Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On August 25, 2016, our board of directors (the Board), upon
recommendation of the Remuneration Committee, increased the annual base salary
of Serge C.P. Belamant, our Chairman and Chief Executive Officer, and Herman
Kotzé, our Chief Financial Officer, to $1,100,000 and $650,000, respectively.
The increase in annual base salary in each case was effective July 1, 2016.
In addition, the Board adopted a cash incentive award plan for
fiscal 2017 for Messrs. Serge C.P. Belamant and Kotzé and awarded shares of
restricted stock to Messrs. Serge C.P. Belamant and Kotzé.
Cash Incentive Award Plan for Fiscal 2017
Under the cash incentive award plan, each of Messrs. Serge C.P.
Belamant and Kotzé will be eligible to earn a cash incentive award based on our
fiscal 2017 financial performance and his individual contribution toward the
achievement of certain objectives described under Qualitative Portion of the
Cash Incentive Award Plan below. The terms of the cash incentive award plan are
not contained in a formal written document, but are summarized below. The cash
incentive award plan provides for a target level cash incentive award of 100% of
the executives annual base salary for fiscal 2017, 60% of which will be based
on our fiscal 2017 financial performance and 40% of which will be based on
qualitative factors. The quantitative portion of the award provides for
threshold, target and maximum percentages of the executives base salary
multiplied by 0.60. The qualitative portion of the award is limited to 100% of
the executives base salary multiplied by 0.40.
Quantitative Portion of the Cash Incentive Award Plan
Each of Messrs. Serge C.P. Belamant and Kotzé will be entitled
to receive an amount equal to 60% of his annual base salary (the
Target
Quantitative Award
) if we achieve profit before tax (
PBT
) of $140
million for fiscal 2017. At other levels of PBT, each of Messrs. Serge C.P.
Belamant and Kotzé will receive the following percentages of the Target
Quantitative Award:
|
At or below $130 million (threshold)0%
|
|
$140 million (target)100%
|
|
$150 million or above (maximum) 200% for Mr.
Serge C.P. Belamant and 150% for Mr. Kotzé
|
|
PBT above $130 million and below $150 million
will be interpolated relative to the $140 million target on a linear
basis.
|
PBT will be measured in U.S. dollars in accordance with U.S.
generally accepted accounting principles. The Remuneration Committee may
determine in its discretion certain adjustment as it deems appropriate.
Qualitative Portion of the Cash Incentive Award Plan
Each of Messrs. Serge C.P. Belamant and Kotzé will be entitled
to receive up to 40% of his annual base salary based on his contribution toward
the enhancing shareholder value through:
|
Developing an appropriate succession plan for
executive management;
|
|
Conducting meetings with US-based shareholders
to enhance managements visibility with these shareholders;
|
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Resolving the status of our SASSA contract;
|
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Developing a detailed organizational structure
for our company and recruiting leaders for business units;
|
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Developing a strategic plan;
|
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Integrating acquisitions and developing our
platform internationally;
|
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Winning new contracts in emerging markets for
establishment of the UEPS platform and successfully implementing the
system; and
|
|
Developing and setting KPI targets for next
tier executive officers.
|
The Remuneration Committee may award between 0% and 100% of 40%
of the executives annual base salary, based on its assessment of progress
against these objectives.
Tables Illustrating Potential Payments Under Cash Incentive
Award Plan
Based on Mr. Serge C.P. Belamants current annual base salary
of $1,100,000, the table below illustrates the potential amounts that could be
payable to him under the cash incentive award plan upon achievement of various
levels of PBT in respect of the quantitative portion of the plan and assuming
the full award is made in respect of the qualitative portion of the plan. The
maximum award payable to Mr. Serge C.P. Belamant under the cash incentive award
plan is $1,760,000.
|
Quantitative
Portion
|
Qualitative
Portion
|
Total
|
PBT
($ 000)
|
Amount
Payable
($)
|
($)
|
($)
|
Threshold
|
130,000 or below
|
-
|
440,000
|
440,000
|
Target
|
140,000
|
660,000
|
440,000
|
1,100,000
|
Maximum
|
150,000 or above
|
1,320,000
|
440,000
|
1,760,000
|
Based on Mr. Kotzés current annual base salary of $650,000,
the table below illustrates the potential amounts that could be payable to him
under the cash incentive award plan upon achievement of various levels of PBT in
respect of the quantitative portion of the plan and assuming the full award is
made in respect of the qualitative portion of the plan. The maximum award
payable to Mr. Kotzé is $845,000.
|
Quantitative
Portion
|
Qualitative
Portion
|
Total
|
|
PBT
($ 000)
|
Amount
Payable
($)
|
($)
|
($)
|
Threshold
|
130,000 or below
|
-
|
260,000
|
260,000
|
Target
|
140,000
|
390,000
|
260,000
|
650,000
|
Maximum
|
150,000 or above
|
585,000
|
260,000
|
845,000
|
Grants of Restricted Stock FEPS Based
On August 25, 2016, our Board, upon the recommendation of the
Remuneration Committee, awarded 200,000 and 150,000 shares of restricted stock
to Messrs. Serge C.P. Belamant and Kotzé, respectively.
All of the shares of restricted stock are subject to time-based
and performance-based vesting conditions. In order for any of the shares to
vest, the recipient must remain employed by us on a full-time basis on the date
that we file our Annual Report on Form 10-K for the fiscal year ended June 30,
2019. If that condition is satisfied, then the shares will vest based on the
level of Fundamental EPS we achieve for the respective fiscal year ended
(
2019 Fundamental EPS
), as follows:
|
One-third of the shares will vest if we achieve
2019 Fundamental EPS of $2.60;
|
|
Two-thirds of the shares will vest if we
achieve 2019 Fundamental EPS of $2.80; and
|
|
All of the shares will vest if we achieve 2019
Fundamental EPS of $3.00.
|
At levels of 2019 Fundamental EPS greater $2.60 and less than
$3.00, the number of shares that will vest will be determined by linear
interpolation relative to 2019 Fundamental EPS of $2.80.
Any shares that do not vest in accordance with the
above-described conditions will be forfeited.