<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EURONET SERVICES 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):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] 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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
EURONET SERVICES INC.
HORVAT U. 14-24
1027 BUDAPEST
HUNGARY
011-361-224-1000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 8, 1999
The annual meeting of stockholders of Euronet Services Inc., a Delaware
corporation (the "Company"), will be held on Thursday, July 8, 1999 at 11:00
a.m. (Central time), at the Marriott Overland Park, 10800 Metcalf Avenue,
Overland Park, Kansas 66210, USA, for the purpose of electing the Company's
directors and transacting such other business as may properly come before the
meeting and at any adjournment thereof.
The Board of Directors (the "Board") has fixed the close of business on May
25, 1999, as the record date for determination of stockholders entitled to
notice of, and to vote at, the annual meeting and at any adjournment thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND
DATE YOUR PROXY AND MAIL IT IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AND VOTE YOUR
SHARES PERSONALLY.
By Order of the Board
Jeffrey B. Newman
Secretary and General Counsel
June 7, 1999
<PAGE>
EURONET SERVICES INC.
HORVAT U. 14-24
1027 BUDAPEST
HUNGARY
011-361-224-1000
-----------------
PROXY STATEMENT
-----------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 8, 1999
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Euronet Services Inc., a
Delaware corporation (the "Company"), for use at the annual meeting of
stockholders to be held on Thursday, July 8, 1999, at 11:00 a.m. (Central
time), at the Marriott Overland Park, 10800 Metcalf Avenue, Overland Park,
Kansas 66210, USA, and at any adjournment thereof (the "Meeting").
Stockholders at the close of business on May 25, 1999 (the "Record Date") are
entitled to notice of, and to vote at, the 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 Meeting, a quorum which is composed of
holders of a majority of the outstanding shares of Common Stock must be
represented by proxy or in person at the Meeting. On May 25, 1999, there were
15,213,453 shares of Common Stock outstanding.
Shares of Common Stock represented by valid proxies received by the Company in
time for the 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 Meeting and voting in person or by filing with the
Company's secretary an instrument of revocation or a duly executed proxy
bearing a later date.
Votes cast by proxy or in person at the Meeting will be tabulated by the judge
of elections appointed for the Meeting. The judge of elections will treat
abstentions as shares of Common Stock that are present and entitled to be
voted for purposes of determining the presence of a quorum but as not voted
for purposes of determining the approval of any matter submitted to
stockholders for a vote. If a broker indicates on a proxy that such broker
does not have discretionary authority as to certain shares of Common Stock to
vote on a particular matter, such shares of Common Stock will not be
considered as present and entitled to vote with respect to that matter.
This proxy statement, the accompanying proxy, and the Company's annual report
to stockholders for the year ended December 31, 1998 (the "Annual Report"),
were first sent or given to stockholders on or about June 7, 1999. ADDITIONAL
COPIES OF THE ANNUAL REPORT, NOT INCLUDING EXHIBITS, WILL BE FURNISHED WITHOUT
CHARGE TO ANY STOCKHOLDER UPON WRITTEN REQUEST TO: JEFFREY B. NEWMAN AT THE
COMPANY'S ADDRESS SET FORTH ABOVE. EXHIBITS TO THE ANNUAL REPORT WILL BE
FURNISHED TO STOCKHOLDERS UPON WRITTEN REQUEST AND PAYMENT OF AN APPROPRIATE
PROCESSING FEE.
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
As of the close of business on May 25, 1999, the Company had 15,213,453 shares
of Common Stock issued and outstanding. The following table sets forth, to the
Company's knowledge as of May 25, 1999, based on filings with the Securities
and Exchange Commission, the beneficial ownership of Common Stock by (i) each
person or entity beneficially owning more than 5% of the shares of the
Company's Common Stock, (ii) each director, each nominee, and certain named
executive officers, individually, and (iii) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Beneficial ownership
------------------------
Number of Percentage of
STOCKHOLDER shares(1) outstanding(1)
- ----------- --------- --------------
<S> <C> <C>
Directors and Named Executive Officers
Michael J. Brown(2)............................... 3,063,202 20.2%
Daniel R. Henry(3)................................ 759,619 5.0%
Jeffrey B. Newman(4).............................. 28,000 *
Bruce S. Colwill(5)............................... 28,832 *
Anthony Ficarra(6)................................ 8,000 *
Dennis H. Depenbusch(7)........................... 289,905 1.9%
Steven J. Buckley(8).............................. 1,000 *
Nicholas B. Callinan(9)........................... 5,898 *
Thomas A. McDonnell(10)........................... 1,000 *
Andrzej Olechowski(11)............................ 2,400 *
Eriberto R. Scocimara(12)......................... 1,000 *
All directors and executive officers as a group (8
persons)........................................... 4,188,856 27.5%
Five Percent Holders:
DST Systems, Inc.(10)............................. 1,683,597 11.1%
333 West 11th Street
Kansas City, Missouri 64105-1594
Hungarian-American Enterprise Fund(12)............ 1,008,702 6.6%
East Putman Avenue
Greenwich, Connecticut 06830
Poland Investment Fund L.P.(9)(13)................ 737,268 4.9%
Corporation Trust Center
1209 Orange Street,
Wilmington, Delaware 19801
Advent Partners L.P.(9)(13)....................... 29,491 *
101 Federal Street
Boston, Massachusetts 02110
Advent Private Equity Fund--Central Europe
L.P.(9)(13)...................................... 707,777 4.7%
123 Buckingham Palace Road
London SW1 9SL UK
Hungarian Private Equity Fund L.P.(9)(13)......... 294,910 1.9%
101 Federal Street
Boston, Massachusetts 02110
Poland Partners L.P.(8)........................... 1,769,446 11.7%
c/o Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
</TABLE>
- --------
* The percentage of shares of Common Stock beneficially owned does not exceed
one percent of the outstanding Shares.
2
<PAGE>
(1) Calculations of percentage of beneficial ownership assumes the exercise by
only the respective named stockholder of all options for the purchase of
shares of Common Stock held by such stockholder which are exercisable
within 60 days of May 25, 1999.
(2) Includes an aggregate of 851,323 shares of Common Stock issuable pursuant
to options exercisable within 60 days of May 25, 1999.
(3) Includes an aggregate of 777,707 shares of Common Stock issuable pursuant
to options exercisable within 60 days of May 25, 1999.
(4) Includes an aggregate of 28,000 shares of Common Stock issuable pursuant
to options exercisable within 60 days of May 25, 1999.
(5) Includes an aggregate of 28,832 shares of Common Stock issuable pursuant
to options exercisable within 60 days of May 25, 1999.
(6) Includes an aggregate of 8,000 shares of Common Stock issuable pursuant to
options exercisable within 60 days of May 25, 1999.
(7) Includes an aggregate of 289,905 shares of Common Stock issuable pursuant
to options exercisable within 60 days of May 25, 1999.
(8) Steven Buckley is also the President of Poland Partners L.P.
(9) Mr. Callinan's shares are held indirectly through his interest in Advent
Partners L.P. Mr. Callinan is also Senior Vice President and Managing
Director for Central and Eastern Europe of Advent International
Corporation.
(10) Thomas A. McDonnell is also the President of DST Systems, Inc.
(11) Includes an aggregate of 1,400 shares of Common Stock issuable pursuant
to options exercisable within 60 days of May 25, 1999.
(12) Eriberto R. Scocimara is also the President and Chief Executive Officer
of the Hungarian-American Enterprise Fund.
(13) These entities are affiliated through Advent International Corporation of
which Mr. Callinan is Senior Vice President and Managing Director for
Central and Eastern Europe. Such entities own in the aggregate 1,769,446
shares, which constitute approximately 11.7% of the outstanding shares.
3
<PAGE>
ELECTION OF DIRECTORS
The Directors, Executive Officers and key employees of the Company are as
follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Directors
Michael J. Brown(1)... 42 Chairman, President and Chief Executive Officer
Daniel R. Henry....... 33 Director, Chief Operating Officer
Thomas A.
McDonnell(1)(2)(3)... 53 Director
Nicholas B. Callinan
(1)(2)............... 52 Director
Steven J. Buckley
(1)(2)(3)............ 43 Director
Eriberto R.
Scocimara............ 63 Director
Andrzej Olechowski.... 51 Director
Executive Officers
Daniel C. Stevens(4).. 43 Chief Financial Officer and Chief Accounting Officer
Jeffrey B. Newman..... 44 Vice President and General Counsel
Anthony M. Ficarra.... 55 Chief Information Officer
Ronald Ferguson(5).... 49 President--ARKSYS Systems Inc.
Dennis H. Depenbusch.. 35 Vice President
Other Key Employees
Miro I. Bergman....... 36 Regional Director--Central Europe
Thierry Michel........ 36 Regional Director--Western Europe
Roger Heinz........... 38 Managing Director--Germany
</TABLE>
- --------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Stock Option Committee
(4) Mr. Stevens was appointed Chief Financial Officer effective April 20,
1999. Mr. Bruce Colwill was Chief Financial Officer until his resignation
on February 28, 1999. Mr. Richard Halka was Acting Chief Financial Officer
from February 28, 1999 until April 20, 1999, and is continuing with the
Company as European Finance Director.
(5) Appointed Vice President of the Company effective April 20, 1999.
Classified Board
The Company has a classified Board of Directors consisting of two directors
with terms expiring in 1999, three directors with terms expiring in 2000 and
two directors with terms expiring in 2001, who will serve until 1999, 2000 and
2001, respectively, and until their respective successors are elected and
qualified. Mr. Brown and Mr. Henry are employee directors. The remaining five
directors are independent directors. Each year, two directors (three in one
year) are elected for a full term of three years to succeed those directors
whose terms expire in such year.
The election of each director requires an affirmative vote by the holders of a
majority of the outstanding shares of Common Stock present and entitled to be
voted at the Meeting. Mr. Nicholas B. Callinan and Mr. Eriberto R. Scocimara
are the directors who have terms expiring in 1999, and they are the persons
named in the proxy solicited by the Board that the Board will vote in favor of
electing, unless the proxy is marked otherwise. If elected, the nominees will
serve until their terms expire in 2001. If either nominee is unable to serve
as a director, the persons acting under the proxy may vote the proxy for the
election of a substitute. It is not currently contemplated that either nominee
will be unable to serve.
The following information relates to the nominees listed above, to the other
directors of the Company whose terms of office will extend beyond 1999, and to
key employees of the Company. All directors have held their
4
<PAGE>
present positions for at least five years, except as otherwise indicated. THE
BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE NOMINEES LISTED BELOW.
Nominees
Nicholas B. Callinan has been a Director of the Company since its
incorporation in December 1996 and he previously served on the board of
Euronet Holding N.V. From 1993 he served as Senior Vice President and Managing
Director for Central and Eastern Europe of Advent International Corporation,
the ultimate general partner of private equity funds which are a shareholder
of the Company. In 1997, he was appointed Managing Director of Emerging
Markets for Advent International Corporation. From 1983 to 1993, he was
founder and Chief Executive Officer of Western Pacific Management & Investment
Company, which later became the Advent Group of Companies. Mr. Callinan has a
B.E. in Civil Engineering and an M.B.A. from the University of Melbourne. Mr.
Callinan's term as Director of the Company will expire in May 1999, or when
his successor is duly elected and qualified at the next annual meeting of
stockholders.
Eriberto R. Scocimara has been a Director of the Company since its
incorporation in December 1996 and he previously served on the boards of
Euronet's predecessor companies. Since April 1994 Mr. Scocimara has served as
President and Chief Executive Officer of the Hungarian-American Enterprise
Fund, a private company that is funded by the U.S. government and invests in
Hungary and is also a shareholder of the Company. Since 1984 he has been the
President of Scocimara & Company, Inc., an investment management company. Mr.
Scocimara is currently a director of the Hungarian-American Enterprise Fund,
Carlisle Companies, Roper Industries, Quaker Fabrics and several privately-
owned companies. He has a Licence de Science Economique from the University of
St. Gallen, Switzerland, and an M.B.A. from Harvard University. His term as a
Director of the Company will expire in May 1999 or when his successor is duly
elected and qualified at the next annual meeting of stockholders.
Other Directors
Michael J. Brown is one of the founders of the Company and has served as its
Chief Executive Officer since 1994. In 1979 Mr. Brown founded Innovative
Software, a computer software company that was merged with Informix in 1988.
During this period, Innovative Software conducted three public offerings of
its shares. 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.
Annual revenues of Informix had grown to $170 million by the time Mr. Brown
left Informix in 1990. In 1993 Mr. Brown was a founding investor of Visual
Tools, Inc., a company that writes and markets component software for the
growing Visual Basic and Visual C++ developer market. Visual Tools, Inc. was
acquired by Sybase Software in February 1996. 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 1996. Mr. Brown has been a Director of the Company since its
incorporation in December 1996 and he previously served on the boards of
Euronet's predecessor companies. Mr. Brown's term will expire in July 2001.
Mr. Brown is married to the sister of Mr. Henry's wife.
Daniel R. Henry founded the predecessor of the Company with Michael Brown in
1994 and is serving as Chief Operating Officer of the Company. Mr. Henry
divides his time between Budapest and Kansas City, and he oversees the daily
operations of the Company's European subsidiaries. Mr. Henry also is
responsible for the expansion of the Company into other countries and the
development of new markets. Prior to joining the Company, Mr. Henry was a
commercial real estate broker for five years in the Kansas City metropolitan
area where he specialized in the development and leasing of premiere office
properties. Mr. Henry received a B.S. in Business Administration from the
University of Missouri--Columbia in 1988. Mr. Henry has been a Director of the
Company since its incorporation in December 1996 and he previously served on
the boards of Euronet's predecessor companies. His term as Director of the
Company will expire in May 2000. Mr. Henry is married to the sister of Mr.
Brown's wife.
5
<PAGE>
Thomas A. McDonnell has been a Director of the Company since its incorporation
in December 1996 and he previously served on the boards of Euronet's
predecessor companies. From 1973 to September 1995, he served as Treasurer of
DST Systems, Inc. Since October 1984 he has served as Chief Executive Officer
and since January 1973 (except for a 30 month period from October 1984 to
April 1987) he has served as President of such company. From February 1987 to
October 1995, he served as Executive Vice President and from 1983 to November
1995 he served as a director of Kansas City Southern Industries. From December
1989 to October 1995, he served as a director of The Kansas City Southern
Railway Company. From October 1994 to April 1995 he served as President and
from 1992 to September 1995 as director of Berger Associates, Inc. From 1994
to January 1997, Mr. McDonnell was a director of First of Michigan Capital
Corporation. He is currently a director of Informix, BHA Group, Inc., DST
Systems Inc., Cerner Corporation, Computer Science Corporation and Janus
Capital Corporation. Mr. McDonnell has a B.S. in Accounting from Rockhurst
College and an M.B.A. from the Wharton School of Finance. Mr. McDonnell's term
as Director of the Company will expire in May 2000.
Steven J. Buckley has been a Director of the Company since its incorporation
in December 1996 and he previously served on the boards of Euronet's
predecessor companies. In April 1994 he was a co-founder of Poland Partners
L.P., a venture capital fund for investment in Poland and since that time
April 1994 he has served as President and Chief Executive Officer of Poland
Partners Management Company, the advisor of such fund. From June 1990 to April
1994, he was a founder and director of Company Assistance Ltd., a business
advisory firm in Poland. He has a B.A. in Political Science from Stanford
University and an M.B.A. from Harvard University. Mr. Buckley's term as
Director of the Company will expire in May 2000.
Andrzej Olechowski has served as a Director of the Company since its
incorporation in December 1996. 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 Walesa. From 1991 to 1992, he was
Secretary of State in the Ministry of Foreign Economic Relations and from 1989
to 1991 was Deputy Governor of the National Bank of Poland. At present Dr.
Olechowski is Chairman of Central Europe Trust, Poland, a consulting firm.
Since 1994, he has served as Chairman of the City Council in Wilanow, a
district of Warsaw. His memberships include a number of public policy
initiatives as well as International Advisory Boards of Goldman Sach
International, Creditanstalt, Banca Nazionale del Lavoro, International
Finance Corporation, Textron and 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. Mr. Olechowski's term will expire in
July 2001.
Executive Officers
Daniel C. Stevens joined the company as CFO effective April 20, 1999. From
June 1998 until the date he joined the Company, Mr. Stevens was a partner in
Rochdale Principals, an agricultural finance venture. From January 1997 to
June 1998, he was Senior Vice-President, Chief Financial and Risk Officer for
U.S. Central Credit Union, the principal financial intermediary and
technology, operational and payment provider for the U.S. credit union
industry. Mr. Stevens held various positions with ABN AMRO in their North
American headquarters from November 1993 until January 1997; his final
position was Senior Vice President and Chief Financial Officer, USA. Prior to
that, he was First Vice President and Chief Financial Officer of the US
operations of Caisse Nationale de Credit Agricole. Mr. Stevens started his
financial career with Arthur Andersen & Co., Chicago. He holds a B.A. in
English/Communications from Loyola University and a M.S.A. from DePaul
University. Mr. Stevens is a Certified Public Accountant.
Jeffrey B. Newman joined the Company as Vice President and General Counsel on
January 31, 1997. Prior to this, he practiced law in Paris with the law firm
of Salans Hertzfeld & Heilbronn and then with the Washington, D.C. based law
firm of Arent Fox Kintner Plotkin & Kahn, PLLC, of which he was a partner
since 1993. He established the Budapest office of Arent Fox Kintner Plotkin &
Kahn, PLLC in 1991 and has resided in Budapest since that time. He is a member
of the Virginia, District of Columbia and Paris bars. He received a B.A. in
Political Science and French from Ohio University and law degrees from Ohio
State University and the University of Paris.
6
<PAGE>
Anthony M. Ficarra joined the company as Chief Information Officer in January
1998. Prior to this, he was with Bisys Inc. from 1983 to 1997 as Director
National Operations (Banking), Vice-President (Electronic Financial Services),
Eastern Region General Manager, and finally Senior Vice President/Chief
Information Officer. From 1971 to 1983, he worked with Tymshare Inc. with the
final post of Regional Vice President of the Dynatax Division. From 1969 to
1971, he was with Brandon Applied Systems in the final post of Executive Vice
President/General Manager. He also previously worked with Thiokol Chemical
Corporation from 1962 to 1966. Mr. Ficarra has a B.B.A. in Management from
Florida International University.
Ronald Ferguson joined the Company as President of Arksys in December 1998.
Prior to this he was President of Bankline MidAmerica, Inc., from mid 1997.
Mr. Ferguson was Vice President of Marketing for AeroComm, Inc. for a period
of three years and also was principal of Ferguson Group, a consulting company
involved with technology based hardware and software firms. During the period
from 1984 to 1990, Mr. Ferguson was Vice President of Marketing for Innovative
Software, Inc. which was later acquired by Informix Software, Inc. where he
was also Vice President of Marketing. Prior to Innovative Software, he was
Director of Financial Services Marketing for United Computing Services from
1981 to 1984. He also was President of Dynabank Corporation from 1976 to 1981
and started his career with the First National Bank in Lawrence Kansas in
1973. Mr. Ferguson has a BS in Business and an MBA from the University of
Kansas.
Key Employees
Miro I. Bergman joined the Company in 1997 and is currently Regional Manager
for Central Europe and Managing Director of the Company's Czech Republic
operations. Prior to joining Euronet, he established a Colorado based company
involved in international trade. From 1992 to 1996, Mr. Bergman was with First
Bank System as Vice President responsible for the bank's off-premises ATM
business of over 1,200 ATMs and served as a Manager of new co-brand card
initiatives. From 1988 to 1992, Mr. Bergman worked for Citicorp--Diners Club
in various card management and marketing positions. Mr. Bergman received a
B.S. in Business Administration from the University of New York at Albany in
1984 and an M.B.A from Cornell University in 1988.
Thierry Michel joined the Company in November 1997 and is currently Regional
Manager for Europe and Managing Director of Euronet's French subsidiary, EFT
Services France S.A.S. Prior to joining the Company, he was Vice President of
Business Development at GE Capital-Sovac from 1994 to 1997. From 1990 to 1993,
he was Vice President of Marketing and Sales at Robeco and also Chief
Information Officer from 1987 to 1990. From 1985 to 1987, he was Chief
Information Officer at American Express in France. Mr. Michel received a
Masters degree in General Engineering from l'Ecole polytechnique in 1983, a
Masters degree in Systems and Telecommunications from l'Ecole National
Superieure de Telecommunication in 1985. In 1984 he received a Ph.D. in
Economics from l'Universite de Paris.
Roger Heinz joined the Company as Managing Director of the Euronet's German
subsidiary, Euronet Services GmbH, in July 1997. From 1985 to 1997, Mr. Heinz
was with NCR Germany and NCR Poland as Sales Manager and Sales and Operations
Director.
7
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board held six (6) meetings (including telephonic meetings) during 1998.
During 1998, each director attended at least 75% of the aggregate of the total
number of meetings of the Board (held during the period for which he was a
director) and the total number of meetings held by all Board committees on
which he served (during the periods that he served as a member). The Board has
a standing audit committee, a standing compensation committee and a standing
stock option committee. The Board does not have a standing nominating
committee.
The Audit Committee, which is comprised solely of independent directors, held
two (2) meetings in 1998. The Audit Committee makes recommendations concerning
the engagement of independent accountants, reviews with the independent
accountants the plans and results of the audit engagement, approves
professional services provided by the independent accountants, reviews the
independence of the independent accountants, considers the range of the audit
and non-audit fees and reviews the adequacy of the Company's internal
accounting controls. In addition, the Audit Committee is responsible for
reviewing and overseeing transactions between the Company and related parties
or affiliated companies. Thomas A. McDonnell, Steven J. Buckley and Nicholas
B. Callinan are the current members of the Audit Committee.
The Compensation Committee, which is comprised of a majority of independent
directors, held one (1) meeting in 1998. The Compensation Committee makes
determinations with respect to salaries and bonuses payable to the Company's
Executive Officers. Michael J. Brown, Thomas A. McDonnell, Steven J. Buckley
and Nicholas B. Callinan are the current members of the Compensation
Committee. Mr. Brown does not participate in decisions regarding his own
compensation.
The Stock Option Committee, which is comprised solely of independent
directors, did not hold any meetings in 1998, but acted by written consent
throughout the year to grant options to the employees of the Company. The
Stock Option Committee makes determinations with respect to grants of options
to officers and other key employees of the Company. Thomas A. McDonnell and
Steven J. Buckley are the current members of the Stock Option Committee.
Compensation Committee Interlocks and Insider Participation
Of the members of the Company's Compensation Committee, Michael J. Brown is
the Chief Executive Officer and President of the Company. Mr. Brown does not
participate in decisions relating to his own compensation.
Section 16 Compliance
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during 1998, the Company's directors, officers, and
greater than 10% beneficial owners complied with all applicable Section 16(a)
filing requirements.
Compensation of Directors
The Company pays each director a fee of $2,000 for each board meeting
attended, $1,000 for each committee meeting attended and $250 for
participation in a telephonic meeting. In addition, each Director receives for
each year of service options to purchase 1,000 shares of Common Stock in
accordance with the Company's Stock Option Plan. The Company also reimburses
directors for out-of-pocket expenses incurred in connection with the
directors' attendance at meetings. Dr. Andrzej Olechowski is also paid $4,000
for serving as a member of the Company's Advisory Board.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the compensation
awarded or paid by the Company to its Chief Executive Officer and to the other
executive officers of the Company whose total annual salary and bonus equaled
or exceeded $100,000 during the year ended December 31, 1998 (the "Named
Executive Officers") for the periods indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual compensation Long-term compensation
------------------------- -------------------------------------------
Other Securities
annual underlying Restricted All other
compen- options/ stock LTIP compen-
Name and principal position Period Salary($) Bonus($) sation($) sar's (#) award(s)($) Payouts($) sation($)
- --------------------------- ------ --------- -------- --------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael J. Brown........ 1998 150,000 -- --
Chief Executive Officer 1997 100,000 -- -- -- -- -- --
1996 100,000 -- -- 1,149,890 -- -- --
Jeffrey B. Newman....... 1998 167,198 20,000 -- 10,000
Vice President and 1997 133,000 -- -- 17,500 -- -- --
General Counsel 1996 -- -- -- 52,500 -- -- --
Daniel R. Henry......... 1998 148,513 -- -- -- -- -- --
Chief Operating Officer 1997 80,000 -- --
1996 50,000 -- 539,399
Anthony M. Ficarra...... 1998 167,347 50,000 -- 32,000 -- -- --
Chief Information
Officer
Bruce S. Colwill........ 1998 134,082 20,000 -- 25,000 -- -- --
Chief Financial Officer
</TABLE>
Option Grants in Last Fiscal Year
The following table provides certain information concerning Options granted to
the Named Executive Officers of the Company during the year ended December 31,
1998.
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Potential
Realizable
Value At
Assumed Annual
% Of Rates Of Stock
Total Price
Number Of Options Appreciation
Securities Granted To For Option
Underlying Employees Exercise Term(1)
Options In Fiscal Price Expiration ---------------
Name Granted Year Per Share Date 5%($) 10%($)
---- ---------- ---------- --------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Brown........ -- -- -- -- -- --
Jeffrey B. Newman....... 10,000 1.9% $5.87 May 18, 2008 36,916 93,553
Daniel R. Henry......... -- -- -- -- -- --
Anthony M. Ficarra...... 32,000 3.1% $5.87 May 18, 2008 118,132 299,369
Bruce S. Colwill........ 25,000 2.4% $5.87 May 18, 2008 92,290 233,882
</TABLE>
- --------
(1) Potential realizable value is based on the assumption that the shares
appreciate at the annual rates shown (compounded annually) from the date
of grant until the expiration of the option term. Those numbers are
calculated based upon the requirements promulgated by the Commission and
do not reflect any estimate by the Company of future price increases.
9
<PAGE>
Aggregate Option Exercises In Last Fiscal Year And Fiscal Year-End Option
Values
The following table sets forth certain information concerning Options
exercised by the Named Executive Officers during the year ended December 31,
1998 and Options held by such individuals at December 31, 1998:
<TABLE>
<CAPTION>
Number Of Securities
Underlying Unexercised Value Of Unexercised
Options At December 31, In-the-Money Options At
Shares 1998 December 31, 1998($)
Acquired -------------------------- -------------------------
On Value
Name Exercise Exercisable Realized$(1) Unexercisable Exercisable Unexercisable
- ---- -------- ----------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Brown........ 75,000 167,625 851,323 -- 459,714 --
Daniel R. Henry......... -- -- 777,707 88,088 760,741 173,533
Jeffrey B. Newman....... -- -- 28,000 52,000 11,340 17,010
Anthony M. Ficarra...... -- -- 8,000 64,000 -- --
Bruce S. Colwill........ -- -- 28,832 25,000 31,473 --
</TABLE>
- --------
(1) Based on the difference between the exercise price of the Options and the
fair market value of the Common Stock on June 24, 1998, which is the date
on which the Options were exercised.
Employment Agreements
Mr. Brown serves as the Chief Executive Officer, President and Chairman of the
Board of the Company pursuant to an employment agreement dated December 17,
1996. Under the terms of his agreement, Mr. Brown's salary for 1997 was
$100,000, subject to annual review and adjustments by the Board of Directors.
His salary was increased to $200,000 per year effective July 1, 1998. Mr.
Brown is reimbursed for all reasonable and proper business expenses incurred
by him in the performance of his duties under the agreement. The terms of the
agreement also provide that Mr. Brown will be entitled to fringe benefits and
perquisites comparable to those provided to any or all of the Company's senior
officers. The term of the agreement expires in December 1999. The term of the
agreement, however, will be automatically extended on the same terms and
conditions for successive periods of one year each unless declined by either
party for any reason. In the event that Mr. Brown's employment with the
Company is terminated by the Company for Cause (as defined in the agreement),
or if Mr. Brown voluntarily terminates employment with the Company, he will be
entitled to receive all compensation, benefits and reimbursable expenses
accrued as of the date of such termination. In the event that Mr. Brown's
employment with the Company is terminated by reason of death or disability (as
defined in the agreement), he (or his designated beneficiary) will be paid his
annual salary at the rate then in effect for an additional one-year period.
The agreement also contains certain non-competition, non-solicitation and
confidentiality covenants.
The Company has entered into employment agreements with terms substantially
similar to the terms of Mr. Brown's agreement with Messrs. Henry (Chief
Operating Officer) and Newman (Vice President and General Counsel). These
agreements expire on December 17, 1999 but are automatically renewable for
successive one year terms.
The Company also has employment agreements with Messrs. Stevens, Ficarra and
Mr. Ferguson. These agreements are not fixed-term agreements, but are
terminable by either the employee or the Company upon 30 days notice. The
agreements provide that the employee is reimbursed for all reasonable and
proper business expenses incurred by him in the performance of his duties
under the agreement and that the employee is entitled to fringe benefits and
perquisites comparable to those provided to any or all of the Company's senior
officers. The agreements also contain certain non-competition, non-
solicitation and confidentiality covenants.
Benefit Plans
The Company provides insurance benefits to its officers and other employees,
including health, dental, and life insurance, subject to certain deductibles
and copayments by employees.
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee. The Committee is responsible for establishing and
administering the policies which govern both annual compensation and equity
ownership programs. The grant of options is governed by the Company's Stock
Option Committee. Mr. Brown does not participate in any decisions regarding
his own compensation.
Overview and Philosophy
The Company's executive compensation program has the following objectives:
. To provide competitive compensation that will help attract, retain and
reward highly qualified executives who contribute to the long-term
success of the Company.
. To align management's interests with stockholders by including long-term
equity incentives.
Currently, the Company's compensation package for executives consists of a
base salary and stock options which vest over a period of years, generally
five years. The Company's executive compensation package was revised in 1998
to include a performance based cash bonus program with the objective of
reinforcing the incentive impact of the compensation package.
Compensation Levels in 1998
The Company's philosophy in recruiting during 1997 and the first part of 1998
was to grant relatively low base salaries and an option package that was
considered potentially very valuable in light of anticipated growth of the
Company. However, the fall in the Company's stock price during 1998 has
resulted in a situation in which the strike price of most of the options
granted to the Company's employees is higher than the current market price. As
a result, it has been necessary, in order to recruit employees, to set
starting salaries at higher levels. Correlatively, salaries for employees with
greater seniority with the Company have been increased somewhat during 1998 in
order to maintain parity with newly recruited employees. Notwithstanding this,
the Company has attempted to keep base salaries as low as possible by
establishing bonus compensation based on overall results of the Company.
Base Salary
In most cases, the Company sets base salary compensation within the range of
salaries of executive officers with comparable qualifications, experience and
responsibilities at other companies in the same or similar businesses and of
comparable size and success. In addition, salary determinations upon hiring
depend both upon the executive's salary at his previous place of employment
and upon the individual's potential value to the Company as measured by
certain subjective non-financial objectives. The non-financial objectives
include the individual's potential and actual contribution to the company as a
whole, including his or her ability to motivate others, develop the skills
necessary to grow as the Company matures, recognize and pursue new business
opportunities and initiate programs to enhance the Company's growth and
success.
In view of compensation earned through grant of share options at the time of
the Company's initial public offering in March, 1997, the base salaries of
Michael Brown, Chief Executive Officer, and Daniel Henry, Chief Operating
Officer, were initially set at levels that were well below industry standard.
Mr. Brown's base salary was increased to from $100,000 to $200,000 in July
1998. The Compensation Committee increased Mr. Henry's salary from $95,000 to
$175,000 on July 1, 1998 to bring it into line with his responsibilities as
Chief Operating Officer. The Committee believes the Mr. Brown's and Mr.
Henry's overall compensation packages (base salary, incentive compensation and
stock options) are now within an appropriate range given industry standard and
the size of the Company. Base salaries for other executive and management
level employees were reviewed at the end of 1998 and increases of up to 26%
were granted.
11
<PAGE>
Annual Incentive Compensation and Stock Options Programs
The Company's 1998 Incentive Compensation Plan resulted in the payment of a
very low level of bonuses to its key employees, because in most cases the 1998
annual corporate objectives required to trigger bonus payments were not met.
No bonuses were paid to the Chief Executive Officer or the Chief Operating
Officer. Those bonuses paid were either tied to the accomplishment of
specific, employee-defined objectives or to pre-negotiated contractual
provisions.
A new bonus plan was established for the Company's employees for 1999. Under
this plan, bonus objectives for executives and corporate employees are based
only on overall Company financial performance during 1999. For country
managers and in-county staff, 25% of the bonuses are based country based
objectives and 75% on overall corporate performance. The level of bonus ranges
from 10% to 75% of base salary.
Stock Option Programs
The Company's stock option plans are designed to promote the identity of long-
term interests between the Company's employees and its stockholders and to
assist in the retention of executives. All option grants are proposed by
management and approved by the Stock Option Committee of the Board of
Directors, which consists of two non-management members of the Compensation
Committee. The size of option grants is generally intended by management to
reflect the executive's position with the Company and his or her contributions
to the Company. Under the general terms of the Company's Stock Option Plan,
options are to be granted at an option price equal to the fair market value of
the Common Stock on the date of grant. However, reflecting the belief that the
Company's stock is undervalued, the Compensation Committee and the Board of
Directors established a "floor" strike price of $5 per share in December 1998.
Other than options issued to employees of ARKSYS Systems, Inc. ("ARKSYS") in
connection with the acquisition of ARKSYS, no options have been granted since
that time at a strike price of less than $5 per share. Stock Options generally
vest over a five year period in order to encourage key employees to remain
with the Company.
Benefits
The Company's executive officers are entitled to receive medical insurance
benefits. A 401(K) Plan is being established and will be available to
executives on the same basis as other full-time employees of the Company.
The amount of perquisites, as determined in accordance with the rules of the
Securities and Exchange Commission relating to executive compensation, did not
exceed 10% of salary and bonus for 1998 for any of the Named Executive
Officers.
Conclusion
Through these programs, a significant portion of the Company's executive
compensation is linked directly to individual and Company performance in
furtherance of strategic goals, as well as stock price appreciation. The
Committee intends to continue the policy of linking executive compensation to
Company performance and stockholder return.
12
<PAGE>
Performance Graph
Set forth below is a line graph comparing the total cumulative return on the
Common Stock from March 7, 1997 (the date of the IPO) through December 31,
1998 with the Center for Research in Security Prices ("CRSP") Total Returns
Index for U.S. companies traded on the Nasdaq Stock Market (the "Market
Group") and an index group of peer companies, the CRSP Total Returns Index for
U.S. Nasdaq Financial Stocks (the "Peer Group"). The companies in each of the
Market Group and the Peer Group were weighted by market capitalization.
Returns are based on monthly changes in price and assume reinvested dividends.
These calculations assume the value of an investment in the Common Stock, the
Market Group and the Peer Group was $100 on March 7, 1997. The Company's
Common Stock is traded on the Nasdaq National Market under the symbol EEFT.
[GRAPH APPEARS HERE]
Total Returns Index 3/7/97 6/30/97 12/31/97 6/30/98 12/31/98
------------------- ------ ------- -------- ------- --------
- ---- Euronet Services Inc. 100.00 73.75 51.67 29.17 17.92
- ---- The Market Group 100.00 115.61 126.56 152.58 178.34
____ The Peer Group 100.00 116.25 146.21 150.95 141.73
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
With the exception of the compensation and other transactions described above,
there are no relationships or related party transactions requiring disclosure.
INDEPENDENT ACCOUNTANTS
The firm of KPMG Polska Audyt Sp. zo.o. currently serves as the Company's
independent accountants. KPMG Polska Sp. zo.o. will be retained as the
Company's independent auditors in 1999.
OTHER MATTERS
The Board knows of no other business which may come before the Meeting. If,
however, any other matters are properly presented to the 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.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Any proposal of a stockholder to be presented at the Company's annual meeting
of stockholders in 2000, including the nomination of persons to serve on the
Board, must be received not later than February 8, 2000 to be included in the
proxy materials for that meeting. Any proposal of a stockholder to be
presented at the Company's annual meeting of stockholders in 2000 which has
not been included in the Company's proxy materials must be received not later
than April 24, 2000 to be considered timely. Stockholders submitting proposals
should submit them in writing and direct them to the Company's secretary at
the Company's principal executive offices via certified mail, return receipt
requested, to ensure timely delivery. No stockholders proposals were received
with respect to the Meeting scheduled for July 8, 1999.
METHOD OF PROXY SOLICITATION
The entire cost of this solicitation of proxies will be borne by the Company.
The Company's directors, officers, and regular employees, without additional
remuneration, may solicit proxies by telephone, telegraph and personal
interviews. The Company 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.
By Order of the Board,
Jeffrey B. Newman
Secretary and General Counsel
June 7, 1999
14
<PAGE>
EURCM-PS-99
<PAGE>
EURONET SERVICES INC.
FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 8, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF EURONET
SERVICES INC. The undersigned holder of shares of Common Stock of the Company
hereby appoints Michael J. Brown, President and Chief Executive Officer, or
failing him, Jeffrey B. Newman, Vice President and General Counsel, 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 Thursday July 8,
1999 at 11:00 a.m. (Central time), at the Marriott Overland Park, 10800 Metcalf
Avenue, Overland Park, Kansas 66210, USA, and at any adjournments thereof (the
"Meeting"), and hereby revokes any proxy previously given by the undersigned. If
this proxy is not dated, it shall be deemed to be dated on the date on which
this proxy was mailed to the Company.
Without limiting the general powers hereby conferred, with respect to the
Company's proposal to elect directors, the shares of Common Stock represented by
this proxy are to be:
[_] VOTED FOR the election as directors of all nominees listed below (except
as marked to the contrary below), or
[_] WITHHELD FROM VOTING for all nominees listed below.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.
Nicholas B. Callinan Eriberto R. Scocimara
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE.)
<PAGE>
(CONTINUED FROM PREVIOUS SIDE)
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made, this
proxy will be voted in favor of each of the nominees set forth above.
Please sign exactly as name appears exactly as your name(s) appear(s)
on the books of the Company. When shares of Common Stock are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated , 1999
------- ---
--------------------------------
Signature
--------------------------------
Signature, if Held Jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
