Item 1.01 Entry into Material Definitive Agreement.

Agreement and Plan of Merger

On January 3, 2021, SMTC Corporation, a Delaware corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with EMS Silver Inc., a Delaware corporation ("Parent"), and EMS Silver Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub"). Parent and Merger Sub are controlled by funds affiliated with H.I.G. Capital ("H.I.G.").

The Merger Agreement provides, among other things and subject to the terms and conditions set forth therein, that Merger Sub will be merged with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the "Merger"). At the Effective Time (as defined in the Merger Agreement), and as a result of the Merger, each share of common stock, par value $0.01 per share, of the Company (the "Company Common Stock"), that is issued and outstanding immediately prior to the Effective Time, other than, (i) Company Common Stock held by the Company as treasury stock or held by Parent or Merger Sub (or any direct or indirect wholly-owned subsidiaries of the Parent or Merger Sub), (ii) Dissenting Shares (as defined in the Merger Agreement) or (iii) as and if applicable, certain shares or equity of Company Common Stock held by certain employees of the Company (collectively, the "Rollover Stockholders") and contributed to Parent prior to the Effective Time will be converted automatically into the right to receive $6.044 in cash, without interest, subject to any withholding of taxes required by applicable law (the "Merger Consideration").

Pursuant to the Merger Agreement, at the Effective Time:



   •  Each outstanding vested option to purchase Company Common Stock (each, a
      "Vested Company Option") will automatically be cancelled and be converted
      into the right to receive (without interest) an amount in cash equal to the
      product of (x) the total number of shares of Company Common Stock then
      underlying the Vested Company Option multiplied by (y) the excess, if any,
      of the Merger Consideration over the exercise price of such Vested Company
      Option. Any Vested Company Option with an exercise price that is equal to or
      greater than the Merger Consideration will be cancelled for no
      consideration.


   •  Each outstanding vested award of Company restricted stock units (each, a
      "Vested Company RSU") will automatically be cancelled and be converted into
      the right to receive (without interest) an amount in cash equal to (x) the
      total number of shares of Company Common Stock then underlying such award of
      Vested Company RSUs, multiplied by (y) the Merger Consideration. Any
      unvested awards of Company restricted stock units will be terminated for no
      consideration.


   •  Each outstanding warrant to purchase shares of Company Common Stock (each a
      "Company Warrant"), whether or not exercisable, will automatically be
      cancelled and be converted into the right to receive (without interest) an
      amount in cash equal to the product of (x) the total number of shares of
      Company Common Stock underlying the Company Warrant multiplied by (y) the
      excess, if any, of the Merger Consideration over the exercise price of such
      Company Warrant. Any such Company Warrant with respect to which the exercise
      price subject thereto is equal to or greater than the Merger Consideration
      will be cancelled for no consideration.

The Board of Directors of the Company (the "Board") has unanimously (i) determined that the transactions contemplated by the Merger Agreement, including the Merger, are advisable, fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, (iii) directed that the Merger Agreement be submitted to the stockholders of the Company for its adoption at the Special Meeting (as defined below), and (iv) recommended that the Company's stockholders adopt the Merger Agreement.

Assuming the satisfaction of the conditions set forth in the Merger Agreement, the Company expects the Merger to close by the second quarter of 2021. The stockholders of the Company will be asked to vote on the adoption of the Merger Agreement at a special meeting of the stockholders of the Company that will be held on a date, and at the time and place (which may include a special meeting held in a virtual meeting format), to be announced (the "Special Meeting").

The closing of the Merger is subject to various customary conditions, including (i) the adoption of the Merger Agreement by the holders of a majority of the voting power of the Company Common Stock (the "Company Stockholder Approval"); . . .

Item 3.03. Material Modification to Rights of Security Holders.

The information contained in Item 1.01 above with respect to the NOL Plan is incorporated by reference herein.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

As previously disclosed, on November 4, 2020, the Company announced that Richard J. Fitzgerald, Chief Operating Officer, has decided for personal reasons to pursue other opportunities. On January 3, 2021, the Company and Mr. Fitzgerald entered into a Separation Agreement, pursuant to which Mr. Fitzgerald's employment will terminate effective March 31, 2021, unless extended at the discretion of the Chief Executive Officer in the event certain operational projects are not substantially completed by that date. The Separation Agreement provides that Mr. Fitzgerald will (i) receive severance in the amount of $323,100, payable beginning on his termination date, (ii) refrain from competing in the Company's industry or soliciting the Company's employees for a period of 12 months following his termination date, (iii) refrain from soliciting the Company's customers for a period of 24 months following his termination date, and (vi) release any claims against the Company or its affiliates.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

In connection with the Merger Agreement, the Board approved an amendment (the "By-Laws Amendment") to the Company's Second Amended and Restated By-Laws (as amended to date, the "By-Laws") to add a new Section 6.15 to Article 6 of the By-Laws containing exclusive forum selection provisions, effective immediately.

The new Section 6.15 provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee or stockholder of the Company to the Company or the Company's stockholders; (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) any action asserting a claim arising pursuant to any provision of the Company's certificate of the incorporation or the By-Laws or governed by the internal affairs doctrine.

The new Section 6.15 also provides that unless the Company consents in writing to the selection of an alternative forum, the federal district court for the District of Delaware (or if such court does not have jurisdiction over such action, any other federal district court of the United States), to the fullest extent permitted by law, shall be the sole and exclusive forum for the resolution of any claims arising under the Securities Act of 1933, as amended.



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The foregoing summary of the By-Laws Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the By-laws Amendment, which is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 8.01. Other Events.

On January 4, 2021, the Company issued a press release announcing the execution of the Merger Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Also, on January 4, 2021, the Company issued communications to its customers and employees concerning the Merger Agreement and the proposed Merger. Copies of these communications are filed as Exhibit 99.2 and Exhibit 99.3 to this Current Report on Form 8-K, respectively, and incorporated by reference herein.

Additional Information and Where to Find It:

This communication relates to the proposed Merger involving the Company. In connection with the proposed Merger, the Company will file a preliminary proxy statement and file or furnish other relevant materials with the SEC. Once the SEC completes its review of the preliminary proxy statement, a definitive proxy statement and a form of proxy will be filed with the SEC and mailed or otherwise furnished to the stockholders of the Company. BEFORE MAKING ANY VOTING DECISION, THE COMPANY'S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT, IF ANY, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE PROPOSED MERGER. This communication is not a substitute for the proxy statement or any other document that may be filed by the Company with the SEC. Investors and stockholders will be able to obtain the documents (when available) free of charge at the SEC's website, http://www.sec.gov, and the Company's website, www.smtc.com. In addition, the documents (when available) may be obtained free of charge by directing a request by mail or telephone to: SMTC Corporation, 425 North Drive, Melbourne, Florida 32934, Attention: Secretary, (321) 409-4718.

Participants in the Solicitation

The Company, H.I.G. and certain of their respective directors, executive officers, certain other members of management and employees of the Company and H.I.G. and agents retained by the Company may be deemed to be participants in the solicitation of proxies from stockholders of the Company in favor of the proposed Merger. Information about directors and executive officers of the Company and their beneficial ownership of the Company's common stock is set forth in the Company's definitive proxy statement on Schedule 14A for its 2020 annual meeting of stockholders, as filed with the SEC on June 26, 2020. Certain directors, executive officers, other members of management and employees of the Company may have direct or indirect interests in the proposed Merger due to securities holdings, vesting of equity awards and rights to severance payments. Additional information regarding the direct and indirect interests of these individuals and other persons who may be deemed to be participants in the solicitation will be included in the proxy statement with respect to the proposed Merger the Company will file with the SEC and furnish to the Company's stockholders.

Forward-Looking Statements

This Current Report on Form 8-K and the exhibits furnished or filed herewith, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, including statements regarding the proposed Merger and the ability to consummate the proposed Merger. Forward-looking statements are indicated by words or phrases such as "guidance," "believes," "expects," "intends," "forecasts," "can," "could," "may," "anticipates," "estimates," "plans," "projects," "seeks," "should," "targets," "will," "would," "outlook," "continuing," "ongoing," and similar words or phrases and the negative of such words and phrases. Forward-looking statements are based on the Company's current plans and expectations and involve risks and uncertainties which are, in many instances, beyond the Company's control, and which could cause actual results to differ materially from those included in or contemplated or implied by the forward-looking statements. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: (1) the Company may be unable to obtain stockholder approval as required for the proposed Merger; (2) the conditions to the closing of the proposed Merger may not be satisfied and required regulatory approvals may not be obtained; (3) the proposed Merger may involve unexpected costs, liabilities or delays, including the payment of a termination fee to Parent by the Company; (4) the business of the Company may suffer as a result of uncertainty surrounding the proposed Merger; (5) the effect of the announcement or pendency of the proposed Merger on the Company's business relationships, including with customers and suppliers; (6) the outcome of any legal proceedings related to the proposed Merger; (7) the Company may be adversely affected by other economic, business, legislative,



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regulatory and/or competitive factors, including, but not limited to, future response to, and effects of, the COVID-19 pandemic, including the Company's continued operations, customer demand, supply chain availability and implementation of protective measures and public policy response to the COVID-19 pandemic, including legislation or restrictions; (8) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (9) the attention of the Company's management and employees may be diverted from ongoing business concerns as a result of the proposed Merger; (10) limitations placed on the Company's ability to operate its business under the proposed Merger Agreement; (11) risks that the proposed Merger disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed Merger; (12) the fact that under the terms of the Merger Agreement, the Company is restricted from soliciting other acquisition proposals; (13) the failure by Parent or Merger Sub to obtain the necessary debt and equity financing arrangements set forth in the commitment letters received in connection with the proposed Merger; and (14) other risks to consummation of the proposed Merger, including the risk that the proposed Merger will not be completed within the expected time period or at all, which may adversely affect the Company's business and the price of the Company's common stock.

The foregoing review of important factors that could cause actual results to differ from expectations should not be construed as exhaustive and should be read in conjunction with the information contained in the Company's SEC filings, including, but not limited to, the risk factors included in the Company's filings with the SEC, including the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019, filed with the SEC on March 13, 2020, as updated by the Company's Quarterly Reports on Form 10-Q for the quarters ended March 29, 2020, June 28, 2020 and September 27, 2020, filed with the SEC on May 7, 2020, August 6, 2020 and November 5, 2020, respectively. 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.

Except as required by applicable law, the Company does not intend, and assumes no obligation, to update any forward-looking statements. The Company's stockholders are advised, however, to consult any future disclosures the Company makes on related subjects as may be detailed in the Company's other filings made from time to time with the SEC.

Item 9.01 Financial Statements and Exhibits.



(d) Exhibits.



Exhibit
Number                                  Description

2.1*        Agreement and Plan of Merger, dated as of January 3, 2021, by and
          among EMS Silver Inc., EMS Silver Merger Sub Inc. and SMTC
          Corporation.
3.1         Amendment No. 3 to Second Amended and Restated By-Laws of SMTC
          Corporation.
10.1        Voting Agreement, dated as of January 3, 2021, among EMS Silver Inc.
          and the persons listed on Schedule A thereto.
99.1        Press Release, dated January 4, 2021.
99.2        Letter to customers, dated January 4, 2021.
99.3        Letter to employees, dated January 4, 2021.
104       Cover Page Interactive Data File (embedded within the Inline XBRL
          document)

*Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to supplementally furnish copies of any omitted schedules to the Securities and Exchange Commission upon request.



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