def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant o |
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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þ Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Euronet Worldwide, 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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þ No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (11-01) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
EURONET
WORLDWIDE, INC.
4601 COLLEGE BOULEVARD
SUITE 300
LEAWOOD, KANSAS 66211
913-327-4200
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON MAY 19,
2010
Euronet Worldwide, Inc., a Delaware corporation
(Euronet, the Company, we or
us), will hold the Annual Meeting of our
Stockholders on Wednesday, May 19, 2010 at 2:00 p.m.
(Central time) at the Courtyard Kansas City Overland
Park/Convention Center, 11001 Woodson Avenue, Overland Park,
Kansas 66211, USA, to consider and vote upon the following
matters:
1. Election of the Companys three nominees for
Director, each to serve a three-year term expiring upon the 2013
Annual Meeting of Stockholders or until a successor is duly
elected and qualified;
2. Ratification of the appointment of KPMG LLP as
Euronets independent registered public accounting firm for
the year ending December 31, 2010; and
3. Consideration of such other business as may properly
come before the meeting or any adjournment of the meeting.
Our Board of Directors has fixed the close of business on
March 31, 2010, as the record date for the determination of
Stockholders entitled to notice of, and to vote at, the Annual
Meeting and at any adjournment of the meeting.
All Stockholders are cordially invited to attend the meeting in
person. However, to assure your representation at the
meeting, you are urged to promptly vote and submit your proxy by
telephone or internet or by marking, signing, dating and
returning the enclosed proxy in the postage prepaid envelope
provided for that purpose. Any Stockholder attending the meeting
may vote in person even if he or she returned a proxy.
By Order of the Board,
Jeffrey B. Newman
Executive Vice President,
General Counsel and Secretary
April 15, 2010
EURONET
WORLDWIDE, INC.
4601 COLLEGE BOULEVARD
SUITE 300
LEAWOOD, KANSAS 66211
913-327-4200
PROXY STATEMENT
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ANNUAL
MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2010
DATE,
TIME AND PLACE OF MEETING
Euronet Worldwide, Inc. (Euronet, the
Company, we or us) is
furnishing this proxy statement in connection with the
solicitation of proxies by our Board of Directors (the
Board), for use at the Annual Meeting of
Stockholders to be held on Wednesday, May 19, 2010, at
2:00 p.m. (Central time), at the Courtyard Kansas City
Overland Park/Convention Center, 11001 Woodson Avenue, Overland
Park, Kansas 66211, USA, and at any adjournment of the meeting
(the Annual Meeting).
Record
Date; Quorum; Shares Outstanding
Stockholders at the close of business on March 31, 2010
(the Record Date) are entitled to notice of, and to
vote at, the Annual Meeting. The Stockholders will be entitled
to one vote for each share of common stock, par value $0.02 per
share (the Common Stock), held of record at the
close of business on the Record Date. To take action at the
Annual Meeting, a quorum composed of holders of one-third of the
shares of Common Stock outstanding must be represented by proxy
or in person at the Annual Meeting. On March 31, 2010,
there were 50,900,879 shares of Common Stock outstanding.
No shares of preferred stock are outstanding.
Date of
Mailing
We are first sending this proxy statement, the accompanying
proxy and our annual report for the year ended December 31,
2009 (the Annual Report) to Stockholders on or about
April 15, 2010.
REVOCABILITY
OF PROXIES
Shares of Common Stock represented by valid proxies that we
receive at any time up to and including the day of the Annual
Meeting will be voted as specified in such proxies. Any
Stockholder giving a proxy has the right to revoke it at any
time before it is exercised by attending the Annual Meeting and
voting in person or by filing with Euronets Secretary an
instrument of revocation or a duly executed proxy bearing a
later date.
VOTING
AND SOLICITATION
Each share of Common Stock issued and outstanding as of the
Record Date will have one vote on each of the matters presented
herein. Votes cast by proxy or in person at the Annual Meeting
will be tabulated by the inspector of elections appointed for
the Annual Meeting. To vote by mail, please complete the
accompanying proxy card and return it to us as instructed in the
proxy card. To vote using the telephone or electronically
through the Internet, please refer to the instructions included
with the proxy card. We will treat shares that are voted
For, Against or Withheld
From a matter as being present at the meeting for purposes
of establishing a quorum. We will treat abstentions and broker
non-votes also as shares that are present and entitled to be
voted for purposes of determining the presence of a quorum.
Election
of Directors
In an uncontested election, a Director nominee must be elected
by a majority of the votes cast, in person or by proxy,
regarding the election of that Director nominee. A
majority of the votes cast for the purposes of
Director elections means that the number of votes cast
For a Director nominees election exceeds the
number of votes cast as Withheld From for that
particular Director nominee. If an incumbent Director is not
re-elected in an uncontested election and no successor is
elected at the same meeting, the Director must submit an offer
to resign.
In a contested election, which occurs when the number of
Director nominees exceeds the number of open seats on the Board
at any time before the meeting, Director nominees will be
elected by a plurality of the shares represented at the meeting.
A plurality means that the open seats on the Board
will be filled by those Director nominees who received the most
affirmative votes, regardless of whether those Director nominees
received a majority of the votes cast with respect to their
election.
2
At the Annual Meeting, the election of Directors is considered
to be uncontested because we have not been notified of any other
nominees as required by our Amended and Restated Bylaws
(Bylaws). To be elected, each Director nominee must
receive a majority of votes cast regarding that nominee.
Abstentions will have no effect on the election of Directors.
Other
Matters
All other matters will be determined by a vote of a majority of
the shares present in person or represented by proxy and voting
on such matters. Under Delaware law, abstentions are not
considered votes cast and will have no effect on whether a
matter is approved.
Broker
Non-Votes
On certain routine matters, such as the ratification of the
appointment of KPMG as our independent registered public
accounting firm, if you do not provide instructions on how you
wish to vote, your broker will be allowed to exercise discretion
and vote on your behalf. Your broker is prohibited, however,
from voting on other non-routine matters, such as the election
of Directors. Broker non-votes will occur when a
broker does not receive voting instructions from a Stockholder
on a non-routine matter or if the broker otherwise does not vote
on behalf of the Stockholder. Broker non-votes will not count in
determining the number of votes cast with respect to the
election of Directors or a proposal that requires a majority of
votes cast and, therefore, will not affect the outcome of the
election of Directors or the voting on such a proposal.
PERSONS
MAKING THE SOLICITATION
Euronet is making all the solicitations in this proxy statement.
We will bear the entire cost of this solicitation of proxies.
Our Directors, officers, and employees, without additional
remuneration, may solicit proxies by mail, telephone and
personal interviews. We will, if requested, reimburse banks,
brokerage houses and other custodians, nominees and certain
fiduciaries for their reasonable
out-of-pocket
expenses incurred in connection with the distribution of proxy
materials to their principals.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 19,
2010
This proxy statement (which includes our annual report on
Form 10-K)
and our annual report to Stockholders for the year ended
December 31, 2009 are available to you at
www.edocumentview.com/EEFT.
WE WILL FURNISH ADDITIONAL COPIES OF THE ANNUAL REPORT TO
STOCKHOLDERS, EXCLUDING EXHIBITS, WITHOUT CHARGE TO ANY
STOCKHOLDER UPON WRITTEN REQUEST TO OUR GENERAL COUNSEL AND
SECRETARY, JEFFREY B. NEWMAN, AT OUR ADDRESS SET FORTH HEREIN.
WE WILL FURNISH EXHIBITS TO THE ANNUAL REPORT TO
STOCKHOLDERS UPON WRITTEN REQUEST AND PAYMENT OF AN APPROPRIATE
PROCESSING FEE.
3
BENEFICIAL
OWNERSHIP OF COMMON STOCK
As of the close of business on February 28, 2010, we had
50,837,711 shares of Common Stock issued and outstanding.
The following table sets forth certain information with respect
to the beneficial ownership of our Common Stock as of
February 28, 2010, by: (i) each Euronet Director,
nominee for Director and executive officer named in the summary
compensation table, (ii) all Euronet Directors, nominees
for Director and executive officers as a group, and
(iii) each Stockholder known by Euronet beneficially to own
more than 5% of our Common Stock.
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Beneficial Ownership
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Number of
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Percent of
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Stockholder
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Shares(1)
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Outstanding
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Directors and Named Executive Officers
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Michael J. Brown(2)
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2,744,881
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5.4
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%
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4601 College Boulevard, Suite 300
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Leawood, KS 66211
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Rick L. Weller(3)
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239,345
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*
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Thomas A. McDonnell(4)
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61,470
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*
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M. Jeannine Strandjord(5)
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56,163
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*
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Jeff Newman(6)
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50,238
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*
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Dr. Andrzej Olechowski(7)
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49,824
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*
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Andrew B. Schmitt(8)
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42,817
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*
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Kevin Caponecchi(9)
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30,181
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*
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Paul S. Althasen
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29,545
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*
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Juan C. Bianchi
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26,989
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*
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Eriberto R. Scocimara
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17,536
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*
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All Directors, Nominees for Director and Executive Officers as a
Group (13 persons) (10)
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3,404,375
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6.6
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%
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Five Percent Holders:
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Waddell & Reed Financial, Inc.(11)
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4,223,175
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8.3
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%
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6300 Lamar Avenue
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Overland Park, KS 66202
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The Guardian Life Insurance Company of America(12)
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2,737,986
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5.4
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%
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388 Market Street, Suite 1700
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San Francisco, CA 94111
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BlackRock, Inc.(13)
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2,663,350
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5.2
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%
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55 East 52nd St.
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New York, NY 10055
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* |
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The percentage of shares of Common Stock beneficially owned does
not exceed one percent of the outstanding shares of Common Stock. |
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(1) |
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Calculation of percentage of beneficial ownership includes the
assumed exercise of options to purchase Common Stock by only the
respective named Stockholder that are vested or that will vest
within 60 days of February 28, 2010 and any restricted
stock units owned by such person that will vest within
60 days of February 28, 2010. Mr. Brown and the
members of the Board have beneficial ownership of certain shares
of restricted stock, the number of which are disclosed in the
footnotes that follow because they can vote the shares. These
shares are also included in our total outstanding shares of
Common Stock. Restricted stock units that do not result in
beneficial ownership or voting rights are excluded from the
calculations above. |
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(2) |
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Includes: (i) 173,750 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010, (ii) 7,728 shares of
restricted Common Stock that are subject to vesting,
(iii) 34,000 shares of Common Stock held by |
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Mr. Browns wife, and (iv) 206,000 shares of
Common Stock held by Mr. Browns wife as guardian for
their children. |
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(3) |
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Includes 217,250 shares of Common Stock issuable pursuant
to options currently exercisable and/or options and restricted
stock units that will vest within 60 days of
February 28, 2010. |
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(4) |
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Includes: (i) 40,000 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010, and (ii) 1,167 shares of
restricted Common Stock that are subject to vesting. Thomas A.
McDonnell is also the Chief Executive Officer of DST Systems,
Inc., which beneficially owns 1,884,597 shares of Common
Stock, but Mr. McDonnell disclaims ownership of these
shares. |
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(5) |
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Includes: (i) 40,000 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010, (ii) 2,000 shares held in
Ms. Strandjords individual retirement account, and
(iii) 1,167 shares of restricted Common Stock that are
subject to vesting. |
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(6) |
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Includes: (i) 41,960 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010. |
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(7) |
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Includes: (i) 20,000 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010, and (ii) 1,167 shares of
restricted Common Stock that are subject to vesting. |
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(8) |
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Includes: (i) 20,000 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010, and (ii) 1,167 shares of
restricted Common Stock that are subject to vesting. |
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(9) |
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Includes 14,043 shares of Common Stock issuable pursuant to
options currently exercisable and/or options and restricted
stock units that will vest within 60 days of
February 28, 2010. |
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(10) |
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Includes: (i) 594,878 shares of Common Stock issuable
pursuant to options currently exercisable and/or options and
restricted stock units that will vest within 60 days of
February 28, 2010, and (ii) 13,563 shares of
restricted Common Stock that are subject to vesting. |
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(11) |
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This information was supplied on Schedule 13G filed with
the Securities and Exchange Commission (the SEC) on
February 12, 2010. These shares are beneficially owned by
one or more open-end investment companies or other managed
accounts which are advised or
sub-advised
by Ivy Investment Management Company, an investment subsidiary
of Waddell & Reed Financial, Inc. or
Waddell & Reed Investment Management Company, an
investment advisory subsidiary of Waddell & Reed, Inc.
Waddell & Reed, Inc. is a subsidiary of
Waddell & Reed Financial Services, Inc.
Waddell & Reed Financial Services, Inc. is a
subsidiary of Waddell & Reed Financial, Inc. Ivy
Investment Management Company has sole voting and dispositive
power with respect to 1,179,100 shares. Waddell &
Reed Investment Management Company has sole voting and
dispositive power with respect to 3,044,075 shares.
Waddell & Reed, Inc. and Waddell & Reed
Financial Services, Inc. may be deemed to have sole voting and
dispositive power with respect to 3,044,075 shares due to
their direct and indirect ownership of Waddell & Reed
Investment Management Company. Waddell & Reed
Financial, Inc. may be deemed to have sole voting and
dispositive power with respect to 4,223,175 shares due to
its direct ownership of Ivy Management Company and its indirect
ownership of Waddell & Reed Investment Management
Company. |
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(12) |
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This information was supplied on Schedule 13G/A filed with
the SEC on February 11, 2010 by The Guardian Life Insurance
Company of America, Guardian Investor Services LLC, RS
Investment Management Co. LLC and RS Partners Fund. The Guardian
Life Insurance Company of America, Guardian Investor Services
LLC and RS Investment Management Co. LLC have shared voting and
shared dispositive power over 2,737,986 shares. RS Partners
Fund has shared voting and shared dispositive power over
1,849,804 shares. |
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(13) |
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This information was supplied on Schedule 13G filed with
the SEC on January 29, 2010. BlackRock, Inc. has sole
voting and dispositive power over 2,663,350 shares. |
5
PROPOSAL 1
ELECTION
OF DIRECTORS
Our Directors are as follows:
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Name
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Age
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Position
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Term Expires
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Michael J. Brown*
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53
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Chairman, Chief Executive Officer and Class I Director
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2010
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Andrew B. Schmitt*(1)(2)(3)
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61
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Class I Director
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2010
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M. Jeannine Strandjord*(1)(2)(3)
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64
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Class I Director
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2010
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Dr. Andrzej Olechowski(2)(3)
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63
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Class II Director
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2011
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Eriberto R. Scocimara(1)(2)(3)
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74
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Class II Director
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2011
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Paul S. Althasen
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45
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Executive Vice President and Class III Director
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2012
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Thomas A. McDonnell(1)(2)(3)
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64
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Class III Director
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2012
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* |
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Nominated for election at this Annual Meeting. |
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(1) |
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Member of the Audit Committee. |
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(2) |
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Member of the Compensation Committee. |
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(3) |
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Member of the Nominating & Corporate Governance
Committee. |
Classified
Board
We currently have seven Directors divided among three classes as
follows:
Class I Michael J. Brown, Andrew B. Schmitt and
M. Jeannine Strandjord;
Class II Dr. Andrzej Olechowski and
Eriberto R. Scocimara; and
Class III Paul S. Althasen and Thomas A.
McDonnell.
Messrs. Althasen and Brown are management Directors. The
Board has determined that the five remaining Directors are
independent Directors as defined in the listing standards for
The Nasdaq Stock Market LLC.
Three Class I Directors are to be elected at the Annual
Meeting for three-year terms ending at the Annual Meeting of
Stockholders in 2013. The Board has nominated Michael J. Brown,
Andrew B. Schmitt and M. Jeannine Strandjord for election
as Class I Directors. Unless otherwise instructed, each
signed and returned proxy will be voted for Messrs. Brown
and Schmitt and Ms. Strandjord. Messrs. Brown and
Schmitt and Ms. Strandjord have consented to serve as
Directors of Euronet. If any of Messrs. Brown or Schmitt or
Ms. Strandjord are unable or subsequently declines to serve
as a Director at the time of the Annual Meeting, the proxies
will be voted for any alternative nominee who shall be
designated by the present Board to fill the vacancy. We are not
aware of any reason why Messrs. Brown or Schmitt or
Ms. Strandjord will be unable or will decline to serve as a
Director.
Nominees
for Election at the Annual Meeting
The following is a brief description of the business experience
of each nominee for Director, each of whom has served on our
Board for at least five years, and a brief discussion of the
specific experience, qualifications, attributes or skills that
led to the conclusion that the nominee should continue to serve
as a Director for the Company, in light of the Companys
business and structure.
MICHAEL J. BROWN is one of the founders of Euronet and has
served as our Chairman of the Board and Chief Executive Officer
since 1996 and served as our President from December 11,
2006 to June 11, 2007. He also founded our predecessor in
1994 with Daniel R. Henry, our former President and Chief
Operating Officer. Mr. Brown has been a Director of Euronet
since our incorporation in December 1996 and
6
previously served on the boards of Euronets predecessor
companies. In 1979, Mr. Brown founded Innovative Software,
Inc., a computer software company that was merged in 1988 with
Informix. Mr. Brown served as President and Chief Operating
Officer of Informix from February 1988 to January 1989. He
served as President of the Workstation Products Division of
Informix from January 1989 until April 1990. In 1993,
Mr. Brown was a founding investor of Visual Tools, Inc.
Visual Tools, Inc. was acquired by Sybase Software in
1996. Mr. Brown is currently a director of Blue
Valley Ban Corp. and Nexxus Lighting, Inc. Mr. Brown
received a B.S. in electrical engineering from the University of
Missouri Columbia in 1979 and a M.S. in molecular
and cellular biology at the University of Missouri-Kansas City
in 1997.
In selecting Mr. Brown as a nominee for Director, the Board
considered his deep commitment to the success of the Company
(demonstrated in particular by his long-term stock holdings),
his extensive experience as the founder of the Company and the
initiator of each of the business lines of the Company, and the
strategic, business and financial skills and knowledge he brings
to his position as Director. Through his management of the
Company since its inception, Mr. Brown has acquired a
unique knowledge of the financial transaction processing
industry in the markets in which the Company operates.
ANDREW B. SCHMITT has served on our Board since
September 24, 2003. Mr. Schmitt has served as
President and Chief Executive Officer of Layne Christensen
Company since October 1993. For approximately two years prior to
joining Layne Christensen Company, Mr. Schmitt was a
partner in two privately owned hydrostatic pump and motor
manufacturing companies and an oil and gas service company. He
served as President of the Tri-State Oil Tools Division of Baker
Hughes Incorporated from February 1988 to October 1991.
Mr. Schmitt serves on the board of directors of Layne
Christensen Company, as well as the boards of its subsidiaries
and affiliates. Mr. Schmitt holds a bachelor of science
degree from the University of Alabama School of Commerce and
Business.
In selecting Mr. Schmitt as a nominee for Director, the
Board considered his extensive financial, business and
management experience and skills, including in particular
valuable knowledge and experience acquired from managing an
international business that, like the Company, operates in many
developing markets.
M. JEANNINE STRANDJORD, CPA, has over 40 years of
financial management experience and was employed in three
different and diverse industries after starting in public
accounting on the audit staff of Ernst and Whinney in 1968. For
20 years, beginning in 1985, she held several senior
financial and related senior management roles at Sprint
Corporation. She managed the successful transformation and
restructuring of Sprint as Chief Integration Officer from 2003
until 2005 when she retired. She was Senior Vice President and
Chief Financial Officer of Global Solutions, a $9 billion
division, from 1998 until 2003 and was Controller and then
Treasurer for Sprint Corporation from 1986 to 1998.
Ms. Strandjord is currently a director of the following
public companies: American Century Mutual Funds (for six
registered investment companies) since 1994, where she chairs
the Compliance and Shareholder Relations Committee and is a
member of the Executive Committee and Performance Committee; DST
Systems, Inc. since 1996, where she chairs the Compensation
Committee and sits on the Audit Committee and Governance and
Nominating Committee; and Charming Shoppes, Inc. since 2006
where she chairs the Audit Committee and sits on the
Compensation Committee. Ms. Strandjord is also the director
for various private and
not-for-profit
charitable organizations. She was a trustee for Rockhurst
University for nine years and is currently on the Heartland
Board of the National Association for Corporate Directors which
she chaired for two years. Ms. Strandjord has been a
director of the Company since 2001 and is currently the Chairman
of the Audit Committee and sits on the Compensation Committee
and Nominating & Corporate Governance Committee and
was named Lead Independent Director in 2010.
In selecting Ms. Strandjord as a nominee for Director, the
Board considered her experience on the boards of various other
public companies, as well as her extensive background in
finance, corporate governance, restructuring, talent management,
and compensation and benefits.
Other
Directors
The following is a brief description of the business experience
of each of our other Directors whose terms of office will extend
beyond 2010, and a brief discussion of the specific experience,
qualifications, attributes
7
or skills that led to the conclusion that the other Directors
are qualified for service as a Director for the Company, in
light of the Companys business and structure. All of these
Directors have served on our Board for at least five years.
PAUL S. ALTHASEN has served on our Board since May 2003.
Mr. Althasen currently serves as Executive Vice President
of Euronet. He joined Euronet in February 2003 in connection
with Euronets acquisition of
e-pay
Limited, a UK company. Mr. Althasen is a co-founder and
former CEO and Co-Managing Director of
e-pay, and
he was responsible for the strategic direction of
e-pay since
its formation in 1999. From 1989 to 1999, Mr. Althasen was
a co-founder and Managing Director of MPC Mobile Phone Center, a
franchised retailer of cellular phones in the UK. Previously,
Mr. Althasen worked for Chemical Bank in London where he
traded financial securities. Mr. Althasen has a B.A.
(Honors) degree in business studies from the City of London
Business School.
The Board considers as particularly valuable
Mr. Althasens broad first-hand knowledge and
experience in the prepaid payments industry in Western Europe
and especially in the UK, which is one of the Companys
largest prepaid markets.
THOMAS A. MCDONNELL has been a Director of Euronet since its
incorporation in December 1996 and he previously served on the
boards of Euronets predecessor companies. Since October
1984, he has served as Chief Executive Officer of DST Systems,
Inc., a stockholder of Euronet. From 1973 to September 1995, he
served as Treasurer of DST Systems, Inc. Mr. McDonnell is
currently a director of DST Systems, Inc., Commerce Bancshares,
Inc., Garmin Ltd., Blue Valley Ban Corp. and Kansas City
Southern. He is a member of the audit committees of Kansas City
Southern, Commerce Bancshares, Inc. and Garmin Ltd.
Mr. McDonnell has a B.S. in Accounting from Rockhurst
College and an M.B.A. from the Wharton School of Finance.
Through many years of experience in management of a public
company in the transaction processing industry and participation
on other company boards, Mr. McDonnell has acquired
extensive financial, accounting and management experience and
substantive business knowledge. These qualities, as well as the
knowledge of the Companys business gained from his
participation on the Board since the Companys inception,
are considered particularly valuable by the Board.
DR. ANDRZEJ OLECHOWSKI has served on our Board since May
2002. He previously served as a Director of Euronet from its
incorporation in December 1996 until May 2000.
Dr. Olechowski is currently the President of Conseil DG, a
Polish consulting company. From 1995 until 2008,
Dr. Olechowski served as a Senior Advisor for Central
Europe Trust, Poland, a consulting firm. He has held several
senior positions with the Polish government: from 1993 to 1995,
he was Minister of Foreign Affairs and in 1992 he was Minister
of Finance. From 1992 to 1993, and again in 1995, he served as
economic advisor to President Lech Walesa. From 1991 to 1992, he
was Secretary of State in the Ministry of Foreign Economic
Relations and from 1989 to 1991 he was Deputy Governor of the
National Bank of Poland. From May 1998 to June 2000,
Dr. Olechowski served as the Chairman of Bank Handlowy w
Warszavie SA (Poland). Until April 2009, Dr. Olechowski sat
on the Supervisory Board of Vivendi (France) and currently sits
on the Supervisory Boards of Bank Handlowy w Warszavie SA
(Poland) and MCI Management SA (Poland), and the boards of
various charitable and educational foundations. He received a
Ph.D. in Economics in 1979 from the Central School of Planning
and Statistics in Warsaw.
Dr. Olechowski brings to the Board his considerable stature
in Polish government and business, his extensive business
connections in and knowledge of the banking industry in Poland
and Central Europe (which have historically been among the
Companys most important markets in the electronic funds
transfer division), as well as his experience as a consultant
and member of other boards with respect to the strategic and
market factors affecting the Companys business.
ERIBERTO R. SCOCIMARA has been a Director of Euronet since its
incorporation in December 1996 and previously served on the
boards of Euronets predecessor companies. Since April
1994, Mr. Scocimara has served as President and Chief
Executive Officer of the
Hungarian-American
Enterprise Fund (HAEF), a private company that is
funded by the U.S. government and invests in Hungary. Since
1984, Mr. Scocimara
8
has also been the President of Scocimara & Company,
Inc., an investment management company. Mr. Scocimara is
currently a director of HAEF, American Reprographics Company
(ARP) and several privately owned companies. He is the chairman
of the audit committee of ARP. He was a member of the board of
Roper Industries until June 2006 and was the chairman of the
audit committee of Roper Industries until February 2006. He has
a Licence de Science Economique from the University of St.
Gallen, Switzerland, and an M.B.A. from Harvard University.
Mr. Scocimara has extensive financial and business
experience acquired through his participation on other boards
and committees and management of a Central European investment
fund. These qualities as well as his broad range of business
contacts and knowledge of Central Europe are considered
particularly valuable by the Board.
Required
Vote and Board Recommendation
Election of the Companys three nominees for Director
requires each Director nominee to receive the affirmative vote
of a majority of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting and voting on such
Director nominee.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE ELECTION OF MR. MICHAEL J. BROWN, MR. ANDREW
B. SCHMITT AND MS. M. JEANNINE STRANDJORD AS CLASS I
DIRECTORS OF EURONET.
9
PROPOSAL 2
RATIFICATION
OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR 2010
We are requesting our Stockholders to ratify the selection by
our Audit Committee of KPMG LLP as Euronets independent
registered public accounting firm for 2010. KPMG LLP will audit
the consolidated financial statements of Euronet and its
subsidiaries for 2010, review certain reports we will file with
the SEC, audit the effectiveness of our internal control over
financial reporting, provide our Board and Stockholders with
certain reports, and provide such other services as our Audit
Committee and its Chairperson may approve from time to time.
KPMG LLP served as our independent registered public accounting
firm for 2009, and performed professional services for us as
described below in the Audit Matters section.
Representatives of KPMG LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement
if they desire and to respond to appropriate questions. Although
our Audit Committee has selected KPMG LLP, it nonetheless may,
in its discretion, terminate KPMGs engagement and retain
another independent registered public accounting firm at any
time during the year, if it concludes that such change would be
in the best interests of Euronet and its Stockholders.
Required
Vote and Board Recommendation
Approval of the ratification of KPMG LLP as our independent
registered public accounting firm for 2010 requires the
affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting
and voting on such matter.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL
YEAR 2010.
MEETINGS
AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board held four meetings during 2009. The Board has
established an Audit Committee, a Compensation Committee and a
Nominating & Corporate Governance Committee. During
2009, each Director attended at least 75% of the total number of
meetings held by the Board and Board committees on which he or
she served (during the period for which he or she was a
Director).
Audit
Committee
The Audit Committee of the Board, composed solely of independent
Directors, met seven times in 2009. The following four Directors
are members of the Audit Committee: M. Jeannine Strandjord,
Chair, Thomas A. McDonnell, Eriberto R. Scocimara and Andrew B.
Schmitt. The Audit Committee operates under a written charter
adopted by the Board, which is published on Euronets
website at
http://ir.euronetworldwide.com/documents.cfm.
The Board has determined that each of the Audit Committee
members is independent, as that term is defined under the
enhanced independence standards for audit committee members in
the Securities Exchange Act of 1934 and rules promulgated
thereunder, as amended and incorporated into the listing
standards of The Nasdaq Stock Market LLC.
The Board has determined that all of the members of the Audit
Committee are audit committee financial experts as
that term is defined in the rules promulgated by the SEC
pursuant to the Sarbanes-Oxley Act of 2002.
The Audit Committee has oversight responsibilities with respect
to our financial reporting process and systems of internal
controls regarding finance, accounting and legal compliance. The
Audit Committee is responsible for retaining, evaluating, and
monitoring our independent registered public accounting firm and
for providing an audit committee report for inclusion in our
proxy statement. The Audit Committee is also
10
responsible for maintaining open communication among the Audit
Committee, management and our outside auditors. However, the
Audit Committee is not responsible for conducting audits,
preparing financial statements, or assuring the accuracy of
financial statements or filings, all of which is the
responsibility of management
and/or the
outside auditors.
Compensation
Committee
The Compensation Committee of the Board met four times in 2009
to determine policies regarding the compensation of our
executives and to review and recommend to the Board the approval
of the grant of options, restricted stock, restricted stock
units and cash bonuses to our executives. The purpose of the
Compensation Committee is to make determinations and
recommendations to the Board with respect to the compensation of
our Chief Executive Officer and other senior executive officers.
Thomas A. McDonnell, Chair, M. Jeannine Strandjord,
Dr. Andrzej Olechowski, Andrew B. Schmitt and Eriberto R.
Scocimara are the current members of the Compensation Committee.
The Board has determined that all the members of the
Compensation Committee are independent as defined under the
general independence standards of the listing standards of The
Nasdaq Stock Market LLC.
The Compensation Committee performs its functions and
responsibilities pursuant to a written charter adopted by our
Board, which is published on Euronets website at
http://ir.euronetworldwide.com/documents.cfm.
Under its charter, our Compensation Committee is authorized to
delegate its responsibilities to one or more subcommittees or
Directors, in accordance with restrictions set forth in the
charter. Under the terms of our incentive plans, our
Compensation Committee is authorized to administer the plans and
may delegate its authority under such plans to another committee
of the Board or a Director.
During 2009, the Compensation Committee delegated its authority
to management in only one respect. In December 2009, it
delegated to Mr. Brown, our CEO and Chairman of the Board,
the determination whether or not to accelerate certain equity
awards previously granted to employees of a U.K. subsidiary.
Such authority has not been utilized as of the date of this
proxy statement.
Our human resources department supports the Compensation
Committee in its work and in some cases acts pursuant to
delegated authority to fulfill various functions in
administering the
day-to-day
ministerial aspects of our compensation and benefits plans.
Annual
Process for Determining Compensation of Executive
Officers
As further described in the Compensation Discussion and
Analysis, our Compensation Committee, together with senior
management and outside consultants engaged by the Compensation
Committee, conducts an annual review of our overall compensation
program for executive officers and directors. With respect to
executive officer compensation, our Compensation Committee
reviews each of the key components of compensation
base salary and short- and long-term incentives, both within
Euronet and as compared to peers and survey data to determine
whether each of these components is consistent with our
compensation philosophy and its related goals and objectives.
Upon the recommendation of our Chief Executive Officer with
respect to the compensation of each executive officer who
directly reports to him, and, based on the findings of any
outside consultants that may be engaged to assist in this
review, our Compensation Committee then recommends to the Board
the compensation for all key executives. The Compensation
Committee makes to the Board all of the recommendations related
to our Chief Executive Officer.
Process
for Determining Non-Employee Director Compensation
Our Compensation Committee makes recommendations to the Board
regarding Board compensation and benefits for non-employee
Directors, including cash, equity-based awards and other
compensation. In determining non-employee Director compensation,
our Compensation Committee seeks advice from outside
compensation consultants who are retained by the Compensation
Committee to, among other functions: (i) conduct a
competitive assessment of non-employee Director compensation
compared to competitive practice, (ii) inform the
Compensation Committee of emerging trends in director pay
practices, (iii) advise on
11
stock ownership guidelines for non-employee Directors, and
(iv) assess the amount of compensation that is adequate to
compensate our Directors for their time and effort with respect
to Board obligations. If, after the annual review of
non-employee Director compensation by our Compensation
Committee, the Committee determines that any changes should be
made to such program, it will recommend such changes to our
Board for approval.
Outside
Executive Compensation Consultants
In October 2007, the Compensation Committee directly retained
Towers Perrin, outside compensation consultants, to assist the
committee and to perform functions in connection with executive
compensation matters for the committee annually including:
(i) conducting a competitive assessment of key
executives total direct compensation (e.g., sum of base
salary, annual bonus and long-term incentive opportunity),
(ii) evaluating appropriateness of annual incentive plan
targets and standards, (iii) assessing whether the
structure (the mix of cash and equity compensation, as well as
annual and long term incentives) is appropriate and competitive,
(iv) comparing Euronets annual share utilization and
earnings per share dilution for equity-based compensation to
competitive practices and institutional investor guidelines,
(v) comparing Euronets expense for stock-based
compensation to its peer companies, (vi) advising the
committee regarding design changes to compensatory programs and
the development of new programs based on strategic goals,
competitive assessment and regulatory changes,
(vii) informing the committee of emerging trends in
executive compensation, the institutional investor climate and
corporate governance and accounting developments,
(viii) providing and periodically advising on stock
ownership or retention guidelines for senior executives, and
(ix) providing the committee with regular updates regarding
changes in regulatory and legislative developments.
Nominating &
Corporate Governance Committee
The Nominating & Corporate Governance Committee met
once during 2009 and met in February 2010 to evaluate the
performance of the Board during 2009. Andrew B. Schmitt, Chair,
M. Jeannine Strandjord, Andrzej Olechowski, Eriberto R.
Scocimara and Thomas A. McDonnell are the current members of the
Nominating & Corporate Governance Committee. The Board
has determined that all of the members of the
Nominating & Corporate Governance Committee are
independent as defined under the general independence standards
of the listing standards of The Nasdaq Stock Market LLC.
The Nominating & Corporate Governance Committee
performs the functions of a nominating committee. The
Nominating & Corporate Governance Committees
charter describes the committees responsibilities,
including developing corporate governance guidelines and
seeking, screening and recommending Director candidates for
nomination by the Board. This charter is published on our
website at
http://ir.euronetworldwide.com/documents.cfm
under the Corporate Governance menu. Euronets Corporate
Governance Guidelines contain information regarding the
selection, qualification and criteria for Director nominees and
the composition of the Board, and are published on
Euronets website at
http://ir.euronetworldwide.com/documents.cfm.
The Nominating & Corporate Governance Committee
evaluates each Director in the context of the Board as a whole,
with the objective of recommending a Director who can best
perpetuate the success of the business and represent Stockholder
interests through the exercise of sound judgment using its
diversity of experience in these various areas. The
Nominating & Corporate Governance Committee considers
the experience, qualifications, attributes and skills of each
director and nominee, including the persons particular
areas of expertise and other relevant qualifications, and the
interplay of such experience, qualifications, attributes and
skills with the Board as a whole. As determining the specific
qualifications or criteria against which to evaluate the fitness
or eligibility of potential Director candidates is necessarily a
dynamic and an evolving process, the Board believes that it is
not always in the best interests of Euronet or its Stockholders
to attempt to create an exhaustive list of such qualifications
or criteria. Appropriate flexibility is needed to evaluate all
relevant facts and circumstances in context of the needs of the
Board and Euronet at a particular point in time. Accordingly,
the Nominating & Corporate Governance Committee
reserves the right to consider those factors as it deems
relevant and appropriate, including the current composition of
the Board, the balance of management and independent Directors,
the need for Audit Committee expertise and the evaluations of
other potential Director candidates. The committee does not have
a policy concerning diversity but it believes that the above
criteria
12
will lead the committee to consider diversity in its various
forms (including diversity of age, experience, background and
perspective) in selecting director candidates. In determining
whether to recommend a Director for re-election, the
Nominating & Corporate Governance Committee also
considers the Directors past attendance at meetings and
participation in and contributions to the activities of the
Board.
As general guidelines, members of the Board and potential
Director candidates for nomination to the Board will be persons
with appropriate educational background and training and who:
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have personal and professional integrity,
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act in a thorough and inquisitive manner,
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are objective,
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have practical wisdom and mature judgment,
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have demonstrated the kind of ability and judgment to work
effectively with other members of the Board to serve the
long-term interests of the Stockholders,
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have a general understanding of management, marketing,
accounting, finance and other elements relevant to
Euronets success in todays business environment,
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have financial and business acumen, relevant experience, and the
ability to represent and act on behalf of all Stockholders,
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are willing to devote sufficient time to carrying out their
duties and responsibilities effectively, including advance
review of meeting materials, and
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are committed to serve on the Board and its committees for an
extended period of time.
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In addition, any new Directors nominated by the Board
(a) who serve as a member of Euronets Audit Committee
will not be permitted to serve on the audit committee of more
than two other boards of public companies, (b) who serve as
chief executive officers or in equivalent positions of other
public companies will not be permitted to serve on more than two
boards of public companies in addition to the Board, and
(c) generally are not permitted to serve on more than four
other boards of public companies in addition to the Board. These
policies were adopted in November 2003 and the Board determined
that they will not be applied to incumbent Directors, unless the
Board considers that failure to comply is impairing the quality
of a Directors service on the Board.
The Board values the contributions of a Director whose years of
service has given him or her insight into Euronet and its
operations and believes term limits are not necessary. In
general, Directors will not be nominated for election to the
Board after their 73rd birthday, although the full Board
(upon the recommendation of the Nominating & Corporate
Governance Committee) may nominate Director candidates older
than 73 under special circumstances.
Lead
Independent Director
At a meeting on February 24, 2010, the
Nominating & Corporate Governance Committee
recommended, and the Board adopted, a revision to the
Companys Corporate Governance Guidelines under which the
Board will select a Lead Independent Director each year. The
principal responsibilities of the Lead Independent Director will
be to call for and conduct executive sessions of the Board,
serve as liaison between the Chairman of the Board and the
independent Directors, approve meeting agendas and schedules for
Board meetings, recommend matters to the Chairman for
consideration by the Board and be available for consultation and
direct communication with Stockholders and all interested
parties. A full list of the roles and responsibilities is
included in the Companys Corporate Governance Guidelines.
The Board adopted this revision principally because it
determined that the existence of a Lead Independent Director
would enhance coordination of decision-making among the
independent Directors and communication between them and the
Chairman, and provide a clear, single point of contact for
Stockholders
13
and other outside parties to communicate with the Board. M.
Jeannine Strandjord was named Lead Independent Director for 2010.
Combined
CEO and Chairman Role
Michael J. Brown currently serves as both Chairman of the Board
of Directors and Chief Executive Officer of the Company. The
Nominating & Corporate Governance Committee and the
Board have considered the advantages and disadvantages of the
combination of these two roles and consider it appropriate to
maintain the combined roles. In particular, they have concluded
that this structure has promoted and will continue to promote
unified leadership and direction for the Company and provide a
single, clear focus for the chain of command to execute the
Companys business plans and strategies.
Risk
Oversight
The Board, together with the Audit Committee, provide oversight
of Euronets risk management efforts. The Audit
Committees role in risk oversight includes reviewing
information provided by members of senior management on areas of
material risk to the Company, or to the success of a particular
project or endeavor under consideration, including operational,
financial, legal and regulatory, strategic and reputational
risks. The Audit Committee uses such information to understand
the Companys risk identification, risk management, and
risk mitigation strategies. The Board believes that risk
management is an integral part of Euronets annual
strategic planning process, which addresses, among other things,
the risks and opportunities facing the Company.
Part of the Audit Committees responsibilities, as set
forth in its charter, is to review with corporate management,
the independent auditors and the internal auditors, if
applicable, any legal matters, risks or exposures that could
have a significant impact on the financial statements and the
steps management has taken to minimize the Companys
exposure. The Companys management regularly evaluates
these controls, and the Audit Committee is provided regular
updates regarding the effectiveness of the controls. The Audit
Committee regularly reports to the full Board.
Director
Candidate Recommendations and Nominations by
Stockholders
The Nominating & Corporate Governance Committees
charter provides that the Nominating & Corporate
Governance Committee will consider Director candidate
recommendations by Stockholders. Director candidates recommended
by Stockholders are evaluated in the same manner as candidates
recommended by the Nominating & Corporate Governance
Committee. Stockholders should submit any such recommendations
to the Nominating & Corporate Governance Committee
through the method described under Other
Matters Recommendations or Nominations of
Individuals to Serve as Directors below. In addition, in
accordance with Euronets Bylaws, any Stockholder of record
entitled to vote for the election of Directors at the applicable
meeting of Stockholders may nominate persons for election to the
Board of Directors if such Stockholder complies with the notice
procedures set forth in the Bylaws and summarized in Other
Matters Deadline to Propose or Nominate Individuals
to Serve as Directors below.
Communications
with the Board of Directors
The Board has approved a formal policy for Stockholders to send
communications to the Board or its individual members.
Stockholders can send communications to the Board and specified
individual Directors by mailing a letter to the attention of the
Board or a specific Director
(c/o the
General Counsel) at Euronet Worldwide, Inc., 4601 College Blvd.,
Suite 300, Leawood, Kansas 66211 or by sending an email to
directors@eeft.com.
Upon receipt of a communication for the Board or an individual
Director, the General Counsel will promptly forward any such
communication to all the members of the Board or the individual
Director, as appropriate. If a communication to an individual
Director deals with a matter regarding Euronet, the General
Counsel will forward the communication to the entire Board, as
well as the individual Director. Neither the
14
Board nor a specific Director is required to respond to
Stockholder communications and when responding shall do so only
in compliance with the Corporate Governance Guidelines.
Director
Attendance at Annual Meeting
Euronet has a policy encouraging its Directors to attend the
Annual Meeting of Stockholders. Two Directors, Michael J. Brown
and M. Jeannine Strandjord, attended our 2009 Annual Meeting.
Code of
Conduct
The Board has adopted a Code of Business Conduct &
Ethics for Directors, Officers and Employees (the Code of
Conduct) that applies to all of our employees and
Directors, including the Chief Executive Officer, the Chief
Financial Officer and the Controller. The Code of Conduct is
available on Euronets website at
http://ir.euronetworldwide.com/documents.cfm.
Any amendment to or waiver of the Code of Conduct will be
disclosed on a
Form 8-K
or on our website.
15
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
and Philosophy
The Compensation Committee, which currently consists of five
independent Directors, administers our executive compensation
programs. The Compensation Committee is responsible for
recommending to the Board policies that govern both annual cash
compensation and equity ownership programs.
Our executive compensation policies have the following
objectives:
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to align the interests of executive management and Stockholders
by making individual compensation dependent upon achievement of
financial goals and by providing long-term incentives through
our equity-based award plans; and
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to provide competitive compensation that will help attract,
retain and reward highly qualified executives who contribute to
our long-term success.
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The overall compensation program is also designed to reward a
combination of strong individual performance, strong performance
by Euronet in meeting its long-term strategic goals and stock
price appreciation.
Our compensation package for executive officers consists of a
balance of base salary, certain employee benefits, annual
bonuses under our Executive Annual Incentive Plan, which are
based on a combination of corporate and individual performance
criteria, and stock options or grants of restricted stock or
restricted stock units (collectively referred to as
restricted stock) which vest over a period of years
and/or upon
the achievement of certain performance-based criteria. The base
salary and benefit components are intended to compensate
executive officers for
day-to-day
activity in accordance with each executive officers
employment arrangement with us. The annual bonus component and
the stock option and restricted stock awards are intended to
reward executive officers for strong performance and to help
align executive officers interests with those of the
Stockholders.
To serve the best interests of Stockholders, the Compensation
Committee follows an executive compensation philosophy that
emphasizes performance-based compensation. In determining
compensation, the Compensation Committee considers measures of
performance against pre-determined financial and strategic goals
and objectives. This approach provides Euronets top
executive officers with an incentive to achieve strategic
long-term goals that benefit Stockholders.
The Compensation Committees executive compensation
philosophy also aligns the economic interests of executive
officers and Stockholders by ensuring that nonvested
performance-based equity incentive awards represent a
substantial portion of an executive officers total
compensation package.
The Compensation Committee considers input from our Chief
Executive Officer and Chief Financial Officer regarding the
responsibilities and accomplishments of individual executive
officers, information as to potential achievability of incentive
goals and levels of various compensation elements necessary to
provide incentives for and to retain executive management. Our
Chief Executive Officer makes recommendations to the
Compensation Committee on each of the other executive
officers compensation. Executive officers are not involved
in proposing or seeking approval for their own compensation. For
the Chief Executive Officers review, the independent
Directors meet in executive session to rate the Chief Executive
Officers performance and determine appropriate
compensation levels.
In determining executive compensation for 2009, the Compensation
Committee considered the information contained in an executive
compensation analysis completed in September 2009, together with
advice received from the Committees compensation
consultant, Towers Perrin. The Compensation Committee made no
changes in 2009 with respect to structural components of the
compensation of the executive officers listed in the Summary
Compensation Table (the Named Executive Officers),
however, increases to the level of base salary were made for
Michael J. Brown, Kevin J. Caponecchi and Rick L. Weller as
discussed below.
16
Performance
Criteria
In determining the annual compensation of each executive
officer, including the Chief Executive Officer, the Compensation
Committee considers Euronets financial performance both on
an absolute basis and relative to comparable companies. In
addition, it assesses individual performance against
quantitative and qualitative objectives. Factors considered by
the Compensation Committee in assessing individual performance
include, but are not limited to:
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Financial Results company and business sector
financial results for the most recent relevant period, on an
absolute basis and relative to comparable companies with respect
to certain financial parameters, including revenue growth,
operating income growth, growth in per share earnings and return
on equity;
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Strategic Growth and Execution strategic planning
and implementation, business growth, acquisitions, technology
and innovation;
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Leadership and Effectiveness management development
and personal leadership; and
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Governance and Controls corporate reputation and
brand, risk management, the strength of the internal control
environment and contribution to a culture of ethics and
compliance.
|
The Compensation Committee considers all factors collectively in
determining executive officers annual compensation. The
weight given to a particular factor may vary from year to year
depending on the goals and objectives of the organization, thus
enabling the Compensation Committee to align annual financial
objectives with strategic leadership initiatives.
Incentive
Plan
In order to broaden senior management accountability for
company-wide financial and strategic goals and to emphasize the
long-term performance of Euronet, the Board has adopted, and
Stockholders have approved, the Executive Annual Incentive Plan
for certain members of senior and executive management,
including the Named Executive Officers. Under this plan, a
portion of the executive officers compensation is based on
the achievement of goals approved by the Compensation Committee
after consultation with management. This plan is designed to
focus the efforts of our key leaders by creating common
accountability around specific long-term objectives.
The stated goal for Messrs. Brown, Caponecchi, Weller and
Newman under the performance-based program under this plan for
2009 was to increase the annual earnings per share, subject to
certain adjustments approved by the committee (Cash
EPS) as compared to 2008. Management believes, and the
Compensation Committee concurs, that a current focus on Cash EPS
improvement is an important component in delivering Stockholder
value and an appropriate measure for Messrs. Brown,
Caponecchi, Weller and Newman. For Mr. Bianchi, 2009
incentive targets consisted of achieving specific Adjusted
EBITDA targets for the Money Transfer Segment. The specific
goals under this program are discussed in more detail in the
section entitled Elements of Compensation
Annual Bonus below.
For 2009, Cash EPS of $1.31 was achieved which resulted in the
maximum annual bonus being achieved for Messrs. Brown,
Caponecchi, Weller and Newman. Mr. Bianchi achieved his
target annual bonus, as the Money Transfer Segment achieved
target Adjusted EBITDA of $31 million.
Peer
Group
The Compensation Committee believes that it is essential for our
continued success that overall compensation policies allow us to
be competitive in attracting and retaining executive talent.
However, the Committee does not establish compensation targets
solely based on peer group compensation amounts, because it
believes that individual and company performance should be the
primary determinants of annual compensation.
17
The Companys peer group (the Peer Group) is
unchanged from 2008 and includes 23 companies having
similar financial characteristics and that operate in similar
industries. These companies are:
|
|
|
Acxiom Corp
|
|
Metavante Technologies Inc
|
Coinstar Inc
|
|
MICROS Systems Inc
|
Compuware Corp
|
|
ModusLink Global Solutions Inc
|
CyberSource Corp
|
|
MoneyGram International Inc
|
Earthlink Inc
|
|
Novell Inc
|
Fair Isaac Corp
|
|
Parametric Technology Corp
|
Gartner Inc
|
|
Sapient Corp
|
Global Cash Access Holdings Inc
|
|
SAVVIS Inc
|
Global Payments Inc
|
|
Sykes Enterprises Inc
|
Heartland Payment Systems Inc
|
|
Total System Services Inc
|
Henry (Jack) & Associates Inc
|
|
Wright Express Corp
|
Mentor Graphics Corp
|
|
|
Members of the current Peer Group were included because they met
some or all of the following criteria:
|
|
|
|
|
Comparable in revenue and market capitalization size to Euronet
|
|
|
|
Business competitors or competitors for executive talent
|
|
|
|
Similar operating structure, such as companies composed of
multiple business units
and/or
having meaningful international operations
|
|
|
|
In the software and services industry, excluding home
entertainment software companies and companies primarily serving
government customers
|
Our
Actual Performance
The Compensation Committee conducted a review of our performance
compared to the performance of the Peer Group using several
critical financial and Stockholder metrics. The Compensation
Committee then assessed actual and target levels of compensation
of our executive officers in light of the results of this
review. The Compensation Committee determined that compensation
provided to the Chief Executive Officer and other executive
officers was appropriately aligned with our performance. The
charts below outline key comparisons between Euronet and the
Peer Group. The Compensation Committee also considered actual
performance compared to anticipated performance, taking into
consideration our strategic plans.
The Compensation Committees analysis of Euronet in
comparison to the Peer Group was completed during the middle of
2009, and statistics for the most recent relevant period (fiscal
year 2008 for financial performance data, share price
performance data are as of July 31, 2009) of the Peer
Group and selected market indices are summarized in the table
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholder Return (as
|
|
|
|
|
Total
|
|
Employees
|
|
Market Cap.
|
|
of 7/31/2009)
|
|
|
Revenue
|
|
Assets
|
|
(000s)
|
|
7/31/2009
|
|
1 Year
|
|
3 Year
|
|
5 Year
|
|
Low
|
|
$
|
229
|
|
|
$
|
452
|
|
|
|
0.6
|
|
|
$
|
185
|
|
|
|
(52.9
|
)%
|
|
|
(58.0
|
)%
|
|
|
(34.3
|
)%
|
25th Percentile
|
|
$
|
767
|
|
|
$
|
829
|
|
|
|
2.3
|
|
|
$
|
767
|
|
|
|
(28.5
|
)%
|
|
|
(16.6
|
)%
|
|
|
(7.6
|
)%
|
Median
|
|
$
|
954
|
|
|
$
|
1,093
|
|
|
|
4.2
|
|
|
$
|
970
|
|
|
|
(11.7
|
)%
|
|
|
(3.9
|
)%
|
|
|
(0.8
|
)%
|
75th Percentile
|
|
$
|
1,184
|
|
|
$
|
1,581
|
|
|
|
5.5
|
|
|
$
|
1,605
|
|
|
|
0.4
|
%
|
|
|
6.2
|
%
|
|
|
9.3
|
%
|
High
|
|
$
|
1,939
|
|
|
$
|
6,642
|
|
|
|
32.9
|
|
|
$
|
3,407
|
|
|
|
62.3
|
%
|
|
|
20.0
|
%
|
|
|
27.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euronet Worldwide, Inc.
|
|
$
|
1,046
|
|
|
$
|
1,440
|
|
|
|
2.5
|
|
|
$
|
1,063
|
|
|
|
31.5
|
%
|
|
|
(6.1
|
)%
|
|
|
3.2
|
%
|
Percent Rank
|
|
|
63
|
%
|
|
|
70
|
%
|
|
|
32
|
%
|
|
|
56
|
%
|
|
|
93
|
%
|
|
|
46
|
%
|
|
|
59
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nasdaq Index
|
|
|
(15.4
|
)%
|
|
|
(1.7
|
)%
|
|
|
0.9
|
%
|
S&P 500 Composite
|
|
|
(23.1
|
)%
|
|
|
(8.2
|
)%
|
|
|
(2.3
|
)%
|
Russell 2000 Index
|
|
|
(23.3
|
)%
|
|
|
(7.3
|
)%
|
|
|
0.2
|
%
|
All financial data are in millions unless otherwise noted
18
Based on the overall size of the peer companies, we compared
executive compensation data with the median statistics of the
relevant peer data. We also consider general industry market
data that are regressed or size-adjusted for Euronets
revenue size; these data are used as a secondary reference to
the Peer Group. For total stockholder returns, Euronet was in
the upper quartile for
1-year
returns, in the 50th percentile for
3-year
returns and the 75th percentile for
5-year
returns compared to the Peer Group as of July 31, 2009.
Elements
of Compensation
Each element of compensation is described below, including a
discussion of the specific actions taken by the Compensation
Committee for 2009 concerning the Chief Executive Officer and
other executive officers.
Base
Salary
In determining salary adjustments for the Chief Executive
Officer and other executive officers, the Compensation Committee
considered each executive officers individual performance
and the competitive salary levels for executives with similar
responsibilities within the Peer Group. Adjustments are not made
each year. Salary increases for the Named Executive Officers
during 2009 were increases to each of Mr. Caponecchis
and Mr. Wellers base salaries to $365,000 per year
effective October 1, 2009 and an increase to
Mr. Browns base salary to $600,000 per year effective
December 15, 2009. The increases were made to bring the
salaries of the respective executive officers more in line with
the peer median salaries.
Annual
Bonus
In determining annual bonuses, the Compensation Committee
considers the overall performance of Euronet and the individual
performance of each executive officer. In measuring individual
performance, the Compensation Committee measures the level of
responsibility of an executive officer against his base salary
and other elements of compensation in order to determine whether
overall compensation is sufficient to retain and motivate highly
qualified individuals.
The Executive Annual Incentive Plan, which was approved by
Stockholders in 2006, covers officers holding the office of Vice
President and above. Bonuses to executive officers are closely
correlated to Euronets financial performance. In December
2008, the Compensation Committee established 2009 incentive
targets for executive officers that were based on predetermined
Cash EPS targets for Messrs. Brown, Caponecchi, Weller and
Newman. For Mr. Bianchi, 2009 incentive targets consisted
of achieving specific Adjusted EBITDA targets for the Money
Transfer Segment.
For 2009, Messrs. Brown, Caponecchi, Weller and Newman were
entitled to receive annual bonuses based on the achievement of
predetermined threshold, target and maximum Cash EPS objectives.
Cash EPS of $1.18, $1.25 or $1.31 would result in a payout as a
percentage of base salary of 50%, 100% or 200%, respectively,
for Mr. Brown, 30%, 60% or 120%, respectively, for
Messrs. Caponecchi and Weller, and 20%, 40% or 80%,
respectively, for Mr. Newman. Mr. Bianchi was entitled
to receive an annual bonus of 30%, 60% or 120% of his base
salary based on achieving Money Transfer Adjusted EBITDA of
$28 million, $31 million or $34 million,
respectively.
Cash EPS for 2009 met the predetermined maximum target;
therefore, Messrs. Brown, Caponecchi, Weller and Newman
were paid $1,000,000, $431,700, $402,000 and $232,000,
respectively. The Money Transfer Segment met its target
objective set for the award of bonuses; therefore,
Mr. Bianchi was paid $180,000.
Stock
Incentive Programs
Our stock incentive plans are designed to promote an alignment
of long-term interests between our employees and our
Stockholders and to assist in the retention and motivation of
employees. The Compensation Committee can grant to key employees
of Euronet and its subsidiaries a variety of stock incentives,
including nonqualified stock options, incentive stock options,
stock appreciation rights, restricted stock, performance awards
and other stock-based incentives. Grants are usually approved by
the Compensation Committee for recommendation to the Board
during regularly scheduled committee meetings, of which there
are typically four per year occurring at regular intervals. The
Compensation Committee intends that performance-based stock
incentives serve as a significant portion of our executive
officers total compensation package. They are
19
granted in consideration of anticipated performance. Stock
incentives offer the executive officers significant long-term
incentives to increase their efforts on behalf of Euronet and
its subsidiaries, to focus managerial efforts on enhancing
Stockholder value and to align the interests of the executive
officers with the Stockholders. In certain circumstances,
executives are awarded time-based stock incentives to provide a
significant retention incentive. Grants of stock incentives are
designed to be competitive with the companies in the Peer Group
for the level of job the executive officer holds and to motivate
the executive officer to contribute to an increase in our stock
price over time.
The Compensation Committees compensation philosophy is to
have stock incentives that generally pay more for superior
performance and less if performance does not achieve that level.
The Compensation Committee, in determining stock incentive
grants to the individual executive officers, considered the
award levels granted to executive officers in prior years and
award levels granted to executives with similar job
responsibilities in the Peer Group. The Compensation Committee
also compared the performance of the companies in the Peer Group
to the performance of Euronet.
In December 2009, executive officers were granted a combination
of stock options and restricted stock. The restricted stock
awards vest based on achieving cumulative Cash EPS of $4.76 for
the years 2010 through 2012. The stock options vest based on
service conditions and also require that the price for Euronet
Common Stock must average at least $29.00 per share for a
30-day
calendar period prior to December 8, 2012. If the share
price does not reach the $29.00 level in the three-year period,
the options terminate and are cancelled. These awards are
further described in the paragraphs and tables below.
As described above, the Compensation Committee reviewed
Euronets performance in recent years in relation to the
Peer Group in order to confirm that the performance measures the
Compensation Committee previously set for performance-based
incentive stock awards were sufficiently rigorous and demanding.
After this review, the Compensation Committee determined that
the level of compensation awarded to the executive officers has
been justified by Euronets historical performance. The
Compensation Committee also concluded that executive
compensation reflects an appropriate mix of base salary,
incentive bonuses, discretionary bonuses, service-based equity
compensation and performance-based equity compensation to
provide sufficient retentive and motivational value to align the
interests of executives with our Stockholders.
All incentive stock awards to executive officers approved by the
Compensation Committee in 2009 will vest only upon achievement
of certain minimally established financial-based performance
goals.
Benefits
Our employees are entitled to receive medical, dental, life and
short-term and long-term disability insurance benefits and may
participate in our 401(k) plan. For 401(k) participants, we
match 50% of participant deferrals on the first six percent of a
participants deferrals, provided the participants
deferrals are at least four percent of salary.
With the exception of Mr. Brown, who is prohibited from
participating in an Employee Stock Purchase Plan
(ESPP) by Internal Revenue Service regulations
because his ownership of Euronet exceeds five percent, all of
our employees are entitled to participate in the ESPP, which was
adopted in 2001. This plan, which has been established in
accordance with certain federal income tax rules set forth in
Section 423 of the Internal Revenue Code of 1986, as
amended (the Code), permits employees to purchase
stock from us at a price that is equal to 85% of the lower of
the trading price on the opening or closing of certain
three-month offering periods.
Retirement
Plans
We do not sponsor a defined benefit pension plan or any other
deferred compensation plans for executives or any of our other
employees.
Perquisites
and Other Compensation
The Compensation Committee believes the compensation plan
described above is sufficient for attracting and retaining
talented management and that providing significant perquisites
is neither necessary nor in our
20
Stockholders best interests. Accordingly, executive
officers did not receive significant perquisites during the
fiscal year ended December 31, 2009.
Employee
Stock Ownership
Euronet encourages broad-based employee stock ownership through
various Stockholder approved stock compensation plans. More than
300 employees have received supplemental bonuses in a
combination of cash, stock options and restricted stock, and
currently have unvested stock options or restricted stock. This
means that, like other Stockholders, employees broadly
participate in both the upside opportunity and the
downside risk of our performance. The allocation of
stock bonus awards is progressive, so that as an employees
total compensation increases, an increasing percentage of total
compensation is paid in stock. This ensures that higher paid
employees have a greater at risk financial interest
in the sustained success of Euronet and its Stockholders.
Repricing
of Equity Awards
The Compensation Committee believes that equity awards should be
made based upon conditions and financial metrics established as
of the time of each award and that the terms of awards
outstanding should not be revised as conditions change. The
Compensation Committee is therefore committed not to engage in
re-pricing of outstanding equity awards, except in the context
of certain corporate reorganizations or with the approval of
Stockholders. This policy has been confirmed through an
amendment of our 2006 Stock Incentive Plan, which restricts us
from engaging in repricings except in certain corporate
reorganizations, without the approval of our Stockholders. The
Compensation Committee extends its policy against re-pricing to
all of Euronets equity plans.
21
COMPENSATION
TABLES
Summary
Compensation Table
The following table sets forth certain information regarding the
compensation awarded or paid to our Chief Executive Officer, our
Chief Financial Officer and the three other most highly
compensated of our executive officers (the Named Executive
Officers) for the year ended December 31, 2009 for
the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Restricted
|
|
|
|
|
|
All Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Stock
|
|
|
Option
|
|
|
Compen-
|
|
|
Annual
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Compensation
|
|
|
Awards(4)
|
|
|
Awards(5)
|
|
|
sation
|
|
|
Compensation
|
|
|
Michael J. Brown
|
|
|
2009
|
|
|
$
|
504,167
|
|
|
|
|
|
|
$
|
1,000,000
|
(2)
|
|
$
|
699,990
|
|
|
$
|
1,515,789
|
|
|
$
|
7,350
|
|
|
$
|
3,727,296
|
|
Chairman and
|
|
|
2008
|
|
|
|
500,000
|
|
|
|
|
|
|
|
87,500
|
(3)
|
|
|
1,884,607
|
|
|
|
1,621,716
|
|
|
|
7,908
|
|
|
|
4,101,731
|
|
Chief Executive Officer
|
|
|
2007
|
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,464
|
|
|
|
516,464
|
|
Kevin J. Caponecchi
|
|
|
2009
|
|
|
|
359,375
|
|
|
|
|
|
|
|
431,700
|
(2)
|
|
|
350,006
|
|
|
|
757,899
|
|
|
|
9,975
|
|
|
|
1,908,955
|
|
President
|
|
|
2008
|
|
|
|
357,500
|
|
|
|
|
|
|
|
37,537
|
(3)
|
|
|
200,000
|
|
|
|
810,855
|
|
|
|
9,525
|
|
|
|
1,415,417
|
|
|
|
|
2007
|
|
|
|
170,000
|
|
|
|
|
|
|
|
|
|
|
|
933,320
|
|
|
|
600,001
|
|
|
|
2,708
|
|
|
|
1,706,029
|
|
Rick L. Weller
|
|
|
2009
|
|
|
|
335,000
|
|
|
|
|
|
|
|
402,000
|
(2)
|
|
|
350,006
|
|
|
|
757,899
|
|
|
|
7,350
|
|
|
|
1,852,255
|
|
Executive Vice President and
|
|
|
2008
|
|
|
|
325,000
|
|
|
|
|
|
|
|
34,125
|
(3)
|
|
|
582,521
|
|
|
|
636,525
|
|
|
|
7,908
|
|
|
|
1,586,079
|
|
Chief Financial Officer
|
|
|
2007
|
|
|
|
275,550
|
|
|
$
|
78,750
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,244
|
|
|
|
360,544
|
|
Jeffrey B. Newman
|
|
|
2009
|
|
|
|
290,000
|
|
|
|
|
|
|
|
232,000
|
(2)
|
|
|
137,896
|
|
|
|
298,609
|
|
|
|
16,760
|
(6)
|
|
|
975,265
|
|
Executive Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Juan C. Bianchi
|
|
|
2009
|
|
|
|
300,000
|
|
|
|
|
|
|
|
180,000
|
(2)
|
|
|
87,507
|
|
|
|
189,477
|
|
|
|
29,050
|
(7)
|
|
|
786,034
|
|
Executive Vice President and
|
|
|
2008
|
|
|
|
311,545
|
|
|
|
|
|
|
|
270,000
|
(3)
|
|
|
44,996
|
|
|
|
182,443
|
|
|
|
27,696
|
|
|
|
836,680
|
|
Managing Director-Money
|
|
|
2007
|
|
|
|
219,244
|
|
|
|
|
|
|
|
|
|
|
|
6,500,045
|
|
|
|
|
|
|
|
17,494
|
|
|
|
6,736,783
|
|
Transfer Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Bonus earned for 2007, paid in 2008. |
|
(2) |
|
Non-equity incentive compensation earned for 2009, paid in 2010. |
|
(3) |
|
Non-equity incentive compensation earned for 2008, paid in 2009. |
|
(4) |
|
Compensation for restricted stock is computed in accordance with
the provisions of Financial Accounting Standards Board
(FASB) Accounting Standards Codification
(ASC) Topic 718, Compensation Stock
Compensation. Amounts represent the grant date fair value
determined by utilizing the closing stock price for Euronet
Common Stock at the date of grant. Assumptions used in
calculating the aggregate grant date fair value in accordance
with ASC Topic 718 are set out in Note 18 to our audited
consolidated financial statements contained in the
Form 10-K
for the fiscal year ended December 31, 2009. The amounts
noted for 2008 and 2007 have been restated to be in conformance
with the new disclosure rules that became effective on
February 28, 2010. As such, amounts related to the
recognition of compensation expense under ASC Topic 718
previously reported for those years has been removed and the
aggregate grant date fair value of any awards granted in 2008
and 2007 has been added for those years. During 2009,
Mr. Brown forfeited 92,272 shares of restricted stock based
on cumulative performance results through 2009. During 2009 and
2008, Mr. Bianchi forfeited 24,121 restricted stock units
each year based on 2008 and 2007 performance results. |
|
(5) |
|
Compensation for stock options is computed in accordance with
the provisions of ASC Topic 718. Amounts represent the grant
date fair value determined using the Black-Scholes or Monte
Carlo simulation models. The grant date fair values are only
theoretical values and may not accurately determine present
value. The actual value, if any, to be realized from an option
will depend on the excess of the market value of the Common
Stock over the exercise price on the date the option is
exercised. Assumptions used in calculating the aggregate grant
date fair value in accordance with ASC Topic 718 are set out in
Note 18 to our audited consolidated financial statements
contained in the
Form 10-K
for the fiscal year ended December 31, 2009. The amounts
noted for 2008 and 2007 have been restated to be in conformance
with the new disclosure rules that became effective on
February 28, 2010. As such, amounts related to the |
22
|
|
|
|
|
recognition of compensation expense under ASC Topic 718
previously reported for those years has been removed and the
aggregate grant date fair value of any awards granted in 2008
and 2007 has been added for those years. |
|
(6) |
|
Consists of life and health insurance premiums. |
|
(7) |
|
Consists of life and health insurance premiums of $21,850 and a
company-paid automobile lease of $7,200. |
Grants of
Plan-Based Awards for 2009
The following table summarizes estimated future payouts under
non-equity incentive plan awards made to Named Executive
Officers during the fiscal year ended December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Non-Equity Incentive Plan Awards
|
Name
|
|
Threshold ($)
|
|
Target ($)
|
|
Maximum ($)
|
|
Michael J. Brown
|
|
$
|
250,000
|
|
|
$
|
500,000
|
|
|
$
|
1,000,000
|
|
Kevin J. Caponecchi
|
|
|
107,925
|
|
|
|
215,850
|
|
|
|
431,700
|
|
Rick L. Weller
|
|
|
100,500
|
|
|
|
201,000
|
|
|
|
402,000
|
|
Jeffrey B. Newman
|
|
|
58,000
|
|
|
|
116,000
|
|
|
|
232,000
|
|
Juan C. Bianchi
|
|
|
90,000
|
|
|
|
180,000
|
|
|
|
360,000
|
|
The following table summarizes estimated future payouts under
equity incentive plan awards made to Named Executive Officers
during the fiscal year ended December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
Future
|
|
|
|
|
|
|
|
|
|
|
Payouts
|
|
All Other
|
|
|
|
|
|
|
|
|
Under
|
|
Option
|
|
|
|
|
|
|
|
|
Equity
|
|
Awards:
|
|
Exercise or
|
|
Grant Date
|
|
|
|
|
Incentive
|
|
Number of
|
|
Base Price
|
|
Fair Value
|
|
|
|
|
Plan
|
|
Securities
|
|
of Options
|
|
of Stock and
|
|
|
|
|
Awards
|
|
Underlying
|
|
Awards
|
|
Option
|
Name
|
|
Grant Date
|
|
Target (#)
|
|
Options (#)
|
|
($/Sh)
|
|
Awards ($)
|
|
Michael J. Brown
|
|
|
12/9/2009
|
(1)
|
|
|
32,437
|
|
|
|
|
|
|
|
|
|
|
$
|
699,990
|
|
|
|
|
12/9/2009
|
(2)
|
|
|
|
|
|
|
162,813
|
|
|
$
|
21.58
|
|
|
|
1,515,789
|
|
Kevin J. Caponecchi
|
|
|
12/9/2009
|
(1)
|
|
|
16,219
|
|
|
|
|
|
|
|
|
|
|
|
350,006
|
|
|
|
|
12/9/2009
|
(2)
|
|
|
|
|
|
|
81,407
|
|
|
|
21.58
|
|
|
|
757,899
|
|
Rick L. Weller
|
|
|
12/9/2009
|
(1)
|
|
|
16,219
|
|
|
|
|
|
|
|
|
|
|
|
350,006
|
|
|
|
|
12/9/2009
|
(2)
|
|
|
|
|
|
|
81,407
|
|
|
|
21.58
|
|
|
|
757,899
|
|
Jeffrey B. Newman
|
|
|
12/9/2009
|
(1)
|
|
|
6,390
|
|
|
|
|
|
|
|
|
|
|
|
137,896
|
|
|
|
|
12/9/2009
|
(2)
|
|
|
|
|
|
|
32,074
|
|
|
|
21.58
|
|
|
|
298,609
|
|
Juan C. Bianchi
|
|
|
12/9/2009
|
(1)
|
|
|
4,055
|
|
|
|
|
|
|
|
|
|
|
|
87,507
|
|
|
|
|
12/9/2009
|
(2)
|
|
|
|
|
|
|
20,352
|
|
|
|
21.58
|
|
|
|
189,477
|
|
|
|
|
(1) |
|
Award vests on achieving cumulative Cash EPS of $4.76 for the
years 2010 through 2012, contingent upon the executive
officers continued employment on the vesting date. |
|
(2) |
|
Award vests 40% on the second anniversary of the grant and 20%
each on the third, fourth and fifth anniversary of the grant
provided that the price of Euronet Common Stock averages at
least $29.00 per share for a
30-day
calendar period prior to December 8, 2012 and contingent
upon the Named Executive Officers continued employment on
the vesting dates. If the share price does not reach the $29.00
level in the three-year period, the options terminate and are
cancelled. |
23
Outstanding
Equity Awards at Fiscal Year-End for 2009
The following table sets forth equity awards outstanding for the
Named Executive Officers as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
Equity Incentive
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Plan Awards:
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
Market or
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Unearned
|
|
Payout Value
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Shares, Units
|
|
of Unearned
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Units of
|
|
Units of
|
|
or Other
|
|
Shares, Units or
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Stock That
|
|
Stock That
|
|
Rights that
|
|
Other Rights
|
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
That Have Not
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
Price ($)
|
|
Date
|
|
Vested (#)
|
|
Vested ($)
|
|
Vested (#)
|
|
Vested ($)
|
|
Michael J. Brown
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
16.40
|
|
|
|
11/27/2011
|
|
|
|
|
|
|
|
|
|
|
|
46,136
|
(1)
|
|
$
|
1,012,685
|
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
5.00
|
|
|
|
10/14/2012
|
|
|
|
7,728
|
(2)
|
|
$
|
169,630
|
|
|
|
|
|
|
|
|
|
|
|
|
33,750
|
|
|
|
|
|
|
|
|
|
|
|
22.00
|
|
|
|
6/9/2014
|
|
|
|
2,440
|
(3)
|
|
|
53,558
|
|
|
|
72,591
|
(3)
|
|
|
1,593,372
|
|
|
|
|
|
|
|
|
152,323
|
(4)
|
|
|
|
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
39,604
|
(5)
|
|
|
869,308
|
|
|
|
|
|
|
|
|
|
|
|
|
226,308
|
(6)
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
32,437
|
(7)
|
|
|
711,992
|
|
|
|
|
|
|
|
|
|
|
|
|
162,813
|
(7)
|
|
|
21.58
|
|
|
|
12/9/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin J. Caponecchi
|
|
|
14,043
|
|
|
|
21,065
|
(8)
|
|
|
|
|
|
|
29.20
|
|
|
|
7/2/2017
|
|
|
|
438
|
(9)
|
|
|
9,614
|
|
|
|
13,042
|
(9)
|
|
|
286,272
|
|
|
|
|
|
|
|
|
76,161
|
(4)
|
|
|
|
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
19,802
|
(5)
|
|
|
434,654
|
|
|
|
|
|
|
|
|
|
|
|
|
113,154
|
(6)
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
16,219
|
(7)
|
|
|
356,007
|
|
|
|
|
|
|
|
|
|
|
|
|
81,407
|
(7)
|
|
|
21.58
|
|
|
|
12/9/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick L. Weller
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
5.90
|
|
|
|
11/22/2012
|
|
|
|
|
|
|
|
|
|
|
|
27,682
|
(1)
|
|
|
607,620
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
5.90
|
|
|
|
11/22/2012
|
|
|
|
6,000
|
(10)
|
|
|
131,700
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
10.47
|
|
|
|
5/8/2013
|
|
|
|
699
|
(3)
|
|
|
15,343
|
|
|
|
20,806
|
(3)
|
|
|
456,692
|
|
|
|
|
22,250
|
|
|
|
|
|
|
|
|
|
|
|
22.00
|
|
|
|
6/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
15,545
|
(5)
|
|
|
341,213
|
|
|
|
|
|
|
|
|
59,787
|
(4)
|
|
|
|
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
16,219
|
(7)
|
|
|
356,007
|
|
|
|
|
|
|
|
|
|
|
|
|
88,826
|
(6)
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,407
|
(7)
|
|
|
21.58
|
|
|
|
12/9/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey B. Newman
|
|
|
9,600
|
|
|
|
|
|
|
|
|
|
|
|
10.79
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
13,841
|
(1)
|
|
|
303,810
|
|
|
|
|
2,280
|
|
|
|
|
|
|
|
|
|
|
|
16.40
|
|
|
|
11/27/2011
|
|
|
|
3,200
|
(10)
|
|
|
70,240
|
|
|
|
|
|
|
|
|
|
|
|
|
2,280
|
|
|
|
|
|
|
|
|
|
|
|
17.66
|
|
|
|
5/8/2012
|
|
|
|
474
|
(3)
|
|
|
10,404
|
|
|
|
14,102
|
(3)
|
|
|
309,539
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
5.00
|
|
|
|
10/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
7,723
|
(5)
|
|
|
169,520
|
|
|
|
|
17,800
|
|
|
|
|
|
|
|
|
|
|
|
22.00
|
|
|
|
6/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
6,390
|
(7)
|
|
|
140,261
|
|
|
|
|
|
|
|
|
29,703
|
(4)
|
|
|
|
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,130
|
(6)
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,074
|
(7)
|
|
|
21.58
|
|
|
|
12/9/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Juan C. Bianchi
|
|
|
|
|
|
|
17,136
|
(4)
|
|
|
|
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
31,014
|
(11)
|
|
|
680,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,460
|
(6)
|
|
|
10.10
|
|
|
|
12/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
31,015
|
(12)
|
|
|
680,779
|
|
|
|
|
|
|
|
|
|
|
|
|
20,352
|
(7)
|
|
|
21.58
|
|
|
|
12/9/2019
|
|
|
|
|
|
|
|
|
|
|
|
72,365
|
(13)
|
|
|
1,588,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,455
|
(5)
|
|
|
97,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,055
|
(7)
|
|
|
89,007
|
|
|
|
|
(1) |
|
Awards vest based on each years cumulative growth in
Adjusted EPS, as compared to 2005, less shares vested in prior
years such that all shares will vest when we have achieved 100%
growth in Adjusted EPS as compared to 2005. |
|
(2) |
|
Award vests on August 16, 2010 with the number of shares
vested determined based on cumulative growth in Adjusted EPS as
compared to 2005 for each year in the period from 2006 through
2009, to a maximum of 100,000 shares when Euronet has
achieved 100% growth in Adjusted EPS as compared to 2005.
Vesting is also contingent upon Mr. Browns continued
employment on the four-year anniversary of the grant date (i.e.,
August 16, 2010). If Adjusted EPS growth is negative, no
shares will be granted for that measurement year and there will
be no reversal of granting of already-granted shares, therefore,
the 7,728 shares earned based on 2006 performance are
contingent on continued employment only. These were the only
shares earned under this award and the remaining
92,272 shares were forfeited. The awards were approved at
the June 6, 2006 meeting of the Compensation Committee,
however, the grant was made contingent upon, and to be effective
shortly after, the filing of the registration statement on
Form S-8
registering the awarded shares with the U.S. Securities and
Exchange Commission, which occurred on August 10, 2006. |
|
(3) |
|
Award vests each year in proportion to growth in Cash EPS, with
the number of shares vested determined based on cumulative
growth in Cash EPS over 10 years, such that all shares vest
upon achievement of 100% growth in Cash EPS with 2007 as the
base year. If Cash EPS growth is negative, no shares will be |
24
|
|
|
|
|
granted for that measurement year and there will be no reversal
of granting of already-granted shares. The shares earned based
on 2009 performance vested on March 15, 2010. |
|
(4) |
|
Award vests 40% on the second anniversary and 20% each of the
third through fifth anniversaries of December 16, 2008. |
|
(5) |
|
Award vests on achieving cumulative Cash EPS of $4.14 for the
years 2009 through 2011, contingent upon the executive
officers continued employment on the vesting date. |
|
(6) |
|
Award vests 40% on the second anniversary and 20% each of the
third through fifth anniversaries of December 16, 2008
provided that the price of Euronet Common Stock averages at
least $16.00 per share for a
30-day
calendar period prior to December 16, 2011 and contingent
upon the executive officers continued employment on the
vesting dates. The stock price provision was met during 2009;
therefore, the award is only contingent upon the executive
officers continued employment. |
|
(7) |
|
See footnotes to table under Grants of Plan-Based Awards
for 2009 for a description of the vesting schedule for
these awards. |
|
(8) |
|
Remaining unvested award vests one-third each on
December 31, 2010, 2011 and 2012. |
|
(9) |
|
Award vests based on the achievement of growth in Cash EPS, with
the number of shares vested determined based on growth in Cash
EPS for the period from 2008 through 2012, when compared to the
respective prior year. Vesting is also subject to time-based
criteria, with 20% of the award eligible for vesting on
December 31, 2008 and on December 31 of each of the next
four years, contingent upon Mr. Caponecchis continued
employment on each vesting date. The shares earned based on 2009
performance vested on March 15, 2010. |
|
(10) |
|
Remaining unvested award vests one-half each on
December 11, 2010 and 2011. |
|
(11) |
|
Remaining unvested award vests one-third each on June 11,
2010, 2011 and 2012. |
|
(12) |
|
Of the remaining restricted stock units, one-third of the shares
are eligible for vesting on June 11 of each of 2010, 2011 and
2012 provided that EBITDA of RIA has increased by a
pre-determined growth rate during the
12-month
period ending March 31 prior to each annual vesting date,
compared to the previous
12-month
period. If the target is met, the entire allotment will vest. If
the target is not met, the entire allotment is forfeited by
Mr. Bianchi. Vesting is also contingent upon
Mr. Bianchis continued employment on each vesting
date. |
|
(13) |
|
Of the remaining restricted stock units, one-third of the shares
are eligible for vesting on June 11 of each of 2010, 2011 and
2012 provided that EBITDA of RIA has increased by a
pre-determined growth rate during the year prior to each annual
vesting date, compared to the previous year. If the target is
met, the entire allotment will vest. If the target is not met,
the entire allotment is forfeited by Mr. Bianchi. Vesting
is also contingent upon Mr. Bianchis continued
employment on each vesting date. RIA did not achieve the
pre-determined EBITDA growth rate during 2009; therefore,
Mr. Bianchi forfeited 24,121 shares in 2010. |
Option
Exercises and Restricted Stock Vested for 2009
The following table sets forth certain information concerning
options exercised and restricted stock vested for the Named
Executive Officers during the fiscal year ended
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
Value
|
|
Number of
|
|
Value
|
|
|
Shares
|
|
Realized
|
|
Shares
|
|
Realized
|
|
|
Acquired on
|
|
on Exercise
|
|
Acquired on
|
|
on Vesting
|
Name
|
|
Exercise (#)
|
|
($)(1)
|
|
Vesting (#)
|
|
($)
|
|
Michael J. Brown
|
|
|
|
|
|
|
|
|
|
|
1,220
|
|
|
|
10,980
|
|
Kevin J. Caponecchi
|
|
|
|
|
|
|
|
|
|
|
2,770
|
|
|
|
31,588
|
|
Rick L. Weller
|
|
|
|
|
|
|
|
|
|
|
3,350
|
|
|
|
67,440
|
|
Jeffrey B. Newman
|
|
|
11,000
|
|
|
|
116,480
|
|
|
|
1,837
|
|
|
|
36,421
|
|
Juan C. Bianchi
|
|
|
|
|
|
|
|
|
|
|
10,338
|
|
|
|
200,144
|
|
|
|
|
(1) |
|
Market value of underlying securities on the date of exercise,
minus the exercise price. |
25
Employment
Agreements
Messrs. Brown, Caponecchi, Weller, Newman and Bianchi are
Named Executive Officers of Euronet. They have employment
agreements that have substantially the same terms, except in
respect to the levels of compensation, and as otherwise
discussed below or under Compensation Tables above.
The agreements with Messrs. Brown, Weller and Newman were
entered into in October 2003 and were amended and restated in
April 2008, principally to bring them into conformity with the
provisions of the Jobs Creation Act of 2004. The agreements with
Messrs. Caponecchi and Bianchi were entered into during
2007 in connection with their hiring. Mr. Bianchis
agreement was also amended in April 2008.
The employment agreements have indefinite terms and provide that
they may be terminated by the executives at any time upon
60 days notice for Messrs. Brown, Caponecchi,
Weller and Newman and 30 days notice for
Mr. Bianchi. The agreements may be terminated by Euronet
with or without cause provided that, in the case of
termination due to cause, Euronet provides the
executive with 14 days notice. The agreements define
cause to mean: (i) conviction of the executive
of, or the entry of a plea of guilty or nolo contendere by the
executive to, any felony or any misdemeanor involving moral
turpitude; (ii) fraud, misappropriation or embezzlement by
the executive; (iii) willful failure or gross misconduct in
the performance of the executives assigned duties;
(iv) willful failure by the executive to follow reasonable
instructions of any officer to whom the executive reports or the
Board of Directors; and (v) the executives gross
negligence in the performance of his assigned duties. In each
case, the employment agreements provide that, in a three-year
period following a change in control, termination
for cause is limited to only mean an act of
dishonesty by an executive constituting a felony that was
intended to or resulted in gain or personal enrichment of the
executive at Euronets expense. Euronets termination
of an executives employment for cause does not result in
separation payments, separation benefits or accelerated or
extended vesting of unvested stock option or restricted stock
awards.
If Euronet terminates an executive absent cause and prior to a
change in control as discussed below, the employment
agreements provide that the executive will be entitled to
certain severance benefits for a period of 24 months,
including the payment of the executives then current base
salary, the continuation of the vesting and rights to exercise
any then outstanding equity-based awards and the maintenance of
certain employee benefits.
In general, voluntary termination by Messrs. Brown,
Caponecchi, Weller and Newman does not result in separation
payments, separation benefits or accelerated or extended vesting
of unvested stock options or restricted stock, except under
certain circumstances constituting constructive termination.
These circumstances include certain changes in conditions of the
executives employment, such as a significant diminution in
responsibilities or salary or a forced relocation. In such
circumstances, these executives are entitled to the same
severance benefits as if they were terminated by Euronet absent
cause, prior to a change of control. In addition,
voluntary termination by Mr. Bianchi prior to a
change in control generally entitles
Mr. Bianchi to the same severance benefits as a termination
absent cause.
The following table summarizes the severance benefits due
Messrs. Brown, Caponecchi, Weller and Newman upon their
termination by Euronet without cause, or their voluntary
termination due to their constructive termination, and, in the
case of Mr. Bianchi, the severance benefits due upon his
termination without cause by Euronet or upon his voluntary
termination for any reason:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested
|
|
|
|
|
Name
|
|
Base Salary
|
|
Equity Comp(1)
|
|
Benefits
|
|
Total
|
|
Michael J. Brown
|
|
$
|
1,200,000
|
|
|
$
|
4,270,459
|
|
|
$
|
14,400
|
|
|
$
|
5,484,859
|
|
Kevin J. Caponecchi
|
|
|
730,000
|
|
|
|
1,874,520
|
|
|
|
14,400
|
|
|
|
2,618,920
|
|
Rick L. Weller
|
|
|
730,000
|
|
|
|
1,691,357
|
|
|
|
14,400
|
|
|
|
2,435,757
|
|
Jeffrey B. Newman
|
|
|
600,000
|
|
|
|
870,269
|
|
|
|
14,400
|
|
|
|
1,484,669
|
|
Juan C. Bianchi
|
|
|
600,000
|
|
|
|
2,370,289
|
(2)
|
|
|
14,400
|
|
|
|
2,984,689
|
|
|
|
|
(1) |
|
Represents value of unvested awards at December 31, 2009
that would become vested upon a termination without cause or
constructive termination. For the purpose of this table, we have
assumed an annual increase in Adjusted EPS and Cash EPS of 12%
each, which represents a reasonable estimate of average |
26
|
|
|
|
|
annual long-term equity returns, for performance-based
restricted stock awards that vest based on the percentage growth
in Adjusted EPS or Cash EPS. |
|
(2) |
|
For the purpose of this table, we have assumed that the growth
in EBITDA for the RIA subsidiary will be sufficient for the
vesting of performance-based restricted stock during the
24 month period following termination, in accordance with
the agreement. |
In the event of a change of control, all equity
incentive awards outstanding held by the Named Executive
Officers will become immediately vested and the term of the
employment agreements become fixed at three years from the date
of the change of control and they may be terminated without
cause only upon payment to the executive of a lump sum within
five days of the termination equal to the full amount of base
salary that would have been payable during the remaining term of
the agreement (or for two years, if the remaining term is less
than two years), discounted at a rate of 7.5% per annum. These
provisions also apply if the executive resigns for good
reason following a change of control. In
addition, the executives equity incentive awards will
continue to vest through the later of three years from the
change of control date or two years from the date of
termination, if the executive is terminated without cause or
resigns for good reason following a change of
control. Good reason includes certain changes
in conditions of employment, as a result of which the executive
can be considered to have been constructively terminated,
including a significant diminution in responsibilities or salary
or a forced relocation. In general, the employment agreements
provide that change of control includes:
(i) completion of any merger, consolidation or sale of
substantially all of our assets and such merger results in our
Stockholders immediately prior to the merger holding less than
50% of the surviving entity; (ii) replacement of over 25%
of our Directors without the approval of at least 75% of the
Directors in office as of the effective date of the employment
agreement or of Directors so approved; or (iii) the
acquisition by any person or group of persons of 40% or more of
the voting rights of our outstanding voting securities. At
current compensation levels, if the remaining term of the
agreement was three years and assuming the amounts due under the
change of control provisions outlined above would be paid in a
lump sum, the following table summarizes amounts that would
accrue to our Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested
|
|
|
|
|
Name
|
|
Base Salary
|
|
Equity Comp(1)
|
|
Benefits
|
|
Total
|
|
Michael J. Brown
|
|
$
|
1,607,396
|
|
|
$
|
8,957,563
|
|
|
$
|
21,600
|
|
|
$
|
10,586,559
|
|
Kevin J. Caponecchi
|
|
|
977,832
|
|
|
|
3,360,050
|
|
|
|
21,600
|
|
|
|
4,359,482
|
|
Rick L. Weller
|
|
|
977,832
|
|
|
|
3,699,759
|
|
|
|
21,600
|
|
|
|
4,699,191
|
|
Jeffrey B. Newman
|
|
|
803,698
|
|
|
|
1,890,562
|
|
|
|
21,600
|
|
|
|
2,715,860
|
|
Juan C. Bianchi
|
|
|
803,698
|
|
|
|
3,649,036
|
|
|
|
21,600
|
|
|
|
4,474,334
|
|
|
|
|
(1) |
|
Represents value of unvested awards at December 31, 2009
that would become vested upon termination without cause or
resignation for good reason in connection with a change of
control. |
Additionally, the employment agreements entitle the executives
to certain rights to income and excise tax
gross-up
amounts in the event Section 4999 of the Code, or any
similar tax law, applies to the change in control payments. If
an executive is entitled to such tax
gross-up
payments, the
gross-up
payments will be made either to the executive or directly to the
Internal Revenue Service. The
gross-up
amounts are subject to additional conditions and limitations and
exclude excise taxes or other penalties under Section 409A
of the Code. The Compensation Committee has considered the above
change of control provisions, the change of
control provisions in the Peer Groups employment
agreements, and determined that the provisions offered to
executives by Euronet are reasonable and appropriate.
In the event of the death of an executive officer, with the
exception of Mr. Caponecchi who is discussed below, the
provisions of our equity award agreements generally provide that
all unvested equity awards outstanding shall vest immediately.
As of December 31, 2009, the value of unvested equity
awards outstanding that would vest in the event of death was
$8,957,563 for Mr. Brown, $3,699,759 for Mr. Weller,
$1,890,562 for Mr. Newman and $3,649,036 for
Mr. Bianchi.
In the event of disability of an executive officer, with the
exception of Mr. Caponecchi who is discussed below, the
employment agreements with Messrs. Brown, Weller, Newman
and Bianchi provide for the payment
27
of a lump-sum disability benefit equal to 12 months of the
current base salary, which represents $600,000 for
Mr. Brown, $365,000 for Mr. Weller and $300,000 each
for Mr. Newman and Mr. Bianchi. In addition, the
provisions of our equity award agreements generally provide that
all equity awards outstanding shall vest immediately. As of
December 31, 2009, the value of unvested equity awards
outstanding that would vest in the event of disability was
$8,957,563 for Mr. Brown, $3,699,759 for Mr. Weller,
$1,890,562 for Mr. Newman and $3,649,036 for
Mr. Bianchi. The employment agreements with
Messrs. Brown, Weller, Newman and Bianchi also provide that
the executives right to exercise any such awards will
continue for a period of 12 months after termination due to
disability.
In the event of death or disability of Mr. Caponecchi, his
employment agreement provides for a payment of a lump sum
benefit equal to 24 months of the current base salary,
which represents a total of $730,000. Mr. Caponecchis
employment agreement also stipulates that all unvested equity
incentive awards shall vest immediately, which represents
$3,360,050 as of December 31, 2009. The stock options will
remain exercisable pursuant to their terms after the death or
disability of Mr. Caponecchi.
The Named Executive Officers must not disclose confidential
information during the term of the employment agreements and
following termination. Each of the agreements includes a
restriction on the ability of the executive to compete with
Euronet or solicit our employees during the severance period
following termination. Any severance payments are conditioned on
the executive officer complying with these restrictions.
Tax
Treatment
The Code limits the allowable tax deduction we may take for
compensation paid to executive officers required to be named in
the Summary Compensation Table. The limit is $1.0 million
per executive per year, although compensation payable solely
based on performance goals is excluded from the limitation. All
compensation of executive officers for 2009 is fully tax
deductible. Generally, the Compensation Committee intends that
the annual incentive bonus, stock options and performance awards
qualify as performance-based compensation so that these awards
may qualify for the exclusion from the $1.0 million limit.
28
DIRECTOR
COMPENSATION
Non-management Directors are compensated through a combination
of cash and equity, which we believe best aligns the interest of
Board members with Stockholders. For 2005 through 2007, we
granted restricted stock awards that vest over a period of three
years, which is the same duration as the terms for which the
Directors are elected. The restricted stock awards provide that
in the event of a change in control of Euronet, the restricted
stock vests and is immediately distributable to non-management
Directors. Beginning in 2008, stock awards granted to the
Directors as compensation vest immediately on the grant date.
We believe that the compensation paid to non-management
Directors in 2009 was appropriate and was properly weighted
between cash and equity.
Paul Althasen, who is an executive vice-president, also receives
compensation as a Director of Euronet, but only through equity
awards.
During 2009, in addition to reimbursement of
out-of-pocket
expenses, each non-management Director and Paul Althasen (who is
a management Director) was compensated as summarized in the
table below:
Director
Compensation for 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
Stock
|
|
|
|
|
or Paid
|
|
Awards
|
|
|
Name
|
|
in Cash
|
|
(2)(3)
|
|
Total
|
|
M. Jeannine Strandjord
|
|
$
|
74,250
|
(1)
|
|
$
|
67,497
|
|
|
$
|
141,747
|
|
Thomas A. McDonnell
|
|
|
67,500
|
|
|
|
67,497
|
|
|
|
134,997
|
|
Andrew B. Schmitt
|
|
|
67,500
|
|
|
|
67,497
|
|
|
|
134,997
|
|
Dr. Andrzej Olechowski
|
|
|
67,500
|
|
|
|
67,497
|
|
|
|
134,997
|
|
Eriberto R. Scocimara
|
|
|
67,500
|
|
|
|
67,497
|
|
|
|
134,997
|
|
Paul S. Althasen
|
|
|
|
|
|
|
67,497
|
|
|
|
67,497
|
|
|
|
|
(1) |
|
As a result of the additional duties and responsibilities
involved in being the Chairman of the Audit Committee,
Ms. Strandjord received an additional 10% of cash
compensation. |
|
(2) |
|
For 2005 through 2007, we granted each non-management Director
3,500 shares of restricted Common Stock for each year of
service as a Director. The grants were generally made as of the
date of each Annual Meeting with vesting to occur one-third per
year on each anniversary of the Annual Meeting with respect to
which the grant was made. Beginning in 2008, the stock awards
granted to Directors as compensation vest immediately on the
grant date. For 2009, the value per share at the grant date was
$15.10 per share, for a total grant date fair value of $67,497
for each non-management Director and Mr. Althasen (who is a
management Director). The aggregate grant date fair value is
computed in accordance with FASB Accounting Standards
Codification Topic 718. |
|
(3) |
|
As of December 31, 2009, each non-management Director and
Mr. Althasen held the following restricted stock and stock
options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
Unvested
|
|
|
Exercisable
|
|
Restricted
|
Name
|
|
Options
|
|
Shares
|
|
M. Jeannine Strandjord
|
|
|
40,000
|
|
|
|
1,167
|
|
Thomas A. McDonnell
|
|
|
40,000
|
|
|
|
1,167
|
|
Andrew B. Schmitt
|
|
|
20,000
|
|
|
|
1,167
|
|
Dr. Andrzej Olechowski
|
|
|
20,000
|
|
|
|
1,167
|
|
Eriberto R. Scocimara
|
|
|
|
|
|
|
1,167
|
|
Paul S. Althasen
|
|
|
|
|
|
|
2,833
|
|
29
REPORT OF
COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis presented above with
management, and, based on that review and discussion, has
recommended to the Board that the Compensation Discussion and
Analysis be included in this proxy statement.
Compensation Committee
Thomas A. McDonnell, Chair
Eriberto R. Scocimara
M. Jeannine Strandjord
Andrew B. Schmitt
Dr. Andrzej Olechowski
The Compensation Committee report and the Compensation
Discussion and Analysis is not deemed soliciting
material and is not deemed filed with the SEC or subject
to Regulation 14A or the liabilities under Section 18
of the Exchange Act.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the persons who served on the Companys
Compensation Committee during the last completed fiscal year
(Thomas A. McDonnell, M. Jeannine Strandjord, Andrzej
Olechowski, Andrew B. Schmitt and Eriberto R. Scocimara)
(i) was formerly an officer of the Company;
(ii) during the last fiscal year, was an officer or
employee of the Company; or (iii) had any relationship
requiring disclosure under Item 404 of
Regulation S-K.
None of the Companys executive officers, during the last
completed fiscal year, served as a (i) member of the
compensation committee (or equivalent) of another entity, one of
whose executive officers served on the Companys
Compensation Committee; (ii) director of another entity,
one of whose executive officers served on the Companys
Compensation Committee; or (iii) member of the compensation
committee (or equivalent) of another entity, one of whose
executive officers served as the Companys Director.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
In January 2008, we entered into a Non Exclusive Aircraft Lease
Agreement with Birardi Investments, LLC (Birardi), a
company that is jointly owned by our CEO and Chairman of the
Board of Directors, Mr. Brown, and our former COO and
former Director, Dan Henry. The Lease Agreement provided that
Birardi would make a Sabreliner aircraft available to Euronet
for transportation of executives for up to 100 hours per
year (later increased to 110 hours per year), in
consideration of payment of a fee of $4,500 per hour, less
certain direct expenses incurred by Birardi, including pilot
compensation and fuel charges. There are no minimum usage
requirements. The Audit Committee of the Board examined the
arrangements provided under the Lease Agreement in comparison to
aircraft leasing arrangements available in the market and
determined that the terms of the agreement were fair to Euronet.
The total amount paid to Birardi under the Lease Agreement
during the year 2009 was $144,903.
There were no other material related party transactions during
2009. On February 26, 2008, the Audit Committee of the
Board of Directors approved an amendment to our Code of Conduct
to provide that no related party transaction that would require
disclosure under the U.S. securities laws may be
consummated or continued unless the transaction is approved or
ratified by the Audit Committee. In determining whether to
approve or ratify a related party transaction, the Audit
Committee will take into account, among other factors it deems
appropriate, whether the related party transaction is on terms
no less favorable than terms generally available to an
unaffiliated third-party under the same or similar circumstances
and the extent of the related persons interest in the
transaction. The Lease Agreement with Birardi, which had been
approved before its entry into effect by the Compensation
Committee, was ratified by the Audit Committee in accordance
with this new policy.
All of our Directors, with the exception of Messrs. Brown
and Althasen, are independent under the listing standards of The
Nasdaq Stock Market LLC.
30
AUDIT
MATTERS
Report of
the Audit Committee
The Audit Committee reviewed and discussed Euronets
audited consolidated financial statements for fiscal year 2009
with management. The Audit Committee has also discussed with the
independent accounting firm the matters required to be discussed
by Statement on Auditing Standards No. 61, as amended
(AICPA, Professional Standards, Vol. 1 AU Section 380), as
adopted by the Public Company Accounting Oversight Board in
Rule 3200T.
The Audit Committee has received the written disclosures and the
letter from the auditors required by applicable requirements of
the Public Company Accounting Oversight Board regarding the
independent accounting firms communications with the Audit
Committee concerning independence, and has discussed with the
independent accounting firm its independence.
Based on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors that
Euronets audited consolidated financial statements be
included in the Annual Report on
Form 10-K
for the year ended December 31, 2009 for filing with the
Securities and Exchange Commission.
Audit Committee
M. Jeannine Strandjord, Chair
Thomas A. McDonnell
Andrew B. Schmitt
Eriberto R. Scocimara
The Audit Committee Report is not deemed soliciting
material and is not deemed filed with the SEC or subject
to Regulation 14A or the liabilities under Section 18
of the Exchange Act.
Fees of
the Companys Independent Auditors
KPMG LLP served as Euronets independent registered public
accounting firm as of and for the year ended December 31,
2009. As such, KPMG LLP performed professional services in
connection with the audit of the consolidated financial
statements of Euronet and the review of reports filed with the
SEC, and performed an audit of the effectiveness of our internal
control over financial reporting as of December 31, 2009.
Audit
Fees
Audit fees for financial statement audits were $1,881,529 during
2009 and $1,840,840 during 2008. Audit fees include fees for
services performed to comply with the standards of the Public
Company Accounting Oversight Board (United States) and Generally
Accepted Auditing Standards, including the recurring audit of
Euronets consolidated financial statements and fees
related to the audit of the effectiveness of our internal
control over financial reporting as required by the
Sarbanes-Oxley Act of 2002. This category also includes fees for
audits provided in connection with statutory filings or
procedures related to audit of income tax provisions and related
reserves, consents and assistance with and review of documents
filed with the SEC.
Audit-Related
Fees
Audit-related fees were $139,512 during 2009 and $67,000 during
2008. This category includes fees related to assistance in
financial due diligence related to mergers and acquisitions,
consultations regarding Generally Accepted Accounting
Principles, reviews and evaluations of the impact of new
regulatory pronouncements, general assistance with
implementation of new SEC guidance, audit services not required
by statute or regulation, audits of pension and other employee
benefit plans and the review of information systems and general
internal controls unrelated to the audit of the financial
statements or the audit of the effectiveness of internal control
over financial reporting as required by the Sarbanes-Oxley Act
of 2002.
31
Tax
Fees
Tax fees were $52,396 during 2009 and $42,633 during 2008. This
category includes fees associated with tax audits, tax
compliance, tax consulting, domestic and international tax
planning, tax planning on mergers and acquisitions,
restructurings, as well as other services related to tax
disclosure and filing requirements.
All
Other Fees
During each of 2009 and 2008, there were no fees paid to KPMG
LLP other than those described above.
The Audit Committee has concluded that the provision by KPMG LLP
of the services described under the captions Audit-Related
Fees, Tax Fees and All Other Fees
above is compatible with maintaining the independence of KPMG.
Audit
Committee Pre-Approval Policy
The Audit Committee has adopted policies that prohibit us from
engaging our independent registered public accounting firm to
perform any service that the independent registered public
accounting firm is prohibited by the securities laws from
providing. Such procedures require the Audit Committee to
pre-approve or reject any audit or non-audit services. The
Chairperson, with the assistance of Euronets Chief
Financial Officer, presents and describes at regularly scheduled
Audit Committee meetings all services that are subject to
pre-approval. The Audit Committee regularly examines whether the
fees for auditor services exceed estimates.
The Audit Committee pre-approved all services that KPMG LLP
rendered to Euronet for 2009.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our executive officers and Directors and any person or
entity who owns more than ten percent of a registered class of
our Common Stock or other equity securities to file with the SEC
certain reports of ownership and changes in ownership of our
securities. We prepare Section 16(a) forms on behalf of our
executive officers and Directors based on the information
provided by them. Based solely on a review of copies of reports
available to us and representations made to us that no other
reports were required, during 2009, our Directors, executive
officers and beneficial owners of greater than 10% of our Common
Stock complied with all applicable Section 16(a) filing
requirements during the year 2009, except that a Form 4 was
filed late on February 9, 2009 to report the exercise of
25,000 stock options by Roger Heinz on January 28, 2009.
In addition, several executive officers of the Company
previously reported performance-based restricted stock unit
awards upon the grant of the awards, and then reported any
subsequent forfeiture of portions of the awards on the
respective determination dates. To comply with existing SEC
interpretations regarding reporting of performance-based awards,
the executive officers are changing the reporting of these
awards to report the vesting of such awards. As a result of the
change in reporting, Mike Brown, Rick Weller and Jeff Newman are
each filing late one Form 4 reporting the prior vesting of
a portion of a performance-based restricted stock award, Juan
Bianchi is filing late one Form 4 reporting the prior
vesting of two tranches of performance-based restricted stock
awards and Gareth Gumbley is filing late one Form 4
reporting the prior vesting of three tranches of
performance-based restricted stock awards.
OTHER
MATTERS
Other
Business
The Board knows of no other business which may come before the
Annual Meeting. If, however, any other matters are properly
presented at the Annual Meeting, it is the intention of the
persons named in the accompanying proxy to vote, or otherwise
act, in accordance with their judgment on such matters.
Householding
If you and other residents at your mailing address own shares in
street name, your broker, bank or other nominee may have sent
you a notice that your household will receive only one annual
report and proxy statement for each company in which you hold
shares through that broker, bank or nominee. This practice is
32
called householding. If you did not respond that you
did not want to participate in householding, you are deemed to
have consented to that process. If these procedures apply to
you, your broker, bank or other nominee will have sent one copy
of our annual report to Stockholders, annual report on
Form 10-K
and proxy statement to your address. You may revoke your consent
to householding at any time by contacting your broker, bank or
other nominee. If you did not receive an individual copy of our
annual report to Stockholders, annual report on
Form 10-K,
and/or proxy
statement, we will send copies to you if you contact us by
writing to the Secretary of Euronet, 4601 College Boulevard,
Suite 300, Leawood, Kansas 66211 or by calling
(913) 327-4200.
If you and other residents at your address have been receiving
multiple copies of our annual report to Stockholders, annual
report on
Form 10-K
and proxy statement and desire to receive only a single copy of
these materials, you may contact your broker, bank or other
nominee or contact us at the above address or telephone number.
Proposals
for Inclusion in Euronets Proxy Statement
You may submit proposals for consideration at future Stockholder
meetings. For a Stockholder proposal to be considered for
inclusion in Euronets proxy statement for the annual
Stockholder meeting next year, the Secretary must receive the
written proposal at our principal executive offices no later
than December 10, 2010. Such proposals also must comply
with SEC regulations under
Rule 14a-8
regarding the inclusion of Stockholder proposals in
company-sponsored proxy materials. Proposals should be addressed
to:
Secretary
Euronet Worldwide, Inc.
4601 College Blvd
Suite 300
Leawood, Kansas 66211
Proposals Not
Intended for Inclusion in Euronets Proxy
Statement
For a Stockholder proposal that is not intended to be included
in Euronets proxy statement for the annual meeting next
year under
Rule 14a-8,
the Stockholder must provide the information required by our
Bylaws and give timely notice to the Secretary in accordance
with our Bylaws, which, in general, require that the notice be
received by the Secretary:
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not earlier than the close of business on January 19,
2011; and
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not later than the close of business on February 18, 2011.
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If the date of the Stockholder meeting is moved more than
30 days before or 60 days after the anniversary of
Euronets Annual Meeting for 2010, then notice of a
Stockholder proposal that is not intended to be included in
Euronets proxy statement under
Rule 14a-8
must be received not earlier than the close of business
120 days prior to the meeting and not later than the close
of business 90 days prior to the meeting, or if later, the
tenth day following the day on which the notice of the annual
meeting was first publicly disclosed. If Euronet intends to
exclude such a Stockholder proposal from its proxy statement, it
must file its reasons with the SEC no later than 80 calendar
days before the filing date of its definitive proxy statement
and simultaneously provide the Stockholder with a copy of
Euronets submission.
Recommendations
or Nominations of Individuals to Serve as Directors
You may propose Director candidates for consideration by the
Boards Nominating & Corporate Governance
Committee. Any such recommendations should include the
nominees name and qualifications for Board membership and
should be directed to the Secretary at the address of our
principal executive offices set forth above.
You may send a proposed Directors candidates name
and information to the Board at anytime. Generally, such
proposed candidates are considered at the Board meeting prior to
the next annual meeting subject to the advance notice provisions
in our Bylaws.
33
Deadline
to Propose or Nominate Individuals to Serve as
Directors
Our Bylaws permit Stockholders to nominate Directors for
election at an annual Stockholder meeting. To nominate a
Director, the Stockholder must deliver the information required
by our Bylaws.
To nominate an individual for election at the 2011 annual
Stockholder meeting, the Stockholder must give timely notice to
the Secretary in accordance with our Bylaws, which, in general,
require that the notice be received by the Secretary between the
close of business on January 19, 2011 and the close of
business on February 18, 2011, unless the date of the
Stockholder meeting is moved more than 30 days before or
60 days after the anniversary of our Annual Meeting for
2010, then the nomination must be must be received not earlier
than the close of business 120 days prior to the meeting
and not later than the close of business 90 days prior to
the meeting or, if later, the tenth day following the day on
which the 2011 annual meeting was first publicly disclosed.
Availability
of Euronets Bylaws
You may contact the Secretary at our principal executive offices
for a copy of the relevant Bylaw provisions regarding the
requirements for making Stockholder proposals and nominating
director candidates. A copy of our Bylaws is filed as
Exhibit 3.2 to our Current Report on
Form 8-K
filed on December 22, 2008.
By Order of the Board,
Jeffrey B. Newman
Executive Vice President,
General Counsel and Secretary
April 15, 2010
34
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000000000.000000 ext 000000000.000000 ext ADD 1 Electronic Voting Instructions ADD 2 ADD 3 You can
vote by Internet or telephone! ADD 4 Available 24 hours a day, 7 days a week! ADD 5 Instead of
mailing your proxy, you may choose one of the two voting ADD 6 methods outlined below to vote your
proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or
telephone must be received by 12:00 p.m., Central Time, on May 18, 2010. Vote by Internet Log on
to the Internet and go to www.envisionreports.com/EEFT Follow the steps outlined on the secured
website. Vote by telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories &
Canada any time on a touch tone telephone. There is NO CHARGE to you for the call. Using a black
ink pen, mark your votes with an X as shown in X Follow the instructions provided by the recorded
message. this example. Please do not write outside the designated areas. Annual Meeting Proxy Card
1234 5678 9012 345 3 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 A Proposals The
Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. 1. Election of
Directors: For Withhold For Withhold For Withhold 01 Michael J. Brown 02 Andrew B. Schmitt 03 -
M. Jeannine Strandjord + (Class I) (Class I) (Class I) For Against Abstain 2. To ratify the
appointment of KPMG as independent auditors 3. To transact such other business as may properly come
of the Company for the year ending December 31, 2010. before the meeting or any adjournment
thereof. B Non-Voting Items Change of Address Please print new address below. Meeting Attendance
Mark box to the right if you plan to attend the Annual Meeting. C Authorized Signatures This
section must be completed for your vote to be counted. Date and Sign Below Please sign exactly as
name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date
(mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box.
Signature 2 Please keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS
SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE
AND MR A SAMPLE AND NNNNNNN3 1 C V 0 2 4 9 1 9 1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND +
<STOCK#> 016ENB |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy Euronet Worldwide, Inc. FOR USE AT THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON MAY 19, 2010 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF EURONET WORLDWIDE, INC. The undersigned holder of shares of Common Stock of the
Company hereby appoints Michael J. Brown, Chairman of the Board and Chief Executive Officer, or
failing him, Jeffrey B. Newman, Executive Vice President and General Counsel, each with full power
of substitution, as proxy for the undersigned to attend, vote, and act for and on behalf of the
undersigned at the annual meeting of stockholders of the Company to be held on Wednesday, May 19,
2010 at 2:00 p.m. (Central time), at Courtyard Kansas City Overland Park/Convention Center, 11001
Woodson Avenue, Overland Park, KS 66211 USA, and at any postponements and adjournments thereof (the
Meeting), and hereby revokes any proxy previously given by the undersigned. If the proxy is not
dated, it shall be deemed to be dated on the date on which this proxy was mailed to the Company.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. THIS PROXY,
WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO SUCH DIRECTIONS ARE
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE
BOARD OF DIRECTORS AND FOR EACH PROPOSAL. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 19, 2010 This proxy statement
and our annual report to Stockholders for the year ended December 31, 2009 are available to you at
www.edocumentview.com/EEFT (CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE.) |