OzForex allocates $2.66M to retain key execs in light of Western Union bid

A follow-up to LeapRate’s earlier story on the Western Union Company (NYSE:WU) submitting an acquisition proposal for Ozforex Group Ltd (ASX:OFX), an international provider of online payment services…

OzForex announced today that in light of the bid, its Board has determined to allocate a total retention pool of $2.66 million to six key executives who assumed their roles at OzForex within the past six months. The pool includes $1.25 million allocated to OzForex’s Chief Executive Officer, Richard Kimber, who commenced his work as OzForex’s CEO on June 1, 2015.

The executives recently employed by OzForex include the Chief Operating Officer, Chief Technology Officer, Head of People and Culture, Chief Marketing Officer and Acting Head of North America.

The reasons for the Board decision include:

  • new executives have little or no unvested equity allocated to them under OzForex’s long term incentive plan and as such present a retention risk if they get more certain offers of employment;
  • it is in shareholders’ best interests that the services of Mr Kimber and newer key executives are retained to lead the company during the period of uncertainty and beyond if there is no change of control as they will be vital for the execution of OzForex’s Accelerate Strategy;
  • the retention arrangements stimulate the management team to stay with OzForex post any transaction, which has been indicated as a key requirement of Western Union and will help maximise the value realised for shareholders in the event of a change of control.

If the Indicative Proposal proceeds and there is a change of control, the retention pool will vest in favour of eligible management as to 50% upon a change of control, and 50% six months from financial close of the transaction to ensure continuity and retention post the transaction period.

The retention pool will be progressively reduced/replaced by any long term incentives (LTI) granted before any change of control transaction completes. Longer serving executives who have multiple grants under the existing OzForex Long Term Incentive Plan still on foot will not be eligible to participate in the retention pool.

In case there has been no change of control by December 31, 2016, the balance of the retention pool that has not been granted in LTI will lapse.

To view the official announcement from OzForex on the retention arrangements, click here.

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