; and

 

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Sykes’ Board determines in good faith, after consulting with outside legal counsel and its financial advisor, that such Takeover Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Parent during the Superior Proposal Notice Period to the terms and conditions of this Agreement.

In addition, the Board may also effect a Company Adverse Recommendation Change in response to an Intervening Event if the Board determines in good faith in its reasonable discretion, after consultation with its independent financial advisor and outside legal counsel, that the failure to effect a Company Adverse Recommendation Change would be inconsistent with its fiduciary duties under applicable law, subject to a five (5) business day negotiation period with Parent (it being agreed that in the event that, after the commencement of such period, if there is any material development in an Intervening Event, such period shall be extended, if applicable, to ensure that at least three (3) business days remain in the period subsequent to the time when Sykes notifies Parent of any such material development, and that there may be multiple such extensions).

The Board has not effected a Company Adverse Recommendation Change.

Termination of the Merger Agreement and Termination Fees (see page 84)

The Merger Agreement may be terminated by either party and the Merger may be abandoned in certain circumstances, including if (i) the Merger is not completed by November 17, 2021, subject to certain extension

 

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rights by the parties on no more than two successive occasions of two (2) months each (not to exceed 9 months after the date of the Merger Agreement) (an “Outside Date Termination”), (ii) Sykes’ shareholders fail to approve the Merger Proposal (a “Shareholder Vote Termination”), (iii) a governmental entity of competent jurisdiction has issued a final non-appealable governmental order prohibiting the Merger or (iv) the other party breaches its representations, warranties or covenants in the Merger Agreement which gives rise to the failure of a condition to the consummation of the Merger, subject in certain cases, to the right of the breaching party to cure the breach (a “Representation/Covenant Breach Termination”).

Parent may terminate the Merger Agreement if (i) prior to receiving the Company’s shareholder approval, the Board changes, withholds or withdraws its recommendation in favor of the Merger to the Company’s shareholders (an “Adverse Recommendation Termination”) or (ii) the Company has willfully and materially breached its “no-shop” obligations (a “No-Shop Breach Termination”).

In addition, subject to compliance with specified process and notice requirements, the Company may terminate the Merger Agreement (i) in order to concurrently enter into a definitive agreement for a transaction that constitutes a Superior Proposal (as defined below) prior to receiving the Company’s shareholder approval (a “Superior Proposal Termination”) or (ii) if all conditions set forth in the Merger Agreement have been satisfied, Parent fails to close the Merger when required to do so under the Merger Agreement, and Sykes has irrevocably notified Parent in writing that it is ready, willing and able to consummate the Merger, but Parent and Merger Sub fail to consummate the Merger within three (3) business days of such note (or such later date specified in Sykes’ notice) of its intent to terminate (a “Closing Failure Termination”). Parent and the Company may also terminate the Merger Agreement by mutual written consent.

The Company is entitled to terminate the Merger Agreement, and receive a termination fee of $99,000,000 from Parent if Parent and Merger Sub fail to consummate the Merger when required to do so under the Merger Agreement.

The Company will be required to make a payment to Parent of $66,000,000 (the “Company Termination Fee”) if an Adverse Recommendation Termination, a No-Shop Breach Termination or a Superior Proposal Termination occurs. The Company Termination Fee may also become payable by the Company under certain specified circumstances where (i) an Outside Date Termination or a Shareholder Vote Termination occurs, (ii) prior to such termination, a Takeover Proposal has been publicly announced or disclosed and not withdrawn or otherwise abandoned and (iii) within one year following such termination, either a Takeover Transaction (as defined below) is consummated by the Company or the Company enters into a definitive agreement providing for the consummation of a Takeover Transaction (provided that, for purposes of this paragraph, all references to “15%” in the definition of “Takeover Transaction” are deemed to be references to “50%”).

Delisting and Deregistration of Sykes Common Stock (see page 63)

As promptly as practicable following the effectiveness of the Merger, Sykes common stock will be delisted from the NASDAQ and deregistered under the Exchange Act.

Market Prices of Sykes Common Stock (see page 91)

On June 17, 2021, the last trading day prior to the execution of the Merger Agreement, the closing price per share of Sykes common stock on the NASDAQ was $44.17. The closing sales price of Sykes common stock on the NASDAQ on July 23, 2021, the most recent practicable date prior to the date of this proxy statement, was $53.74 per share. You are encouraged to obtain current market prices of Sykes common stock in connection with voting your shares of Sykes common stock.

 

13

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following are brief answers to certain questions that you may have regarding the Merger, the Merger Agreement, the Special Meeting and the proposals being considered at the Special Meeting. We urge you to carefully read the remainder of this proxy statement because the information in this section does not provide all of the information that might be important to you with respect to the Merger and the Special Meeting. Additional important information is also contained in the annexes attached to this proxy statement and the documents referred to or incorporated by reference into this proxy statement.

 

Q.	Why am I receiving these proxy materials?

 

A.

On June 17, 2021, Sykes entered into the Merger Agreement pursuant to which Merger Sub will merge with and into Sykes, with Sykes continuing as the surviving corporation in the Merger. A copy of the Merger Agreement is attached to this proxy statement as Annex A and is incorporated by reference herein. In order to complete the Merger, Sykes shareholders must vote to approve the Merger Proposal. The approval of the Merger Proposal by our shareholders is a condition to the consummation of the Merger. You are receiving this proxy statement in connection with the solicitation by the Board of proxies of Sykes shareholders to vote their shares in favor of the Merger Proposal.

You are also being asked to vote on a proposal to approve on a non-binding, advisory basis, certain compensation that will or may be paid by Sykes to its named executive officers that is based on or otherwise relates to the Merger and on a proposal to approve the adjournment of the Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal or in the absence of a quorum.

This proxy statement, which you should read carefully, contains important information about the Merger, the Merger Agreement and the Special Meeting of our shareholders and the matters to be voted on thereat. The enclosed materials allow you to submit a proxy to vote your shares without attending the Special Meeting and to ensure that your shares are represented and voted at the Special Meeting.

Your vote is very important. Even if you plan to attend the Special Meeting, we encourage you to submit a proxy as soon as possible.

 

Q.	What is the proposed transaction?

 

A.

If the Merger Proposal is approved by Sykes shareholders and the other conditions to the consummation of the Merger contained in the Merger Agreement are satisfied or waived, Merger Sub will merge with and into Sykes, with Sykes continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of Parent. As noted elsewhere herein, Parent and Merger Sub are affiliates of Sitel Group SA.

 

Q.	What will I receive in the Merger if it is completed?

 

A.

Under the terms of the Merger Agreement, if the Merger is completed, you will be entitled to receive $54.00 in cash, without interest and subject to any applicable withholding taxes, for each share of Sykes common stock you own, which represents a premium of 31.2% to the Company’s closing share price on June 17, 2021, which was the last trading day prior to the execution of the Merger Agreement. For example, if you own 100 shares of Sykes common stock, you will be entitled to receive $5,400 in cash in exchange for your shares, without interest and subject to any applicable withholding taxes. You will not be entitled to receive shares in the surviving corporation or in Parent.

 

Q.	Where and when is the Special Meeting, and who may attend?

 

A.	The Special Meeting will be held at the Rivergate Tower, 400 N. Ashley Drive, Suite 320, 3rd Floor, Conference Room A, Tampa, FL 33602, on August 24, 2021 at 8:00 a.m., Eastern Time. Eastern Time and

 

14

registration will begin at that time. Shareholders of record as of the record date of the Special Meeting may attend the meeting. All shareholders and proxyholders will need proof of identification along with their proxy card or proof of stock ownership to enter the Special Meeting. Beneficial owners of shares held in “street name” who wish to attend the meeting must present proof of ownership of Sykes common stock as of the record date, such as a bank or brokerage account statement, and will only be able to vote at the Special Meeting if they have a legal proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares at the Special Meeting.

 

Q.	Who can vote at the Special Meeting?

 

A.

All Sykes shareholders of record as of the close of business on July 23, 2021, the record date for the Special Meeting, are entitled to receive notice of, attend and vote at the Special Meeting, or any adjournment or postponement thereof. Each share of Sykes common stock is entitled to one vote on all matters that come before the Special Meeting. On the record date, there were 39,796,017 shares of Sykes common stock issued and outstanding, held by approximately 694 holders of record.

 

Q.	What matters will be voted on at the Special Meeting?

 

A.	At the Special Meeting, you will be asked to consider and vote on the following proposals:

 

•

the Merger Proposal;

 

•

the named executive officer Merger-related compensation proposal; and

 

•

the Adjournment Proposal.

Shareholders may also be asked to transact such other business as may properly be brought before the Special Meeting or any adjournments or postponements of the Special Meeting, by or at the direction of the Board.

 

Q.	What is the position of the Board regarding the Merger?

 

A.

After consulting with its outside legal counsel and financial advisor and after consideration of various factors, the Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the best interests of, the Company and the Company’s shareholders; (ii) approved and declared advisable the Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that the Merger Agreement be submitted to a vote of the Company’s shareholders for adoption at the Special Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of the Merger Agreement in accordance with the FBCA.

 

Q.	How does the Board recommend that I vote on the proposals to be considered at the Special Meeting?

 

A.	The Board unanimously recommends that you vote:

 

•

“FOR” the Merger Proposal;

 

•

“FOR” the named executive officer Merger-related compensation proposal; and

 

•

“FOR” the Adjournment Proposal.

 

Q.	What vote is required to approve the Merger Proposal?

 

A.	The Merger Proposal will be approved if shareholders holding at least a majority of all votes entitled to be cast by the shares of Sykes common stock outstanding on the record date vote “FOR” the proposal. As of

 

15

the close of business on the record date, there were 39,796,017 shares of Sykes common stock outstanding. Accordingly, 19,898,009 shares of Sykes common stock must vote in favor of the Merger Proposal in order for it to be approved.

 

Q.	What vote is required to approve the named executive officer Merger-related compensation proposal and the Adjournment Proposal?

 

A.

The named executive officer Merger-related compensation proposal will be approved if there is a quorum present at the Special Meeting and at least a majority of the votes that are cast at the Special Meeting are “FOR” such proposal. The Adjournment Proposal will be approved if at least a majority of the votes that are cast at the Special Meeting are “FOR” such proposal.

 

Q.	Is the Merger expected to be taxable to holders of Sykes common stock?

 

A.

In general, the exchange of Sykes common stock for cash in the Merger will be a taxable transaction to U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96) for U.S. federal income tax purposes and may also be taxable under state and local and other tax laws. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96. The tax consequences of the Merger to you will depend on your particular circumstances. You should consult your tax advisors regarding the U.S. federal income tax consequences of the Merger to you in your particular circumstances, as well as the tax consequences arising under other U.S. federal tax laws and the laws of any state, local or foreign taxing jurisdiction.

 

Q.	What other effects will the Merger have on Sykes?

 

A.

If the Merger is completed, Sykes common stock will be delisted from the NASDAQ and deregistered under the Exchange Act, and Sykes will no longer be required to file periodic reports with the SEC with respect to Sykes common stock, in each case in accordance with applicable law, rules and regulations. Following the completion of the Merger, Sykes common stock will no longer be publicly traded and you will no longer have any interest in Sykes’ future earnings or growth. In addition, from and after the date the Merger is completed, each share of Sykes common stock (other than canceled shares) you hold will represent only the right to receive $54.00 in cash, without interest and subject to any applicable withholding taxes.

 

Q.	When is the Merger expected to be completed?

 

A.

Assuming timely satisfaction of necessary closing conditions, including the approval by our shareholders of the Merger Proposal, the parties to the Merger Agreement expect to complete the Merger in the second half of 2021. However, Sykes cannot assure completion by any particular date, if at all. Because the Merger is subject to a number of conditions, including the receipt of shareholder approval of the Merger Proposal, the expiration of the waiting period under the HSR Act and the approval of certain other regulatory clearances as set forth in the Merger Agreement, the exact timing of the Merger cannot be determined at this time and we cannot guarantee that the Merger will be completed.

 

Q.	What happens if the Merger is not completed?

 

A.

If the Merger Proposal is not approved by the requisite vote of Sykes shareholders, or if the Merger is not completed for any other reason, the Company’s shareholders will not receive any payment for their shares of Sykes common stock in connection with the Merger. Instead, the Company will remain a public company, and shares of Sykes common stock will continue to be registered under the Exchange Act, as well as listed and traded on the NASDAQ. In the event that either Sykes or Parent terminates the Merger Agreement, then, in certain specified circumstances, Sykes may be required to pay Parent a termination fee of $66,000,000 (the “Company Termination Fee”), or Parent may be required to pay Sykes a termination fee of $99,000,000 (the “Parent Termination Fee”), as applicable. For more information on these termination fees, see the section entitled “The Merger Agreement — Termination Fees and Expenses.”

 

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Q.	How will our directors and executive officers vote on the Merger Proposal?

 

A.	Each of the directors and executive officers of Sykes have informed Sykes that, as of the date of this proxy statement, they intend to vote in favor of the Merger Proposal (although none of them is obligated to do so).

As of the record date for the Special Meeting, the directors and executive officers of Sykes owned, in the aggregate, 819,472 shares of Sykes common stock, representing approximately 2.06% of the issued and outstanding shares of Sykes common stock entitled to vote at the Special Meeting.

 

Q.	Do any of Sykes’ directors or executive officers have interests in the Merger that may differ from or be in addition to my interests as a shareholder?

 

A.

Yes. In considering the recommendation of the Board with respect to the Merger Proposal, you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our shareholders generally. The Board was aware of and considered these differing interests, to the extent such interests existed at the time, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, in determining to adopt the Merger Agreement, and in recommending that the Merger Proposal be approved by Sykes shareholders. See the section entitled “The Merger Proposal (Proposal 1) — Interests of Sykes’ Executive Officers and Directors in the Merger” beginning on page 55 for more information.

 

Q.	Why am I being asked to consider and vote on the named executive officer Merger-related compensation proposal?

 

A.

SEC rules require Sykes to seek approval on a non-binding, advisory basis with respect to certain payments and benefits that will or may be made or provided to Sykes’ named executive officers in connection with the Merger. Approval of the named executive officer Merger-related compensation proposal, however, is not required to complete the Merger. If the Merger Proposal is approved by Sykes’ shareholders and the Merger is completed, the Merger-related compensation will be paid to Sykes’ named executive officers in accordance with and subject to the terms of their compensation agreements and arrangements even if shareholders fail to approve the named executive officer Merger-related compensation proposal.

 

Q.	Who is soliciting my vote? Who will pay for the cost of this proxy solicitation?

 

A.

The Board is soliciting your proxy, and Sykes will bear the cost of soliciting proxies. OKAPI Partners has been retained to assist with the solicitation of proxies and provide related proxy advisory services. OKAPI Partners will be paid a fee of $18,500 plus reasonable and documented out-of-pocket expenses for these services in connection with the Special Meeting. Sykes will also indemnify OKAPI Partners for certain losses arising out of these services. OKAPI Partners will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders.

 

Q.	What do I need to do now? If I am going to attend the Special Meeting, should I still submit a proxy?

 

A.

Carefully read and consider the information contained in and incorporated by reference into this proxy statement, including the attached annexes. Whether or not you expect to attend the Special Meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the Special Meeting.

 

Q.	How do I vote if my shares are registered directly in my name?

 

A.	If your shares are registered directly in your name with our transfer agent, you are considered a “shareholder of record.” Shareholders of record can vote their shares of Sykes common stock in the following four ways:

 

•

By Internet — You may submit your proxy by going to www.proxyvote.com and by following the voting instructions on the proxy card on how to complete an electronic proxy card. You will need the 16-digit number included on your proxy card in order to vote by Internet.

 

17

•

By Telephone — You may submit your proxy by dialing (800) 690-6903 and by following the recorded instructions and following the voting instructions provided on the proxy card. You will need the 16-digit number included on your proxy card in order to vote by telephone.

 

•

By Mail — You may vote by mail by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the prepaid reply envelope provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity.

 

•

At the Special Meeting — If you are a shareholder of record and prefer to vote your shares at the Special Meeting, you must bring proof of identification along with your proxy card or proof of ownership.

Even if you plan to attend the Special Meeting, we encourage you to submit a proxy in advance by Internet, telephone or mail so that your shares will be voted if you later decide not to attend the Special Meeting. Telephone and Internet facilities for the submission of a proxy to vote shares will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on August 23, 2021.

If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, broker or other nominee on how to submit voting instructions. Shareholders who own their shares in “street name” are not able to vote at the Special Meeting unless they have a legal proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares.

 

Q.	How do I vote if my shares are held in the name of my bank, brokerage firm or other nominee?

 

A.

If your shares are held by your bank, brokerage firm or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your bank, brokerage firm or other nominee seeking instruction from you as to how your shares should be voted. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, brokerage firm or other nominee on how to submit voting instructions. Shareholders may be able to vote by telephone and by Internet. Shareholders who own their shares in “street name” are not able to vote at the Special Meeting unless they have a proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares.

 

Q.	What is a proxy?

 

A.

A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of Sykes common stock. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of Sykes common stock is called a “proxy card.”

 

Q.	If a shareholder gives a proxy, how are the shares voted?

 

A.

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way you indicate. When completing the Internet or telephone process for submitting a proxy, you may specify whether your shares should be voted “FOR” or “AGAINST” or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.

If you properly sign and return your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted as recommended by the Board with respect to each proposal.

 

18

Q.	Can I change or revoke my proxy after it has been submitted?

 

A.	Yes. You can change or revoke your proxy at any time before the final vote at the Special Meeting. If you are the shareholder of record, you may change or revoke your proxy by:

 

•

sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than August 23, 2021;

 

•

submitting a new proxy by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. Eastern Time on August 23, 2021;

 

•

timely submitting a properly signed proxy card with a later date; or

 

•

attending the Special Meeting and voting in person. Shareholders who own their shares in “street name” are not able to vote at the Special Meeting unless they have a proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares.

If you hold shares in “street name,” you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy in person at the Special Meeting if you obtain a proxy, executed in your favor, from the shareholder of record (bank, brokerage firm or other nominee) giving you the right to vote the shares.

If you submit a proxy or provide instructions to vote your shares and do not thereafter revoke such proxy or change such instructions in accordance with one of the methods set forth above, your shares will be represented and voted at the Special Meeting.

 

Q.	How many shares of Sykes common stock must be present to constitute a quorum for the Special Meeting? What if there is no quorum?

 

A.

Under our bylaws and the FBCA, the holders (as of the record date) of a majority of the outstanding shares of Sykes common stock entitled to vote on a matter at the Special Meeting, whether represented in person or by proxy, will constitute a quorum on that matter at the Special Meeting. There must be a quorum for business to be conducted at the Special Meeting. If a quorum is not present, the shareholders holding a majority of the shares of Sykes common stock present in person or by proxy at the Special Meeting and entitled to vote thereat may adjourn the Special Meeting from time to time. Failure of a quorum to be present at the Special Meeting will necessitate an adjournment or postponement of the Special Meeting and may subject Sykes to additional expense. If a new record date is or must be fixed under law, a notice of the adjourned meeting must be given to each shareholder of record as of the new record date and who is otherwise entitled to notice of and vote at such meeting. As of the close of business on the record date, there were 39,796,017 shares of Sykes common stock outstanding. Accordingly, 19,898,009 shares of Sykes common stock must be present or represented by proxy at the Special Meeting to constitute a quorum.

 

Q.	What if I abstain from voting on any proposal?

 

A.

If you attend the Special Meeting or submit (and do not thereafter revoke) a properly executed proxy card, even if you abstain from voting, your shares of Sykes common stock will still be counted for purposes of determining whether a quorum is present at the Special Meeting, but will not be counted for purposes of voting on the proposals. As a result, your abstention from voting will have the same effect as a vote “AGAINST” the Merger Proposal, the named executive officer Merger-related compensation proposal and the Adjournment Proposal.

 

Q.	Will my shares be voted if I do not sign and return my proxy card or vote by telephone or over the Internet or in person at the Special Meeting?

 

A.	If you are a shareholder of record of Sykes and you do not attend the Special Meeting, sign and return your proxy card by mail, or submit your proxy by telephone or over the Internet, your shares will not be voted at

 

19

the Special Meeting and will not be counted as present for purposes of determining whether a quorum exists. The failure to return your proxy card or otherwise vote your shares at the Special Meeting will have no effect on the outcome of the named executive officer Merger-related compensation proposal (assuming a quorum is present) or the Adjournment Proposal. However, the vote to approve the Merger Proposal is based on the total number of shares of Sykes common stock outstanding and entitled to vote as of the close of business on the record date, not just the shares that are counted as present in person or by proxy at the Special Meeting. As a result, if you fail to return your proxy card or otherwise vote your shares at the Special Meeting, it will have the same effect as a vote “AGAINST” the Merger Proposal.

You will have the right to receive the Merger Consideration if the Merger Proposal is approved and the Merger is completed even if your shares are not voted at the Special Meeting.

 

Q.	Will my shares held in “street name” or another form of record ownership be combined for voting purposes with shares I hold of record?

 

A.

No. Because any shares you may hold in “street name” will be deemed to be held by a different shareholder than any shares you hold of record, any shares held in “street name” will not be combined for voting purposes with shares you hold of record. Similarly, if you own shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for each of those shares because they are held in a different form of record ownership. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. Shares held in an individual retirement account must be voted under the rules governing the account.

 

Q.	Am I entitled to exercise appraisal rights instead of receiving the per share Merger Consideration for my shares of Sykes common stock in connection with the Merger?

 

A.	No. Holders of Sykes common stock do not have appraisal rights under the FBCA in connection with the Merger.

 

Q.	What happens if I sell my shares of Sykes common stock before the completion of the Merger?

 

A.

In order to receive the Merger Consideration, you must hold your shares of Sykes common stock through completion of the Merger. Consequently, if you transfer your shares of Sykes common stock before completion of the Merger, you will have transferred your right to receive the Merger Consideration in the Merger. The record date for shareholders entitled to vote at the Special Meeting is earlier than the date of completion of the Merger. If you transfer your shares of Sykes common stock after the record date but before the closing of the Merger, you will have the right to vote at the Special Meeting but not the right to receive the Merger Consideration with respect to your transferred shares.

 

Q.	Should I send in my evidence of ownership now?

 

A.

No. After the Merger is completed, you will receive transmittal materials from the paying agent for the Merger with detailed written instructions for exchanging your shares of Sykes common stock for the Merger Consideration to be paid to former Sykes shareholders in connection with the Merger. If you are the beneficial owner of shares of Sykes common stock held in “street name,” you may receive instructions from your bank, brokerage firm or other nominee as to what action, if any, you need to take to effect the surrender of such shares.

 

Q.	What does it mean if I get more than one proxy card or voting instruction card?

 

A.

If your shares are registered differently or are held in more than one account, you will receive more than one proxy card or voting instruction card. Please complete and return all of the proxy cards or voting instruction cards you receive (or submit each of your proxies over the Internet or by telephone) to ensure that all of your shares are voted.

 

20

Q.	What is householding and how does it affect me?

 

A.

The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing an address by delivering a single proxy statement to those shareholders, unless contrary instructions have been received. This procedure reduces the amount of duplicate information that shareholders receive and lowers printing and mailing costs for companies. Certain brokerage firms may have instituted householding for beneficial owners of Sykes common stock held through brokerage firms. If your family has multiple accounts holding Sykes common stock, you may have already received a householding notification from your broker. You may decide at any time to revoke your decision to household, and thereby receive multiple copies of proxy materials. If you wish to opt out of this procedure and receive a separate set of proxy materials in the future, or if you are receiving multiple copies and would like to receive only one, you should contact your broker, trustee or other nominee or Sykes at the address and telephone number below. A separate copy of these proxy materials will be promptly delivered upon request by writing sent to: Sykes Enterprises, Incorporated, Attention: James T. Holder, Corporate Secretary, 400 N. Ashley Drive, Suite 2800, Tampa, FL 33602.

 

Q.	What will the holders of outstanding Sykes equity awards receive in the Merger?

 

A.

Pursuant to the Merger Agreement, as of the Effective Time, each Company Restricted Stock Unit (as defined in the Merger Agreement) or Company Performance Stock Unit (as defined in the Merger Agreement) that is outstanding under any Company Stock Plan immediately prior to the Effective Time (a “Company Restricted Share”) will vest at closing and be canceled and converted into the right to receive an amount in cash equal to $54.00 for each share of Sykes common stock subject to such Company Restricted Share immediately prior to the Effective Time, (with any such Company Performance Stock Units deemed achieved at one hundred percent (100%) of the Company Performance Stock Units granted), less applicable withholding taxes.

Additionally, at the Effective Time, each Company stock appreciation right (“Company SAR”) that is outstanding under any Company stock incentive plan immediately prior to the Effective Time shall have all rights thereunder cancelled by virtue of the Merger and each former holder of any cancelled In-the-Money SAR (as defined in the Merger Agreement), in exchange therefor shall be entitled to an amount in cash, without interest, equal to the product of (A) the SAR Per Share Consideration multiplied by (B) the number of shares of Company Common Stock subject to such In-the-Money SAR, less any applicable withholding Taxes. Each Company SAR that is not an In-the-Money SAR shall be automatically cancelled immediately prior to the Effective Time for no consideration. “SAR Per Share Consideration” means, with respect to a Company SAR, an amount equal to the difference between (a) $54.00, minus (b) the per share exercise price of such Company SAR (such Company SARs have a weighted average exercise price of $28.24 per share). “In-the-Money SAR” means a vested Company SAR for which the SAR Per Share Consideration is greater than zero.

Any payment to which a holder of a Company Restricted Share or In-the-Money SAR may become entitled to receive will be paid as promptly as reasonably practicable following the closing date, but in no event later than the next regularly scheduled payroll date that is at least two (2) business days following the closing date, through Sykes’ payroll systems.

 

Q.	When will Sykes announce the voting results of the Special Meeting, and where can I find the voting results?

 

A.

Sykes intends to announce the preliminary voting results at the Special Meeting and will report the final voting results of the Special Meeting in a Current Report on Form 8-K filed with the SEC within four business days after the meeting. All reports that Sykes files with the SEC are publicly available when filed.

 

21

Q.	Where can I find more information about Sykes?

 

A.	You can find more information about us from various sources described in the section entitled “Where You Can Find More Information” beginning on page 100 of this proxy statement.

 

Q.	Who can help answer my other questions?

 

A.	If you have questions about the Merger, the Merger Agreement or the Special Meeting, require assistance in submitting your proxy or voting your shares, or need additional copies of this proxy statement or the enclosed proxy card, please contact our proxy solicitor:

 

1212 Avenue of the Americas, 24^th Floor

New York, NY 10036

Banks and Brokers Call Collect: (212) 297-0720

All Others Call Toll Free: (877) 629-6356

Email: info@okapipartners.com

If your bank, brokerage firm or other nominee holds your shares, you should also call your bank, brokerage firm or other nominee for additional information.

 

22

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Some of these statements can be identified by words such as “anticipate,” “approximate,” “believe,” “commit,” “continue,” “could,” “estimate,” “expect,” “hope,” “intend,” “may,” “outlook,” “plan,” “project,” “potential,” “should,” “would,” “will,” and other similar words or expressions. Sykes cautions readers of this proxy statement that such forward-looking statements are inherently uncertain, and shareholders and other potential investors must recognize that actual results may differ materially from Sykes’ expectations as a result of a variety of factors. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which Sykes is unable to predict or control, that may cause Sykes’ actual results, performance, or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements.

Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements and as it relates to the proposed Merger include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filings on Forms 10-K and 10-Q, factors and matters described in this proxy statement, and the following factors:

 

•

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement or the abandonment of the transactions contemplated thereby;

 

•

the failure of the parties to satisfy conditions to completion of the Merger, including the failure of Sykes shareholders to approve the Merger Proposal or the failure of the parties to obtain required regulatory approvals;

 

•

the risk that regulatory or other approvals are delayed or are subject to terms and conditions that are not anticipated, or that the proposed Merger may not be otherwise completed in a timely manner or at all;

 

•

risks related to disruption of management’s attention from Sykes’ ongoing business operations due to the Merger;

 

•

risks related to limitations placed on Sykes’ ability to operate its business under the Merger Agreement;

 

•

the effect of the announcement of the Merger on Sykes’ relationships with its customers, vendors and other business partners;

 

•

the potential difficulties in employee retention as a result of the Merger;

 

•

the amount of the costs, fees, expenses and charges related to the Merger Agreement and the risk of exceeding the expected costs;

 

•

the failure of Parent to obtain the necessary debt financing arrangements set forth in the Commitment Letter received in connection with the Merger;

 

•

the risk that the Merger Agreement may be terminated in circumstances that require Sykes to pay a termination fee;

 

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the risk that shareholder litigation in connection with the Merger may affect the timing or occurrence of the Merger, or the outcome of any legal proceedings that may be instituted against us and others related to the Merger Agreement;

 

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risks that our stock price may decline significantly if the Merger is not completed; and

 

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the possibility that Parent could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of Sykes’ assets to one or more purchasers, that could conceivably produce a higher aggregate value than that available to Sykes shareholders in the Merger.

 

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Consequently, all of the forward-looking statements that we make in this proxy statement are qualified by the information contained herein or contained in Sykes’ other public filings with the SEC, including (1) the information contained under this caption, and (2) the information contained under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and information in our consolidated financial statements and notes thereto included in Sykes’ most recent Annual Report on Form 10-K filed with the SEC on February 26, 2021 and in Sykes’ Quarterly Report on Form 10-Q filed on May 5, 2021. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

Many of the factors that will determine future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which speak only as of the date hereof. We cannot guarantee any future results, outcomes, levels of activity, performance or achievements.

 

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THE PARTIES TO THE MERGER

Sykes Enterprises, Incorporated

Sykes Enterprises, Incorporated

400 N. Ashley Drive, Suite 2800

Tampa, FL 33602

(813) 274-1000

Sykes is a full lifecycle provider of global customer experience management services, multichannel demand generation and digital transformation. Sykes is a complex global business serving sophisticated and demanding clients. Our business and financial strategies require careful expense management while providing superior customer service and value.

Sykes is a corporation organized under the laws of the State of Florida and headquartered in Tampa, Florida. Sykes’ principal offices are located at 400 N. Ashley Drive, Suite 2800, Tampa, FL 33602 and our telephone number is (813) 274-1000. Sykes common stock is traded on the NASDAQ under the ticker symbol “SYKE”. Our corporate web address is www.sykes.com. The information provided on, or that may be accessed through, the Sykes website is not part of this proxy statement and is not incorporated in this proxy statement by reference hereby or by any other reference to Sykes’ website provided in this proxy statement.

Additional information about Sykes is contained in our public filings with the SEC. See the section entitled “Where You Can Find More Information” beginning on page 100.

Sitel Worldwide Corporation

Sitel Worldwide Corporation

600 Brickell Avenue, Unit 3200

Miami, FL 33131

(866) 957-4835

Parent is a Delaware corporation and the sole shareholder of Merger Sub. Parent is a subsidiary of Sitel Group, a global provider of customer experience (CX) products and solutions. Upon completion of the transactions contemplated thereby, Sykes will be a wholly-owned subsidiary of Parent.

Florida Mergersub, Inc.

Florida Mergersub, Inc.

c/o Sitel Worldwide Corporation

600 Brickell Avenue, Unit 3200

Miami, FL 33131

(866) 957-4835

Merger Sub is a Delaware corporation and a wholly-owned subsidiary of Parent that was formed solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated thereby. Merger Sub has not conducted any business operations other than in connection with the transactions contemplated by the Merger Agreement and related agreements. Upon completion of the Merger, Merger Sub will merge with and into Sykes, and Merger Sub will cease to exist.

 

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THE SPECIAL MEETING

This proxy statement is being provided to holders of shares of Sykes common stock as of the record date as part of a solicitation by the Board of proxies for use at the Special Meeting to be held at the time and place specified below, and at any properly convened meeting following an adjournment or postponement of the Special Meeting.

Date, Time and Place

The Special Meeting is scheduled to be held at the Rivergate Tower, 400 N. Ashley Drive, Suite 320, 3rd Floor, Conference Room A, Tampa, FL 33602 on August 24, 2021 at 8:00 a.m., Eastern Time.

Purpose of the Special Meeting

At the Special Meeting, Sykes shareholders will be asked to consider and vote on the following proposals:

 

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the Merger Proposal, which is further described in the sections entitled “The Merger Proposal (Proposal 1)” and “The Merger Agreement,” beginning on pages 32 and 64, respectively. A copy of the Merger Agreement is attached to this proxy statement as Annex A and is incorporated herein by reference;

 

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the named executive officer Merger-related compensation proposal, which is further described in the sections entitled “The Merger Proposal (Proposal 1) — Interests of Sykes’ Executive Officers and Directors in the Merger” and “Advisory Vote On Named Executive Officer Merger-Related Compensation Proposal (Proposal 2)” beginning on pages 55 and 89, respectively; and

 

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the Adjournment Proposal, which is further described in the section entitled “The Adjournment Proposal (Proposal 3)” beginning on page 90.

Shareholders may also be asked to transact such other business as may properly be brought before the Special Meeting or any adjournments or postponements of the Special Meeting, by or at the direction of the Board.

The holders of at least a majority of the outstanding shares of Sykes common stock entitled to vote on the Merger Proposal must vote to approve the Merger Proposal at the Special Meeting as a condition to the completion of the Merger. If Sykes shareholders fail to approve the Merger Proposal by such vote, the Merger will not occur. The vote on the named executive officer Merger-related compensation proposal is a vote separate and apart from the vote to approve the Merger Proposal. Accordingly, a shareholder may vote to approve the Merger Proposal and vote not to approve the named executive officer Merger-related compensation proposal, and vice versa. Because the vote on the named executive officer Merger-related compensation proposal is only advisory in nature, it will not be binding on Sykes, Parent or the surviving corporation. Accordingly, because Sykes is contractually obligated to pay such Merger-related compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the Merger Proposal is approved, regardless of the outcome of the advisory vote.

Other than the matters described above, Sykes does not expect a vote to be taken on any other matters at the Special Meeting or any adjournment or postponement thereof. However, if any other matters are properly brought before the Special Meeting or any adjournment or postponement thereof for consideration, the holders of the proxies will have discretion to vote on such matters in accordance with their best judgment.

Recommendation of the Board

The Board has unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the

 

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best interests of, the Company and the Company’s shareholders; (ii) approved and declared advisable the Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that the Merger Agreement be submitted to a vote of the Company’s shareholders for adoption at the Special Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of the Merger Agreement in accordance with the FBCA. The Board made its determination after consultation with its outside legal counsel and financial advisor and consideration of a number of factors more fully described in the section entitled “The Merger Proposal (Proposal 1) — Recommendation of the Board and Reasons for the Merger” beginning on page 42.

The Board unanimously recommends that Sykes shareholders vote “FOR” the Merger Proposal, “FOR” the named executive officer Merger-related compensation proposal and “FOR” the Adjournment Proposal.

Record Date; Shareholders Entitled to Vote

Only holders of record of Sykes common stock at the close of business on July 23, 2021, the record date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting or any adjournments or postponements of the Special Meeting. On the record date, 39,796,017 shares of Sykes common stock were issued and outstanding, held by approximately 694 holders of record.

Shareholders of record of Sykes common stock are entitled to one vote on each matter submitted to a vote at the Special Meeting for each share of Sykes common stock they owned of record on the record date. A complete list of shareholders entitled to vote at the Special Meeting will be available for inspection for any purpose germane to the Special Meeting during regular business hours at the Company’s principal place of business, 400 N. Ashley Drive, Suite 2800 Tampa, FL 33602, for a period of no less than 10 days before the Special Meeting, and also at the Special Meeting.

Quorum

As of the close of business on the record date, there were 39,796,017 shares of Sykes common stock outstanding and entitled to vote. Under our bylaws and the FBCA, the holders (as of the record date) of a majority of the outstanding shares of Sykes common stock entitled to vote on a matter at the Special Meeting on the record date, whether represented in person or by proxy, will constitute a quorum on that matter at the Special Meeting. Accordingly, 19,898,009 shares of Sykes common stock must be present or represented by proxy at the Special Meeting to constitute a quorum. There must be a quorum for business to be conducted at the Special Meeting. Failure of a quorum to be represented, in person or by proxy, at the Special Meeting will necessitate an adjournment or postponement of the Special Meeting and may subject Sykes to additional expense.

If you submit (and do not thereafter revoke) a properly executed proxy card, even if you abstain from voting, your shares of Sykes common stock will be counted for purposes of determining whether a quorum is present at the Special Meeting. In the event that a quorum is not present or represented at the Special Meeting or additional votes must be solicited to approve the Merger Proposal, the meeting may be adjourned or postponed to solicit additional proxies.

Required Vote

The approval of the Merger Proposal requires the affirmative vote of at least a majority of all votes entitled to be cast by the holders of Sykes common stock outstanding on the record date.

The approval of the named executive officer Merger-related compensation proposal (on a non-binding, advisory basis) requires the affirmative vote of at least a majority of the votes cast at the Special Meeting.

 

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The approval of the Adjournment Proposal requires the affirmative vote of at least a majority of the votes cast at the Special Meeting.

As of the record date, 39,796,017 shares of Sykes common stock were issued and outstanding, held by approximately 694 holders of record. Accordingly, 19,898,009 shares of Sykes common stock must vote in favor of the Merger Proposal in order for it to be approved.

Abstentions and Broker Non-Votes

An abstention occurs when a shareholder attends a meeting, either in person or by proxy, but abstains from voting. At the Special Meeting, abstentions will be counted as present for purposes of determining whether a quorum exists. Abstaining from voting will have the same effect as a vote “AGAINST” the Merger Proposal, the named executive officer Merger-related compensation proposal, and the Adjournment Proposal.

Broker non-votes are shares held in “street name” by banks, brokerage firms or other nominees that are present or represented by proxy at the Special Meeting, but with respect to which the bank, brokerage firm or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such bank, brokerage firm or other nominee does not have discretionary voting power on such proposal. Under NASDAQ rules, banks, brokerage firms or other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. Accordingly, if a beneficial owner of shares of Sykes common stock held in “street name” does not give voting instructions to the bank, brokerage firm or other nominee, then those shares will not be permitted under NASDAQ rules to be voted at the Special Meeting, and thus will not be counted as present in person or by proxy at the Special Meeting. The vote to approve the Merger Proposal is based on the total number of shares of Sykes common stock entitled to vote on the Merger Proposal on the record date, not just the shares that are counted as present in person or by proxy at the Special Meeting. As a result, if you fail to issue voting instructions to your bank, brokerage firm or other nominee, the shares of Sykes common stock that you own will not be counted for purposes of determining whether a quorum is present at the Special Meeting and it will have the same effect as a vote “AGAINST” the Merger Proposal.

The approval of each named executive officer Merger-related compensation proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast at the Special Meeting (and, in the case of the named executive officer Merger-related compensation proposal, subject to a quorum being present). Accordingly, shares deemed not in attendance at the special meeting, whether due to a record holder’s failure to vote or a “street name” holder’s failure to provide any voting instructions to such holder’s bank, broker or other nominee, and broker non-votes will have no effect on the outcome of the named executive officer Merger-related compensation proposal (assuming a quorum is present) and no effect on the outcome of the Adjournment Proposal.

Failure to Vote

If you are a shareholder of record and you do not sign and return your proxy card by mail or vote over the Internet, by telephone or in person at the Special Meeting, your shares will not be voted at the Special Meeting, will not be counted as present in person or by proxy at the Special Meeting and will not be counted as present for purposes of determining whether a quorum exists.

As discussed above, under NASDAQ rules, brokers and other record holders do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. Accordingly, if you are the beneficial owner of shares held in “street name” and you do not issue voting instructions to your bank, brokerage firm or other nominee, your shares will not be voted at the Special Meeting and will not be counted as present in person or by proxy at the Special Meeting or counted as present for purposes of determining whether a quorum exists.

 

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Voting by Sykes’ Directors and Executive Officers

On the record date, directors and executive officers of Sykes and their affiliates were entitled to vote 819,472 shares of Sykes common stock, or approximately 2.06% of the shares of Sykes common stock issued and outstanding on that date. Each of Sykes’ directors and executive officers have informed us that they intend to vote their shares in favor of the Merger Proposal and the other proposals to be considered at the Special Meeting, although none of Sykes’ directors and executive officers is obligated to do so.

Voting at the Special Meeting

If your shares are registered directly in your name with Computershare, our transfer agent, you are considered a “shareholder of record.” Shareholders of record can vote their shares of Sykes common stock in the four ways listed below. Even if you plan to attend the Special Meeting, Sykes encourages you to submit a proxy in advance by Internet, telephone or mail so that your shares will be voted if you later decide not to attend the Special Meeting. Votes cast in person or by proxy at the Special Meeting will be tabulated by the inspector of election appointed for the Special Meeting, who also will determine whether a quorum is present. Telephone and Internet facilities for the submission of proxies to vote shares will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on August 23, 2021. Proxy cards mailed with respect to shares must be received no later than August 23, 2021 in order to be counted in the vote.

 

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By Internet — You may submit your proxy by going to www.proxyvote.com and by following the instructions on how to complete an electronic proxy card. You will need the 16-digit number included on your proxy card in order to vote by Internet.

 

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By Telephone — You may submit your proxy by dialing 1-800-690-6903 and by following the recorded instructions and voting instructions provided on the proxy card. You will need the 16-digit number included on your proxy card in order to vote by telephone.

 

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By Mail — You may vote by mail by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the prepaid reply envelope that provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity.

 

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At the Special Meeting — If you are a shareholder of record and prefer to vote your shares at the Special Meeting, you must bring proof of identification along with your proxy card or proof of ownership. If you are disabled, Sykes can provide reasonable assistance to help you participate in the Special Meeting if you inform Sykes of your disability and how you plan to attend. Please write to Sykes at 400 N. Ashley Drive, Suite 2800, Tampa, FL 33602, Attention: James T. Holder, Secretary, or call at (813) 274-1000.

If your shares are held by your bank, brokerage firm or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your bank, brokerage firm or other nominee seeking instruction from you as to how your shares should be voted. You should instruct your bank, brokerage firm or other nominee how to vote your shares on each proposal in accordance with your voting instruction form. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, broker or other nominee on how to submit voting instructions. Shareholders who hold their shares in “street name” are not able to vote at the Special Meeting unless they have a proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares at the Special Meeting.

Shareholders who are entitled to vote at the Special Meeting (i.e., who own shares of Sykes common stock as of the record date) may attend the Special Meeting. If you are a shareholder of record, you should bring the proxy card and proof of identification. If you are a beneficial owner of shares held in “street name,” you should

 

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present proof of ownership of Sykes common stock as of the record date, such as a bank or brokerage account statement, along with proof of identification.

Revocation of Proxies

You can change or revoke your proxy at any time before the final vote at the Special Meeting. If you are the shareholder of record, you may change or revoke your proxy by:

 

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sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than August 23, 2021;

 

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voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. Eastern Time on August 23, 2021;

 

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submitting a properly signed proxy card with a later date that is received no later than August 23, 2021; or

 

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attending the Special Meeting and voting in person. Shareholders who own their shares in “street name” are not able to vote at the Special Meeting unless they have a proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares.

If you hold shares in “street name,” you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy in person at the Special Meeting if you obtain a proxy, executed in your favor, from the shareholder of record (bank, brokerage firm or other nominee) giving you the right to vote the shares.

If you submit a proxy or provide instructions to vote your shares and do not thereafter revoke such proxy or change such instructions in accordance with one of the methods set forth above, your shares will be represented and voted at the Special Meeting in accordance with your instructions.

Solicitation of Proxies

The Board is soliciting your proxy, and Sykes will bear the cost of soliciting proxies. OKAPI Partners has been retained to assist with the solicitation of proxies and provide related proxy advisory services. OKAPI Partners will be paid a fee of $18,500 plus reasonable and documented out-of-pocket expenses for these services in connection with the Special Meeting. Sykes will also indemnify OKAPI Partners for certain losses arising out of these services. OKAPI Partners will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders.

Adjournment

In addition to the Merger Proposal and the named executive officer Merger-related compensation proposal, Sykes shareholders are also being asked to approve the Adjournment Proposal, which will enable the adjournment of the Special Meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal or in the absence of a quorum. If a quorum is not present, the shareholders holding a majority of the shares of Sykes common stock present in person or by proxy at the Special Meeting and entitled to vote thereat may adjourn the Special Meeting from time to time until a quorum shall be present. If a new record date is or must be fixed under law, a notice of the adjourned meeting must be given to each shareholder of record as of the new record date and who is otherwise entitled to notice of and vote at such meeting. In addition, the Special Meeting could be postponed before it commences, subject to the terms of the Merger Agreement. If the Special Meeting is adjourned or postponed, shareholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you return a proxy and do not indicate how you wish to vote on the Adjournment Proposal, your shares will be voted in favor of the Adjournment Proposal.

 

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The Board recommends a vote “FOR” the Adjournment Proposal, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Proposal or in the absence of a quorum.

Other Information

You should not send documents representing Sykes common stock or your ownership thereof with the proxy card. If the Merger is completed, the paying agent for the Merger will send you transmittal materials and instructions for exchanging your shares of Sykes common stock for the Merger Consideration to be paid to the former Sykes shareholders in connection with the Merger. If you are the beneficial owner of shares of Sykes common stock held in “street name,” you may receive instructions from your bank, brokerage firm or other nominee as to what action, if any, you need to take to effect the surrender of such shares.

Questions

If you have more questions about the Merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor:

 

1212 Avenue of the Americas, 24^th Floor

New York, NY 10036

Banks and Brokers Call Collect: (212) 297-0720

All Others Call Toll Free: (877) 629-6356

Email: info@okapipartners.com

 

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THE MERGER PROPOSAL (PROPOSAL 1)

The discussion of the Merger Agreement and the Merger in this proxy statement is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and is hereby incorporated by reference into this proxy statement. We urge you to read the Merger Agreement carefully and in its entirety.

Structure of the Merger

Subject to the terms and conditions of the Merger Agreement and in accordance with the FBCA, at the Effective Time, Merger Sub will merge with and into Sykes, the separate corporate existence of Merger Sub will cease and Sykes will survive the Merger as a direct wholly-owned subsidiary of Parent.

What Shareholders Will Receive in the Merger

At the Effective Time, each outstanding share of Sykes common stock (other than canceled shares) will be automatically converted into the right to receive $54.00 in cash, without interest and subject to any applicable withholding taxes. After the Merger is completed, holders of Sykes common stock will have only the right to receive a cash payment in respect of their shares of Sykes common stock and will no longer have any rights as holders of Sykes common stock, including voting or other rights.

Treatment of Sykes Equity Awards

Pursuant to the Merger Agreement, as of the Effective Time, each Company Restricted Stock Unit (as defined in the Merger Agreement) that is outstanding will fully vest at closing and be canceled and converted into the right to receive an amount in cash, without interest, equal to $54.00 for each share of Sykes common stock subject to such Company Restricted Stock Unit immediately prior to the Effective Time (less applicable withholding taxes). Each Company Performance Stock Unit (as defined in the Merger Agreement) that is outstanding will be deemed achieved at one hundred percent (100%) and at closing, will be canceled and converted into the right to receive an amount in cash, without interest, equal to $54.00 for each share of Sykes common stock subject to such Company Performance Stock Unit immediately prior to the Effective Time (less applicable withholding taxes).

Additionally, at the Effective Time, each Company stock appreciation right (“Company SAR”) that is outstanding under any Company stock incentive plan immediately prior to the Effective Time shall have all rights thereunder cancelled by virtue of the Merger and each former holder of any cancelled Company SAR that has an exercise price that is greater than the Merger Consideration shall be entitled to an amount in cash, without interest, equal to the product of (A) the Merger Consideration minus the exercise price thereof multiplied by (B) the number of shares of Company Common Stock subject to such Company SAR, less any applicable withholding taxes. Each Company SAR that is not an In-the-Money SAR shall be automatically cancelled immediately prior to the Effective Time for no consideration. “In-the-Money SAR” means a vested Company SAR for which the difference between (a) $54.00, minus (b) the per share exercise price of such Company SAR is greater than zero (such Company SARs have a weighted average exercise price of $28.24 per share).

Effects on Sykes if the Merger Is Not Completed

If the Merger Proposal is not approved by the requisite vote of Sykes shareholders or if the Merger is not completed for any other reason, Sykes shareholders will not receive any payment for their shares of Sykes common stock in connection with the Merger. Instead, Sykes will remain a standalone public company, shares of Sykes common stock will continue to be listed and traded on the NASDAQ and Sykes will be required to continue to file periodic reports with the SEC. In addition, if the Merger is not completed, Sykes expects that

 

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management will operate Sykes’ business in a manner similar to that in which it is being operated today and that Sykes shareholders will continue to be subject to the same risks and opportunities to which they are currently subject with respect to ownership of common stock, including, without limitation, risks related to our commercial operations and relationships, laws and regulations affecting our industry, as well as the evolving regulatory environment and adverse economic conditions, and the various additional risks and uncertainties that are described in Sykes’ most recent Annual Report on Form 10-K filed with the SEC.

Furthermore, if the Merger is not completed, and depending on the circumstances that would have caused the Merger not to be completed, the price of Sykes common stock may decline. If that were to occur, it is uncertain when, if ever, the price of Sykes common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Sykes common stock. If the Merger is not completed, the Board will continue to evaluate and review Sykes’ business operations, properties and capitalization, among other things, make such changes as are deemed appropriate by the Board and management, and continue to consider strategic plans and alternatives to enhance shareholder value. If the Merger Proposal is not approved by the requisite vote of Sykes shareholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to Sykes will be offered or that Sykes’ stock price, business, prospects or results of operation will not be adversely impacted.

Further, upon termination of the Merger Agreement, under certain specified circumstances, Sykes may be required to pay a termination fee of $66,000,000 pursuant to the terms and conditions of the Merger Agreement. Upon termination of the Merger Agreement, under certain specified circumstances, Parent may be required to pay Sykes a reverse termination fee of $99,000,000 pursuant to the terms and conditions of the Merger Agreement. See the section entitled “The Merger Agreement — Termination Fees and Expenses” beginning on page 85 for a discussion of the circumstances under which either party will be required to pay a termination fee.

Background of the Merger

The Board, in the exercise of its duties, has kept apprised of market opportunities, both as buyer and seller. The Board and management of the Company regularly review and evaluate the Company’s stand-alone business plan and the possibility of pursuing various strategic alternatives and transactions as part of their ongoing efforts to strengthen the Company’s business and enhance shareholder value, taking into account economic, competitive and other conditions. As part of this review, the Board and management has from time to time during the two-year period preceding the execution and delivery of the Merger Agreement assessed the Company’s existing assets, the acquisition of assets and contractual commitments to complement the Company’s existing business and strategy. During such time, with the assistance of Goldman Sachs & Co. LLC, its financial advisor, the Company engaged in an evaluation of potential transaction opportunities available during the late summer and fall of 2019, including a potential sale of the Company (the “2019 strategic review process”). In connection with the Board’s decision to undertake the review of such opportunities, the Board formed a special transaction committee consisting of all independent directors to supervise the review and negotiate any potential agreements. Over the course of several months, Goldman Sachs, at the direction of the special transaction committee, contacted a total of twelve potential strategic partners and financial sponsors. The Company established a data room, entered into non-disclosure agreements with certain of the contacted parties, shared other non-public information with several parties and received several indications of interest for a potential transaction involving the Company. After discussions and negotiations, Sykes and a merger partner were prepared to enter into a transaction in December 2019 but, ultimately, no agreement was finalized. The purchase price proposed in such potential transaction was significantly less than the purchase price contemplated by the Merger Agreement.

On December 14, 2020, Geraud Mazel, Sitel Group’s Head of Strategy and Mergers and Acquisitions, contacted Charles Sykes, Chief Executive Officer of Sykes, to request an introductory meeting in mid-January 2021 with Mr. Sykes that would include Laurent Uberti, President and Chief Executive Officer of Sitel Group.

 

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From December 15, 2020 through January 7, 2021, Mr. Sykes and the representative of Sitel Group exchanged correspondences regarding the date and time of a meeting, with the parties ultimately agreeing to meet in Miami, Florida on February 4, 2021.

On February 4, 2021, Mr. Uberti, Mr. Sykes, Mr. Mazel and Olivier Camino, Sitel Group’s Chief Operating Officer, met for lunch in Miami. Mr. Sykes indicated that he thought Sykes and Sitel Group would make a strong combined entity. Mr. Uberti told Mr. Sykes that Sitel Group would not be interested in being acquired and that Sitel Group was in a more acquisitive mode. There was no discussion of Sitel Group acquiring Sykes at the meeting.

On April 1, 2021, Mr. Mazel asked Mr. Sykes if he would be willing to continue the discussions that the parties had begun in Miami on February 4, 2021.

From April 6, 2021 through April 8, 2021, the parties exchanged various correspondences regarding a potential follow-up meeting, with the parties ultimately agreeing to meet in Tampa, Florida on April 20, 2021.

On April 20, 2021, Mr. Uberti, Elisabeth Destailleur, Sitel Group’s Chief Financial Officer and Mr. Mazel visited Sykes’ offices and met with Mr. Sykes and John Chapman, Sykes’ Chief Financial Officer, to discuss Sykes’ history and strategy, its prior acquisitions, its culture and the industries in which it operates and to assess Sykes’ interest in a transaction pursuant to which Sitel Group would acquire Sykes. The parties did not discuss any terms for a potential transaction at the meeting.

On the morning of April 23, 2021, Mr. Sykes and Sykes’ Chairman of the Board, Jim MacLeod, met for a regularly scheduled breakfast meeting. After the general discussion of Company operations, Mr. Sykes informed Mr. MacLeod of the April 20, 2021 meeting with representatives of Sitel Group and Sitel Group’s interest in possibly acquiring the Company. Mr. Sykes stated that Sitel Group’s strategic rationale for a combination made a lot of sense, that the fit between Sykes and Sitel Group was very compelling, and that Sitel Group was confident in its ability to secure the requisite financing for such a transaction. Mr. Sykes indicated that the timing of selling Sykes was not exactly as he had envisioned but that strategically and culturally it felt like a good fit. Mr. Sykes told Mr. MacLeod that no discussions had taken place regarding price and that given where Sykes was currently performing and its current stock price, in his opinion, Sitel Group would have to offer at least $50.00 per share for a bid to be seriously considered. Mr. MacLeod and Mr. Sykes concluded their discussion with a view that Sitel Group should submit an offer for consideration by the Board, but before asking Sitel Group to do so, they wanted to make Carlos Evans, Chair of the Finance Committee of the Board, aware of the discussions with Sitel Group that had taken place.

Later on April 23, 2021, Messrs. Sykes, MacLeod and Evans met by teleconference where Mr. Evans was made aware of the April 20, 2021 meeting and they collectively decided to ask Sitel Group for a formal written offer.

On the evening of April 23, 2021, Mr. Sykes and Mr. Uberti met by teleconference where Mr. Sykes updated Mr. Uberti on his conversations with Mr. MacLeod and Mr. Evans and asked Mr. Uberti to submit a written offer containing an indication of value, financial approach and timing. Mr. Uberti indicated that he would have a response to Mr. Sykes by the end of the week.

During the week of April 26, 2021, Mr. Sykes received an unsolicited request from the Chief Executive Officer of strategic buyer B to schedule a call to discuss an unspecified matter. On May 3, 2021, Mr. Sykes spoke to the Chief Executive Officer of strategic buyer B who indicated that if Sykes had an interest in pursuing a transaction where it would sell the call center business and retain the digital marketing business, strategic buyer B would have an interest in such a deal. Mr. Sykes told strategic buyer B that Sykes was not interested in pursuing that strategy at that time. Mr. Sykes believed that there was meaningful synergy between Sykes’ core business and the digital marketing business making a separation of the two unattractive.

 

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On May 3, 2021, Mr. Sykes contacted Mr. Uberti asking for an update on the offer. Mr. Uberti indicated that he was waiting to receive confirmatory feedback from potential lenders regarding their ability to provide financing before submitting an offer and that he expected to have them within a few days.

On May 6, 2021, Sitel Group presented a non-binding, written proposal, along with a “highly confident” letter from a potential lender, for Sitel Group to acquire all of the shares of common stock for $53.00 per share, subject to due diligence and certain other conditions. In its proposal, Sitel Group requested that the Company agree to exclusively negotiate with Sitel on a potential transaction.

On May 7, 2021, the Board held a special meeting, with certain members of management in attendance. At that meeting, the Board discussed the proposal from Sitel Group regarding a possible acquisition of the Company by Sitel Group. Representatives of Shumaker, the Company’s regular outside counsel, and the Board discussed the Board’s fiduciary duties in connection with its consideration of a possible strategic transaction with Sitel Group. Also at that meeting, the Board formed a Transaction Committee, comprised of independent directors Carlos E. Evans, James S. MacLeod, William Muir, Jr., and W. Mark Watson, with Mr. Evans serving as chair, to manage day-to-day matters related to the strategic review process and to supervise and direct any process with Sitel Group or other potential strategic partners. The members of the Transaction Committee were selected by the Board after a review of all relevant factors, including knowledge of and experience with strategic transactions, the absence of any conflicts of interest, and sufficient time to undertake the associated responsibilities. The Transaction Committee was not formed as a result of or in connection with any conflicts of interest in a potential transaction with Sitel Group, however, in anticipation of the Transaction Committee exploring other strategic alternatives, the Board considered that potential conflicts could arise and therefore having a committee entirely comprised of independent directors could be advantageous.

On May 7, 2021, Mr. Sykes and Mr. Uberti met telephonically at which time Mr. Sykes informed Mr. Uberti that the Sykes Board had met to discuss the proposal and that the Company was willing to engage in a dialogue with Sitel Group. Mr. Sykes told Mr. Uberti that Goldman Sachs, who recently represented Sykes in the 2019 strategic review process, would likely assist Sykes, subject to Transaction Committee approval, and that he would introduce Goldman Sachs to Mr. Uberti. Mr. Sykes stressed that speed was very important in connection with the negotiation as balanced against overall conduct of the process and confidentiality. Later on May 7, 2021, Mr. Sykes introduced Mr. Uberti to representatives of Goldman Sachs.

Between May 8, 2021 and May 12, 2021, the parties and their respective legal advisors exchanged several drafts of a confidentiality agreement, and on May 13, 2021, the parties executed the confidentiality agreement.

On May 13, 2021, the Transaction Committee held a meeting at which James T. Holder, Chief Legal Officer and Corporate Secretary, and representatives of Ballard Spahr LLP were present. At the meeting, the Transaction Committee considered and, following confirmation by Ballard Spahr that it had no conflicts of interest with Sykes or Sitel Group, approved the appointment of Ballard Spahr as independent counsel to the Transaction Committee. The representatives of Ballard Spahr discussed the Transaction Committee’s fiduciary duties and noted the importance of identifying any potential conflicts of interest that members of the Transaction Committee might have with respect to a potential acquisition by Sitel Group. Following a discussion of potential conflicts of interest and interviews with each of the committee members, it was determined that none of the Transaction Committee members had any conflicts of interest with respect to a potential transaction with Sitel Group. At the same meeting, Mr. Evans provided an update on management’s most recent discussions with Sitel Group and the progress of the proposed transaction. Mr. Evans also reported that Sitel Group had provided Sykes a due diligence request list and that management was in the process of preparing responses to such requests. The Transaction Committee and its legal advisors discussed whether to conduct a market check to determine whether any third parties might have an interest in exploring an acquisition of the Company. Sitel Group’s request for exclusivity was also considered by the Transaction Committee. The Transaction Committee determined that it was not appropriate to agree to exclusivity at that time. The Transaction Committee also discussed the engagement of Goldman Sachs as the Transaction Committee’s financial advisor in connection with a potential

 

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transaction. The Transaction Committee reviewed Goldman Sachs’ qualifications, industry experience and familiarity with Sykes, as well as the substantial work Goldman Sachs had performed for Sykes in the past, including with respect to the 2019 strategic review process. The Transaction Committee also concluded that Goldman Sachs could serve as the Transaction Committee’s independent financial advisor and therefore determined to engage Goldman Sachs as its financial advisor in connection with the potential transaction, subject to confirming the absence of conflicts and entry into a satisfactory engagement letter with Goldman Sachs.

On May 14, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs and Ballard Spahr were present. At the meeting, representatives of Goldman Sachs updated the Transaction Committee on the proposed work plan for continuing discussions and meetings with Sitel Group, as well as the due diligence process. Representatives of management also presented to the Transaction Committee certain financial forecasts prepared by Company management, which forecasts are described in more detail in the section entitled “Financial Forecasts.” Following a review of such forecasts, the Transaction Committee authorized Goldman Sachs and the Company to share such forecasts with Sitel Group. The Transaction Committee and its legal and financial advisors discussed whether to have Goldman Sachs contact other financial and strategic parties, including some contacted during the 2019 strategic review process, to evaluate such parties’ interest in a potential acquisition of the Company. After discussion, the Transaction Committee determined that such contacts should be undertaken.

On May 14, 2021, Sykes opened a virtual data room to Sitel Group and its advisors. The confirmatory due diligence process commenced and continued through June 17, 2021, and included, among other things, a review of financial, operational and legal information and a series of due diligence in-person meetings and calls with representatives of Sykes and Sitel Group and their respective advisors.

Also, on May 18, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs and Ballard Spahr were present. At the meeting, representatives of Goldman Sachs provided an update on the status of the process with Sitel Group and also presented preliminary financial analyses with respect to Sykes. The Transaction Committee and its legal and financial advisors reviewed the non-binding proposal submitted by Sitel Group on May 6, 2021 and noted that Sitel Group was engaged in due diligence review and sessions despite Sykes unwillingness to grant Sitel Group exclusivity. The Transaction Committee and its legal and financial advisors discussed a request to have Sitel Group submit another proposal with an updated price indication after it had substantially completed its due diligence review. Also at the meeting, the Transaction Committee and its legal and financial advisors further discussed conducting a market check with other potential interested parties. Representatives of Goldman Sachs reviewed the extensive market check conducted during the 2019 strategic review process, including the parties contacted at that time and their potential interest in a transaction. The Transaction Committee’s legal and financial advisors reviewed the benefits and risks of having Goldman Sachs contact other financial and strategic parties, including some contacted during the 2019 strategic review process, to evaluate such parties’ interest in a potential acquisition of the Company. The Transaction Committee’s financial and legal advisors also noted that such risks included the risk of leaks created by making outbound calls to a broad set of potential interested parties and market risk resulting from delays in the process with Sitel Group in order to obtain additional indications of interest from other potential interested parties. Representatives of Goldman Sachs presented a list of third parties, based on, among other things, their knowledge of the industry and market participants as well as the results of the 2019 strategic review process, who might have an interest in exploring a potential acquisition of Sykes based on their financial resources and likelihood of interest and suggested that they contact four of these potentially interested parties, which consisted of two financial sponsor parties and two strategic parties, three of whom the Company had previously contacted during the 2019 strategic review process, including the merger partner with whom Sykes was preparing to enter into a merger transaction in the 2019 strategic review process. After discussion, the Transaction Committee instructed Goldman Sachs to contact such parties to assess their interest in a transaction with Sykes. Representatives of Goldman Sachs contacted the four parties during the weeks of May 17, 2021 and May 24, 2021.

 

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During the remainder of May 2021, representatives of Sitel Group and Sykes held several virtual and in-person, in-depth due diligence sessions.

On May 19, 2021, the Board held a meeting to review and discuss the Sitel Group proposal with representatives of Goldman Sachs, Ballard Spahr, and Shumaker present. Representatives of Shumaker again reviewed with the Board its fiduciary duties in considering strategic alternatives and a response to the Sitel Group proposal. The members of the Transaction Committee also provided an update to the Board on the status of the potential transaction with Sitel Group, as well as the plans for contacting certain other potential interested parties.

On May 20, 2021, Mr. Uberti, Ms. Destailleur and Mr. Mazel met with Mr. Sykes and Mr. Chapman at Sykes’ offices. At this meeting Mr. Sykes presented information on Sykes, including the countries where it engages in business, its organizational structure and strategy, and the business conducted by its subsidiary, Clear Link Technologies, LLC. Senior Sykes executives, Lance Zingale, Chief Customer Officer and General Manager EMEA, Kelly Morgan, Chief Customer Officer and General Manager, Mike Henderson, Chief Operations Officer, North America and APAC, Jenna R. Nelson, Chief Human Resource Officer and Dave Pearson, Executive Vice President and Chief Information Officer also met with Mr. Uberti, Ms. Destailleur and Mr. Mazel at lunch, where the parties introduced themselves and engaged in a round table discussion. The parties also decided that more in depth due diligence would take place the following week.

On May 21, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs and Ballard Spahr were present. Representatives of Goldman Sachs provided an update regarding the most recent due diligence meetings with representatives of Sitel Group and the plans for completing due diligence and requesting an updated proposal, including a more favorable price indication, from Sitel Group. Such representatives also reported on their initial outreach to the other potential interested parties.

On May 26, 2021 and May 27, 2021, Mr. Uberti, Ms. Destailleur, David Slaviero, Nordine Benbekti, Olivier Camino and Mr. Mazel (among other Sitel Group executives) visited Sykes’ offices to conduct in-person due diligence meetings. Representatives of Goldman Sachs attended these meetings along with members of Sykes’ management. The attendees at these meetings varied and included James T. Holder, Sykes’ Chief Legal Officer, Emily Biel, Sykes’ Vice President, Human Resources Total Rewards and Andrea Kiehl, Sykes’ Vice President Compliance and Employment Counsel, Jenna Nelson, Chief Human Resources Officer, David Pearson, Chief Information Officer, John Chapman, Chief Financial Officer, Joanne Diaz, Global Treasurer and Strategy, Subhaash Kumar, Vice President of Investor Relations, William Rocktoff, Sr. Vice President and Corporate Controller, Laura McKenna, Vice President of Global Taxation, Lance Zingale, Chief Customer Officer and General Manager EMEA, Kelly Morgan, Chief Customer Officer and President of Assistant Services Group, Mike Henderson, Chief Operating Officer APAC and North America, David Brain, Chief Digital Officer and President Digital Operations, Theodore Roxbury, Clearlink President and Christopher Rogers, Sykes’ Chief Security Officer and Deputy Chief Information Officer. Representatives of Shumaker and Sitel Group’s legal counsel, Freshfields Bruckhaus Deringer US LLP (“Freshfields”) as well as members of Sitel Group’s advisors PriceWaterhouseCoopers, attended certain of those meetings by videoconference.

Mr. Mazel called Mr. Chapman after the May 27, 2021 meetings to discuss selling, general and administrative expenses (“SG&A”) so that Sitel Group could gain a better understanding of possible synergies associated with the potential transaction.

On May 27, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs and Ballard Spahr were present. Representatives of Goldman Sachs reported on Sitel Group’s diligence review process and the expected timing to receive an updated proposal from Sitel Group, as well as an update on the diligence conducted by Sitel Group’s potential lenders. Such representatives also provided an update on outreach made to other potential interested parties. Representatives of Goldman Sachs

 

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reached out to four potentially interested parties: senior executives of both strategic buyer A, strategic buyer B (who had previously approached Sykes during the week of April 26, 2021), and senior investment professionals for both financial buyer A and financial buyer B via telephone. Strategic buyer A, financial buyer A, and financial buyer B were all contacted as part of the 2019 strategic review process. Representatives of Goldman Sachs reported to the Transaction Committee that, with the exception of one party from which they were waiting for additional feedback, none of such potential interested parties had either serious interest in a potential acquisition of Sykes or their interest was likely far below Sitel Group’s initial offer. Potential strategic buyer A was not interested in a transaction, concluding that an acquisition of Sykes was not and would not be a current strategic priority. Potential strategic buyer B indicated it would only be interested in a portion of Sykes’ business and would engage in the process only if Sykes were to retain or separately divest its digital marketing business. The Transaction Committee discussed strategic buyer B’s response and concluded that it presented substantial risks as compared to Sitel Group’s proposal since Sykes would be required to separately divest its various business units. Potential financial buyer A indicated it could be interested in a transaction but only at a price per share significantly lower than Sitel Group’s proposal. Representatives of Goldman Sachs reported that, as of this meeting, they were awaiting a response from potential financial buyer B. The Transaction Committee discussed the feedback provided from each of these parties in comparison to Sitel Group’s proposal. None of the four potentially interested parties entered into any confidentiality or standstill agreements with Sykes in connection with the Transaction Committee’s outreach.

Following the May 27, 2021 meeting of the Transaction Committee, the full Board held a meeting for the purpose of receiving a report from the Transaction Committee on the status of negotiations with Sitel Group and the market check. Representatives of senior management, Goldman Sachs, Shumaker and Ballard Spahr were present. Mr. Evans presented a report on the status of negotiations and the results of the market check undertaken by Goldman Sachs.

On May 27, 2021, Ballard Spahr sent a draft of the merger agreement to Freshfields.

From May 30, 2021 through June 8, 2021, Mr. Sykes and Mr. Uberti corresponded regarding the due diligence process and work completed by Sitel Group and its advisors. In addition, they discussed the fact that Sitel Group was undergoing its own due diligence process to obtain bank financing and holding board meetings in preparation to send a final proposal to Sykes.

On June 1, 2021, a joint due diligence call was held with representatives of Sitel Group and its advisors and Mr. Chapman, Ms. McKenna, Ms. Diaz, Mr. Rocktoff and Mr. Kumar in order to review finance diligence materials that Sykes had provided to Sitel Group and answer questions related thereto.

On June 2, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs and Ballard Spahr were present. Mr. Evans updated the Transaction Committee on management’s most recent diligence meetings with Sitel Group and their advisors. He also reported on the timing of a revised proposal from Sitel Group, which was expected to be received early the following week. Representatives of Goldman Sachs noted that Sitel Group’s lenders were also finalizing their due diligence review of the Company and that Sitel Group’s board would be meeting in the next few days to review the transaction. The representatives of Goldman Sachs also reported that Sitel Group indicated that they could move quickly to complete definitive agreements for the transaction. Representatives of Goldman Sachs also reported that potential financial buyer B had responded to Goldman Sachs’ prior outreach noting they would not be interested in a potential transaction with Sykes at this time.

On June 2, 2021, representatives of Sitel Group and its advisors and Mr. Chapman, Ms. McKenna, Ms. Diaz, Mr. Rocktoff and Mr. Kumar reconvened by teleconference to continue discussing financial due diligence matters. After the teleconference, Mr. Mazel called Mr. Chapman. On this teleconference they discussed some of the items discussed earlier in the day on the due diligence call to ensure Mr. Mazel fully understood them.

 

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On June 4, 2021, representatives of Sitel Group and its advisors discussed their due diligence findings with Mr. Chapman, Ms. McKenna, Ms. Diaz, Mr. Rocktoff and Mr. Kumar.

On June 4, 2021, the Transaction Committee held a meeting at which Mr. Holder and Ballard Spahr were present. At the meeting, representatives of Ballard Spahr reported on recent legal due diligence meetings and meetings related to regulatory matters, as well as preliminary negotiations of the merger agreement with Freshfields. The representatives also reported that Sykes expected to receive an updated proposal from Sitel Group in the coming days. At the meeting, the Transaction Committee also confirmed Goldman Sachs’ independence and approved the entry into an engagement letter with Goldman Sachs in the form provided to the Transaction Committee in advance of the meeting.

On June 4, 2021, the Transaction Committee and Company executed a formal engagement letter with Goldman Sachs as approved during the Transaction Committee meeting on June 4, 2021.

On June 7, 2021, Mr. Mazel and Mr. Chapman spoke by telephone regarding certain financial information of Sykes. Mr. Mazel indicated to Mr. Chapman that he was working to complete a presentation to Sitel Group’s board of directors as well as obtaining information necessary for Sitel Group to provide a final updated proposal by June 8, 2021. Messrs. Chapman and Mazel reviewed Sykes’ SG&A in detail as a follow up to the discussions held in Tampa on May 27, 2021.

On June 8, 2021, Sitel Group presented a revised, non-binding, written proposal for Sitel Group to acquire all of the shares of Sykes’ common stock for $54.00 per share, subject to certain conditions. Sitel Group also provided a mark-up of the draft merger agreement as well as a draft exclusivity agreement that Sitel Group desired Sykes to sign and an executed debt commitment letter from a bank for the full purchase price assuming a price of $54.00 per share.

From June 8, 2021 until the execution of the merger agreement on June 17, 2021, the parties and their respective legal and financial advisors exchanged several drafts of, and engaged in numerous discussions and negotiations concerning the terms of the merger agreement. Significant areas of discussion and negotiation included, among others, the scope and terms of representations, warranties and covenants, including the interim operating restrictions (primarily related to employment matters, material contracts, possible cybersecurity breaches and responses thereto, responses to matters related to COVID), the impact of the financing on the timing of the closing, Sykes’ obligations related to financing, “deal protection” provisions of the merger agreement (including the fiduciary-out that Sykes insisted on in order to comply with the Board’s fiduciary duties, the termination fee and reverse termination fee) and the parties’ respective efforts related to obtaining regulatory clearances.

On June 9, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs and Ballard Spahr were present. The Transaction Committee and its financial and legal advisors discussed the revised proposal submitted by Sitel Group and the status of the potential transaction. Representatives of Ballard Spahr reported on the review and continued negotiation of the merger agreement. The Transaction Committee also discussed that an alternative to entering into a transaction with Sitel Group was to remain an independent company.

Following the June 9, 2021 meeting of the Transaction Committee, the Board held a meeting to receive a report from the Transaction Committee regarding the revised offer from Sitel Group and the status of the transaction. Representatives of senior management, Goldman Sachs, Shumaker and Ballard Spahr were present at that meeting. Mr. Evans reported on the terms of Sitel Group’s revised proposal, the status of due diligence, the significant points being negotiated in the merger agreement, Sitel Group’s renewed request for exclusivity and the proposed termination fees. Mr. Evans requested that the Board grant the Transaction Committee the authority to enter into a letter of intent, if requested in order to memorialize the parties’ discussions and the revised offer from Sitel Group. Following discussion, the Board agreed to such request. Representatives of Goldman Sachs next reviewed the increased offer and presented updated preliminary financial analyses in respect of the revised offer.

 

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On June 10, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs, Ballard Spahr, and Shumaker were present. The Transaction Committee’s legal advisors reported on the key issues to be negotiated in the merger agreement and their current status. The Transaction Committee, together with its financial and legal advisors, discussed the plan for further negotiations with Sitel Group and Freshfields.

On June 12, 2021, Ballard Spahr sent a revised draft of the merger agreement to Freshfields.

On June 12, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs, Ballard Spahr, and Shumaker were present. The Transaction Committee and its advisors discussed the plans for further negotiation of the merger agreement with Sitel Group and Freshfields. The Transaction Committee provided input to its legal advisors on the key issues in the merger agreement previously identified by representatives of Ballard Spahr and Shumaker. In addition, the Transaction Committee determined not to accept Sitel Group’s request to enter into an exclusivity agreement until certain key issues in the merger agreement were resolved.

On June 12, 2021, Ballard Spahr sent an initial draft of the Company’s disclosure schedules to the merger agreement to Freshfields.

On June 13, 2021, Mr. Holder and representatives of Ballard Spahr and Shumaker held a videoconference meeting with representatives of Freshfields in order to discuss and explain the Company’s reluctance to accept certain terms of the merger agreement.

On the morning of June 14, 2021, the parties and their legal and financial advisors met by videoconference to further discuss and negotiate certain terms of the merger agreement.

Also on June 14, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs, Ballard Spahr, and Shumaker were present. The Transaction Committee’s financial and legal advisors reported on the most recent negotiations of the merger agreement.

Later on June 14, 2021, Freshfields sent a revised draft of the merger agreement to Ballard Spahr and Shumaker.

From June 14, 2021 to June 17, 2021, Mr. Mazel and Mr. Chapman held multiple teleconferences to discuss the terms of the merger agreement.

On June 15, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs, Ballard Spahr, and Shumaker were present. Representatives of Ballard Spahr and Shumaker reported on the status of the merger agreement and the remaining open points to be negotiated.

Following the June 15, 2021 meeting of the Transaction Committee, the Board held a meeting to receive a report from the Transaction Committee about the status of the potential transaction. Representatives of senior management, Goldman Sachs, Shumaker and Ballard Spahr were present at the meeting. Mr. Evans reported on the status of the potential transaction. He reported that substantial progress had been made, but there remained some matters in the merger agreement that were in the process of resolution.

Later on June 15, 2021, Ballard sent a revised draft of the merger agreement to Freshfields.

Also on June 15, 2021, Mr. Mazel, Mr. Chapman and Joanne Diaz had a teleconference where they discussed Sykes’ current cash projections.

 

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On the morning of June 16, 2021, the parties and their legal and financial advisors met by videoconference to discuss issues related to the merger agreement.

Later on June 16, 2021, the parties exchanged drafts of the merger agreement and representatives of Ballard Spahr and Shumaker continued to discuss and explain the Company’s reluctance to accept certain terms of the merger agreement with representatives of Freshfields.

On the morning of June 17, 2021, the parties and their legal and financial advisors met by videoconference to discuss open points in the merger agreement, including each parties’ efforts related to obtaining regulatory clearances.

Later on June 17, 2021, the parties exchanged drafts of the merger agreement and representatives of Ballard Spahr and Shumaker continued to discuss and explain the Company’s reluctance to accept certain terms of the merger agreement with representatives of Freshfields.

Following completion of such negotiations, during the afternoon of June 17, 2021, the Transaction Committee held a meeting at which representatives of the Company’s senior management, Goldman Sachs, Ballard Spahr, and Shumaker were present. Representatives of Goldman Sachs, Ballard Spahr, and Shumaker summarized recent negotiations regarding the merger agreement and confirmed that the merger agreement and related documentation were substantially final. The Transaction Committee and its legal and financial advisors reviewed the extensive 2019 strategic review process undertaken by the Company, noting the robust outreach conducted by Goldman Sachs at such time, as well as the current market check. Representatives of Goldman Sachs confirmed that they were prepared to deliver their fairness opinion if requested by the Transaction Committee. The Transaction Committee then met in executive session with the representatives of Ballard Spahr. Such representatives again reviewed the Transaction Committee’s fiduciary duties in connection with the proposed transaction and the process undertaken by the Transaction Committee in evaluating the proposed transaction, including the negotiation of an increased price in Sitel Group’s revised proposal. The Transaction Committee again confirmed that each of the members was free of any conflicts of interest relating to the proposed transaction. The representatives of Ballard Spahr also summarized the merger agreement and debt commitment letter for the Transaction Committee. After discussion, the Transaction Committee agreed to recommend to the Board that the Company enter into the merger agreement with Parent.

Following the Transaction Committee meeting, on June 17, 2021, the Board held a meeting at which representatives of the Company’s senior management, Goldman Sachs, Ballard Spahr and Shumaker were present. In advance of the meeting, the Board was provided with copies of the finalized merger agreement and debt commitment letter and a summary thereof, drafts of which had been previously distributed to the Board and Transaction Committee members in connection with their prior meetings. Mr. Evans summarized the history of the negotiations and transaction, including the increase in the price per share from Sitel Group’s initial proposal, material merger agreement terms that had been negotiated, the 2019 strategic review process, and the current market check undertaken by the Transaction Committee, among other factors. Representatives of Goldman Sachs reviewed its financial analyses in detail with the Board, which had been provided to the Board in advance. The Goldman Sachs representatives also described the results of the current market check, following which Goldman Sachs delivered its oral opinion (later confirmed in writing on June 17, 2021) that, as of such date and based upon and subject to the assumptions and limitations set forth in such written opinion, the $54.00 in cash per share of Sykes common stock to be paid to the holders (other than Sitel Group and its affiliates) of shares of Sykes common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders. The Board then discussed the reasons for, advantages of, and risks involved with, the merger as contrasted with remaining an independent company. The Board noted that remaining an independent company presented some significant challenges, including business and operating risks, for the Company. Representatives of Shumaker again advised the Board of its fiduciary responsibilities. In addition, such representatives noted that the Board may rely on the advice of experts, including counsel and financial advisors. Following those presentations, senior management, including Mr. Sykes, and the representatives of Goldman Sachs left the meeting. The Board further considered the challenges of remaining independent. The Transaction Committee then provided its

 

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recommendation to the Board that it is in the best interests of the Company and its shareholders and the Company’s other constituencies to enter into the merger agreement as presented to the Board. Mr. Sykes and Mr. Holder returned to the Board meeting. Thereafter, the Board voted unanimously to adopt the recommendation of the Transaction Committee and approved the Company’s entry into the merger agreement with Parent.

Parent, Merger Sub and the Company executed the merger agreement in the evening of June 17, 2021.

The following morning, on June 18, 2021, the Company issued a press release announcing the transaction and the execution of the merger agreement.

Recommendation of the Board and Reasons for the Merger

The Board unanimously recommends that you vote “FOR” the Merger Proposal, Merger-related Compensation Proposal, and the Adjournment Proposal.

After careful consideration, the Board, upon the unanimous recommendation of the Transaction Committee, unanimously adopted resolutions that: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the best interests of, the Company and the Company’s shareholders; (ii) approved and declared advisable the Merger Agreement, including the execution, delivery, and performance thereof, and the consummation of the transactions contemplated by the Merger Agreement, including the Merger, upon the terms and subject to the conditions set forth therein; (iii) directed that the Merger Agreement be submitted to a vote of the Company’s shareholders for adoption at the Special Meeting; and (iv) resolved to recommend that Company shareholders vote in favor of adoption of the Merger Agreement in accordance with the FBCA.

When you consider the Board’s recommendation, you should be aware that Sykes’ directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of Sykes shareholders generally. These interests are described in the section entitled “The Merger Proposal (Proposal 1) — Interests of Sykes Executive Officers and Directors in the Merger.”

In reaching its decision, the Board and the Transaction Committee, as described in the prior section entitled “the Merger Proposal (Proposal 1) – Background of the Merger”, met and consulted with Sykes’ senior management, as well as the Transaction Committee’s financial advisor, Goldman Sachs, and its legal counsel, Ballard Spahr, and Sykes’ outside legal counsel, Shumaker, Loop & Kendrick. In addition, the Board and the Transaction Committee reviewed information and considered a number of factors with respect to the Merger and the other transactions contemplated by the Merger Agreement, including, among others, the following factors and benefits (not necessarily in order of relative importance), in coming to its determination, approval and related recommendation:

 

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Best Alternative for Maximizing Shareholder Value. The Board and the Transaction Committee believed that receipt of the Merger Consideration of $54.00 per share in cash was a compelling opportunity for Sykes shareholders to maximize the value of their shares, one that was more favorable to Sykes shareholders than the likely value that would result from other potential transactions or remaining a stand-alone public company taking into account Sykes’ prospects. This decision was based on, among other things, the Board’s and the Transaction Committee’s assessment of:

 

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Sykes’ historical operating and financial performance, including its results in the first quarter of its fiscal year 2021 and outlook for the remainder of its fiscal year 2021, taking into account the Board’s knowledge of Sykes’ business and the industries in which Sykes operates, competitive position and business strategy, on both a historical and prospective basis, including the Forecasts, and the revenue growth and operating margins contemplated therein;

 

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Sykes’ future prospects if it were to remain a stand-alone public company, including the significant business, financial and execution risks related to achieving the revenue growth and improved operating margins contemplated by Sykes’ financial projections as a stand-alone public company (including as set forth in the Forecasts), Sykes’ strategic direction and competitive position, the anticipated future trading prices of Sykes common stock and the various additional risks and uncertainties that are described in Sykes’ most recent Annual Report on Form 10-K filed with the SEC; and

 

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the possible alternatives to a sale of the entire company, including continuing as a stand-alone public company, which alternatives the Board and the Transaction Committee evaluated with the assistance of Sykes’ financial advisor and outside legal counsel and determined did not represent more attractive alternatives to a sale in light of, among other factors, the significant business, financial and execution risk of remaining a stand-alone public company, and the other potential risks, rewards and uncertainties associated with those alternatives.

 

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Attractive Value. The Board and the Transaction Committee considered the fact that Sykes has not historically paid dividends to its shareholders. The Board and the Transaction Committee also considered the fact that the $54.00 per share in cash to be paid as Merger Consideration represents an attractive value given the anticipated future trading prices of Sykes common stock. In particular, the Merger Consideration represents (i) a 38.9% percent premium to the unaffected 30-day volume weighted average closing share price of Sykes common stock, (ii) a 49.4% percent premium to the unaffected 90-day volume weighted average closing share price of Sykes common stock, (iii) a 30.2% percent premium to the spot closing share price of Sykes common stock, and (iv) a 30.2% premium to the 52-week high closing share price of Sykes common stock, in each case as of June 17, 2021, the last trading day prior to the execution of the Merger Agreement. The Board and the Transaction Committee also considered that, based on discussions and negotiations with Parent and its advisors and its discussions and negotiations with other potential counterparties, in the Board’s and the Transaction Committee’s view, the Merger Consideration represented the highest price per share of Sykes common stock that was realistically available to Sykes’ shareholders, and any request for a further price increase created a meaningful risk that Parent or one or more of its financing sources might determine not to enter into the transaction and to terminate negotiations, in which event Sykes shareholders would lose the opportunity to obtain the $54.00 per share in cash being offered.

 

•

Cash Consideration and Greater Certainty of Value. The Board and the Transaction Committee considered the fact that the Merger Consideration would be paid solely in cash, which, compared to non-cash consideration, provides immediate certainty of value and liquidity to Sykes shareholders at the closing of the Merger, enabling Sykes shareholders to realize the value that has been created at Sykes while eliminating significant long-term business, regulatory and execution risks that Sykes would face if it remained as a stand-alone public company.

 

•

Opinion of Goldman Sachs and Related Analyses. The Board considered the opinion of Goldman Sachs to the Transaction Committee, dated June 17, 2021, as to the fairness, from a financial point of view and as of the date of the opinion, of the $54.00 in cash per share to be paid to the holders of Sykes common stock (other than Parent and its affiliates), which opinion was based upon and subject to the assumptions and limitations set forth in such opinion and as more fully described in the section entitled “The Merger Proposal—Opinion of the Transaction Committee’s Financial Advisor.” The full text of Goldman Sachs’ opinion is attached to this proxy statement as Annex B.

 

•

Negotiation Process and Procedural Fairness. The Board considered the process conducted by the Board and the Transaction Committee with the assistance of Sykes’ advisors, which involved numerous meetings of the Board and the Transaction Committee. The Board and the Transaction Committee also considered the fact that the terms of the Merger Agreement were the result of arm’s-length negotiations with Parent and its advisors; that the Board and the Transaction Committee were advised in these negotiations by a qualified and experienced financial advisor and qualified and experienced outside legal counsel; the terms that Sykes and its advisors were able to obtain during such

 

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negotiations; that the Board and the Transaction Committee met multiple times over the course of the weeks leading up to the execution of the Merger Agreement to evaluate Parent’s proposal to acquire Sykes; and that the final Merger Agreement contained terms and conditions that were, in the Board’s and the Transaction Committee’s view, fair to, and in the best interests of, Sykes and its shareholders.

 

•

Right to Receive Higher Offers. The Board and the Transaction Committee considered Sykes’ rights under the Merger Agreement to consider and negotiate certain higher offers thereafter (which are more fully described in the section entitled “The Merger Agreement — Company Takeover Proposal; Non-Solicitation” beginning on page 73), including:

 

•

the right of Sykes and its representatives, subject to certain conditions, to respond to and negotiate with respect to certain unsolicited acquisition proposals made prior to the time Sykes’ shareholders approve the proposal to adopt the Merger Agreement, and to terminate the Merger Agreement to enter into an agreement with respect to such proposal with any such bidder, subject to certain notice requirements and “matching” rights in favor of Parent and Parent’s right to receive payment of a termination fee of $66 million, which amount the Board and Transaction Committee believed to be reasonable under the circumstances, taking into account the size of the transaction, the range of such termination fees in similar transactions; and

 

•

the belief of the Board and the Transaction Committee that the termination fee provisions are customary for transactions of this type, were reasonable in the context of comparable transactions, and that payment of fees in such amounts would not likely deter any potential interested party from making a competing acquisition proposal.

 

•

Merger Agreement. The Board and the Transaction Committee considered, in consultation with Sykes’ outside legal counsel, the other terms of the Merger Agreement, which are more fully described in the section entitled “The Merger Agreement” beginning on page 64. Certain provisions of the Merger Agreement that the Board and the Transaction Committee considered important included, among others:

 

•

the representations, warranties and covenants of the parties, the conditions to the parties’ obligations to complete the Merger and their ability to terminate the Merger Agreement;

 

•

the fact that the consummation of the Merger is not conditioned on Parent’s ability to obtain financing;

 

•

the fact that Sykes has sufficient operating flexibility to conduct its business in the ordinary course between the execution of the Merger Agreement and consummation of the Merger;

 

•

the obligation of Parent under certain circumstances to pay Sykes a reverse termination fee of $99 million;

 

•

the fact that the definition of “material adverse effect” has a number of customary exceptions and a “material adverse effect” is generally a very high standard as applied by Delaware courts;

 

•

the Board’s right to change its recommendation to Sykes shareholders in connection with an intervening event or a superior proposal prior to obtaining Sykes shareholder approval if the Board has determined in good faith, after consultation with its independent financial advisors and/or outside legal counsel, that the failure to make such change in recommendation would be inconsistent with its fiduciary duties under applicable law, subject to certain notice requirements and “matching” rights in favor of Parent;

 

•

the fact that, in the Board’s and the Transaction Committee’s views, the outside date under the Merger Agreement allows for sufficient time to satisfy the relevant conditions and complete the Merger; and

 

•

Sykes’ right, under specified circumstances, to specifically enforce Parent’s and Merger Sub’s obligations under the Merger Agreement, in order to consummate the Merger.

 

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•

Committed Financing. The Board and the Transaction Committee considered the fact that Parent has obtained committed debt financing for the transaction from reputable financial institutions and that such financing will provide for funding of an amount sufficient to consummate the transactions contemplated by the Merger Agreement on the closing date, including the payment of the aggregate per share merger consideration and other amounts required to be paid at the closing of the Merger, repayment or refinancing of certain existing indebtedness of Sitel Group and Sykes and payment of all fees and expenses in connection therewith.

 

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Likelihood of Consummation. The Board and the Transaction Committee considered the likelihood that the Merger would be completed, in light of, among other things, the conditions to the Merger and the absence of a financing condition, the absence of any expected significant substantive antitrust or other regulatory risks with respect to the consummation of the Merger, the relative likelihood of obtaining required regulatory clearances and the remedies available to Sykes under the Merger Agreement, as well as the reputation and financial condition and capability of Parent and its financing sources and the level of commitment by Parent to obtain regulatory clearances.

 

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Shareholders’ Ability to Reject the Merger. The Board and the Transaction Committee considered the fact that the Merger is subject to the adoption of the Merger Agreement by the affirmative vote of a majority of all votes entitled to be cast by the holders of shares of Sykes common stock outstanding on the record date.

In reaching its decision, the Board and the Transaction Committee also considered with respect to the Merger and the other transactions contemplated by the Merger Agreement including, among others, the following (not necessarily in the order of relative importance):

 

•

No Participation in Future Gains. The Board and the Transaction Committee considered the fact that, if the Merger is consummated, Sykes will no longer exist as a stand-alone public company and Sykes shareholders will no longer have the opportunity to participate in any future earnings or possible growth of Sykes or benefit from any potential future appreciation in the value of Sykes common stock, including any value that could be received if Sykes engages in future strategic or other transactions. The Board and the Transaction Committee concluded that the premium reflected in the Merger Consideration constituted fair compensation for the loss of the potential shareholder benefits that could be realized by Sykes’ strategic plan, particularly on a risk-adjusted basis and in light of Sykes’ historical performance, revenue growth and operating margins and the continuing significant business, financial and execution risks that Sykes would face if it remained a stand-alone public company.

 

•

Market Outreach. In the late summer and fall of 2019, the Company conducted an evaluation of potential opportunities, including a potential sale of the Company. As part of that evaluation, the Company engaged in a broad-based process that included contacting multiple financial and strategic parties. After consideration of that process and review of market and industry developments with its advisors, in connection with the current transaction, the Board and the Transaction Committee determined to engage in a more limited set of discussions with strategic buyer A, strategic buyer B, financial buyer A and financial buyer B for a sale of Sykes in connection with the potential sale to Sitel. The Board’s and the Transaction Committee’s decision to conduct a more limited outreach was based on: (i) in light of the communications with Sitel, the delay inherent in conducting a broad-based process created a meaningful risk that Sykes’ shareholders would lose the opportunity to obtain the $54 per share in cash being offered by Sitel in the Merger Agreement, without the assurance of obtaining a comparable opportunity; (ii) Sykes’ refusal to grant Sitel exclusivity prior to signing the Merger Agreement provided the opportunity for other potentially interested parties to contact Sykes regarding a potential transaction; (iii) the absence of any additional indications of interest prior to entering into the Merger Agreement; (iv) the inability of any of the other third parties with whom Sykes was engaged in sale discussions prior to signing the Merger Agreement to propose an offer price that was superior to the per share merger consideration; and (v) the ability under the Merger Agreement of third-parties to make a Superior Proposal to Sykes.

 

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•

Regulatory Risk. The Board and the Transaction Committee considered the risk that the receipt of regulatory clearances, which is beyond Sykes’ control, may be delayed, conditioned or denied.

 

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Risks Associated with a Failure to Consummate the Merger. The Board and the Transaction Committee considered the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the Merger will be satisfied and as a result the possibility that the Merger might not be completed, and the fact that any reverse termination fee may not fully compensate Sykes for the costs of non-consummation in the circumstances in which such fee is payable. The Board and the Transaction Committee noted the fact that, if the Merger is not completed, (i) Sykes will have incurred significant transaction and lost opportunity costs, including the possibility of disruption to Sykes’ operations, diversion of management and employee attention, employee attrition and a potentially negative effect on Sykes’ business and business relationships, (ii) depending on the circumstances that caused the Merger not to be completed, it is likely that the price of Sykes common stock would decline, potentially significantly, and (iii) the market’s perception of Sykes’ prospects could be adversely affected.

 

•

Financing Risk. The Board and the Transaction Committee considered the risk that, while the Merger Agreement is not subject to any financing condition, if Parent fails to obtain sufficient financing, the Merger is unlikely to be consummated.

 

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Restrictions on the Operation of Sykes’ Business. The Board and the Transaction Committee considered the restrictions on the conduct of Sykes’ business prior to the completion of the Merger, realizing certain business opportunities or taking certain actions with respect to Sykes’ operations that Sykes would otherwise take absent the pending merger.

 

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Termination Fees. While the Board and the Transaction Committee considered such a possibility unlikely, the Board and the Transaction Committee considered the possibility that the $66,000,000 termination fee payable to Parent in connection with a termination to accept a superior proposal might have the effect of discouraging alternative acquisition proposals or reducing the price of such proposals.

 

•

Parent Termination Fee. The Board and the Transaction Committee considered the fact that Sykes’ monetary remedy in connection with a breach of the Merger Agreement by Parent or Merger Sub is limited to payment of the $99,000,000 reverse termination fee under certain limited circumstances, and such amounts may not be sufficient to compensate Sykes for losses suffered as a result of a breach of the Merger Agreement by Parent or Merger Sub and, under certain circumstances, Sykes may not be entitled to receive such a fee.

 

•

Tax Treatment. The Board and the Transaction Committee considered the fact that any gains arising from the receipt of the Merger Consideration generally would be taxable to U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96) for U.S. federal income tax purposes.

 

•

Shareholder Litigation. The Board and the Transaction Committee considered the likelihood of distracting litigation from shareholder suits in connection with the merger or attempts by shareholders to discourage a vote in favor of the Merger.

While the Board and the Transaction Committee considered the above and other potentially positive and potentially countervailing factors, the Board and the Transaction Committee concluded that, overall, the potentially positive factors and benefits outweighed the potentially countervailing factors and risks. Accordingly, the Board determined that the Merger, Merger Agreement and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, Sykes and its shareholders.

The foregoing discussion is not intended to be an exhaustive list of the information and factors considered by each of the Board and the Transaction Committee in its consideration of the Merger, but includes the material positive factors and material negative factors considered by the Board and the Transaction Committee in that regard. In view of the number and variety of factors and the amount of information considered, the Board and the Transaction Committee did not find it practicable to, nor did it attempt to, make specific assessments of,

 

46

quantify, or otherwise assign relative weights to, the specific factors considered in reaching its determination. In addition, individual members of the Board and the Transaction Committee may have given different weights to different factors. Based on the totality of the information presented to the Board and the Transaction Committee, the members of the Board, upon the unanimous recommendation of the Transaction Committee, unanimously reached the decision to adopt and approve, and declare as fair to, and in the best interests of, Sykes and its shareholders, the Merger Agreement and the transactions contemplated thereby, including the Merger, in light of the factors described above and the other factors that such members of the Board felt were appropriate.

Portions of this explanation of the above reasons for the Merger and other information presented in this section are forward-looking in nature and, therefore, should be read in conjunction with the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23.

Opinion of the Transaction Committee’s Financial Advisor

Goldman Sachs rendered its opinion to the Transaction Committee (and indicated that it could be relied upon by the Board) that, as of June 17, 2021 and based upon and subject to the factors and assumptions set forth therein, the $54.00 in cash per share of Sykes common stock to be paid to the holders (other than Parent and its affiliates) of shares of Sykes common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated June 17, 2021, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Transaction Committee and the Board in connection with their consideration of the transaction. The Goldman Sachs opinion is not a recommendation as to how any holder of shares of Sykes common stock should vote with respect to the transaction, or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

•

the merger agreement;

 

•

annual reports to stockholders and Annual Reports on Form 10-K of the Company for the five years ended December 31, 2020;

 

•

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company;

 

•

certain other communications from the Company to its stockholders;

 

•

certain publicly available research analyst reports for the Company; and

 

•

certain internal financial analyses and forecasts for the Company prepared by its management, as approved for Goldman Sachs’ use by the Transaction Committee, which are referred to as the “Forecasts”.

Goldman Sachs also held discussions with members of the senior management of the Company regarding their assessment of the past and current business operations, financial condition, and future prospects of the Company; reviewed the reported price and trading activity for the shares of Sykes common stock; compared certain financial and stock market information for the Company with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the business process outsourcing industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

For purposes of rendering this opinion, Goldman Sachs, with the Transaction Committee’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting

 

47

and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the Transaction Committee’s consent that the Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the Transaction Committee. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of the Company or any of its subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the transaction will be obtained without any adverse effect on the expected benefits of the transaction in any way meaningful to its analysis. Goldman Sachs has also assumed that the transaction will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’ opinion does not address the underlying business decision of the Company to engage in the transaction or the relative merits of the transaction as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addresses only the fairness from a financial point of view to the holders (other than Parent and its affiliates) of shares of Sykes common stock, as of the date of the opinion, of the $54.00 in cash per share of Sykes common stock to be paid to such holders pursuant to the Merger Agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the Merger Agreement or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the transaction, including the fairness of the transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons, in connection with the transaction, whether relative to the $54.00 in cash per share of Sykes common stock to be paid to the holders (other than Parent and its affiliates) of shares of Sykes common stock pursuant to the merger agreement or otherwise. Goldman Sachs does not express any opinion as to the potential effects of volatility in the credit, financial and stock markets on the Company, Parent or the transaction, or as to the impact of the transaction on the solvency or viability of the Company or Parent or the ability of the Company or Parent to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions, as in effect on, and the information made available to it as of, the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to the Transaction Committee and the Board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 14, 2021 and is not necessarily indicative of current market conditions.

Implied Premia and Multiples Analysis. Goldman Sachs calculated and compared the implied premia and implied multiples described below based on the $54.00 in cash per shares of Sykes common stock to be paid to the holders (other than Parent and its affiliates) of shares of Sykes common stock pursuant to the Merger Agreement.

Goldman Sachs calculated the implied premia represented by the $54.00 in cash per share relative to:

 

•

$41.18, the closing price of the shares of Sykes common stock on June 14, 2021 (the “Unaffected Share Price”);

 

48

•

$53.00, the median price target of the shares of Sykes common stock based on analyst research (“Median Price Target”);

 

•

$46.16, the highest closing trading price of the shares of Sykes common stock over the 52-week period ended June 14, 2021 (“52-Week High”);

 

•

$42.29, the volume weighted average price (“VWAP”) of the shares of Sykes common stock over the 30-trading-day period ended June 14, 2021 (“30-Day VWAP”); and

 

•

$43.12, the VWAP of the shares of Sykes common stock over the 90-trading-day period ended June 14, 2021 (“90-Day VWAP”).

The results of these calculations and comparisons are as follows:

 

		Implied Premium Represented by $54.00 in cash per Share of Sykes Common Stock
Reference Price Per Share of Sykes Common Stock:
Unaffected Share Price of $41.18			31.1	%
Median Price Target of $53.00			1.9	%
52-Week High of $46.16			17.0	%
30-Day VWAP of $42.29			27.7	%
90-Day VWAP of $43.12			25.2	%

In addition, Goldman Sachs calculated an implied equity value of the Company for purposes of calculating the following multiples by multiplying the $54.00 in cash per share of Sykes common Stock by the total number of fully diluted outstanding shares of Sykes common stock as of June 15, 2021, as provided by the management of the Company. Goldman Sachs then calculated an implied enterprise value of the Company by adding to the implied equity value it calculated the net cash of the Company as of March 31, 2021, as provided by the management of the Company.

Using the foregoing, Goldman Sachs calculated the implied enterprise value for the Company as a multiple of the Company’s Adjusted EBITDA for fiscal years 2020 to 2022 and the last 12 months’ (“LTM”) ended March 31, 2021. For purposes of this section, “Adjusted EBITDA” means earnings before interest, taxes, depreciation and amortization, as adjusted to add back certain charges, including long-lived asset impairments, acquisition related depreciation and amortization of property and equipment and purchased intangibles, merger and integration costs and restructuring costs.

The results of these calculations are as follows:

 

		Multiples
Implied Enterprise Value as a Multiple of:
2020 Adjusted EBITDA			11.1x
LTM ending 3/31/2021 Adjusted EBITDA			10.7x
2021 Adjusted EBITDA (estimated)			10.3x
2022 Adjusted EBITDA (estimated)			9.2x

Illustrative Discounted Cash Flow Analysis. Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on the Company. Using discount rates ranging from 8.0% to 9.0%, reflecting estimates of the Company’s weighted average cost of capital, Goldman Sachs discounted to present value as of March 31, 2021 (i) Goldman Sachs’ estimates of unlevered free cash flow for the Company for the nine months ended December 31, 2021 and fiscal years 2022 through 2025 derived from the Forecasts and (ii) a range of illustrative terminal values for the Company, which were calculated by applying multiples ranging from 7.0x to

 

49

9.0x to a terminal year estimate of the LTM Adjusted EBITDA, as reflected in the Forecasts (which analysis implied perpetuity growth rates ranging from (0.2)% to 2.5%). Goldman Sachs derived such discount rates by application of the Capital Asset Pricing Model, which requires certain company-specific inputs, including the company’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The terminal value to LTM Adjusted EBITDA multiple range was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical enterprise value to LTM Adjusted EBITDA multiples for the Company.

Goldman Sachs derived ranges of illustrative enterprise values for the Company by adding the ranges of present values it derived above. Goldman Sachs then added from the range of illustrative enterprise values it derived for the Company the net cash of the Company as of March 31, 2021, as provided by the management of the Company, to derive a range of illustrative equity values for the Company. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Sykes common stock as of June 15, 2021, as provided by the management of the Company, to derive a range of illustrative present values per share of Sykes common stock ranging from $45 to $56, rounded to the nearest dollar.

Illustrative Present Value of Future Share Price Analysis. Goldman Sachs performed an illustrative analysis of the implied present value of an illustrative future value per share of Sykes common stock. For this analysis, Goldman Sachs used the Forecasts for each of the fiscal years 2021 to 2023. Goldman Sachs first calculated the implied enterprise values for the Company as of December 31 for each of the fiscal years 2021 to 2023 by applying enterprise value to next 12 months’ (“NTM”) Adjusted EBITDA multiples ranging from 6.5x to 8.5x to NTM Adjusted EBITDA estimates for each of the fiscal years 2021 to 2023. These illustrative enterprise value to NTM Adjusted EBITDA multiples were derived by Goldman Sachs utilizing its professional judgment and experience, taking into account historical enterprise value to NTM Adjusted EBITDA multiples for the Company.

Goldman Sachs then calculated the implied equity values for the Company as of December 31 for each of the fiscal years 2021 to 2023 by adding to the range of implied enterprise values the estimated net cash of the Company as of December 31 for each of the fiscal years 2021 to 2023, as provided by the management of the Company. Goldman Sachs then calculated a range of implied prices per share of Sykes common stock as of December 31 for each of the fiscal years 2021 to 2023 by dividing the range of implied equity values by the total number of fully diluted shares of Sykes common stock estimated by the management of the Company to be outstanding as of December 31 for each of the fiscal years 2021 to 2023. Goldman Sachs then discounted the implied prices per share of Sykes common stock to present value as of March 31, 2021 using an illustrative discount rate of 8.5%, reflecting an estimate of the Company’s cost of equity. Goldman Sachs derived such discount rate by application of the Capital Asset Pricing Model, which requires certain company-specific inputs, including a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis resulted in a range of implied present values of $37 to $51 per share of Sykes common stock, rounded to the nearest dollar.

Selected Precedent Transactions Analysis. Goldman Sachs analyzed certain publicly available information relating to the selected acquisition transactions listed below announced since 2011 involving targets in the business process outsourcing industry where the disclosed enterprise values were over $350 million.

Based on information in public filings, press releases and investor relations documents for each of the selected transactions, Goldman Sachs calculated and compared the implied enterprise value of the applicable target company based on the consideration paid in the transaction as a multiple of the target company’s LTM Adjusted EBITDA.

 

50

The following table presents the results of this analysis:

 

Announcement Date		Acquiror		Target		Enterprise Value / LTM Adj. EBITDA
July 2011		One Equity Partners / NCO Group, Inc.		APAC Customer Services, Inc.			8.4x
October 2012		Bain Capital Partners LLC		Atento Inversiones y Teleservicios, S.A.			6.5x
January 2014		Convergys Corporation		Stream Global Services, Inc.			7.1x
July 2015		Groupe Acticall S.A.		SITEL Worldwide Corporation			6.4x
August 2016		Teleperformance SE		LanguageLine Solutions LLC			10.4x
May 2017		Apollo Global Management, LLC		West Corporation			7.8x
June 2018		Teleperformance SE		Intelenet Global Services			12.0x
June 2018		SYNNEX Corporation		Convergys Corporation			8.4x
July 2019		Groupe Bruxelles Lambert S.A.		Webhelp SAS			12.4x
December 2020		Brookfield Business Partners L.P.		Everise Holdings Pte. Ltd.			11.3x

While none of the target companies that participated in the selected transactions are directly comparable to the Company, the target companies that participated in the selected transactions are companies with operations that, for the purposes of analysis, may be considered similar to certain of the Company’s results, market size and service profile.

Based on the results of the foregoing calculations and Goldman Sachs’ analyses of the selected transactions and its professional judgment, Goldman Sachs applied a reference range of enterprise value to LTM Adjusted EBITDA multiples of 7.0x to 11.5x to the Company’s LTM Adjusted EBITDA as of March 31, 2021, as provided by the management of the Company, to derive a range of implied enterprise values for the Company. Goldman Sachs then added the net cash of the Company as of March 31, 2021, as provided by the management of the Company, and divided the result by the number of fully diluted outstanding shares of Sykes common stock as of June 15, 2021, as provided by the management of the Company, to derive a reference range of implied values per share of Sykes common stock of $36 to $58, rounded to the nearest dollar.

Premia Analysis. Goldman Sachs reviewed and analyzed, using publicly available information, the acquisition premia for all-cash acquisition transactions announced since 2016 involving a public company based in the United States as the target where the disclosed enterprise value for the transaction was over $500 million. For the entire period, using publicly available information, Goldman Sachs calculated the median, 25th percentile and 75th percentile premiums of the price paid in the transactions relative to the target’s last undisturbed closing stock price prior to announcement of the transaction. This analysis indicated a median premium of 26% across the period. This analysis also indicated a 25th percentile premium of 14% and 75th percentile premium of 48% across the period. Using this analysis, Goldman Sachs applied a reference range of illustrative premiums of 14% to 48% to the undisturbed closing price per share of Sykes common stock of $41.18 as of June 14, 2021 and calculated a range of implied equity values per share of Sykes common stock of $47 to $61, rounded to the nearest dollar.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to the Company or Parent or the contemplated transaction.

 

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Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the Transaction Committee as to the fairness from a financial point of view to the holders (other than Parent and its affiliates) of shares of Sykes common stock, as of the date of its opinion, of the $54.00 in cash per share of Sykes common stock to be paid to such holders pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of the Company, Parent, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The $54.00 in cash per share of Sykes common stock consideration was determined through arm’s-length negotiations between the Company and Sitel Group and was approved by the Board. Goldman Sachs provided advice to the Transaction Committee during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to the Transaction Committee or that any specific amount of consideration constituted the only appropriate consideration for the transaction.

As described above Goldman Sachs’ opinion to the Transaction Committee was one of many factors taken into consideration by the Transaction Committee in making its recommendation to the Board to approve the Merger Agreement and by the Board in making its determination to approve the Merger Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Parent, any of their respective affiliates and third parties, including Creadev, a significant shareholder of Parent (“Creadev”), and/or its affiliates and portfolio companies, or any currency or commodity that may be involved in the transaction. Goldman Sachs acted as financial advisor to the Transaction Committee in connection with, and participated in certain of the negotiations leading to, the transaction. During the two-year period ended June 17, 2021, the Investment Banking Division of Goldman Sachs has not been engaged by the Company, Parent, Creadev or its affiliates or portfolio companies or their respective affiliates for which Goldman Sachs has recognized compensation. Goldman Sachs may in the future provide financial advisory and/or underwriting services to the Company, Parent, Creadev and/or its affiliates and portfolio companies and their respective affiliates for which the Investment Banking Division of Goldman Sachs may receive compensation. Affiliates of Goldman Sachs may also have co-invested with Creadev and its affiliates from time to time and may do so in the future.

The Transaction Committee selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transaction. Pursuant to a letter agreement dated June 4, 2021, the Transaction Committee engaged Goldman Sachs to act as its financial advisor in connection with the contemplated Merger Agreement. The engagement letter among the Transaction Committee, the Company and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $27 million, $2 million of which became payable at announcement of the Merger Agreement, and the reminder of which is contingent upon consummation of the transaction. In addition, the Company has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

 

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Certain Unaudited Prospective Financial Information

The Transaction Committee, the Board and Goldman Sachs were each provided by the management of Sykes with certain prospective financial information for Sykes consistent with that described below.

As described further in “The Merger Proposal (Proposal 1) — Background of the Merger” beginning on page 33, on May 14, 2021, management of Sykes prepared and reviewed with the Transaction Committee certain preliminary projections for the financial performance of Sykes through the year 2025 that, in management’s view, were required to reflect management’s best currently available estimates and judgments of future financial performance of Sykes (the “Forecasts”).

The Transaction Committee and the Board reviewed the assumptions underlying the Forecasts with management. At the direction of the Transaction Committee, Goldman Sachs used the Forecasts in preparation of its financial analysis of the proposed transactions.

A summary of the Forecasts is set forth below.

 

(in thousands)		Historical												Projected
FYE December		FY2018 A				FY2019 A				FY2020 A				FY2021 E				FY2022 E				FY2023 E				FY2024 E				FY2025 E
Total Revenue		$	1,626			$	1,615			$	1,710			$	1,841			$	1,929			$	2,027			$	2,132			$	2,244
% Growth							(0.7)%				5.9%				7.6%				4.8%				5.1%				5.2%				5.2%
Gross Profit		$	556			$	573			$	611			$	650			$	687			$	722			$	760			$	800
% Margin			34.2%				35.5%				35.7%				35.3%				35.6%				35.6%				35.6%				35.7%
Site SG&A		$	305			$	306			$	307			$	320			$	331			$	345			$	359			$	374
Country SG&A			30				27				31				33				34				35				36				37
Regional SG&A			51				57				57				68				66				68				71				73
Total SG&A		$	386			$	390			$	395			$	422			$	432			$	448			$	465			$	483
% of Sales			23.7%				24.2%				23.1%				22.9%				22.4%				22.1%				21.8%				21.5%
Corporate Expenses		$	59			$	62			$	71			$	71			$	75			$	78			$	81			$	84
% of Sales			3.6%				3.8%				4.2%				3.9%				3.9%				3.8%				3.8%				3.7%
Adj. EBIT		$	111			$	121			$	145			$	157			$	180			$	196			$	214			$	233
% Margin			6.8%				7.5%				8.4%				8.5%				9.3%				9.7%				10.0%				10.4%
Depreciation		$	55			$	50			$	50			$	52			$	54			$	57			$	60			$	63
% of Sales			3.4%				3.1%				2.9%				2.8%				2.8%				2.8%				2.8%				2.8%
Adj. EBITDA		$	166			$	171			$	194			$	209			$	234			$	253			$	274			$	295
% Margin			10.2%				10.6%				11.4%				11.3%				12.1%				12.5%				12.8%				13.2%
Unlevered Free Cash Flow (1)																			120				131				143				157
(1) Calculated as Adj. EBIT plus depreciation and amortization less taxes, capital expenditures and changes in net working capital, in each case, as set forth in the Forecasts. Unlevered free cash flow was arithmetically calculated by representatives of Goldman Sachs from the Forecasts prepared by management and provided to and approved for use by Goldman Sachs by the Transaction Committee. Goldman Sachs only arithmetically calculated unlevered free cash flow for the nine months ended December 31, 2021 and for fiscal years 2022 through 2025. For the nine months ended December 31, 2021, unlevered free cash flow was arithmetically calculated as $45.
Select Cash Flow Assumptions
Capital Expenditures		($	47)			($	39)			($	53)			($	50)			($	58)			($	61)			($	64)			($	67)
% of Revenue			(2.9)%				(2.4)%				(3.1)%				(2.7)%				(3.0)%				(3.0)%				(3.0)%				(3.0)%
Net Working Capital
Receivables, Net		$	347			$	390			$	416			$	447			$	469			$	493			$	518			$	545
Prepaid Expenses			24				21				21				24				26				27				28				30
Other Current Assets			17				20				19				21				22				23				24				25
Total Current Assets		$	388			$	431			$	456			$	493			$	516			$	542			$	571			$	600

 

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(in thousands)		Historical												Projected
FYE December		FY2018 A				FY2019 A				FY2020 A				FY2021 E				FY2022 E				FY2023 E				FY2024 E				FY2025 E
Select Cash Flow Assumptions
Net Working Capital
Accounts Payable		$	27			$	34			$	32			$	33			$	36			$	40			$	44			$	49
Income Taxes Receivable / Payable			1				4				4				3				3				4				4				4
Accrued Employee Compensation and Benefits			96				110				147				125				130				137				144				152
Other Accrued Expenses and Current Liabilities			31				29				32				34				36				38				40				42
Total Current Liabilities		$	155			$	176			$	215			$	196			$	206			$	218			$	231			$	246
Net Working Capital		$	232			$	255			$	242			$	297			$	310			$	324			$	339			$	355
D in Net Working Capital						$	(22)			$	13			$	(55)			$	(13)			$	(14)			$	(15)			$	(15)

General

Except for annual modeling assumptions and quarterly guidance of certain metrics from time to time, Sykes does not as a matter of course make public projections as to future performance. The Forecasts were not prepared with a view to public disclosure. The Forecasts are included in this proxy statement only because they were made available to Goldman Sachs in its capacity as financial advisor to the Transaction Committee, and because certain of them were made available to Sitel Group as described above.

The Forecasts were not prepared with a view to compliance with generally accepted accounting principles as applied in the United States (“GAAP”), the published guidelines of the SEC regarding projections or forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The Forecasts included in this proxy statement have been prepared by, and are the responsibility of, Sykes and its management. Sykes’ independent registered public accounting firm, has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Forecasts and, accordingly, does not express an opinion or any other form of assurance with respect thereto. The Forecasts were prepared solely for the use of the Board and Goldman Sachs and to be provided to potential bidders and are subjective in many respects.

Although this summary of the Forecasts is presented with numerical specificity, the Forecasts reflect numerous variables, assumptions and estimates as to future events made by management that management believed were reasonable at the time the Forecasts were prepared, taking into account the relevant information available to management at the time. However, such variables, assumptions and estimates are inherently uncertain and many of them are beyond the control of management. Because the Forecasts cover multiple years, by their nature they become subject to greater uncertainty with each successive year. The Forecasts are not fact and should not be relied upon as being necessarily indicative of actual future results.

The Forecasts are forward-looking statements. Important factors that may affect actual results and cause the Forecasts not to be achieved include, but are not limited to, risks and uncertainties relating to Sykes’ business,

 

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general business, economic and regulatory conditions and other factors described or referenced under “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23. In addition, the Forecasts do not take into account any circumstances or events occurring after the date that they were prepared and do not give effect to the Merger. As a result, there can be no assurance that the Forecasts will be realized, and actual results may be materially better or worse than those contained in the Forecasts. The inclusion of this information should not be regarded as an indication that the Transaction Committee, the Board, Sykes, Goldman Sachs, Parent, Parent’s financing sources, or any other recipient of this information considered, or now considers, the Forecasts to be predictive of actual future results. This summary of the Forecasts is not included in this proxy statement in order to induce any shareholder to vote in favor of the Merger Proposal or any of the other proposals to be voted on at the Special Meeting.

Except to the extent required by applicable federal securities laws, Sykes does not intend, and expressly disclaims any responsibility, to update or otherwise revise the Forecasts to reflect circumstances existing after the date when Sykes prepared the Forecasts or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the Forecasts are shown to be in error. By including in this proxy statement a summary of the Forecasts, neither Sykes nor any of its representatives or advisors (including Goldman Sachs) or Parent, or Parent’s financing sources, or any of their respective representatives or affiliates or any other recipient of this information makes any representation to any person regarding the ultimate performance of Sykes or the surviving entity compared to the information contained in such financial projections and should not be read to do so.

Certain of the measures included in the Forecasts may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Sykes may not be comparable to similarly titled amounts used by other companies.

Interests of Sykes’ Executive Officers and Directors in the Merger

In considering the recommendation of the Board that you vote to approve the Merger Proposal, you should be aware that, aside from their interests as Sykes shareholders, Sykes’ directors and executive officers have interests in the merger that are different from, or in addition to, the interests of Sykes shareholders generally, which may create potential conflicts of interest. These interests are described in more detail below, and with respect to the named executive officers of Sykes, are quantified in the “Golden Parachute Compensation” table below. The Board was aware of these interests and considered them when it adopted the Merger Agreement and approved the Merger.

Sykes’ current executive officers are: Charles E. Sykes, President and Chief Executive Officer; John Chapman, Chief Financial Officer; Lawrence R. Zingale, Chief Customer Officer and General Manager EMEA; James T. Holder, Chief Legal Officer and Secretary; David L. Pearson, Chief Information Officer; Jenna Nelson, Chief Human Resources Officer, William Rocktoff, Senior Vice President and Corporate Controller.

Treatment of Director and Executive Officer Common Stock

As is the case for any shareholder of Sykes, Sykes’ directors and executive officers will be entitled to receive, in connection with the Merger and if the Merger is completed, $54.00 in cash, without interest, and subject to any applicable withholding taxes, for each share of Sykes common stock that they own at the Effective Time. For information regarding beneficial ownership of Sykes common stock by each of Sykes’ directors, Sykes’ named executive officers and all directors and executive officers as a group, see the section entitled “Security Ownership of Certain Beneficial Owners and Management” beginning on page 93.

 

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Treatment of Director and Executive Officer Equity Awards

The Merger Agreement provides that each Sykes equity award will be treated as described under “The Merger Agreement — Treatment of Sykes Equity Awards” beginning on page 66, which description is incorporated herein.

The tables below set forth, for each of our executive officers and directors, the number of Sykes equity awards outstanding (assuming, with respect to each Sykes equity award subject to vesting conditions, that such awards vest in accordance with the Merger Agreement as described under “The Merger Agreement — Treatment of Sykes Equity Awards” beginning on page 66), in each case, that was held by such executive officer and director as of July 20, 2021, the latest practicable date to determine such amounts before the filing of this proxy statement.

The following table sets forth, for each of Sykes’ executive officers and the members of the Sykes Board (i) the number of Company Restricted Shares, including restricted stock units and in the case of the executive officers, performance stock units, held as of July 20, 2021 and (ii) the cash consideration payable (on a pre-tax basis) in respect thereof, calculated by multiplying the number of shares subject to such Company Restricted Shares by the per share merger price of $54.00 per share, assuming that the Closing occurs on August 27, 2021.

 

Company RSUs and PSUs/Restricted Shares
Name of Executive Officer		Number of Shares Subject to Company RSUs and PSUs/ Restricted Shares (#)				Cash Consideration for Company RSUs and PSUs/ Restricted Shares ($)
Charles E. Sykes			383,404			$	20,703,816
John Chapman			117,113			$	6,324,102
Lawrence R. Zingale			120,113			$	6,486,102
James T. Holder			48,143			$	2,599,722
David L. Pearson			44,099			$	2,381,346
Kelly J. Morgan			41,925			$	2,263,950
Jenna R. Nelson			40,577			$	2,191,158
William N. Rocktoff			14,238			$	768,852

 

Company RSUs/Restricted Shares
Name of Director		Number of Shares subject to Company RSUs/ Restricted Shares (#)				Cash Consideration for Company RSUs/ Restricted Shares ($)
Jeanne Beliveau-Dunn			2,082			$	112,428
Mark C. Bozek			2,670			$	144,180
Vanessa C.L. Chang			2,082			$	112,428
Carlos E. Evans			2,082			$	112,428
Lorraine L. Lutton			2,082			$	112,428
James S. MacLeod			2,988			$	161,352
William D. Muir, Jr			2,082			$	112,428
W. Mark Watson			2,082			$	112,428

The following table sets forth, for each of Sykes’ executive officers and the members of the Sykes Board (i) the number of In-the-Money SARs held as of July 20, 2021 and (ii) the cash consideration payable (on a pre-tax basis) in respect thereof, calculated by multiplying the SAR Per Share Consideration by the number of shares of Company Common Stock subject to such In-the-Money SAR, assuming that the Closing occurs on August 27, 2021.

 

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In-the-Money SARs
Name of Executive Officer		Number of In-the-Money SARs (#)				Cash Consideration for In-the-Money SARs ($)
Charles E. Sykes			43,304			$	1,119,408
John Chapman			12,456			$	321,988
Lawrence R. Zingale			—				—
James T. Holder			—				—
David L. Pearson			15,237			$	387,453
Kelly J. Morgan			—				—
Jenna R. Nelson			—				—
William N. Rocktoff			—				—
In-the-Money SARs
Name of Director		Number of In-the-Money SARs (#)				Cash Consideration for In-the-Money SARs ($)
Jeanne Beliveau-Dunn			—			$	—
Mark C. Bozek			—			$	—
Vanessa C.L. Chang			—			$	—
Carlos E. Evans			—			$	—
Lorraine L. Lutton			—			$	—
James S. MacLeod			—			$	—
William D. Muir, Jr			—			$	—
W. Mark Watson			—			$	—

Executive Deferred Compensation

The Company maintains a non-qualified deferred compensation plan (the “Deferred Compensation Plan”). Participation in the Deferred Compensation Plan is limited to a select group of key management employees and employees who are expected to receive an annualized base salary that exceeds the amount taken into account for purposes of determining highly compensated employees as defined by the Internal Revenue Code. The Deferred Compensation Plan provides participants with the ability to defer between 1% and 80% of their compensation until the participant’s retirement, termination, disability or death, a change in control of the Company, as defined in the Deferred Compensation Plan, or an in-service distribution as described in the Deferred Compensation Plan. Using the Company’s common stock, the Company matches 50% of the amounts deferred by participants on a quarterly basis up to a total of $12,000 per year for the president, chief executive officer, and executive vice presidents, $7,500 per year for senior vice presidents, global vice presidents and vice presidents, and, $5,000 per year for all other participants. Generally, matching contributions and the associated earnings vest over a seven-year service period. However, vesting will be accelerated in the event of the participant’s death or disability, retirement (defined as separation from service after age 65 that is not an involuntary termination for cause, as defined in the Deferred Compensation Plan) or a change in control of the Company. In the event of a distribution of benefits as a result of a change in control, the Company will increase the benefits by an amount sufficient to offset the income tax obligations created by the distribution of benefits. The estimated amount of the payment to offset the income tax obligations, based on account balances as of July 20, 2021, was $15,047,256. This amount is subject to change as a result of future contributions to the plan prior to the consummation of the Merger in accordance with elections previously made by participants. Compensation deferred by a participant while participating in the Deferred Compensation Plan is deferred until such participant’s retirement, termination, disability or death, a change in control of the Company. The Closing under the Merger Agreement will constitute a change in control as defined in the Deferred Compensation Plan.

Participation in, and matching contributions under, the Deferred Compensation Plan are expected to continue in effect through the Effective Time in accordance with elections previously made by participants.

 

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Immediately prior to the Effective Time, Sykes’ Deferred Compensation Plan will terminate and no further contributions will be made to the Deferred Compensation Plan after the Effective Time.

Potential Payments upon Termination or Change of Control

The Company has entered into employment agreements with Messrs. Sykes, Chapman and Zingale which contain change of control payment provisions. Pursuant to these provisions, if Mr. Sykes terminates his employment following a change of control for any reason (as a change in control of the Company constitutes “good reason” under his employment agreement), or if any of Messrs. Sykes, Chapman or Zingale terminates his employment for good reason (as defined in his employment agreement) within 24 months following a change of control (as defined in their employment agreement), he will receive the following benefits:

Mr. Sykes. Mr. Sykes will be entitled to receive an amount equal to three times his then annual base salary, plus an amount determined by multiplying the annual target bonus designated or otherwise indicated for Mr. Sykes in the year such change of control occurs by a factor of three. The target bonus amount is to be determined under the performance-based bonus plan in which Mr. Sykes is then participating. In addition, all stock options, stock grants or other similar equity incentives and/ or compensation programs will immediately accelerate and become fully vested and exercisable at the option of Mr. Sykes. Payment of these amounts and benefits are subject to Mr. Sykes executing a waiver and release agreement. Mr. Sykes will be subject to non-competition and non-solicitation provisions for two years following a termination of employment after a Change in Control. Under Mr. Sykes’ employment agreement, “good reason” generally means: mean (i) a change of control of the Company (such as the one contemplated by the Merger Agreement), (ii) a good faith determination by the Executive that there has been a breach of this Agreement by the Company, (iii) a material adverse change in Mr. Sykes’ working conditions or status, (iv) the deletion of, or change in, either of the following titles of Mr. Sykes: CEO or president, (v) a significant relocation of his principal office, (vi) a significant increase in travel requirements, or (vii) an impairment of his health to an extent that makes the continued performance of his duties hereunder hazardous to his physical or mental health or his life.

Messrs. Chapman and Zingale. Each of Messrs. Chapman and Zingale will be entitled to receive an amount equal to two times his then current annual base salary, plus an amount determined by multiplying the annual maximum bonus designated or otherwise indicated for him in the year such change of control occurs by a factor of two. The maximum bonus amount is to be determined under the performance-based bonus plan in which he is then participating. In addition, all stock options, stock grants or other similar equity incentives and/or compensation programs will immediately accelerate and become fully vested and exercisable at his option. Payment of these amounts and benefits are subject to Messrs. Chapman and Zingale executing a waiver and release agreement. Mr. Zingale will be subject to non-competition and non-solicitation provisions for one year following a termination of employment. Mr. Chapman will be subject to non-competition and non-solicitation provisions for the greater of one year following a termination of employment or the period of time during which Mr. Chapman is being paid Liquidated Damages (as defined in Mr. Chapman’s employment agreement). Severance payments may be reduced in order to avoid imposition of any loss of tax deduction to the employer under Section 280G and the imposition of excise tax on the Executive under Section 4999. Under Messrs. Chapman and Zingale’s employment agreements, “good reason” is generally defined as (i) a breach of the relevant employment agreement by the Company, (ii) a material adverse change in their working conditions, duties or status, (iii), a significant geographic relocation of their principal office, or (iv) a change in reporting such that either Mr. Chapman or Mr. Zingale is required to report to a position other than the CEO.

The foregoing amounts are to be paid biweekly in equal installments over 52 weeks, commencing immediately upon such officer’s separation from service. If such officer is determined to be a “specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and applicable regulations), to the extent that he is entitled to receive any benefit or payment upon such separation from service under the employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise

 

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required to be provided or paid. Instead, all such amounts shall be accumulated and paid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within 15 days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the payment schedule described above.

Messrs. Holder and Pearson. Neither of Mr. Holder or Mr. Pearson has change of control provisions in his employment agreement, but under various equity incentive agreements, all stock options, stock grants or other similar equity incentives and/or compensation programs will immediately accelerate and become fully vested and exercisable at his option in the event of a change in control. However, in the event the employment of Mr. Holder or Mr. Pearson is terminated by the Company for any reason other than death, disability, or cause (as defined in their respective employment agreements), he will be entitled to receive an amount equal to his annual base salary. Payment of these amounts and benefits are subject to Messrs. Holder and Pearson executing a waiver and release agreement. Messrs. Holder and Pearson will be subject to non-competition and non-solicitation provisions for one year following a termination of employment.

New Management Arrangements

As of the date of this proxy statement, no new employment, reinvestment, participation, equity contribution or other agreements, arrangements or understandings between any executive officer or director, on the one hand, and Sykes, Parent, Merger Sub or their respective affiliates, on the other hand, have been entered into (other than as described above). The Merger is not conditioned upon any executive officer or director of Sykes entering into any such agreement. Certain executive officers may enter into arrangements with Sykes, Parent, Merger Sub or their respective affiliates following the date of this proxy statement that relate to employment or severance arrangements with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates. Prior to the following the Effective Time, however, certain of our executive officers may have discussions, and following the Effective Time, may enter into agreements with Parent or the surviving corporation, its subsidiaries or its affiliates regarding employment with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates.

Indemnification; Directors’ and Officers’ Insurance

Pursuant to the terms of the Merger Agreement, certain directors and officers of Sykes will be entitled to certain new and ongoing indemnification and coverage under directors’ and officers’ liability and fiduciary liability insurance policies following the Merger. Such indemnification and insurance coverage is further described in the section entitled “The Merger Agreement — Indemnification and Insurance.”

Golden Parachute Compensation

The table below, entitled “Golden Parachute Compensation,” along with its footnotes and the information incorporated therein, sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation payable to Sykes’ named executive officers, which compensation is subject to an advisory vote of Sykes’ shareholders, as described below under the heading “Advisory Vote On Named Executive Officer Merger-Related Compensation Proposal (Proposal 2)” beginning on page 89 of this proxy statement.

The table assumes the consummation of the Merger occurs on August 27, 2021 (which is the assumed date solely for purposes of this golden parachute compensation disclosure and which is the last practicable date prior to the date of this proxy statement), the employment of Mr. Sykes terminates for any reason and each other named executive officer is terminated without “cause” or for “good reason” on such date and the per share merger price of $54.00. The calculations in the table below do not include amounts that our named executive officers were already entitled to receive or will be vested in as of August 27, 2021, or amounts under

 

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contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of named executive officers and that are available generally to all the salaried employees of Sykes. The amounts indicated below are estimates of amounts that might become payable to the named executive officers and the estimates are based on multiple assumptions that may not prove correct. Accordingly, the actual amounts, if any, received by a named executive officer may differ in material respects from the amounts set forth below.

Golden Parachute Compensation

 

Name		Cash ($)				Equity1 ($)				Pension/ NQDC ($)				Perquisites ($)				Tax Reim- bursement3 ($)				Other ($)				Total ($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)				(h)
Charles E. Sykes		$	4,819,500	2		$	20,703,816			$	—			$	—			$	1,053,951			$	—			$	26,577,267
John Chapman		$	1,968,000	4		$	6,324,102			$	—			$	—			$	306,714			$	—			$	8,598,816
Lawrence R. Zingale		$	1,965,130	4		$	6,486,102			$	—			$	—			$	785,180			$	—			$	9,236,412
James T. Holder		$	385,000	5		$	2,599,722			$	—			$	—			$	757,097			$	—			$	3,741,819
David L. Pearson		$	352,500	5		$	2,381,346			$	—			$	—			$	1,146,380			$	—			$	3,880,226

 

1

Under the Merger Agreement, all in-the-money stock options, restricted stock unit and performance stock unit grants will immediately accelerate and become fully vested upon the consummation of the Merger. See “The Merger Agreement – Treatment of Sykes Equity Awards” beginning on page 66, which description is incorporated herein.

2

Mr. Sykes will be entitled to receive, as indicated in his employment agreement, an amount equal to three times the annual base salary of $765,000, as approved by the Compensation Committee of the Board of Directors and effective on May 24, 2019 and reflected in the latest proxy filing of April 16, 2021, plus an amount determined by multiplying his annual target bonus of $841,500 by a factor of three. The target bonus amount is to be determined under the performance-based bonus plan in which Mr. Sykes is then participating.

3	The Non-Qualified Deferred Compensation Plan provides for an additional payment to each participant sufficient to offset the income tax obligations resulting from the distribution of benefits from that plan.

4

Each of Messrs. Chapman and Zingale will be entitled to receive an amount equal to two times his then current annual base salary, plus an amount determined by multiplying the annual maximum bonus designated or otherwise indicated for him in the year such change of control occurs by a factor of two. The maximum bonus amount is to be determined under the performance-based bonus plan in which he is then participating.

5	Each of Messrs. Holder and Pearson will be entitled to receive an amount equal to the annual base salary.

The payments set forth in column (b) of this table are “double-trigger” in nature as they will only be payable in the event of a termination of employment without “cause” or for “good reason” in connection with the completion of the Merger; provide, that in the case of Mr. Sykes, “good reason” includes a change of control. Payments for the equity awards set forth in column (c) of this table, as well as the tax payments reflected in column (f) of this table, respectively, will be made in connection with the Closing of the Merger, whether or not the applicable individual’s employment or provision of services continues beyond the Closing Date. The amounts shown above are based on the compensation and benefit levels in effect on July 20, 2021, the latest practicable date to determine such amounts before the filing of this proxy statement; therefore, if compensation and benefit levels are changed after such date, actual payments to an executive officer may be different than those provided for above.

 

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