Item 1.01 Entry into Material Definitive Agreement.
Acquisition Agreement
On January 25, 2021, Cardtronics plc, a public limited company
incorporated under the laws of England and Wales (the “Company” or “Cardtronics”), entered
into an Acquisition Agreement (the “Acquisition Agreement”), with NCR Corporation, a Maryland corporation (“BidCo”)
and, solely for purposes of Section 8.2, Section 8.4 and Article IX of the Acquisition Agreement, Cardtronics USA, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company (“Company Sub”), pursuant to which BidCo has agreed
to acquire the Company by means of a court-sanctioned scheme of arrangement under Part 26 of the U.K. Companies Act of 2006 (the
“Scheme”) for $39.00 per share (the “Per Share Consideration”), subject to the terms and
conditions of the Acquisition Agreement (such transaction, the “Acquisition”). The board of directors of the
Company (the “Board”) has approved the Acquisition Agreement and the transactions contemplated thereby, including
the Acquisition. Douglas Braunstein is a member of the Board and the Managing Partner and Founder of Hudson Executive Capital,
an approximate 19.4% shareholder of the Company, and he has abstained from all discussions and approvals in connection with the
proposed transaction to date.
Pursuant to the Scheme and subject to the terms and conditions
of the Acquisition Agreement, on the effective date of the Acquisition, BidCo (or its nominee) shall acquire all of the Company’s
issued and to be issued ordinary shares, nominal value $0.01 per share (the “Ordinary Shares”) other than (a)
Ordinary Shares legally or beneficially held by BidCo or any of its subsidiaries (or any nominee on their behalf) and (b) any Ordinary
Shares held in treasury or owned, directly or indirectly, by the Company or any of its subsidiaries, none of which will be covered
by the Scheme.
Pursuant to the Acquisition Agreement, immediately prior
to the effective date of the Acquisition (the “Effective Date”),
each then-outstanding (a) option to purchase Ordinary Shares (each, an “Option”)
granted under any director or employee stock option or compensation plan or arrangement of the Company (such plans or
arrangements, collectively, the “Company Share Plans”) prior to
calendar year 2021 that vests and is paid out immediately prior to the Effective Date in accordance with its terms as in
effect of the date of the Acquisition Agreement (each, a “Cash Out
Option”), (b) award for restricted stock units with respect to Ordinary Shares that vests solely based on the
passage of time (each, a “Company RSU”) granted under any Company
Share Plan prior to calendar year 2021 that either vests and is paid out (except as required under Section 409A of the U.S.
Internal Revenue Code) immediately prior to the Effective Date in accordance with its terms as in effect on the date of the
Acquisition Agreement or is held by a director of the Company (each, a “Cash-Out
Company RSU”) and (c) award for restricted stock units with respect to Ordinary Shares that vests based on both
performance and the passage of time (each, a “Company PSU”)
granted under any Company Share Plan prior to calendar year 2021 that vests and is paid out (except as required under Section
409A of the U.S. Internal Revenue Code) immediately prior to the Effective Date in accordance with its terms as in effect on
the date of the Acquisition Agreement (each, a “Cash-Out Company
PSU”) in each case, whether or not vested, shall automatically and without any action on part of the holder
thereof, be cancelled and converted into the right to receive an amount in cash equal to: (i) in the case of Cash-Out
Options, the product of the excess, if any of the Per Share Consideration over the applicable exercise price per Ordinary
Share of such Cash-Out Option and the number of Ordinary Shares subject to such Cash-Out Option; (ii) in the case of an award
for Cash-Out Company RSUs, the product of the Per Share Consideration and the number of Ordinary Shares subject to such
Cash-Out Company RSU award; and (iii) in the case of an award for Cash-Out Company PSUs, the product of the Per Share
Consideration and the number of Ordinary Shares subject to such Cash-Out Company PSU award (with such number of Ordinary
Shares based on the greater of the target level achievement and the actual level of achievement of any performance goals to
account for any shortened period as determined by the Board immediately prior to the effective date of the Acquisition based
on prorated performance goals); in each case, payable (without any crediting of interest for the period from the effective
date of the Acquisition through the date of payment) as soon as reasonably practicable (but no later than the first payroll
date) after the effective date of the Acquisition (or such later date as required by Section 409A of the U.S. Internal
Revenue Code).
Additionally, pursuant to the Acquisition Agreement, immediately
prior to the Effective Date, each then-outstanding (a) Option that was granted under any Company Share Plan that is not a Cash-Out
Option, including each Option that was granted in calendar year 2021 (each, a “Rollover Option”), (b) award
for Company RSUs that was granted under any Company Share Plan that is not a Cash-Out Company RSU, including each Company RSU that
was granted in calendar year 2021 (each, a “Rollover Company RSU”) and (c) award for Company PSUs that was granted
under any Company Share Plan that is not Cash-Out Company PSU, including any Company PSU that was granted in calendar year 2021
(each, a “Rollover Company PSU”), shall automatically and without any action on part of the holder thereof,
be assumed by BidCo and converted into: (i) in the case of Rollover Options, an option to purchase, on the same terms and conditions
as were applicable under such Rollover Option (other than terms that are rendered inoperative by the transactions contemplated
by the Acquisition Agreement), the number of shares of BidCo common stock, par value $0.01 per share (“BidCo Common Stock”)
(rounded down to the nearest whole number of shares), equal to the product of the number of Ordinary Shares subject to such Rollover
Option and the Equity Award Exchange Ratio (as defined below), at an exercise price per share of BidCo Common Stock (rounded up
to the nearest whole cent) equal to the quotient obtained by dividing the exercise price per Ordinary Share of such Rollover option
by the Equity Award Exchange Ratio; (ii) in the case of Rollover Company RSUs, on substantially the same terms and conditions as
were applicable under such Rollover Company RSU award, an award for restricted stock units with respect to a number of shares of
BidCo Common Stock (rounded up to the nearest whole number of shares) equal to the product of the number of Ordinary Shares subject
to such Rollover Company RSU award and the Equity Award Exchange Ratio; and (iii) in the case of Rollover Company PSUs, on substantially
the same terms and conditions as were applicable under such Rollover Company PSU award (but excluding any performance conditions),
an award for restricted stock units with respect to a number of shares of BidCo Common Stock (rounded up to the nearest whole number
of shares) equal to the product of the number of Ordinary Shares subject to such Rollover Company PSU award (with such number of
Ordinary Shares based on the greater of the target level achievement and the actual level of achievement of any performance goals
as determined by the Board immediately prior to the Effective Date based on pro-rated performance goals to account for any shortened
performance period) and the Equity Award Exchange Ratio. “Equity Award Exchange Ratio” means the quotient obtained
by dividing the Per Share Consideration by the volume weighted average of the closing prices of BidCo Common Stock for the ten
(10) full consecutive days ending on and including the third (3rd) trading day prior to the Effective Date.
The Company has made customary representations, warranties
and covenants in the Acquisition Agreement, including, among others, covenants: (a) to conduct its business in the ordinary course
of business during the interim period between the execution of the Acquisition Agreement and the consummation of the proposed
transaction and (b) not to engage in specified types of transactions or take specified actions during such period unless agreed
to in writing by BidCo. The Company also agreed to use its reasonable efforts to deliver to BidCo, as promptly as possible after
the date of the Acquisition Agreement, an irrevocable undertaking to vote (or, where applicable, to cause to vote) in favor of
the resolutions relating to the Acquisition, duly executed by each of Hudson Executive Capital (collectively with its affiliated
entities party to such undertaking, “HEC”) and Douglas Braunstein (in his capacity as a director on the Board)
(collectively, the “HEC Undertakings”). A form of each HEC Undertaking is set forth as Exhibit A and Exhibit
B to the Acquisition Agreement, filed with this Form 8-K as Exhibit 2.1.
The Company is not permitted, among other things, to (i) initiate,
solicit, or knowingly encourage or facilitate any inquiries, proposals or offers with respect to, or the making of, or that could
reasonably be expected to lead to, any “Acquisition Proposal” (as defined in the Acquisition Agreement), (ii) enter
into, continue or otherwise participate or engage in, facilitate or encourage, any negotiations or discussions concerning, or that
could reasonably be expected to lead to, an Acquisition Proposal, or provide access to its properties, books and records or any
information or data relating to any Acquisition Proposal, (iii) approve, endorse or recommend, or propose publicly to approve,
endorse or recommend, any Acquisition Proposal, (iv) waive, terminate, modify or fail to enforce any provision of any “standstill”
or similar obligation of any Person (other than BidCo) with respect to the Company or any of its subsidiaries, (v) take any action
to make the provisions of any takeover law, or any restrictive provision of any applicable anti-takeover provision in the Company’s
organizational documents, inapplicable to any transactions contemplated by any Acquisition Proposal, (vi) execute or enter into
any merger agreement, acquisition agreement or other similar definitive agreement with respect to any Acquisition Proposal or (vii)
authorize any of, or commit or agree to do any of, the foregoing. However, subject to the satisfaction of certain conditions, the
Company and the Board, as applicable, are permitted to take certain actions which may, as more fully described in the Acquisition
Agreement, include changing the recommendation of the Board following receipt of a “Superior Proposal” (as defined
in the Acquisition Agreement) or after an “Intervening Event” (as defined in the Acquisition Agreement) if the Board
has concluded in good faith after consultation with its outside legal counsel that the failure to effect a change of recommendation
or termination of the Acquisition Agreement would violate the Board’s fiduciary duties under applicable law.
Each party’s obligation to implement the Scheme is conditional
upon, among other conditions, the following: (a) the Scheme shall have been approved by a majority in number representing not less
than seventy-five percent (75%) in value of the shareholders of the Company who are on the register of members of the Company (or
the relevant class or classes thereof) as of the record date, present and voting (and who are entitled to vote) at the meeting
of the shareholders convened by order of the High Court of Justice in England and Wales (the “Court”) to consider
and vote on the Scheme and at any separate class meeting which may be required; (b) the resolutions required to implement the Scheme
shall have been duly passed by the requisite majority of the shareholders of the Company at the general meeting of the shareholders;
(c) the Court shall have sanctioned the Scheme (with or without modification (but subject to any modification being on terms acceptable
to BidCo and the Company)); and (d) the waiting period (and any extension thereof) under applicable antitrust laws shall have expired
or been earlier terminated and any required approvals thereunder shall have been obtained. Each of the Company and BidCo must perform
or comply in all material respects with all required agreements and covenants on or prior to the date of the Court Hearing (as
defined under the Acquisition Agreement).
The Acquisition Agreement may be terminated by mutual written
consent of the parties. The Acquisition Agreement also contains certain customary termination rights, including, among others,
the right of either party to terminate if (a) the consummation of the Acquisition does not occur on or before October 25, 2021,
(b) if the Scheme is not sanctioned by the Court at the Court Hearing, (c) if the shareholders meetings have been held and completed
but the requisite votes of the shareholders of the Company have not been obtained, (d) if a governmental entity issues an injunction
preventing the Acquisition, and (e) in the event of an uncured breach of the Acquisition Agreement by the other party that results
in a condition to closing not being capable of satisfaction. The Acquisition Agreement also includes a “fiduciary out”
which enables the Company to terminate the Acquisition Agreement to accept a Superior Proposal prior to the shareholder meetings, subject to the Company’s compliance with the terms of the
Acquisition Agreement.
In addition, BidCo may terminate the Acquisition Agreement if the Board has effected a Change in Recommendation (as defined in
the Acquisition Agreement), subject to the Company’s compliance with the terms of the
Acquisition Agreement. In the event that the Acquisition Agreement is terminated under certain specified circumstances, Company
Sub is required to reimburse NCR for the Apollo Termination Fee (as defined below) within five business days of such termination.
The Company will be required to pay BidCo a termination fee
in the amount of $36,911,410 (the “Company Termination Fee”) in the following circumstances: (i) if the Company
terminates the Acquisition Agreement to accept a superior proposal; (ii) if the Board changes its recommendation in connection
with a superior proposal or an intervening event; and (iii) if an acquisition proposal is made for the Company or has become publicly
known prior to the shareholder meetings, and the Acquisition Agreement is terminated under certain circumstances and within twelve
months after such termination the Company enters into a definitive agreement to sell more than 50% of its capital stock or assets,
or consummates such a transaction, the Company will be required to pay BidCo the Company Termination Fee at the earlier of the
entry into such definitive agreement and two (2) Business Days from the consummation of such transaction (provided that, if BidCo
terminates the Acquisition Agreement for material breach by the Company of the Acquisition Agreement and an acquisition proposal
is made for the Company prior to such termination, the Company must pay BidCo an amount equal to $18,455,705 at or prior to the
time of such termination, which amount shall reduce the amount of the Company Termination Fee that later becomes payable upon entry
into a definitive agreement or consummation of a transaction as described in (iii)).
It is expected that, subject to the satisfaction or waiver of
all relevant conditions, the proposed transaction will be completed in the first half of calendar year 2021.
The foregoing description of the Acquisition Agreement and the
transactions contemplated thereby does not purport to be a complete description and is qualified in its entirety by reference to
the full text of the Acquisition Agreement, which is filed with this Current Report on Form 8-K (this “Form 8-K”)
as Exhibit 2.1 and incorporated by reference herein.
Irrevocable Undertakings
On January 25, 2021, following the termination of the
Apollo Acquisition Agreement (as defined below) in accordance with its terms, each member of the Board that holds Ordinary
Shares (other than Douglas Braunstein) delivered to the Company a deed of irrevocable undertaking (collectively, the
“Director Undertakings”) under which each such director agrees,
among other things, to vote his or her Ordinary Shares in favor of the Acquisition and against any proposal that would impede
or frustrate the Acquisition. The Director Undertakings represent an aggregate of 408,430 Ordinary Shares, or approximately
0.9% of the outstanding Ordinary Shares as of January 21, 2021.
The Director Undertakings will terminate in certain circumstances.
The foregoing description of the Director Undertakings is qualified
in its entirety by reference to the full text of such undertakings. A Form of Director Undertaking is filed with this Form 8-K
as Exhibit 10.1, which is incorporated by reference herein.