Item 1.01 Entry into a Material Definitive Agreement.
On April 26, 2020, USA Technologies, Inc. (the “Company”) and Hudson Executive Capital LP (“Hudson Executive”), on behalf of itself, its affiliates and its affiliated funds (such affiliates and affiliated funds, together with Hudson Executive, collectively, the “HEC Group”) entered into a letter agreement (the “Letter Agreement”) pursuant to which Lisa P. Baird, Douglas G. Bergeron, Douglas L. Braunstein, Jacob Lamm, Michael K. Passilla, Ellen Richey, Anne M. Smalling and Shannon S. Warren (the “New Directors”) were appointed to the Company’s Board of Directors (the “Board”), effective upon execution of the Letter Agreement, and Kelly Ann Kay, Robert L. Metzger, Sunil Sabharwal, William J. Schoch and Ingrid S. Stafford resigned from the Board, effective upon execution of the Letter Agreement. The Company agreed to nominate Donald W. Layden, Jr., Patricia A. Oelrich (the “Incumbent Directors”) and the New Directors (collectively, the “Continuing Directors”) for election at the next annual meeting of shareholders (the “Annual Meeting”), distribute a revised proxy statement reflecting the nomination of the Continuing Directors and use its reasonable best efforts to cause the election of the Continuing Directors. The Company also agreed to adopt a resolution approving the amendment to that certain Employment Agreement, dated as of February 28, 2020, between the Company and Mr. Layden, as further described in Item 5.02(e).
Pursuant to the Letter Agreement, each member of the HEC Group will cause its shares to be voted in favor of the election of the Continuing Directors. The HEC Group and the Company will file all documents necessary to effect the dismissal with prejudice of the action captionedHEC Master Fund LP v. USA Technologies, Inc., et al., case number2019-11640-MJ, and the HEC Group withdraws its shareholder demand for board action, dated as of February 12, 2020.
This summary description of the Letter Agreement is qualified in its entirety by the Letter Agreement, a copy of which is included as Exhibit 10.1 to this Current Report on Form8-K and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Pursuant to the Letter Agreement, on April 26, 2020, each of Kelly Ann Kay, Robert L. Metzger, Sunil Sabharwal, William J. Schoch and Ingrid S. Stafford resigned from their position as a director of the Company, effective upon execution of the Letter Agreement. There are no disagreements between each of Ms. Kay, Mr. Metzger, Mr. Sabharwal, Mr. Schoch and Ms. Stafford and the Company relating to matters concerning the Company’s operations, policies or practices.
(d) Pursuant to the Letter Agreement, on April 26, 2020, each of Lisa P. Baird, Douglas G. Bergeron, Douglas L. Braunstein, Jacob Lamm, Michael K. Passilla, Ellen Richey, Anne M. Smalling and Shannon S. Warren were appointed as directors of the Company, effective upon execution of the Letter Agreement.
Mr. Bergeron will serve as Chair of the Board.
Ms. Baird will serve as a member of the Compensation Committee and the Nominating and Corporate Governance Committee. Mr. Bergeron will chair the CEO Search Committee, a newly formed committee to review and approve matters related to searching for a new CEO of the Company, and will serve as a member of the Finance Committee, a newly formed committee to review and approve matters related to financing activities of the Company. Mr. Braunstein will serve as a member of the CEO Search Committee, the Compensation Committee and the Finance Committee. Mr. Lamm will serve as a member of the Nominating and Corporate Governance Committee and will chair the Finance Committee. Mr. Passilla will serve as a member of the CEO Search Committee and will chair the Compensation Committee. Ms. Richey will serve as a member of the Audit Committee, the Compliance Committee and the Finance Committee. Ms. Smalling will serve as a member of the Audit Committee and will chair the Nominating and Corporate Governance Committee. Ms. Warren will serve as a member of the CEO Search Committee and will chair the Audit Committee.
As of the date hereof, there are no transactions between the New Directors and the Company that would be reportable under Item 404(a) of RegulationS-K.
(e) On April 26, 2020, the Company and Mr. Layden entered into the First Amendment to Employment Agreement (the “Amendment”) to that certain Employment Agreement, dated as of February 28, 2020, between the Company and Mr. Layden. The Amendment provides that Mr. Layden is no longer required to resign as a member of the Board (or any committee thereof) in the event of the termination of Mr. Layden’s employment with the Company for any reason.
This summary description of the Amendment is qualified in its entirety by the Amendment, a copy of which is included as Exhibit 10.2 to this Current Report on Form8-K and is incorporated herein by reference.
