UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 2, 2014
(June 30, 2014)
NET 1 UEPS TECHNOLOGIES, INC.
(Exact name of
registrant as specified in its charter)
Florida |
000-31203 |
98-0171860 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
President Place, 4th Floor, Cnr. Jan
Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
(Address of
principal executive
offices)
(ZIP Code)
Registrants telephone number, including area code:
011-27-11-343-2000
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a -12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e -4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 30, 2014, each of KSNET, Inc. and Net1 Applied Technologies Korea (Net1 Korea) entered into a three-year service agreement with Mr. Phil-Hyun Oh, President of KSNET. The service agreements replace the employment agreement between
KSNET and Mr. Oh that expired on June 30, 2014.
As of June 30, 2014, the USD/KRW exchange rate was $1: KRW 1,014.
KSNET service agreement
Under the KSNET service agreement, Mr. Oh is entitled to receive: (i) an annual base salary of KRW 405 million and (ii) an annual bonus of up to KRW 440 million, which comprises a quantitative and qualitative portion.
The quantitative portion of the annual bonus is capped at a maximum of KRW 338 million and will be based on the achievement of specified levels of KSNETs free cash flow and profit before interest and tax (defined as profit before interest and
tax and any bonus under the service agreement) (PBIT) during any calendar year during the term of the service agreement, as described below.
Mr. Oh is entitled to receive KRW 2 million for every KRW 1 billion of free cash flow (defined as operating cash flow, minus tax and capital expenditures) during the year. The maximum payable in respect of the free cash flow metric is KRW 50
million.
If PBIT is at least 90% but less than 100% of the previous years PBIT, then Mr. Oh is entitled to receive (i) KRW 208 million, minus (ii) KRW 10 million for each 1% by which current PBIT is less than the previous years
PBIT. If PBIT is equal to or greater than the previous years PBIT, then Mr. Oh is entitled to receive KRW 208 million, plus KRW 3,333,333 for each 1% increase in PBIT when compared to the previous year (up to a maximum of KRW 80 million
in respect of the excess), for a total maximum of KRW 288 million.
The qualitative portion of the annual bonus is capped at a maximum of KRW 102 million and is based on the achievement of certain key objectives to be determined annually by our chairman. Each item comprising the qualitative portion is based on
performance during our fiscal year ending June 30. Achievement of the qualitative targets will be determined by our Remuneration Committee each year. The qualitative targets for the 2015 fiscal year are:
(i) If KSNET maintains or improves its market position in the Korean Card VAN market, or if KSNET internally improves the relative contribution of the Banking VAN, PG, and Purchase business units compared to the core VAN business unit (i.e. if
Banking VAN, PG, and Purchase contribute more than the current 14% of gross profit) then Mr. Oh is entitled to receive KRW 50 million; and
(ii) If KSNET is not the subject of any adverse regulatory findings, fines, or penalties during the relevant period then Mr. Oh is entitled to receive KRW 52 million.
Mr. Oh will continue to be eligible for participation in our Amended and Restated Stock Incentive Plan during the term of the service agreement.
In addition, under the terms of the KSNET service agreement, Mr. Oh is entitled to participate in national health insurance and the national pension plan provided under the laws of Korea, to receive reimbursement for annual physical examinations for
him and his spouse, and to make use of KSNET provided car and driver for business and reasonable personal use.
The KSNET service agreement also includes a restraint of trade clause which provides that upon the termination of Mr. Ohs services with KSNET, he is restricted, for a period of 36 months, from soliciting business from certain customers,
working for or holding interests in KSNETs competitors or participating in a competitive activity within the territories where KSNET does business.
Mr. Oh may be terminated with or without justifiable cause (as defined in the service agreement). In the case of termination without justifiable cause, he will be entitled to receive his base salary and the bonus (if any) that he would
have otherwise received for the remainder of the then-current fiscal year.
Net1 Korea service agreement
Under the Net1 Korea service agreement, Mr. Oh is entitled to receive the following cash compensation: (i) an annual base salary of KRW 10 million and (ii) an annual bonus of up to KRW 80 million, based on the achievement of qualitative targets
determined by our chairman. The qualitative targets for the 2015 fiscal year are the successful launch in Korea during the year of any of our products, that are not currently marketed by Net1 Korea in the Korean market (for example Virtual Credit
Card, Variable PIN, Money transfers, and bill payments).
The other terms of the Net1 Korea service agreement are substantially similar to the terms of the KSNET service agreement.
The foregoing summary of the service agreements is qualified in its entirety by the terms and conditions of the service agreements, which are filed as Exhibits 10.1 and 10.2 to this and are incorporated herein by reference.
Item 9.01. |
Financial Statements and Exhibits
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SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
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NET 1 UEPS TECHNOLOGIES, INC. |
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Date: July 2, 2014 |
By: /s/ Serge Belamant |
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Dr. Serge C.P.
Belamant |
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Chief Executive
Officer and Chairman of the Board |
Service Agreement (KSNET)
This Service Agreement (this Agreement) is entered
into on the 30th day of June, 2014, by and between:
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I. |
KSNET, INC., a corporation organized and existing under
the laws of the Republic of Korea (Korea), with its registered
office at Seong Bo Building, 2nd Floor, 169-10 Samsung-Dong,
Gangnam-Gu, Seoul, 135-090 Korea (the Company); and |
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II. |
PHIL-HYUN OH, a natural person residing at [XXX], (the
Executive). |
WITNESSETH:
WHEREAS, the Company previously appointed the Executive as its
representative director under the terms of the Employment Agreement dated
September 17, 2010, between the Company and the Executive (the Employment
Agreement);
WHEREAS, the Company wishes to reappoint the Executive as its
representative director for an additional three (3) years;
WHEREAS, the Company also intends to appoint the Executive as
the representative director of Net1 Applied Technologies Korea (Net1
Korea), under the terms of the Service Agreement with Net1 Korea, of the
same date hereof; and
WHEREAS, the Executive wishes to accept these appointments;
NOW, THEREFORE, in consideration of the mutual promises set
forth hereinafter, the parties hereto agree as follows:
The Company shall reappoint the Executive as its representative
director, effective as of July 1, 2014 (the Effective Date),
immediately upon the expiration of his current term. And the Executive shall
accept such appointment, and perform the functions and carry out the duties and
responsibilities set forth hereinafter as the representative director of the
Company on the terms and conditions set forth in this Agreement.
2. |
Duties and
Responsibilities. |
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(a) |
As the representative director, the Executive shall have
the power, authority and responsibility delegated to the Executive by the
board of directors of the Company (the Board of Directors) and as
provided for in the articles of incorporation of the Company (the
Articles of Incorporation) and the Korean Commercial Code
(collectively, the General Services). In this regard, it is
hereby acknowledged and agreed that the Executive shall be entitled to
communicate with and shall rely upon the advice, direction and
instructions of the Board of Directors in order to initiate, coordinate
and implement the General Services as contemplated herein, subject, at all
times, to the final direction and supervision of the Board of
Directors. |
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(b) |
Without limiting in any manner the generality of the
General Services, the Executive shall perform the General Services
faithfully, diligently, to the best of the Executives ability, and in the
best interests of the Company, consistent with the Executives position as
the representative director of Company, and will devote and prioritize his
full working time and use his best efforts for the Company in that
regard. |
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(c) |
The Executive hereby acknowledges and agrees to abide by
the rules, regulations, instructions, personnel practices, policies and
procedures of each of the Company and Net 1 UEPS Technologies, Inc.
(Net l), and any changes thereto which may be adopted from time
to time as such rules, regulations, instructions, personnel practices,
policies and procedures may be applied to the Executive as the
representative director of the Company. |
3. |
Direction. The Executive shall at all times
be subject to and act in accordance with the Articles of Incorporation and
the rules, regulations and instructions issued or approved from time to
time by the Board of Directors, as well as the Korean Commercial Code.
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4. |
Compensation. As the representative
director of the Company, the Executive shall receive the compensation,
benefits and allowances for services rendered to the Company as set forth
below. No other compensation, other than the items specifically mentioned
in this Agreement, shall be paid to the Executive in relation to his
position as the representative director of the Company. The Company shall
pay to the Executive all of the compensation described herein in
compliance with the Korean Commercial Code and the Articles of
Incorporation, subject to regular and customary deductions and tax
withholdings as required by applicable laws and regulations.
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(a) |
Base Salary: The Executive shall be
compensated at the rate of KRW 405 million per year (the Base
Salary), in twelve (12) equal monthly installments to be paid in
arrears on the same day of each month on which the other executives of the
Company receive their compensation. |
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(b) |
Bonus: The Company shall also pay annual
bonus compensation up to a maximum of KRW 440 million, which is
approximately 109% of the Base Salary (the Bonus), consisting of
an amount based on the achievement of quantitative targets (the
Quantitative Portion) and an amount based on the achievement of
qualitative targets (the Qualitative Portion), each as set forth
below. |
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(i) |
The Quantitative Portion will comprise approximately 77%
of the potential Bonus amount, up to a maximum of KRW 338 million. The
amount of the Quantitative Portion will be the sum of the following
amounts, each based on the achievement of the relevant target during the
twelve months ending December 31, and payable in February of the following
year: |
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(1) |
For each KRW 1 billion of free cash flow (i.e., operating
cash flow, less tax, less capital expenditure) generated by the Company
during the relevant period: KRW 2 million, up to a maximum of KRW 50
million; plus |
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(2) |
Whichever of the following is
applicable: |
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(A) |
If the profit of the Company for the relevant period,
before payment of the Bonus, interest, and tax (PBIT),is at least
90% or more of the previous years PBIT but less than 100% of the previous
years PBIT: KRW 208 million, minus KRW 10 million for every 1% by
which PBIT is less than the previous year; or |
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(B) |
If the PBIT of the Company for the relevant period is at
least equal to the previous years PBIT: KRW 208 million, plus KRW
3,333,333 for each 1% increase in PBIT when compared to the previous year,
up to a maximum of KRW 80 million. |
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(ii) |
The Qualitative Portion will comprise 23% of the
potential Bonus amount, up to a maximum of KRW 102 million. The amount of
the Qualitative Portion is the sum of amounts based on the achievement of
certain qualitative targets, which will be determined every year by the
group Chairman. Each item comprising the Qualitative Portion is based on
performance during the Companys fiscal year ending June 30. The amounts
will be assessed by the Remuneration Committee in August of each year, and
any amount payable will be paid in the following September. For the 2015
fiscal year, the key objectives and associated amounts are as
follows: |
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(1) |
If the Company maintains or improves its market position
in the Korean Card VAN market, or if the Company internally improves the
relative contribution of the Banking VAN, PG, and Purchase business units
compared to the core VAN business unit (i.e. if Banking VAN, PG, and
Purchase contribute more than the current 14% of gross profit): KRW 50
million; plus |
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(2) |
If the Company is not the subject of any adverse
regulatory findings, fines, or penalties during the relevant period: KRW
52 million. |
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(c) |
Stock Grant. The Executive will continue to be
eligible for participation in the stock incentive plan of Net 1 under the
terms of the Amended and Restated Stock Incentive Plan of Net 1 UEPS
Technologies, Inc. (the Stock Incentive Plan). |
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(d) |
Additional Benefits. To the extent permitted by
applicable law, the Executive (and where applicable, his plan-eligible
dependents) will be eligible to participate in the following benefits
maintained by the Company for the benefit of its executive officers,
subject in any event to the eligibility requirements and other terms and
conditions to those plans and programs: |
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(i) |
Health Insurance The Executive shall be entitled
to participate in the national health insurance in accordance with the
applicable laws, rules, and regulations, and shall be reimbursed for
annual physical examinations for the Executive and his
spouse. |
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(ii) |
National Pension The Executive shall be entitled
to participate in the national pension plan in accordance with the
applicable laws, rules, and regulations. |
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(iii) |
Car Use The Executive shall be entitled to the
use of a Company car and driver for business and reasonable personal use
in accordance with the Companys policy. |
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(iv) |
Mobile Phone The Executive will receive a mobile
phone and reimbursement of expenses associated with the use of the phone
for business and reasonable personal use in accordance with the Companys
policy. |
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(e) |
Vacation. The Executive shall be entitled to take
twenty-one (21) days of paid vacation during each twelve (12) months of
the Executives service term hereunder, and which vacation may be taken on
dates to be selected by mutual agreement of the Board of Directors and the
Executive, consistent with the requirements of his service. Such vacation
days are not cumulative and as a result, the unused vacation days in a
given year will not be carried over to subsequent years nor will the
Company provide any compensation for unused vacation days to the
Executive. |
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(f) |
Reimbursement of Business Expenses. The Company
agrees to reimburse the Executive for reasonable business-related expenses
incurred in the performance of the General Services in accordance with the
Companys rules and regulations. |
5. |
Retirement Benefits. Upon the termination
of this Agreement, the Executive shall be entitled to receive retirement
benefits in accordance with the Companys rules and regulations.
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6. |
Working Hours. The Executive may work
additional hours, including hours on weekends and/or during public
holidays, whenever it is necessary to carry out the General Services. The
Executive, however, will not be entitled to overtime compensation or
allowances. |
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7. |
Place of Work. The Executive may be
required to travel temporarily to other locations in connection with the
Companys business. Furthermore, the Executive understands and agrees that
his place of work may be changed by the Company from time to time
according to the Companys business needs. |
8. |
Term of Agreement;
Termination. |
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(a) |
This term of this Agreement will begin on the Effective
Date immediately upon expiration of the Executives prior term, and will
continue for a term of three (3) years, from July 1, 2014 to June 30,
2017. |
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(b) |
The Company may remove the Executive from his position as
the representative director of the Company with or without justifiable
cause at a meeting of the board of directors or shareholders, as
applicable, of the Company prior to the expiration of his then current
term of office as provided for under the Korean Commercial Code, in which
case this Agreement shall terminate immediately upon written notice
thereof. For purposes of this Article 8, the term justifiable cause
shall include any of the following circumstances, as well as any other
circumstances permitted under applicable law: |
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(i) |
The Executive has breached the provisions on
non-competition or confidentiality of this Agreement; |
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(ii) |
The Executive has taken actions that are likely
to result in a material loss of or harm to the business, reputation or
goodwill of the Company; |
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(iii) |
The Executive has misappropriated funds or
assets of the Company; |
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(iv) |
The Executive has concealed from or falsely
disclosed to the Company his name, age, education, experience, or other
personal information; |
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(v) |
The Executive has failed to show performance
results or job capacity; |
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(vi) |
The Executive has committed a crime or offense
which will adversely affect the interest or reputation of the Company;
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(vii) |
The Executive has committed gross negligence,
willful misconduct or any violation of laws in performance of his duties;
or |
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(viii) |
The Executive has done any of the above, or any
similar act or omission, which constitutes justifiable cause for
termination from his position with an affiliate of the Company.
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(c) |
In the event the Executive is removed from office as a
director of the Company without justifiable cause by a special resolution
of the shareholders of the Company and this Agreement is terminated as a
result thereof, the Executive shall be entitled to receive the amounts of
Base Salary and the Bonus (if any) that would have been due and payable to
the Executive if the Executive was fully employed with the Company with
respect to the remainder of the then-current fiscal year in which the
Executive was removed. |
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(d) |
The Executive agrees that in the event of the termination
of his services with the Company, the Executive will assist the Company
with any procedures in connection with such termination, including,
without limitation, the transition of services. The Executive agrees that
he will return all property of the Company, including laptops, mobile
phone, personal digital assistants (PDAs), or other data devices provided
by the Company, as well as all Company information whether original copies
or duplicates in or on whatever media, in his control, custody, or
possession to the Company immediately upon termination of his services or
upon request by the Company at any time. |
9. |
Non-Competition. In consideration of the
Base Salary, the Bonus, and all other compensation to be paid to the
Executive by the Company as set forth in this Agreement, the Executive
agrees that during the term of this Agreement and for a period of three
(3) years after the termination or expiration hereof, the Executive shall
not, without the Companys prior written
consent, directly or indirectly, lend his credit, advice, or assistance,
or engage in any activity or act in any manner, including but not limited
to, as an individual, owner, sole proprietor, founder, associate,
promoter, partner, joint venture participant, shareholder (other than as a
less than one percent (1%) shareholder of a publicly traded corporation),
officer, director, trustee, manager, employer, employee, licensor,
licensee, principal, agent, salesman, broker, representative, consultant,
advisor, investor or otherwise, for the purpose of establishing, operating
or managing any business or entity that is engaged in activities
competitive with the business that the Company has conducted or proposed
to conduct during the Executives service term in any geographic area in
which the Company has conducted or proposed to conduct that
business. |
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(a) |
In consideration of the Base Salary, the Bonus, and all
other compensation to be paid to the Executive by the Company as set forth
in this Agreement, the Executive agrees that during the term of this
Agreement and for a period of three (3) years after the termination or
expiration hereof, the Executive shall not, whether for his own account or
for the account of any other Person (as hereinafter defined), directly or
indirectly interfere with the Companys relationship with or endeavor to
divert or entice away from the Company any Person who or which at any time
during the Executives service term is or was an agent, officer, employee,
customer, distributor, or consultant of the Company. |
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(b) |
As used in this Agreement, the term Person means
any individual, corporation joint venture, general or limited partnership,
association, or other entity. |
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(a) |
The Executive understands and agrees that the business of
the Company is unique and specialized and that, in connection with his
service with the Company, he will receive or have access to Confidential
Information (as hereinafter defined). In consideration of the Base Salary,
the Bonus, and all other compensation to be paid to the Executive by the
Company as set forth in this Agreement, the Executive agrees that at all
times from and after the Effective Date, he shall keep secret all such
Confidential Information and will not, except as required by law, directly
or indirectly, or individually or collectively, Use (as hereinafter
defined) or Disclose (as hereinafter defined) the same to any Person
without first obtaining the written consent of the Company. At any time
the Company may so request, the Executive shall turn over to the Company
all books, notes, memoranda, manuals, notebooks, tables, drawings,
calculations, records and other documents made, compiled by or delivered
to him containing or concerning any Confidential Information, including
copies thereof, in his possession, it being agreed that the same and all
information contained therein are at all times the exclusive property of
the Company. |
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(b) |
As used in this Section, the term Confidential
Information means any information or compilation of information not
generally known to the public or the industry relating to procedures,
techniques, methods, concepts, ideas, affairs, products, processes, and
services related to the Companys business, including but not limited to,
information relating to marketing, merchandising, selling, research,
development, purchasing, costs, customers, plans, pricing, billing, needs
of customers, and services used by customers of the Company. Confidential
Information for purposes of this Agreement shall also include all lists of
customers, addresses, prospects, sales calls, products, services, prices,
and the like, as well as any specifications, formulas, plans, drawings,
accounts or sales records, sales brochures, books, code books, records,
manuals, trade secrets, knowledge, know-how, pricing strategies, operating
costs, sales margins, methods of operation, and the like. All information
disclosed to the Executive during the term of his service with the Company
which he has a reasonable basis to believe to be Confidential Information,
or which was previously or currently is treated by the Company as
Confidential Information, shall be presumed to be Confidential
Information. |
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(c) |
As used in this Section, the term Disclose means
to reveal, deliver, divulge, disclose, publish, copy, communicate, show or
otherwise make known or available to any other Person, or in any way to
copy, any of the Confidential Information. |
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(d) |
As used in this Section, the term Use means to
appropriate any of Confidential Information for the benefit of any Person
other than the Company. |
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(e) |
In addition, the Executive acknowledges and agrees to
comply with the Companys policy on the use of e-mail, fax, intranet and
the Internet, and the use of computer software as amended from time to
time, and accept that the Company will monitor his work practices and the
use of office networks as and when
appropriate. |
12. |
Intellectual Property
Rights. |
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(a) |
To the maximum extent allowed by law, all Intellectual
Property (as hereinafter defined) created or developed by the Executive
(whether alone or jointly with others) in the course of his services or
outside the course of his duties but relating to the business of the
Company shall belong to the Company absolutely. In consideration of the
Base Salary, the Bonus, and all other compensation to be paid to the
Executive by the Company as set forth in this Agreement, the Executive
hereby assigns to the Company all his right, title and interest in such
Intellectual Property (whether now existing or brought into being in the
future) to the maximum extent allowed by law, undertakes to do everything
necessary during and after the term of this Agreement to vest all right,
title and interest in such Intellectual Property in the Company or its
nominee, and irrevocably and unconditionally waives any moral rights or
similar rights that he may have, so far as permitted by law, in exchange
for reasonable compensation to be paid by the Company in accordance with
the Companys relevant rules and regulations (if any) or the applicable
laws of Korea. |
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(b) |
As used in this Section, the term Intellectual
Property means trademarks, service marks, trade names, domain names,
logos, get-up, patents, inventions, registered and unregistered design
rights, copyrighted works, database rights, and all other similar rights
and works in any part of the world (including know-how), including, where
such rights are obtained or enhanced by
registration, any registration of such rights and applications and rights
to apply for such registrations. |
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13. |
Reasonableness of Covenants. The Executive
acknowledges and agrees that the terms and conditions, geographic scope,
and period of duration of the restrictive covenants contained in Sections
9, 10, 11, and 12 above are both fair and reasonable and that the
interests sought to be protected by the Company are legitimate business
interests entitled to be protected. |
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Breach of this Agreement. If the Executive
commits a breach or threatens to commit a breach of any of the provisions
of Sections9, 10, 11, and 12of this Agreement, the Company shall have the
right and remedy to have those provisions specifically enforced by any
court having equity or equivalent jurisdiction, it being acknowledged and
agreed by the Executive that the rights and privileges of the Company
granted in Section 9, 10, 11, and 12are of a special, unique and
extraordinary character and any such breach or threatened breach will
cause great and irreparable injury to the Company and that money damages
will not provide an adequate remedy to the Company. |
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15. |
Tax Returns. Filing annual income tax
returns with the relevant tax authorities is the responsibility of the
Executive. The Company shall have the right to deduct and withhold from
the compensation payable to the Executive hereunder any amounts required
to be deducted and withheld under the provisions of any applicable laws.
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Entire Agreement. This Agreement
contains the entire agreement between the parties relating to the subject
matter hereof. No modification, alteration or amendment of this Agreement
and no waiver of any provision hereof may be made unless such
modification, alteration, amendment, or waiver is set forth in writing
signed by the parties hereto. |
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17. |
Governing Law and Severability. This
Agreement shall be construed in accordance with and governed by the laws
of Korea. With respect to any disputes arising from this Agreement, the
Seoul Central District Court shall have exclusive jurisdiction. If any
provision of this Agreement shall be held by a court of competent
jurisdiction to be illegal, invalid, or unenforceable, the remaining
provisions shall remain in full force and effect, legal, and enforceable,
as if the above illegal, invalid, or unenforceable provision had never
existed herein. |
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18. |
Assignment. Neither party may assign this
Agreement or any of its rights hereunder without the prior written consent
of the other party, provided that the Company may assign this Agreement to
any of its affiliates. |
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19. |
Prevailing Language. This Agreement may be
executed in multiple counterparts in the English language, each of which
shall be deemed an original but which, taken together, shall constitute
one and the same instrument. Should any conflict arise between the English
language version of this Agreement and any translation hereof, the English
language version shall be controlling. |
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20. |
Survival. Sections 8, 9, 10, 11, 17, and 20
shall survive any termination of this Agreement or the end of its term.
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21. |
Non-Employee. The Executive acknowledges
that he is not an employee of the Company under the applicable laws and
regulations of Korea and, as such, shall not be entitled to any benefits
given to employees under such laws and regulations (except with respect to
those benefits which the Executive had previously been regularly receiving
from the Company prior to the Effective Date), unless such is specifically
provided for under the terms and conditions of this Agreement. |
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22. |
Indemnification. The parties hereto hereby
each agree to indemnify and save harmless the other party hereto and
including, where applicable, their respective subsidiaries and affiliates
and each of their respective directors, officers, employees, consultants,
associates, counsel and agents (each such party being an Indemnified
Party) harmless from and against any and all losses, claims, actions,
suits, proceedings, damages, liabilities or expenses of whatever nature or
kind and including, without limitation, any investigation expenses
incurred by any Indemnified Party, (collectively Loss) to which
an Indemnified Party may become subject as a result of any breach of, or
failure by, the other party to perform any of its covenants, agreements or
other obligations contained in this Agreement so long as the Loss is not
caused by the willful misconduct or gross negligence of the Indemnified
Party. |
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23. |
Access to Email. Any email account issued
to the Executive by the Company is deemed the exclusive property of the
Company and is to be used by the Executive solely for the purpose of
performing the General Services under this Agreement. Furthermore, by
accepting the terms of this Agreement, the Executive agrees and consents
to the Company accessing the issued email account and disclosing any
information obtained therein to any third party whenever the Company finds
it necessary to protect its interests in connection with: (i) preventing
acts of libel through email; (ii) protecting Confidential Information and
other business secrets; (iii) preventing infringement of intellectual
property rights; (iv) preventing the illegal use of email; (v) the use of
emails as evidence in legal proceedings; and (vi) any other reason that
the Company deems necessary to protect its interests.
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[Signatures to follow on next page]
9
IN WITNESS WHEREOF, the parties hereto and/or their duly
authorized representatives have executed this Agreement as of the date first
written above.
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COMPANY: |
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KSNET, INC. |
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By: /s/ Herman Kotz |
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Name: Herman Kotz |
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Title: Director |
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EXECUTIVE: |
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/s/ PHIL-HYUN OH |
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PHIL-HYUN OH |
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Address: [XXX] |
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Service Agreement (NET1 KOREA)
This Service Agreement (this Agreement) is entered
into on the 30th day of June, 2014, by and between:
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I. |
NET1 APPLIED TECHNOLOGIES KOREA, a company organized and
existing under the laws of the Republic of Korea (Korea), with
its registered office at Seong Bo Building, 2nd Floor, 169-10
Samsung-Dong, Gangnam-Gu, Seoul, 135-090 Korea (the Company);
and |
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II. |
PHIL-HYUN OH, a natural person residing at [XXX] (the
Executive). |
WITNESSETH:
WHEREAS, the Company wishes to appoint the Executive as of its
representative director;
WHEREAS, the Companys subsidiary KSNET, Inc. (KSNET)
intends to reappoint the Executive as its representative director, under the
terms of the Service Agreement with KSNET, of the same date hereof; and
WHEREAS, the Executive wishes to accept these appointments;
NOW, THEREFORE, in consideration of the mutual promises set
forth hereinafter, the parties hereto agree as follows:
The Company shall appoint the Executive as its representative
director, effective as of July 1, 2014 (the Effective Date). And the
Executive shall accept such appointment, and perform the functions and carry out
the duties and responsibilities set forth hereinafter as the representative
director of the Company on the terms and conditions set forth in this Agreement.
2. |
Duties and
Responsibilities. |
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(a) |
As the representative director, the Executive shall have
the power, authority and responsibility delegated to the Executive by the
board of directors of the Company (the Board of Directors) and as
provided for in the articles of incorporation of the Company (the
Articles of Incorporation) and the Korean Commercial Code
(collectively, the General Services). In this regard, it is
hereby acknowledged and agreed that the Executive shall be entitled to
communicate with and shall rely upon the advice, direction and
instructions of the Board of Directors in order to initiate, coordinate
and implement the General Services as contemplated herein, subject, at all
times, to the final direction and supervision of the Board of
Directors. |
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(b) |
Without limiting in any manner the generality of the
General Services, the Executive shall perform the General Services
faithfully, diligently, to the best of the Executives ability, and in the
best interests of the Company, consistent with the Executives position as
the representative director of Company, and will devote and prioritize his
full working time and use his best efforts for the Company in that
regard. |
1
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(c) |
The Executive hereby acknowledges and agrees to abide by
the rules, regulations, instructions, personnel practices, policies and
procedures of each of the Company and Net 1 UEPS Technologies, Inc.
(Net l), and any changes thereto which may be adopted from time
to time as such rules, regulations, instructions, personnel practices,
policies and procedures may be applied to the Executive as the
representative director of the Company. |
3. |
Direction. The Executive shall at all times
be subject to and act in accordance with the Articles of Incorporation and
the rules, regulations and instructions issued or approved from time to
time by the Board of Directors, as well as the Korean Commercial Code.
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4. |
Compensation. As the representative
director of the Company, the Executive shall receive the compensation,
benefits and allowances for services rendered to the Company as set forth
below. No other compensation, other than the items specifically mentioned
in this Agreement, shall be paid to the Executive in relation to his
position as the representative director of the Company. The Company
shall pay to the Executive all of the compensation described herein in
compliance with the Korean Commercial Code and the Articles of
Incorporation, subject to regular and customary deductions and tax
withholdings as required by applicable laws and regulations.
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(a) |
Base Salary: The Executive shall be
compensated at the rate of KRW 10 million per year (the Base
Salary), in four (4) equal quarterly installments commencing
September 2014 and to be paid in arrears on the same day of the month on
which the other executives of the Company receive their
compensation. |
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(b) |
Bonus: The Company shall also pay annual
bonus compensation up to a maximum of KRW 80 million (the Bonus)
per year subject to the achievement of certain qualitative targets, which
will be determined every year by the group Chairman. The amounts will be
assessed by the Remuneration Committee in August of each year, and any
amount payable will be paid in the following September. For the 2015
fiscal year, the qualitative target is as follows: |
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If any Net1-group product that is not currently marketed
by the Company in the Korean market (for example Virtual Credit Card,
Variable PIN, Money transfers, and bill payments) is successfully launched
during [the relevant period] by any Net1-group company in Korea: KRW 80
million. |
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(c) |
Stock Grant. The Executive will continue to be
eligible for participation in the stock incentive plan of Net 1 under the
terms of the Amended and Restated Stock Incentive Plan of Net 1 UEPS
Technologies, Inc. (the Stock Incentive Plan). |
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(d) |
Additional Benefits. To the extent permitted by
applicable law, the Executive (and where applicable, his plan-eligible
dependents) will be eligible to participate in the following benefits
maintained by the Company for the benefit of its executive officers, subject in any event to the eligibility
requirements and other terms and conditions to those plans and
programs: |
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(i) |
Health Insurance The Executive shall be entitled
to participate in the national health insurance in accordance with the
applicable laws, rules, and regulations, and shall be reimbursed for
annual physical examinations for the Executive and his spouse. |
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(ii) |
National Pension The Executive shall be entitled
to participate in the national pension plan in accordance with the
applicable laws, rules, and regulations. |
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(e) |
Vacation. The Executive shall be entitled to take
twenty-one (21) days of paid vacation during each twelve (12) months of
the Executives service term hereunder, and which vacation may be taken on
dates to be selected by mutual agreement of the Board of Directors and the
Executive, consistent with the requirements of his service. Such vacation
days are not cumulative and as a result, the unused vacation days in a
given year will not be carried over to subsequent years nor will the
Company provide any compensation for unused vacation days to the
Executive. |
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(f) |
Reimbursement of Business Expenses. The Company
agrees to reimburse the Executive for reasonable business-related expenses
incurred in the performance of the General Services in accordance with the
Companys rules and regulations. |
5. |
Retirement Benefits. Upon the
termination of this Agreement, the Executive shall be entitled to receive
retirement benefits in accordance with the Companys rules and
regulations. |
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6. |
Term of Agreement; Termination.
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(a) |
This term of this Agreement will begin on the Effective
Date, and will continue for a term of three (3) years, from
July 1, 2014 to June 30, 2017. |
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(b) |
The Company may remove the Executive from his position as
the representative director of the Company with or without justifiable
cause at a meeting of the board of directors or shareholders, as
applicable, of the Company prior to the expiration of his then current
term of office as provided for under the Korean Commercial Code, in which
case this Agreement shall terminate immediately upon written notice
thereof. For purposes of this Article 6, the term justifiable cause
shall include any of the following circumstances, as well as any other
circumstances permitted under applicable law: |
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(i) |
The Executive has breached the provisions on
non-competition or confidentiality of this Agreement; |
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(ii) |
The Executive has taken actions that are likely to result
in a material loss of or harm to the business, reputation or goodwill of
the Company; |
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(iii) |
The Executive has misappropriated funds or assets of the
Company; |
3
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(iv) |
The Executive has concealed from or falsely disclosed to
the Company his name, age, education, experience, or other personal
information; |
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(v) |
The Executive has failed to show performance results or
job capacity; |
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(vi) |
The Executive has committed a crime or offense which will
adversely affect the interest or reputation of the Company; |
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(vii) |
The Executive has committed gross negligence, willful
misconduct or any violation of laws in performance of his duties;
or |
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(viii) |
The Executive has done any of the above, or any similar
act or omission, which constitutes justifiable cause for termination from
his position with an affiliate of the Company. |
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(c) |
In the event the Executive is removed from office as a
director of the Company without justifiable cause by a special resolution
of the shareholders of the Company and this Agreement is terminated as a
result thereof, the Executive shall be entitled to receive the amounts of
Base Salary and the Bonus (if any) that would have been due and payable to
the Executive if the Executive was fully employed with the Company with
respect to the remainder of the then-current fiscal year in which the
Executive was removed. |
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(d) |
The Executive agrees that in the event of the termination
of his services with the Company, the Executive will assist the Company
with any procedures in connection with such termination, including,
without limitation, the transition of services. The Executive agrees that
he will return all property of the Company, including laptops, mobile
phone, personal digital assistants (PDAs), or other data devices provided
by the Company, as well as all Company information whether original copies
or duplicates in or on whatever media, in his control, custody, or
possession to the Company immediately upon termination of his services or
upon request by the Company at any time. |
7. |
Non-Competition. In consideration of the
Base Salary, the Bonus, and all other compensation to be paid to the
Executive by the Company as set forth in this Agreement, the Executive
agrees that during the term of this Agreement and for a period of three
(3) years after the termination or expiration hereof, the Executive shall
not, without the Companys prior written consent, directly or indirectly,
lend his credit, advice, or assistance, or engage in any activity or act
in any manner, including but not limited to, as an individual, owner, sole
proprietor, founder, associate, promoter, partner, joint venture
participant, shareholder (other than as a less than one percent (1%)
shareholder of a publicly traded corporation), officer, director, trustee,
manager, employer, employee, licensor, licensee, principal, agent,
salesman, broker, representative, consultant, advisor, investor or
otherwise, for the purpose of establishing, operating or managing any
business or entity that is engaged in activities competitive with the
business that the Company has conducted or proposed to conduct during the
Executives service term in any geographic area in which the Company has
conducted or proposed to conduct that business. |
4
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(a) |
In consideration of the Base Salary, the Bonus, and all
other compensation to be paid to the Executive by the Company as set forth
in this Agreement, the Executive agrees that during the term of this
Agreement and for a period of three (3) years after the termination or
expiration hereof, the Executive shall not, whether for his own account or
for the account of any other Person (as hereinafter defined), directly or
indirectly interfere with the Companys relationship with or endeavor to
divert or entice away from the Company any Person who or which at any time
during the Executives service term is or was an agent, officer, employee,
customer, distributor, or consultant of the Company. |
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(b) |
As used in this Agreement, the term Person means
any individual, corporation joint venture, general or limited partnership,
association, or other entity. |
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(a) |
The Executive understands and agrees that the business of
the Company is unique and specialized and that, in connection with his
service with the Company, he will receive or have access to Confidential
Information (as hereinafter defined). In consideration of the Base Salary,
the Bonus, and all other compensation to be paid to the Executive by the
Company as set forth in this Agreement, the Executive agrees that at all
times from and after the Effective Date, he shall keep secret all such
Confidential Information and will not, except as required by law, directly
or indirectly, or individually or collectively, Use (as hereinafter
defined) or Disclose (as hereinafter defined) the same to any Person
without first obtaining the written consent of the Company. At any time
the Company may so request, the Executive shall turn over to the Company
all books, notes, memoranda, manuals, notebooks, tables, drawings,
calculations, records and other documents made, compiled by or delivered
to him containing or concerning any Confidential Information, including
copies thereof, in his possession, it being agreed that the same and all
information contained therein are at all times the exclusive property of
the Company. |
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(b) |
As used in this Section, the term Confidential
Information means any information or compilation of information not
generally known to the public or the industry relating to procedures,
techniques, methods, concepts, ideas, affairs, products, processes, and
services related to the Companys business, including but not limited to,
information relating to marketing, merchandising, selling, research,
development, purchasing, costs, customers, plans, pricing, billing, needs
of customers, and services used by customers of the Company. Confidential
Information for purposes of this Agreement shall also include all lists of
customers, addresses, prospects, sales calls, products, services, prices,
and the like, as well as any specifications, formulas, plans, drawings,
accounts or sales records, sales brochures, books, code books, records,
manuals, trade secrets, knowledge, know-how, pricing strategies, operating
costs, sales margins, methods of operation, and the like. All information
disclosed to the Executive during the term of his service with the Company
which he has a reasonable basis to believe to be Confidential Information,
or which was previously or currently is treated by the Company as
Confidential Information, shall be presumed to be Confidential
Information. |
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(c) |
As used in this Section, the term Disclose means
to reveal, deliver, divulge, disclose, publish, copy, communicate, show or
otherwise make known or available to any other Person, or in any way to
copy, any of the Confidential Information. |
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(d) |
As used in this Section, the term Use means to
appropriate any of Confidential Information for the benefit of any Person
other than the Company. |
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(e) |
In addition, the Executive acknowledges and agrees to
comply with the Companys policy on the use of e-mail, fax, intranet and
the Internet, and the use of computer software as amended from time to
time, and accept that the Company will monitor his work practices and the
use of office networks as and when
appropriate. |
10. |
Intellectual Property
Rights. |
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(a) |
To the maximum extent allowed by law, all Intellectual
Property (as hereinafter defined) created or developed by the Executive
(whether alone or jointly with others) in the course of his services or
outside the course of his duties but relating to the business of the
Company shall belong to the Company absolutely. In consideration of the
Base Salary, the Bonus, and all other compensation to be paid to the
Executive by the Company as set forth in this Agreement, the Executive
hereby assigns to the Company all his right, title and interest in such
Intellectual Property (whether now existing or brought into being in the
future) to the maximum extent allowed by law, undertakes to do everything
necessary during and after the term of this Agreement to vest all right,
title and interest in such Intellectual Property in the Company or its
nominee, and irrevocably and unconditionally waives any moral rights or
similar rights that he may have, so far as permitted by law, in exchange
for reasonable compensation to be paid by the Company in accordance with
the Companys relevant rules and regulations (if any) or the applicable
laws of Korea. |
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(b) |
As used in this Section, the term Intellectual
Property means trademarks, service marks, trade names, domain names,
logos, get-up, patents, inventions, registered and unregistered design
rights, copyrighted works, database rights, and all other similar rights
and works in any part of the world (including know-how), including, where
such rights are obtained or enhanced by registration, any registration of
such rights and applications and rights to apply for such
registrations. |
11. |
Reasonableness of Covenants. The Executive
acknowledges and agrees that the terms and conditions, geographic scope,
and period of duration of the restrictive covenants contained in Sections
7, 8, 9, and 10 above are both fair and reasonable and that the interests
sought to be protected by the Company are legitimate business interests
entitled to be protected. |
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12. |
Breach of this Agreement. If the Executive
commits a breach or threatens to commit a breach of any of the provisions
of Sections7, 8, 9, and 10of this Agreement, the Company shall have the
right and remedy to have those provisions specifically enforced by any
court having equity or equivalent jurisdiction, it being acknowledged and
agreed by the Executive that the rights and privileges of the Company
granted in Section 7, 8, 9, and 10are of a special, unique and
extraordinary character and any such breach or threatened breach will
cause great and irreparable injury to the Company and that money damages
will not provide an adequate remedy to the Company.
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6
13. |
Tax Returns. Filing annual income tax
returns with the relevant tax authorities is the responsibility of the
Executive. The Company shall have the right to deduct and withhold from
the compensation payable to the Executive hereunder any amounts required
to be deducted and withheld under the provisions of any applicable laws.
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14. |
Entire Agreement. This
Agreement contains the entire agreement between the parties relating to
the subject matter hereof. No modification, alteration or amendment of
this Agreement and no waiver of any provision hereof may be made unless
such modification, alteration, amendment, or waiver is set forth in
writing signed by the parties hereto. |
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15. |
Governing Law and Severability. This
Agreement shall be construed in accordance with and governed by the laws
of Korea. With respect to any disputes arising from this Agreement, the
Seoul Central District Court shall have exclusive jurisdiction. If any
provision of this Agreement shall be held by a court of competent
jurisdiction to be illegal, invalid, or unenforceable, the remaining
provisions shall remain in full force and effect, legal, and enforceable,
as if the above illegal, invalid, or unenforceable provision had never
existed herein. |
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16. |
Assignment. Neither party may assign this
Agreement or any of its rights hereunder without the prior written consent
of the other party, provided that the Company may assign this Agreement to
any of its affiliates. |
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17. |
Prevailing Language. This Agreement may be
executed in multiple counterparts in the English language, each of which
shall be deemed an original but which, taken together, shall constitute
one and the same instrument. Should any conflict arise between the English
language version of this Agreement and any translation hereof, the English
language version shall be controlling. |
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18. |
Survival. Sections 6, 7, 8, 9, 15, and 18
shall survive any termination of this Agreement or the end of its term.
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19. |
Non-Employee. The Executive acknowledges
that he is not an employee of the Company under the applicable laws and
regulations of Korea and, as such, shall not be entitled to any benefits
given to employees under such laws and regulations, unless such is
specifically provided for under the terms and conditions of this
Agreement. |
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20. |
Indemnification. The parties hereto hereby
each agree to indemnify and save harmless the other party hereto and
including, where applicable, their respective subsidiaries and affiliates
and each of their respective directors, officers, employees, consultants,
associates, counsel and agents (each such party being an Indemnified
Party) harmless from and against any and all losses, claims, actions,
suits, proceedings, damages, liabilities or expenses of whatever nature or
kind and including, without limitation, any investigation expenses
incurred by any Indemnified Party,
(collectively Loss) to which an Indemnified Party may become subject as
a result of any breach of, or failure by, the other party to perform any
of its covenants, agreements or other obligations contained in this
Agreement so long as the Loss is not caused by the willful misconduct or
gross negligence of the Indemnified Party. |
7
21. |
Access to Email. Any email account issued
to the Executive by the Company is deemed the exclusive property of the
Company and is to be used by the Executive solely for the purpose of
performing the General Services under this Agreement. Furthermore, by
accepting the terms of this Agreement, the Executive agrees and consents
to the Company accessing the issued email account and disclosing any
information obtained therein to any third party whenever the Company finds
it necessary to protect its interests in connection with: (i) preventing
acts of libel through email; (ii) protecting Confidential Information and
other business secrets; (iii) preventing infringement of intellectual
property rights; (iv) preventing the illegal use of email; (v) the use of
emails as evidence in legal proceedings; and (vi) any other reason that
the Company deems necessary to protect its interests.
|
[Signatures to follow on next page]
8
IN WITNESS WHEREOF, the parties hereto and/or their duly
authorized representatives have executed this Agreement as of the date first
written above.
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COMPANY: |
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NET1 APPLIED TECHNOLOGIES KOREA |
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By: /s/ Herman Kotzé
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Name: Herman Kotz |
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Title: Director |
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EXECUTIVE: |
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/s/ PHIL-HYUN OH |
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PHIL-HYUN OH |
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Address: [XXX] |
9
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