This Section 6.3 sets out the nature and extent of the interests and fees of certain persons involved in the Offer. Other than as set out below or elsewhere in this Prospectus, no:
• Director or proposed Director;
• Person named in this Prospectus and who has performed a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
• Promoter of iSelect; or
• Underwriter to the Offer,
holds at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in:
• The formation or promotion of iSelect;
• Property acquired or proposed to be acquired by iSelect in connection with its formation or promotion, or in connection with the Offer; or
• The Offer,
and no amount (whether in cash, Shares or otherwise) has been paid or agreed to be paid, nor has any benefit been given or agreed to be given to any such person for services in connection with the formation or promotion of iSelect or the Offer or to any Director or proposed Director to induce them to become, or qualify as, a Director.
6.3.1 interests of advisors
iSelect has engaged the following professional advisors:
• Credit Suisse (Australia) Limited and Baillieu Holst Ltd have acted as JLMs to the Offer. iSelect and SaleCo have paid, or agreed to pay, the JLMs the fees described in Section 9.4.1 for these services;
• Gilbert + Tobin has acted as Australian legal advisor (other than in respect of taxation matters) to iSelect in relation to the Offer. iSelect has paid, or agreed to pay, approximately $1,530,000 (excluding disbursements and goods and services tax (GST)), for these services up until the Prospectus Date. Further amounts may be paid to Gilbert + Tobin in accordance with its normal time-based charges;
• Ernst & Young Transaction Advisory Services Limited has acted as the Investigating Accountants and has prepared the Investigating Accountant’s Report and has performed work in relation to due diligence enquiries. iSelect has paid, or agreed to pay, approximately $95,000 (excluding disbursements and GST) for the above services up until the Prospectus Date;
• Ernst & Young has performed work in relation to due diligence enquiries. iSelect has paid, or agreed to pay, approximately $825,000(excluding disbursements and GST) for the above services up until the Prospectus Date; and
• Deloitte Actuaries & Consultants Limited has provided actuarial services to iSelect in relation to the Offer. iSelect has paid or agreed to pay approximately $160,000 (excluding disbursements and GST) for these services.
These amounts, and other expenses of the Offer, will be paid out of funds raised under the Offer or cash otherwise available to iSelect (or one of its subsidiaries). Further information on the use of proceeds and payment of expenses of the Offer is set out in Section 7.1.2.
6.3.2 directors’ interests and remuneration
executive chairman
The total salary for Damien Waller in his position as Executive Chairman is $574,426 per annum (inclusive of superannuation). Mr Waller’s salary is subject to annual review.
In addition, Mr Waller may also receive a bonus of 45% of his salary per annum where key performance indicators and target earnings (as agreed with the Company) are achieved. Mr Waller may also receive an additional annual bonus where performance targets are exceeded (see Section 9.3.1 for more details of Mr Waller’s entitlements under the STI Plan). Mr Waller is also eligible to participate in the iSelect LTI Plan (see Section 9.3.2 for more details).
Mr Waller may terminate his employment, by giving 12 months’ written notice or by giving one month’s notice within six months of him ceasing to hold the position of Executive Chairman, or Executive Director or where the scope of his responsibilities or authority is materially diminished (other than in certain circumstances) or immediately upon the Company committing a serious breach of his contract.
The Company may terminate Mr Waller’s employment by making payment of his salary, superannuation and bonuses for the next 12 months in lieu of notice or where there are unrectified grounds for summary dismissal or serious breach of his contract.
Termination of Mr Waller’s employment by either party will not terminate Mr Waller’s position as a Director and he will be under no obligation to resign as a Director (unless summarily dismissed). Upon termination of Mr Waller’s employment contract he:
• will be subject to a restraint of trade for 12 months. The enforceability of the restraint clause is subject to all usual legal requirements; and
• is entitled to retain copies of all confidential information that the Board has determined may not cause real detriment to the Company if retained by Mr Waller, all intellectual property created by Mr Waller in the course of his employment and all information relating to his capacity as a shareholder or officer
of the Company. Mr Waller may not use any confidential information in competition with the Company for a period of 24 months from the date of termination.
Details of Mr Waller’s escrow arrangements are set out in Section 7.6. Details of Mr Waller’s initial long-term incentive grant of Shares are set out in Section 9.3.2.
chief executive officer
The total fixed remuneration (including superannuation) for Matt McCann in his position as CEO is $500,225 per annum. In addition, Mr McCann is also eligible to receive a bonus of 34% of his salary where key performance indicators and target earnings (as agreed with the Company) are achieved. Mr McCann may also receive an additional annual bonus where performance targets are exceeded (see Section 9.3.1 for more details of Mr McCann’s entitlements under the STI Plan). Mr McCann is also eligible to participate in the iSelect LTI Plan (see Section 9.3.2 for more details). Either Mr McCann or the Company may terminate Mr McCann’s employment by giving 12 months’ written notice or alternatively, in iSelect’s case, payment of total fixed remuneration in lieu of notice. The Company may also direct Mr McCann to take enforced leave during his notice period, during which time he will remain an employee and remain entitled to receive remuneration and all other contractual benefits. Upon termination of Mr McCann’s employment contract, he will be subject to a restraint of trade for a maximum of 18 months. The enforceability of the restraint clause is subject to all usual legal requirements.
Details of Mr McCann’s escrow arrangements are set out in Section 7.6.
non-executive director remuneration
Under the Constitution, the Directors decide the total amount paid to each Director as remuneration for their services as a Director to iSelect. However, under the listing rules of the ASX (ASX Listing Rules or History Rules), the total amount of fees paid to all Directors for their services (excluding, for these purposes, the salary of any executive Director) must not exceed in aggregate in any financial year the amount fixed by iSelect’s general meeting. This amount has been fixed by iSelect (and approved by the shareholders at a general meeting of the Company) at $950,000 per annum. iSelect currently has four non-executive Directors. As at the date of this Prospectus, three of the four non-executive Directors each receive $68,500 per annum in fees (inclusive of superannuation). As a nominee of ninemsn, Pat O’Sullivan has not previously received any fees from iSelect for acting as a non-executive Director; however, following completion of the Offer Pat O’Sullivan will remain on the Board as a non-executive Director and will receive the same fees on the same terms as the other non-executive Directors. After completion of the Offer, each non-exective Director will receive fees of $85,000 per annum (inclusive of superannuation). The Executive Chairman is not paid any fees in addition to his salary disclosed in Section 6.3.2. The Deputy Chairman is paid a fee of $10,000 per annum (in addition to his Director fee). In addition, the chairman of each of the Audit and Risk Management, Remuneration and Nominations Committees will be paid $10,000 annually. The remuneration of Directors must not include a commission on, or a percentage of profits or operating rate. All Directors’ fees include superannuation at the minimum rate required under applicable legislation – currently 9% of the respective amounts.
Listing bonuses
In the event of a successful Listing of the Company, the Executive Chairman, Chief Executive Officer and three other Directors may become eligible to receive a one-off cash bonus. The final amount paid will depend on the size and success of the Offer and each individual’s contribution at the discretion of the Remuneration Committee of the Board. The maximum amounts payable are $150,000 for the Chief Executive Officer, $50,000 for the Executive Chairman and $20,000 to each non-executive Director that is not a nominee Director.
deeds of access, insurance and indemnity for directors
iSelect has entered into deeds of access, insurance and indemnity with each Director which contain rights of access to certain books and records of iSelect for a period of seven years after the Director ceases to hold office. This seven year period can be extended where certain proceedings or investigations commence before the seven year period expires.
Pursuant to the Constitution, iSelect is required to indemnify all Directors and officers, past and present, against all liabilities allowed under law. Under the deed of access, insurance and indemnity, iSelect indemnifies parties against all liabilities to another person that may arise from their position as an officer of iSelect or its subsidiaries or any other entity to which a party to the deed has been appointed as a nominee director at iSelect’s request to the extent permitted by law. The deed stipulates that iSelect will meet the full amount of any such liabilities, including reasonable legal costs and expenses.
Pursuant to the Constitution, iSelect may arrange and maintain Directors’ and Officers’ insurance for its Directors to the extent permitted by law. Under the deed of access, insurance and indemnity, iSelect must obtain such insurance during each Director’s period of office and for a period of seven years after a Director ceases to hold office. This seven year period can be extended where certain proceedings or investigations commence before the seven year period expires.
other information
Directors may also be reimbursed for travel and other expenses incurred in attending to iSelect’s affairs.
If a Director renders or is called on to perform extra services or make any special exertions in connection with the affairs of the Company, the Directors may arrange for special remuneration to be paid to that Director, either in addition to or substitution for that Director’s remuneration set out in Section 6.3.2.
There are no retirement benefit schemes for non-executive Directors, other than statutory superannuation contributions. The interests of Directors and Management are set out in Sections 6.3, 7.1.5, 7.12 and 9.3.
directors’ shareholdings and optionholdings
Directors are not required under the Constitution to hold any Shares or Options. The table below shows the interests of each Director (whether held directly or indirectly) in securities of iSelect as at the date of this Prospectus:
figure 6.3.2.1: Directors’ interests
director shares options
Damien Waller 31,377,6601 nil
Matt McCann 235,2302 nil
Greg Camm 60,000 nil
Pat O’Sullivan nil nil
Leslie Webb (ITV Consulting) 2,400,0003 450,000(at an exercise price of $2.365 per option)
Shaun Bonètt 300,000 nil
1 Excludes 1,351,350 LTIP Shares granted to Damien Waller on 24 May 2013. 2 Excludes 1,891,890 LTIP Shares granted to Matt McCann on 24 May 2013.
3 Leslie Webb (ITV Consulting) has agreed to sell 350,000 of these Shares to SaleCo. See Section 9.2.
Directors may hold their relevant interests in securities shown above directly, or through holdings by companies and trusts. The above disclosure of Leslie Webb’s Shareholding excludes 3,750,000 Shares which are held by a superannuation fund of which Leslie Webb is a member, and in which he has an indirect interest. These Shares are not subject to any escrow arrangements. That fund may sell all or a portion of these Shares during the Escrow Period.
6.3.3 executive remuneration
executive chairman and chief executive officer See Section 6.3.2.
other management personnel
iSelect’s other management personnel are employed under individual executive services agreements. These establish:
• Total compensation, inclusive of base salary and superannuation contribution to a fund of the individual’s election;
• Eligibility to participate in iSelect’s short term incentive scheme and long term incentive scheme. For further details about iSelect’s short term incentive scheme and long term incentive scheme, refer to Section 9.3;
• Variable notice and termination provisions of up to 6 months, or by iSelect without notice in the event of serious misconduct;
• Restraint and confidentiality provisions; and
• For employees, leave entitlements as per the National Employment Standard and applicable legislation.
Certain members of management and other personnel are eligible to receive a discretionary cash bonus in the event of a successful Listing and Offer. The final amount payable to this group will not exceed $350,000 in aggregate. The Remuneration Committee has full discretion in granting these bonuses.
6.3.4 incentive schemes
Full details of iSelect’s incentive arrangements for its employees and senior management (including executive Directors) are contained in Section 9.3.