SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
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 Section 240.14a-11(c) or Section 240.14a-12
WORLD ACCEPTANCE CORPORATION
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] 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>
[GRAPHIC LOGO WORLD ACCEPTANCE CORPORATION APPEARS HERE]
July 1, 1999
To the Shareholders of
World Acceptance Corporation:
In connection with the Annual Meeting of Shareholders of your Company to
be held on August 4, 1999, we enclose a Notice of the Meeting, a Proxy Statement
containing information about the matters to be considered at the Meeting and a
form of proxy relating to those matters.
In addition, we enclose our 1999 Annual Report, which provides information
relating to the Company's activities and operating performance during the most
recent fiscal year.
You are cordially invited to attend the Annual Meeting of Shareholders. We
would appreciate your signing and returning the form of proxy in the enclosed
postage-paid return envelope so that your shares can be voted in the event that
you are unable to attend the Meeting. Your proxy will, of course, be returned to
you if you are present at the Meeting and elect to vote in person. It may also
be revoked in the manner set forth in the Proxy Statement. We look forward to
seeing you at the Annual Meeting.
Sincerely yours,
By: /s/ CHARLES D. WALTERS
-------------------------
Charles D. Walters
Chairman of the Board and
Chief Executive Officer
<PAGE>
WORLD ACCEPTANCE CORPORATION
108 Frederick Street
Greenville, South Carolina 29607
- - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- - --------------------------------------------------------------------------------
To Our Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of World
Acceptance Corporation will be held at the Company's main office at 108
Frederick Street, Greenville, South Carolina, on Wednesday, August 4, 1999, at
11:00 a.m., local time, for the following purposes:
1. To elect six (6) directors to hold office until the next annual
meeting of shareholders or until their successors have been duly
elected and qualified;
2. To consider and act upon a proposal to ratify the action of the Board
of Directors in selecting KPMG Peat Marwick LLP as independent public
accountants to audit the books of the Company and its subsidiaries for
the current fiscal year; and
3. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 18, 1999,
as the record date for determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors of the Company would appreciate your signing and
returning the accompanying form of proxy promptly, so that if you are unable to
attend, your shares can nevertheless be voted at the Annual Meeting.
By:/s/ CHARLES D. WALTERS
-------------------------
Charles D. Walters
Chairman of the Board and
Chief Executive Officer
July 1, 1999
IMPORTANT NOTICE
Please Sign and Mail Your Proxy Promptly
<PAGE>
WORLD ACCEPTANCE CORPORATION
108 Frederick Street
Greenville, South Carolina 29607
---------------
PROXY STATEMENT
---------------
The following statement, first mailed on or about July 1, 1999, is
furnished in connection with the solicitation by the Board of Directors (the
"Board") of World Acceptance Corporation (the "Company") of proxies to be used
at the Annual Meeting of Shareholders of the Company (the "Meeting") to be held
on August 4, 1999, at 11:00 a.m., local time, at the Company's main office at
108 Frederick Street, Greenville, South Carolina, and at any adjournment or
adjournments thereof.
The accompanying form of proxy is for use at the Meeting if a shareholder
will be unable to attend in person. The proxy may be revoked by the shareholder
at any time before it is exercised by submitting to the Secretary of the Company
written notice of revocation, or a properly executed proxy of a later date, or
by attending the Meeting and electing to vote in person. All shares represented
by valid proxies received pursuant to this solicitation, and not revoked before
they are exercised, will be voted in the manner specified therein.
If no specification is made, the proxies will be voted in FAVOR of:
1. The election to the Board of the six (6) nominees named in this Proxy
Statement; and
2. The ratification of the Board's selection of KPMG Peat Marwick LLP as
independent public accountants to audit the books of the Company and
its subsidiaries for the current fiscal year.
The entire cost of soliciting these proxies will be borne by the Company.
In addition to the solicitation of the proxies by mail, the Company will request
banks, brokers, and other record holders to send proxies and proxy materials to
the beneficial owners of the Company's common stock, no par value (the "Common
Stock"), and secure their voting instructions, if necessary. The Company will
reimburse them for their reasonable expenses in so doing. If necessary, the
Company may use several of its regular employees, who will not be specially
compensated, to solicit proxies from shareholders, either personally or by
telephone, telegram, or special letter.
Pursuant to the provisions of the South Carolina Business Corporation Act,
the Board of Directors has fixed June 18, 1999, as the record date for the
determination of shareholders entitled to notice of and to vote at the Meeting
and, accordingly, only holders of record at the close of business on that date
of outstanding shares (the "Shares") of the Common Stock will be entitled to
notice of and to vote at the Meeting.
<PAGE>
The number of outstanding Shares entitled to vote as of the record date
was 19,016,573. Each Share is entitled to one vote. In accordance with South
Carolina law and the Company's bylaws, a majority of the outstanding Shares
entitled to vote, represented in person or by proxy, will constitute a quorum
for the election of directors and the ratification of the selection of auditors.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum.
With regard to the election of directors, votes may either be cast in
favor of or withheld, and directors will be elected by a plurality of the votes
cast. Votes that are withheld will be excluded entirely from the vote and will
have no effect on the outcome of the election of directors. The ratification of
the selection of the auditors will be approved if more votes are cast in favor
of such proposal than are cast against it. Accordingly, abstentions will have no
effect on the outcome of the vote of such proposal. Broker non-votes, which will
not be counted as votes cast, will have no effect on the election of directors
or the approval of auditors. Cumulative voting is not permitted under the
Company's articles of incorporation.
On June 18, 1999, the only class of voting securities the Company had
issued and outstanding was its Common Stock. The following table sets forth the
names and addresses of, and the numbers and percentages of Shares beneficially
owned by, persons known to the Company to beneficially own five percent or more
of the outstanding Shares. Except as noted otherwise, each shareholder listed
below possesses sole voting and investment power with respect to the Shares
listed opposite his name.
2
<PAGE>
Ownership of Shares by Certain
Beneficial Owners as of June 18, 1999
<TABLE>
<CAPTION>
Amount and Nature Percent
Name and Address of Beneficial Owner of Beneficial Ownership of Class
- - ------------------------------------ ----------------------- --------
<S> <C> <C> <C>
Wanger Asset Management L.P. (1) 2,990,200 15.3%
Wanger Asset Management, Ltd.
Acorn Investment Trust
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Mills Value Advisor, Inc. (2) 2,208,000 11.3%
707 East Main Street
Richmond, Virginia 23218
Charles D. Walters (3) 2,204,186 11.3%
108 Frederick Street
Greenville, South Carolina 29607
Wasatch Advisors, Inc. (4) 2,065,911 10.6%
150 Social Hall Avenue
Salt Lake City, Utah 84111
Thomas W. Smith (5) 2,060,750 10.6%
Thomas N. Tryforos
323 Railroad Avenue
Greenwich, Connecticut 06830
- - --------------------------
</TABLE>
(1) Based on an amended Schedule 13G dated February 23, 1999. Wanger Asset
Management, Ltd. reports shared dispositive power over all Shares listed,
and Acorn Investment Trust reports shared voting and dispositive power
over 2,410,000 of the Shares listed.
(2) Based on an amended Schedule 13D dated March 18, 1999. Mills Value
Advisor, Inc. reports sole dispositive power over all Shares listed.
(3) Includes 513,586 Shares subject to options exercisable within 60 days of
June 18, 1999, and 15,000 Shares held in trust for the benefit of Mr.
Walters' grandchildren and nephew. Mr. Walters disclaims beneficial
ownership of the 15,000 Shares held in trust. Also includes 190,857
Shares held by a family limited partnership of which Mr. Walters is the
general partner.
(4) Based on amended Schedule 13G dated February 12, 1999. Wasatch Advisors,
Inc. reported sole voting and dispositive power over all shares listed.
(5) Based on a Schedule 13D filed with the Company on November 4, 1998. Each
of Mr. Smith and Mr. Tryforos has shared voting and disposition power
over 2,038,600 shares. Mr. Smith reports sole voting and dispositive
power over 22,000 shares and Mr. Tryforos reports sole voting and
dispositive power over 150 shares.
3
<PAGE>
ELECTION OF DIRECTORS
The Company's bylaws provide for seven directors. Mr. Harold Owens'
resignation from his position as President and director on April 1, 1999,
created a vacancy on the Board. It is intended that the persons named in the
accompanying proxy will only vote for the six nominees for director named on the
following pages, except to the extent authority to so vote is withheld with
respect to one or more nominees. Each director will be elected to serve until
the next annual meeting of Shareholders or until a successor is elected and
qualified. Directors will be elected by a plurality of the votes cast. The Board
of Directors is seeking a director candidate to fill the vacancy created by Mr.
Owens' resignation, but has yet to fill the vacancy. Any director appointed
after this meeting to fill this vacancy will serve a term expiring at the annual
meeting of shareholders in the year 2000, expected to be held in August 2000, or
until a successor has been duly elected and qualified.
Although the Board does not expect that any of the nominees named will be
unavailable for election, in the event of a vacancy in the slate of nominees
occasioned by death or any other unexpected occurrence, it is intended that
Shares represented by proxies in the accompanying form will be voted for the
election of a substitute nominee selected by the persons named in the proxy.
During the most recent fiscal year, the Board of Directors held three
regularly scheduled meetings. Each director attended all meetings of the Board
of Directors and of each committee on which he served.
Each director who is not an employee of the Company currently is paid a
$3,000 quarterly retainer (up from $1,500 last year), plus $500 for each meeting
of the Board of Directors attended and $200 for each meeting of a committee on
which he serves. All directors are reimbursed for ordinary and necessary
out-of-pocket expenses incurred in attending meetings of the Board of Directors
and its committees. In addition, each outside director receives options to
purchase 6,000 Shares on April 30 of each year pursuant to the terms of the
Company's 1992 and 1994 Stock Option Plans. The exercise price for these options
is the fair market value of the Shares on the date of grant, and each option is
exercisable for 10 years from the date of grant. In May 1999, each non-employee
director also received a one-time payment of $10,000 in recognition of past
services.
The Board of Directors maintains an Audit Committee on which Messrs.
Hummers, McLean and Way serve. The Audit Committee reviews the results and scope
of each audit, the service provided by the Company's independent accountants and
all related-party transactions. The Audit Committee met once during the most
recent fiscal year.
The Board of Directors also maintains a Stock Option Committee on which
Messrs. Gilreath, Hummers and Way serve. This Stock Option Committee administers
the Company's 1992 and 1994 Stock Option Plans. The Stock Option Committee met
two times during the most recent fiscal year.
4
<PAGE>
The Board also maintains a Compensation Committee on which Messrs.
Gilreath, Hummers and Way serve. Mr. Bramlett has also been appointed to the
Compensation Committee for fiscal 2000. The Compensation Committee establishes
and reviews the compensation criteria and policies of the Company, reviews the
performance of the officers of the Company and recommends appropriate
compensation levels to the Board of Directors. The Compensation Committee met
three times during the most recent fiscal year.
The following is a list of nominees for election to the Board of
Directors. Each nominee's name, age, current principal occupation (which has
continued for at least five years unless otherwise indicated), and the name and
principal business of the organization in which that occupation is carried on,
the year each incumbent was first elected to the Board, all positions and
offices presently held with the Company, and directorships in other public
companies are set forth below. Each of the nominees served on the Board of
Directors during the Company's last fiscal year. None of the following nominees
or current directors is related (as first cousin or closer) by blood, marriage,
or adoption to any other nominee, director, or person who may be deemed to be an
executive officer of the Company.
CHARLES D. WALTERS (60), Chairman and Chief Executive Officer, World
Acceptance Corporation. Mr. Walters has served as Chairman of the Board of
Directors and Chief Executive Officer since July 1991 and as a director since
April 1989. Mr. Walters served as President from 1986 to 1996, Executive Vice
President from 1984 to 1986, and as Regional Vice President responsible for
operations in Texas and Oklahoma from 1976 to 1984. Mr. Walters joined a
predecessor of the Company in 1972.
A. ALEXANDER McLEAN, III (48), Executive Vice President and Chief
Financial Officer, World Acceptance Corporation. Mr. McLean has served as
Executive Vice President since August 1996, Senior Vice President since 1992,
and as Vice President and Chief Financial Officer and a director since June
1989. Mr. McLean is a certified public accountant in South Carolina.
JAMES R. GILREATH (57), Attorney, James R. Gilreath, P. A., Greenville,
South Carolina, a law firm. Mr. Gilreath has served as a director of the Company
since April 1989.
WILLIAM S. HUMMERS, III (53), Executive Vice President and Chief Financial
Officer, Carolina First Corporation, Greenville, South Carolina, a bank holding
company. Mr. Hummers has served in his present capacities with Carolina First
Corporation since 1988. From 1987 to 1988, Mr. Hummers served as a vice
president of management reporting of First Union Corporation, a bank holding
company headquartered in Charlotte, North Carolina. Mr. Hummers currently serves
as a director of Carolina First Corporation. Mr. Hummers has served as a
director of the Company since April 1989.
CHARLES D. WAY (46), Chairman, President, and Chief Executive Officer,
Ryan's Family Steak Houses, Inc., Greer, South Carolina, a restaurant company.
Mr. Way has served as president of Ryan's Family Steak Houses, Inc. since 1988,
as its chief executive officer since 1989, and as its chairman since October
1992. From 1986 until 1988, Mr. Way served as executive vice president,
treasurer and secretary of Ryan's Family Steak Houses, Inc. Mr. Way currently
serves as a director of Ryan's Family Steak Houses, Inc. Mr. Way has served as a
director of the Company since September 1991.
5
<PAGE>
KEN R. BRAMLETT, JR. (39), Senior Vice President and General Counsel,
Personnel Group of America, Inc., Charlotte, North Carolina, an information
technology and personnel staffing services company. Mr. Bramlett has served as
senior vice president and general counsel of Personnel Group of America, Inc.
since October 1996, and as a director of that company since August 1997. Prior
to October 1996, Mr. Bramlett was an attorney with Robinson, Bradshaw & Hinson,
P.A., a Charlotte, North Carolina, law firm, for 12 years. Mr. Bramlett has
served as a director of the Company since October 1993.
The following table sets forth the sole (unless otherwise indicated)
beneficial ownership, as defined by Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, of Shares as of June 18, 1999, for each director, nominee,
or executive officer identified in the Summary Compensation Table and all
directors and executive officers as a group.
OWNERSHIP OF COMMON STOCK OF MANAGEMENT AS OF JUNE 18, 1999
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------
Name of Individual or Number in Group Amount (1) Percent of Class
- - ------------------------------------- ---------- ----------------
<S> <C> <C> <C>
Charles D. Walters................................................ 2,204,186 (2) 11.3%
R. Harold Owens................................................... 253,223 (3) 1.3%
A. Alexander McLean, III.......................................... 440,691 (4) 2.3%
Mark C. Roland.................................................... 20,000 *
Casey K. Johnson.................................................. 61,890 *
James R. Gilreath................................................. 148,500 (5) *
William S. Hummers, III........................................... 66,820 *
Charles D. Way.................................................... 68,000 *
Ken R. Bramlett, Jr............................................... 38,800 *
Director and all executive
officers as a group (9 persons) .............................. 3,302,110 16.2%
</TABLE>
- - ----------------
*Less than 1%.
(1) Includes the following Shares subject to options exercisable within 60
days of June 18, 1999: Mr. Walters - 513,586; Mr. Owens - 253,223; Mr.
McLean - 362,291; Mr. Roland - 20,000; Mr. Johnson - 40,500; Mr. Gilreath
- 48,000; Mr. Hummers - 48,000; Mr. Way - 48,000; Mr. Bramlett - 36,000;
Directors and Executive Officers as a group - 1,369,600.
(2) Includes 15,000 Shares held in trust for the benefit of Mr. Walters'
grandchildren and nephew. Mr. Walters disclaims beneficial ownership of
these Shares. Also includes 190,857 Shares held by a family limited
partnership of which Mr. Walters is the general partner.
(3) Mr. Owens resigned all of his positions with the Company on April 1, 1999.
(4) Includes 51,000 Shares in a self-directed retirement account maintained
for the benefit of Mr. McLean.
(5) Includes 7,500 Shares held in a profit-sharing trust for which Mr.
Gilreath serves as trustee. Also includes 90,000 shares in a limited
partnership in which Mr. Gilreath is a partner.
6
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Executive officers, directors, and greater-than-10-percent shareholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. 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, all of the Company's
executive officers, directors, and greater-than-10-percent beneficial owners
have complied with such reporting requirements during the fiscal year ended
March 31, 1999.
SHAREHOLDER RETURN
PERFORMANCE GRAPH. The following chart provides a graphic comparison of
the cumulative shareholder return on the Company's Shares to (a) the cumulative
total return of the NASDAQ Composite Index and (b) the cumulative total return
of the NASDAQ Financial Index. All cumulative returns assume the investment of
$100.00 in each of the Company's Shares, the NASDAQ Composite Index and the
NASDAQ Financial Index on March 31, 1994.
Comparison of Cumulative Total Return Between World
Acceptance Corporation, NASDAQ Composite Index and
NASDAQ Financial Index
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
3/31/94 3/31/95 3/31/96 3/31/97 3/31/98 3/31/99
WORLD ACCEPTANCE CORPORATION 100.000 149.286 190.715 96.429 113.572 92.143
NASDAQ COMPOSITE INDEX 100.000 111.254 151.062 167.837 254.430 342.421
NASDAQ FINANCIAL INDEX 100.000 112.012 154.350 198.442 308.024 274.793
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
Joint Report of the Compensation Committee and the Stock Option Committee
COMPENSATION COMMITTEE
The Compensation Committee is responsible for establishing compensation
and benefits (other than stock option grants) for the members of senior
management of the Company. The Compensation Committee annually evaluates the
Company's performance and compensation paid to the Company's executive officers
and other senior management.
STOCK OPTION COMMITTEE
The Stock Option Committee is responsible for administering the Company's
1992 and 1994 Stock Option Plans and granting stock options and restricted stock
awards under these plans. The Stock Option Committee meets periodically to
consider option grants to newly-hired, promoted, and existing members of
management.
OBJECTIVES AND POLICIES
The Compensation Committee and the Stock Option Committee seek to
establish compensation policies, plans, and programs to accomplish two
objectives: (i) to attract and retain highly capable and well-qualified
executives and (ii) to focus executives' efforts on increasing shareholder
value. To achieve these objectives, the committees have established a
compensation package consisting of base salary, short-term incentive
compensation in the form of annual cash bonuses based on the performance of the
Company during the prior fiscal year, and long-term incentive compensation
primarily in the form of stock options and restricted stock awards that vest
over a period of time.
Since the beginning of fiscal 1995, Messrs. Walters and McLean (and from
June 1995 until his resignation effective April 1, 1999, Mr. Owens) have been
compensated pursuant to the objectives described above in accordance with
employment agreements and incentive compensation plans described. The
Compensation Committee believes that it is desirable to tie a significant
percentage of each executive's overall compensation to the achievement of goals
designed to maximize shareholder value. Accordingly, the employment agreements
provide for minimum base salary levels subject to adjustment at the discretion
of the Compensation Committee, potentially significant annual cash bonus awards
based on the achievement of objective annual Company performance goals, and
potentially significant awards of stock options and restricted stock based on
the achievement of objective long-term Company performance goals.
For fiscal 1999, Messrs. Walters, Owens, and McLean were paid the minimum
base salaries established under their employment agreements. The amount of cash
bonuses awarded to Messrs. Walters, Owens, and McLean for fiscal 1999 were
determined in accordance with the Company's Executive Incentive Plan (the
"Executive Incentive Plan") and based on the Company's achievement of
pre-established annual goals related to (1) increases in earnings per
8
<PAGE>
share, (2) growth in loans receivable, and (3) expense control. The Compensation
Committee selected these goals to motivate and reward the maximization of
shareholder value based on its belief that earnings per share is the most direct
measure of shareholder value and that growth in loans receivable and expense
control are the two most significant determinants of earnings per share. The
relative weights assigned to each of these goals in determining the amount of
cash bonus compensation for Messrs. Walters, Owens, and McLean in fiscal 1999
were as follows: earnings per share--40%; growth in loans receivable--30%; and
expense control--30%. Possible bonuses ranging from 25% to 150% of base salary
for Mr. Walters, from 22.5% to 135% of base salary for Mr. Owens, and from 20%
to 120% of base salary for Mr. McLean were available for fiscal 1999 depending
upon whether the Company reached the pre-established minimum, threshold, target,
or maximum levels of achievement with respect to a particular goal. During
fiscal 1999, the Company achieved maximum performance levels with respect to its
goal for earnings per share, and the targeted performance level with respect to
growth in loans receivable, and expense control, and as a result, the cash
bonuses payable under the Executive Incentive Plan amounted to 120.0%, 108.0%
and 96.0% of base salary for Messrs. Walters, Owens, and McLean, respectively.
Historically, the long-term incentive components of the Company's
executive compensation have been stock options and restricted stock awards under
the 1992 and 1994 Stock Option Plans in accordance with the Company's Executive
Strategic Incentive Plan (the "Strategic Incentive Plan"). Options may have a
term of up to 10 years, but expire earlier upon an executive's termination of
employment. Options granted under the 1992 and 1994 Stock Option Plans are
exercisable at the fair market value of the Shares at the date of grant.
Restricted stock awards may contain such transfer restrictions and vesting and
other terms as determined by the Stock Option Committee.
At the beginning of each fiscal year, Messrs. Walters, Owens, and
McLean have received long-term incentive compensation based upon the achievement
of objective Company performance goals embodied in the Strategic Incentive Plan
for the previous fiscal year. The Strategic Incentive Plan, adopted during
fiscal 1995, is similar in structure to the Executive Incentive Plan, but was
designed to reward performance over a three-year period. The performance goals
on which long-term incentive compensation have been based relate to: (1)
increases in earnings per share, (2) growth in loans receivable, and (3) return
on average equity. The relative weights assigned to those goals as a percentage
of the executive's total award opportunity for fiscal 1999 were as follows:
earnings per share--40%; growth in loans receivable--20%; and return on average
equity--40%. Following the end of fiscal 1999, the Company discontinued the
Strategic Incentive Plan to simplify its compensation programs for senior
management generally and to conserve options for future issuance under its
existing option plans. The Compensation Committee and Stock Option Committee
intend to replace this plan in fiscal 2000 with an alternative designed to
provide long-term incentive compensation on a discretionary basis (through the
use of discretionary stock option grants or otherwise). To compensate Messrs.
Walters and McLean for any awards that may have been accrued under the Strategic
Incentive Plan, these executives were awarded on April 1, 1999, options to
purchase 50,000 Shares, representing in value approximately 35.0% and 50.0% of
each executive's base salary, respectively. One-third of the options granted on
April 1, 1999, vested immediately and the remaining two-thirds vest in equal
increments over the next two years. These options are for a term of 10 years and
are exercisable at $5.375 per share, the average of the high and low sales
9
<PAGE>
price of the Company's Common Stock on the date of grant. The options will
terminate upon the executive's termination of employment, except in the event of
death, disability, and certain involuntary termination, in which case the
options continue to be exercisable for a certain period after termination of
employment. Accordingly, the extent to which these options appreciate in value
depends upon the executive's continued employment with the Company and the
Company's continued performance.
Prior to his resignation on April 1, 1999 from his positions as an
officer, director and employee of the Company, Mr. Owens was employed pursuant
to an employment agreement with the Company that provided for an annual base
salary of not less than $189,414 per year, as determined each year by the
Compensation Committee. In conjunction with this resignation, the Company and
Mr. Owens entered into a settlement agreement whereby Mr. Owens will continue to
receive his base salary and all fringe benefits through April 30, 2000, and was
assigned the title to his Company owned vehicle. Additionally, in lieu of any
award which may have accrued in fiscal 1999 under the Company's Strategic
Incentive Plan, Mr. Owens was awarded options to purchase 50,000 shares of the
Company's Common Stock. These options, as well as all other options previously
awarded by the Company to Mr. Owens, were fully vested under the terms of the
settlement agreement, and all of such options remain exercisable at any time
prior to June 26, 2001 (the stated expiration date of Mr. Owens' employment
agreement).
The compensation of the Company's other two executive officers, Mr. Roland
and Mr. Johnson, provide for bonuses which are based 50% on the achievement of
business unit performance goals and 50% on the same Company performance goals
that determine the compensation of Messrs. Walters and McLean.
Section 162(m) of the Internal Revenue Code prohibits publicly-held
corporations from deducting as an expense for tax purposes the amount by which
compensation paid to certain executives exceeds $1,000,000. Certain types of
incentive compensation are excepted from this prohibition. While the current
compensation levels of the Company's executives are well below this limit, the
committees intend to consider the effects of Section 162(m) in determining
whether any of the committee's policies, or any of the Company's compensation
plans, should be changed to avoid payment of nondeductible compensation.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Walters' compensation for fiscal 1999 was determined in the manner and
in accordance with the policies described above.
During fiscal 1999, the Company experienced improvement in its operating
performance. Actual results were less positive because of a $5.4 million
settlement of certain litigation relating to the Company's non-filing insurance
practices. Excluding this settlement, the Company had several quarters of year
over year increased earnings. During fiscal 1999, the Company earned $10.8
million (excluding the net after tax effect of the legal settlement),
representing a 33% increase in operating income over the prior year, an 8.4%
return on average assets and a 21.3% return on average equity. During the last
three fiscal years ended March 31, 1997, 1998, and 1999, Mr. Walters has
overseen increases in the Company's office network of 54, 24, and 19 net new
offices, respectively; and in gross loans receivable, the Company's primary
earning assets,
10
<PAGE>
of 14%, 15%, and 15%, respectively. Based on these factors, the committees
continue to believe that Mr. Walters' compensation as Chief Executive Officer
appropriately reflects the Company's short-term and long-term performance.
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
James R. Gilreath James R. Gilreath
William S. Hummers, III William S. Hummers, III
Charles D. Way Charles D. Way
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, Messrs. Gilreath, Hummers, and Way served as members
of the Compensation Committee and the Stock Option Committee. Mr. Gilreath is a
member of the law firm of James R. Gilreath, P.A., which, since 1989, has served
and will continue to serve as counsel to the Company.
Summary Compensation Table. The following table sets forth certain
information with respect to compensation paid or accrued by the Company during
the fiscal years ended March 31, 1999, 1998 and 1997 with respect to the chief
executive officer of the Company and the four other executive officers of the
Company whose salary and bonus exceeded $100,000 in the fiscal year ended March
31, 1999. Mr. Owens and Mr. Roland became executive officers of the Company
during fiscal 1996 and Mr. Johnson became an executive officer during fiscal
1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Award
------------------- ------------------
Other Annual Securities Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Options (#) (1) Compensation($)
- - --------------------------- ---- --------- -------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Walters 1999 228,480 229,770 (2) 29,840 34,882(3)
Chairman and Chief 1998 222,000 138,750 (2) 40,276 43,423(4)
Executive Officer 1997 210,000 68,250 (2) 84,076 50,362(5)
R. Harold Owens 1999 186,720 189,414 (2) 23,287 3,137(6)
President and Chief 1998 173,250 100,485 (2) 31,082 4,071(6)
Operating Officer 1997 157,500 46,463 (2) 73,854 85,535(7)
A. Alexander McLean, III 1999 155,255 156,276 (2) 20,182 3,050(6)
Executive Vice President 1998 150,150 75,075 (2) 27,304 4,750(6)
and Chief Financial
Officer 1997 136,500 35,490 (2) 58,847 5,124(6)
Mark C. Roland 1999 115,894 87,500 (2) 15,000 3,488(6)
Senior Vice President 1998 107,625 45,000 (2) 17,000 1,375(6)
Eastern Division 1997 102,083 22,038 (2) 15,000 -
Casey K. Johnson 1999 82,590 50,000 (2) 15,000 2,873(6)
Senior Vice President 1998 64,375 5,000 (2) 5,000 2,085(6)
Western Division 1997 58,500 7,500 (2) 5,000 1,998(6)
- - --------------------------------
(1) Amounts do not include options with respect to 50,000 Shares that were granted on April 1, 1999 to each
Messrs. Walters, Owens, and McLean, for fiscal 1999.
</TABLE>
11
<PAGE>
(2) Certain amounts may have been expended by the Company which may have had
value as a personal benefit to the named officer. However, the total value
of such benefits did not exceed the lesser of $50,000 or 10% of the annual
salary and bonus of such named officer for the fiscal year reported.
(3) Includes $3,033 in Company matching contributions under the Company's
401(k) plan and $31,849 representing the assumed present value of the
non-term portion of premium payments made on behalf of Mr. Walters by the
Company to purchase split-dollar insurance covering Mr. Walters's life,
assuming repayment of such amount by Mr. Walters upon retirement at age 65
at an interest rate of 8% per annum.
(4) Includes $4,750 in Company matching contributions under the Company's
401(k) plan and $38,673 representing the assumed present value of the
non-term portion of premium payments made on behalf of Mr. Walters by the
Company to purchase split-dollar insurance covering Mr. Walters's life,
assuming repayment of such amount by Mr. Walters upon retirement at age 65
at an interest rate of 8% per annum.
(5) Includes $5,275 in Company matching contributions under the Company's
401(k) plan and $45,087 representing the assumed present value of the
non-term portion of premium payments made on behalf of Mr. Walters by the
Company to purchase split-dollar insurance covering Mr. Walters' life,
assuming repayment of such amount by Mr. Walters upon retirement at age 65
at an interest rate of 8% per annum.
(6) Amount represents Company matching contributions under the Company's
401(k) plan.
(7) Includes $3,605 in Company matching contributions under the Company's
401(k) plan and $81,930 in relocation-related special bonuses.
Option Grants Table. The following table sets forth information with
respect to options granted during the fiscal year ended March 31, 1999 to the
named officers.
OPTION GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
Individual Grants
-----------------
% of Total Potential Realized
Number of Options Value at Assumed
Securities Granted to Annual Rates of Stock
Underlying Employees Exercise or Price Appreciation for
Options in Fiscal Base Price Expiration Option Term (2)
Name Granted (#) Year (%) ($/Sh)(1) Date 5% ($) 10% ($)
- - ---- ----------- -------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles D. Walters........... 29,840 7.20 6.69 4/1/08 125,546 318,158
R. Harold Owens.............. 23,287 5.62 6.69 6/26/01 97,976 248,289
A. Alexander McLean, III..... 20,182 4.87 6.69 4/1/08 84,912 215,183
Mark C. Roland............... 15,000 3.62 5.25 10/28/08 49,525 125,507
Casey K. Johnson............. 15,000 3.62 5.25 10/28/08 49,525 125,507
- - ----------------------------
</TABLE>
(1) All Options shown in this table were granted under the Company's 1992
Stock Option Plan and 1994 Stock Option Plan at the fair market value of
the Shares on the date of grant (defined as the average of the high and
low sale prices of the Shares as quoted on the NASDAQ National Market
System). As of June 18, 1999, the Company has granted options covering
1,432,500 shares under the 1992 Stock Option Plan and 2,071,540 shares
under the 1994 Stock Option Plan to approximately 263 employees,
including the named officers, and to its outside directors.
12
<PAGE>
(2) These amounts represent only certain assumed rates of appreciation.
Actual gains, if any, on stock option exercises and Common Stock holdings
cannot be predicted, and there can be no assurance that the gains set
forth in the table can be achieved. No gains to the option holders are
possible without increases in the price of the Shares, which will benefit
all shareholders.
Option Year-End Value Table. The following table sets forth information
with respect to unexercised options held as of March 31, 1999.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options at FY-End (#) Options at FY-End ($) (1)
--------------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C>
Charles D. Walters .................. 496,919 27,947 181,088 -
R. Harold Owens .................. 203,223 - 1,268 -
A. Alexander McLean, III .................. 345,624 21,727 109,890 -
Mark C. Roland .................. 20,000 42,000 945 4,095
Casey K. Johnson .................. 40,500 27,000 37,055 2,615
</TABLE>
- - -------------------------
(1) The fair market value used for computations in this column was $5.375,
which was the last sales price of the shares on March 31, 1999.
Employment Agreements. The Company maintains employment agreements with
Messrs. Walters and McLean. These agreements expire on April 1, 2001. The terms
of these agreements are three years and provide for current annual base salaries
of not less than $229,770 and $156,276, for Messrs. Walters and McLean,
respectively, as determined by the Compensation Committee. These salaries are
subject to annual increases as determined by the Compensation Committee. In
addition, the agreements provide for the payment of annual cash incentive
payments in accordance with the terms of the Company's Executive Incentive Plan,
based on the Company's achievements of certain pre-established performance
criteria. For fiscal 1999, the performance criteria related to achievement of a
certain level of earnings per common share, a certain amount of growth in loans
receivable, and the control of general and administrative expenses within
certain limits.
The agreements also provide for the payment of long-term incentive awards
in accordance with the Company's Strategic Incentive Plan, which was
discontinued at the end of fiscal 1999. The Compensation Committee and Stock
Option Committee intend to replace this plan in fiscal 2000 with an alternative
designed to provide long-term incentive compensation on a discretionary basis
(through the use of discretionary stock options or otherwise).
Under the agreements with Messrs. Walters and McLean, the Company has
agreed to provide each with long-term disability insurance benefits equal to 60%
of such executive's base salary at the time of disability, and Mr. Walters'
agreement requires the Company to provide at least $2,000,000 in life insurance
coverage payable to Mr. Walters' designated beneficiary in the event of his
death. These agreements also provide for severance payments and the continuation
of certain benefits if either executive is terminated without cause or
constructively discharged (as defined in the agreements). In the event of such
termination without cause or constructive
13
<PAGE>
discharge, including any such termination or discharge that occurs within one
year after a change of control of the Company, the executive is entitled to
receive (i) severance pay equal to 100% of such executive's base salary at the
time of termination or change of control, as the case may be, for the longer of
24 months or the remaining term of the employment agreement, (ii) the
continuation of all other prerequisites and benefits available under the
agreement for a period of 24 months from the date of termination, and (iii)
annual incentive compensation payments prorated to the date of termination.
Messrs. Walters and McLean have agreed not to compete with the Company
during the term of their employment and for two years thereafter.
Prior to his resignation on April 1, 1999 from his positions as an
officer, director and employee of the Company, Mr. Owens was employed pursuant
to an employment agreement with the Company that provided for an annual base
salary of not less than $189,414 per year, as determined each year by the
Compensation Committee. In conjunction with this resignation, the Company and
Mr. Owens entered into a settlement agreement whereby Mr. Owens will continue to
receive his base salary and all fringe benefits through April 30, 2000, and was
assigned the title to his Company owned vehicle. Additionally, in lieu of any
award which may have accrued in fiscal 1999 under the Company's Strategic
Incentive Plan, Mr. Owens was awarded options to purchase 50,000 shares of the
Company's Common Stock. These options, as well as all other options previously
awarded by the Company to Mr. Owens, were fully vested under the terms of the
settlement agreement, and all of such options remain exercisable at any time
prior to June 26, 2001 (the stated expiration date of Mr. Owens' employment
agreement). Mr. Owens has agreed not to compete with the Company for a period of
13 months following his resignation.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the Audit Committee, has approved
the selection of the firm KPMG Peat Marwick LLP as independent public
accountants to examine the books of the Company and its subsidiaries for the
current year, to report on the consolidated balance sheet and related statement
of operations of the Company and its subsidiaries, and to perform such other
appropriate accounting services as may be required by the Board. The Board
recommends that the shareholders vote in favor of ratifying and approving the
selection of KPMG Peat Marwick LLP for the purposes set forth above. The Company
has been advised by KPMG Peat Marwick LLP that the firm did not have any direct
financial interest or any material indirect financial interest in the Company
and its subsidiaries during the Company's most recent fiscal year.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Meeting with the opportunity to make a statement if they so desire, and they are
expected to be available to respond to appropriate questions.
Approval of the proposal requires the affirmative vote of a majority of
the Shares voted on the proposal. Should the shareholders vote negatively, the
Board of Directors will consider a change in auditors for the next year.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFYING THE SELECTION OF
KPMG PEAT MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE BOOKS OF
THE COMPANY AND ITS SUBSIDIARIES FOR THE CURRENT YEAR.
14
<PAGE>
PROPOSALS FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who intend to present proposals for consideration at next
year's annual meeting are advised that any such proposal must be received by the
Secretary of the Company by no later than the close of business on March 3,
2000, if such proposal is to be considered for inclusion in the proxy statement
and proxy appointment form relating to that meeting. Only persons who have held
beneficially or of record at least $2,000 in market value, or 1% of the
outstanding Common Stock, for at least one year on the date the proposal is
submitted and who continue in such capacity through the meeting date are
eligible to submit proposals to be considered for inclusion in the Company's
proxy statement. In addition, under SEC rules, proxies of the Board of Directors
may exercise their discretionary voting authority to vote against any
shareholder proposal raised at next year's annual meeting if notice of such
proposal is received by the Secretary of the Company later than the close of
business on May 17, 2000.
OTHER MATTERS
The Board and the Company's officers are not aware of any other matters
that may be presented for action at the Meeting, but if other matters do
properly come before the Meeting, it is intended that Shares represented by
proxies in the accompanying form will be voted by the persons named in the proxy
in accordance with their best judgement.
You are cordially invited to attend this year's Meeting. However, whether
you plan to attend the Meeting or not, you are respectfully urged to sign and
return the enclosed proxy, which will, of course, be returned to you at the
Meeting if you are present and so request.
CHARLES D WALTERS
Chairman of the Board and
Chief Executive Officer
July 1, 1999
15
<PAGE>
[GRAPHIC LOGO APPEARS HERE]
Notice of Annual Meeting
and
Proxy Statement
Annual Meeting
of Shareholders
to be held on
August 4, 1999
<PAGE>
**********************************APPENDIX*********************************
FOLD AND DETACH HERE
---------------------------------------------------------------------------
REVOCABLE PROXY WORLD ACCEPTANCE CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 4, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints A. Alexander McLean, III and Jeffrey W. Ohly
as Proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and to vote, as designated below, all
the shares of common stock of World Acceptance Corporation (the "Company")
held of record by the undersigned on June 18, 1999 at the annual meeting of
shareholders to be on August 4, 1999 or any adjournment thereof.
<TABLE>
<CAPTION>
<S> <C>
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY (to vote
(except as marked to the contrary below) for all nominees listed below)
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
Charles D. Walters; A. Alexander McLean, III; James R. Gilreath; William S.
Hummers, III; Charles D. Way; and Ken R. Bramlett, Jr.
2. PROPOSAL TO RATIFY THE BOARD OF DIRECTORS' SELECTION OF KPMG PEAT MARWICK
LLP as the Company's independent public accountants
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign and date on the reverse side and return in the enclosed
postage-prepaid envelope.
<PAGE>
FOLD AND DETACH HERE
---------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH PROPOSAL AND THE
ELECTION OF THE DIRECTOR NOMINEES NAMED HEREIN, AND THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL AND FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED HEREIN
UNLESS THE SHAREHOLDER DIRECTS OTHERWISE, IN WHICH CASE IT WILL BE VOTED AS
DIRECTED.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF
THE NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT DATED JULY 1, 1999, AND REVOKES
ALL PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED.
Please sign exactly as name appears below.
When shares are held by joint tenants,
both should sign. When signing as
attorney, as 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
POSTAGE-PREPAID ENVELOPE
