Item 1.01. Entry into a Material Definitive Agreement.
Net 1 UEPS Technologies, Inc., a Florida corporation (the "Company"), entered into a Cooperation Agreement, dated as of May 13, 2020 (the "Agreement"), with VCP (Proprietary) Limited ("VCP").
Pursuant to the Agreement, on or before May 21, 2020, the Board of Directors of the Company (the "Board") has agreed to take all necessary actions to: (A) set the size of the Board at twelve (12) members; and (B) appoint Mr. Antony Ball (the "New Nominee") as a director of the Company and as a member of the Remuneration Committee of the Board. In connection therewith, the Company has agreed, subject to certain limitation set forth in the agreement, to (A) include the New Nominee in its slate of nominees for election to the Board at its 2020 annual meeting of shareholders and 2021 annual meeting of shareholders (the "2021 Annual Meeting") or at any special meeting of the shareholders of the Company at which directors are to be elected to be held prior to the business day immediately following the 2021 Annual Meeting (the "Termination Date") and at which the seat held by the New Nominee is subject to election and (B) recommend that the Company's shareholders vote in favor of the election of the New Nominee at each such meeting.
From the date of the Agreement until the Termination Date (the "Standstill Period"), if the New Nominee is unable or unwilling to serve as a director (including as a result of not being elected at any annual meeting), resigns as a director or is removed as a director and so long as VCP continuously beneficially owns in the aggregate at least 5.0% of the Company's then outstanding common stock (the "Minimum Ownership Threshold"), VCP has the right to recommend a substitute person to replace the New Nominee. During the Standstill Period, in addition to its rights relating the appointment of the New Nominee, VCP is entitled to designate one observer to the Board.
The Company will be relieved of its obligations with respect to the Board matters described above in the event that VCP ceases to be the beneficial owner of common stock equal to at least the Minimum Ownership Threshold.
With respect to the shares of the Company's capital stock owned by VCP and its affiliates, as more thoroughly described in the Agreement, VCP has agreed that, among other things, from and after the date of the Agreement through and until December 1, 2020, it will not, and it will not permit any controlling and controlled affiliate of VCP to, directly or indirectly, (A) nominate any person for election at an annual or special meeting of shareholders, (B) submit any proposal for consideration at, or bring any other business before any annual or special meeting of shareholders, (C) initiate, encourage or participate in any "withhold" or similar campaign with respect to any annual or special meeting of shareholders, (D) disclose publicly any disagreement with any decisions or actions made by the Board, (E) solicit any proxies or consents with respect to securities of the Company in opposition to the recommendation or proposal of the Board, or seek to influence any other person with respect to the voting of its securities of the Company or grant a proxy with respect to voting of any securities of the Company, (F) seek or encourage any person to submit nominations in furtherance of a contested solicitation or (G) (1) call or seek to call or request the call of any meeting of shareholders or (2) seek representation on the Board or the removal of any member of the Board (in each instance, except as expressly provided in the Agreement).
Pursuant to the Agreement, during the Standstill Period, except following approval of the Board, VCP has agreed that neither it nor its affiliates will purchase or cause to be purchased or otherwise acquire (i) beneficial ownership of any common stock or other securities of the Company (other than securities issued pursuant to a plan established by the Board for members of the Board or a stock split, stock dividend or similar corporate action initiated by the Company with respect to any securities beneficially owned by VCP), if immediately after the taking of such action, VCP together with its controlled and controlling affiliates would, in the aggregate, beneficially own more than 19.9% of the then outstanding shares of common stock, or (ii) interests in any of the Company's indebtedness.
Additionally, VCP agrees, among other things, that during the Standstill Period, neither it nor any of its controlling or controlled Affiliates will, and it will cause each of its controlling or controlled Affiliates not to, directly or indirectly, (i) form, join in or in any way participate in any "partnership, limited partnership, syndicate or other group", including, without limitation, a "group" each as defined under Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") with any person or entity other than the New Nominee, with respect to any securities of the Company owned as of the date of the Agreement or subsequently acquired in accordance with the Agreement, (ii) acquire or agree, offer, seek or propose to acquire, or cause to be acquired, ownership (including beneficial ownership) of any of the assets or business of the Company or any rights or options to acquire any such assets or business from any person, in each case other than securities of the Company or (iii) seek, propose or make any statement with respect to, or solicit, negotiate with, or provide any information to any person with respect to, a merger, consolidation, acquisition of control or other business combination, tender or exchange offer, purchase, sale or transfer of assets or securities, dissolution, liquidation, reorganization, change in structure or composition of the Board, change in the executive officers of the Company, change in capital structure, recapitalization, dividend, share repurchase or similar transaction involving the Company, its subsidiaries or its business, whether or not any such transaction involves a change of control of the Company.
The Agreement will terminate on the Termination Date or such other date established by mutual written agreement of the parties to the Agreement.
A copy of the Agreement is attached hereto as Exhibit 10.1, and the description above is not complete and is qualified in its entirety by the full text of the Agreement as attached and incorporated herein by reference.