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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 18, 2006
Euronet Worldwide, Inc.
(Exact name of registrant as specified in its charter)
Delaware 001-31648 74-2806888
(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification No.)
4601 College Boulevard, Suite 300
Leawood, Kansas 66211
(Address of principal executive office)(Zip Code)
(913) 327-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
Stockholder Approval of the 2006 Stock Incentive Plan
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At the Annual Meeting of Stockholders of Euronet Worldwide, Inc. (the
"Company"), held on May 18, 2006 (the "Annual Meeting"), the Company's
stockholders approved, among other things, the Euronet Worldwide, Inc. 2006
Stock Incentive Plan (the "2006 Stock Incentive Plan").
The 2006 Stock Incentive Plan provides for grants of non-qualified stock
options and incentive stock options, restricted shares, restricted stock units,
stock appreciation rights, performance units and performance shares. The 2006
Stock Incentive Plan authorizes the issuance of up to 4,000,000 shares of the
Company's common stock in satisfaction of awards under the plan. To the extent
any award under the 2006 Stock Incentive Plan is exercised, cashed out,
terminates, expires or is forfeited without payment being made in the form of
shares of common stock, the shares subject to the award that were not so paid
will again be available for distribution under the 2006 Stock Incentive Plan. In
addition, except with respect to certain share limitations applicable to
incentive stock options, any shares of common stock that are used for full or
partial payment of the purchase price of shares of common stock with respect to
a stock option exercise and any shares of common stock withheld by the Company
for the purpose of satisfying any tax withholding obligation will automatically
become available under the 2006 Stock Incentive Plan and not counted against the
authorized limit.
Any director, key employee or independent contractor of Euronet or any
majority owned subsidiary will be eligible to receive awards under the 2006
Stock Incentive Plan. The objectives of the 2006 Stock Incentive Plan are to
strengthen key employees' commitment to the Company's success, to stimulate key
employees' efforts on the Company's behalf and to help the Company attract new
employees with the necessary education, skills and experience and to retain
existing key employees.
The foregoing description of the 2006 Stock Incentive Plan is qualified in
its entirety by reference to the actual terms of the 2006 Stock Incentive Plan,
which is attached hereto as Exhibit 10.1.
Stockholder Approval of the Euronet Executive Annual Incentive Plan
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At the Annual Meeting, the Company's stockholders also approved the Euronet
Worldwide, Inc. Executive Annual Incentive Plan (the "Performance Plan"). The
Performance Plan is designed to qualify bonuses paid under the Performance Plan
as "qualified performance-based compensation" for purposes of Section 162(m) of
the Internal Revenue Code. This enables the Company to exclude compensation
payable under the Performance Plan from the deduction limitations of Section
162(m). The purposes of the Performance Plan are to promote the Company's
success; to provide designated executive officers with an opportunity to receive
incentive compensation dependent upon that success; to attract, retain and
motivate such individuals; and to provide awards that are "qualified
performance-based" compensation under Section 162(m).
The Compensation Committee of the Company's Board of Directors will
administer the Performance Plan. Executive officers selected by the committee
are eligible to participate in the Performance Plan. Payment of compensation to
participants is conditioned upon the attainment of pre-established performance
goals measured over a performance period designated by the committee. A
performance period may be one or more periods of time over which the attainment
of one or more performance goals will be measured for the purposes of
determining a participant's right to payment in respect of an award under the
Performance Plan. The performance goals applicable to a performance period must
be established in writing by the committee no later than the earlier of (i) 90
days after the start of the performance period, or (ii) the date upon which 25%
of the performance period has elapsed.
The compensation amount that is payable to a participant in a performance
period will be determined in accordance with a pre-established objective award
formula based on the achievement of
performance goals. The committee has the discretion to reduce or eliminate, but
cannot increase, any amounts otherwise payable under the Performance Plan.
Incentive payments under the Performance Plan may be payable in cash or in
an equivalent number of shares of Company common stock issued pursuant to and
under one or more of the Company's stockholder approved stock incentive plans.
The maximum amount of incentive compensation payable under the Performance Plan
to any participant with respect to any fiscal year (or a portion thereof)
contained within a performance period is the lesser of 500% of the participant's
base annual salary as in effect as of the last day of such Performance Plan or
$4,000,000.
The foregoing description of the Performance Plan is qualified in its
entirety by reference to the actual terms of the Performance Plan, which is
attached hereto as Exhibit 10.2.
The committee previously approved the 2006 annual incentive compensation
program pursuant to the Performance Plan. For participants, target bonuses
expressed as a percentage of the participant's base salary were established by
the committee to be paid to the participant if, for Messrs. Brown, Henry, Weller
and Newman, specified levels of adjusted earnings per share were achieved, and
for Messrs. Bergman and Romney, specified levels of operating profits for the
participant's respective division were achieved. The committee established
target annual incentives as percentages of base salary for each of the following
participants as follows:
Percentage of Base
Name Salary Bonus Targets
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Michael J. Brown, Chairman of the Board
of Directors and Chief Executive Officer 50%, 100%, 200%
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Daniel R. Henry, President and Chief
Operating Officer 50%, 100%, 200%
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Rick L. Weller, Executive Vice President
and Chief Financial Officer 30%, 60%, 120%
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Jeffrey B. Newman, Executive Vice
President and General Counsel 30%, 50%, 80%
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Miro I. Bergman, Executive Vice
President and Chief Operating Officer -
Prepaid Processing Division 50%, 100%, 150%
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John Romney, Executive Vice President,
Managing Director, EMEA - EFT Processing
Division 50%, 100%, 150%
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Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description of Exhibit
10.1 Euronet Worldwide, Inc. 2006 Stock Incentive Plan (filed as
Appendix 1 to the Company's proxy statement filed with the
Securities and Exchange Commission on April 10, 2006, and
incorporated by reference herein)
10.2 Euronet Worldwide, Inc. Executive Annual Incentive Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
EURONET WORLDWIDE, INC.
By: /s/ Jeffrey B. Newman
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Jeffrey B. Newman,
Executive Vice President and General
Counsel
Date: May 24, 2006
EXHIBIT INDEX
Exhibit No. Description of Exhibit
10.1 Euronet Worldwide, Inc. 2006 Stock Incentive Plan (filed as
Appendix 1 to the Company's proxy statement filed with the SEC
on April 10, 2006, and incorporated by reference herein)
10.2 Euronet Worldwide, Inc. Executive Annual Incentive Plan.
EURONET WORLDWIDE, INC.
EXECUTIVE ANNUAL INCENTIVE PLAN
1. OBJECTIVE
The Euronet Worldwide, Inc. Executive Annual Incentive Plan (the "Incentive
Plan") is designed to reward value creation by providing competitive incentives
for the achievement of annual financial performance goals. By providing
market-competitive target awards, the Plan supports the attraction and retention
of senior executive talent critical to achieving the strategic business
objectives of Euronet Worldwide, Inc (the "Corporation"). The Incentive Plan is
also intended to secure the full deductibility of bonus compensation payable to
the Corporation's Chief Executive Officer and the four highest compensated
executive officers (collectively the "Covered Employees") whose compensation is
required to be reported in the Corporation's proxy statement and all
compensation payable hereunder to such persons is intended to qualify as
"performance-based compensation" as described in Section 162(m)(4)(C) of the
Internal Revenue Code of 1986, as amended (the "Code").
2. ELIGIBILITY AND PARTICIPATION
Only those executive officers of the Corporation who are selected by the
Compensation Committee (the "Committee") of the Corporation's Board of Directors
(the "Board") shall be eligible to participate in the Incentive Plan. Prior to
or at the time performance objectives are established for an "Incentive Period",
as defined below, the Committee will designate in writing which executive
officers and key employees among those who may be eligible to participate in the
Incentive Plan shall in fact be participants for such Incentive Period.
3. PLAN YEAR, INCENTIVE PERIODS AND INCENTIVE OBJECTIVES
The fiscal year of the Incentive Plan (the "Plan Year") shall be the fiscal
year beginning on January 1 and ending on December 31. The performance period
(the "Incentive Period") with respect to which target awards and bonuses may be
payable under the Incentive Plan shall generally be the Plan Year, provided that
the Committee shall have the authority to designate different Incentive Periods
under the Incentive Plan.
Within the first ninety (90) days of each Incentive Period the Committee
shall establish in writing, with respect to such Incentive Period, one or more
performance goals, a specific target objective or objectives with respect to
such performance goals and an objective formula or method for computing the
amount
of bonus compensation payable to each participant under the Incentive Plan if
the performance goals are attained. Notwithstanding the foregoing sentence, for
any Incentive Period, such goals, objectives and compensation formulae or
methods must be (i) established within that number of days, beginning on the
first day of such Incentive Period, which is no more than twenty-five percent
(25%) of the total number of days in such Incentive Period and (ii) established
such that the outcome of the goal or objective is substantially uncertain at the
time the Committee actually establishes the goal or objective.
Incentive goals shall be based upon one or more of the following business
criteria for the Corporation as a whole or any of its subsidiaries, operating
divisions or other operating units:
(i) Earnings (either in the aggregate or on a per-Share basis);
(ii) Growth or rate of growth in earnings (either in the aggregate or on
a per-Share basis);
(iii) Net income or loss (either in the aggregate or on a per-Share
basis);
(iv) Cash flow provided by operations, either in the aggregate or on
a per-Share basis;
(v) Growth or rate of growth in cash flow (either in the aggregate or on
a per-Share basis);
(vi) Free cash flow (either in the aggregate on a per-Share basis);
(vii) Reductions in expense levels, determined either on a Corporation-
wide basis or in respect of any one or more business units;
(viii) Operating and maintenance cost management and employee productivity;
(ix) Stockholder returns (including return on assets, investments,
equity, or gross sales);
(x) Return measures (including return on assets, equity, or sales);
(xi) Growth or rate of growth in return measures (including return on
assets, equity, or sales);
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(xii) Share price (including attainment of a specified per-Share price
during the Incentive Period; growth measures and total stockholder
return or attainment by the Shares of a specified price for a
specified period of time);
(xiii) Strategic business criteria, consisting of one or more objectives
based on meeting specified revenue, market share, market
penetration, geographic business expansion goals, objectively
identified project milestones, production volume levels, cost
targets, and goals relating to acquisitions or divestitures; and/or
(xiv) Achievement of business or operational goals such as market share
and/or business development;
provided that applicable incentive goals may be applied on a pre- or
post-tax basis; and provided further that the Committee may, when the applicable
incentive goals are established, provide that the formula for such goals may
include or exclude items to measure specific objectives, such as losses from
discontinued operations, extraordinary gains or losses, the cumulative effect of
accounting changes, acquisitions or divestitures, foreign exchange impacts and
any unusual, nonrecurring gain or loss.
Target award levels are approved by the Committee and may be a percentage
of the executive's base salary based on organizational responsibilities and
market-compilation bonus levels based on industry data. In addition, to the
extent consistent with the goal of providing for deductibility under Section
162(m) of the Code, performance goals may be based upon a participant's
attainment of personal objectives with respect to any of the foregoing
performance goals: negotiating transactions and sales, business unit/department
performance, profit margins, reduction of certain accounts receivable or
achievement of subsidiary or departmental budgets or developing long-term
business goals. Measurements of the Corporation's or a participant's performance
against the performance goals established by the Committee shall be objectively
determinable and, unless otherwise established by the Committee when the
incentive goals are established, to the extent they are expressed in standard
accounting terms, they shall be determined according to generally accepted
accounting principals ("GAAP") as in existence on the date on which the
performance goals are established and without regard to any changes in such
principles after such date. Individual incentive awards reflect a mix of the
Corporation's and business unit/department performance along with individual
discretionary factors; the current actual mix for each executive will be
determined based upon his/her role and contribution to the organization.
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Due to the possibility that the specific targets related to a specific
performance goal or objective may be confidential commercial or business
information, and the release of which to the public may have an adverse affect
on the Corporation, such information has been intentionally omitted from the
Plan as confidential information.
4. DETERMINATION OF BONUS AWARDS
As soon as practicable after the end of each Incentive Period, the
Committee shall certify in writing to what extent the Corporation and the
participants have achieved the performance goals or goals for such Incentive
Period, including the specific target objective or objectives and the
satisfaction of any other material terms of the bonus award and the Committee
shall calculate the amount of each participant's bonus for such Incentive Period
based upon the performance goals, objectives and computation formulae or methods
for such Incentive Period. The Committee shall have no discretion to increase
the amount of any participant's bonus as so determined, but may reduce the
amount of or totally eliminate such bonus, if it determines, in its absolute and
sole discretion, that such a reduction or elimination is appropriate in order to
reflect the participant's performance or unanticipated factors.
No participant's bonus for any Plan Year shall exceed the lesser of
500% of the participant's base annual salary as in effect as of the
last day of such Plan Year or $4,000,000.00.
5. PAYMENT OF AWARDS
Approved bonus awards shall be payable by the Corporation to each
participant, or to his estate in the event of his death, as soon as practicable
after the end of each Incentive Period and after the Committee has certified in
writing that the relevant performance goals were achieved. Bonus awards may be
payable in cash or in an equivalent number of shares of the Corporation's common
stock issued pursuant to and under one or more of the Corporation's
stockholder-approved stock incentive plans.
A bonus award that would otherwise be payable to a participant who is not
employed by the Corporation or one of its subsidiaries on the last day of a
Incentive Period shall be prorated, or not paid, in accordance with rules and
regulations adopted by the Committee for the administration of the Incentive
Plan.
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6. OTHER TERMS AND CONDITIONS
Unless otherwise permitted under Section 162(m) of the Code, no bonus
awards shall be paid under the Incentive Plan unless and until the material
terms (within the meaning of Section 162(m)(4)(C) of the Code) of the Incentive
Plan, including the business criteria described above in Section 3 of the
Incentive Plan, are disclosed to the Corporation's stockholders and are approved
by the stockholders by a majority of votes cast in person or by proxy (including
abstentions to the extent abstentions are counted as voting under applicable
state law). The Incentive Plan will submitted to the stockholders for reapproval
if the business criteria stated above in Section 3 are materially changed and,
in any event, will be submitted to be reapproved by stockholders after five
years since the last time stockholder approval was received.
No person shall have any legal claim to be granted an award under the
Incentive Plan and the Committee shall have no obligation to treat participants
uniformly. Except as may be otherwise required by law, bonus awards under the
Incentive Plan shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution,
or levy of any kind, either voluntary or involuntary. Bonuses awarded under the
Incentive Plan shall be payable from the general assets of the Corporation and
no participant shall have any claim with respect to any specific assets of the
Corporation.
Neither the Incentive Plan nor any action taken under the Incentive Plan
shall be construed as giving any employee the right to be retained in the employ
of the Corporation or any subsidiary or to maintain any participant's
compensation at any level.
The Corporation or any of its subsidiaries may deduct from any award any
applicable withholding taxes or any amounts owed by the executive of the
Corporation or any of its subsidiaries.
7. ADMINISTRATION
All members of the Committee shall be persons who qualify as "outside
directors" as defined under Section 162(m) of the Code. Until changed by the
Board, the Committee of the Board shall constitute the Committee hereunder.
The Committee shall have full power and authority to administer and
interpret the provisions of the Incentive Plan and to adopt such rules,
regulations, agreements, guidelines and instruments for the administration of
the Incentive
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Plan and for the conduct of its business as the Committee deems necessary or
advisable.
Except with respect to matters which under Section 162(m)(4)(C) of the Code
are required to be determined in the sole and absolute discretion of the
Committee, the Committee shall have full power to delegate to any officer or
employee of the Corporation the authority to administer and interpret the
procedural aspects of the Incentive Plan, subject to the Incentive Plan's terms,
including adopting and enforcing rules to decide procedural and administrative
issues.
The Committee may rely on opinions, reports or statements of officers or
employees of the Corporation or any subsidiary thereof and of company counsel
(inside or retained counsel), public accountants and other professional or
expert persons.
The Board reserves the right to amend or terminate the Incentive Plan in
whole or in part at any time. Unless otherwise prohibited by applicable law, any
amendment required to conform the Incentive Plan to the requirements of Section
162(m) of the Code may be made by the Committee. No amendment may be made to the
class of individuals who are eligible to participate in the Incentive Plan, the
performance criteria specified in Section 3 or the maximum bonus payable to any
participant without stockholder approval unless stockholder approval is not
required in order for bonuses paid to Covered Employees to constitute qualified
performance-based compensation under Section 162(m) of the Code.
No member of the Committee shall be liable for any action taken or omitted
to be taken or for any determination made by him or her in good faith with
respect to the Incentive Plan, and the Corporation shall indemnify and hold
harmless each member of the Committee against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a claim with
the approval of the Committee) arising out of any fact or omission in connection
with the administration or interpretation of the Incentive Plan, unless arising
out of such person's own fraud or bad faith.
The place of administration of the Incentive Plan shall be in the State of
Kansas and the validity, construction, interpretation, administration and effect
of the Incentive Plan and the rules, regulations and rights relating to the
Incentive Plan, shall be determined solely in accordance with the laws of the
State of Delaware.
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