Dear Stockholder:
We cordially invite you to attend our 1996 Annual Meeting, which
will be held on Thursday, January 16, 1997, at 10:00 a.m. at the First
Cash, Inc. corporate offices located at 690 East Lamar Boulevard, Suite
400, Arlington, Texas, 76011. At this meeting you will be asked to act
upon the proposals as contained herein.
Your Board of Directors recommends that you vote in favor of each
of these proposals. You should read with care the attached Proxy
Statement, which contains detailed information about these proposals.
Your vote is important, and accordingly, we urge you to complete,
sign, date and return your Proxy card promptly in the enclosed postage
paid envelope. The fact that you have returned your Proxy in advance
will in no way affect your right to vote in person should you attend the
meeting. However, by signing and returning the Proxy, you have assured
representation of your shares.
We hope that you will be able to join us on January 16.
Very truly yours,
Rick Powell
Chairman of the Board and
Chief Executive Officer
First Cash, Inc.
690 East Lamar Boulevard, Suite 400
Arlington, Texas 76011
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held January 16, 1997
---------------------------
Notice is hereby given that the Annual Meeting of Stockholders of First
Cash, Inc. (the "Company") will be held at the First Cash, Inc. corporate
offices located at 690 East Lamar Boulevard, Suite 400, Arlington, Texas 76011
at 10:00 a.m., Dallas/Fort Worth time, on Thursday, January 16, 1997, for the
following purposes:
1. To elect three Directors;
2. To ratify the selection of Price Waterhouse LLP as independent
auditors of the Company for the fiscal year ending July 31, 1997; and
3. To transact such other business as may properly come before the
meeting.
Common stockholders of record at the close of business on November 25,
1996, will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
Arlington, Texas Rick L. Wessel
December 3, 1996 Chief Financial Officer,
Secretary and Treasurer
First Cash, Inc.
690 East Lamar Boulevard, Suite 400
Arlington, Texas 76011
----------------------
PROXY STATEMENT
Annual Meeting of Stockholders
------------------------------
This Proxy Statement is being furnished to stockholders in connection
with the solicitation of proxies by the Board of Directors of First Cash,
Inc., a Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders of the Company to be held at the First Cash corporate offices
located at 690 East Lamar Boulevard, Suite 400, Arlington, Texas 76011 at
10:00 a.m., on Thursday, January 16, 1997, and at any adjournments thereof for
the purpose of considering and voting upon the matters set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement
and the accompanying form of proxy are first being mailed to stockholders on
or about December 3, 1996.
The close of business on November 25, 1996, has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote
at the Annual Meeting and any adjournment thereof. As of the record date,
there were 3,719,121 shares of the Company's common stock, par value $.01 per
share ("Common Stock"), issued and outstanding. The presence, in person or by
proxy, of a majority of the outstanding shares of Common Stock on the record
date is necessary to constitute a quorum at the Annual Meeting. Each share of
Common Stock is entitled to one vote on all questions requiring a stockholder
vote at the Annual Meeting. A plurality of the votes of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is required for the election of the directors nominated in Item
1 as set forth in the accompanying Notice. The affirmative vote of a majority
of the shares of Common Stock present or represented by proxy and entitled to
vote at the Annual Meeting is required for the approval of Item 2 as set forth
in the accompanying Notice. Stockholders may not cumulate their votes in the
election of directors. Abstentions are treated as votes against a proposal
and broker non-votes have no effect on the vote.
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Meeting in
accordance with the directions on the proxies. If no direction is indicated,
the shares will be voted (i) TO ELECT THREE DIRECTORS, (ii) TO RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE FISCAL YEAR ENDING JULY 31, 1997, AND (iii) TO TRANSACT SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. The enclosed proxy, even
though executed and returned, may be revoked at any time prior to the voting
of the proxy (a) by the execution and submission of a revised proxy, (b) by
written notice to the Secretary of the Company or (c) by voting in person at
the Annual Meeting.
ANNUAL REPORT
-------------
The Annual Report to Stockholders, covering the fiscal year of the
Company, dated July 31, 1996, including audited financial statements, is
enclosed herewith. The Annual Report to Stockholders does not form any part
of the material for solicitation of proxies.
The Company will provide, without charge, a copy of its Annual Report on
Form 10-K upon written request to Rick L. Wessel, the Chief Financial Officer,
Secretary and Treasurer at 690 East Lamar Boulevard, Suite 400, Arlington,
Texas 76011. The Company will provide exhibits to its Annual Report on Form
10-K, upon payment of the reasonable expenses incurred by the Company in
furnishing such exhibits.
ITEM 1
------
TO ELECT THREE DIRECTORS
------------------------
The Bylaws of the Company provide that the number of directors will be
determined by the Board of Directors, but shall consist of at least one
director and no more than 15 directors. The directors are elected by the
stockholders of the Company. At each annual meeting of stockholders of the
Company successors of the class of directors whose term expires at the annual
meeting will be elected for a three-year term. Any director elected to fill a
vacancy or newly created directorship resulting from an increase in the
authorized number of directors shall hold office for a term that shall
coincide with the remaining term of that class. In no case will a decrease in
the number of directors shorten the term of any incumbent director. Any
vacancy on the Board howsoever resulting, may be filled by a majority of the
directors then in office, even if less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy shall hold office for a term
that shall coincide with the term of the class to which such director shall
have been elected. The stockholders will elect three directors for the coming
year. All three nominees presently serve as directors of the Company and will
be appointed for terms of three years.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted for the election of the nominees listed herein.
Although the Board of Directors of the Company does not contemplate that any
of the nominees will be unable to serve, if such a situation arises prior to
the Annual Meeting, the person named in the enclosed proxy will vote for the
election of such other person(s) as may be nominated by the Board of
Directors.
The Board of Directors of the Company consists of four directors divided
into three classes. At each annual meeting of stockholders, one class is
elected to hold office for a term of three years. Directors serving until the
earlier of (i) resignation or (ii) expiration of their terms at the annual
meeting of stockholders in the years indicated are as follows: 1998 - Mr.
Powell; and 1996 - Messrs. Wessel, Burke and Love. There are currently no
directors serving in the class up for election at the 1997 annual meeting.
All officers serve at the discretion of the Board of Directors. No family
relationships exist between any director and executive officer. The Directors
standing for election at the 1996 Annual Meeting are as follows:
Rick L. Wessel has been associated with the Company since February 1992,
has served as chief financial officer, secretary and treasurer of the Company
since May 1992, and has served as a director since November 1992. Prior to
February 1992, Mr. Wessel was employed by Price Waterhouse LLP for
approximately nine years. Mr. Wessel is a certified public accountant
licensed in Texas.
Richard T. Burke has served as a director of the Company since December
1993. He is the founder and former chief executive officer and chairman, from
1974 to 1988, of United HealthCare Corporation. Mr. Burke remains a director
of United HealthCare Corporation, a company engaged in the managed health care
industry. From 1977 to 1987, Mr. Burke also served as chief executive officer
of Physicians Health Plan of Minnesota (now MEDICA), the largest client of
United HealthCare Corporation. He also currently serves as a director and
vice chairman of the board of directors of Education Alternatives, Inc., a
company engaged in the business of providing school management services and
products to public schools. The securities of United HealthCare Corporation
and Education Alternative, Inc. are registered pursuant to the Exchange Act.
Mr. Burke is co-owner and chief executive officer of the Phoenix Coyotes, a
professional sports franchise of the National Hockey League.
Joe R. Love has served as a director of the Company since December 1991.
Mr. Love has served as chairman and chief executive officer of Partridge
Capital Corporation, a venture capital firm, since October 1976. Since July
1989, Mr. Love has served on the board of directors of Sooner Energy
Corporation, a company engaged in oil and gas exploration and production. In
October 1996, Mr. Love became a member of the board of directors of Western
Country Clubs, Inc., a public company involved in the entertainment industry.
Director Not Standing For Election
- ----------------------------------
Phillip E. Powell has served as director since March 1990, served as
president from March 1990 until May 1992, and has served as chief executive
officer since May 1992. Mr. Powell has been engaged in the financial services
business for over 16 years. From April 1986 to February 1990, Mr. Powell was
an officer and director of First Savings Bank, Arlington, Texas.
Board of Directors, Committees and Meetings
- -------------------------------------------
The Board of Directors held nine meetings during fiscal 1996. Each
director attended 100% of the Board meetings during fiscal 1996. The Audit
and Compensation Committees each consist of Richard T. Burke and Joe R. Love.
The Audit Committee held one meeting during fiscal 1996 and the Compensation
Committee held three meetings during fiscal 1996.
Audit Committee. The Audit Committee is responsible for making
recommendations to the Board of Directors concerning the selection and
engagement of the Company's independent auditors and reviews the scope of the
annual audit, audit fees, and results of the audit. The Audit Committee also
reviews and discusses with management and the Board of Directors such matters
as accounting policies, internal accounting controls, procedures for
preparation of financial statements, scope of the audit, the audit plan and
the independence of such accountants.
Compensation Committee. The Compensation Committee approves the
standards for salary ranges for executive, managerial and technical personnel
of the Company and establishes, subject to existing employment contracts, the
specific compensation and bonus plan of all corporate officers. In addition,
the Compensation Committee oversees the Company's stock option plan.
The Company has no nominating committee or any committee serving a
similar function.
Directors' Fees
- ---------------
For the year ended July 31, 1996, the outside directors were reimbursed
for their reasonable expenses incurred for each Board and committee meeting
attended. See "Compensation - Stock Options and Warrants" and "-Certain
Transactions" for a discussion of options and warrants issued to directors
since August 1, 1995.
Reports
- -------
To the Company's knowledge, all reports as required under Section 16 of
the Exchange Act were filed on a timely basis during the fiscal year ended
July 31, 1996.
Board Committees; Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------------------------
The Board of Directors has two standing committees. The Compensation
Committee reviews compensation paid to management and recommends to the Board
of Directors appropriate executive compensation. The Audit Committee reviews
internal controls, recommends to the Board of Directors engagement of the
Company's independent certified public accountants, reviews with such
accountants the plan for and results of their examination of the consolidated
financial statements, and determines the independence of such accountants.
Messrs. Burke and Love serve as members of each of these committees.
THE BOARD HAS NOMINATED THE ABOVE-REFERENCED DIRECTORS FOR ELECTION BY
THE STOCKHOLDERS AND RECOMMENDS A VOTE FOR SUCH ELECTION. THE ELECTION OF
THESE DIRECTORS REQUIRES A PLURALITY OF THE VOTES OF THE SHARES OF COMMON
STOCK PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING AND
ENTITLED TO VOTE ON THE ELECTION OF DIRECTORS.
ITEM 2
------
RATIFY THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING JULY 31, 1997
------------------------------------------------
The Board of Directors and the Audit Committee of the Board have approved
engagement of Price Waterhouse LLP as independent auditors for the fiscal year
ending July 31, 1997 consolidated financial statements. The Board of
Directors has reviewed and will continue to review and consider competitive
proposals from nationally recognized accounting firms. The Board of Directors
may, irrespective of whether the shareholders ratify the appointment of Price
Waterhouse LLP, appoint a different nationally recognized accounting firm to
serve as the Company's independent auditor for the fiscal year ending July 31,
1997. Such determination, if any, will be made by the Board of Directors
based upon many factors, including the cost, quality and type of services
provided by such an accounting firm. The Board of Directors wishes to obtain
from the stockholders a ratification of the Board's action in appointing Price
Waterhouse LLP as independent auditors of the Company for the fiscal year
ending July 31, 1997. The engagement of Price Waterhouse LLP for audit
services has been approved by both the Audit Committee of the Board of
Directors and the Board itself. Representatives of Price Waterhouse LLP are
expected to be present at the meeting, with the opportunity to make a
statement if desired to do so. Such representatives are also expected to be
available to respond to appropriate questions.
THE BOARD HAS RECOMMENDED THE RATIFICATION OF PRICE WATERHOUSE LLP AS
INDEPENDENT AUDITORS. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF THE
MAJORITY OF OUTSTANDING SHARES OF COMMON STOCK PRESENT OR REPRESENTED BY PROXY
AT THE ANNUAL MEETING.
EXECUTIVE OFFICERS
------------------
The following table lists the executive officers of the Company as of the
date hereof and the capacities in which they serve.
<TABLE>
Name Age Position
---- --- --------
<S> <C> <C>
Phillip E. Powell 46 Chairman of the Board and
Chief Executive Officer
Rick L. Wessel 38 Chief Financial Officer, Secretary,
Treasurer and Director
J. Alan Barron 35 Chief Operating Officer
Scott Williamson 38 Senior Vice President
</TABLE>
J. Alan Barron joined the Company in January 1994 as its chief operating
officer. Prior to joining the Company, Mr. Barron spent two years as chief
financial officer for a nine store privately-held pawnshop chain. Prior to
his employment as chief financial officer of this privately-held pawnshop
chain, Mr. Barron spent five years in the Fort Worth office of Price
Waterhouse LLP. Mr. Barron is a certified public accountant licensed in
Texas.
Scott Williamson joined the Company in January 1994 as its corporate
controller and in October 1994 was elected to senior vice president. Prior to
joining the Company, Mr. Williamson served as the director of internal audit
for the Dallas office of the Federal Deposit Insurance Corporation where he
was employed since 1989. From 1985 to 1989, Mr. Williamson served as vice
president and corporate audit department manager for Bright Banc Savings
Association of Dallas. Mr. Williamson also spent a total of five years in
public accounting firms, including two years with Ernst & Young. Mr.
Williamson is a certified public accountant licensed in Texas and Oklahoma.
Biographical information with respect to Messrs. Powell and Wessel was
previously provided under "Directors".
STOCK OWNERSHIP
---------------
The table below sets forth information to the best of the Company's
knowledge with respect to the total number of shares of the Company's Common
Stock beneficially owned by each person known to the Company to beneficially
own more than 5% of its Common Stock, each director and the total number of
shares of the Company's Common Stock beneficially owned by all directors and
officers as a group, as reported by each such person, as of November 22, 1996.
On that date, there were 3,719,121 shares of voting Common Stock issued and
outstanding.
<TABLE>
Shares Beneficially
Officers, Directors Owned (2)
and 5% Stockholders (1) Number Percent
----------------------- ------ -------
<S> <C> <C>
Phillip E. Powell(3) 1,033,074 22.00%
Richard T. Burke(4) 850,000 19.68
Joe R. Love(5) 688,000 16.03
Rick L. Wessel(6) 535,959 12.61
Springer Run Investments, L.C.(7) 483,000 11.49
J. Alan Barron(8) 477,833 11.40
Mark Rothman(9) 400,000 9.71
Scott Williamson(10) 227,000 5.81
Don Sanders(11) 224,000 5.68
All officers and directors
as a group (6 persons) 3,811,866 54.01
</TABLE>
(1) The addresses of the persons shown in the table above who are directors
or 5% stockholders are as follows: Don Sanders, 3100 Texas Commerce Tower,
Houston, Texas 77002; all other persons and/or entities listed, 690 East Lamar
Boulevard, Suite 400, Arlington, Texas 76011.
(2) Unless otherwise noted, each person has sole voting and investment power
over the shares listed opposite his name, subject to community property laws
where applicable. Beneficial ownership includes both outstanding shares of
Common Stock and shares of Common Stock such person has the right to acquire
within 60 days of November 22, 1996, upon exercise of outstanding convertible
debentures, warrants and options.
(3) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 200,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 275,000
shares at a price of $4.625 per share to expire in January 2001, a stock
option to purchase 35,000 shares at a price of $4.625 per share to expire in
November 1999, a stock option to purchase 100,000 shares at a price of $4.625
per share to expire in January 2001, 34,000 shares underlying convertible
debentures, and an option to purchase from Mr. Rothman a debenture convertible
into 133,333 shares of common stock.
(4) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 250,000 shares at a price
of $4.00 per share to expire in January 2001, and a warrant to purchase
150,000 shares at a price of $4.625 per share to expire in January 2001.
(5) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 223,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 150,000
shares at a price of $4.625 per share to expire in January 2001, and 115,000
shares of common stock all of which are beneficially owned by affiliates of
Mr. Love.
(6) Includes a warrant to purchase 150,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 100,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 105,000
shares at a price of $4.625 per share to expire in January 2001, a stock
option to purchase 10,000 shares at a price of $4.625 per share to expire in
November 1999, 33,000 shares underlying convertible debentures, and an option
to purchase from Mr. Rothman a debenture convertible into 133,334 shares of
common stock.
(7) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 133,000 shares at a price
of $4.00 per share to expire in January 2001, and a warrant to purchase
150,000 shares at a price of $4.625 per share to expire in January 2001 all of
which are beneficially owned by affiliates of Mr. Love.
(8) Includes a warrant to purchase 150,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 50,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 100,000
shares at a price of $4.625 per share to expire in January 2001, a stock
option to purchase 5,000 shares at a price of $4.625 per share to expire in
November 1999, 33,000 shares underlying convertible debentures, and an option
to purchase from Mr. Rothman a debenture convertible into 133,333 shares of
common stock.
(9) Includes 400,000 shares underlying convertible debentures.
(10) Includes a warrant to purchase 75,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 50,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 55,000
shares at a price of $4.625 per share to expire in January 2001, and a stock
option to purchase 5,000 shares at a price of $4.625 per share to expire in
November 1999.
(11) Includes 200,000 shares underlying convertible debentures and a warrant
to purchase 24,000 shares at a price of $4.00 per share to expire in January
1999.
COMPENSATION
------------
Executive Compensation
- ----------------------
The following table sets forth compensation with respect to the chief
executive officer and other executive officers of the Company who received
total annual salary and bonus for the fiscal year ended July 31, 1996 in
excess of $100,000:
<TABLE>
Summary Compensation Table
--------------------------
Long-Term
Annual compensation(1) Compensation
---------------------- ---------------------
Stock Warrants
Name and Principal Fiscal Options Issued
Position Year Salary Bonus (Shares)(2) (Shares)(2)
-------- ---- ------ ----- ----------- -----------
<S> <C> <C> <C> <C> <C>
Phillip E. Powell,
Chairman of the 1996 $175,000 $20,000 100,000 475,000
Board and Chief 1995 150,000 - 35,000 -
Executive Officer 1994 150,000 - - 200,000(3)
Rick L. Wessel,
Chief Financial 1996 $ 95,000 $10,000 - 255,000
Officer, Secretary 1995 85,000 - 10,000 -
and Treasurer 1994 85,000 - - 100,000(3)
J. Alan Barron, 1996 $ 95,000 $10,000 - 250,000
Chief Operating 1995 80,000 - 5,000 -
Officer 1994 80,000 - - 50,000(3)
</TABLE>
(1) Does not include certain perquisites and other benefits; however, the
Company has concluded that the aggregate amount of such personal benefits and
other compensation is less than 10% of such executive officer's annual salary.
(2) See "- Employment Agreements" and "- Stock Options and Warrants" for a
discussion of the terms of long-term compensation awards.
(3) This warrant was extended in fiscal 1996 until January 2001, and is not
reflected in the warrants issued in fiscal 1996.
Employment Agreements
- ---------------------
Mr. Powell has entered into an employment agreement with the Company
through fiscal 2000 which provides for: (i) a fiscal 1996 annual base salary
of $175,000; (ii) the right to receive incentive compensation of two percent
of income before bonuses and taxes in excess of 10% of the average equity
during each fiscal year, or lesser period during which Mr. Powell is employed;
(iii) a lump-sum payment equal to the greater of one-year base salary or the
remaining base salary that would have been paid in the initial term of
employment in the event of constructive termination of employment; and (iv) a
warrant to purchase 200,000 shares of Common Stock at an exercise price of
$4.00 per share, which in the event of a change of control or constructive
termination, Mr. Powell could cause the Company to repurchase at a price equal
to the difference between the exercise price and the exchange, sale or tender
offer price, or the closing bid price, whichever is applicable, depending upon
the triggering event. These warrants, and the underlying shares, have
piggyback registration rights. The Company has agreed to pay all expenses in
connection with such piggyback registration rights, except underwriting
discounts and commissions and Mr. Powell's legal fees. In the event Mr.
Powell voluntarily resigns or is removed for cause, the unexercised portion of
the warrant automatically becomes forfeited. This agreement contains
provisions which automatically extend the agreement for one year periods
unless earlier terminated.
Mr. Wessel has a one-year employment agreement with the Company,
substantially identical to the employment agreement described above, except
that the base salary is $95,000, Mr. Wessel is not entitled to receive
incentive compensation, and a warrant to purchase 100,000 shares of Common
Stock at an exercise price of $4.00 per share. The initial term of this
employment agreement expired on July 31, 1994; however, the agreement contains
provisions which automatically extend the agreement for one year periods
unless earlier terminated.
Stock Options and Warrants
- --------------------------
The following table shows stock options and warrant grants made to named
executive officers during fiscal 1996:
<TABLE>
Individual Grants of Stock Options and Warrant Grants Made in Fiscal 1996
-------------------------------------------------------------------------
Potential Realizable
Percentage Percentage Value at
of Total of Total Assumed Annual
Options Warrants Rates of Stock
Options Granted to Warrants Granted to Exercise Price Appreciation
Granted Employees in Granted Employees in Price Expiration for Option and
Name (Shares) Fiscal 1996 (Shares)(1) Fiscal 1996 (Per Share) Date Warrant Terms (2)
---- -------- ----------- ----------- ----------- ----------- ---- -----------------
5% 10%
----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Phillip E. Powell 100,000(3) 85% 275,000 14% $4.625 Jan. 2001 $150,000 $643,688
- - 200,000 11 15.00 July 2000 - -
Rick L. Wessel - - 105,000 5 4.625 Jan. 2001 42,000 180,233
- - 150,000 8 15.00 July 2000 - -
J. Alan Barron - - 100,000 5 4.625 Jan. 2001 40,000 171,650
- - 150,000 8 15.00 July 2000 - -
</TABLE>
(1) Excludes term extensions effected in fiscal 1996 for warrants issued in
fiscal 1994. See "-Executive Compensation."
(2) The actual value, if any, will depend upon the excess of the stock price
over the exercise price on the date of exercise, so that there is no assurance
the value realized will be at or near the present value.
(3) Expires in January 2001 and is exercisable at $4.625 per share.
<TABLE>
July 31, 1996 Stock Option and Warrant Values
---------------------------------------------
Number of Unexercised Value of Unexercised
Stock Options and Warrants In-The-Money
Shares at July 31, 1996 Stock Options and Warrants
Acquired on Value (Shares) July 31 , 1996 (l)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Phillip E. Powell - - 810,000(2) - $201,250 -
Rick L. Wessel - - 365,000(3) - 89,375 -
J. Alan Barron - - 305,000(4) - 50,625 -
</TABLE>
(1) Computed based upon the differences between aggregate fair market value
and aggregate exercise price.
(2) Includes warrants to purchase 675,000 shares at prices ranging from $4.00
to $15.00 per share and options to purchase 135,000 shares at $4.625 per
share.
(3) Includes warrants to purchase 355,000 shares at prices ranging from $4.00
to $15.00 per share and options to purchase 10,000 shares at $4.625 per share.
(4) Includes warrants to purchase 300,000 shares at prices ranging from $4.00
to $15.00 per share and options to purchase 5,000 shares at $4.625 per share.
Warrants held by other directors: On November 22, 1996, other directors
held warrants to purchase 1,173,000 shares at prices ranging from $4.00 to
$15.00 per share, extending to January 2001.
Warrants held by employees: On November 22, 1996, other employees and
third parties own warrants and options to purchase an aggregate of 781,037
shares at prices ranging from $4.00 to $15.00 per share, extending to January
2001.
The Company has not established, nor does it provide for, long-term
incentive plans or defined benefit or actuarial plans. The Company does not
grant any stock appreciation rights.
Certain Transactions
- --------------------
In May 1996, the Company acquired from Mr. Rothman substantially all the
assets of three stores in Baltimore, Maryland. The total purchase price was
$2,400,000. The purchase price of the transaction was determined based upon
the volume of annual loan and sales transactions, outstanding loan balances,
inventory on hand, and location and condition of the facilities.
In fiscal 1996, the Company issued to Mr. Jon Burke, the brother of
Richard T. Burke, a five year warrant to purchase 50,000 shares of the
Company's Common Stock at an exercise price of $4.625 per share for consulting
services. In August 1996, the Company entered into a management agreement to
operate and manage pawnshops for JB Pawn, Inc., a Texas corporation. JB Pawn,
Inc. will own and provide 100% of the financing for the pawnshops, and will
incur all direct costs to operate the pawnshops, including but not limited to
payroll, store operating expenses, cost of inventory, and pawn loans. The
Company will receive a monthly management fee for each store managed, and will
provide computer support, accounting, auditing, oversight and management of
these stores. JB Pawn, Inc. is 100% owned and controlled by Mr. Jon Burke.
In the event that JB Pawn, Inc. receives an offer to purchase any of its
pawnshops, the Company shall have a first right of refusal to match such
offer.
In October 1995, the Company paid Mr. Love $75,000 in fees for consulting
services rendered in connection with certain acquisitions. In fiscal 1996,
the Company issued to affiliates of Mr. Love a warrant to purchase (i) 200,000
shares at a price of $15.00 per share expiring in July 2000, and (ii) 125,000
shares at a price of $4.625 per share expiring in January 2001. In addition,
the Company extended warrants issued in fiscal 1994 to purchase 223,000 shares
at $4.00 per share until January 2001 and warrants issued in fiscal 1995 to
purchase 25,000 shares at $4.625 per share until January 2001. In fiscal
1996, the Company issued Mr. Richard T. Burke warrants to purchase (i) 200,000
shares at a price of $15.00 per share expiring in July 2000, and (ii) 125,000
shares at a price of $4.625 per share expiring in January 2001. In addition,
the Company extended warrants issued in fiscal 1994 to purchase 250,000 shares
at $4.00 per share until January 2001 and warrants issued in fiscal 1995 to
purchase 25,000 shares at $4.625 per share until January 2001. In fiscal
1996, Mr. Williamson was issued a five year warrant to purchase 75,000 shares
at $15.00 per share and a five year warrant to purchase 55,000 shares at
$4.625 per share.
In April 1991, the Company adopted a policy prohibiting transactions with
its officers, directors or affiliates, unless approved by a majority of the
disinterested directors and on terms no less favorable to the Company than
could be obtained from an independent third party. The Company believes that
all prior related party transactions were on terms as favorable as could be
obtained from independent third parties.
Report of the Compensation Committee
- ------------------------------------
The Company's executive compensation is supervised by the Compensation
Committee of the Board of Directors. The Company seeks to provide executive
compensation that will support the achievement of the Company's financial
goals while attracting and retaining talented executives and rewarding
superior performance. In performing this function, the Compensation Committee
reviews executive compensation surveys and other available information and may
from time to time consult with independent compensation consultants.
The Company seeks to provide an overall level of compensation to the
Company's executives that is competitive within the pawnshop industry and
other companies of comparable size and complexity. Compensation in any
particular case may vary from any industry average on the basis of annual and
long-term Company performance as well as individual performance. The
Compensation Committee will exercise its discretion to set compensation where
in its judgment external, internal or individual circumstances warrant it.
In general, the Company compensates its executive officers through a
combination of base salary, annual incentive compensation in the form of cash
bonuses and long-term incentive compensation in the form of stock options and
warrants.
Base Salary
Base salary levels for the Company's executive officers are set generally
to be competitive in relation to the salary levels of executive officers in
other companies within the pawn shop industry or other companies of comparable
size, taking into consideration the position's complexity, responsibility and
need for special expertise. In reviewing salaries in individual cases the
Compensation Committee also takes into account individual experience and
performance.
Annual Incentive Compensation
The Compensation Committee has historically structured employment
arrangements with incentive compensation. Payment of bonuses has generally
depended upon the Company's achievement of pre-tax income targets established
at the beginning of each fiscal year or other significant corporate
objectives. Individual performance is also considered in determining bonuses.
Long-Term Incentive Compensation
The Company provides long-term incentive compensation through its stock
option plan and the issuance of warrants, which is described elsewhere in this
proxy statement. The number of shares covered by any grant is generally
determined by the then current stock price, subject in certain circumstances,
to vesting requirements. In special cases, however, grants may be made to
reflect increased responsibilities or reward extraordinary performance.
Chief Executive Officer Compensation
Mr. Powell was elected to the position of chief executive officer in May
1992. Upon his becoming chief executive officer, Mr. Powell's annual base
salary was increased to $150,000 pursuant to his employment agreement
described herein. Mr. Powell's salary was increased from $150,000 to $175,000
in fiscal 1996. Mr. Powell received bonus compensation and warrant and option
issuances based upon the overall performance of the Company in fiscal 1996.
The overall goal of the Compensation Committee is to insure that
compensation policies are established that are consistent with the Company's
strategic business objectives and that provide incentives for the attainment
of those objectives. This is effected in the context of a compensation
program that includes base pay, annual incentive compensation and stock
ownership.
Compensation Committee:
Richard T. Burke
Joe R. Love
Stock Price Performance Graph
- -----------------------------
The Stock Price Performance Graph set forth below compares the cumulative
total stockholder return on the Common Stock of the Company for the five year
period ending July 31, 1996, with the cumulative total return on the Nasdaq
Composite Index and a peer group index over the same period (assuming the
investment of $100 in the Company's Common Stock, the Nasdaq Composite Index
and the peer group). The peer group selected by the Company includes the
Company, Cash America International, Inc., EZCORP, Inc., and U.S. Pawn, Inc.
<TABLE>
First Cash, Inc. Peer Group Nasdaq Composite
---------------- ---------- ----------------
<S> <C> <C> <C>
July 31, 1991 100.00 100.00 100.00
July 31, 1992 154.55 105.47 117.30
July 31, 1993 103.03 76.75 142.72
July 31, 1994 100.00 88.40 146.02
July 31, 1995 84.85 93.23 205.69
July 31, 1996 115.15 130.95 228.65
</TABLE>
OTHER MATTERS
-------------
Management is not aware of any other matters to be presented for action
at the meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed form of proxy to vote in
accordance with their best judgment on such matter.
COST OF SOLICITATION
--------------------
The Company will bear the costs of the solicitation of proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and
employees of the Company will not be compensated additionally for the
solicitation but may be reimbursed for out-of-pocket expenses in connection
with the solicitation. Arrangements are also being made with brokerage houses
and any other custodians, nominees and fiduciaries of the forwarding of
solicitation material to the beneficial owners of the Company, and the Company
will reimburse the brokers, custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses.
STOCKHOLDER PROPOSALS
---------------------
Proposals by stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company for inclusion in the
Company's proxy statement and form of proxy relating to that meeting no later
than August 16, 1997.
By Order of the Board of Directors,
Rick L. Wessel
Arlington, Texas Chief Financial Officer,
December 3, 1996 Secretary and Treasurer
REVOCABLE PROXY
- ---------------
FIRST CASH, INC.
ANNUAL MEETING OF STOCKHOLDERS
January 16, 1997
------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST CASH,
INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
CHOICES SPECIFIED BELOW.
- ------------------------------------------------------------------------------
The undersigned stockholder of First Cash, Inc. (the "Company") hereby
appoints Rick Powell and Rick L. Wessel the true and lawful attorneys, agents
and proxies of the undersigned with full power of substitution for and in the
name of the undersigned, to vote all the shares of Common Stock of First Cash,
Inc. which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of First Cash, Inc. to be held at the First Cash, Inc. corporate
offices located at 690 East Lamar Blvd., Suite 400, Arlington, Texas on
Thursday, January 16, 1997 at 10:00 a.m., and any and all adjournments
thereof, with all of the powers which the undersigned would posses if
personally present, for the following purposes. Please indicate for,
withhold, against, or abstain with respect to each of the following matters:
For Withhold
--- --------
1. Approval of the election of the following three
directors (the Board of Directors recommends a
vote FOR)
Richard T. Burke [ ] [ ]
Joe R. Love [ ] [ ]
Rick L. Wessel [ ] [ ]
For Against Abstain
--- ------- -------
2. Ratification of the selection of Price Waterhouse
LLP as independent auditors of the Company for
the fiscal year ending July 31, 1997 (the Board
of Directors recommends a vote FOR) [ ] [ ] [ ]
3. Other Matters:
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy will be voted for the choices specified. If no choice is specified
for Item 1 this Proxy will be voted FOR this item. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement dated
December 3, 1996 as well as the Annual Report for the fiscal year ended July
31, 1996.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
DATED:
------------------------ --------------------------------------------
(Signature)
--------------------------------------------
(Signature if jointly held)
--------------------------------------------
(Printed Name)
Please sign exactly as name appears on stock
certificate(s). Joint owners should each
sign. Trustees and others acting in a
representative capacity should indicate the
capacity in which they sign.
