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 Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
--------
2) Aggregate number of securities to which transaction applies: N/A
---------
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: N/A
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( ) 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: N/A
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2) Form, Schedule, or Registration Statement No.: N/A
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3) Filing Party: N/A
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4) Date Filed: N/A
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<PAGE>
[GRAPHIC]
World Acceptance Corporation
June 30, 2000
To the Shareholders of
World Acceptance Corporation:
In connection with the Annual Meeting of Shareholders of your company to
be held on August 2, 2000, 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 2000 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,
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 2, 2000, 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 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 19, 2000, 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.
Charles D. Walters
Chairman of the Board and
Chief Executive Officer
June 30, 2000
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 June 30, 2000, 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 2, 2000, 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 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 19, 2000, 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
18,627,573. 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 (if any) 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 (if any),
will not be counted as votes cast and will have no effect on the outcome of the
vote on any proposals. Cumulative voting is not permitted under the Company's
articles of incorporation.
On June 19, 2000, 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 19, 2000
<TABLE>
<CAPTION>
Amount and Nature Percent
Name and Address of Beneficial Owner of Beneficial Ownership of Class
------------------------------------ ----------------------- --------
<S> <C> <C>
Wanger Asset Management L.P. (1) 2,971,200 16.0%
Wanger Asset Management, Ltd.
Acorn Investment Trust
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Wasatch Advisors, Inc. (2) 2,462,897 13.2%
150 Social Hall Avenue
Salt Lake City, Utah 84111
James T. Martin (3) 2,450,000 13.2%
Tuppeny House
Tuckestown, Bermuda
Charles D. Walters (4) 2,227,799 11.6%
108 Frederick Street
Greenville, South Carolina 29607
Thomas W. Smith (5) 2,145,750 11.5%
Thomas N. Tryforos
323 Railroad Avenue
Greenwich, Connecticut 06830
</TABLE>
---------------
(1) Based on an amended Schedule 13G dated February 11, 2000. 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 amended Schedule 13G dated February 14, 2000. Wasatch Advisors,
Inc. reported sole voting and dispositive power over all shares listed.
(3) Based on a Form 4 dated June 7, 2000.
(4) Includes 558,199 Shares subject to options exercisable within 60 days of
June 19, 2000, and 27,000 Shares held in trust for the benefit of Mr.
Walters' grandchildren and nephew. Mr. Walters disclaims beneficial
ownership of the 27,000 Shares held in trust. Also includes 190,857 Shares
held by a family limited partnership of which Mr. Walters is the general
partner.
(5) Based on an amended Schedule 13G filed with the Company on February 14,
2000. Each of Mr. Smith and Mr. Tryforos reports shared voting and
disposition power over 2,038,600 Shares. Mr. Smith reports sole voting and
dispositive power over 107,000 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 2001, expected to be held in August 2001, 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 four
regularly scheduled meetings. Each director attended all meetings of the Board
of Directors and of each committee on which he served, except Mr. Gilreath was
unable to attend the 1999 Annual Meeting of Shareholders and related Board of
Directors meeting held the same day, and Mr. Way was unable to attend the Audit
Committee Meeting.
Each director who is not an employee of the Company currently is paid a
$3,000 quarterly retainer, 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.
The Board of Directors maintains an Audit Committee on which Messrs.
Hummers, McLean and Way served during fiscal 2000. In order to comply new NASDAQ
requirements regarding the composition of audit committees, Mr. McLean resigned
from the Audit Committee effective February 2, 2000, and Mr. Bramlett was
elected to fill this position on the Committee. 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. Bramlett, 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.
Bramlett, Gilreath, Hummers and Way serve. 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 (61), 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 (49), 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 (58), 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 (54), Executive Vice President and Chief Financial
Officer, The South Financial Group, Inc., Greenville, South Carolina, a bank
holding company. Mr. Hummers has served in his present capacities with The South
Financial Group, Inc., formerly Carolina First Corporation, since 1988. Mr.
Hummers currently serves as a director of The South Financial Group, Inc.. Mr.
Hummers has served as a director of the Company since April 1989.
CHARLES D. WAY (47), 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. (40), Senior Vice President, Chief Financial Officer,
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, as chief financial officer since
November 1999, 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 19, 2000, 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 19, 2000
<TABLE>
<CAPTION>
Shares Beneficially Owned
--------------------------------------
Name of Individual or Number in Group Amount (1) Percent of Class
------------------------------------- ------------ ----------------
<S> <C> <C>
Charles D. Walters................................................ 2,227,799 (2) 11.6%
A. Alexander McLean, III.......................................... 479,084 (3) 2.5%
R. Harold Owens................................................... 253,223 (4) 1.3%
James R. Gilreath................................................. 154,500 (5) *
Charles D. Way.................................................... 64,000 *
William S. Hummers, III........................................... 60,280 *
Ken R. Bramlett, Jr............................................... 47,800 *
Mark C. Roland.................................................... 32,000 *
Casey K. Johnson.................................................. 21,390 (6) *
Douglas R. Jones.................................................. 15,000 *
Director and all executive
officers as a group (11 persons) ............................. 3,394,576 16.9%
</TABLE>
------------
*Less than 1%.
(1) Includes the following Shares subject to options exercisable within 60 days
of June 19, 2000: Mr. Walters - 558,199; Mr. McLean - 400,684; Mr. Owens -
253,223; Mr. Gilreath - 54,000; Mr. Way - 54,000; Mr. Hummers - 54,000; Mr.
Bramlett - 42,000; Mr. Roland - 32,000; Mr. Jones - 10,000; Directors and
Executive Officers as a group - 1,497,606.
(2) Includes 27,000 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) Includes 51,000 Shares in a self-directed retirement account maintained for
the benefit of Mr. McLean.
(4) Mr. Owens resigned all of his positions with the Company on April 1, 1999.
(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) Mr. Johnson resigned all of his positions with the Company on February 29,
2000.
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, 2000.
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, 1995.
Comparison of Cumulative Total Return Between World
Acceptance Corporation, NASDAQ Composite Index and
NASDAQ Financial Index
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.
The following executive officers have been compensated pursuant to the
objectives described above in accordance with employment agreements and
incentive compensation plans described: Messrs. Walters and McLean since the
beginning of fiscal 1995, Mr. Owens from June 1995 until his resignation
effective April 1, 1999, and Mr. Jones since August 1999. 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 2000, Messrs. Walters, Jones, and McLean were paid the minimum
base salaries established under their employment agreements. The amount of cash
bonuses awarded to Messrs. Walters, Jones, and McLean for fiscal 2000 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 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
8
<PAGE>
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, Jones, and McLean in fiscal 2000 were as follows: earnings per
share--40%; growth in loans receivable--30%; and expense control--30%. Messrs.
Walters and McLean also faced a potential penalty of 10% of their respective
base salaries for not meeting certain investor relations goals. Possible bonuses
ranging from 25% to 150% of base salary for Mr. Walters, from 22.5% to 135% of
base salary for Mr. Jones, and from 20% to 120% of base salary for Mr. McLean
were available for fiscal 2000 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 2000, the Company achieved
maximum performance levels with respect to its goals for earnings per share,
growth in loans receivable, and expense control, and as a result, the cash
bonuses payable under the Executive Incentive Plan amounted to 150.0%, 135.0%
and 120.0% of base salary for Messrs. Walters, Jones, and McLean, respectively.
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, Jones, and McLean.
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.
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. To compensate Messrs. Walters and McLean for any awards that may have
been accrued under the Strategic Incentive Plan, these executives were granted
cash bonuses of $60,000 and $40,000, respectively, and 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. The cash payments
are payable in three equal installments in August 1999, April 2000, and April
2001. 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 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
9
<PAGE>
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.
In addition to the above, Mr. Doug Jones was awarded an option to purchase
50,000 shares of the Company's Common Stock in August 1999 as part of his
employment package. This option is also for a term of 10 years and is
exercisable at $5.78 per share. It vests at the rate of 20% per year over a
period of five years and terminates upon the termination of Mr. Jones'
employment, except under certain circumstances as described above.
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 committees' 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 2000 was determined in the manner and
in accordance with the policies described above.
During fiscal 2000, the Company continued to experience dramatic
improvement in its operating performance. For the 12 months ended March 31,
2000, the Company earned $14.2 million, representing a 93.6% increase over the
prior year, a 9.7% return on average assets and a 23.2% return on average
equity. During the last three fiscal years ended March 31, 1998, 1999, and 2000,
Mr. Walters has overseen increases in the Company's office network of 24, 19,
and 31 net new offices, respectively; and in gross loans receivable, the
Company's primary earning assets, of 15%, 15%, and 16%, 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
Ken R. Bramlett Ken R. Bramlett
James R. Gilreath James R. Gilreath
William S. Hummers, III William S. Hummers, III
Charles D. Way Charles D. Way
10
<PAGE>
Compensation Committee Interlocks and Insider Participation
During fiscal 2000, Messrs. Bramlett, 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, 2000, 1999 and 1998 with respect to the chief
executive officer of the Company and, except as otherwise noted, the four other
executive officers of the Company whose salary and bonus exceeded $100,000 in
the fiscal year ended March 31, 2000. Mr. Johnson became an executive officer of
the Company during fiscal 1999 and Mr. Jones became an executive officer during
fiscal 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Award
--------------------------------------- ---------------------
Other Annual Securities Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Options (#) Compensation($)
--------------------------- ---- --------- -------- --------------- --------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Walters 2000 248,918 399,121 (1) 50,000 29,764(2)
Chairman and Chief 1999 228,480 295,724 (1) 29,840 34,268(3)
Executive Officer 1998 222,000 138,750 (1) 40,276 43,423(4)
Douglas R. Jones 2000 123,958 236,250 (1) 50,000 -
President and Chief 1999 - - (1) - -
Operating Officer 1998 - - (1) - -
A. Alexander McLean, III 2000 170,132 220,818 (1) 50,000 5,125(5)
Executive Vice President 1999 155,255 150,026 (1) 20,182 2,436(5)
and Chief Financial Officer 1998 150,150 75,075 (1) 27,304 4,750(5)
Mark C. Roland 2000 122,231 105,000 (1) 10,000 3,572(5)
Senior Vice President 1999 115,894 87,500 (1) 15,000 3,488(5)
Eastern Division 1998 107,625 45,000 (1) 17,000 1,375(5)
R. Harold Owens 2000 - - (1) 50,000 192,328(6)
Former President and 1999 186,720 204,567 (1) 23,287 1,884(5)
Chief Operating Officer 1998 173,250 100,485 (1) 31,082 4,071(5)
Casey K. Johnson 2000 89,993 56,056 (1) 10,000 3,976(5)
Former Senior Vice 1999 82,590 50,000 (1) 15,000 2,873(5)
President, Western Division 1998 64,375 5,000 (1) 5,000 2,085(5)
</TABLE>
--------------------
11
<PAGE>
(1) 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.
(2) Includes $5,173 in company-matching contributions under the Company's
401(k) plan and $24,591 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.
(3) Includes $2,419 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 $38,673 representing the assumed present value of the
non-term portion of premium payments made on behalf of Mr. Walters by the
Company to purchase split-dollar insurance covering Mr. Walters's life,
assuming repayment of such amount by Mr. Walters upon retirement at age 65
at an interest rate of 8% per annum.
(5) Amount represents company-matching contributions under the Company's 401(k)
plan.
(6) Mr. Owens resigned all of his positions with the Company effective April 1,
1999, and the amount represents severance payments made to Mr. Owens during
fiscal 2000 under the terms of his settlement agreement with the Company,
as described below under "Employment and Severance Agreements."
Option Grants Table. The following table sets forth information with
respect to options granted during the fiscal year ended March 31, 2000 to the
named officers.
Option Grants in Last Fiscal Year (1)
<TABLE>
<CAPTION>
Individual Grants
--------------------------
% of Total Potential Realized
Number of Options Value at Assumed
Securities Granted to Annual Rates of Stock
Underlying Employees Exercise or Price Appreciation for
Options in Fiscal Base Price Expiration Option Term (2)
Name Granted (#) Year (%) ($/Sh) (1) Date 5% ($) 10% ($)
---- ----------- --------- ---------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Walters........... 50,000 11.87 5.375 4/1/09 169,015 428,318
Douglas R. Jones............. 50,000 11.87 5.780 8/16/09 181,751 460,592
A. Alexander McLean, III..... 50,000 11.87 5.375 4/1/09 169,015 428,318
Mark C. Roland............... 10,000 2.37 5.440 10/20/09 34,212 86,700
R. Harold Owens.............. 50,000 11.87 5.375 6/26/01 169,015 428,318
Casey K. Johnson............. 10,000 2.37 5.440 5/28/00 34,212 86,700
</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).
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, 2000.
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........................ 558,199 16,667 156,225 -
Douglas R. Jones.......................... 10,000 40,000 - -
A. Alexander McLean, III.................. 400,684 16,667 94,680 -
Mark C. Roland............................ 32,000 40,000 - -
R. Harold Owens........................... 253,223 - - -
Casey K. Johnson.......................... 49,500 28,000 32,190 -
</TABLE>
(1) The fair market value used for computations in this column was $5.063,
which was the last sales price of the shares on March 31, 2000.
Employment and Severance Agreements. The Company maintains employment
agreements with Messrs. Walters, Jones and McLean. These agreements expire on
April 1, 2003, for Messrs. Walters and McLean and on August 16, 2002, for Mr.
Jones. The terms of these agreements are three years and provide for current
annual base salaries of not less than $260,000, $185,000 and $180,000, for
Messrs. Walters, Jones 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 2000, 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.
Under the agreements with Messrs. Walters, Jones 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 perquisites 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, Jones 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 his resignation, the Company and Mr. Owens
entered into a settlement agreement whereby Mr. Owens continued 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).
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the Audit Committee, has approved the
selection of the firm KPMG 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 LLP for the purposes
set forth above. The Company has been advised by KPMG 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 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
LLP as independent public accountants to audit the books of the Company and its
subsidiaries for the current year.
14
<PAGE>
PROPOSALS FOR 2001 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 2,
2001, 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 16, 2001.
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
June 30, 2000
15
<PAGE>
[GRAPHIC]
World Acceptance Corporation
Notice of Annual Meeting
and
Proxy Statement
Annual Meeting
of Shareholders
to be held on
August 2, 2000
<PAGE>
Appendix A
- FOLD AND DETACH HERE-
-----------------------------------------------------------------------------
Revocable Proxy
World Acceptance Corporation
ANNUAL MEETING OF SHAREHOLDERS
to be held on August 2, 2000
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 19, 2000 at the annual meeting of shareholders to be on
August 2, 2000 or any adjournment thereof.
<TABLE>
<CAPTION>
1. Election of Directors
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY (to vote for all
(except as marked to the contrary below) 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 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 June 30, 2000, 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:________________________________, 2000
Signature:__________________________________
Signature if held jointly:__________________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PREPAID ENVELOPE
