def14a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o 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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offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule
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NET 1
UEPS TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
to be held on November 25,
2009
To the Shareholders of Net 1 UEPS Technologies, Inc.:
NOTICE IS HEREBY GIVEN that the 2009 Annual Meeting of
Shareholders of Net 1 UEPS Technologies, Inc., a Florida
corporation, will be held at President Place, 6th Floor,
Cnr. Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg,
South Africa on November 25, 2009 at 16h00, local time, for
the following purposes:
1. To elect seven directors to serve until the next Annual
Meeting of Shareholders and until their successors are duly
elected and qualified.
2. To consider a proposal to amend and restate our 2004
Stock Incentive Plan.
3. To ratify the selection of Deloitte & Touche
(South Africa) as the independent registered public accounting
firm for the fiscal year ending June 30, 2010.
4. 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 16, 2009 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, which is located at President Place, 6th Floor,
Cnr. Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg,
South Africa 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, 2009, which is enclosed with this proxy
statement.
The Board of Directors,
Dr. Serge C. P. Belamant
Chairman and Chief Executive Officer
Johannesburg, South Africa
October 28, 2009
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON
NOVEMBER 25, 2009. 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
WE CORDIALLY
INVITE ALL SHAREHOLDERS TO ATTEND IN PERSON. HOWEVER,
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE
PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
IN THE
ENVELOPE PROVIDED. IF YOU ATTEND THE ANNUAL MEETING YOU MAY
REVOKE YOUR
PROXY CARD AND VOTE IN PERSON.
NET 1
UEPS TECHNOLOGIES, INC.
President Place, 6th Floor,
Cnr. Jan Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
PROXY
STATEMENT
TABLE OF
CONTENTS
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A-1
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1
General
This proxy statement is being furnished to shareholders of Net 1
UEPS Technologies, Inc., a Florida corporation, in connection
with the solicitation by our Board of Directors, or the Board,
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 25, 2009 at 16h00, local time, and at any
adjournment or postponement of the annual meeting.
INFORMATION
CONCERNING SOLICITATION AND VOTING
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.
This proxy statement and the accompanying solicitation materials
are being sent to our shareholders on or about October 28,
2009.
Revocation
of Proxies
You may revoke your proxy at any time prior to exercise of the
proxy by (1) 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., P O Box 2424,
Parklands 2121, Gauteng, South Africa, or (2) 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. However, if you are a shareholder
whose shares are not registered in your own name, you will need
documentation from your record holder stating your ownership as
of October 16, 2009 in order to vote personally at the
annual meeting.
Record
Date, Quorum and Voting Requirements
Each holder of shares of our common stock on the close of
business on October 16, 2009, the record date, is entitled
to notice of and vote at the annual meeting or any adjournment
thereof. There were 45,378,397 shares of common stock
outstanding on the record date. The presence at the annual
meeting, in person or by a proxy, of a majority of the total
number of outstanding shares of common stock, or
22,689,199 shares, is necessary to constitute a quorum.
Each share of common stock is entitled to one vote on all
matters to be acted upon at the annual meeting. For purposes of
the quorum and the discussion below regarding the vote necessary
to take shareholder action, holders of record of common stock
who are present at the annual meeting in person or by proxy and
who abstain, including brokers holding customers shares of
record who cause abstentions to be recorded at the annual
meeting, are considered shareholders who are present and
entitled to vote and they count toward the quorum. 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.
Brokers holding shares of record for customers generally are not
entitled to vote on certain matters unless they receive voting
instructions from their customers. Broker non-votes
mean the votes that could have been cast on the matter in
question if the brokers had received instructions from their
customers, and as to which the brokers have notified us on a
proxy form in accordance with industry practice or have
otherwise advised us that they lack voting authority.
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Under the rules that govern brokers who are voting with respect
to shares held in a fiduciary capacity, brokers have the
discretion to vote shares on routine matters, but not on
non-routine matters. Routine matters include, among other
things, the election of directors in an uncontested election and
ratification of the appointment of an independent registered
public accounting firm. Non-routine matters include amendments
to stock plans. This means that if you hold your shares through
a broker, bank or other nominee, and you do not provide voting
instructions by the tenth day before the annual meeting, the
broker, bank or other nominee has the discretion to vote your
shares on all proposals described in this proxy statement except
for the amendment and restatement of our 2004 Stock Incentive
Plan.
All outstanding shares of common stock represented by valid and
unrevoked proxies received in time for the annual meeting will
be voted. Shares will be voted as instructed in the accompanying
proxy on each matter submitted to shareholders. A shareholder
may, with respect to the election of directors (1) vote for
the election of the named director nominees, (2) withhold
authority to vote for all such director nominees or
(3) vote for the election of all such director nominees
other than any nominee(s) with respect to whom the shareholder
withholds authority to vote by writing such nominees name
on the proxy in the space provided. A shareholder may, with
respect to each other matter specified in the notice of meeting
(1) vote FOR the matter, (2) vote
AGAINST the matter or (3) ABSTAIN
from voting on the matter. If no instructions are given on a
properly completed and returned proxy, the shares will be voted
FOR the election of the named director nominees, FOR approval of
the amendment and restatement of our 2004 Stock Incentive Plan,
and FOR the ratification of the selection of
Deloitte & Touche (South Africa), or Deloitte, as our
independent registered public accounting firm for the fiscal
year ending June 30, 2010.
Our seven director nominees will be elected by a plurality of
votes. Withholding a vote as to any director nominee is the
equivalent of abstaining. In an uncontested election such as
this, abstentions have no effect, since approval by a specific
percentage of the shares present or outstanding is not required.
With respect to the proposal to amend and restate our 2004 Stock
Incentive Plan, the affirmative vote of a majority of the shares
of common stock present in person or by proxy at the meeting and
voting is required to approve the proposal. Abstentions will
have the same effect as a vote against the proposal. With
respect to the ratification of the selection of Deloitte as our
independent registered public accounting firm, the proposal will
be approved if the votes cast in favor of the proposal exceed
the number of votes cast against the proposal, and abstentions
and broker non-votes will not be taken into account in
determining the outcome of the vote on this proposal.
The Board knows of no additional 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. Proxies solicited hereby will be tabulated
by inspectors of election designated by the Board.
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 or at such time as their successors shall
be elected and qualified. 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 expiring at the annual
meeting of shareholders in 2010 or until their successors shall
be duly elected and qualified.
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.
3
The Board recommends that you vote FOR election of each
of its director nominees.
Information
Regarding the Nominees
The current members of our Board are as follows:
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Dr. S. C. P. Belamant
56 years old
Director since 1997
Chairman and Chief Executive Officer |
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Dr. Belamant has been our chief executive officer since
October 2000 and the chairman of our Board since February 2003.
From June 1997 until June 2004, Dr. Belamant served as
chief executive officer and a director of Net 1 Applied
Technology Holdings, or Aplitec, whose business was acquired by
Net 1 in June 2004. From 1996 to 1997, Dr. Belamant served
as a consultant in the development of Chip Off-Line
Pre-Authorized Card, which is a Visa product. From October 1989
to September 1995, Dr. Belamant served as the managing
director of Net 1 (Pty) Limited, a privately owned South African
company specializing in the development of advanced technologies
in the field of transaction processing and payment systems.
Dr. Belamant also serves on the boards of a number of other
companies that perform welfare distribution services and the
provision of microfinance to customers. 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 rates today as the third largest ATM switching
system in the world. Dr. Belamant has patented a number of
inventions besides the FTS patent ranging from biometrics to
gaming-related inventions. Dr. Belamant has more than
29 years of experience in the fields of operations
research, security, biometrics, artificial intelligence and
online and offline transaction processing systems.
Dr. Belamant holds a PhD in Information Technology and
Management. |
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Herman G. Kotzé
40 years old
Director since 2004
Chief Financial Officer, Secretary and Treasurer |
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Mr. Kotzé has been our chief financial officer,
secretary and treasurer since June 2004. From January 2000 until
June 2004, he served on the board of Aplitec as group financial
director. In mid-1997 until October 1998, Mr. Kotzé
worked for the Industrial Development Corporation of South
Africa Limited as a business analyst. Mr. Kotzé served
his articles from 1994 to 1996 at KPMG in Pretoria, South
Africa, and in 1997 he became the audit manager for several
major corporations in the manufacturing, mining, retail and
financial services industries. Mr. Kotzé joined
Aplitec in November 1998 as a strategic financial analyst.
Mr. Kotzé is a member of the South African Institute
of Chartered Accountants. |
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Christopher S. Seabrooke
56 years old
Director since 2005
Chief Executive Officer of Sabvest Limited |
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Mr. Seabrooke has been a member of our Board since January
2005. Mr. Seabrooke is chief executive officer and a
director of Sabvest Limited, an investment holding company which
is listed on the JSE Limited (JSE).
Mr. Seabrooke also serves as a director of the following
JSE-listed companies Metrofile Holdings Limited,
Setpoint Technology Holdings Limited (a Sabvest portfolio
company), Massmart Holdings Limited, Datatec Limited and
Primedia Holdings. Mr. Seabrooke is also a director of
Brait, S.A. Mr. Seabrooke is a member of The Institute of
Directors in South Africa. Formerly, he |
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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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Antony C. Ball
50 years old
Director since 2004
Chief Executive Officer of Brait Group |
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Mr. Ball has been a member of our Board since June 2004.
Mr. Ball has held various senior leadership positions with
the Brait Group since 1998 and has been the chief executive
officer of Brait since October 1, 2006. Mr. Ball has
led the raising and governance of a number of Braits
private equity funds and is responsible for certain of its
private equity investments. Prior to assuming his current
position at Brait, Mr. Ball served as joint deputy chairman
of Brait from 1998 to March 2000. Prior to joining Brait,
Mr. Ball was the chief executive of Capital Partners, which
was the predecessor company to Brait and which pioneered the
private equity market in South Africa, from 1991 to 1998.
Mr. Ball began his career with Deloitte & Touche
Consulting
(1986-1991),
where he co-founded its Strategy Group. |
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Alasdair J. K. Pein
49 years old
Director since 2005 |
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Mr. Pein has been a member of our Board since February
2005. Between 1994 and March 2009, Mr. Pein served as the
CEO of the Oppenheimer familys private equity business
(excluding Rest of Africa). During this period of time
Mr. Pein served as a director of a number of private
companies including companies in the Stockdale Street Group
(formerly Southern Cross Capital Group), Central Holdings
Limited and E Oppenheimer & Son International Limited.
From 1995 to 2002 Mr. Pein served as President and CEO of
Task (USA), Inc., a New York-based investment company. In
addition, from 1998 to 2002, Mr. Pein was a director of
Archangel Diamond Corporation Inc. and from 2001 to 2008, was a
director of Arsenal Digital Solutions, a privately-held US
company that provides on-demand data protection services. Prior
to 1994, Mr. Pein worked in London for Bankers
Trust International mergers and acquisitions team.
Mr. Pein is a qualified South African chartered accountant
and completed his articles with Deloitte in Johannesburg in 1987. |
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Paul Edwards
55 years old
Director since 2005
Executive Chairman of Merryn Capital |
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Mr. Edwards has been a member of our Board since July 2005.
Mr. Edwards is the executive chairman of Merryn Capital, a
privately-owned financial services group. From 2002 to 2005,
Mr. Edwards was executive chairman of Chartwell Capital
Group. In January 2005, Mr. Edwards was appointed
non-executive vice chairman of Starcomms Limited, a Nigerian
telecommunications operator. Prior to that, Mr. Edwards was
the chief executive officer of MTN Group, a pan-African mobile
operator. Between 1999 and 2001, Mr. Edwards was the chief
executive officer of the Johnnic Group in South Africa, of which
the MTN Group was a subsidiary. Between 1995 and 1999,
Mr. Edwards was the chief operating officer of MEASAT
Broadcast Network, a Malaysian-based regional pay television
operator. Between 1993 and 1995, Mr. Edwards was executive
vice president of satellite television broadcaster Star TV,
based out of Hong Kong. Between 1989 and 1993, Mr. Edwards
was chief executive officer of Multichoice, Africas
leading pay television operator. Mr. Edwards has a BSc and
an MBA from the University of Cape Town. |
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Tom C. Tinsley
56 years old
Director since 2008
Director of General Atlantic LLC |
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Mr. Tinsley has been a member of our Board since September
2008. He has been employed by General Atlantic LLC, or GA, since
1999 and currently serves as a managing director of GA.
Mr. Tinsley has served on numerous boards of directors of
both private and public companies in the United States. Prior to
joining GA, he served as Chairman and Chief Executive of the
management board of Baan Company NV, a leading provider of
enterprise software solutions. Prior to joining Baan Company NV,
he was a director at McKinsey & Company, where he was
employed for 18 years. Mr. Tinsley serves on our Board
as the nominated director pursuant to a contractual arrangement
between us and investment entities affiliated with GA pursuant
to which GA is entitled to designate one person to serve on our
Board. Mr. Tinsley received an MBA from The Stanford
Graduate School of Business in 1978. |
PROPOSAL NO. 2:
APPROVE THE AMENDMENT AND RESTATEMENT OF
OUR 2004 STOCK INCENTIVE PLAN
The 2004 Stock Incentive Plan of Net 1 UEPS Technologies, Inc.
and Its Subsidiaries (the Stock Incentive Plan) was
initially adopted solely for the purpose of granting awards in
connection with the Aplitec acquisition. In 2006, our
shareholders approved the first amendment and restatement of the
Stock Incentive Plan, which authorized the issuance of an
additional 2,845,600 shares for awards that were expected
to be granted during a five-year period of annual grants
beginning in 2006. As of October 28, 2009, only
570,506 shares, or approximately one-fifth of the
2006 share increase, remain available for the August 2010
annual grant cycle and beyond.
On September 22, 2009, our Board further amended and
restated the Stock Incentive Plan, subject to shareholder
approval, to (among other things) increase the number of shares
available for issuance and extend the term of the plan by five
years. Our Board recommends that shareholders approve the
amended and restated Stock Incentive Plan to allow us to
continue granting stock options and other stock-based awards. As
discussed below under Compensation Discussion
and Analysis, equity awards granted under the Stock
Incentive Plan are a principal element of our executive
officers compensation package. These awards emphasize
long-term company performance, as measured by creation of
shareholder value, and foster a commonality of interest between
shareholders and employees. We believe that the Stock Incentive
Plan is critical in enabling us to attract and retain key
employees and to create effective incentives for those employees
to contribute to our growth and financial success.
In addition, the amended and restated Stock Incentive Plan
reflects our continuing commitment to preserving shareholder
value and promoting corporate responsibility, as evidenced by
the following design features:
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No evergreen provisions are included in the amended and restated
Stock Incentive Plan. This means that the maximum number of
shares issuable under the plan is fixed and cannot be increased
without shareholder approval, the plan expires by its terms upon
a specified date, and no new stock options are awarded
automatically upon exercise of an outstanding stock option.
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Shareholder approval is required for the repricing of awards or
the implementation of any award exchange program.
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There are limits on the number of awards that any one
participant may receive in a given year.
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The maximum number of shares that may be granted during a
calendar year to any one participant with respect to stock
options, stock appreciation rights, and other stock-based awards
(other than performance-based awards that are not options) is
569,120 shares.
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For performance-based awards that are not options, a participant
is limited during a calendar year to receiving awards having an
aggregate value of up to $20,000,000 as of the grant date.
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The
569,120-share
limit on most awards represents 20% of the original share
reserve under the Stock Incentive Plan at its inception.
Although the Board is proposing to increase the share reserve
under the amended and restated Stock Incentive Plan, we have
decided to maintain the original
569,120-share
award limit.
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Performance-based awards exempt from the $1,000,000 cap on
deductible compensation imposed by Section 162(m) of the
Internal Revenue Code of 1986, or the Code, may be granted under
the Stock Incentive Plan. The performance criteria permitted to
be used for such awards are designed to provide the Remuneration
Committee maximum flexibility to tailor incentives targeted
toward performance that it believes best achieves our corporate
objectives and financial success.
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If the amended and restated Stock Incentive Plan is approved,
2,800,000 new shares of common stock will be available for
issuance (in addition to the shares currently available for
future awards or subject to outstanding awards), and the plan
would be scheduled to remain in effect until June 7, 2019.
Other material differences included in the amended and restated
Stock Incentive Plan are described throughout the summary below,
which is qualified in its entirety by reference to the full text
of the plan set forth in Exhibit A to this proxy statement.
If the amended and restated Stock Incentive Plan is not
approved, the plan will continue in effect until June 7,
2014, unless the share reserve is exhausted before then.
Number of
Shares
At its inception, the Stock Incentive Plan provided for the
issuance of 2,906,980 shares of our common stock, as
adjusted to reflect the reverse stock split effectuated on
June 13, 2005. In 2006, the number of shares issuable under
the Stock Incentive Plan was increased by 2,845,600 shares
to an aggregate of 5,752,580 shares. As of October 28,
2009, only 570,506 shares remain available for grant under
the Stock Incentive Plan, although shares underlying outstanding
awards that are subsequently forfeited or expire without
exercise will again be available for future grants.
If the amended and restated Stock Incentive Plan is approved,
the number of shares issuable under the Stock Incentive Plan
will be increased by 2,800,000 shares to an aggregate of
8,552,580 shares. The increase in the number of shares
under the amended and restated Stock Incentive Plan represents
approximately six percent of the aggregate number of outstanding
shares of our common stock as of October 28, 2009. We
anticipate that this increase in available shares will enable us
to continue our equity compensation program at its current rate
of aggregate annual awards for approximately five additional
years.
Shares covered by awards that expire, terminate or lapse without
payment will again be available for the grant of awards under
the Stock Incentive Plan, as well as shares that are delivered
to us by the holder to pay withholding taxes or as payment for
the exercise price of an award, if permitted by the committee
that administers the plan. The number of shares underlying any
substitute awards granted are counted against the aggregate
number of shares available for awards under the Stock Incentive
Plan. The maximum number of shares for which stock options,
stock appreciation rights, and other stock-based awards (other
than performance-based awards that are not options) may be
granted during a calendar year to any participant is
569,120 shares. For performance-based awards that are not
options, a participant is limited during a calendar year to
receiving awards having an aggregate value of up to $20,000,000
as of the grant date. The shares deliverable in connection with
awards granted under the Stock Incentive Plan may consist, in
whole or in part, of authorized but unissued shares or treasury
shares.
To account for stock splits, stock dividends, reorganizations,
recapitalizations, mergers, consolidations, spin-offs and other
corporate events, the amended and restated Stock Incentive Plan
requires the committee that administers the plan to equitably
adjust the number and kind of shares of common stock issued or
reserved pursuant to the plan or outstanding awards, the maximum
number of shares issuable pursuant to awards, the exercise price
for awards, and other affected terms of awards to reflect such
event. Such adjustments to outstanding awards are discretionary,
rather than mandatory, under the existing terms of the Stock
Incentive Plan. Discretionary adjustments made to outstanding
awards to reflect events such as stock splits could result in
our having to record significant additional compensation
expenses at that time. This change in the amended and restated
Stock Incentive Plan to mandatory adjustments is equitable and
should enable us to avoid having to record additional
compensation expenses for adjustments to outstanding awards to
reflect stock splits and the like.
In the event of certain corporate events, including stock sales,
mergers, and sales of substantial assets, the committee may, but
is not obligated to, cancel outstanding awards for full value,
waive vesting requirements, provide for the issuance of
substitute awards,
and/or
provide that, for a period of time before such corporate event,
stock options will be exercisable for all shares subject to the
option and that upon the occurrence of the corporate
7
event the options will terminate. In this regard, the amended
and restated Stock Incentive Plan clarifies that the
committees discretion is limited by the anti-acceleration
provisions of Section 409A of the Code.
Administration
The Board or a designated subcommittee of the Board administers
the Stock Incentive Plan. A designated subcommittee must, unless
the Board determines otherwise, consist solely of (i) at
least two individuals who qualify as non-employee
directors within the meaning of
Rule 16b-3
under the Exchange Act, during any period that the Company are
subject to Section 16 of the Exchange Act; and
(ii) outside directors within the meaning of
Section 162(m) of the Code, during any period that the
Company is subject to Section 162(m) of the Code. The Board
has designated the Remuneration Committee as the subcommittee
responsible for administering the Stock Incentive Plan (the
Committee).
The Committee determines who receives awards under the Stock
Incentive Plan, as well as the form of the awards, the number of
shares underlying the awards, and the terms and conditions of
the awards consistent with the terms of the plan. Awards may, in
the discretion of the Committee, be made in assumption of, or in
substitution for, outstanding awards previously granted by us or
our affiliates or a company acquired by us or with which we
combine. However, the amended and restated Stock Incentive Plan
clarifies that, consistent with applicable Nasdaq marketplace
rules, no repricing of outstanding awards may be undertaken
without obtaining prior shareholder approval.
The Committee is authorized to interpret the Stock Incentive
Plan, to establish, amend and rescind any rules and regulations
relating to the plan, and to make any other determinations that
it deems necessary or desirable for the administration of the
plan. The Committee also may correct any defect, supply any
omission or reconcile any inconsistency in the Stock Incentive
Plan in the manner and to the extent that the Committee deems it
necessary or desirable.
The Stock Incentive Plan authorizes the Committee to require
payment of any amount determined to be necessary to withhold for
federal, state, local or other taxes resulting from the
exercise, grant or vesting of an award. The amended and restated
Stock Incentive Plan clarifies, however, that any payment of
withholding taxes by delivery of shares or having shares
withheld by the Company may not exceed the amount necessary to
satisfy the statutory minimum withholding amount due.
Eligibility
The Stock Incentive Plan permits grants of awards to our
employees, directors and consultants. Any eligible person may be
granted nonqualified stock options, but only employees may be
granted incentive stock options. As of October 28, 2009, we
had approximately 2,000 employees, including three
executive officers and five non-executive directors, who were
eligible under the Stock Incentive Plan.
Types of
Awards
Incentive stock options, nonqualified stock options, stock
appreciation rights, limited stock appreciation rights,
restricted stock, performance-based awards and other awards
based on our common stock may be granted under the Stock
Incentive Plan.
Stock
Options
The Stock Incentive Plan permits the Committee to grant
employees incentive stock options, which qualify for special tax
treatment in the United States, and permits the Committee to
grant employees, directors and consultants nonqualified stock
options. The Committee establishes the duration of each stock
option at the time it is granted. The maximum duration of an
incentive stock option is ten years after the date of grant.
The Committee establishes the exercise price of each stock
option at the time it is granted. The exercise price of a stock
option may not be less than the fair market value, as defined in
the Stock Incentive Plan, of our common stock on the date of
grant. As of October 16, 2009, the fair market value
of our common stock as reported on the Nasdaq Global Select
Market was $20.67 per share. The Committee may establish
vesting and performance
8
requirements that must be met before the exercise of stock
options. Unless otherwise determined by the Committee, stock
options vest ratably (20%), on an annual basis, over a period of
five years, commencing with the first anniversary of the grant
date and subject to the holders continued service with us.
The exercise price of stock options may be paid in cash or cash
equivalents by the holder. The Committee may permit an option
holder to pay the exercise price, or to satisfy withholding tax
liabilities that arise upon exercise, by tendering shares of our
common stock owned by the holder or by having us withhold some
of the shares deliverable upon exercise of the option, with a
fair market value equal to the exercise price and statutory
minimum tax withholding liabilities. The Committee may also
permit a stock option holder to exercise the option by tendering
a promissory note, in such form as the Committee may specify,
that bears a market rate of interest and is fully recourse.
If there is a public market for our common stock, the committee
may permit a stock option holder to exercise all or part of the
option holders vested options through a cashless exercise
procedure. Under a cashless exercise procedure, the option
holder delivers irrevocable instructions to a broker to sell the
shares obtained upon exercise of the option and deliver promptly
to the Company proceeds of the sale equal to the exercise price
of the option and related tax withholding obligation.
Stock
Appreciation Rights
The Committee also may grant stock appreciation rights, either
alone or in tandem with stock options. Stock appreciation rights
entitle their holder upon exercise to receive an amount in any
combination of cash or shares of our common stock (as determined
by the Committee) equal in value to the excess of the fair
market value of the shares covered by the rights over the grant
price. The Committee may also grant limited stock appreciation
rights that are exercisable upon the occurrence of specified
contingent events. Such awards may provide for a different
method of determining appreciation, specify that payment must be
made only in cash, or provide that any related awards are not
exercisable while such limited stock appreciation rights are
exercisable. No stock appreciation right may have a term longer
than ten years duration under the amended and restated
Stock Incentive Plan. In contrast, the existing terms of the
Stock Incentive Plan do not include a term limit on stock
appreciation rights.
Other
Stock-Based Awards
The Stock Incentive Plan also permits the Committee to grant
awards that are valued by reference to, or otherwise based on
the fair market value of, our common stock. The Committee
determines the form of award and the conditions to which awards
are subject, including the satisfaction of performance goals,
the completion of periods of service, or the occurrence of
events. Stock-based awards may be granted alone or in
conjunction with any other award granted under the Stock
Incentive Plan. Unless otherwise determined by the Committee,
stock-based awards vest as to 20% of the shares on each of the
grant date and the first four anniversaries of the grant date
subject to the recipients continued service with us.
Performance-Based
Awards
In general, Section 162(m) of the Code prevents the
deductibility for US income tax purposes of compensation in
excess of one million dollars paid in any taxable year to an
individual who, on the last day of that year, is the
companys chief executive officer or is among its three
other most highly compensated executive officers (other than the
chief financial officer, to whom Section 162(m) does not
apply), except that a deduction may be taken for compensation
that qualifies as performance-based compensation under
Section 162(m) of the Code.
Stock options granted at fair market value ordinarily satisfy
the performance-based requirements of Section 162(m) of the
Code, if shareholder disclosure and approval requirements are
met. If restricted stock or other performance-based awards are
intended to satisfy the Code Section 162(m) deductibility
requirements, payments under such awards must be conditioned on
attainment of pre-established objective performance measures
that have
9
been established and certified by a committee of outside
directors and approved by shareholders. The performance criteria
under the Stock Incentive Plan on which applicable performance
measures may be based include:
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consolidated earnings before or after taxes (including earnings
before interest, taxes, depreciation and amortization),
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net income,
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operating income,
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earnings per share,
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fundamental earnings per share (as determined by the
Remuneration Committee),
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book value per share,
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return on shareholders equity,
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expense management,
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return on investment,
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improvements in capital structure,
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profitability of an identifiable business unit or product,
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maintenance or improvement of profit margins,
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stock price,
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market share,
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revenues or sales,
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costs,
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cash flow,
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working capital, and
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return on assets.
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Performance criteria for performance-based awards under the
Stock Incentive Plan may relate to any combination of the total
corporation, a subsidiary,
and/or any
business unit. Performance targets may be set at a specific
level or may be expressed relative to measures at comparison
companies or a defined index.
Under the amended and restated Stock Incentive Plan, the maximum
amount of a performance-based award that may be granted during a
calendar year to any participant is: (i) with respect to
performance-based awards that are stock options, options
covering 569,120 shares, and (ii) with respect to
performance-based awards that are not options, awards having an
aggregate value as of the grant date of $20,000,000. A
performance-based award is paid, if at all, at such time as
determined by the Committee in its discretion, subject to
Section 162(m) of the Code and, as clarified under the
amended and restated Stock Incentive Plan, Section 409A of
the Code.
Transferability
Unless otherwise determined by the Committee, awards may not be
transferred or assigned by the holder other than by will or the
laws of descent and distribution.
Awards
Granted to Certain Persons
The aggregate number of shares of common stock subject to
options and other stock-based awards granted to certain persons
under the Stock Incentive Plan since its inception are as
follows: Dr. Serge C.P. Belamant, Chief Executive Officer,
Chairman of the Board and Director, 826,668 shares
(comprising 453,334 options and 373,334 other stock-based awards
in the form of restricted stock); Herman G. Kotze, Chief
Financial Officer, Treasurer,
10
Secretary and Director, 701,668 shares (comprising 328,334
options and 373,334 other stock-based awards in the form of
restricted stock); and Nitin Soma, Senior Vice
President Information Technology,
503,334 shares (comprising 223,334 options and 280,000
other stock-based awards in the form of restricted stock); all
current executive officers as a group, an aggregate of
2,031,670 shares; all current directors who are not
executive officers, as a group, an aggregate of
183,522 shares; and all employees, including current
officers who are not executive officers, as a group, an
aggregate of 2,966,882 shares. In addition, the following
persons, who constitute all of our director nominees who are not
also executive officers as named above, have received the number
of options and other stock-based awards since inception of the
Stock Incentive Plan as follows:
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Stock
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Restricted
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Name
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Options
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Stock
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Total
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Antony Ball
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41,667
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1,365
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43,032
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Paul Edwards
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41,667
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4,691
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46,358
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Alasdair Pein
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41,667
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2,729
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44,396
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Christopher Seabrooke
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41,667
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6,704
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48,371
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Tom Tinsley
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1,365
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1,365
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183,522
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Amendment
The Board may amend the Stock Incentive Plan at any time,
provided that no amendment may be made without the consent of an
affected award holder that diminishes the rights of the holder,
except that the Board may amend the plan in any manner it deems
necessary for awards to meet the requirements of the Code or
other applicable laws.
No amendment to the Stock Incentive Plan may be made without the
approval of shareholders if the amendment would increase the
total number of shares reserved for issuance under the plan or
change the maximum number of shares for which awards may be
granted to participants, except for such changes in accordance
with the plans adjustment provisions described above.
Plan
Term
Under the amended and restated Stock Incentive Plan, no award
may be granted after June 7, 2019, but awards granted
before that date may extend beyond that date. Under the terms of
the existing Stock Incentive Plan, no awards may be granted
after June 7, 2014.
United
States Federal Income Tax Consequences
The following discussion of the US federal income tax
consequences relating to the Stock Incentive Plan is based on
present US federal tax laws and regulations and does not purport
to be a complete description of the US federal tax laws.
Participants may also be subject to certain state and local
taxes and
non-United
States taxes, which are not described below.
When a nonqualified stock option is granted, there are generally
no United States income tax consequences for the option holder
or the company at that time. When a nonqualified stock option is
exercised, the option holder generally recognizes compensation
equal to the excess, if any, of the fair market value of the
underlying shares on the exercise date over the exercise price.
The company or its subsidiary that employs the stock option
holder may be entitled to a deduction equal to the compensation
recognized by the stock option holder.
When an incentive stock option, within the meaning of
Section 422 of the Code, is granted, there are no
United States income tax consequences for the option holder
or the company at that time. Generally, when an incentive stock
option is exercised, the option holder does not recognize income
and the company does not receive a deduction. The incentive
stock option holder, however, must treat the excess, if any, of
the fair market value of the shares on the exercise date over
the exercise price as an item of adjustment for purposes of the
alternative minimum tax.
11
If an incentive stock option holder disposes of the shares after
holding them for at least two years after the incentive stock
option was granted and one year after the option was exercised,
the amount the option holder receives upon the disposition over
the exercise price is treated as long-term capital gain to the
option holder. The company or its subsidiary is not entitled to
a deduction.
If the stock option holder makes a disqualifying
disposition of the shares by disposing of the shares
before satisfying the holding periods described above, the
option holder generally recognizes compensation income equal to
the excess, if any, of (1) the fair market value of the
shares on the exercise date, or, if less, the amount received on
the disposition, over (2) the exercise price. The company
or its subsidiary may be entitled to a deduction equal to the
compensation recognized by the stock option holder.
When a stock appreciation right is granted, there are no US
federal income tax consequences for the participant or the
company at that time. When a stock appreciation right is
exercised, the participant generally recognizes compensation
equal to the cash
and/or the
fair market value of the shares received on exercise. The
company or its subsidiary may be entitled to a deduction equal
to the compensation recognized by the participant.
In general, other types of awards that may be issued under the
Stock Incentive Plan are taxable to the holder upon receipt,
except that awards of restricted stock are taxable to the holder
on the date the shares vest or become transferable, or on the
date of receipt if the holder makes an election under
Section 83(b) of the Code. The company or its subsidiary
may be entitled to a deduction equal to the compensation
recognized by the participant receiving other stock-based
awards, including restricted stock awards.
The Board recommends a vote FOR approval of the
amendment and restatement of the Stock Incentive Plan.
PROPOSAL NO. 3:
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, 2010. 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.
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
appointment. 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
Deloitte.
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, 2009, our Board held a total of six
meetings. All of the directors who served during our 2009 fiscal
year attended or participated in more than 75% of the aggregate
number of meetings of the Board and 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. Three of our directors who served
during fiscal 2009 attended last years annual meeting. 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 its directors. After this examination, the
Board has concluded that Messrs. Seabrooke, Pein, Edwards
and Ball are independent as defined under Nasdaq
Rule 5605(a)(2) and under
Rule 10A-3(b)(1)
under the Securities Exchange Act of 1934, or
12
the Exchange Act, as that term relates to membership on the
Board and the various Board committees. Mr. Tinsley is an
independent director as defined under Nasdaq rules
but is not eligible to serve on our Audit Committee, under
Rule 10A-3(b)(1)
due to the number of shares owned by GA and its affiliated
investment entities. Mr. Ball was not eligible to serve on
our Audit Committee during fiscal 2009 but became so eligible in
August 2009 after we repurchased Braits shares.
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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Director
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Committee
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Committee
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Committee
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Antony C. Ball
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X
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X
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Dr. Serge C.P. Belamant(#)
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Paul Edwards
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X
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X
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X
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Herman G. Kotzé(#)
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Alasdair J.K. Pein
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X
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X
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*
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X
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Christopher S. Seabrooke
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X
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*
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X
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X
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*
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Tom C. Tinsley
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X
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X
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# |
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Executive |
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* |
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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 eight meetings during the
2009 fiscal year. See Audit Committee Report on
page 31.
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.
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A copy of our Audit Committee charter is available without
charge on our website, www.net1.com under the
Investor Relations Governance section.
13
Remuneration
Committee
The Remuneration Committee comprises Messrs. Pein,
Seabrooke, Edwards, Tinsley and Ball, with Mr. Pein acting
as the chairperson. The Remuneration Committee held five
meetings during the 2009 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.
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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, Ball, Pein, Edwards and Tinsley, with
Mr. Seabrooke acting as the chairperson. The Nominating and
Corporate Governance Committee held four meetings during the
2009 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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14
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.
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.
During fiscal 2009, Messr. Ball served on our Board as a
designee of SAPEF, an affiliate of Brait, in accordance with the
2004 agreement pursuant to which SAPEF purchased shares of the
Company. As a result of our repurchase of Braits shares in
August 2009, Messrs. Ball no longer serves as a designee of
Brait.
Pursuant to the stock purchase agreement, dated July 18,
2005, among the investment entities affiliated with GA, us and
certain other parties, GA is entitled to designate one nominee
to our Board. Mr. Tinsley serves as the GA designee. In
addition, pursuant to the stock purchase agreement, we granted
rights, under certain circumstances and subject to certain
limitations, with respect to the registration of our shares held
by investment entities affiliated with GA.
NOMINATIONS
PROCESS AND DIRECTOR QUALIFICATIONS
The Nominating and Corporate Governance Committee reviews with
the Board the skills and characteristics required of Board
members. 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 diverse viewpoints,
as well as the benefits of constructive working relationships
among directors.
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
P O Box 2424
Parklands, 2121, Gauteng, South Africa
Fax: 27 11 880 7080
15
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 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, Chief Financial Officer
and Principal Accounting Officer or controller 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., P O Box 2424, Parklands
2121, Gauteng, South Africa or by telephone to our Investor
Relations Department at + 1 604
484-8750. 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 2009, certain directors who are not executive officers
received compensation as described below.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
|
|
|
Name
|
|
in Cash
|
|
Stock Awards
|
|
Total
|
|
Christopher Seabrooke
|
|
$
|
100,000
|
|
|
$
|
50,000
|
(1)
|
|
$
|
150,000
|
|
Alasdair Pein
|
|
$
|
20,000
|
|
|
|
|
|
|
$
|
20,000
|
|
Paul Edwards
|
|
$
|
65,000
|
|
|
$
|
35,000
|
(2)
|
|
$
|
100,000
|
|
|
|
|
(1) |
|
Represents 2,044 shares of restricted stock granted on
August 27, 2008, one-third of which vested on
August 27, 2009. One-half of the remaining shares vest on
each of August 27, 2010 and 2011, respectively. Vesting of
such shares is conditioned upon Mr. Seabrookes
continuous service as a member of our Board through the
applicable vesting date. The value reflected is based on the
closing price of our common stock on the date of grant. |
|
(2) |
|
Represents 1,430 shares of restricted stock granted on
August 27, 2008, one-third of which vested on
August 27, 2009. One-half of the remaining shares vest on
each of August 27, 2010 and 2011, respectively. Vesting of
such shares is conditioned upon Mr. Edwards
continuous service as a member of our Board through the
applicable vesting date. The value reflected is based on the
closing price of our common stock on the date of grant. |
16
During August 2008, our Board approved cash compensation for
Messrs. Seabrooke and Edwards of $100,000 and $65,000,
respectively, for their services in respect of fiscal 2009. In
addition, during May 2009, our Board approved annual cash
compensation for Mr. Pein of $80,000, of which $20,000 was
paid in fiscal 2009. The Board made these determinations based
on analysis of the annual compensation of non-executive
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: Fiserv Inc., Heartland Payment Systems, Inc.,
Global Payments Inc., Wright Express Corporation, Euronet
Worldwide, Inc., Verifone Holdings, Inc. and Dimension Data
Holdings Plc. This peer group is similar to the peer group used
to determine our executive officers compensation. During
fiscal 2009, we also reimbursed Mr. Peins former
employer for travel and accommodation expenses of approximately
$95,000 related to Mr. Peins attendance at Board
meetings.
During fiscal 2009, Mr. Ball served on our Board as
SAPEFs designee. We did not pay Mr. Ball any
compensation for his service as a director during fiscal 2009.
During fiscal 2009, Mr. Tinsley served as a director
pursuant to an agreement between us and investment entities
affiliated with GA. We did not pay Mr. Tinsley any
compensation for his services as a director. Under this
agreement, we are required to reimburse the travel and
accommodation expenses incurred in connection with his
attendance at our Board and committee meetings. Mr. Tinsley
did not claim any reimbursements in the fiscal 2009 year.
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, 2009:
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|
|
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|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
|
Number of
|
|
|
|
Remaining
|
|
|
Securities to be
|
|
Weighted
|
|
Available for
|
|
|
Issued upon
|
|
Average
|
|
Future Issuance
|
|
|
Exercise of
|
|
Exercise Price
|
|
Under Equity
|
|
|
Outstanding
|
|
of 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 2004 Stock Incentive Plan
|
|
|
1,758,918
|
|
|
$
|
18.76
|
|
|
|
580,604
|
|
Equity compensation plans not approved by security holders Stock
options granted to employees of Prism Holdings Limited
(Prism)(1)
|
|
|
230,046
|
|
|
$
|
22.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,988,964
|
|
|
|
|
|
|
|
580,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 become exercisable in five
equal annual installments and expire on August 24, 2016. |
17
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
The goal of our executive compensation program is the same as
our goal for operating the company to 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 three individuals who comprised our named
executive officers at the end of our 2009 fiscal
year our Chief Executive Officer, our Chief
Financial Officer and our Senior Vice President
Information Technology. 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. 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.
Compensation
Objectives
Performance. Each of our named executive
officers has had a long and distinguished career with us. In
particular, our Chief Executive Officer founded the Company and
developed the technology on which our products are based. 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 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 and leadership and management
effectiveness. Equity incentive compensation 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 correlate to long-term shareholder value.
Financial measures include growth in revenues, EBITDA and
adjusted earnings per share (on both a South African rand,
or ZAR and US dollar basis), while non-financial measures
include international expansion of our business and the
achievement of strategic and operational goals. The elements of
our compensation package that we believe align these interests
most closely are stock option awards which increase in value as
our stock price increases and restricted stock awards which vest
over time and upon the satisfaction of our performance goals.
Retention. Our executive officers and the
Remuneration Committee recognize that the talent pool in South
Africa is more limited than in other more developed countries.
Even more significantly, the long tenure of our named executive
officers has made them especially knowledgeable about our
business and industry and thus particularly valuable to the
Company. We wish to avoid losing these long-tenured officers and
their invaluable knowledge, particularly given how important
they are to the future performance of the Company. Therefore,
retention is a key objective of our executive compensation
program. We attempt to retain our key employees, including our
named executive officers, by seeking to provide a competitive
pay package and using continued
18
service as a condition to receipt of full compensation. The
extended vesting terms of stock options and restricted stock
awards have the effect of tying this element of compensation to
continued service with us.
Implementing
our Objectives
Process for Determining Compensation. A
substantial amount of the Remuneration Committees
responsibilities and efforts relate to the determination of
compensation for our named executive officers. The Remuneration
Committee obtains compensation data compiled from executive
compensation surveys which include data gathered from annual
reports and proxy statements of companies that it selects as a
peer group for executive compensation analysis
purposes. The Remuneration Committees goal is that the
total cash compensation for our named executive officers be at
the 75th percentile and the overall equity compensation for
named executive officers should be within the range of the
50th to 75th percentiles when our financial
performance equals the average of our peer group companies.
Because of the high proportion of cash compensation that is at
risk, the Remuneration Committee reserves the right to adjust
total cash compensation to be higher or lower, when our
financial performance exceeds that of our peer group companies
or is lower than that of our peer group companies, as the case
may be. Our peer group consists of payment processing companies
generally considered comparable to us as well other companies
within the information technology sector and those engaged in
emerging markets. The Remuneration Committees intent
generally is to choose peer group members that have one or more
attributes significantly similar to us, such as that of being a
payment systems provider. Our peer group, which includes both US
and UK listed companies, consists of the following companies:
Fiserv Inc., Global Payments Inc., Wright Express Corporation,
Euronet Worldwide, Inc., Heartland Payment Systems, Inc.,
Verifone Holdings, Inc. and Dimension Data Holdings Plc.
The Remuneration Committees process for determining
compensation includes an analysis, for each executive officer,
of all elements of compensation. The Remuneration Committee
compares these compensation components separately and in total
to compensation at the peer group companies. The Remuneration
Committee sets the compensation of our Chief Financial Officer
based on the total compensation package of our Chief Executive
Officer. Since the role played by our Chief Financial Officer is
significantly broader than that of a typical Chief Financial
Officer, the Remuneration Committees goal is to set this
package at approximately 45% - 65% of our Chief
Executive Officers total compensation package. Our other
executive officers compensation is then set at
approximately 40% - 50% of the compensation of our Chief
Financial Officer. Because the Remuneration Committee considers
international comparables in its compensation analysis for both
our Chief Executive Officer and Chief Financial Officer, their
total compensation packages are denominated in US dollars.
Because our other executive officers compensation packages
is derived from the amount of compensation we pay to our Chief
Financial Officer, his compensation package is also denominated
in US dollars. Our executive officers may elect to be paid in a
currency other than USD, in which case the USD amount is
converted into ZAR at the exchange rate in effect at the time of
payment. In the first quarter of each year, the Remuneration
Committee establishes base salaries and sets the short-term cash
incentive plan remuneration targets and payment criteria.
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.
Before the Remuneration Committee makes decisions on
compensation for the year, it discusses with our Chief Executive
Officer each executive officers performance during the
year, his or her accomplishments and specific areas of progress.
Our Chief Executive Officer 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. The Chief Executive Officer
makes a recommendation to the Remuneration Committee on each
executive officers compensation, except for his own and
the Chief Financial Officers compensation. Executive
officers do not propose or seek approval for their own
compensation. Our Chief Executive Officers and Chief
Financial Officers annual performance review is developed
by the Remuneration Committee as a whole. For our Chief
Executive Officers and Chief Financial Officers
reviews, formal feedback is received from the non-employee
directors.
19
The Remuneration Committee also consults with our Chief
Executive Officer and Chief Financial Officer regarding
non-executive officer employee compensation and is responsible
for approving all awards under our Stock Incentive Plan.
Equity Grant Practices. We believe that
long-term performance is achieved through a culture that
encourages such 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 five years after grant unless otherwise
provided in a particular award agreement and have ten-year terms
from the date of grant. 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 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 adopted Financial Accounting Standards Board Statement
No. 123 (revised 2004), Share-Based Payments
(FAS 123R) at the beginning of fiscal year
2006 and, therefore, record stock-based compensation charges
over the vesting term of the equity award. 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, 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.
No Employment Agreements. Our executive
officers are all 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 our 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 our 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.
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
each of our named executive officers (other than our Chief
Financial Officer, to whom these limits do not currently apply).
Certain qualified performance-based compensation is not subject
to this deduction limit. Our stock option awards under the Stock
Incentive Plan have been structured with the intention that the
compensation the executives will realize when the stock options
are exercised will be qualified performance-based compensation
not subject to the limitations imposed by Section 162(m).
However, 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. For example, the bonuses and non-equity
incentive compensation payments made to our named executive
officers are not qualified performance-based compensation and
may be subject to the tax deduction limitations imposed by
Section 162(m). Similarly, the restricted stock granted to
our named executive officers, the vesting of which is
conditioned upon satisfaction of our performance goals, may be
subject to the tax deductibility limitations imposed by
Section 162(m) because the Remuneration Committee retained
flexibility to adjust the performance goals to reflect
extraordinary events. The Remuneration Committee believes that
the importance of retaining this flexibility outweighs the
benefits of tax deductibility.
20
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.
Elements
of 2009 Compensation
There are four elements that comprised our compensation program
in fiscal 2009: (i) base salary; (ii) cash incentive
awards for our Chief Executive Officer and Chief Financial
Officer; (iii) bonus for our Chief Financial Officer and
our Senior Vice-President Information Technology and
(iv) equity incentive awards for each of our named
executive officers. In addition, we cover all costs for security
guards for our Chief Executive Officer. We did not provide any
other type of compensation, retirement, healthcare, or welfare
benefits to any of our named executive officers.
Base Salary. Salaries for fiscal 2009 were
determined in the first quarter of the 2009 fiscal year after a
review of our peer group companies described above.
Cash Incentive Awards. During the second
quarter of fiscal 2009, the Remuneration Committee established a
cash incentive plan for the Chief Executive Officer and the
Chief Financial Officer pursuant to which each of these officers
became eligible to receive a cash incentive payment upon the
achievement of certain performance targets with respect to the
2009 fiscal year. The cash incentive plan provided for a target
cash incentive award of 100% of the executives base salary
for fiscal 2009, 80% of which was to be based on achievement of
the quantitative factors described below and 20% of which was to
be based on the level of achievement of the qualitative factors
described below.
The cash incentive plan provided that 100% of 80% of the target
cash incentive award would be payable if we achieved a 25%
increase in fundamental earnings per share in fiscal
2009 as compared with fiscal 2008, with a threshold based on the
achievement of a 15% increase, with each percentage point
increase between 15% and 30% resulting in a payment of 10% of
the quantitative portion of the award. While the plan targeted a
100% award to be payable at the 25% threshold, in the event
fundamental earnings per share achieved was 30% or greater than
fiscal 2008, the quantitative award would be a maximum of 150%
of 80% of the respective annual salary. Fundamental earnings per
share was to be determined in US dollars and measured as our
earnings per share determined in accordance with US generally
accepted accounting principles to exclude the effects related
to: (i) the amortization of intangible assets;
(ii) stock-based compensation charges; and
(iii) one-time, large, unusual items as determined in the
discretion of the Remuneration Committee. Further, the
calculation of fundamental earnings per share would assume no
change in our effective tax rate from fiscal 2008. The cash
incentive plan provided that 20% of the target cash incentive
award was to be based on the following qualitative factors:
(i) increasing management depth; (ii) integrating the
BGS acquisition and (iii) expanding our foreign operations.
The Remuneration Committee reserved the right to exercise
judgment in the final determination of the quantitative portion
of the cash incentive award as it recognized that changes in
exchange rates between the US dollar, which is our
reporting currency, and the South African rand, which is our
primary functional currency, could have a substantial impact on
our fundamental earnings per share which is reported in US
dollars.
After the completion of the 2009 fiscal year, the Remuneration
Committee met to discuss 2009 performance and whether and to
what extent the cash incentive awards should be paid. The
Remuneration Committee determined that the threshold targets to
qualify for the minimum quantitative portion of the awards had
not been met, largely because of the significant depreciation in
the South African rand during fiscal 2009. The Remuneration
Committee re-evaluated whether it was appropriate to use US
dollar-based results to evaluate performance of the Chief
Executive Officer and Chief Financial Officer and determined
that it would be more appropriate to use rand-based results
because the executives did not have control over currency
fluctuations and because most of our revenues and expenses were
rand-based. The Remuneration Committee also took into account
that at least one peer company specifically excluded currency
fluctuations when determining incentive awards. The Remuneration
Committee determined to apply a similar percentage increase
reference scale used to establish the cash incentive plan but to
use a rand-based earnings target adjusted by an additional 5%
hurdle to reflect the inflation differential between the United
States and South Africa. Accordingly, the earnings increase
required to achieve the minimum quantitative portion of the
award would be 20%, rather than 15% and the maximum award would
be payable at earnings increase
21
of 35%. Based on the 2009 fiscal year 24% increase in rand-based
fundamental earnings per share, the Remuneration Committee
determined to award 40% of the 80% target quantitative cash
incentive award to the Chief Executive Officer and Chief
Financial Officer.
With respect to the qualitative portion of the cash incentive
award, the Remuneration Committee determined that although good
progress had been made in each of the areas to be considered,
the level of progress did not warrant the full 20% award. After
discussion with management the Committee noted that in addition
recognition needed to be given to various other factors
including among other things, the renegotiation of the SASSA
contract, the BGS acquisition and the financing thereof, the
inward listing on the JSE and the sale of the Moneyline business
to Finbond Property Finance Limited. Following due consideration
the Committee determined to award 75% of the 20% qualitative
portion of the cash incentive awards.
Based on the deliberations as described above, the Remuneration
Committee approved cash incentive awards of $400,000 and
$200,000, to the Chief Executive Officer and Chief Financial
Officer, respectively.
Bonus. Bonuses may be awarded for
accomplishments during the previous fiscal year and are designed
to be commensurate with the executives scope of
responsibilities, demonstrated leadership abilities, management
experience and effectiveness. Likewise, with respect to the
Chief Executive Officer and the Chief Financial Officer, bonuses
may be paid for performance based on factors external to the
ones considered in determining the payment of the cash incentive
awards described above. Bonuses are determined by the
Remuneration Committee with advice from the management directors
(in the case of executives other than the Chief Executive
Officer and the Chief Financial Officer), based upon the
Remuneration Committees assessment of the
individuals contributions during the year, compared to,
but not limited to, a list of individualized goals previously
approved by the executive officers and the Remuneration
Committee. The goal of this element of compensation focuses on
motivating and challenging the executive to achieve superior,
longer term, sustained results.
The Remuneration Committee did not grant any bonus awards in the
2009 fiscal year to our Chief Executive Officer as it was of the
opinion that the cash incentive award adequately compensated
him. The Remuneration Committee granted a $100,000 bonus to our
Chief Financial Officer based on his significant contributions
in fiscal 2009, most notably his management of the foreign
exchange gain we realized in connection with the BGS
acquisition. In addition, our Vice-President
Information Technology received a bonus of $72,000 as a result
of his contributions to the successful certification of various
payment processing solutions and developing and demonstrating
the functionality of the Virtual Card in a live environment and
integration of certain UEPS functionality, primarily biometrics,
into our DUET offering.
Equity Incentive Awards. On August 27,
2008 and May 20, 2009, respectively, our executive officers
were awarded stock options to purchase an aggregate of 360,000
and 300,000 shares of our common stock under the Stock
Incentive Plan as set out in more detail in the Grants of
Plan-Based Awards table below at page 27. In addition,
employees who were not executive officers received grants of
stock options to purchase 200,000 and 260,000 shares on
August 27, 2008 and May 20, 2009, respectively. The
August 2008 grants were approved at a regularly scheduled
meeting of the Remuneration Committee and the May 2009 grants
were approved at a special meeting of the Remuneration
Committee. The May 2009 grants were made in lieu of the grants
that would have been made in August 2009. The Remuneration
Committee decided to accelerate the August 2009 awards to May
2009 in recognition of the fact that, due to the significant
decline in our stock price resulting from the global economic
crisis, the exercise prices of the vast majority of our
outstanding stock options were significantly below current
market values. The Remuneration Committee believed that this
stock price decline negatively impacted the incentivizing
purpose of those options. Following considered deliberations at
Remuneration Committee meetings in November 2008, February 2009
and in May 2009, the Remuneration Committee decided to
accelerate the August 2009 stock option award across all levels
of management and avail itself the opportunity to incent and
reward a committed management team.
The stock options granted in August 2008 vest in 20% increments
on May 8th of 2009, 2010, 2011, 2012 and 2013, and the
stock options granted in May 2009 vest in 20% increments on
May 8th of 2010, 2011, 2012, 2013 and 2014, in each
case so long as the recipient remains employed with us through
the applicable vesting date. The vesting provisions of the
August 2008 and May 2009 stock option awards are described more
fully below the Grants of Plan-Based Awards Table on
page 27 of this proxy statement.
22
With regard to the 2007 performance-based restricted stock
awards granted to the Chief Executive Officer and the Chief
Financial Officer, the Remuneration Committee determined that
the 2009 fundamental earnings per share was less than the amount
required to vest the one-third of the stock awards that was
scheduled to vest on September 1, 2009 if the requisite
performance had been achieved but was also of the view that the
one-time $26.7 million foreign exchange gain that was
excluded from the earnings calculation had nevertheless provided
a significant benefit to us. The Remuneration Committee used its
discretion to adjust the earnings targets stated in the
restricted stock agreements to take into account unusual or
non-recurring events, and therefore determined that the vesting
criteria for the Chief Executive Officer and the Chief Financial
Officer should be considered to have been met and that one-third
of their restricted shares would vest on September 1, 2009.
Security Guards for our Chief Executive
Officer. 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 and as a
result, must be reported in the Summary Compensation Table below.
REMUNERATION
COMMITTEE REPORT
For the
Year Ended June 30, 2009
The Remuneration Committee, which comprises all the independent
directors, has reviewed and discussed the Compensation
Discussion and Analysis section of this proxy statement
with the Chief Executive Officer, Dr. Serge C.P. Belamant,
and the 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
Christopher Stefan Seabrooke
Antony Charles Ball
Paul Edwards
Tom C. Tinsley
23
Executive
Compensation Tables
The following narrative, tables and footnotes describe the
total compensation earned during fiscal years 2009,
2008 and 2007, 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 2009. The
actual value realized by our named executive officers in fiscal
2009 from long-term equity incentives (options and restricted
stock) is presented in the Options Exercised and Stock Vested
Table on page 29 of this proxy statement. Target annual
incentive awards for fiscal 2009 are presented in the Grants of
Plan-Based Awards table on page 27 of this proxy statement.
The amounts reflected in the Summary Compensation Table for
stock awards and option awards are the non-cash expense
recognized by us for financial statement reporting purposes with
respect to fiscal 2009, 2008 and 2007 for all such awards,
including those granted in prior fiscal years, in accordance
with FAS 123R.
SUMMARY
COMPENSATION TABLE(1)
The following table sets forth the compensation earned by our
Chief Executive Officer, our Chief Financial Officer and our
other named executive officer for services rendered during
fiscal years 2009, 2008 and 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
All
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Plan
|
|
Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
|
|
|
|
|
($000)
|
|
($000)
|
|
($000)
|
|
($000)
|
|
($000)
|
|
($000)
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(3)
|
|
(6)
|
|
($000)
|
|
Dr. Serge Belamant,
|
|
|
2009
|
|
|
|
850
|
|
|
|
|
|
|
|
224
|
|
|
|
354
|
|
|
|
400
|
|
|
|
32
|
|
|
|
1,860
|
|
Chief Executive Officer,
|
|
|
2008
|
|
|
|
850
|
|
|
|
|
|
|
|
205
|
|
|
|
88
|
|
|
|
850
|
|
|
|
41
|
|
|
|
2,034
|
|
Chairman of the Board and
|
|
|
2007
|
|
|
|
725
|
|
|
|
|
|
|
|
|
|
|
|
79
|
|
|
|
725
|
|
|
|
39
|
|
|
|
1,568
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman Kotzé,
|
|
|
2009
|
|
|
|
425
|
|
|
|
100
|
|
|
|
224
|
|
|
|
174
|
|
|
|
200
|
|
|
|
|
|
|
|
1,123
|
|
Chief Financial Officer,
|
|
|
2008
|
|
|
|
425
|
|
|
|
|
|
|
|
205
|
|
|
|
38
|
|
|
|
319
|
|
|
|
|
|
|
|
987
|
|
Treasurer, Secretary and Director
|
|
|
2007
|
|
|
|
350
|
|
|
|
|
|
|
|
|
|
|
|
35
|
|
|
|
263
|
|
|
|
|
|
|
|
648
|
|
Nitin Soma,
|
|
|
2009
|
|
|
|
288
|
|
|
|
72
|
|
|
|
169
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
632
|
|
Vice-President
|
|
|
2008
|
|
|
|
288
|
|
|
|
72
|
|
|
|
156
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
538
|
|
Information Technology
|
|
|
2007
|
|
|
|
230
|
|
|
|
58
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
308
|
|
|
|
|
(1) |
|
Includes only those columns relating to compensation awarded to,
earned by, or paid to the named executive officers in either
fiscal 2009, 2008 or 2007. All other columns have been omitted. |
|
(2) |
|
The applicable amount for each named executive officer is
denominated in USD and paid in ZAR at the exchange rate in
effect at the time of payment. |
|
(3) |
|
Bonus and non-equity incentive plan compensation represent
amounts earned for the fiscal years ended June 30, and were
paid in September. The amounts for each executive officer are
denominated in USD. |
|
(4) |
|
Represents grants of shares of restricted stock awarded to our
named executive officers in August 2007, one-third of which
vested on September 1, 2009. One-half of the remaining
shares vest on each of September 1, 2010 and 2011. Vesting
of the award shares is conditioned upon each recipients
continuous service through the applicable vesting date and the
Company achieving the financial performance target set for that
vesting date. See note 14 to the consolidated financial
statements included in our Annual Reports on
Form 10-K
for the years ended June 30, 2006 and 2009 for the relevant
assumptions used in calculating grant date fair value under
FAS 123R. For further information about these awards, see
Compensation Discussion and Analysis Elements
of 2009 Compensation Equity Incentive Awards
above. |
|
(5) |
|
Represents actual stock-based plan compensation charge related
to stock options granted under the Stock Incentive Plan to our
named executive officers. The amounts are valued based on the
grant date fair value of the award determined under
FAS 123R. See note 14 to the consolidated financial
statements included in our Annual Reports on
Form 10-K
for the years ended June 30, 2006 and 2009 for the relevant
assumptions used in calculating grant date fair value under
FAS 123R. For further information about these awards, see
the Grants of Plan-Based Awards table below. |
|
(6) |
|
Represents costs for security guards for Dr. Belamant,
which are paid in ZAR. |
24
GRANTS OF
PLAN-BASED AWARDS(1)
The following table provides information concerning awards under
our Stock Incentive Plan and non-equity incentive awards granted
during fiscal 2009 to each of our named executive officers.
|
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|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive Plan Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Exercise
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under
|
|
|
Underlying
|
|
|
or Base
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive
|
|
|
Options
|
|
|
Price
|
|
|
Stock and
|
|
|
|
|
|
|
|
|
|
Plan Awards(2)
|
|
|
Granted
|
|
|
(Price
|
|
|
Option
|
|
|
|
Type of
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
(Number
|
|
|
per Share
|
|
|
Awards
|
|
Name
|
|
Award
|
|
|
Date
|
|
|
($000)
|
|
|
($000)
|
|
|
($000)
|
|
|
of Shares)
|
|
|
in $)
|
|
|
($000)(3)
|
|
|
Dr. Serge Belamant
|
|
|
SO
|
|
|
|
8/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
24.46
|
|
|
|
1,434
|
|
|
|
|
SO
|
|
|
|
5/20/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
13.16
|
|
|
|
527
|
|
|
|
|
AC
|
|
|
|
2/05/09
|
|
|
|
238,000
|
|
|
|
850,000
|
|
|
|
1,190,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman Kotzé
|
|
|
SO
|
|
|
|
8/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
24.46
|
|
|
|
717
|
|
|
|
|
SO
|
|
|
|
5/20/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,000
|
|
|
|
13.16
|
|
|
|
446
|
|
|
|
|
AC
|
|
|
|
2/05/09
|
|
|
|
119,000
|
|
|
|
425,000
|
|
|
|
595,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitin Soma
|
|
|
SO
|
|
|
|
8/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
24.46
|
|
|
|
430
|
|
|
|
|
SO
|
|
|
|
5/20/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
13.16
|
|
|
|
243
|
|
|
|
|
SO: |
|
Stock Option |
|
AC: |
|
Annual Cash Incentive |
|
(1) |
|
Includes only those columns relating to grants awarded to the
named executive officers in fiscal 2009. All other columns have
been omitted. |
|
(2) |
|
In the second quarter of fiscal 2009, the Remuneration Committee
approved a cash incentive plan providing for a payment of 100%
of Dr. Belamants $850,000 annual base salary and 100%
of Mr. Kotzes $425,000 annual base salary, if certain
quantitative and qualitative requirements were met for our
fiscal 2009 year. The Remuneration Committee determined
that Dr. Belamant and Mr. Kotze satisfied a portion of
the quantitative requirements and the qualitative requirements
to justify a portion of the cash incentive award which was paid
in September 2009. See the discussion under Compensation
Discussion and Analysis Elements of 2009
Compensation Cash Incentive Awards for the
performance targets established by the Remuneration Committee
and the reasons underlying the Remuneration Committees
determination regarding the payment of the cash incentive awards. |
|
(3) |
|
See note 14 to the consolidated financial statements
included in our Annual Report on
Form 10-K
for the year ended June 30, 2009 for the relevant
assumptions used in calculating grant date fair value under
FAS 123R. |
25
OUTSTANDING
EQUITY AWARDS AT 2009 FISCAL YEAR-END(1)
The following table shows all outstanding equity awards held by
our named executive officers at the end of fiscal 2009. The
market value of unvested shares reflected in this table is
calculated by multiplying the number of unvested shares by the
closing price of $13.59 of our common stock on June 30,
2009, the last trading day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
of
|
|
or Payout
|
|
|
|
|
|
|
|
|
|
|
Unearned
|
|
Value of
|
|
|
Option Awards
|
|
Shares,
|
|
Unearned
|
|
|
|
|
Number
|
|
|
|
|
|
Units or
|
|
Shares,
|
|
|
Number of
|
|
of
|
|
|
|
|
|
Other
|
|
Units or
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Rights
|
|
Other
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
That
|
|
Rights
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
Have Not
|
|
That
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
Vested
|
|
Have Not
|
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
|
(Number
|
|
Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
($)
|
|
Date
|
|
of Shares)
|
|
($ 000)
|
|
Dr. Serge Belamant
|
|
|
48,000
|
|
|
|
32,000
|
(2)
|
|
$
|
22.51
|
|
|
|
8/24/2016
|
|
|
|
40,000
|
(5)
|
|
|
544
|
(6)
|
|
|
|
40,000
|
|
|
|
160,000
|
(3)
|
|
$
|
24.46
|
|
|
|
8/24/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
(4)
|
|
$
|
13.16
|
|
|
|
5/20/2019
|
|
|
|
|
|
|
|
|
|
Herman Kotzé
|
|
|
21,000
|
|
|
|
14,000
|
(2)
|
|
$
|
22.51
|
|
|
|
8/24/2016
|
|
|
|
40,000
|
(5)
|
|
|
544
|
(6)
|
|
|
|
20,000
|
|
|
|
80,000
|
(3)
|
|
$
|
24.46
|
|
|
|
8/24/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,000
|
(4)
|
|
$
|
13.16
|
|
|
|
5/20/2019
|
|
|
|
|
|
|
|
|
|
Nitin Soma
|
|
|
12,000
|
|
|
|
8,000
|
(2)
|
|
$
|
22.51
|
|
|
|
8/24/2016
|
|
|
|
30,000
|
(5)
|
|
|
408
|
(6)
|
|
|
|
12,000
|
|
|
|
48,000
|
(3)
|
|
$
|
24.46
|
|
|
|
8/24/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(4)
|
|
$
|
13.16
|
|
|
|
5/20/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes only those columns that are relevant to the types of
awards that remained outstanding as of the end of fiscal 2009. |
|
(2) |
|
One-half of these options vest on each of May 8, 2010 and
2011, respectively. |
|
(3) |
|
One-fourth of these options vest on each of May 8, 2010,
2011, 2012 and 2013, respectively. |
|
(4) |
|
One-fifth of these options vest on each of May 8, 2010,
2011, 2012, 2013 and 2014, respectively. |
|
(5) |
|
Represents restricted stock of which one-third of the award
shares vested on September 1, 2009. One-half of the
remaining shares vest on September 1, 2010 and 2011.
Vesting of the award shares is conditioned upon each
recipients continuous service through the applicable
vesting date and our achieving the financial performance target
set for that vesting date. |
|
(6) |
|
Assumes that all performance targets will be met in each year
and all shares of restricted stock will vest on each of
September 1, 2010 and 2011. |
26
OPTIONS
EXERCISED AND STOCK VESTED
The following table shows all stock options exercised and value
realized upon exercise by the named executive officers during
fiscal 2009.
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
Number of Shares
|
|
Value Realized on
|
Name
|
|
Acquired on Exercise (#)
|
|
Exercise ($000)(1)
|
|
Dr. Serge Belamant
|
|
|
16,670
|
|
|
|
358
|
|
Herman Kotzé
|
|
|
16,670
|
|
|
|
358
|
|
Nitin Soma
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The value realized in connection with each option exercise is
calculated as the difference between the per share exercise
price of the option and the closing price of our common stock on
the date of exercise, multiplied by the number of shares of
common stock for which such option was exercised on that date. |
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.
Accordingly, 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, 2009.
We do not have any on-going 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:
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the nature of the related persons interest in the
transaction;
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|
the material terms of the transaction, including, without
limitation, the amount and type of transaction;
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|
the importance of the transaction to the related person;
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the importance of the transaction to us;
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whether the transaction would impair the judgment of a director
or executive officer to act in our best interest; and
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any other matters the committee deems appropriate.
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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.
27
Related
Party Transactions
Pursuant to the stock purchase agreement, dated July 18,
2005, among the investment entities affiliated with GA, us and
certain other parties, GA is entitled to designate one nominee
to our Board. This designee is currently Mr. Tinsley. In
addition, pursuant to the stock purchase agreement, we granted
rights, under certain circumstances and subject to certain
limitations, with respect to the registration of our shares held
by investment entities affiliated with GA.
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, 2009 and 2008.
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2009
|
|
|
2008
|
|
|
|
$000
|
|
|
$000
|
|
|
Audit Fees
|
|
|
1,352
|
|
|
|
1,329
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|
Audit-Related Fees
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Tax Fees
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All Other Fees
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|
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,
2009 or 2008.
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, 2009 or 2008.
All Other Fees There were no such fees paid
in the fiscal years ended June 30, 2009 or 2008.
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 2009 and 2008,
all of services provided by Deloitte with respect to fiscal
years 2009 and 2008 were pre-approved by the Board and the Audit
Committee.
28
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 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
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 may be modified or supplemented.
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 Independence Standards Board
Standard No. 1 (Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees), and
the Audit Committee discussed with Deloitte the firms
independence. The 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 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, 2009, for filing with the SEC.
Audit Committee
Christopher S. Seabrooke, Chairman
Alasdair J. K. Pein
Paul Edwards
29
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table presents, as of October 16, 2009,
information about beneficial ownership of our common stock by:
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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;
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each of our directors and named executive officers; and
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all of our directors and executive officers as a group.
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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
45,378,397 shares of common stock outstanding as of
October 16, 2009. All shares of common stock, including
that common stock underlying stock options that are presently
exercisable or exercisable within 60 days after
October 16, 2009 (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.
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Shares of Common
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Stock Beneficially Owned
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Name
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Number
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%
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Antony C. Ball(1)
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1,365
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*
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Dr. Serge C.P Belamant(2)
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1,991,288
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4.4
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%
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Paul Edwards(3)
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4,241
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*
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Herman G. Kotzé(4)
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67,666
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*
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|
Alasdair J.K. Pein(5)
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157,853
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*
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Chris S. Seabrooke(6)
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6,704
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|
|
*
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|
Nitin Soma(7)
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|
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194,002
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*
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Tom C. Tinsley(8)(9)
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6,410,456
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14.1
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%
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Investment entities affiliated with General Atlantic LLC(9)
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6,409,091
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14.1
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%
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Directors and Executive Officers as a group(10)
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8,833,575
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19.4
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%
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* |
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Less than one percent |
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(1) |
|
Represents 1,365 shares of restricted stock, one-third of
which vest annually commencing on August 27, 2010. Vesting
of the restricted stock is conditioned on Mr. Balls
continued service as a member of our Board on the applicable
vesting date. |
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(2) |
|
CI Law Trustees Limited for the San Roque Trust dated
8/18/92 owns
725,799 shares of common stock. Dr. Serge C.P.
Belamant as proxy of CI Law Trustees has the power to vote all
of CI Law Trustees shares. The remaining
1,265,489 shares are owned directly by Dr. Belamant
and include 26,666 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
88,000 shares of common stock, all of which are currently
exercisable. |
|
(3) |
|
Includes 3,746 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. |
30
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|
(4) |
|
Represents 26,666 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 options to purchase 41,000 shares of
common stock, all of which are currently exercisable. |
|
(5) |
|
Represents 155,124 shares of common stock held by a trust,
settled by Mr. Pein and of which he is a beneficiary and
2,729 shares of restricted stock, one-third of which vest
annually commencing on August 27, 2009. Vesting of the
restricted stock is conditioned on Mr. Peins
continued service as a member of our Board on the applicable
vesting date. |
|
(6) |
|
Includes 5,379 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) |
|
Includes 20,000 shares of restricted stock, the vesting of
which is subject to certain financial performance and other
conditions described elsewhere in this proxy statement and
24,000 options to purchase shares of common stock, all of which
are currently exercisable. |
|
(8) |
|
Includes 1,365 shares of restricted stock, one-third of
which vest annually commencing on August 27, 2009. Vesting
of the restricted stock is conditioned on
Mr. Tinsleys continued service as a member of our
Board on the applicable vesting date. The business address of
Mr. Tinsley is 2401 Pennsylvania Avenue NW, Washington DC
20037. |
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(9) |
|
According to Amendment No. 1 to Schedule 13D, dated
June 22, 2006, filed by General Atlantic LLC
(GA), and its affiliates, General Atlantic Partners
80, L.P. (GAP 80), General Atlantic Partners 82,
L.P. (GAP 82), GapStar, LLC (GapStar),
GAP Coinvestments III, LLC, (GAPCO III),
GAP Coinvestments IV, LLC, (GAPCO IV), GAPCO
GmbH & Co. KG (KG), GAPCO Management GmbH,
(GmbH Management), and GAP Coinvestments CDA, L.P.
(GAPCO CDA) and supplemental information provided to
us by GA, these entities beneficially own, in the aggregate,
6,409,091 shares of common stock. GA is the general partner
of GAP 80, GAP 82 and GAPCO CDA. GA is also the sole member of
GapStar. GmbH Management is the general partner of KG. The
Managing Directors of GA are Steven A. Denning (Chairman),
William E. Ford Chief Executive Officer), H. Raymond Bingham,
Peter L. Bloom, Mark F. Dzialga, Klaus Esser, Vince Feng,
William O. Grabe, Abhay Havaldar, David C. Hodgson, Rene M.
Kern, Jonathan Korngold, Christopher G. Lanning, Jeff Leng,
Anton J. Levy, Marc F. McMorris, Thomas J. Murphy, Matthew
Nimetz, Ranjit Pandit, Andrew C. Pearson, Raul Rai, David A.
Rosenstein, Sunish Sharma, Franchon M. Smithson, Oliver Thum,
Tom C. Tinsley, Sean Tong, Philip P. Trahanas and Florian P.
Wendelstadt (collectively, the GA Managing
Directors). Mr. Tinsley is a director of the Company.
The managing members of GAPCO III and GAPCO IV are GA
Managing Directors. The business address of each of the GA
Managing Directors (other than Messrs. Esser, Feng, Leng,
Tong, Havaldar, Pandit, Rai, Sharma, Thum, Tinsley, Wendelstadt,
Bingham and McMorris) is 3 Pickwick Plaza, Greenwich,
Connecticut 06830. The business address of Messrs. Esser
and Thum is Koenigsallee 62, 40212, Duesseldorf, Germany. The
business address of Messrs. Feng, Leng and Tong is
Suite 2007-10,
One International Finance Centre, 1 Harbour View Street,
Central, Hong Kong. The business address of
Messrs. Havaldar, Pandit, Rai and Sharma is Room 151,
152 Maker Chambers VI, Naisman Point, Mumbai 400 021, India. The
business address of Mr. Wendelstadt is 83 Pall Mall,
London, SW1Y 5ES. The business address of Messrs. Bingham
and McMorris is 228 Hamilton Avenue, Palo Alto, California 94301. |
|
(10) |
|
Represents shares beneficially owned by the directors and
executive officers listed in the table. Includes options to
purchase 153,000 shares of common stock, all of which are
currently exercisable and 89,736 shares of restricted
stock, the vesting of which is subject to certain conditions
discussed above. |
31
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 2009;
however we identified one filing that was not made on a timely
basis. Dr. Belamant was late in filing one Form 4.
Other
Matters
Our Board knows of no other business that will be presented for
consideration at the annual meeting. Return of a valid proxy,
however, confers on the designated proxy holders
discretionary authority to vote the shares in accordance with
their best judgment on such other business, if any, that may
properly come before the annual meeting or any adjournment or
postponement thereof. It is important that the proxies be
returned promptly and that your shares be represented. You are
urged to sign, date and promptly return the enclosed proxy card
in the enclosed envelope.
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, 2009
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 report (with exhibits) is available at the
SECs website (www.sec.gov).
Shareholder
Proposals for the 2010 Annual Meeting
Qualified shareholders who wish to have proposals presented at
the 2010 annual meeting of shareholders must deliver them to us
by July 30, 2010, in order to be considered for inclusion
in next years proxy statement and proxy pursuant to
Rule 14a-8
under the Exchange Act.
Any shareholder proposal or director nomination for our 2010
annual meeting that is submitted outside the processes of
Rule 14a-8
will be considered untimely if we receive it after
July 30, 2010. Such proposals and nominations must be made
in accordance with Section 2.08 of our Amended and Restated
By-Laws. An untimely proposal may be excluded from consideration
at our 2010 annual meeting. All proposals and nominations must
be delivered to us at our principal executive offices at P O
Box 2424, Parklands 2121, Gauteng, 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., P O Box 2424, Parklands 2121, Gauteng,
South Africa, Attention: Corporate Secretary. You also may
request additional copies of the proxy materials by notifying us
in writing at the same address.
32
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.
By Order of the Board of Directors,
Dr. Serge C. P. Belamant
Chairman and Chief Executive Officer
October 28, 2009
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.
33
Exhibit A
AMENDED
AND RESTATED STOCK INCENTIVE PLAN OF
NET 1 UEPS TECHNOLOGIES, INC.
1. Purpose
of the Plan
The Company hereby establishes the Amended and Restated Stock
Incentive Plan of Net 1 UEPS Technologies, Inc. (the
Plan), which is a continuation, and amendment
and restatement of the Amended and Restated 2004 Stock Incentive
Plan of Net 1 UEPS Technologies, Inc., which in turn was the
successor to the 2004 Stock Incentive Plan of Net 1 UEPS
Technologies, Inc. and Its Subsidiaries, as amended. The purpose
of the Plan is to aid the Company and its Affiliates in
recruiting and retaining key employees, directors or consultants
of outstanding ability and to motivate such employees, directors
or consultants to exert their best efforts on behalf of the
Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit
from the added interest which such key employees, directors or
consultants will have in the welfare of the Company as a result
of their proprietary interest in the Companys success.
2. Definitions
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
a. Act: The Securities Exchange
Act of 1934, as amended, or any successor thereto.
b. Affiliate: With respect to the
Company, any entity directly or indirectly controlling,
controlled by, or under common control with, the Company or any
other entity designated by the Board in which the Company or an
Affiliate has an interest.
c. Award: An Option, Stock
Appreciation Right or Other Stock-Based Award granted pursuant
to the Plan.
d. Beneficial Owner: A
beneficial owner, as such term is defined in
Rule 13d-3
under the Act (or any successor rule thereto).
e. Board: The Board of Directors
of the Company.
f. Code: The Internal Revenue Code
of 1986, as amended, or any successor thereto.
g. Committee: The Board, or such
committee of the Board as it shall designate from time to time,
in accordance with Section 4.
h. Company: Net 1 UEPS
Technologies, Inc., a Florida corporation.
i. Disability: Inability of a
Participant to perform in all material respects the
Participants duties and responsibilities to the Company,
or any Subsidiary of the Company, by reason of a physical or
mental disability or infirmity which inability is reasonably
expected to be permanent and has continued (i) for a period
of six consecutive months or (ii) such shorter period as
the Committee may reasonably determine in good faith. The
Disability determination shall be in the sole discretion of the
Committee and a Participant (or the Participants
representative) shall furnish the Committee with medical
evidence documenting the Participants disability or
infirmity which is satisfactory to the Committee.
j. Effective Date: June 7,
2004.
k. Employment: The term
Employment as used herein shall be deemed to refer
to (i) a Participants employment if the Participant
is an employee of the Company or any of its Affiliates,
(ii) a Participants services as a consultant, if the
Participant is consultant to the Company or its Affiliates and
(iii) a Participants services as an non-employee
director, if the Participant is a non-employee member of the
Board.
l. Fair Market Value: On a given
date, (i) if the Shares are registered under
Section 12(b) or 12(g) of the Act, and listed for trading
on a national exchange or market, the term Fair Market
Value shall mean, as applicable, (a) the official
closing price on the relevant date, the average of the high and
low sale price on the
A-1
relevant date, or the average of the official closing price over
a period of up to thirty consecutive days immediately prior to
or including the relevant date, as determined in the
Committees discretion, as quoted on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq Global Select
Market or the Nasdaq Global Market; (b) the last sale price
on the relevant date or the average of the last sale price over
a period of up to thirty consecutive days immediately prior to
or including the relevant date, as determined in the
Committees discretion, as quoted on the Nasdaq Capital
Market; (c) the average of the high bid and low asked
prices on the relevant date quoted on the Nasdaq OTC
Bulletin Board Service or by the National Quotation Bureau,
Inc. or a comparable service as determined in the
Committees discretion; or (d) if the Shares are not
quoted by any of the above, the average of the closing bid and
asked prices on the relevant date furnished by a professional
market maker for the Shares, or by such other source, selected
by the Committee; provided, however, that if an average of
prices over a period of days is not applicable and no public
trading of the Shares occurs on the relevant date but the Shares
are so listed, then Fair Market Value shall be determined as of
the earliest preceding date on which trading of the Shares does
occur; and (ii) if the Shares on the relevant date are not
listed for trading on a national exchange or market, then Fair
Market Value shall be the value established by the Committee in
good faith.
m. ISO: An Option that is also an
incentive stock option granted pursuant to Section 6.d of
the Plan.
n. LSAR: A limited stock
appreciation right granted pursuant to Section 7.d of the
Plan.
o. Other Stock-Based
Awards: Awards granted pursuant to
Section 8 of the Plan.
p. Option: A stock option granted
pursuant to Section 6 of the Plan.
q. Option Price: The purchase
price per Share of an Option, as determined pursuant to
Section 6.a of the Plan.
r. Participant: An employee,
director or consultant of the Company or a Subsidiary who is
selected by the Committee to participate in the Plan.
s. Performance-Based
Awards: Certain Other Stock-Based Awards
granted pursuant to Section 8.b of the Plan.
t. Person: A person,
as such term is used for purposes of Section 13(d) or 14(d)
of the Act (or any successor section thereto).
u. Plan: The Amended and Restated
Stock Incentive Plan of Net 1 UEPS Technologies, Inc.
v. Shares: Shares of common stock,
par value $0.001 per share, of the Company.
w. Stock Appreciation Right: A
stock appreciation right granted pursuant to Section 7 of
the Plan.
x. Subsidiary: With reference to
the Company, a subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto).
3. Shares Subject
to the Plan
The total number of Shares which may be issued under the Plan,
measured from the Effective Date, is 8,552,580. The maximum
number of Shares for which Options, Stock Appreciation Rights,
or Other Stock-Based Awards (other than Performance-Based Awards
granted pursuant to Section 8.b), in any combination, may
be granted during a calendar year to any Participant shall be
569,120 Shares. The Shares may consist, in whole or in
part, of unissued Shares or treasury Shares. The issuance of
Shares or the payment of cash upon the exercise of an Award or
in consideration of the cancellation or termination of an Award
shall reduce the total number of Shares available under the
Plan, as applicable. Shares which are subject to Awards which
terminate or lapse without the payment of consideration may be
granted again under the Plan. Shares delivered to the Company as
part or full payment for the exercise of an Option or to satisfy
withholding obligations upon the exercise of an Option, in each
case if permitted by the Committee, may be granted again under
the Plan.
A-2
4. Administration
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any
subcommittee thereof, which Committee shall consist, unless
otherwise determined by the Board, (i) during any period
that the Company is subject to Section 16 of the Act,
solely of at least two individuals who are intended to qualify
as Non-Employee Directors within the meaning of
Rule 16b-3
under the Act (or any successor rule thereto) and
(ii) during any period that the Company is subject to
Section 162(m) of the Code, solely of outside
directors within the meaning of Section 162(m) of the
Code (or any successor section thereto). Awards may, in the
discretion of the Committee, be made under the Plan in
assumption of, or in substitution for, outstanding awards
previously granted by the Company or its affiliates or a company
acquired by the Company or with which the Company combines. The
number of Shares underlying such substitute awards shall be
counted against the aggregate number of Shares available for
Awards under the Plan. The Committee is authorized to interpret
the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, to grant awards consistent
with the terms of the Plan, and to make any other determinations
that it deems necessary or desirable for the administration of
the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan in the
manner and to the extent the Committee deems necessary or
desirable. Any decision of the Committee in the interpretation
and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned (including, but
not limited to, Participants and their beneficiaries or
successors). The Committee shall have the full power and
authority to establish the terms and conditions of any Award
consistent with the provisions of the Plan and to waive any such
terms and conditions at any time (including, without limitation,
accelerating or waiving any vesting conditions). Notwithstanding
the foregoing, the Committee shall not, without obtaining prior
shareholder approval, modify or amend any outstanding Award, nor
grant an Award in substitution for an outstanding Award, if such
modification, amendment or substitution results in repricing the
Award, within the meaning of Nasdaq Marketplace
Rule 5635(c) and IM-5635-1, or any successor provision. The
Committee shall require payment of any amount it may determine
to be necessary to withhold for federal, state, local or other
taxes as a result of the exercise, grant or vesting of an Award.
Unless the Committee specifies otherwise, the Participant may
elect to pay a portion or all of such withholding taxes, not in
excess of the amount necessary to satisfy the statutory minimum
withholding amount due, by (a) delivery in Shares or
(b) having Shares withheld by the Company from any Shares
that would have otherwise been received by the Participant.
5. Limitations
No Award may be granted under the Plan after June 7, 2019,
but Awards granted on or before June 7, 2019 may
extend beyond that date.
6. Terms
and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, nonqualified or incentive stock options for federal
income tax purposes, as evidenced by the related Award
agreements, and shall be subject to the foregoing and the
following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall
determine:
a. Option Price. The Option Price
per Share shall be determined by the Committee, but shall not be
less than 100% of the Fair Market Value of the Shares on the
date an Option is granted.
b. Exercisability. Options granted
under the Plan shall vest and become exercisable at such time
and upon such terms and conditions as may be determined by the
Committee, but in no event shall an Option be exercisable more
than ten years after the date it is granted. Unless otherwise
provided in an Award agreement, an Option shall vest with
respect to twenty percent (20%) of the Shares initially covered
by the Option on each of the first, second, third, fourth and
fifth anniversaries of the date the Option was granted, subject
to the Participants continued Employment with the Company
and the other terms and conditions of the Plan and the Award
agreement.
c. Exercise of Options. Except as
otherwise provided in the Plan or in an Award agreement, an
Option may be exercised for all, or from time to time any part,
of the Shares for which it is then exercisable. For purposes of
Section 6 of the Plan, except as otherwise provided in an
Award agreement, the exercise date of an Option shall be the
later of the date a notice of exercise is received by the
Company and, if applicable, the date
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payment is received by the Company pursuant to the following
sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full, in
accordance with Committee procedures, at the election of the
Participant (i) in cash (US dollars) or cash equivalent
acceptable to the Committee (including offset against US
dollars, if any, owed by the Company to the Participant as of
the date of exercise, subject to any required regulatory
approval), (ii) if permitted by the Committee, by tender to
the Company, or attestation to the ownership, of whole Shares
owned by the Participant, including Shares deliverable upon
exercise of the Option, (iii) to the extent permitted by
the Committee, if there is a public market for the Shares at
such time, through the delivery of irrevocable instructions to a
broker in a form acceptable to the Committee providing for the
assignment to the Company of the proceeds of a sale or loan with
respect to some or all of the Shares obtained upon the exercise
of the Option, (iv) if permitted by the Committee, with a
promissory note in such form as the Committee may specify that
bears a market rate of interest and is fully recourse,
(v) by any other means acceptable to the Committee, or
(vi) by any combination of the foregoing as may be
permitted by the Committee, in its sole discretion. Shares
tendered in payment of the Exercise Price will be valued at
their Fair Market Value as of the date that the exercise occurs.
No Participant shall have any rights to dividends or other
rights of a shareholder with respect to Shares subject to an
Option until the Participant has given written notice of
exercise of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by the
Committee pursuant to the Plan.
d. ISOs. The Committee may grant
Options under the Plan that are intended to be ISOs. Such ISOs
shall comply with the requirements of Section 422 of the
Code (or any successor section thereto). No ISO may be granted
to any Participant who at the time of such grant owns ten
percent or more of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, unless
(i) the Option Price for such ISO is at least 110% of the
Fair Market Value of a Share on the date the ISO is granted and
(ii) the date on which such ISO terminates is a date not
later than the day preceding the fifth anniversary of the date
on which the ISO is granted. Any Participant who disposes of
Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or
(ii) within one year after the transfer of such Shares to
the Participant, shall notify the Company of such disposition
and of the amount realized upon such disposition. All Options
granted under the Plan are intended to be nonqualified stock
options, unless the applicable Award agreement expressly states
that the Option is intended to be an ISO. If an Option is
intended to be an ISO, and if for any reason such Option (or
portion thereof) shall not qualify as an ISO, then, to the
extent of such nonqualification, such Option (or portion
thereof) shall be regarded as a nonqualified stock option
granted under the Plan; provided that such Option (or potion
thereof) otherwise complies with the Plans requirements
relating to nonqualified stock options. In no event shall any
member of the Committee, the Company or any of its Affiliates
(or their respective employees, officers or directors) have any
liability to any Participant (or any other Person) due to the
failure of an Option to qualify for any reason as an ISO.
e. Attestation. Wherever in this
Plan or any agreement evidencing an Award a Participant is
permitted to pay the exercise price of an Option or taxes
relating to the exercise of an Option by delivering Shares, the
Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirement by presenting proof
of beneficial ownership of such Shares, in which case the
Company shall treat the Option as exercised without further
payment and shall withhold such number of Shares from the Shares
acquired by the exercise of the Option.
7. Terms
and Conditions of Stock Appreciation Rights
a. Grants. The Committee also may
grant (i) a Stock Appreciation Right independent of an
Option or (ii) a Stock Appreciation Right in connection
with an Option, or a portion thereof. A Stock Appreciation Right
granted pursuant to clause (ii) of the preceding sentence
(A) may be granted at the time the related Option is
granted or at any time prior to the exercise or cancellation of
the related Option, (B) shall cover the same number of
Shares covered by an Option (or such lesser number of Shares as
the Committee may determine) and (C) shall be subject to
the same terms and conditions as such Option except for such
additional limitations as are contemplated by this
Section 7 (or such additional limitations as may be
included in an Award agreement).
b. Terms. The exercise price per
Share of a Stock Appreciation Right shall be an amount
determined by the Committee but in no event shall such amount be
less than the greater of (i) the Fair Market Value of a
Share on the
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date the Stock Appreciation Right is granted or, in the case of
a Stock Appreciation Right granted in conjunction with an
Option, or a portion thereof, the Option Price of the related
Option and (ii) the minimum amount permitted by applicable
laws, rules, by-laws or policies of regulatory authorities or
stock exchanges. Each Stock Appreciation Right granted
independent of an Option shall entitle a Participant upon
exercise to an amount equal to (i) the excess of
(A) the Fair Market Value on the exercise date of one Share
over (B) the exercise price per Share, times (ii) the
number of Shares covered by the Stock Appreciation Right. Each
Stock Appreciation Right granted in conjunction with an Option,
or a portion thereof, shall entitle a Participant to surrender
to the Company the unexercised Option, or any portion thereof,
and to receive from the Company in exchange therefore an amount
equal to (i) the excess of (A) the Fair Market Value
on the exercise date of one Share over (B) the Option Price
per Share, times (ii) the number of Shares covered by the
Option, or portion thereof, which is surrendered. The date a
notice of exercise is received by the Company shall be the
exercise date. Payment shall be made in Shares or in cash, or
partly in Shares and partly in cash (any such Shares valued at
such Fair Market Value), all as shall be determined by the
Committee. Stock Appreciation Rights may be exercised from time
to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the
Stock Appreciation Right is being exercised. No fractional
Shares will be issued in payment for Stock Appreciation Rights,
but instead cash will be paid for a fraction or, if the
Committee should so determine, the number of Shares will be
rounded downward to the next whole Share. No Stock Appreciation
Right shall have a term longer than ten years duration.
c. Limitations. The Committee may
impose, in its discretion, such conditions upon the
exercisability or transferability of Stock Appreciation Rights
as it may deem fit.
d. Limited Stock Appreciation
Rights. The Committee may grant LSARs that
are exercisable upon the occurrence of specified contingent
events. Such LSARs may provide for a different method of
determining appreciation, may specify that payment will be made
only in cash and may provide that any related Awards are not
exercisable while such LSARs are exercisable. Unless the context
otherwise requires, whenever the term Stock Appreciation
Right is used in the Plan, such term shall include LSARs.
8. Other
Stock-Based Awards
a. Generally. The Committee, in
its sole discretion, may grant or sell Awards of Shares, Awards
of restricted Shares and Awards that are valued in whole or in
part by reference to, or are otherwise based on the Fair Market
Value of, Shares (Other Stock-Based Awards).
Such Other Stock-Based Awards shall be in such form, and
dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest
with respect to, one or more Shares (or the equivalent cash
value of such Shares) upon the completion of a specified period
of service, the occurrence of an event
and/or the
attainment of performance objectives. Other Stock-Based Awards
may be granted alone or in addition to any other Awards granted
under the Plan. Subject to the provisions of the Plan, the
Committee shall determine to whom and when Other Stock-Based
Awards will be made, the number of Shares to be awarded under
(or otherwise related to) such Other Stock-Based Awards; whether
such Other Stock-Based Awards shall be settled in cash, Shares
or a combination of cash and Shares; and all other terms and
conditions of such Awards (including, without limitation, the
vesting provisions thereof and provisions ensuring that all
Shares so awarded and issued shall be fully paid and
non-assessable). Unless otherwise provided in an Award
agreement, Other Stock-Based Awards shall vest with respect to
twenty percent (20%) of the Shares initially covered by such
Other Stock-Based Award on each of the grant date and the first,
second, third and fourth anniversaries of the date such Award
was granted, subject to the Participants continued
Employment with the Company and the other terms and conditions
of the Plan and the Award agreement.
b. Performance-Based
Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under
this Section 8 may be granted in a manner which is
deductible by the Company under Section 162(m) of the Code
(or any successor section thereto) (Performance-Based
Awards). A Participants Performance-Based Award
shall be determined based on the attainment of written
performance goals approved by the Committee for a performance
period established by the Committee (i) while the outcome
for that performance period is substantially uncertain and
(ii) no more than 90 days after the commencement of
the performance period to which the performance goal relates or,
if less, the number of days which is equal to 25% of the
relevant performance period. The performance goals, which must
be objective, shall be based upon one or more of the following
criteria: (i) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and
A-5
amortization); (ii) net income; (iii) operating
income; (iv) earnings per Share or fundamental earnings per
Share; (v) book value per Share; (vi) return on
shareholders equity; (vii) expense management;
(viii) return on investment; (ix) improvements in
capital structure; (x) profitability of an identifiable
business unit or product; (xi) maintenance or improvement
of profit margins; (xii) stock price; (xiii) market
share; (xiv) revenues or sales; (xv) costs;
(xvi) cash flow; (xvii) working capital and
(xviii) return on assets. The foregoing criteria may relate
to the Company, one or more of its Subsidiaries or one or more
of its divisions or units, or any combination of the foregoing,
and may be applied on an absolute basis
and/or be
relative to one or more peer group companies or indices, or any
combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of
the Code (or any successor section thereto), the performance
goals may be calculated without regard to extraordinary items.
The maximum amount of Performance-Based Awards that may be
granted during a calendar year to any Participant shall be:
(x) with respect to Performance-Based Awards that are
Options, Options covering 569,120 Shares and (y) with
respect to Performance-Based Awards that are not Options, Awards
having an aggregate value as of the grant date of $20,000,000.
The Committee shall determine whether, with respect to a
performance period, the applicable performance goals have been
met with respect to a given Participant and, if they have, to so
certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be
paid for such performance period until such certification is
made by the Committee. The amount of the Performance-Based Award
actually paid to a given Participant may be less than the amount
determined by the applicable performance goal formula, at the
discretion of the Committee. The amount of the Performance-Based
Award determined by the Committee for a performance period shall
be paid to the Participant at such time as determined by the
Committee in its sole discretion after the end of such
performance period; provided, however, that a Participant may,
if and to the extent permitted by the Committee and consistent
with the provisions of Sections 162(m) and 409A of the
Code, to the extent applicable, elect to defer payment of a
Performance-Based Award.
9. Adjustments
Upon Certain Events
Notwithstanding any other provisions in the Plan to the
contrary, the following provisions shall apply to all Awards
granted under the Plan:
a. In the event of any change in the outstanding Shares
after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation,
spinoff, combination or transaction or exchange of Shares or
other corporate exchange, or any distribution to shareholders of
Shares other than regular cash dividends or any transaction
similar to the foregoing, the Committee shall make such
substitution or adjustment, as it deems to be equitable in its
sole discretion and without liability to any person, as to
(i) the number or kind of Shares or other securities issued
or reserved for issuance pursuant to the Plan or pursuant to
outstanding Awards, (ii) the maximum number of Shares for
which Options or Stock Appreciation Rights may be granted during
a calendar year to any Participant, (iii) the maximum
amount of a Performance-Based Award that may be granted during a
calendar year to any Participant, (iv) the Option Price or
exercise price of any stock appreciation right
and/or
(v) any other affected terms of such Awards.
b. In the event a significant corporate transaction, such
as sale of voting stock, merger, sale of substantial assets, or
other similar corporate event involving the Company, occurs
after the Effective Date, (i) if determined by the
Committee in the applicable Award agreement or otherwise, any
outstanding Awards then held by Participants which are
unexercisable or otherwise unvested or subject to lapse
restrictions may automatically be deemed exercisable or
otherwise vested or no longer subject to lapse restrictions, as
the case may be, as of immediately prior to such corporate
transaction, and (ii) the Committee may, but shall not be
obligated to, (A) cancel such Awards for fair value (as
determined in the sole discretion of the Committee) which, in
the case of Options and Stock Appreciation Rights, may equal the
excess, if any, of value of the consideration to be paid in such
corporate transaction to holders of the same number of Shares
subject to such Options or Stock Appreciation Rights (or, if no
consideration is paid in any such transaction, the Fair Market
Value of the Shares subject to such Options or Stock
Appreciation Rights) over the aggregate exercise price of such
Options or Stock Appreciation Rights or (B) provide for the
issuance of substitute Awards that will substantially preserve
the otherwise applicable terms of any affected Awards previously
granted hereunder as determined by the Committee in its sole
discretion or (C) provide that for a period of at least
15 days prior to the consummation of such corporate
transaction, such Options shall be exercisable as to all shares
subject thereto
A-6
and that upon the consummation of such corporate transaction,
such Options shall terminate and be of no further force and
effect. Notwithstanding anything in the Plan to the contrary, in
no event shall the Committee exercise its discretion to
accelerate the payment or settlement of an Award where such
payment or settlement is on behalf of a United States taxpayer
and constitutes deferred compensation within the meaning of
Section 409A of the Code unless, and solely to the extent,
that such accelerated payment or settlement is permissible under
Treasury Regulation
section 1.409A-3(j)(4)
or any successor provision.
10. No
Right to Employment or Awards
The granting of an Award under the Plan shall impose no
obligation on the Company or any Subsidiary to continue the
Employment of a Participant and shall not lessen or affect the
Companys or Subsidiarys right to terminate the
Employment of such Participant. No Participant or other Person
shall have any claim to be granted any Award, and there is no
obligation for uniformity of treatment of Participants, or
holders or beneficiaries of Awards. The terms and conditions of
Awards and the Committees determinations and
interpretations with respect thereto need not be the same with
respect to each Participant (whether or not such Participants
are similarly situated).
11. Successors
and Assigns
The Plan shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, the
estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy
or representative of the Participants creditors.
12. Nontransferability
of Awards
Unless otherwise determined by the Committee, an Award shall not
be transferable or assignable by the Participant otherwise than
by will or by the laws of descent and distribution. An Award
exercisable after the death of a Participant may be exercised by
the legatees, personal representatives or distributees of the
Participant.
13. Amendments
or Termination
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made,
(a) without the approval of the shareholders of the
Company, if such action would (except as is provided in
Section 9 of the Plan), increase the total number of Shares
reserved for the purposes of the Plan or change the maximum
number of Shares for which Awards may be granted to any
Participant or (b) without the consent of a Participant, if
such action would diminish any of the rights of the Participant
under any Award theretofore granted to such Participant under
the Plan; provided, however, that the Committee may amend the
Plan in such manner as it deems necessary to permit the granting
of Awards meeting the requirements of the Code or other
applicable laws.
14. International
Participants
With respect to Participants who reside or work outside the
United States of America and who are not (and who are not
expected to be) covered employees within the meaning
of Section 162(m) of the Code, the Committee may, in its
sole discretion, amend the terms of the Plan or Awards with
respect to such Participants in order to conform such terms with
the requirements of local law.
15. Choice
of Law
The Plan shall be governed by and construed in accordance with
the laws of the State of Florida without regard to conflicts of
laws.
16. Effectiveness
of the Plan
The Plan initially became effective June 7, 2004, and was
amended by Amendment No. 1 thereto on June 21, 2006.
The Plan was then amended and restated on August 24, 2006,
subject to shareholder approval, which was obtained on
December 1, 2006. The Board has approved the Plans
second amendment and restatement, as set forth herein, subject
to approval of the shareholders of the Company at the 2009
Annual Meeting of the Shareholders or a special meeting of the
shareholders at which the Plan, as amended and restated, is
presented for approval, provided that any such special meeting
is held within twelve months of the date this amended and
restated Plan is adopted by the Board.
A-7
Net 1 UEPS Technologies, Inc. WO 61048 FOLD AND DETACH HERE Mark, Sign, Date and Return this Proxy
Card Promptly Using the Enclosed Envelope. Please mark your votes as THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. indicated in
this example X IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR AND
FOR PROPOSALS 2 AND 3. FOR ALL WITHOLD FOR ALL *EXCEPTIONS FOR AGAINST ABSTAIN 1. ELECTION OF
DIRECTORS: 2. PROPOSAL TO AMEND AND RESTATE THE 2004 Nominees: 01 Dr. Serge C.P. Belamant STOCK
INCENTIVE PLAN. 02 Herman G. Kotze 3. PROPOSAL TO RATIFY THE SELECTION OF 03 Christopher S.
Seabrooke DELOITTE & TOUCHE (SOUTH AFRICA) AS THE 04 Antony C. Ball INDEPENDENT REGISTERED PUBLIC
05 Alasdair J.K. Pein ACCOUNTING FIRM FOR THE COMPANY FOR 06 Paul Edwards THE 2010 FISCAL YEAR. 07
Tom C. Tinsley 4. In their discretion upon such other matters as may properly come before
INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees the
meeting. name in the following space: *Exceptions Mark Here for Address Change or Comments SEE
REVERSE Signature Signature Date Please sign exactly as your name appears on your stock
certificates. When joint tenants hold shares, both should sign. When signing as attorney, executor,
administrator, trustee, guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a partnership, please sign in
partnership name by authorized person. |
You can now access your Net 1 UEPS Technologies, Inc. account online. Access your Net 1 UEPS
Technologies, Inc. account online via Investor ServiceDirect(ISD). BNY Mellon Shareowner
Services, the transfer agent for Net 1 UEPS Technologies, Inc., now makes it easy and convenient to
get current information on your shareholder account. View account status View payment history
for dividends View certificate history Make address changes View book-entry information
Obtain a duplicate 1099 tax form Visit us on the web at http://www.bnymellon.com/shareowner/isd For
Technical Assistance Call 1-877-978-7778 between 9am-7pm Monday-Friday Eastern Time Investor
ServiceDirect Available 24 hours per day, 7 days per week TOLL FREE NUMBER: 1-800-370-1163 Choose
MLink SM for fast, easy and secure 24/7 online access to your future proxy materials,
investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect
at www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through
enrollment. FOLD AND DETACH HERE NET 1 UEPS TECHNOLOGIES, INC. PROXY THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS This proxy is solicited on behalf of the Board of Directors of Net
1 UEPS Technologies, Inc. for the Annual Meeting of Shareholders to be held on November 25, 2009.
The undersigned, appoints Dr. Serge C.P. Belamant and Herman G. Kotze, and each of them, with full
power of substitution in each, the proxies of the undersigned, to represent the undersigned and
vote all shares of the common stock of Net 1 UEPS Technologies, Inc. which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders to be held on November 25, 2009, and at any
adjournment or postponement thereof, as indicated on the reverse side of this proxy. This proxy,
when properly executed, will be voted in the manner directed herein by the undersigned shareholder.
If no direction is given, then this proxy will be voted FOR ALL nominees for director and FOR
proposals 2 and 3. (Please Sign on Reverse Side) BNY MELLON SHAREOWNER SERVICES Address
Change/Comments P.O. BOX 3550 (Mark the corresponding box on the reverse side) SOUTH HACKENSACK,
NJ 07606-9250 WO# 61048 |