Net 1 UEPS Technologies, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com






Service Agreement (KSNET) 

This Service Agreement (this “Agreement”) is entered
into on the 30th day of June, 2014, by and between: 

	 	I. 	
      KSNET, INC., a corporation organized and existing under
      the laws of the Republic of Korea (“Korea”), with its registered
      office at Seong Bo Building, 2nd Floor, 169-10 Samsung-Dong,
      Gangnam-Gu, Seoul, 135-090 Korea (the “Company”); and

	 	 	 
	 	II. 	
      PHIL-HYUN OH, a natural person residing at [XXX], (the
      “Executive”).



WITNESSETH: 

WHEREAS, the Company previously appointed the Executive as its
representative director under the terms of the Employment Agreement dated
September 17, 2010, between the Company and the Executive (the “Employment
Agreement”); 

WHEREAS, the Company wishes to reappoint the Executive as its
representative director for an additional three (3) years; 

WHEREAS, the Company also intends to appoint the Executive as
the representative director of Net1 Applied Technologies Korea (“Net1
Korea”), under the terms of the Service Agreement with Net1 Korea, of the
same date hereof; and 

WHEREAS, the Executive wishes to accept these appointments;


NOW, THEREFORE, in consideration of the mutual promises set
forth hereinafter, the parties hereto agree as follows: 

	1. 	
      Appointment.



The Company shall reappoint the Executive as its representative
director, effective as of July 1, 2014 (the “Effective Date”),
immediately upon the expiration of his current term. And the Executive shall
accept such appointment, and perform the functions and carry out the duties and
responsibilities set forth hereinafter as the representative director of the
Company on the terms and conditions set forth in this Agreement. 

	2. 	
      Duties and
  Responsibilities.




	 	(a) 	
      As the representative director, the Executive shall have
      the power, authority and responsibility delegated to the Executive by the
      board of directors of the Company (the “Board of Directors”) and as
      provided for in the articles of incorporation of the Company (the
      “Articles of Incorporation”) and the Korean Commercial Code
      (collectively, the “General Services”). In this regard, it is
      hereby acknowledged and agreed that the Executive shall be entitled to
      communicate with and shall rely upon the advice, direction and
      instructions of the Board of Directors in order to initiate, coordinate
      and implement the General Services as contemplated herein, subject, at all
      times, to the final direction and supervision of the Board of
      Directors.



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	 	(b) 	
      Without limiting in any manner the generality of the
      General Services, the Executive shall perform the General Services
      faithfully, diligently, to the best of the Executive’s ability, and in the
      best interests of the Company, consistent with the Executive’s position as
      the representative director of Company, and will devote and prioritize his
      full working time and use his best efforts for the Company in that
      regard.

	 	 	 
	 	(c) 	
      The Executive hereby acknowledges and agrees to abide by
      the rules, regulations, instructions, personnel practices, policies and
      procedures of each of the Company and Net 1 UEPS Technologies, Inc.
      (“Net l”), and any changes thereto which may be adopted from time
      to time as such rules, regulations, instructions, personnel practices,
      policies and procedures may be applied to the Executive as the
      representative director of the Company.




	3. 	
      Direction. The Executive shall at all times
      be subject to and act in accordance with the Articles of Incorporation and
      the rules, regulations and instructions issued or approved from time to
      time by the Board of Directors, as well as the Korean Commercial Code.
    

	  	  
	4. 	
      Compensation. As the representative
      director of the Company, the Executive shall receive the compensation,
      benefits and allowances for services rendered to the Company as set forth
      below. No other compensation, other than the items specifically mentioned
      in this Agreement, shall be paid to the Executive in relation to his
      position as the representative director of the Company. The Company shall
      pay to the Executive all of the compensation described herein in
      compliance with the Korean Commercial Code and the Articles of
      Incorporation, subject to regular and customary deductions and tax
      withholdings as required by applicable laws and regulations.
  




	 	(a) 	
      Base Salary: The Executive shall be
      compensated at the rate of KRW 405 million per year (the “Base
      Salary”), in twelve (12) equal monthly installments to be paid in
      arrears on the same day of each month on which the other executives of the
      Company receive their compensation.

	 	 	 
	 	(b) 	
      Bonus: The Company shall also pay annual
      bonus compensation up to a maximum of KRW 440 million, which is
      approximately 109% of the Base Salary (the “Bonus”), consisting of
      an amount based on the achievement of quantitative targets (the
      “Quantitative Portion”) and an amount based on the achievement of
      qualitative targets (the “Qualitative Portion”), each as set forth
      below.




	 	(i) 	
      The Quantitative Portion will comprise approximately 77%
      of the potential Bonus amount, up to a maximum of KRW 338 million. The
      amount of the Quantitative Portion will be the sum of the following
      amounts, each based on the achievement of the relevant target during the
      twelve months ending December 31, and payable in February of the following
      year:




	 	(1) 	
      For each KRW 1 billion of free cash flow (i.e., operating
      cash flow, less tax, less capital expenditure) generated by the Company
      during the relevant period: KRW 2 million, up to a maximum of KRW 50
      million; plus



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	 	(2) 	
      Whichever of the following is
  applicable:




	 	(A) 	
      If the profit of the Company for the relevant period,
      before payment of the Bonus, interest, and tax (“PBIT”),is at least
      90% or more of the previous year’s PBIT but less than 100% of the previous
      year’s PBIT: KRW 208 million, minus KRW 10 million for every 1% by
      which PBIT is less than the previous year; or

	 	 	 
	 	(B) 	
      If the PBIT of the Company for the relevant period is at
      least equal to the previous year’s PBIT: KRW 208 million, plus KRW
      3,333,333 for each 1% increase in PBIT when compared to the previous year,
      up to a maximum of KRW 80 million.




	 	(ii) 	
      The Qualitative Portion will comprise 23% of the
      potential Bonus amount, up to a maximum of KRW 102 million. The amount of
      the Qualitative Portion is the sum of amounts based on the achievement of
      certain qualitative targets, which will be determined every year by the
      group Chairman. Each item comprising the Qualitative Portion is based on
      performance during the Company’s fiscal year ending June 30. The amounts
      will be assessed by the Remuneration Committee in August of each year, and
      any amount payable will be paid in the following September. For the 2015
      fiscal year, the key objectives and associated amounts are as
    follows:




	 	(1) 	
      If the Company maintains or improves its market position
      in the Korean Card VAN market, or if the Company internally improves the
      relative contribution of the Banking VAN, PG, and Purchase business units
      compared to the core VAN business unit (i.e. if Banking VAN, PG, and
      Purchase contribute more than the current 14% of gross profit): KRW 50
      million; plus

	 	 	 
	 	(2) 	
      If the Company is not the subject of any adverse
      regulatory findings, fines, or penalties during the relevant period: KRW
      52 million.




	 	(c) 	
      Stock Grant. The Executive will continue to be
      eligible for participation in the stock incentive plan of Net 1 under the
      terms of the Amended and Restated Stock Incentive Plan of Net 1 UEPS
      Technologies, Inc. (the “Stock Incentive Plan”).

	 	 	 
	 	(d) 	
      Additional Benefits. To the extent permitted by
      applicable law, the Executive (and where applicable, his plan-eligible
      dependents) will be eligible to participate in the following benefits
      maintained by the Company for the benefit of its executive officers,
      subject in any event to the eligibility requirements and other terms and
      conditions to those plans and programs:




	 	(i) 	
      Health Insurance – The Executive shall be entitled
      to participate in the national health insurance in accordance with the
      applicable laws, rules, and regulations, and shall be reimbursed for
      annual physical examinations for the Executive and his
  spouse.





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	 	(ii) 	
      National Pension – The Executive shall be entitled
      to participate in the national pension plan in accordance with the
      applicable laws, rules, and regulations.

	 	 	 
	 	(iii) 	
      Car Use – The Executive shall be entitled to the
      use of a Company car and driver for business and reasonable personal use
      in accordance with the Company’s policy.

	 	 	 
	 	(iv) 	
      Mobile Phone – The Executive will receive a mobile
      phone and reimbursement of expenses associated with the use of the phone
      for business and reasonable personal use in accordance with the Company’s
      policy.




	 	(e) 	
      Vacation. The Executive shall be entitled to take
      twenty-one (21) days of paid vacation during each twelve (12) months of
      the Executive’s service term hereunder, and which vacation may be taken on
      dates to be selected by mutual agreement of the Board of Directors and the
      Executive, consistent with the requirements of his service. Such vacation
      days are not cumulative and as a result, the unused vacation days in a
      given year will not be carried over to subsequent years nor will the
      Company provide any compensation for unused vacation days to the
      Executive.

	 	 	 
	 	(f) 	
      Reimbursement of Business Expenses. The Company
      agrees to reimburse the Executive for reasonable business-related expenses
      incurred in the performance of the General Services in accordance with the
      Company’s rules and regulations.




	5. 	
      Retirement Benefits. Upon the termination
      of this Agreement, the Executive shall be entitled to receive retirement
      benefits in accordance with the Company’s rules and regulations.


	  	  
	6. 	
      Working Hours. The Executive may work
      additional hours, including hours on weekends and/or during public
      holidays, whenever it is necessary to carry out the General Services. The
      Executive, however, will not be entitled to overtime compensation or
      allowances.

	  	  
	7. 	
      Place of Work. The Executive may be
      required to travel temporarily to other locations in connection with the
      Company’s business. Furthermore, the Executive understands and agrees that
      his place of work may be changed by the Company from time to time
      according to the Company’s business needs. 




	8. 	
      Term of Agreement;
  Termination.




	 	(a) 	
      This term of this Agreement will begin on the Effective
      Date immediately upon expiration of the Executive’s prior term, and will
      continue for a term of three (3) years, from July 1, 2014 to June 30,
      2017.

	 	 	 
	 	(b) 	
      The Company may remove the Executive from his position as
      the representative director of the Company with or without “justifiable
      cause” at a meeting of the board of directors or shareholders, as
      applicable, of the Company prior to the expiration of his then current
      term of office as provided for under the Korean Commercial Code, in which
      case this Agreement shall terminate immediately upon written notice
      thereof. For purposes of this Article 8, the term “justifiable cause”
      shall include any of the following circumstances, as well as any other
      circumstances permitted under applicable law: 



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		(i) 	The Executive has breached the provisions on
      non-competition or confidentiality of this Agreement; 
	 	  	  
		(ii) 	The Executive has taken actions that are likely
      to result in a material loss of or harm to the business, reputation or
      goodwill of the Company; 
	 	  	  
	 	(iii) 	The Executive has misappropriated funds or
      assets of the Company; 
	 	  	  
		(iv) 	The Executive has concealed from or falsely
      disclosed to the Company his name, age, education, experience, or other
      personal information; 
	 	  	  
	 	(v) 	The Executive has failed to show performance
      results or job capacity; 
	 	  	  
		(vi) 	The Executive has committed a crime or offense
      which will adversely affect the interest or reputation of the Company;
  
	 	  	  
		(vii) 	The Executive has committed gross negligence,
      willful misconduct or any violation of laws in performance of his duties;
      or 
	 	  	  
		(viii) 	The Executive has done any of the above, or any
      similar act or omission, which constitutes justifiable cause for
      termination from his position with an affiliate of the Company.
  



	 	(c) 	
      In the event the Executive is removed from office as a
      director of the Company without justifiable cause by a special resolution
      of the shareholders of the Company and this Agreement is terminated as a
      result thereof, the Executive shall be entitled to receive the amounts of
      Base Salary and the Bonus (if any) that would have been due and payable to
      the Executive if the Executive was fully employed with the Company with
      respect to the remainder of the then-current fiscal year in which the
      Executive was removed.

	 	 	 
	 	(d) 	
      The Executive agrees that in the event of the termination
      of his services with the Company, the Executive will assist the Company
      with any procedures in connection with such termination, including,
      without limitation, the transition of services. The Executive agrees that
      he will return all property of the Company, including laptops, mobile
      phone, personal digital assistants (PDAs), or other data devices provided
      by the Company, as well as all Company information whether original copies
      or duplicates in or on whatever media, in his control, custody, or
      possession to the Company immediately upon termination of his services or
      upon request by the Company at any time.




	9. 	
      Non-Competition. In consideration of the
      Base Salary, the Bonus, and all other compensation to be paid to the
      Executive by the Company as set forth in this Agreement, the Executive
      agrees that during the term of this Agreement and for a period of three
      (3) years after the termination or expiration hereof, the Executive shall
      not, without the Company’s prior written
      consent, directly or indirectly, lend his credit, advice, or assistance,
      or engage in any activity or act in any manner, including but not limited
      to, as an individual, owner, sole proprietor, founder, associate,
      promoter, partner, joint venture participant, shareholder (other than as a
      less than one percent (1%) shareholder of a publicly traded corporation),
      officer, director, trustee, manager, employer, employee, licensor,
      licensee, principal, agent, salesman, broker, representative, consultant,
      advisor, investor or otherwise, for the purpose of establishing, operating
      or managing any business or entity that is engaged in activities
      competitive with the business that the Company has conducted or proposed
      to conduct during the Executive’s service term in any geographic area in
      which the Company has conducted or proposed to conduct that
      business.



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	10. 	
      Non-Solicitation.




	 	(a) 	
      In consideration of the Base Salary, the Bonus, and all
      other compensation to be paid to the Executive by the Company as set forth
      in this Agreement, the Executive agrees that during the term of this
      Agreement and for a period of three (3) years after the termination or
      expiration hereof, the Executive shall not, whether for his own account or
      for the account of any other Person (as hereinafter defined), directly or
      indirectly interfere with the Company’s relationship with or endeavor to
      divert or entice away from the Company any Person who or which at any time
      during the Executive’s service term is or was an agent, officer, employee,
      customer, distributor, or consultant of the Company.

	 	 	 
	 	(b) 	
      As used in this Agreement, the term “Person” means
      any individual, corporation joint venture, general or limited partnership,
      association, or other entity.




	11. 	
      Confidentiality.




	 	(a) 	
      The Executive understands and agrees that the business of
      the Company is unique and specialized and that, in connection with his
      service with the Company, he will receive or have access to Confidential
      Information (as hereinafter defined). In consideration of the Base Salary,
      the Bonus, and all other compensation to be paid to the Executive by the
      Company as set forth in this Agreement, the Executive agrees that at all
      times from and after the Effective Date, he shall keep secret all such
      Confidential Information and will not, except as required by law, directly
      or indirectly, or individually or collectively, “Use” (as hereinafter
      defined) or “Disclose” (as hereinafter defined) the same to any Person
      without first obtaining the written consent of the Company. At any time
      the Company may so request, the Executive shall turn over to the Company
      all books, notes, memoranda, manuals, notebooks, tables, drawings,
      calculations, records and other documents made, compiled by or delivered
      to him containing or concerning any Confidential Information, including
      copies thereof, in his possession, it being agreed that the same and all
      information contained therein are at all times the exclusive property of
      the Company.

	 	 	 
	 	(b) 	
      As used in this Section, the term “Confidential
      Information” means any information or compilation of information not
      generally known to the public or the industry relating to procedures,
      techniques, methods, concepts, ideas, affairs, products, processes, and
      services related to the Company’s business, including but not limited to,
      information relating to marketing, merchandising, selling, research,
      development, purchasing, costs, customers, plans, pricing, billing, needs
      of customers, and services used by customers of the Company. Confidential
      Information for purposes of this Agreement shall also include all lists of
      customers, addresses, prospects, sales calls, products, services, prices,
      and the like, as well as any specifications, formulas, plans, drawings,
      accounts or sales records, sales brochures, books, code books, records,
      manuals, trade secrets, knowledge, know-how, pricing strategies, operating
      costs, sales margins, methods of operation, and the like. All information
      disclosed to the Executive during the term of his service with the Company
      which he has a reasonable basis to believe to be Confidential Information,
      or which was previously or currently is treated by the Company as
      Confidential Information, shall be presumed to be Confidential
      Information.



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	 	(c) 	
      As used in this Section, the term “Disclose” means
      to reveal, deliver, divulge, disclose, publish, copy, communicate, show or
      otherwise make known or available to any other Person, or in any way to
      copy, any of the Confidential Information.

	 	 	
       

	 	(d) 	
      As used in this Section, the term “Use” means to
      appropriate any of Confidential Information for the benefit of any Person
      other than the Company.

	 	 	
       

	 	(e) 	
      In addition, the Executive acknowledges and agrees to
      comply with the Company’s policy on the use of e-mail, fax, intranet and
      the Internet, and the use of computer software as amended from time to
      time, and accept that the Company will monitor his work practices and the
      use of office networks as and when
appropriate.




	12. 	
      Intellectual Property
  Rights.




	 	(a) 	
      To the maximum extent allowed by law, all Intellectual
      Property (as hereinafter defined) created or developed by the Executive
      (whether alone or jointly with others) in the course of his services or
      outside the course of his duties but relating to the business of the
      Company shall belong to the Company absolutely. In consideration of the
      Base Salary, the Bonus, and all other compensation to be paid to the
      Executive by the Company as set forth in this Agreement, the Executive
      hereby assigns to the Company all his right, title and interest in such
      Intellectual Property (whether now existing or brought into being in the
      future) to the maximum extent allowed by law, undertakes to do everything
      necessary during and after the term of this Agreement to vest all right,
      title and interest in such Intellectual Property in the Company or its
      nominee, and irrevocably and unconditionally waives any moral rights or
      similar rights that he may have, so far as permitted by law, in exchange
      for reasonable compensation to be paid by the Company in accordance with
      the Company’s relevant rules and regulations (if any) or the applicable
      laws of Korea.

	 	 	
       

	 	(b) 	
      As used in this Section, the term “Intellectual
      Property” means trademarks, service marks, trade names, domain names,
      logos, get-up, patents, inventions, registered and unregistered design
      rights, copyrighted works, database rights, and all other similar rights
      and works in any part of the world (including know-how), including, where
      such rights are obtained or enhanced by
      registration, any registration of such rights and applications and rights
      to apply for such registrations.



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	13. 	
      Reasonableness of Covenants. The Executive
      acknowledges and agrees that the terms and conditions, geographic scope,
      and period of duration of the restrictive covenants contained in Sections
      9, 10, 11, and 12 above are both fair and reasonable and that the
      interests sought to be protected by the Company are legitimate business
      interests entitled to be protected. 

	 	
       

	14. 	
      Breach of this Agreement. If the Executive
      commits a breach or threatens to commit a breach of any of the provisions
      of Sections9, 10, 11, and 12of this Agreement, the Company shall have the
      right and remedy to have those provisions specifically enforced by any
      court having equity or equivalent jurisdiction, it being acknowledged and
      agreed by the Executive that the rights and privileges of the Company
      granted in Section 9, 10, 11, and 12are of a special, unique and
      extraordinary character and any such breach or threatened breach will
      cause great and irreparable injury to the Company and that money damages
      will not provide an adequate remedy to the Company. 

	  	
       

	15. 	
      Tax Returns. Filing annual income tax
      returns with the relevant tax authorities is the responsibility of the
      Executive. The Company shall have the right to deduct and withhold from
      the compensation payable to the Executive hereunder any amounts required
      to be deducted and withheld under the provisions of any applicable laws.
      

	  	
       

	16. 	
      Entire Agreement. This Agreement
      contains the entire agreement between the parties relating to the subject
      matter hereof. No modification, alteration or amendment of this Agreement
      and no waiver of any provision hereof may be made unless such
      modification, alteration, amendment, or waiver is set forth in writing
      signed by the parties hereto. 

	
	  	
       

	17. 	
      Governing Law and Severability. This
      Agreement shall be construed in accordance with and governed by the laws
      of Korea. With respect to any disputes arising from this Agreement, the
      Seoul Central District Court shall have exclusive jurisdiction. If any
      provision of this Agreement shall be held by a court of competent
      jurisdiction to be illegal, invalid, or unenforceable, the remaining
      provisions shall remain in full force and effect, legal, and enforceable,
      as if the above illegal, invalid, or unenforceable provision had never
      existed herein. 

	  	
       

	18. 	
      Assignment. Neither party may assign this
      Agreement or any of its rights hereunder without the prior written consent
      of the other party, provided that the Company may assign this Agreement to
      any of its affiliates. 

	  	
       

	19. 	
      Prevailing Language. This Agreement may be
      executed in multiple counterparts in the English language, each of which
      shall be deemed an original but which, taken together, shall constitute
      one and the same instrument. Should any conflict arise between the English
      language version of this Agreement and any translation hereof, the English
      language version shall be controlling. 

	  	
       

	20. 	
      Survival. Sections 8, 9, 10, 11, 17, and 20
      shall survive any termination of this Agreement or the end of its term.
      



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	21. 	
      Non-Employee. The Executive acknowledges
      that he is not an employee of the Company under the applicable laws and
      regulations of Korea and, as such, shall not be entitled to any benefits
      given to employees under such laws and regulations (except with respect to
      those benefits which the Executive had previously been regularly receiving
      from the Company prior to the Effective Date), unless such is specifically
      provided for under the terms and conditions of this Agreement. 

	  	
       

	22. 	
      Indemnification. The parties hereto hereby
      each agree to indemnify and save harmless the other party hereto and
      including, where applicable, their respective subsidiaries and affiliates
      and each of their respective directors, officers, employees, consultants,
      associates, counsel and agents (each such party being an “Indemnified
      Party”) harmless from and against any and all losses, claims, actions,
      suits, proceedings, damages, liabilities or expenses of whatever nature or
      kind and including, without limitation, any investigation expenses
      incurred by any Indemnified Party, (collectively “Loss”) to which
      an Indemnified Party may become subject as a result of any breach of, or
      failure by, the other party to perform any of its covenants, agreements or
      other obligations contained in this Agreement so long as the Loss is not
      caused by the willful misconduct or gross negligence of the Indemnified
      Party. 

	  	
       

	23. 	
      Access to Email. Any email account issued
      to the Executive by the Company is deemed the exclusive property of the
      Company and is to be used by the Executive solely for the purpose of
      performing the General Services under this Agreement. Furthermore, by
      accepting the terms of this Agreement, the Executive agrees and consents
      to the Company accessing the issued email account and disclosing any
      information obtained therein to any third party whenever the Company finds
      it necessary to protect its interests in connection with: (i) preventing
      acts of libel through email; (ii) protecting Confidential Information and
      other business secrets; (iii) preventing infringement of intellectual
      property rights; (iv) preventing the illegal use of email; (v) the use of
      emails as evidence in legal proceedings; and (vi) any other reason that
      the Company deems necessary to protect its interests.




[Signatures to follow on next page] 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto and/or their duly
authorized representatives have executed this Agreement as of the date first
written above. 

	 	COMPANY: 
	 	KSNET, INC. 
	 	  
	 	By: /s/ Herman Kotz                                                       
	 	           Name: Herman Kotz 
	 	           Title: Director 



	 	EXECUTIVE: 
	 	  
	 	/s/ PHIL-HYUN OH                                                         
	 	PHIL-HYUN OH 
	 	Address: [XXX] 


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