<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-12
</TABLE>
Bestway, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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:
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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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
BESTWAY, INC.
7800 N. STEMMONS, SUITE 320
DALLAS, TX 75247
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 11, 2001
----------
TO THE STOCKHOLDERS OF
BESTWAY, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Bestway, Inc., a Delaware corporation (the "Company"), will be held at 9:00
a.m., Central Daylight Time, at the corporate office, 7800 N. Stemmons,
Suite 320, Dallas, TX on Thursday, January 11, 2001 for the following
purposes:
1. To elect four (4) directors of the Company, each to serve until the
next annual meeting of stockholders and until his successor has been
duly elected and qualified; and
2. To amend the Company's Incentive Stock Option Plan to increase the
number of shares available for issuance pursuant to options granted
under such plan; and
3. To consider and act upon the ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent public
accountants for the 2001 fiscal year; and
4. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
Management is not aware of any other matters that will come before the
meeting.
The Board of Directors has fixed the close of business on Monday,
December 4, 2000 as the Record Date for the determination of stockholders
entitled to notice of and vote at this meeting and any adjournment thereof,
and only stockholders of record at such time will be so entitled to vote.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN AND MAIL
THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE PROMPTLY, WHETHER OR NOT
YOU INTEND TO BE PRESENT AT THE MEETING. THE PROXY IS REVOCABLE AT ANY TIME
PRIOR TO ITS EXERCISE.
By Order of the Board of Directors,
/s/ Beth A. Durrett
-------------------
Beth A. Durrett
Secretary
December 13, 2000
Dallas, Texas
<PAGE> 3
PROXY STATEMENT
BESTWAY, INC.
----------
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 11, 2001
----------
INTRODUCTION
The accompanying proxy is being solicited by the Board of Directors of
Bestway, Inc. a Delaware Corporation (the "Company"), on behalf of the
Company for use at the annual meeting (the "Annual Meeting") of
stockholders to be held at the corporate office, 7800 N. Stemmons, Suite
320, Dallas, Texas on Thursday, January 11, 2001 at 9:00 a.m., Central
Daylight Time and at any adjournment thereof. The approximate date of which
the Proxy Statement and the form of Proxy are being sent to stockholders is
December 13, 2000. The cost of preparing and mailing the enclosed material
is to be borne by the Company.
At the Annual Meeting, the following matters will be considered:
1. The election to the Company's Board of Directors of four (4)
directors, each to serve until the next annual meeting of stockholders
and until his successor has been duly elected and qualified; and
2. The amendment of the Company's Incentive Stock Option Plan (the
"Incentive Plan") to increase the number of shares available for
issuance pursuant to options granted under the Incentive Plan; and
3. The ratification of the appointment of PricewaterhouseCoopers LLP as
the Company's independent public accountants for the 2001 fiscal year;
and
4. The transaction of such other business as may properly come before the
meeting or any adjournment(s) thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ELECTION AS DIRECTORS OF THE NOMINEES NAMED HEREIN, FOR THE PROPOSED
AMENDMENT OF THE INCENTIVE PLAN AND FOR THE RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
2001 FISCAL YEAR.
Proxies in the accompanying form, which are properly executed and duly
returned to the Company, will be voted in accordance with the instructions
contained therein. If no instruction is given with respect to any proposal
to be acted upon, the proxy will be voted in favor of the proposals set
forth therein. Each proxy granted may be revoked at any time prior to its
exercise by the subsequent execution and submission of a revised proxy, by
written notice to the Secretary of the Company, or by voting in person at
the meeting.
Votes cast by proxy or in person at the Annual Meeting will be counted
by the persons appointed by the Company to act as election inspectors for
the meeting. The election inspectors will treat shares represented by
proxies that reflect abstentions as shares that are present and entitled to
vote, for purposes of determining the presence of a quorum and for purposes
of determining the outcome of any matter submitted to the shareholders for
a vote. Abstentions, however, do not constitute a vote "for" or "against"
any matter and thus will be disregarded in the calculation of a plurality
or of "votes cast".
1
<PAGE> 4
The election inspectors will treat shares referred to as "broker
non-votes" (i.e., shares held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote that the broker or nominee does not have discretionary
power to vote on a particular matter) as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
However, for purposes of determining the outcome of any matter as to which
the broker has physically indicated on the proxy that it does not have
discretionary authority to vote, those shares will be treated as not
present and entitled to vote with respect to that matter (even though those
shares are considered entitled to vote for quorum purposes and may be
entitled to vote on other matters).
In the election of directors ("Directors") to the Board of Directors,
shares present but not voting will be disregarded (except for quorum
purposes) and the candidates for the election receiving the highest number
of affirmative votes of the shares entitled to be voted for them, up to the
number of Directors to be elected by those shares, will be elected and
votes cast against a candidate or votes withheld will have no legal effect.
VOTING SECURITIES AND VOTE REQUIRED
The only class of voting securities of the Company is its Common
Stock, par value $.01 per share (the "Common Stock"), each share of which
entitles the holder thereof to one vote. As of December 4, 2000, there were
1,756,917 shares of the Company's Common Stock outstanding and entitled to
vote at the Annual Meeting or any adjournment thereof. Assuming the
presence of a quorum, the affirmative vote of a majority of the shares of
Common Stock represented and entitled to vote at the Annual Meeting of
Stockholders is required for the adoption of the proposals set forth herein
except for the election of Directors (Proposal No. 1), in which nominees
will be elected by a plurality of the votes of the shares present in person
or by proxy and entitled to vote on the election of Directors.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of December 4,
2000, obtained from information furnished by the persons named below,
concerning the beneficial stock ownership of each person known to the
Company who may be deemed to be the beneficial owner of more than five
percent of the Company's Common Stock, each Director of the Company and all
Directors and executive officers of the Company as a group. The Company has
no other class of equity securities outstanding other than its Common
Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
Name and Address COMMON STOCK PERCENT
of Beneficial Owner BENEFICIALLY OWNED(1) OF CLASS
----------------------------------------- ---------------------------- -----------------
<S> <C> <C>
O'Donnell & Masur, L.P. ("O&M") 981,872 52.8%
5949 Sherry Lane, Suite 1450
Dallas, Texas 75225
James A. O'Donnell(2) 2,000 *
5949 Sherry Lane, Suite 1450
Dallas, Texas 75225
Mark Masur(3) 800 *
5949 Sherry Lane, Suite 1450
Dallas, Texas 75225
R. Brooks Reed(4) 58,783 3.2%
7800 Stemmons, Suite 320
Dallas, Texas 75247
Bernard J. Hinterlong -- --
7800 Stemmons, Suite 320
Dallas, Texas 75247
Jack E. Meyer 16,203 *
7800 Stemmons, Suite 320
Dallas, Texas 75247
Teresa A. Sheffield(5) 75,000 4.0%
7800 Stemmons, Suite 320
Dallas, Texas 75247
Beth A. Durrett(6) 23,720 1.3%
7800 Stemmons, Suite 320
Dallas, Texas 75247
Joe R. McElroy(7) 17,500 *
7800 Stemmons, Suite 320
Dallas, Texas 75247
Vincent E. Jarbo(8) 16,250 *
7800 Stemmons, Suite 320
Dallas, Texas 75247
All Directors and executive officers 1,192,128 64.1%
as a group (8 persons)
Robert D. Simons 92,517 5.0%
1473 Omni Blvd.
Mt. Pleasant, South Carolina 29466
</TABLE>
* less than 1%
3
<PAGE> 6
(1) Except as noted, beneficial ownership consists of sole voting and
investment power. The inclusion of shares that may be deemed beneficially
owned herein, however, does not constitute an admission that the named
stockholders are direct or indirect beneficial owners of such shares.
(2) Mr. O'Donnell has sole voting power and sole investment power with respect
to 2,000 shares of Common Stock of the Company that he owns directly. Mr.
O'Donnell by virtue of his being a general partner of O&M may be deemed,
for purposes of determining beneficial ownership pursuant to Rule 13d-3, to
own beneficially the 981,872 shares of Common Stock owned by O&M.
(3) Mr. Masur has sole voting power and sole investment power with respect to
80 shares of Common Stock of the Company that he owns directly. Mr. Masur
by virtue of his being a general partner of O&M may be deemed, for purposes
of determining beneficial ownership pursuant to Rule 13d-3, to own
beneficially the 981,872 shares of Common Stock owned by O&M.
(4) Excludes a total of 71,000 shares of Common Stock of the Company owned by
Mr. Reed's spouse and adult children which Mr. Reed may be deemed
beneficially to own.
(5) Includes options to purchase 60,800 shares of Common Stock granted to Ms.
Sheffield, which are currently exercisable or will be exercisable within 60
days.
(6) Includes options to purchase 8,760 shares of Common Stock granted to Ms.
Durrett, which are currently exercisable or will be exercisable within 60
days.
(7) Includes options to purchase 17,500 shares of Common Stock granted to Mr.
McElroy, which are currently exercisable or will be exercisable within 60
days.
(8) Includes options to purchase 16,250 shares of Common Stock granted to Mr.
Jarbo, which are currently exercisable or will be exercisable within 60
days.
4
<PAGE> 7
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The By-laws of the Company provide that the number of Directors which
shall constitute the whole Board shall be fixed and determined from time to
time by resolution adopted by the Board of Directors. This year four (4)
persons will comprise the Board and will be elected. Each Director will
serve until the next annual meeting of stockholders and until his successor
has been elected and qualified. The election of Directors requires a
plurality of the votes cast at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE DIRECTOR NOMINEES.
It is intended that the shares represented by properly executed
proxies will be voted for the election of the persons listed below except
where authority to so vote is withheld. The nominees have indicated that
they are willing to serve as Directors, and management of the Company does
not contemplate that any of the nominees will be unable to serve as a
Director or become unavailable for any reason, but if that should occur
before the meeting, such proxy will be voted for another nominee or
nominees to be selected by management.
The nominees for Director, all of whom are now serving as Directors of
the Company are listed below together with biographical information as to
(i) the name and age of each nominee, (ii) the position and offices with
the Company of each nominee, (iii) the year during which each nominee first
became a Director of the Company, and (iv) the principal occupation or
employment of such nominee for at least the past five years.
<TABLE>
<CAPTION>
NOMINEE AGE CURRENT POSITION(S) WITH THE COMPANY
------------------------------- ------------ ------------------------------------------
<S> <C> <C>
Jack E. Meyer 57 Director and Member of the Audit Committee
of the Board of Directors
James A. O'Donnell 48 Director and Member of the Audit Committee
of the Board of Directors
Bernard J. Hinterlong 54 Director and Member of the Audit Committee
of the Board of Directors
R. Brooks Reed 59 Chairman of the Board and Chief Executive
Officer
</TABLE>
Mr. Meyer has served as a director of the Company since 1980. Mr.
Meyer currently manages his personal investment portfolio. From January
1994 to October 1998, he served as President and Chief Executive Officer of
Urologix, Inc.
Mr. O'Donnell has served as a director of the Company since 1987. Mr.
O'Donnell is currently a partner with the private equity firm of Cravey,
Green & Wahlen and since 1987 has been a general partner of O'Donnell and
Masur, L.P., a venture capital investment firm which is a significant
stockholder and debt holder of the Company.
Mr. Hinterlong has served as a director of the Company since December
1999. Mr. Hinterlong is currently President of Thomas Conveyor Company.
From 1975 to 1986, he held several positions with Continental Screw
Conveyor Company.
5
<PAGE> 8
Mr. Reed has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since 1979. From 1983 to May 1997, Mr.
Reed served as President of the Company. Mr. Reed is also a principal of
Phoenix Partners, Inc., a private investment company engaged in the
acquisition and operation of medium-sized businesses in a variety of
industries.
The executive officers of the Company on the Record Date are as
follows:
<TABLE>
<CAPTION>
NOMINEE AGE CURRENT POSITION(S) WITH THE COMPANY
-------------------------------- ------------ -------------------------------------
<S> <C> <C>
Teresa A. Sheffield 40 President and Chief Operating Officer
Beth A. Durrett 43 Chief Financial Officer and Secretary
Joe R. McElroy 43 Vice President - Real Estate
Vincent E. Jarbo 35 Regional Vice President
</TABLE>
Ms. Sheffield has served as President and Chief Operating Officer
since May 1997. From July 1992 to May 1997, Ms. Sheffield served as Vice
President - Operations. From February 1988 to July 1992, Ms. Sheffield
served in various capacities with the Company.
Ms. Durrett has served as Chief Financial Officer since October 1998.
From May 1997 to September 1998, Ms. Durrett served as Senior Vice
President - Finance. From 1987 to May 1997, Ms. Durrett served as Vice
President - Controller and was appointed Secretary in 1991. Ms. Durrett has
served in various capacities with the Company since September 1979.
Mr. McElroy has served as Vice President - Real Estate since May 1997.
From January 1996 to May 1997, Mr. McElroy served as Director - Real
Estate. Prior to joining the Company, Mr. McElroy was Director of Real
Estate for Drinkard Development, Inc.
Mr. Jarbo has served as Regional Vice President since February 2000.
From January 1995 to May 1998, Mr. Jarbo served as District Manager and
from May 1998 to February 2000, Mr. Jarbo served as Regional Manager. Prior
to joining the Company, Mr. Jarbo was a Store Manager for Rent-A-Center,
Inc.
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND FEES
The Board of Directors held four regular meetings during the fiscal
year ended July 31, 2000. No Director attended fewer than 75% of the
meetings of the Board of Directors or committees thereof from August 1,
1999 to July 31, 2000.
The Board of Directors has a three member Audit Committee, which held
one meeting during the fiscal year, ended July 31, 2000. The Audit
Committee, no member of which is an officer of the Company, is responsible
for (a) nominating the independent auditors for the annual audit, (b)
reviewing the plan for the audit and related services and reviewing audit
results and annual financial statements, (c) overseeing the adequacy of the
Company's system of internal accounting controls and compliance with the
Foreign Corrupt Practices Act, and (d) overseeing compliance with
Securities and Exchange Commission requirements of disclosure of Audit
Committee activities. The present members of the Audit Committee, none of
whom is otherwise employed by the Company, are Jack E. Meyer, Bernard J.
Hinterlong and James A. O'Donnell.
6
<PAGE> 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is indebted to O&M in the principal amount of $3,000,000.
One of the Company's Directors, James A. O'Donnell, is a general partner in
O&M.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows all cash and other
compensation paid (or to be paid) by the Company for the fiscal years ended
July 31, 2000, 1999 and 1998 to the Company's Chief Executive Officer and
four other most highly compensated executive officers for services rendered
in all capacities in which they served during each period whose total
annual salary and bonus exceeded $100,000 in the fiscal year ended July 31,
2000.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------- -----------------
RESTRICTED
Name and Fiscal Salary Bonus Stock All Other
Principal Position Year ($) ($) Award ($) Compensation
------------------------------ ----------- ------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
R. Brooks Reed, Chairman 2000 $150,000 -- -- --
and Chief Operating Officer 1999 $150,000 -- -- --
1998 $150,000 -- -- --
Teresa A. Sheffield, 2000 $150,000 79,211 -- --
President and Chief 1999 $147,885 47,851 -- --
Operating Officer 1998 $125,000 17,203 -- --
Beth A. Durrett, 2000 $127,289 24,347 -- --
Chief Financial Officer and 1999 $111,058 8,954 -- --
Secretary 1998 $ 92,308 17,706 -- --
Joe R. McElroy, 2000 $134,000 30,998 -- --
Vice President - Real 1999 $122,750 3,204 -- --
Estate 1998 $ 87,172 19,199 -- --
Vincent E. Jarbo, 2000 $108,654 44,672 -- --
Regional Vice President 1999 $ 99,206 27,912 -- --
1998 $ 64,000 7,225 -- --
</TABLE>
7
<PAGE> 10
OPTION GRANTS TABLE
The following table includes the following information for all options
granted by the Company for the fiscal year ended July 31, 2000 to the
Company's Chief Executive Officer and four most highly compensated
executive officers listed above: (i) the number of shares covered by such
options; (ii) the percent that such options represented of total options
granted to all the Company's employees during the 2000 fiscal year; (iii)
the exercise price; and (iv) the expiration date.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN 2000 PRICE PER EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
------------------- ------------- --------------- ------------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
R. Brooks Reed -- -- -- -- -- --
Teresa A. Sheffield -- -- -- -- -- --
Beth A. Durrett -- -- -- -- -- --
Joe R. McElroy -- -- -- -- -- --
Vincent E. Jarbo -- -- -- -- -- --
Rhonda M. Wilson -- -- -- -- -- --
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
The following table shows for the fiscal year ended July 31, 2000 to
the Company's Chief Executive Officer and four most highly compensated
executive officers listed above: (i) the number of shares of the Company's
Common Stock acquired upon exercise of options during fiscal year 2000;
(ii) the aggregate dollar value realized upon exercise; (iii) the total
number of unexercised options held at the end of fiscal year 2000; and (iv)
the aggregate dollar value of in-the-money unexercised options held at the
end of fiscal year 2000.
<TABLE>
<CAPTION>
Number of Unexercised Number of Unexercised
Options at 2000 Fiscal In-the-Money Options at
Shares Value Year End 2000 Fiscal Year End(1)
Acquired on Realized ---------------------------- --------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
-------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. Brooks Reed -- -- -- -- -- --
Teresa A. Sheffield -- -- 60,800 -- $30,400 --
Beth A. Durrett -- -- 8,760 6,280 -- --
Joe R. McElroy -- -- 17,500 7,500 -- --
Vincent E. Jarbo -- -- 16,250 3,750 $ 7,500 --
</TABLE>
(1) Market value of underlying securities is based on the closing price of such
securities on July 31, 2000.
8
<PAGE> 11
RETIREMENT SAVINGS PLAN PROGRAM - 401(K) PLAN
The Company established a Retirement Savings Plan (the "Savings Plan")
effective as of September 1, 1994, which is intended to qualify under
Section 401(k) of the Internal Revenue Code (the "Code"). Employees who
have been employed with the Company for one year or more are eligible for
participation in the Savings Plan. Employees may elect to reduce up to 15%
of their annual compensation (subject to certain limitations under the
Code) by having such amounts contributed to the Savings Plan. The Board
intends to conduct a review at the end of each fiscal year to determine
whether the Company will make any additional or matching contribution to
the Savings Plan. For the year ended July 31, 2000, the Company contributed
approximately $145,000 to the Savings Plan. For the years ended July 31,
1999 and 1998, the Company made no matching contributions to the Savings
Plan. All assets of the Savings Plan are held in trust.
COMPENSATION OF DIRECTORS
The Company's policy is to reimburse its directors for travel, lodging
and related expenses incurred on account of attendance at meetings of the
Board of Directors and committees thereof. For their participation in
special meetings of the Board convened by conference telephone call, for
services in relation to any matters adopted by the unanimous written
consent of the directors, and for all the various services rendered,
directors, other than those who are employees or consultants of the
Company, receive an annual retainer of $1,200. Additionally, each director,
other than those who are officers or employees of the Company, receives
$500 for each meeting attended. In order to conserve cash, no fees have
been paid in cash to any director since 1988 and from 1984 through 1988,
directors received Common Stock of the Company in lieu of fees.
Furthermore, in connection with the 1993 restructuring of the Company,
Messrs. R. Brooks Reed and Jack E. Meyer received 109,658 and 13,271
shares, respectively, of the Company's Common Stock. The purpose of
granting stock to Messrs. Reed and Meyer was to prevent dilution of their
respective ownership positions in the Company, to provide an incentive to
them to build stockholder value following the restructuring and to
compensate them for past service to the Company, including, but no limited
to, their waiver of directors fees and service as directors without
compensation since 1988.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions regarding the compensation of the executive officers of the
Company are made by the Board of Directors. In fiscal year 2000, decisions
concerning the compensation of Ms. Beth A. Durrett, Mr. Joe R. McElroy, Mr.
Vincent E. Jarbo and Ms. Teresa A. Sheffield were made by the entire Board
of Directors and decisions concerning the compensation of Mr. R. Brooks
Reed were made by Mr. Jack E. Meyer, Mr. Ben Hinterlong and Mr. James A.
O'Donnell.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
This executive compensation report relates to compensation decisions
made by the Board of Directors. This executive compensation report shall
not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be
deemed filed under such laws.
Objectives of Executive Compensation. The Company's executive
compensation program is intended to attract, motivate and retain key
executives who are capable of leading the Company effectively and
continuing its long-term growth. The compensation program for executives is
comprised of base salary, annual incentives and long-term incentive awards.
Base salary is targeted to be within a reasonable range of compensation for
comparable companies and for comparable levels of expertise by executives.
Annual
9
<PAGE> 12
incentives are based upon the achievement of one or more performance goals.
The Company uses stock options in its long-term incentive program.
Executive Compensation Procedures. The Board of Directors establishes
the general compensation policies of the Company and implements and
monitors the compensation and incentive plans and policies of the Company.
Final compensation determinations for each fiscal year are generally made
after the end of the fiscal year, after audited financial statements for
such year become available. At that time, bonuses, if any, are determined
for the past year's performance, base salaries for the following fiscal
year are set and long-term incentives, if any, are granted.
In setting base salary and determining annual incentive and long-term
incentive awards, the Board of Directors reviews the compensation levels of
executive officers at comparable companies. The Board of Directors also
reviews data contained in published surveys on executive compensation. The
Board of Directors based its decisions regarding 2001 base salary and
annual cash bonus amounts for the year ended July 31, 2000, in part, upon
its review of such data.
Each element of the executive compensation, as well as the
compensation of the Chief Executive Officer, is discussed separately below.
Base Salary. Base salaries are a fixed component of total compensation
and do not relate to the performance of the Company. Base salaries are
determined by the Board of Directors after reviewing salaries paid by
comparable companies of similar size and performance.
Annual Incentives. Annual incentives are provided in the form of cash
bonuses. Annual incentives are designed to reward executives and management
for the annual growth and achievement of the Company and are therefore tied
to the Company's performance. The Board of Directors awards cash bonuses to
those executives who meet established goals, with the amount of the award
based upon each executive's base salary and the level to which such
executive's performance met and exceeded the established goal.
Long-term Incentives. Long-term incentives are provided through the
grant of stock options pursuant to the Incentive Plan. These grants are
designed to align executives' interests with the long-term goals of the
Company and the interests of the Company's stockholders and encourage high
levels of stock ownership among executives.
Compensation of Chief Executive Officer. The Board of Directors set
Mr. Reed's base salary for the year ended July 31, 2000 at or around the
median base salary for chief executive officers of comparable companies.
Mr. Reed's 2000 base salary was $150,000. Mr. Reed did not receive a cash
bonus or a grant of stock options for the year ended July 31, 2000.
Tax Considerations. The Board of Directors' executive compensation
strategy is designed to be cost-effective and tax-effective. Therefore, the
Board of Directors' policies are, where possible and considered
appropriate, to preserve corporate tax deductions, including the
deductibility of compensation paid to the named executive officers pursuant
to Section 162(m) of the Code, while maintaining the flexibility to approve
compensation arrangements that they deem to be in the best interests of the
Company and its stockholders, but which may not always qualify for full tax
deductibility.
Submitted by the Board of Directors
Bernard J. Hinterlong
Jack E. Meyer
James A. O'Donnell
R. Brooks Reed
10
<PAGE> 13
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Stock against the cumulative
total return of the Nasdaq U.S. composite index (the "Nasdaq Market
Index"), a group consisting of publicly-traded rental-purchase companies
(the "Peer Group"), and a group index consisting of companies within the
Company's SIC Code (the "MG Group Index"). The graph assumes that $100.00
was invested on December 19, 1995 in the Common Stock of the Company, the
Nasdaq Market Index, and the Peer Group and the MG Group Index and assumes
reinvestment of dividends. The Peer Group consists of Rent Way, Inc., Aaron
Rents, Inc., Rent-A-Center, Inc. and Rainbow Rentals, Inc. The stock price
performance shown on the following graph is not necessarily indicative of
future price performance. No stock price information is available prior to
December 19, 1995. The Company was removed from Nasdaq on August 17, 1989
because it did not meet the minimum capital requirements. The Company's
stock was quoted in the "pink sheets" and was traded on a limited basis.
The stock price performance graph below shall not be deemed
incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of
1933, as amended or under the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporated this
information by reference and shall not otherwise be deemed filed under such
Acts.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
12/19/95 7/31/96 7/31/97 7/31/98 7/31/99 7/31/00
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
BESTWAY INC 100.00 100.00 72.22 83.33 84.72 61.11
PEER GROUP INDEX 100.00 126.00 125.73 181.73 143.54 182.93
NASDAQ MARKET INDEX 100.00 103.20 151.70 181.88 256.95 374.08
MG GROUP INDEX 100.00 103.72 138.70 159.07 144.65 115.74
</TABLE>
11
<PAGE> 14
AMENDMENT TO INCENTIVE STOCK OPTION PLAN
(PROPOSAL NO. 2)
The Board of Directors recommends that the stockholders approve an
amendment to the Incentive Plan to increase the total number of shares
available for issuance pursuant to options granted under the Incentive Plan
(the "Proposed Amendment").
PROPOSED AMENDMENT
The Incentive Plan currently provides that the aggregate number of
shares of Common Stock available for grants of options under the Incentive
Plan shall be 225,000 shares. As of December 4, 2000, 201,310 shares of
Common Stock were subject to outstanding options under the Incentive Plan,
leaving as of such date only 23,690 shares of Common Stock available for
future option grants under the Incentive Plan.
The Board of Directors believes that the Incentive Plan has been
worthwhile in attracting and retaining employees and promoting their
ownership interests in the Company. The Board of Directors believes that
the number of shares available for future option grants under the Incentive
Plan is not sufficient to enable the Company to continue to make grants
under the Incentive Plan at levels that the Board of Directors has
determined is appropriate. Accordingly, on December 4, 2000, the Board of
Directors adopted the Proposed Amendment to the Incentive Plan, subject to
the approval by the stockholders, to increase the number of shares of
Common Stock available for issuance pursuant options granted under the
Incentive Plan to 285,000 shares of Common Stock. Since options relating to
201,310 shares are currently outstanding, 83,690 shares of Common Stock
would, as of December 4, 2000, be available for future options under the
Incentive Plan if the Proposed Amendment is approved.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
PROPOSED AMENDMENT.
SUMMARY OF THE INCENTIVE PLAN
The Incentive Plan, as adopted by the Board of Directors, was approved
by the Company's stockholders on May 31, 1995. The purpose of the Incentive
Plan is to further the success of the Company by making available shares of
Common Stock for purchase by officers and employees of the Company and thus
providing an additional incentive to such individuals to continue in the
service of the Company and to give them greater interest in the success of
the Company. The material terms of the Incentive Plan are summarized below.
The summary is qualified in its entirety by the full text of the Incentive
Plan.
Plan Administration; Eligibility. The Incentive Plan is administered
by a committee appointed by the Board of Directors (the "Plan Committee").
Each member of the Plan Committee must be a "disinterested person" as that
term is defined under the rules promulgated by the Securities and Exchange
Commission.
12
<PAGE> 15
The Plan Committee has the full power to select, from among the
persons eligible for option grants, the individuals to whom options will be
granted and to determine the specific terms of each option, subject to the
provisions of the Incentive Plan. Persons eligible to participate in the
Incentive Plan are generally those employees and officers of the Company
whose efforts contribute to the performance or success of the Company, as
selected from time to time by the Plan Committee. Non-employee directors of
the Company are not eligible for options under the Incentive Plan. Each
option granted under the Incentive Plan will be evidenced by a written
agreement containing such provisions not inconsistent with the Incentive
Plan, as the Plan Committee shall approve.
Available Shares. Under the Incentive Plan, the aggregate number of
shares of Common Stock available for grants of options is 225,000 shares.
Options. The exercise price of each option will be determined by the
Plan Committee, but may not be less than the fair market value of the
shares on the date of grant. The option price may not be reduced after the
date of grant, except in the case of stock split, stock dividend or certain
other changes in capitalization or events that, in the judgment of the Plan
Committee, necessitates such action. The foregoing does not prohibit the
Plan Committee from authorizing the exchange of outstanding options for new
options at a reduced exercise price so long as the exchange complies with
the terms and conditions of the Incentive Plan.
The term of each option will be fixed by the Plan Committee and may
not exceed ten years from the date of grant. The Plan Committee will
determine at what time or times each option may be exercised and the period
of time, if any, after the optionholder's death during which his or her
options may be exercised. Upon exercise of an option, the option exercise
price must be paid in full either in cash or in the form of a cash
equivalent acceptable to the Plan Committee.
Adjustments Upon Change in Shares of Common Stock. The Plan Committee
will make appropriate adjustments in the outstanding options to reflect
stock dividends, stock splits and similar events or if there occurs any
event that, in the judgment of the Plan Committee, necessitates such
action.
Amendments and Termination. The Board of Directors may amend or
terminate the Incentive Plan from time to time. In addition, amendments to
the Incentive Plan shall be subject to approval by the stockholders if
stockholder approval is required by the federal securities laws, the
internal revenue code, the rules and regulations of any stock exchange on
which the Common Stock is listed or any other applicable rule or law.
TAX ASPECTS UNDER THE U.S. INTERNAL REVENUE CODE
The following is a brief summary of the principal federal income tax
consequences of options granted under the Incentive Plan. It does not
describe all federal tax consequences under the Incentive Plan, nor does it
describe state or local tax consequences.
Options. No taxable income would generally be realized by a
participant upon the grant of an option. Upon the exercise of the option,
ordinary income is realized by the optionee in an amount equal to the
difference between the option price and the fair market value of the shares
of Common Stock on the date of exercise, and the Company receives a tax
deduction for the same amount. Upon subsequent disposition of the shares of
Common Stock, appreciation or depreciation after the date of exercise is
treated as either short-term or long-term capital gain or loss depending on
how long the shares of Common Stock have been held. Special rules will
apply where all or a portion of the exercise price of the option is paid by
tendering shares of Common Stock.
13
<PAGE> 16
Limitation on Company's Deduction. Section 162(m) of the Code
generally provides that a publicly-held corporation will not be allowed a
deduction for employee compensation paid for the taxable year to its chief
executive officer and to its four highest compensated officers other than
the chief executive officer (each, an "Applicable Employee") to the extent
that such compensation with respect to any such Applicable Employee exceeds
$1,000,000. Any compensation that qualifies as "performance-based
compensation" is not subject to this deduction limitation. The Company
believes that all options awarded pursuant to the Incentive Plan will
qualify as performance-based compensation, and the compensation
attributable to such options will not, in the taxable year of exercise, be
considered part of any non-performance-based compensation that is subject
to the $1,000,000 deduction limitation. However, any options granted under
the Incentive Plan that are not subject to vesting or other restrictions
that require the attainment of a Company performance goal that is
generically described in the Incentive Plan will not qualify as
performance-based compensation, and amounts of compensation attributable to
such options will be added, in the year otherwise deductible, to all other
components of compensation that are subject to the deduction limitation.
PROPOSAL TO RATIFY PRICEWATERHOUSECOOPERS L.L.P
AS INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL YEAR 2001
(PROPOSAL NO. 3)
The Board of Directors has appointed PricewaterhouseCoopers L.L.P.,
independent certified public accountants, to examine and report on the
Company's financial statements for the fiscal year ended July 31, 2001. The
firm has served as the Company's independent accountants since 1976. It is
expected that a representative of such firm will be in attendance at the
Company's Annual Meeting of Stockholders and will be afforded an
opportunity to make a statement at the meeting if he so desires and will be
available to respond to appropriate questions. Audit services included
examination of the Company's filings with the Securities and Exchange
Commission and consultation in connection with various audit-related
accounting matters.
THE STOCKHOLDERS ARE REQUESTED BY THE BOARD OF DIRECTORS TO VOTE FOR
THE APPROVAL OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS L.L.P. AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JULY
31, 2001. PROPOSAL FOR NEXT ANNUAL MEETING
Any proposal of holders of Common Stock intended to be presented at
the Annual Meeting of Stockholders of the Company to be held in 2002 must
be received by the Company at 7800 N. Stemmons, Suite 320, Dallas, Texas
75247, no later than August 25, 2001, in order to be included in the Proxy
Statement and Form of Proxy relating to that meeting.
Pursuant to Rule 14a-4(c)(1) under the Exchange Act, if any
stockholder proposal intended to be presented at the 2002 annual meeting
without inclusion in the Company's proxy statement for such meeting is
received at the Company's principal executive offices after October 30,
2001, then any proxy that management solicits for such meeting will confer
discretionary authority to vote on such proposal so long as such proposal
is properly presented at the meeting.
14c
<PAGE> 17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires directors and officers of the Company, and
persons who own more than 10% of the Common Stock, to file with the
Commission initial reports of the Common Stock ownership and reports of
changes in such ownership. A reporting person must file a Form 3 - Initial
Statement of Beneficial Ownership of Securities within 10 days after such
person becomes a reporting person. A reporting person must file a Form 4 -
Statement of Changes of Beneficial Ownership of Securities within 10 days
after any month in which such person's beneficial ownership of securities
changes, except for certain changes exempt from the reporting requirements
of Form 4. Such exempt changes include stock options granted under a plan
qualifying pursuant to Rule 16b-3 under the Exchange Act. A reporting
person must file a Form 5 - Annual Statement of Beneficial Ownership of
Securities within 45 days after the end of the Company's fiscal year to
report any changes in ownership during such year not reported on a Form 4,
including changes exempt from the reporting requirements of Form 4.
The Commission's rules require the Company's reporting persons to
furnish the Company with copies of all Section 16(a) reports that they
file. Based solely upon a review of the copies of such reports furnished to
the Company and written representations that no other reports were required
with respect to the year ended July 31, 2000, the Company believes that the
reporting persons have complied with all applicable Section 16(a) filing
requirements for 2000 on a timely basis.
GENERAL
The cost of preparing and mailing the enclosed material is to be borne
by the Company. In addition to the solicitation of proxies by mail, certain
officers, Directors and regular employees of the Company may, without
additional compensation, solicit proxies on behalf of management by
telephone, telegraph or personal interview. The cost of any solicitation
will be borne by the Company. Upon request, persons, including brokers,
holding shares for others will be reimbursed for their expenses in
transmitting proxy material to their principals and in seeking instructions
by mail, telephone or telegraph for their principals.
Management does not intend to bring any matters before the meeting
other than those mentioned above and is not aware of any other matters to
be presented before the meeting. However, if any other matters should be
presented properly to the meeting, it is intended that the persons named in
the enclosed proxy will vote such proxy in accordance with their best
judgment. A copy of the Company's Annual Report is being mailed to the
stockholders with this Proxy Statement. The Company's Annual Report to
stockholders contains financial statements for the periods ended July 31,
2000, July 31, 1999 and July 31, 1998 which are incorporated by reference
herein. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE TO EACH STOCKHOLDER WITHOUT
CHARGE. ANY STOCKHOLDER DESIRING A COPY OF THE ANNUAL REPORT ON FORM 10-K
SHOULD ADDRESS HIS REQUEST TO MS. BETH A. DURRETT, SECRETARY, 7800 N.
STEMMONS, SUITE 320, DALLAS, TEXAS, 75247.
By Order of the Board of Directors,
/s/ Beth A. Durrett
-------------------
Beth A. Durrett
Secretary
December 13, 2000
Dallas, Texas
15
<PAGE> 18
BESTWAY, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Brooks Reed and Beth A. Durrett,
and each of them, with full power of substitution, to vote as indicated
below, and act with respect to all shares of Common Stock of Bestway, Inc.,
(the "Company") standing in the name of the undersigned, at the annual
meeting of stockholders to be held at 9:00 a.m. on Thursday January 11,
2001, in the Company's corporate office at 7800 N. Stemmons Freeway, Suite
320, Dallas, Texas, or at any adjournment thereof, with all the power the
undersigned would possess if personally present:
1. Election of the following nominees as Directors: R. Brooks Reed, Jack
E. Meyer, James A. O'Donnell and Bernard J. Hinterlong.
FOR all of the nominees (except as otherwise marked below) WITHOUT
AUTHORITY to vote for all nominees
INSTRUCTIONS: To withhold authority to vote for any particular nominee,
write such person's name in the following space.
2. Amendment of the Company's incentive Stock Option Plan to increase the
number of shares available for issuance pursuant to option grants
under such plan. FOR AGAINST ABSTAIN
3. Ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent public accountants for the fiscal year 2001.
FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment(s) thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
ABOVE. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2,
3, AND 4.
IMPORTANT: To ensure a quorum and to avoid the expense and delay of sending
follow-up letters, please mark, sign, date and mail this proxy in the
accompanying envelop.
Date: , 2001
------------------------------
------------------------------
------------------------------
Please sign exactly as name appears
hereon. For a joint account, each owner
should sign. Persons signing as attorney,
executor, administrator, trustee or
guardian or in any other representative
capacity should indicate their full title.
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.
<PAGE> 19
BESTWAY, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Brooks Reed and Beth A. Durrett,
and each of them, with full power of substitution, to vote as indicated
below, and act with respect to all shares of Common Stock of Bestway, Inc.,
(the "Company") standing in the name of the undersigned, at the annual
meeting of stockholders to be held at 9:00 a.m. on Thursday January 11,
2001, in the Company's corporate office at 7800 N. Stemmons Freeway, Suite
320, Dallas, Texas, or at any adjournment thereof, with all the power the
undersigned would possess if personally present:
5. Election of the following nominees as Directors: R. Brooks Reed, Jack
E. Meyer, James A. O'Donnell and Bernard J. Hinterlong.
APPENDIX I
AMENDMENT NUMBER ONE
TO THE
BESTWAY, INC.
INCENTIVE STOCK OPTION PLAN
Bestway, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), previously adopted a stock option plan designated
as the Bestway, Inc. Incentive Stock Option Plan (the "Plan"), originally
approved by the Company's stockholders on May 31, 1995. The Company
reserved the right to amend the Plan under Paragraph 12 thereof.
Accordingly, the Company hereby amends the Plan as follows, effective as of
December ____, 2000:
1. Paragraph 2(g) of the Plan is hereby amended and restated in its
entirety to read as follows:
"(g) "Non-Employee Director" means a member of the Board who is a
"non-employee director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act (or any successor to Rule 16b-3) and who is
also an "outside director" within the meaning of Section 162(m) of the
Code."
2. Paragraph 3 of the Plan is hereby amended and restated to read as
follows:
"3. ADMINISTRATION OF PLAN. The Board of Directors of the Company shall appoint
a committee (the "Committee") composed of not less than two persons to
administer the Plan. Only Non-Employee Directors shall be eligible to serve
as members of the Committee. The Committee shall report all action taken by
it to the Board, which shall review and ratify or approve those actions
that are by law required to be so reviewed and ratified or approved by the
Board. The Committee shall have full and final authority in its discretion,
subject to the provisions of the Plan, to determine the Participants to
whom, and the time or times at which, Options shall be granted and the
number of shares covered by each Option; to construe and interpret the Plan
and any agreements made pursuant to the Plan; to determine the terms and
provisions (which need not be identical or consistent with respect to each
Participant) of the respective Option Agreements and any agreements
ancillary thereto, including, without limitation, terms covering the
payment of the Option Price; and to make all other determinations and take
all other actions deemed necessary or advisable for the proper
administration of this Plan. All such actions and determinations shall be
conclusively binding for all purposes and upon all persons."
<PAGE> 20
3 Paragraph 4 of the Plan is hereby amended to add the following
sentence at the end thereof:
"Subject to adjustment under the provisions of Paragraph 8, no
Participant shall be eligible to be granted options covering more than
100,000 shares of the Company's Common Stock during any calendar year,
in accordance with Section 162(m) of the Code."
4. The first paragraph in Paragraph 5 of the Plan is hereby amended and
restated to read as follows:
"The aggregate number of shares of the Company's Common Stock that may
issued upon the exercise of options shall not exceed 285,000 shares,
subject to adjustment under the provisions of Paragraph 8."
5. Paragraph 12 of the Plan is hereby amended and restated in its
entirety to read as follows:
"12. AMENDMENT, SUSPENSION, AND THE TERMINATION OF PLAN. The Board may at any
time suspend or terminate the Plan or may amend it from time to time in
such respects as the Board may deem advisable in order that the Options
granted thereunder may conform to any changes in the law or in any other
respect which the Board may deem to be in the best interests of the
Company, provided, however, that without approval by the shareholders of
the Company voting the proper percentage of its voting power, no such
amendment shall make any change in the Plan for which shareholder approval
is required of the Company by (a) the Code or regulatory provisions dealing
with incentive stock options pursuant to Code section 422; (b) any rules
for listed companies promulgated by any national stock exchange on which
the Company's stock is traded; or (c) any other applicable rule or law.
Unless sooner terminated hereunder the Plan shall terminate 10 years after
the Effective Date. No Option may be granted during any suspension or after
the termination of the Plan. Except as provided in Paragraph 13, no
amendment, suspension, or termination of the Plan shall, without an
Optionee's consent, impair or negate any of the rights or obligations under
any Option theretofore granted to such Optionee under the Plan."
IN WITNESS WHEREOF, the Company has caused these presents to be duly
executed by its duly authorized officers in a number of copies, all of
which shall constitute one and the same instrument, which may be
sufficiently evidenced by any executed copy hereof, this ______ day of
December, 2000.
IMPORTANT: To ensure a quorum and to avoid the expense and delay of sending
follow-up letters, please mark, sign, date and mail this proxy in the
accompanying envelop.
BESTWAY, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
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