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
(Amendment
No. )
Filed by the Registrant [x] |
Filed by a Party other than the Registrant [ ] |
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Check the appropriate box: |
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Preliminary Proxy Statement. |
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Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2)). |
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Definitive Proxy Statement. |
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Definitive Additional Materials. |
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Soliciting Material Pursuant to
§240.14a-12. |
NET 1 UEPS TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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amount on which the filing fee is calculated and state how it was
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NET 1 UEPS TECHNOLOGIES, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on November 19, 2014
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To the Shareholders of Net 1 UEPS Technologies, Inc.:
NOTICE IS HEREBY GIVEN that the
2014 Annual Meeting of Shareholders of Net 1 UEPS Technologies, Inc., a Florida
corporation, will be held at our principal executive offices located at
President Place, 6th Floor, Cnr. Jan Smuts Avenue and Bolton Road, Rosebank,
Johannesburg, South Africa on November 19, 2014 at 16h00, local time (09h00
Eastern Time), for the following purposes:
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To elect five directors to serve until the next Annual
Meeting of Shareholders and until their successors are duly elected and
qualified. |
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To ratify the selection of Deloitte & Touche (South
Africa) as our independent registered public accounting firm for the
fiscal year ending June 30, 2015. |
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To hold an advisory vote to approve executive
compensation. |
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To transact such other business and act upon any other
matter which may properly come before the annual meeting or any
adjournment or postponement of the meeting. |
Our Board of Directors has fixed
the close of business on October 3, 2014, as the record date for determining
shareholders entitled to notice of and to vote at the meeting. A list of the
shareholders as of the record date will be available for inspection by
shareholders at our principal executive offices during business hours for a
period of ten days prior to the meeting.
Your attention is directed to our
annual report for the fiscal year ended June 30, 2014, which is enclosed with
this proxy statement.
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The Board of Directors, |
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Dr. Serge C. P. Belamant |
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Chairman and Chief Executive Officer |
Johannesburg, South Africa
October 10, 2014
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 19, 2014. A
complete set of proxy materials relating to our annual meeting is available on
the Internet. These materials, consisting of the Notice of Annual Meeting and
Proxy Statement, including proxy card, and annual report, may be viewed and
downloaded at http://materials.proxyvote.com/64107N.
You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the proxy accompanying this notice as promptly as possible in order to ensure your representation
at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your
shares are held of record by a broker, bank or other agent and you wish to vote at the meeting, you must request and obtain a proxy issued in your name from that record holder. You may also submit your proxy via the Internet as specified in the
accompanying Internet voting instructions. Shareholders registered on our South African Branch Register (South African shareholders) are referred to the special instructions contained on page 4 of this proxy statement.
TABLE OF CONTENTS
1
NET 1 UEPS TECHNOLOGIES, INC.
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PROXY STATEMENT
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We are furnishing this proxy
statement in connection with the solicitation by our board of directors of
proxies for use at the annual meeting of shareholders to be held at President
Place, 6th Floor, Cnr. Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg,
South Africa on November 19, 2014 at 16h00, local time (09h00 Eastern Time). Our
annual report on Form 10-K and our proxy materials were first mailed on or about
October 10, 2014.
VOTING RIGHTS AND PROCEDURES
Shareholders who owned our common
stock at the close of business on October 3, 2014, the record date, may attend
and vote at the annual meeting. Each share is entitled to one vote. There were
46,475,623 shares of common stock outstanding on the record date.
A majority of the total number of
outstanding shares of common stock, present either in person or by proxy, will
constitute a quorum for the transaction of business at the annual meeting.
Shareholders who are present at the annual meeting in person or by proxy and who
abstain, and proxies relating to shares held by a bank or broker on your behalf
(that is, in street name), that are not voted (referred to as broker
non-votes) will be treated as present for purposes of determining whether a
quorum is present. In the event that there are not sufficient votes to approve
any proposal at the annual meeting, the annual meeting may be adjourned in order
to permit the further solicitation of proxies. The inspector of election
appointed for the annual meeting will tabulate all votes and will separately
tabulate affirmative and negative votes, abstentions and broker non-votes.
The following describes how you
may vote on each proposal and the votes required for approval of each proposal:
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Proposal No 1Our five director nominees
will be elected by a plurality of votes. You may vote for each director
nominee or withhold your vote from one or more of the nominees.
Withholding a vote as to any director nominee is the equivalent of
abstaining. In an uncontested election such as this, abstentions and
broker non-votes have no effect, since approval by a specific percentage
of the shares present or outstanding is not required. |
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Proposal No. 2The ratification of the
selection of Deloitte & Touche (South Africa) (Deloitte) to act as
our independent registered public accounting firm will be approved if the
votes cast in favor of the proposal exceed the number of votes cast
against the proposal. You may vote for or against the proposal or you may
abstain from voting. Abstentions and broker non-votes will not affect the
outcome of the vote. |
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Proposal No. 3 The advisory vote to
approve executive compensation will be approved if the votes cast in favor
of the proposal exceed the number of votes cast against the proposal. You
may vote for or against the proposal or you may abstain from voting.
Abstentions and broker non-votes will not affect the outcome of the vote.
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If you provide your voting
instructions on your proxy, your shares will be voted as you instruct, and
according to the best judgment of the persons named in the proxy if a proposal
comes up for a vote at the annual meeting that is not on the proxy.
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If you do not indicate a specific
choice on a proxy that you sign and submit, your shares will be voted:
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FOR each of the director nominees; |
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FOR the ratification of the selection of
Deloitte as our independent registered public accounting firm; and |
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FOR the approval of executive compensation.
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If your shares are held in
street name, and you do not instruct the bank or broker as to how to vote your
shares on Proposals 1 or 3, the bank or broker may not exercise discretion to
vote for or against those proposals. This would be a broker non-vote and these
shares will not be counted as having been voted on the applicable proposal. With
respect to Proposal 2, the bank or broker may exercise its discretion to vote
for or against that proposal in the absence of your instruction. Please
instruct your bank or broker so your vote can be counted.
The Board of Directors recommends:
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a vote FOR each of the director
nominees; |
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a vote FOR ratification of Deloitte as
our independent registered public accounting firm; |
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a vote FOR the approval of executive
compensation. |
Revocability of Proxies
You may revoke your proxy at any
time prior to exercise of the proxy by delivering a written notice of revocation
or a duly executed proxy with a later date by mail to our corporate secretary at
Net 1 UEPS Technologies, Inc., PO Box 2424, Parklands 2121, Johannesburg, South
Africa, or by attending the meeting and voting in person. If you hold shares
through a bank or brokerage firm, you must contact that firm to revoke any prior
voting instructions.
Internet Availability of Proxy Materials and Annual
Report
A complete set of proxy materials
relating to our annual meeting is available on the Internet. These materials,
consisting of the Notice of Annual Meeting and Proxy Statement, including proxy
card, and annual report, may be viewed and downloaded at
http://materials.proxyvote.com/64107N.
Market Information
Our common stock is listed on The
Nasdaq Global Select Market, or Nasdaq, in the United States under the symbol
UEPS and, via a secondary listing, on the Johannesburg Stock Exchange, or JSE,
in South Africa under the symbol NT1. The Nasdaq is our principal market for
the trading of our common stock. Our transfer agent in the United States is
Computershare Shareowner Services LLC, 480 Washington Blvd, Jersey City, New
Jersey, 07310. Our transfer agent in South Africa is Link Market Services South
Africa (Pty) Ltd (Link Market), 13th Floor, Rennie House, 19 Ameshoff Street,
Braamfontein, 2001, South Africa.
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Special Instructions to South African Shareholders
We are required to comply with
certain South African regulations related to circulation and tabulation of
proxies issued to our South African shareholders. The proxy form marked Net 1
UEPS Technologies, Inc. Proxy for Shareholders Registered on South African
Branch Register must be used by South African shareholders. The South African
proxy must be lodged, posted or faxed to Link Market so as to reach them by
16:00 on November 14, 2014. South African shareholders that have already
dematerialized their shares through a CSDP or broker, other than with own-name
registration, should not complete the South African proxy. Instead they should
provide their CSDP or broker with their voting instructions, or alternatively,
they should inform their CSDP or broker of their intention to attend the annual
meeting in order for their CSDP or broker to be able to issue them with the
necessary authorization to enable them to attend such meeting. South African
shareholders that hold their shares in certificated form or dematerialized
own-name registration should complete the South African proxy and return it to
Link Market.
Solicitation
We will bear the entire cost of
the solicitation, including the preparation, assembly, printing and mailing of
this proxy statement, including the proxy card and any additional solicitation
materials furnished to our shareholders. Copies of solicitation materials will
be furnished to brokerage houses, fiduciaries and custodians holding shares in
their names that are beneficially owned by others so that they may forward this
solicitation material to such beneficial owners. We may reimburse these persons
for their reasonable expenses in forwarding solicitation materials to beneficial
owners. The original solicitation of proxies by mail may be supplemented by a
solicitation by personal contacts, telephone, facsimile, electronic mail or any
other means by our directors, officers or employees. No additional compensation
will be paid to our directors, officers or employees for performing these
services. Except as described above, we do not presently intend to solicit
proxies other than by mail.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The terms of office of each of
our current directors will expire at the annual meeting. The Board has
determined to nominate for re-election each of our current directors (see
Information Regarding the Nominees for information on all directors) for a
one-year term.
The persons named in the
enclosed proxy intend to vote properly executed and returned proxies FOR
the election of all nominees proposed by the Board unless authority to vote is
withheld. In the event that any nominee is unable or unwilling to serve, the
persons named in the proxy will vote for such substitute nominee or nominees as
they, in their discretion, shall determine. The Board has no reason to believe
that any nominee named herein will be unable or unwilling to serve.
The Board recommends that you vote
FOR election of each of the director nominees.
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Information Regarding the Nominees
Dr. Serge C. P. Belamant 61 years old
Director since 1997 |
Dr. Belamant founded our company and has been our Chief
Executive Officer since 2000 and the Chairman of our Board since 2003. Dr.
Belamant has more than 30 years of experience in the fields of operations
research, security, biometrics, artificial intelligence and online and
offline transaction processing systems. Dr. Belamant spent ten years
working as a computer scientist for Control Data Corporation where he won
a number of international awards. Later, he was responsible for the
design, development, implementation and operation of the Saswitch ATM
network in South Africa that is still rated as one of the largest ATM
switching systems in the world. Dr. Belamant has patented a number of
inventions in a number of fields, including biometrics and gaming. Dr.
Belamant holds a PhD in Information Technology and Management. |
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The Board believes that Dr. Belamants strategic vision,
technological ingenuity and extensive knowledge of the payments industry
makes him an invaluable member of the Board. Dr. Belamant has been the
guiding force behind the development of most of our products and services.
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Herman G. Kotzé 45 years old Director
since 2004 |
Mr. Kotzé has been our Chief Financial Officer, secretary
and treasurer since 2004. From January 2000 until June 2004, he served on
the board of Aplitec as Group Financial Director. Mr. Kotzé joined Aplitec
in November 1998 as a strategic financial analyst. Prior to joining
Aplitec, Mr. Kotzé was a business analyst at the Industrial Development
Corporation of South Africa. Mr. Kotzé is a qualified South African
chartered accountant. |
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The Board believes that Mr. Kotzés financial, accounting
and taxation expertise and experience with corporate transactions, as well
as his long history with the company and deep knowledge of our business
and industry makes him well-suited to serve as a director. |
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Christopher S. Seabrooke 61 years old
Director since 2005 |
Mr. Seabrooke is Chief Executive Officer and a director
of Sabvest Limited, an investment holding company which is listed on the
JSE. Mr. Seabrooke also serves as a non-employee director of the following
JSE listed companies: Brait SE, Datatec Limited, Massmart Holdings
Limited, Metrofile Holdings Limited, Torre Industries Limited and
Transaction Capital Limited. In the past five years he was also a
non-employee director of JSE listed Chrometco Limited. Mr. Seabrooke is a
member of The Institute of Directors in South Africa. Formerly, he was the
Chairman of the South African State Theater and the Deputy Chairman of
each of the National Arts Council and the Board of Business and Arts South
Africa. Mr. Seabrooke has degrees in Economics and Accounting from the
University of Natal and an MBA from the University of Witwatersrand.
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The Board believes that Mr. Seabrookes expertise in
finance, accounting and corporate governance and broad experience as a
director of several publicly-traded companies covering a broad range of
industries makes him a valuable member of our Board.
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Alasdair J. K. Pein 54 years old Director
since 2005 |
Mr. Pein is currently CEO of Ascension Partners Limited,
a Cayman-based provider of investment services to high net worth clients.
Mr. Pein is a director of Mundane International Limited, a Guernsey-based
financial investment fund. Mr. Pein also serves as a director of Ecolutia
Services AG, a global provider of water, wastewater and environmental
treatment solutions. Between 1994 and March 2009, Mr. Pein served as the
CEO of the Oppenheimer familys private equity business. During this
period of time Mr. Pein held directorships of a number of private
companies. In addition, Mr. Pein was a director of Arsenal Digital
Solutions, a privately-held US company that provides on-demand data
protection services, from 2001 to 2008. Mr. Pein is a qualified South
African chartered accountant. |
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The Board believes that Mr. Peins financial and
accounting expertise, as well as his private equity experience and skills
in dealing with compensation, human resources and corporate governance
issues, makes him a valuable member of our Board. |
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Paul Edwards 60 years old Director since
2005 |
Mr. Edwards is Executive Chairman of Emerging Markets
Payments Holdings, an Africa and Middle East payments business. Mr.
Edwards has been a non-employee director of Starcomms Limited, a Nigerian
telecommunications operator since 2005. Prior to that, Mr. Edwards was the
Chief Executive Officer of MTN Group, a pan-African mobile operator. Mr.
Edwards has a BSc and an MBA from the University of Cape Town. |
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The Board believes that Mr. Edwards knowledge and
experience of the telecommunications industry, especially in Africa,
provides us with valuable insight into the potential opportunities to
expand our business internationally. |
PROPOSAL NO. 2: RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board
has proposed that Deloitte be selected to serve as independent registered public
accounting firm for the fiscal year ending June 30, 2015. A representative of
Deloitte is expected to be present at the annual meeting. Such representative
will have an opportunity to make a statement if he or she desires to do so and
is expected to be available to respond to appropriate questions from
shareholders. Deloitte currently serves as our independent registered public
accounting firm.
We are asking our shareholders to
ratify the selection of Deloitte as our independent registered public accounting
firm for the fiscal year ending June 30, 2015. Although ratification is not
required by our by-laws or otherwise, the Board is submitting the selection of
Deloitte to our shareholders for ratification as a matter of good corporate
practice. In the event our shareholders fail to ratify the appointment, the
Audit Committee may reconsider this selection. Even if the selection is
ratified, the Audit Committee in its discretion may select a different
registered public accounting firm at any time during the year if it determines
that such a change would be in our best interests and the best interests of our
shareholders.
The Board recommends a vote FOR ratification of the
selection of Deloitte.
6
PROPOSAL NO. 3: AN ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION
We are providing you with the
opportunity to vote to approve, on an advisory, non-binding basis, the
compensation of our executive officers named in the Summary Compensation Table
under Executive Compensation, whom we refer to as our named executive
officers or NEOs. This proposal, which is commonly referred to as say on pay,
is required by Section 14A to the Securities Exchange Act of 1934, or Exchange
Act.
The philosophy of our executive
compensation program is to link compensation to the achievement of our key
strategic and financial goals. Therefore, we reward our executives for their
contributions to our annual and long-term performance by tying a significant
portion of their total compensation to key drivers of increased shareholder
value. At the same time, we believe our program does not encourage excessive
risk-taking by management. The Executive Compensation section of this proxy
statement beginning on page 13, including the Compensation Discussion and
Analysis, describes in detail our executive compensation program and the
decisions made by the Boards Remuneration Committee with respect to our fiscal
year ended June 30, 2014.
The Board is asking shareholders
to cast a non-binding advisory vote on the following resolution:
Resolved, that the
compensation paid to the Companys named executive officers, as disclosed
pursuant to the disclosure rules of the Securities and Exchange Commission,
including the Compensation Discussion and Analysis, compensation tables and
narrative discussions, is approved on a non-binding advisory basis.
Because your vote is advisory, it
will not be binding upon the Board or the Remuneration Committee. However, the
Board and the Remuneration Committee value the opinions expressed by our
shareholders and will consider the outcome of the vote when considering future
executive compensation decisions.
The Board recommends a vote
FOR approval of the compensation of our named executive officers.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
MEETINGS OF THE BOARD AND DIRECTOR INDEPENDENCE
Our Board typically holds a
regular meeting once every quarter and holds special meetings when necessary.
During the fiscal year ended June 30, 2014, our Board held a total of five
meetings. All of the directors who served during our 2014 fiscal year attended
100% of the meetings of the Board. All of the directors attended 100% of the
aggregate number of meetings of those committees of the Board on which such
director served during the year. We encourage each member of the Board to attend
the annual meeting of shareholders, but have not adopted a formal policy with
respect to such attendance.
All of our directors who served
during fiscal 2014 attended last years annual meeting, except Mr. Pein. The
non-management directors meet regularly without any management directors or
employees present. These meetings are held on the day of or day preceding other
Board or committee meetings.
The Board annually examines the
relationships between the Company and each of our directors. After this
examination, the Board has concluded that Messrs. Seabrooke, Pein and Edwards
are independent as defined under Nasdaq Rule 5605(a)(2) and under Rule
10A-3(b)(1) under the Exchange Act, as that term relates to membership on the
Board and the various Board committees.
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COMMITTEES OF THE
BOARD
The Board has established an
Audit Committee, a Remuneration Committee and a Nominating and Corporate
Governance Committee. The members of our Board Committees are presented in the
table below:
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Nominating and |
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Corporate |
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Audit |
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Remuneration |
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Governance |
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Committee |
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Committee |
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Committee |
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Dr. Serge C.P. Belamant (#) |
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Paul Edwards |
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Herman G. Kotzé (#) |
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Alasdair J.K. Pein |
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X* |
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Christopher S. Seabrooke |
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# Executive |
* Chairperson |
Audit Committee
The Audit Committee consists of
Messrs. Seabrooke, Pein and Edwards, with Mr. Seabrooke acting as the
chairperson. The Board has determined that Mr. Seabrooke is an audit committee
financial expert as that term is defined in applicable Securities and Exchange
Commission, or SEC, rules, and that all three members meet Nasdaqs financial
literacy criteria. The Audit Committee held seven meetings during the 2014
fiscal year. See Audit Committee Report on page 28.
The Audit Committee was
established by the Board for the primary purpose of overseeing or assisting the
Board in overseeing the following:
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the integrity of our financial statements;
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our compliance with legal and regulatory
requirements; |
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the qualifications and independence of our
registered public accounting firm; |
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the performance of our independent auditors and
of the internal audit function; |
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the accounting and financial reporting
processes and the audits of our financial statements; and |
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our systems of disclosure controls and
procedures, internal controls over financial reporting, and compliance
with ethical standards adopted by us. |
A copy of our Audit Committee
charter is available without charge on our website, www.net1.com under the
Investor Relations Governance section.
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Remuneration Committee
The Remuneration Committee
comprises Messrs. Pein, Seabrooke and Edwards, with Mr. Pein acting as the
chairperson. The Remuneration Committee held four meetings during the 2014
fiscal year. The Remuneration Committee has the following principal
responsibilities, authority and duties:
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review and approve performance goals and objectives
relevant to the compensation of all our executive officers, evaluate the
performance of each executive officer in light of those goals and
objectives, and set each executive officers compensation, including
incentive-based and equity- based compensation, based on such evaluation;
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make recommendations to the Board with respect to
incentive and equity-based compensation plans; |
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review and make recommendations to the Board regarding
compensation-related matters outside the ordinary course, including but
not limited to employment contracts, change-in-control provisions and
severance arrangements; |
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administer our stock option, stock incentive, and other
stock compensation plans, including the function of making and approving
all grants of options and other awards to all executive officers and
directors, and all other eligible individuals, under such plans;
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review annually and make recommendations to the Board
regarding director compensation; |
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assist management in developing and, when appropriate,
recommend to the Board, the design of compensation policies and plans;
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review and discuss with management the disclosures in our
Compensation Discussion and Analysis and any other disclosures regarding
executive compensation to be included in our public filings or shareholder
reports; and |
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recommend to the Board whether the Compensation
Discussion and Analysis should be included in our proxy statement, Form
10-K, or information statement, as applicable, and prepare the related
report required by the rules of the SEC. |
A copy of our Remuneration
Committee charter is available without charge on our website, www.net1.com under
the Investor Relations Governance section.
Nominating and Corporate Governance Committee
The Nominating and Corporate
Governance Committee comprises Messrs. Seabrooke, Pein and Edwards, with Mr.
Seabrooke acting as the chairperson. The Nominating and Corporate Governance
Committee held three meetings during the 2014 fiscal year. The principal duties
and responsibilities of the Nominating and Corporate Governance Committee are as
follows:
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monitor the composition, size and independence
of the Board; |
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establish criteria for Board and committee
membership and recommend to our Board proposed nominees for election to
the Board and for membership on each committee of the Board; |
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monitor our procedures for the receipt and
consideration of director nominations by shareholders and other persons
and for the receipt of shareholder communications directed to our Board;
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make recommendations regarding proposals
submitted by our shareholders; |
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establish and monitor procedures by which the
Board will conduct, at least annually, evaluations of its performance;
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review our Corporate Governance Guidelines
annually and recommend changes, as appropriate, for review and approval by
the Board; and |
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make recommendations to the Board regarding
management succession planning and corporate governance best practices.
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A copy of our Nominating and
Corporate Governance Committee charter is available without charge on our
website, www.net1.com under the Investor Relations Governance section.
BOARD LEADERSHIP STRUCTURE AND BOARD OVERSIGHT OF RISK
Board Leadership
Our Board of Directors is led by
our Chairman, Dr. Belamant, who is also our Chief Executive Officer. The Board
believes that Dr. Belamants service as both Chairman of the Board and Chief
Executive Officer is in our best interests and the best interests of our
shareholders.
A combined Chairman and Chief
Executive Officer leadership structure is commonly utilized by public companies
in the United States, and our Board believes that this leadership structure has
been effective for us and minimizes the potential for duplication of efforts and
conflict of roles. Dr. Belamant possesses detailed and in-depth knowledge of the
issues, opportunities and challenges facing us, and is thus better positioned
than a non-employee chairman to focus the Boards time and attention on the
matters that are most critical to us. Additionally, having one person serve as
both Chairman of the Board and Chief Executive Officer enables decisive
leadership, ensures clear accountability and enhances our ability to communicate
our message and strategy clearly and consistently to our shareholders,
employees, customers and suppliers.
While our Bylaws do not require
that the roles of Chairman of the Board and Chief Executive Officer be filled by
the same person, our Board believes that having Dr. Belamant fill both positions
is the appropriate leadership structure for us.
We do not have a lead director.
The Board believes that all of our independent directors are active and engaged
Board members and that a number of them fulfill a lead director role at various
times depending upon the particular issues involved. Further, Mr. Seabrooke, who
is the Chairman of both the Nominating and Corporate Governance Committee and
the Audit Committee and is a member of the Remuneration Committee, presides over
all executive sessions of the independent directors.
The Boards Role in Risk Oversight
Managing risk is an ongoing
process inherent in all decisions made by management. The Board of Directors
discusses risk throughout the year, particularly at Board meetings when specific
actions are considered for approval. The Board of Directors has ultimate
responsibility to oversee our enterprise risk management program. This oversight
is conducted primarily through various committees of the Board as described
below.
Our Enterprise Risk Management
Committee is responsible for identifying, assessing, prioritizing and developing
action plans to mitigate the material business, operational and strategic risks
affecting us. The Enterprise Risk Management Committee comprises our Chief
Executive Officer (who serves as chair), Chief Financial Officer and Group
Compliance Officer. The Group Compliance Officer meets semi-annually with the
leaders of our various business units and his findings are reported to and
discussed by the Enterprise Risk Management Committee. The Enterprise Risk
Management Committee meets and reports to the Audit Committee semi-annually.
10
The Audit Committee directly
provides oversight of risks relating to the integrity of our consolidated
financial statements, internal control over financial reporting and the internal
audit function. The Remuneration Committee oversees the management of risks
related to our executive compensation program. The Nominating and Corporate
Governance Committee oversees the management of risks related to management
succession planning.
REMUNERATION COMMITTEE
INTERLOCKS AND INSIDER
PARTICIPATION
None of the members of our
Remuneration Committee has at any time been one of our officers or employees.
None of our executive officers serves or in the past has served as a member of
the Board or remuneration committee of any entity that has one or more of its
executive officers serving on our Board or our Remuneration Committee.
NOMINATIONS PROCESS AND
DIRECTOR QUALIFICATIONS
The Nominating and Corporate
Governance Committee reviews with the Board the skills and characteristics
required of Board members. Our Corporate Governance Guidelines provide that the
committee will consider a candidates independence, as well as the perceived
needs of the Board and the candidates background, skills, business experience
and expected contributions. At a minimum, members of the Board must possess the
highest professional ethics, integrity and values, and be committed to
representing the long-term interests of our shareholders. They must also have an
inquisitive and objective perspective, practical wisdom and mature judgment. The
committee may also take into account the benefits of diversity in candidates
viewpoints, background and experience, as well as the benefits of constructive
working relationships among directors. Other than as set forth in our Corporate
Governance Guidelines, the committee does not have a formal policy with respect
to diversity.
The Nominating and Corporate
Governance Committee also reviews and determines whether existing members of the
Board should stand for re-election, taking into consideration matters relating
to the number of terms served by individual directors, the ability of an
individual director to devote the appropriate level of time and attention to
Board duties in light of other positions he holds (including other
directorships) and the changing needs of the Board. We do not have a limit on
the number of terms an individual may serve as a director on our Board.
The Nominating and Corporate
Governance Committee utilizes a variety of methods for identifying and
evaluating nominees for director. The committee regularly assesses the
appropriate composition, size and independence of the Board, and whether any
vacancies are expected due to change in employment or otherwise. In the event
that vacancies are anticipated, or otherwise arise, the committee considers
various potential candidates for director. Candidates are evaluated at regular
or special meetings of the Nominating and Corporate Governance Committee, and
may be considered at any point during the year. The committee will consider
shareholder recommendations for candidates for the Board that are properly
submitted in accordance with Section 4.16 of our by-laws in the same manner it
considers nominees from other sources. In evaluating such recommendations, the
committee will use the qualifications standards described above and will seek to
achieve a balance of knowledge, experience and capability on the Board.
SHAREHOLDER COMMUNICATIONS
WITH THE BOARD
Any shareholder who wishes to
communicate directly with the Board may do so via mail or facsimile, addressed
as follows:
Net 1 UEPS Technologies, Inc.
Board
of Directors
PO Box 2424
Parklands, 2121, Johannesburg, South Africa
Fax: 27 11 880 7080
11
The corporate secretary shall
transmit any communication to the Board, or individual director(s), as
applicable, as soon as practicable upon receipt. Absent safety or security
concerns, the corporate secretary shall relay all communications, without any
other screening for content.
CORPORATE GOVERNANCE GUIDELINES
The Board has adopted a set of
corporate governance guidelines. We will continue to monitor our corporate
governance guidelines and adopt changes as necessary to comply with rules
adopted by the SEC and Nasdaq, and to conform to best industry practice. This
monitoring will include comparing our existing policies and practices to
policies and practices suggested by various groups or authorities active in
corporate governance and the practices of other public companies. A copy of our
corporate governance guidelines is available on our website at www.net1.com
under the Investor Relations Governance section.
CODE OF ETHICS
The Board has adopted a written
code of ethics, as defined in the regulations of the SEC. We require all
directors, officers, employees, contractors, consultants and temporary staff,
including our Chief Executive Officer, our Chief Financial Officer (who also
serves as our principal accounting officer) and other senior personnel
performing similar functions, to adhere to this code in addressing the legal and
ethical issues encountered in conducting their work. Our code of ethics requires
avoidance of conflicts of interest, compliance with all laws and other legal
requirements, conduct of business in an honest and ethical manner, integrity and
actions in our best interest. Directors, officers and employees are required to
report any conduct that they believe in good faith to be an actual or apparent
violation of the code. The Sarbanes-Oxley Act of 2002 requires companies to have
procedures to receive, retain and treat complaints received regarding
accounting, internal accounting controls or auditing matters and to allow for
the confidential and anonymous submission by employees of concerns regarding
questionable accounting or auditing matters. We currently have such procedures
in place. A copy of our code of ethics is available upon request made either by
mail to our corporate secretary at Net 1 UEPS Technologies, Inc., PO Box 2424,
Parklands 2121, Johannesburg, South Africa or by telephone to our Investor
Relations Department at + 1 917-767-6722. A copy of our code of ethics is also
available free of charge on our website at www.net1.com under the Investor
Relations Governance section.
COMPENSATION OF DIRECTORS
Directors who are also executive
officers do not receive separate compensation for their services as directors.
During fiscal 2014, our non-employee directors received compensation as
described below.
|
|
|
Fees Earned or
|
|
|
Stock
Awards(1)(2) |
|
|
Stock Options |
|
|
|
|
|
Name |
|
Paid in Cash ($) |
|
|
($) |
|
|
($) |
|
|
Total ($) |
|
|
Paul Edwards |
|
78,650 |
|
|
35,750 |
|
|
- |
|
|
114,400 |
|
|
Brian K. Mosehla (3) |
|
- |
|
|
22,500 |
|
|
- |
|
|
22,500 |
|
|
Alasdair J.K. Pein |
|
105,600 |
|
|
48,000 |
|
|
- |
|
|
153,600 |
|
|
Christopher S. Seabrooke (4) |
|
192,000 |
|
|
60,000 |
|
|
- |
|
|
252,000 |
|
(1) As of June 30, 2014, the
number of shares of restricted stock held by each non-employee director is as
follows: Mr. Edwards 9,394; Mr. Mosehla 0; Mr. Pein 12,614; Mr. Seabrooke
15,768.
(2) Represents shares of
restricted stock granted on August 21, 2013, one-third of which vest on August
22, 2014, 2015 and 2016, respectively. Vesting of such shares is conditioned
upon the recipients continuous service as a member of our Board through the
applicable vesting date. The dollar value reflected is based on the closing
price of our common stock on the date of grant. Based on this price, the number
of shares granted was as follows: Mr. Edwards4,863; Mr. Mosehla3,741; Mr.
Pein6,530 and Mr. Seabrooke8,163.
(3) Mr.
Mosehla resigned on October 31, 2013. Upon his resignation, he forfeited 7,171
shares of unvested restricted stock.
12
(4) Fees earned or paid in cash
($) includes $60,000 paid to Mr. Seabrooke in recognition of the considerable
extra time and effort spent by him in fiscal 2013 as Chairman of the Audit
Committee but outside of normal Board and Audit Committee forums, in particular
in regard to matters arising from the SASSA tender award. No additional fees
were, or will be, awarded for time and effort spent by him in fiscal 2014.
In determining fiscal 2014
compensation, the Board analyzed the annual compensation of non-employee
directors of US- and UK-listed transaction processor companies with a range of
market equity capitalizations above, below and comparable to ours. The peer
group comprised: Micros Systems Inc, Heartland Payment Systems, Inc., Global
Payments Inc., Wright Express Corporation, Euronet Worldwide, Inc., Total System
Services, Inc., Verifone Systems, Inc., Jack Henry & Associates, Inc. and
Sage Group plc. In addition, the Board considered the various roles of the
non-employee directors. Directors receive a base fee for membership on the
Board. Directors who serve on Board committees and/or serve as chair of Board
committees receive additional compensation in recognition of the additional time
they are required to spend on committee matters.
EQUITY
COMPENSATION PLAN
INFORMATION
The following table sets forth
information regarding our compensation plans under which our equity securities
are authorized for issuance as of June 30, 2014:
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
securities |
|
|
|
Number of |
|
|
Weighted |
|
|
remaining |
|
|
|
securities to
be |
|
|
average |
|
|
available for |
|
|
|
issued upon |
|
|
exercise price |
|
|
future issuance |
|
|
|
exercise of |
|
|
of |
|
|
under equity |
|
|
|
outstanding |
|
|
outstanding |
|
|
compensation |
|
|
|
options, |
|
|
options, |
|
|
plans (excluding |
|
|
|
warrants and |
|
|
warrants and |
|
|
securities reflected |
|
|
|
rights |
|
|
rights |
|
|
in column (a)) |
|
Plan Category |
|
(a) |
|
|
(b) |
|
|
(c) |
|
Equity compensation plans approved by security holders |
|
|
|
|
|
|
|
|
|
Amended and
Restated Stock Incentive Plan |
|
2,612,629 |
|
|
$13.85 |
|
|
1,733,162 |
|
Equity compensation plans not approved by
security holders |
|
|
|
|
|
|
|
|
|
Stock options
granted to employees of Prism Holdings Proprietary Limited group
(Prism) (1) |
|
97,763 |
|
|
$22.51 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
2,710,392 |
|
|
|
|
|
1,733,162 |
|
(1) In connection with the
acquisition of Prism in July 2006, we granted Prism employees options to
purchase shares of common stock at an exercise price of $22.51 per share, which
was the average of the high and low sale prices of the common stock on the date
of grant. These options are all currently exercisable and expire on August 24,
2016.
EXECUTIVE
COMPENSATION
ANALYSIS OF RISK IN OUR COMPENSATION STRUCTURE
As part of its responsibilities
to annually review all incentive compensation and equity-based plans, and
evaluate whether the compensation arrangements of our employees incentivize
unnecessary and excessive risk-taking, the Remuneration Committee evaluated the
risk profile of our compensation policies and practices for fiscal 2014 and
concluded that they do not motivate imprudent risk taking. In its evaluation,
the Remuneration Committee reviewed our employee compensation structures, and
noted numerous design elements that manage and mitigate risk without diminishing
the incentive nature of the compensation, including:
|
|
a balanced mix between cash and equity, and
annual and longer-term incentives; |
13
|
|
caps on incentive awards at reasonable levels;
|
|
|
|
|
|
linear payouts between target levels with
respect to annual cash incentive awards; |
|
|
|
|
|
discretion on individual awards, particularly
in special circumstances; and |
|
|
|
|
|
long-term incentives. |
The Remuneration Committee also
reviewed our compensation programs for certain design features that may have the
potential to encourage excessive risk-taking, including: over-weighting towards
annual incentives, highly leveraged payout curves, unreasonable thresholds, and
steep payout cliffs at certain performance levels that may encourage short-term
business decisions to meet payout thresholds. The Remuneration Committee
concluded that our compensation programs do not include such elements.
In addition, the Remuneration
Committee analyzed our overall enterprise risks and how compensation programs
may impact individual behavior in a manner that could exacerbate these
enterprise risks. For this purpose, the Remuneration Committee considered our
growth and return performance, volatility and leverage. In light of these
analyses, the Remuneration Committee concluded that it has a balanced pay and
performance program that does not encourage excessive risk-taking that is
reasonably likely to have a material adverse effect on us. We believe our
compensation programs encourage and reward prudent business judgment and
appropriate risk-taking over the long term.
COMPENSATION DISCUSSION AND ANALYSIS
Fiscal 2014 Compensation Summary
|
|
Base salaryBase salary represents a significant portion
of compensation, given the cash generative nature of our business. Dr.
Belamant, our Chief Executive Officer, Mr. Kotze, our Chief Financial
Officer, and Mr. Nitin Soma, our Vice PresidentInformation Technology,
each received a 5% base salary increase for fiscal 2014. |
|
|
|
|
|
CEO/CFO cash incentive awards In August 2013, we
established an annual cash incentive award plan for fiscal 2014 for Dr.
Belamant and Mr. Kotzé, as we have done in prior years. The plan was
intended to link payment to the achievement of specific financial
performance (quantitative) goals on a company-wide basis, and operational
(qualitative) goals. Based on our fiscal 2014 financial performance, Dr.
Belamant and Mr. Kotze each received the maximum amount of the
quantitative portion of the award, which was based on achievement of
specified quantitative goals that were in excess of target levels. Dr.
Belamant and Mr. Kotze each received approximately 87% of the potential
amount of the qualitative portion of the award for their achievement of
specified goals related to corporate action and mitigation of regulatory
issues, concluding BEE transactions and implementing strategic objectives
and operating plans. |
|
|
|
|
|
Bonuses for Messrs. Oh and SomaMr. Phil-Hyun Oh,
President of KSNET, received 100% of his annual conditional guaranteed
bonus under the terms of his employment agreement. Mr. Nitin Soma, our
Senior Vice PresidentInformation Technology, received a bonus of $290,304
for fiscal 2014. |
|
|
|
|
|
Stock-based awardsWe made an annual award of stock
options with time-based vesting provisions to a group that included Dr.
Belamant and Messrs. Kotzé and Soma. Mr. Oh received a grant of restricted
stock. |
14
Overview
The goal of our executive
compensation program is the same as our goal for operating the Companyto create
long-term value for our shareholders. To achieve this goal, we seek to reward
our named executive officers for sustained financial and operating performance
and leadership excellence, to align their interests with those of our
shareholders and to encourage them to remain with us for long and rewarding
careers. This section of the proxy statement explains how our compensation
program is designed and operates in practice with respect to the four
individuals who comprised our named executive officers at the end of our 2014
fiscal yearDr. Belamant and Messrs. Kotzé, Oh and Soma. Our named executive
officers have the broadest job responsibilities and are the only individuals who
have policy-making authority.
Each element of our executive
compensation program is designed to fulfill one or more of our performance,
alignment and retention objectives. These elements consist of salary, bonus and
both equity and non-equity incentive compensation. Each named executive officer
receives one or more, but not necessarily all, of these elements. In determining
the type and amount of compensation for each executive officer, we focus on both
current pay and the opportunity for future compensation and seek to combine
compensation elements so as to optimize his or her contribution to us. We
consider the mix of our compensation components from year to year based on our
overall performance, an executives individual contributions, and compensation
practices of other US- and UK-based public companies including companies in our
peer group described below. We do not have an exact formula for allocating
between cash and non-cash compensation. We do, nonetheless, provide for a
balanced mix of compensation components that are designed to encourage and
reward behavior that promotes shareholder value in both the short and long term.
The chart below illustrates the
mix of the elements of the 2014 compensation program we established for our
named executive officers, using target levels for the cash incentive component.
15
Compensation Objectives
Performance. We reward
excellent performance by our named executive officers and motivate them to
continue to produce superior, long-term results through a combination of cash
bonuses, incentive payments that depend on achievement of pre-defined levels of
financial and operating goals and equity awards in the form of stock options or
restricted stock that derive their value from increases in our share price
and/or satisfaction of other financial and strategic performance goals. Base
salary, bonus and non-equity incentive compensation are designed to reward
annual achievements and be commensurate with each executive officers scope of
responsibility, demonstrated ingenuity, dedication, leadership and management
effectiveness. Equity incentive compensation generally focuses on achievement of
longer term results.
Alignment. We seek to
align the interests of our named executive officers with our shareholders by
evaluating them on the basis of financial and non-financial measurements that we
believe ultimately drive long-term shareholder value. The elements of our
compensation package that we believe align these interests most closely are a
combination of annual quantitative and qualitative cash compensation awards,
stock option awards which increase in value as our stock price increases and
restricted stock awards which vest over time and are granted or become vested
upon the satisfaction of specified performance goals.
Retention. The
Remuneration Committee recognizes that the talent pool in South Africa is more
limited than in other more developed countries. In addition, the long tenure of
our South Africa-based management team, in particular, Dr. Belamant and Messrs.
Kotzé and Soma, has made them especially knowledgeable about our business and
industry and thus particularly valuable to us. Dr. Belamant in particular has
intricate knowledge of, and has created large parts of the proprietary
technology and software deployed by us in our operations, which is an
indispensable part of our technological advantage in our various operations and
future developments in our growth pipeline. We wish to avoid losing these
long-tenured officers and their invaluable knowledge, particularly given how
important they are to our future performance. Therefore, retention is a key
objective of our executive compensation program. We attempt to retain our named
executive officers by seeking to provide a competitive pay package and using
continued service as a condition to receipt of full compensation. The extended
vesting terms of equity awards have the effect of tying this element of
compensation to continued service with us.
Implementing our Objectives
Process for Determining
Compensation. The Remuneration Committee analyzes compensation
data of companies that it selects as a peer group to better understand how our
pay package compares with those companies. The Remuneration Committee then uses
this knowledge to develop our executive compensation program based on its
judgment of what is appropriate and necessary to fulfill and maintain our
staffing needs. As described in more detail below, it considers internal pay
equity as between the Chief Executive Officer and the Chief Financial Officer
and uses a formulaic approach to set the Chief Financial Officers compensation
relative to the Chief Executive Officers compensation but does not do so for
the other named executive officers.
The peer group selected by the
Remuneration Committee comprises a broad spectrum of companies, which range
significantly in size from a revenue, profitability and enterprise value
perspective. The peer group consists of payment processing companies generally
considered comparable to us in terms of their businesses (such as being a
payment systems provider) as well as other companies within other parts of the
information technology sector and those operating in or providing services in
emerging markets.
Our peer group, which includes
both US and UK listed companies, consists of the following companies:
Micros Systems Inc., Heartland Payment Systems, Inc., Global Payments Inc.,
Wright Express Corporation, Euronet Worldwide, Inc., Total System Services,
Inc., Verifone Systems, Inc., Jack Henry & Associates, Inc. and Sage Group
plc.
16
The Remuneration Committee's process for determining compensation includes an analysis of all elements of compensation. The Remuneration Committee compares these compensation components separately and in total to compensation at the peer group companies, taking into account, among other things, the relative market capitalizations of the Company and the members of the peer group. The Remuneration Committee sets the compensation of Mr. Kotzé based on the total compensation package of Dr. Belamant. Since the role played by Mr. Kotzé is significantly broader than that of a typical chief financial officer, the Remuneration Committee's goal is to set this package at approximately 45% to 65% of Dr. Belamant's total compensation package. Because the Remuneration Committee considers international comparables in its compensation analysis for both Dr. Belamant and Mr. Kotzé, their total compensation packages are denominated in US dollars. Because Mr. Soma's compensation package is derived from the amount of compensation we pay to Mr. Kotzé, his compensation package is also denominated in US dollars. Our executive officers based in South Africa may elect to be paid in a currency other than US dollars, in which case the US dollar amount is converted into South African Rand ("ZAR") at the exchange rate in effect at the time of payment. In the early part of each fiscal year, the Remuneration Committee establishes base salaries and sets the short-term cash incentive award plan remuneration targets and payment criteria for Dr. Belamant and Mr. Kotzé. Following the end of each fiscal year, the Remuneration Committee determines the annual incentive cash payments and bonuses, if any, to be made to each executive officer based on their and our performance during the fiscal year.
Compensation for fiscal 2014 for
Mr. Oh was determined in accordance with his employment agreement. Mr. Ohs
compensation is denominated and paid in Korean won (KRW) in accordance with the
terms of his negotiated employment agreement. Under the employment agreement, he
receives a base salary and is entitled to receive a cash incentive payment based
upon the achievement of certain targets that are linked to the operating
performance of KSNET. We have aligned KSNETs year end with ours. However, in
order to remain consistent with our Korean peer competitors, we continue to
determine Mr. Ohs cash incentive payment (and our KSNET staffs remuneration)
using KSNETs financial results for the twelve month period ending December of
each year. Accordingly, we determined Mr. Ohs cash incentive payment for the
twelve month period ended December 2013.
Before the Remuneration Committee
makes decisions on compensation for the year, it discusses with Dr. Belamant
each executive officers performance during the year, his or her accomplishments
and specific areas of progress. Dr. Belamant bases his evaluation on his
knowledge of each executive officers performance (with due regard to the
operational environment) and targets that have been set for a particular
performance period. The executive officers are then evaluated based on their
individual performance during the fiscal year. Dr. Belamant makes a
recommendation to the Remuneration Committee on each executive officers
compensation, except for his own and Mr. Kotzés compensation. Executive
officers do not propose or seek approval for their own compensation. Dr.
Belamants and Mr. Kotzés annual performance review is developed by the
Remuneration Committee as a whole.
The Remuneration Committee also consults with Dr. Belamant and Mr. Kotzé regarding non-executive officer employee compensation and is responsible for approving all awards under our Amended and Restated Stock Incentive Plan (the "Stock Incentive Plan").
Equity Grant
Practices. We believe that long-term performance of our
company is achieved through a culture that encourages long-term performance by
our executive officers through the use of stock and stock-based awards.
Accordingly, awards of stock options and restricted stock are a fundamental
element in our executive compensation program because they emphasize long-term
performance, as measured by creation of shareholder value, and foster a
commonality of interest between shareholders and employees. We have granted
equity awards through our Stock Incentive Plan which was adopted by our Board of
Directors and approved by our shareholders to permit the grant of stock options
and other stock-based awards to our employees, directors and consultants.
Options granted under the plan vest ratably over a period of three to five years
after grant unless otherwise provided in a particular award agreement and have
ten-year terms from the date of grant.
17
In determining the size of an
equity award to an executive officer, the Remuneration Committee considers the
executives then current cash total compensation package (which includes salary,
potential bonus and cash incentive award plan compensation), any previously
received equity awards, the value of the grant at the time of award and the
number of shares available for grants pursuant to our Stock Incentive Plan.
We record stock-based
compensation charges over the vesting term of the equity award as required under
current accounting standards. When awarding equity compensation, management and
the Remuneration Committee seek to weigh the cost of these grants with their
potential benefits as a compensation tool. We believe that combining grants of
stock options and restricted stock effectively balances our objective of
focusing our employees, including our named executive officers, on delivering
long-term value to our shareholders, with our objective of providing value to
our employees with the equity awards. Stock options have value only to the
extent that our stock price on the date of exercise exceeds the stock price on
the date of grant or any particular minimum share price necessary to vest such
options, and thus are an effective compensation tool only if the stock price
appreciates during the vesting term. In this sense, stock options are a
motivational tool.
Employment Agreements. Our
South African resident executives are employed on an at will basis, without
employment agreements, severance payment arrangements (except as required by
local labor laws), or payment arrangements that would be triggered by a change
in control. The absence of such arrangements enables us to terminate the
employment of these named executive officers with discretion as to the terms of
any severance arrangement that might be provided upon such termination. This is
consistent with our performance-based employment and compensation philosophy. We
do have restraint of trade agreements with each of these named executive
officers. The terms of these agreements provide that upon the termination of the
executives employment, the executive is restricted, for a period of 24 months,
from soliciting business from certain customers, working for or holding
interests in our competitors or participating in a competitive activity within
the territories where we do business.
However, we do from time to time
enter into employment agreements with senior executives of companies that we
acquire in connection with the acquisition. Compensation under that initial
employment agreement would not ordinarily be determined by reference to peer
group comparisons. We entered into an employment agreement with Mr. Oh in
October 2010 in connection with our acquisition of KSNET. The agreement expired
on June 30, 2014 and was renewed for a three-year term commencing July 1, 2014.
Concurrently, we appointed Mr. Oh as a representative director of Net1 Korea and
entered into a three-year employment agreement with Mr. Oh pursuant to this
appointment, which provides only for nominal compensation. The terms of the two
new three-year agreements were based on the original KSNET agreement and no peer
group comparisons were performed.
Under the employment agreement
that was in effect for fiscal 2014, Mr. Oh was entitled to receive the following
cash compensation: (i) an annual base salary of KRW 375 million for the entire
term, (ii) an annual conditional guaranteed bonus of KRW 200 million and (iii)
an annual conditional incremental bonus equal to 2.72% of base salary multiplied
by an operating profit growth multiple. The annual guaranteed bonus was
conditioned on KSNET achieving operating profit in a fiscal year (defined as
KSNET net income before interest, taxation and the conditional guaranteed bonus
and the conditional incremental bonus) that was greater or equal to operating
profit for the immediately preceding fiscal year. Operating profit growth
multiple was defined as the amount (expressed in percentage terms), if any,
beyond which operating profit in a fiscal year exceeds operating profit for the
immediately preceding fiscal year by 15%. The combined conditional guaranteed
and incremental bonus was limited to 125% of annual base salary. Because KSNETs
fiscal year ends in December, Mr. Ohs annual conditional guaranteed and
incremental bonuses were calculated on the 12 month period ending December
31.
Under the terms of his employment
agreements, Mr. Oh is entitled to participate in national health insurance and
the national pension plan provided under the laws of Korea, to receive
reimbursement for annual physical examinations for him and his spouse, education
expenses and to make use of a company provided car and driver for business and
reasonable personal use.
18
Similar to the restraint of trade
agreements that we have with our other named executive officers, Mr. Ohs
employment agreement provides that upon the termination of his services with us,
he is restricted, for a period of 36 months, from soliciting business from
certain customers, working for or holding interests in our competitors or
participating in a competitive activity within the territories where we do
business. The employment agreement also provides for certain payments upon his
termination of service by us without just cause, which payments are described
below under Potential Payments Upon Termination or Change-inControl on page
25.
Considerations Regarding Tax
Deductibility of Compensation. Section 162(m) of the US tax code places a
limit of $1 million on the amount of compensation that we may deduct in any one
year with respect to our Chief Executive Officer and each of the three most
highly compensated executive officers other than our Chief Executive Officer or
Chief Financial Officer. Certain qualified performance-based compensation is not
subject to this deduction limit. To maintain flexibility in compensating our
named executive officers in a manner designed to promote our various corporate
goals, it is not a policy of the Remuneration Committee that all executive
compensation must be tax-deductible. The Remuneration Committee believes that
the importance of retaining this flexibility outweighs the benefits of tax
deductibility.
Compensation Consultants.
Neither we nor the Remuneration Committee have any contractual arrangement
with any compensation consultant or used the services of any compensation
consultant who has a role in determining or recommending the amount or form of
executive officer compensation.
Role of Shareholder Say-on-Pay
Votes. We provide our shareholders with the opportunity to cast an
annual, nonbinding advisory vote to approve executive compensation (a
say-on-pay proposal). At our annual meeting of shareholders held on November
18, 2013, approximately 74% of the votes cast on the say-on-pay proposal at that
meeting were voted in favor of the proposal. The Remuneration Committee
considered the outcome of that advisory vote to be an endorsement of the
Remuneration Committees compensation philosophy and implementation. The
Remuneration Committee will continue to consider the outcome of say-on-pay votes
when making future compensation decisions for our named executive officers.
Elements of 2014 Compensation
Base Salary. Salaries for
fiscal 2014 were determined in the first quarter of the 2014 fiscal year after a
review of our peer group companies described above. The annual base salaries of
Dr. Belamant and Messrs. Kotzé and Soma were increased by 5% to $937,125,
$496,125 and $302,400, respectively. The increase in annual base salary in each
case was effective July 1, 2013. Mr. Oh did not receive a base salary increase
for fiscal 2014.
Payments under Cash Incentive
Award Plan. During the first quarter of fiscal 2014, the Remuneration
Committee established a cash incentive award plan for Dr. Belamant and Mr. Kotzé
pursuant to which each of them would be eligible to earn a cash incentive award
based on our fiscal 2014 financial performance and his individual contribution
toward the achievement of certain corporate objectives. The plan provided for a
target-level cash incentive award of 100% of the executives base salary for
fiscal 2014, 70% of which was to be based on a quantitative metric (achievement
of specified levels of fundamental diluted earnings per share) and 30% of which
was to be based on the level of achievement of the qualitative factors described
below.
The quantitative portion of the
award provided for threshold, target and maximum amounts of 50%, 100% and 200%
for Dr. Belamant, or 50%, 100% and 150% for Mr. Kotzé, respectively, of the
executives base salary multiplied by 0.70 (to reflect that 70% of the target
award was based on the quantitative factors). The qualitative portion of the
award was limited to 100% of the executives base salary multiplied by 0.30 (to
reflect that 30% of the target award was based on qualitative factors).
19
Quantitative Portion of
the Cash Incentive Award Plan
The quantitative portion of the
cash incentive award plan was based on the achievement of specified levels of
fundamental diluted earnings per share for fiscal 2014. The following levels of
fundamental diluted earnings per share entitle the executive to receive the
following percentages of this portion of the award:
|
> |
$ 1.40 (threshold)0% |
|
> |
$ 1.60 (target)100% |
|
> |
$ 1.80 (maximum)200% for Dr. Belamant and 150%
for Mr. Kotzé |
|
> |
Fundamental EPS above $1.40 and below $1.80 is
interpolated on a linear basis and rounded to the nearest percentage. |
Quantitative Portion of
the Cash Incentive Award PlanPotential and Actual Payments
The table below presents our
potential and actual payments to Dr. Belamant and Mr. Kotzé related to the
quantitative portion of our cash incentive award plan for fiscal 2014:
2014 Quantitative portion of cash incentive
award plan |
|
|
|
Dr. Serge
C.P. |
|
|
Herman G.
Kotzé |
|
|
|
BelamantChief |
|
|
Chief
Financial |
|
|
|
Executive Officer |
|
|
Officer |
|
|
|
Potential |
|
|
|
|
|
Potential |
|
|
|
|
|
|
Payment |
|
|
|
|
|
Payment |
|
|
Actual |
|
|
|
($) |
|
|
Actual ($) |
|
|
($) |
|
|
($) |
|
Threshold |
|
0 |
|
|
|
|
|
0 |
|
|
|
|
Target |
|
655,988 |
|
|
|
|
|
347,288 |
|
|
|
|
Maximum |
|
1,311,975 |
|
|
|
|
|
520,931 |
|
|
|
|
Actual |
|
|
|
|
1,311,975 |
|
|
|
|
|
520,931 |
|
After the close of fiscal 2014,
the Remuneration Committee met and determined each element of the Companys
financial performance described above and each executives contribution toward
the progress against the qualitative objectives. Based on achievement of
fundamental diluted earnings per share of in excess of $1.80 per share, the
Remuneration Committee determined to award Dr. Belamant and Mr. Kotzé cash
incentive payments of $1,311,975 and $520,931, respectively, in respect of the
quantitative portion of the cash incentive award plan. These amounts represent
the maximum payment under the quantitative portion of the cash incentive award
plan.
Qualitative Portion of the Cash Incentive Award Plan
Each of Dr. Belamant and Mr. Kotzé were entitled to receive up
to 30% of his annual base salary based on his individual contribution toward the
achievement of the following Company-wide objectives no later than August 2014
(which is the scheduled time during the year that the Remuneration Committee
reviews performance against the qualitative metrics of our cash incentive award
plan):
|
|
corporate action and mitigation of regulatory
issues; |
|
|
implementation of the strategic and operating
plans; and |
|
|
implementation and completion of a black
economic empowerment transaction. |
After the close of fiscal 2014,
the Remuneration Committee considered whether to make payments in respect of the
qualitative portion of the cash incentive award plan. The Remuneration Committee
determined to award each of Dr. Belamant and Mr. Kotzé 87%, or $243,653 and
$128,993, respectively, of the qualitative portion of the cash incentive
award.
20
In reaching its conclusion, the
Remuneration Committee considered several factors. First, the Company
implemented two BEE transactions on favorable terms which minimized dilution and
resulted in increased shareholder value. These transactions were designed to
enhance the Companys ability to win any new tender from the South African
Social Security Agency. Second, the Company successfully disposed of two
non-core businesses (MediKredit and NUETS), which will enable management to
focus more time and attention on its core operations and growth businesses,
including its Net1 Mobile Solutions business, which introduced a number of
innovative products during the year. The Remuneration Committee also considered
the rate of progress made on regulatory issues.
Conditional Guaranteed and
Incremental Bonus for Mr. Oh. Mr. Oh met his conditional guaranteed bonus
target and therefore an amount of $190,572 was paid to him for fiscal 2014. Mr.
Oh did not meet his conditional incremental bonus target and therefore no
incremental bonus was paid to him for fiscal 2014.
Bonus for Mr. Soma. Mr.
Soma, our Vice-President Information Technology received a bonus of $290,304
for fiscal 2014 as a result of his participation in various new business
development initiatives (particularly the development and successful testing of
our biometric ATM solution); maintaining and strengthening our relationships
with key IT suppliers, card associations and IT regulatory bodies; ongoing
oversight of various software development projects, including the applications
for delivery of financial inclusion in South Africa; and continuing oversight of
the information technology component of our Sarbanes-Oxley compliance.
Equity Incentive Awards.
In August 2013, Dr. Belamant, Mr. Kotzé and Mr. Soma were awarded options to
purchase 121,428, 64,285 and 39,183 shares of common stock, respectively. These
options are exercisable at a price of $7.35 per share, which was the closing
price of our common stock on the Nasdaq Stock Market on August 21, 2013.
One-third of the options awarded to Dr. Belamant, Mr. Kotzé and Mr. Soma vest on
each of the first, second and third anniversaries of the grant date and expire
ten years after the grant date, conditioned on the continuous service of the
recipient through the applicable vesting date.
In addition, on August 21, 2013,
Mr. Oh was awarded 13,333 shares of restricted stock. One-third of the award
shares vest on the first, second and third anniversaries of the grant date,
conditioned on his continuous service through the applicable vesting date.
Other. We provide on-site
residential security services for Dr. Belamant consisting of two armed guards.
These services are provided based on bona fide business-related security
concerns and are an integral part of our overall risk management program. The
Board believes that provision of these security services is a necessary and
appropriate business expense because Dr. Belamants personal safety and security
are of the utmost importance to us and our shareholders. These security services
may be viewed as conveying a personal benefit to Dr. Belamant. Under Mr. Ohs
employment agreement, he was paid or reimbursed for the items described under
Compensation Discussion and AnalysisImplementing our ObjectivesEmployment
Agreements.
21
REMUNERATION COMMITTEE REPORT
For the Year Ended June 30, 2014
The information contained in
this report shall not be deemed to be soliciting material or filed with the
SEC or subject to the liabilities of Section 18 of the Securities Exchange Act
of 1934, as amended, the Exchange Act, except to the extent that Net 1 UEPS
Technologies, Inc. specifically incorporates it by reference into a document
filed under the Securities Act of 1933, as amended or the Exchange Act.
The Remuneration Committee, which
comprises three independent directors, has reviewed and discussed the
Compensation Discussion and Analysis section of this proxy statement with our
Chief Executive Officer, Dr. Serge C.P. Belamant, and our Chief Financial
Officer, Herman G. Kotzé. Based on this review and discussion, the Remuneration
Committee recommended to our Board of Directors that the Compensation
Discussion and Analysis section be included in our Annual Report on Form 10-K
and this proxy statement.
Remuneration Committee |
Alasdair J.K. Pein, Chairman |
Christopher S. Seabrooke |
Paul Edwards |
EXECUTIVE COMPENSATION TABLES
The following narrative, tables
and footnotes describe the total compensation earned during fiscal years 2014,
2013 and 2012, as applicable, by our named executive officers. The total
compensation presented below in the Summary Compensation Table does not reflect
the actual compensation received by our named executive officers or the target
compensation of our named executive officers in fiscal 2014. The actual value
realized by our named executive officers in fiscal 2014 from long-term equity
incentives (options and restricted stock) is presented in the Option Exercises
and Stock Vested Table on page 25. Target annual incentive awards for fiscal
2014 are presented in the Grants of Plan-Based Awards table on page 23.
SUMMARY COMPENSATION TABLE (1)
The following table sets forth
the compensation earned by our named executive officers for services rendered
during fiscal years 2014, 2013 and 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option |
|
|
Plan |
|
|
All Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Awards |
|
|
Compens- |
|
|
Compens- |
|
|
|
|
Name and |
|
|
|
|
Salary ($) |
|
|
Bonus ($) |
|
|
Awards |
|
|
($) |
|
|
ation |
|
|
ation |
|
|
Total |
|
Principal Position |
|
Year |
|
|
(2) |
|
|
(3) |
|
|
($) |
|
|
(4) |
|
|
($) (3) |
|
|
($) |
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Serge C.P. Belamant, |
|
2014 |
|
|
937,125 |
|
|
- |
|
|
- |
|
|
306,533 |
|
|
1,555,628 |
|
|
27,270 |
(5) |
|
2,826,556 |
|
Chief Executive Officer, |
|
2013 |
|
|
892,500 |
|
|
812,175 |
|
|
- |
|
|
295,656 |
|
|
- |
|
|
32,548 |
(5) |
|
2,032,879 |
|
Chairman of the Board and
Director |
|
2012 |
|
|
892,500 |
|
|
2,000,000 |
|
|
3,055,250 |
(6) |
|
245,012 |
|
|
661,938 |
|
|
36,731 |
(5) |
|
6,891,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman G. Kotzé, Chief |
|
2014 |
|
|
496,125 |
|
|
- |
|
|
- |
|
|
162,281 |
|
|
649,924 |
|
|
- |
|
|
1,308,330 |
|
Financial Officer, Treasurer, |
|
2013 |
|
|
472,500 |
|
|
429,975 |
|
|
- |
|
|
156,524 |
|
|
- |
|
|
- |
|
|
1,058,999 |
|
Secretary and Director |
|
2012 |
|
|
472,500 |
|
|
1,200,000 |
|
|
1,833,150 |
(6) |
|
131,256 |
|
|
350,437 |
|
|
- |
|
|
3,987,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
357,322 |
|
|
- |
|
|
97,998 |
(7) |
|
- |
|
|
190,572 |
|
|
65,707 |
(8) |
|
711,599 |
|
Phil-Hyun Oh, President |
|
2013 |
|
|
349,701 |
|
|
- |
|
|
- |
|
|
- |
|
|
186,507 |
|
|
63,062 |
(8) |
|
599,270 |
|
KSNET |
|
2012 |
|
|
340,418 |
|
|
- |
|
|
- |
|
|
- |
|
|
181,121 |
|
|
64,778 |
(8) |
|
586,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitin Soma, Vice-President
|
|
2014 |
|
|
302,400 |
|
|
290,304 |
|
|
- |
|
|
98,913 |
|
|
- |
|
|
- |
|
|
691,617 |
|
Information Technology |
|
2013 |
|
|
288,000 |
|
|
72,000 |
|
|
- |
|
|
144,930 |
|
|
- |
|
|
- |
|
|
504,930 |
|
|
|
2012 |
|
|
288,000 |
|
|
472,000 |
|
|
611,050 |
(6) |
|
62,909 |
|
|
- |
|
|
- |
|
|
1,433,959 |
|
_______________________ |
(1) |
Includes only those columns relating to compensation
awarded to, earned by, or paid to the named executive officers in any of
fiscal 2014, 2013 or 2012. All other columns have been
omitted. |
22
(2) |
The applicable amount for Dr. Belamant, Mr. Kotzé and Mr.
Soma is denominated in United States dollars (USD) and paid in ZAR at
the exchange rate in effect at the time of payment. Mr. Ohs salary is
denominated and paid in Korean won (KRW) and has been translated into
USD at the average exchange rate for fiscal 2014. |
|
|
(3) |
Bonus and non-equity incentive plan compensation
represent amounts earned for the fiscal years ended June 30, and were paid
after close of the fiscal year. In fiscal 2013, each of Dr. Belamant and
Mr. Kotzé received a bonus in lieu of payment under the non-equity
incentive plan. The amounts for Dr. Belamant, Mr. Kotzé and Mr. Soma are
denominated in USD and the amount for Mr. Oh is denominated and paid in
KRW, translated into USD at the average exchange rate for the year in
which payment was made. |
|
|
(4) |
Represents FASB ASC Topic 718 grant date fair value of
stock options granted under our Stock Incentive Plan. See note 18 to the
consolidated financial statements included in our Annual Report on Form
10-K for the year ended June 30, 2014, for the relevant assumptions used
in calculating grant date fair value under FASB ASC Topic 718. |
|
|
(5) |
Represents costs for security guards for Dr. Belamant,
which are paid in ZAR. |
|
|
(6) |
Represents FASB ASC Topic 718 grant date fair value of shares of restricted stock awarded in February 2012 related to the new SASSA contract, one-third of which vest on February 8 of 2013, 2014 and 2015. Vesting of the award shares is conditioned upon each recipient's continuous service through the applicable vesting date. See note 18 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2014, for the relevant assumptions used in calculating grant date fair value under FASB ASC Topic 718. |
|
|
(7) |
Represents FASB ASC Topic 718 grant date fair value of
shares of restricted stock awarded in August 2013, one-third of which vest
on August 21 of 2014, 2015 and 2016. Vesting of the award shares is
conditioned upon Mr. Ohs continuous service through the applicable
vesting date. See note 18 to the consolidated financial statements
included in our Annual Report on Form 10-K for the year ended June 30,
2014, for the relevant assumptions used in calculating grant date fair
value under FASB ASC Topic 718. |
|
|
(8) |
Represents payments made by us for Mr. Ohs Korea
mandatory employee national health insurance, national pension, school
fees and automobile expenses, which are paid in KRW translated into USD at
the average exchange rate for the year. The fiscal 2014 and 2013 amounts
include car rental of $29,157 and $25,510,
respectively. |
GRANTS OF PLAN-BASED AWARDS (1)
The following table provides
information concerning non-equity and equity incentive plan awards granted
during fiscal 2014 to each of our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
|
All Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
|
|
|
Grant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
Awards: |
|
|
Exercise |
|
|
Date Fair |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
|
Number of |
|
|
or Base |
|
|
Value of |
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
of Shares |
|
|
Securities |
|
|
Price of |
|
|
Stock and |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive |
|
|
of Stock |
|
|
Underlying |
|
|
Option |
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards (2) |
|
|
or
Units |
|
|
Options |
|
|
Awards |
|
|
Awards |
|
|
|
|
|
|
Date of |
|
|
Type |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant |
|
|
Committee |
|
|
of |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Date |
|
|
Action |
|
|
Award |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
(#) |
|
|
(#) |
|
|
($/Sh) |
|
|
($) |
|
Dr. Serge C.P. |
|
- |
|
|
08/21/13 |
|
|
AC |
|
|
32,799 |
|
|
937,125 |
|
|
1,593,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Belamant |
|
08/21/13 |
|
|
08/21/13 |
|
|
SO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,428 |
|
$ |
7.35 |
|
|
306,533 |
|
Herman G. |
|
- |
|
|
08/21/13 |
|
|
AC |
|
|
17,364 |
|
|
496,125 |
|
|
669,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kotzé |
|
08/21/13 |
|
|
08/21/13 |
|
|
SO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,285 |
|
$ |
7.35 |
|
|
162,281 |
|
Phil-Hyun |
|
- |
|
|
09/14/10 |
|
|
AC |
|
|
190,572 |
|
|
357,322 |
|
|
446,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oh |
|
08/21/13 |
|
|
08/21/13 |
|
|
RS |
|
|
|
|
|
|
|
|
|
|
|
13,333 |
|
|
|
|
|
|
|
|
97,998 |
|
Nitin Soma |
|
08/21/13 |
|
|
08/21/13 |
|
|
SO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,183 |
|
$ |
7.35 |
|
|
98,913 |
|
(1) |
AC (annual cash incentive award); RS (restricted stock);
SO (stock option). Includes only those columns relating to grants awarded
to the named executive officers in fiscal 2014. All other columns have
been omitted. |
23
(2) |
On August 21, 2013, the Remuneration Committee approved a
fiscal 2014 cash incentive award plan for Dr. Belamant and Mr. Kotzé. The
plan and the actual payments made there under are described in detail
under Compensation Discussion and Analysis Elements of 2014
CompensationPayments under Cash Incentive Award Plan. There was no
threshold for the qualitative portion of the award plan and therefore the
amount presented includes only the quantitative portion of the plan. At or
below fundamental diluted earnings per share of $1.40, no amounts would
have been paid. Target and maximum payouts were to be made at fundamental
diluted earnings per share of $1.60 and $1.80, respectively, with awards
to be interpolated on a linear basis relative to $1.60 at levels of
fundamental diluted earnings per share between $1.40 and $1.80. A cash
incentive plan for Mr. Oh is set forth in his employment agreement. The
plan and the actual payments made there under are described in detail
under Compensation Discussion and Analysis Implementing our Objectives
Employment Agreements. The threshold, target and maximum amounts for Mr.
Oh are denominated in KRW and have been translated to US dollars using the
average exchange rate for fiscal 2014. |
OUTSTANDING EQUITY AWARDS AT 2014 FISCAL YEAR-END
(1)
The following table shows all
outstanding equity awards held by our named executive officers at the end of
fiscal 2014. The market value of unvested shares reflected in this table is
calculated by multiplying the number of unvested shares by the per share closing
price of $11.38 of our common stock on June 30, 2014, the last trading day of
the fiscal year.
|
|
|
|
|
Option Awards |
|
|
|
|
|
|
|
|
Stock Awards |
|
|
|
|
|
|
Number |
|
|
Number |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
of |
|
|
of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
|
Equity Incentive |
|
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
Plan Awards: |
|
|
|
Under- |
|
|
Under- |
|
|
|
|
|
|
|
|
|
|
|
Market |
|
|
Number of |
|
|
Market or |
|
|
|
lying |
|
|
lying |
|
|
|
|
|
|
|
|
Number of |
|
|
Value of |
|
|
Unearned |
|
|
Payout Value of |
|
|
|
Unexer- |
|
|
Unexer- |
|
|
|
|
|
|
|
|
Shares or |
|
|
Shares or |
|
|
Shares, Units |
|
|
Unearned |
|
|
|
cised |
|
|
cised |
|
|
|
|
|
|
|
|
Units of |
|
|
Units of |
|
|
or Other |
|
|
Shares, Units or |
|
|
|
Options |
|
|
Options |
|
|
Option |
|
|
|
|
|
Stock That |
|
|
Stock
That |
|
|
Rights That |
|
|
Other Rights |
|
|
|
(#) |
|
|
(#) |
|
|
Exercise |
|
|
Option |
|
|
Have Not |
|
|
Have Not |
|
|
Have Not |
|
|
That Have Not |
|
|
|
Exer- |
|
|
Unexer- |
|
|
Price |
|
|
Expiration |
|
|
Vested |
|
|
Vested |
|
|
Vested |
|
|
Vested |
|
Name |
|
cisable |
|
|
cisable |
|
|
($) |
|
|
Date |
|
|
(#) |
|
|
($) |
|
|
(#) |
|
|
($) |
|
Dr. Serge C.P. |
|
80,000 |
|
|
- |
|
$ |
22.51 |
|
|
8/24/2016 |
|
|
91,666 |
(4) |
|
1,043,159 |
|
|
|
|
|
|
|
Belamant |
|
200,000 |
|
|
- |
|
$ |
24.46 |
|
|
8/24/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000 |
|
|
- |
|
$ |
13.16 |
|
|
5/20/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
- |
|
$ |
10.59 |
|
|
11/10/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,666 |
|
|
37,334 |
(1) |
$ |
7.98 |
|
|
10/28/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,000 |
|
|
68,000 |
(2) |
$ |
8.75 |
|
|
08/22/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
121,428 |
(3) |
$ |
7.35 |
|
|
08/21/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman G. |
|
35,000 |
|
|
- |
|
$ |
22.51 |
|
|
8/24/2016 |
|
|
55,000 |
(5) |
|
625,900 |
|
|
|
|
|
|
|
Kotzé |
|
100,000 |
|
|
- |
|
$ |
24.46 |
|
|
8/24/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,000 |
|
|
- |
|
$ |
13.16 |
|
|
5/20/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,000 |
|
|
- |
|
$ |
10.59 |
|
|
11/10/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000 |
|
|
20,000 |
(1) |
$ |
7.98 |
|
|
10/28/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,000 |
|
|
36,000 |
(2) |
$ |
8.75 |
|
|
08/22/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
64,285 |
(3) |
$ |
7.35 |
|
|
08/21/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phil-Hyun Oh |
|
- |
|
|
|
|
|
|
|
|
|
|
|
13,333 |
(6) |
|
151,730 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitin Soma |
|
20,000 |
|
|
- |
|
$ |
22.51 |
|
|
8/24/2016 |
|
|
18,333 |
(7) |
|
208,630 |
|
|
|
|
|
|
|
|
|
60,000 |
|
|
- |
|
$ |
24.46 |
|
|
8/24/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000 |
|
|
- |
|
$ |
13.16 |
|
|
5/20/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000 |
|
|
- |
|
$ |
10.59 |
|
|
11/10/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,334 |
|
|
11,666 |
(8) |
$ |
6.59 |
|
|
08/26/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,667 |
|
|
33,333 |
(2) |
$ |
8.75 |
|
|
08/22/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
39,183 |
(3) |
$ |
7.35 |
|
|
08/21/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
These options vest on October 28, 2014. |
(2) |
Fifty percent of these options vest on each of August 22,
2014 and 2015, respectively. |
(3) |
Represents stock options awarded in August 2013 to the
extent that they remained unvested as of June 30, 2014. One-third of these
options vest on each of August 21, 2014, 2015 and 2016,
respectively. |
(4) |
These 91,666 shares of restricted stock were awarded in
February 2012, and are scheduled to vest on February 6, 2015, with vesting
conditioned upon continuous service through the applicable vesting
date. |
24
(5) |
These 55,000 shares of restricted stock were awarded in
February 2012, and are scheduled to vest on February 6, 2015, with vesting
conditioned upon continuous service through the applicable vesting
date. |
(6) |
These 13,333 shares of restricted stock were awarded in
August 2013, and are scheduled to vest on each of August 21, 2014, 2015
and 2016, with vesting conditioned upon continuous service through the
applicable vesting date. One-third of the shares of restricted stock vest
on each of August 21, 2014, 2015 and 2016, respectively. |
(7) |
These 18,333 shares of restricted stock were awarded in
February 2012, and are scheduled to vest on February 6, 2015, with vesting
conditioned upon continuous service through the applicable vesting date. |
(8) |
These options vest on August 26,
2014. |
OPTION EXERCISES AND STOCK VESTED
(1)
There were no stock options
exercised by our named executive officers during fiscal 2014. The following
table shows all stock awards that vested during fiscal 2014.
|
|
Stock Awards |
|
|
|
Number of |
|
|
|
|
|
|
shares |
|
|
|
|
|
|
acquired on |
|
|
Value Realized |
|
Name |
|
vesting (#) |
|
|
on Vesting ($)(2) |
|
Dr. Serge C.P. Belamant |
|
91,667 |
|
|
747,086 |
|
Herman G. Kotzé |
|
55,000 |
|
|
448,250 |
|
Phil-Hyun Oh |
|
- |
|
|
- |
|
Nitin Soma |
|
18,333 |
|
|
149,414 |
|
(1) |
Includes only those columns relating to stock awards held
by our named executive officers that vested in fiscal 2014. All other
columns have been omitted. |
|
|
(2) |
The value realized on vesting is calculated as the
closing price of our common stock on the vesting date multiplied by the
number of common shares of restricted stock that
vested. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
As described above under
Compensation Discussion and Analysis, we do not have employment, severance or
change of control agreements with named executive officers, other than the
employment agreement with Mr. Oh. In addition, none of our outstanding equity
awards include provisions for accelerated vesting upon a change in control of
our company or termination of employment following such a change in control.
Under the terms of Mr. Ohs
employment agreement, if he is removed from office as a director of KSNET
without justifiable cause, he is entitled to receive the amounts of base salary
and the bonus (if any) that would have been due and payable to him if he was
fully employed with us for the remainder of the then-current fiscal year. The
term justifiable cause includes any of the following circumstances, as well as
any other circumstances permitted under applicable law:
|
|
Mr. Oh has breached the provisions on
non-competition or confidentiality of the employment agreement; |
|
|
|
|
|
Mr. Oh has taken actions that are likely to
result in a material loss of or harm to the business, reputation or
goodwill of KSNET; |
|
|
|
|
|
Mr. Oh has misappropriated funds or assets of
KSNET; |
|
|
|
|
|
Mr. Oh has concealed from or falsely disclosed
to KSNET his name, age, education, experience, or other personal
information; |
25
|
|
Mr. Oh has failed to show performance results
or job capacity; |
|
|
|
|
|
Mr. Oh has committed a crime or offense which
will adversely affect the interest or reputation of KSNET; or |
|
|
|
|
|
Mr. Oh has committed gross negligence, willful
misconduct or any violation of laws in performance of his duties.
|
Assuming that Mr. Oh was removed
from office as a director of KSNET without justifiable cause on the last day of
fiscal 2014, i.e., June 30, 2014, Mr. Oh would not have been entitled to receive
any cash severance because he would have already received all amounts of base
salary and bonus for the fiscal year.
Mr. Oh is also entitled to a
severance payment equal to 300% of his monthly base salary for each completed
year of service at KSNET. Using exchange rates applicable as of June 30, 2014,
and seven years of completed service, Mr. Oh would be entitled to a severance
payment of $625,313.
Except as described above with
respect to Mr. Oh, there would be no compensation, other than that prescribed by
local labor laws in the case of unfair dismissal or retrenchment, that would
become payable under the existing plans and arrangements if the employment of
any of our named executive officers had terminated on June 30, 2014.
We do not have any ongoing
obligation to provide post-termination benefits to our named executive officers
after termination of employment.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Review, Approval or Ratification of Related Person
Transactions
We review all relationships and
transactions in which we and our directors and named executive officers or their
immediate family members are participants to determine whether such persons have
a direct or indirect material interest. Our Chief Executive Officer and Chief
Financial Officer are primarily responsible for the development and
implementation of processes and controls to obtain information from the
directors and named executive officers with respect to related person
transactions and for then determining, based on the facts and circumstances,
whether we or a related person has a direct or indirect material interest in the
transaction. As required under SEC rules, transactions that are determined to be
directly or indirectly material to us or a related person are disclosed in our
proxy statement. In addition, our Audit Committee reviews and approves or
ratifies any related person transaction that is required to be disclosed. In the
course of its review and approval or ratification of a disclosable related party
transaction, our Audit Committee considers:
|
|
the nature of the related persons interest in
the transaction; |
|
|
|
|
|
the material terms of the transaction,
including, without limitation, the amount and type of transaction; |
|
|
|
|
|
the importance of the transaction to the
related person; |
|
|
|
|
|
the importance of the transaction to us; |
|
|
|
|
|
whether the transaction would impair the
judgment of a director or executive officer to act in our best interest;
and |
|
|
|
|
|
any other matters the committee deems
appropriate. |
26
Any member of the Audit Committee
who is a related person with respect to a transaction under review may not
participate in the deliberations or vote respecting approval or ratification of
the transaction, provided, however, that such director may be counted in
determining the presence of a quorum at a meeting of the committee that
considers the transaction.
Related Party Transactions
There were no related party
transactions during fiscal 2014 that are required to be disclosed under Item 404
of Regulation S-K.
AUDIT AND NON-AUDIT FEES
The following table shows the
fees that we paid or accrued for the audit and other services provided by
Deloitte for the fiscal years ended June 30, 2014 and 2013.
|
|
2014 |
|
|
2013 |
|
|
|
$ 000 |
|
|
$ 000 |
|
Audit Fees |
|
1,960 |
|
|
1,720 |
|
Audit-Related Fees |
|
- |
|
|
- |
|
Tax Fees |
|
- |
|
|
- |
|
Other Fees: Responding to SEC Inquiry |
|
351 |
|
|
113 |
|
All Other Fees |
|
- |
|
|
- |
|
Audit Fees This category
includes the audit of our annual consolidated financial statements, review of
financial statements included in our quarterly reports on Form 10-Q, the
required audit of managements assessment of the effectiveness of our internal
control over financial reporting and the auditors independent audit of internal
control over financial reporting, and the services that an independent auditor
would customarily provide in connection with subsidiary audits, statutory
requirements, regulatory filings, and similar engagements for the fiscal year,
such as comfort letters, attest services, consents, and assistance with review
of documents filed with the SEC. This category also includes advice on audit and
accounting matters that arose during, or as a result of, the audit or the review
of interim financial statements.
Audit-Related Fees This
category consists of assurance and related services by the independent
registered public accounting firm that are reasonably related to the performance
of the audit or review of our financial statements and are not reported above
under Audit Fees. There were no such fees paid in the fiscal years ended June
30, 2014 or 2013.
Tax Fees This category consists
of professional services rendered by Deloitte for tax compliance and tax advice.
The services for the fees disclosed under this category include tax return
review and technical tax advice. There were no such fees paid in the fiscal
years ended June 30, 2014 or 2013.
Other Fees: Responding to SEC
Inquiry This category consists of services, including costs, incurred by
Deloitte that arose during, or as a result of, the investigation by the DOJ/SEC.
The services for the fees disclosed under this category include responding to
document production requests, and preparation for presentations made by Deloitte
directly to the SEC.
All Other Fees There were no
such fees paid in the fiscal years ended June 30, 2014 or 2013.
27
Pre-Approval of Non-Audit Services
Pursuant to our Audit Committee
charter, our Audit Committee reviews and pre-approves both audit and non-audit
services to be provided by our independent auditors. The authority to grant
pre-approvals of non-audit services may be delegated to one or more designated
members of the Audit Committee whose decisions will be presented to the full
Audit Committee at its next regularly scheduled meeting. During fiscal years
2014 and 2013, all of services provided by Deloitte with respect to fiscal years
2014 and 2013 were pre-approved by the Board and the Audit Committee.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board
consists of three independent directors, as required by Nasdaq listing
standards. The Audit Committee operates under a written charter adopted by the
Board and available on our website at www.net1.com under the Investor Relations
Governance section. The Audit Committee is responsible for overseeing our
financial reporting process on behalf of the Board. The members of the Audit
Committee are Messrs. Seabrooke, Pein and Edwards. The Audit Committee selects,
subject to shareholder ratification, our independent registered public
accounting firm.
Management is responsible for our
financial statements and the financial reporting process, including internal
controls. The independent registered public accounting firm is responsible for
performing an independent audit of our consolidated financial statements in
accordance with auditing standards generally accepted in the United States and
of our internal control over financial reporting and for issuing a report
thereon. The Audit Committees responsibility is to monitor and oversee these
processes.
In this context, the Audit
Committee has met and held discussions with management and Deloitte. Our Chief
Executive Officer and Chief Financial Officer represented to the Audit Committee
that the consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States, and the committee
reviewed and discussed the consolidated financial statements with our Chief
Executive Officer and Chief Financial Officer and Deloitte. The Audit Committee
discussed with Deloitte the matters required to be discussed by the Statement on
Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU
§380), as adopted by the Public Company Accounting Oversight Board in Rule
3200T. These matters included a discussion of Deloittes judgments about the
quality (not just the acceptability) of our accounting principles as applied to
our financial reporting.
Deloitte also provided the Audit
Committee with the written disclosures and letter required by applicable
requirements of the PCAOB regarding Deloittes communications with the Audit
Committee concerning independence, and the Audit Committee discussed with
Deloitte the firms independence. The Audit Committee further considered whether
the provision by Deloitte of the non-audit services described above is
compatible with maintaining the auditors independence.
Based upon the Audit Committees
discussion with management and Deloitte and the Audit Committees review of the
representations of management and the disclosures by Deloitte to the Audit
Committee, the Audit Committee recommended to the Board that our audited
consolidated financial statements be included in our Annual Report on Form 10-K
for the year ended June 30, 2014, for filing with the SEC.
Audit Committee
Christopher
S. Seabrooke, Chairman
Alasdair J.K. Pein
Paul Edwards
28
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
The following table presents, as
of October 3, 2014, information about beneficial ownership of our common stock
by:
|
|
each person or group of affiliated persons who
or which, to our knowledge, owns beneficially more than 5% of our
outstanding shares of common stock; |
|
|
|
|
|
each of our directors and named executive
officers; and |
|
|
|
|
|
all of
our directors and executive officers as a group. |
Beneficial ownership of shares is
determined in accordance with SEC rules and generally includes any shares over
which a person exercises sole or shared voting or investment power. The
beneficial ownership percentages set forth below are based on 46,475,623 shares
of common stock outstanding as of October 3, 2014. All shares of common stock,
including that common stock underlying stock options that are presently
exercisable or exercisable within 60 days after October 3, 2014 (which we refer
to as being currently exercisable) by each person are deemed to be outstanding
and beneficially owned by that person for the purpose of computing the ownership
percentage of that person, but are not considered outstanding for the purpose of
computing the percentage ownership of any other person. Unless otherwise
indicated, to our knowledge, each person listed in the table below has sole
voting and investment power with respect to the shares shown as beneficially
owned by such person, except to the extent applicable law gives spouses shared
authority.
Except as otherwise noted, each
shareholders address is c/o Net 1 UEPS Technologies, Inc., President Place, 4th
Floor, Corner of Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg, South
Africa.
|
|
|
Shares of Common |
|
|
Name
|
|
Stock Beneficially Owned |
|
|
|
|
Number |
|
|
% |
|
|
Dr. Serge C.P. Belamant(1) |
|
1,611,677 |
|
|
3.43% |
|
|
Paul Edwards(2) |
|
8,105 |
|
|
* |
|
|
Herman G. Kotzé(3) |
|
431,178 |
|
|
* |
|
|
Phil-Hyun Oh (4) |
|
8,889 |
|
|
* |
|
|
Alasdair J.K. Pein(5) |
|
92,440 |
|
|
* |
|
|
Christopher S. Seabrooke(6) |
|
13,604 |
|
|
* |
|
|
Nitin Soma(7) |
|
158,333 |
|
|
* |
|
|
International Value Advisers, LLC(8) |
|
12,718,593 |
|
|
27.37% |
|
|
Allan Gray Proprietary Limited (9) |
|
8,752,896 |
|
|
18.83% |
|
|
Directors and
Executive Officers as a group(10) |
|
2,324,226 |
|
|
4.87% |
|
*Less than one percent
(1) |
Comprises (i) 163,430 shares of unrestricted stock; (ii) 175,114 shares of restricted stock, the vesting of which is subject to the satisfaction of certain financial performance and other conditions described elsewhere in this proxy statement; (iii) options to purchase 547,334 shares of common stock, all of which are currently exercisable; and (iv) 725,799 shares of common stock owned by CI Law Trustees Limited for the San Roque Trust dated 8/18/92. Dr. Belamant as proxy of CI Law Trustees has the power to vote all of CI Law Trustees' shares. Does not include options to purchase 198,400 shares of common stock which are currently not exercisable by Dr. Belamant. |
|
|
(2) |
Comprises 8,105 shares of restricted stock which vest
over time and are subject to forfeiture. Vesting of the restricted stock
is conditioned on Mr. Edwards continued service as a member of our Board
on the applicable vesting date. |
29
(3) |
Comprises (i) 99,178 shares of restricted stock, the
vesting of which is subject to the satisfaction of certain financial
performance and other conditions described elsewhere in this proxy
statement; and (ii) options to purchase 332,000 shares of common stock,
all of which are currently exercisable. Does not include options to
purchase 105,034 shares of common stock which are currently not
exercisable by Mr. Kotzé. |
|
|
(4) |
Comprises 8,889 shares of restricted stock which vest
over time and are subject to forfeiture. Vesting of the restricted stock
is conditioned on Mr. Ohs continued service as our employee on the
applicable vesting date. |
|
|
(5) |
Comprises (i) 6,432 shares of unrestricted stock; (ii) 10,884 shares of restricted stock which vest over time and are subject to forfeiture; and (iii) 75,124 shares of common stock held by a trust, settled by Mr. Pein and of which he is a beneficiary. Vesting of the restricted stock is conditioned on Mr. Pein's continued service as a member of our Board on the applicable vesting date. |
|
|
(6) |
Comprises 13,604 shares of restricted stock which vest
over time and are subject to forfeiture. Vesting of the restricted stock
is conditioned on Mr. Seabrookes continued service as a member of our
Board on the applicable vesting date. |
|
|
(7) |
Comprises (i) 18,333 shares of restricted stock which
vest over time and are subject to forfeiture; and (ii) options to purchase
140,000 shares of common stock, all of which are currently exercisable.
Does not include options to purchase 69,716 shares of common stock which
are currently not exercisable by Mr. Soma. |
|
|
(8) |
Based solely on Amendment No. 6 to Schedule 13G, dated
February 14, 2014, filed by International Value Advisers, LLC. The
business address of International Value Advisers, LLC is 717 Fifth Avenue,
10th Floor, New York, NY 10022. |
|
|
(9) |
Except as set forth in the last sentence of this
footnote, the number of shares presented and all of the information
contained in this footnote is based solely on Amendment No. 3 to Schedule
13G, dated March 7, 2014, filed by Allan Gray Proprietary Limited (Allan
Gray), a corporation organized under the laws of the Republic of South
Africa. The address of Allan Gray is 1 Silo Square, V&A Waterfront,
Cape Town, 8001. Allan Gray has advised us that it has reported its
beneficial ownership on Schedule 13G as a result of its sole dispositive
power related to these shares and that all of such shares are owned by
clients of entities wholly- owned by Allan Gray, and not by the Allan Gray
entities themselves. |
|
|
(10) |
Represents shares beneficially owned by the directors and
executive officers listed in the table. Includes shares issuable upon
exercise of options to purchase 1,019,334 shares of common stock, all of
which are currently exercisable and 334,107 shares of restricted stock,
the vesting of which is subject to certain conditions discussed
above. |
ADDITIONAL
INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act
requires that our executive officers and directors, and persons who own more
than 10% of a registered class of our equity securities, file reports of
ownership and changes in ownership with the SEC and provide us with copies of
such reports. We have reviewed such reports received by us and written
representations from our directors and executive officers. Based solely on such
review and representations, we believe that all filings requirements applicable
to our executive officers, directors and more than 10% shareholders were
complied with during fiscal year 2014.
Annual Report on Form 10-K
A copy of our annual report on
Form 10-K (without exhibits) for the fiscal year ended June 30, 2014, is being
distributed along with this proxy statement. We refer you to such report for
financial and other information about us, but such report is not incorporated in
this proxy statement and is not deemed to be a part of the proxy solicitation
material. It is also available on our website (www.net1.com). In addition, the
annual report (with exhibits) is available at the SECs website
(www.sec.gov).
30
Shareholder Proposals for the 2015 Annual Meeting
Qualified shareholders who wish
to have proposals presented at the 2014 annual meeting of shareholders must
deliver them to us by June 12, 2015, in order to be considered for inclusion in
next years proxy statement and proxy pursuant to Rule 14a-8 under the Exchange
Act. Shareholders who intend to present an item of business for our 2015 annual
meeting of shareholders (other than a proposal presented for inclusion in next
years proxy statement and proxy pursuant to Rule 14a-8) must provide notice of
such business to us by June 12, 2015, as set forth more fully in Sections 2.08
and 4.16 of our Amended and Restated By-Laws. All proposals and nominations must
be delivered to us at our principal executive offices at PO Box 2424, Parklands
2121, Johannesburg, South Africa.
Householding of Proxy Materials
We have adopted a procedure
approved by the SEC called householding. Under this procedure, multiple
shareholders who share the same last name and address will receive only one copy
of the annual proxy materials, unless they notify us that they wish to continue
receiving multiple copies. We have undertaken householding to reduce our
printing costs and postage fees.
If you wish to opt-out of
householding and receive multiple copies of the proxy materials at the same
address, you may do so at any time prior to 30 days before the mailing of proxy
materials, which typically are mailed at the end of October of each year, by
notifying us in writing at: Net 1 UEPS Technologies, Inc., PO Box 2424,
Parklands 2121, Johannesburg, South Africa, Attention: Net 1 UEPS Technologies,
Inc. Corporate Secretary. You also may request additional copies of the proxy
materials by notifying us in writing at the same address.
If you share an address with
another shareholder and currently are receiving multiple copies of the proxy
materials, you may request householding by notifying us at the above-referenced
address.
Other Matters
The Board knows of no other
matters that will be presented for consideration at the annual meeting. Return
of a valid proxy, however, confers on the designated proxy holders the
discretionary authority to vote the shares in accordance with their best
judgment on such other business, if any, that may properly come before the
meeting or any adjournment or postponement thereof.
|
|
|
By Order of the Board of Directors, |
|
|
|
|
|
Dr. Serge C. P. Belamant |
|
Chairman and Chief Executive Officer |
October 10, 2014
THE BOARD HOPES THAT YOU WILL
ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE PROMPTLY COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY.
31
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