Dear Stockholder:
We cordially invite you to attend our 1998 Annual Meeting, which
will be held on Thursday, January 14, 1999, 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 14.
Very truly yours,
/S/ RICK POWELL
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 14, 1999
---------------------------
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 14, 1999, for the
following purposes:
1. To elect one director;
2. To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for the five months ending December 31, 1998
and for the year ending December 31, 1999;
3. To consider and act upon the proposed name change of the Company from
"First Cash, Inc." to "First Cash Financial Services, Inc.";
4. To consider and act upon the proposed 1999 Stock Option Plan; and
5. To transact such other business as may properly come before the
meeting.
Common stockholders of record at the close of business on December 1, 1998
will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
/s/ RICK L. WESSEL
Arlington, Texas Rick L. Wessel
December 8, 1998 President, 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 14, 1999, 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 8, 1998.
The close of business on December 1, 1998 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
8,568,346 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 at the Annual Meeting is required for
the approval of 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 Items
2, 3 and 4 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 ONE DIRECTOR (ii) TO RATIFY THE SELECTION OF DELOITTE
& TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE FIVE MONTHS ENDING
DECEMBER 31, 1998 AND FOR THE YEAR ENDING DECEMBER 31, 1999; (iii) FOR THE
PROPOSED NAME CHANGE OF THE COMPANY FROM "FIRST CASH, INC." TO "FIRST CASH
FINANCIAL SERVICES, INC."; (iv) FOR THE PROPOSED 1999 STOCK OPTION PLAN; AND (v)
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, 1998, 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 President, 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 ONE DIRECTOR
---------------------
The Bylaws of the Company provide that the Board of Directors will
determine the number of directors, but shall consist of at least one director
and no more than 15 directors. The stockholders of the Company elect the
directors. 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 one
director for the coming year; such nominee presently serves as a director of the
Company and will be appointed for a term 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 the
nominee 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 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 1999 - Messrs. Wessel, Burke and Love. All officers serve at the
discretion of the Board of Directors. No family relationships exist between any
director and executive officer. The Director 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.
Directors Not Standing For Election
- -----------------------------------
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, has served as a director since November 1992, and has served as
president since May 1998. 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. Mr. Burke 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. Until recently, Mr. Burke also
served 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 Alternatives, Inc. are registered pursuant
to the Exchange Act. Mr. Burke is 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 CCDC, Inc.
(formerly Partridge Capital Corporation), a venture capital and real estate
firm, since October 1976. Since July 1981, Mr. Love has served on the board of
directors of PHYMED, INC., (formerly Sooner Energy Corporation), a company
engaged in owning imagining and radiology centers. Mr. Love has served as a
director of Western Country Clubs, Inc., a public company involved in the
entertainment and restaurant industry, since October 1996.
Board of Directors, Committees and Meetings
- -------------------------------------------
The Board of Directors held nine meetings during fiscal 1998. Each
director attended 100% of the Board meetings during fiscal 1998. The Audit and
Compensation Committees consist of Richard T. Burke and Joe R. Love. The Audit
Committee held two meetings during fiscal 1998 and the Compensation Committee
held three meetings during fiscal 1998.
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, 1998, the outside directors received no
compensation for attending meetings of the Board of Directors or any committee
thereof. The directors are 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, 1997.
Reports
- -------
To the best knowledge of the Company, all reports as required under Section
16(a) of the Exchange Act were filed on a timely basis during the fiscal year
ended July 31, 1998, with the exception of a purchase of Mr. Burke's wife of
10,000 shares of common stock of the Company in April 1998, which was reported
on Form 5 in September 1998.
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 DIRECTOR FOR ELECTION BY THE
STOCKHOLDERS AND RECOMMENDS A VOTE FOR SUCH ELECTION. THE ELECTION OF THIS
DIRECTOR REQUIRES A PLURALITY OF THE VOTES OF THE SHARES OF COMMON STOCK PRESENT
IN PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING.
ITEM 2
RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FIVE MONTHS ENDING DECEMBER 31, 1998 AND FOR
THE YEAR ENDING DECEMBER 31, 1999
---------------------------------
The Board of Directors and the Audit Committee of the Board have approved
engagement of Deloitte & Touche LLP as independent auditors for the five months
ending December 31, 1998 and for the year ending December 31, 1999 consolidated
financial statements. The Board of Directors wishes to obtain from the
stockholders a ratification of the Board's action in appointing Deloitte &
Touche LLP as independent auditors of the Company for the five months ending
December 31, 1998 and for the year ending December 31, 1999. Both the Audit
Committee of the Board of Directors and the Board itself has approved the
engagement of Deloitte & Touche LLP for audit services.
In the event the appointment of Deloitte & Touche LLP as independent
auditors for the five months ending December 31, 1998 and for the year ending
December 31, 1999 is not ratified by the stockholders, the adverse vote will be
considered as a direction to the Board of Directors to select other auditors for
the following year. However, because of the difficulty in making any
substitution of auditors so long after the beginning of the five months ending
December 31, 1998, it is contemplated that the appointment for the five months
ending December 31, 1998 will be permitted to stand unless the Board finds other
good reason for making a change.
Representatives of Deloitte & Touche 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 DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF THE
MAJORITY OF OUTSTANDING SHARES OF COMMON STOCK PRESENT OR REPRESENTED BY PROXY
AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
ITEM 3
TO CONSIDER AND ACT UPON THE PROPOSED NAME CHANGE OF THE COMPANY FROM "FIRST
CASH, INC." TO "FIRST CASH FINANCIAL SERVICES, INC."
----------------------------------------------------
The Board of Directors believes that it is in the best interest of the
Company to change the name of the Company from "First Cash, Inc." to "First Cash
Financial Services, Inc." The Board believes this name change will more closely
align the Company's name with its recent change in corporate stategy to
diversify the Company's operations within the consumer financial services
industry.
During Fiscal 1998 the Company expanded its operations into the check
cashing industry with its acquisition of eleven check cashing stores in
California and Washington and a software company, located in California, which
provides computer hardware and software to third party check cashing operators
throughout the continental United States, as well as ongoing technical support.
Therefore, this acquisition combined with its pawn store operations prompted the
change in the Company's name to demonstrate the Company's commitment to
diversification within the consumer financial services industry.
In connection with Company's name change, the Company will also change its
stock symbol used on the Nasdaq Stock Market from "PAWN" to "FCFS". In
addition, the Company will change its year-end from July 31 to December 31. The
above symbol change will more accurately reflect the Company's name change. The
change in year-end will enable the stock market to more accurately and easily
analyze the Company and compare it to its competitors.
THE BOARD HAS APPROVED THE ABOVE NAME CHANGE OF THE COMPANY FROM "FIRST
CASH, INC." TO "FIRST CASH FINANCIAL SERVICES, INC." AND RECOMMENDS A VOTE FOR
SUCH PROPOSAL. SUCH AMENDMENT REQUIRES THE AFFIRMATIVE VOTE OF THE MAJORITY OF
OUTSTANDING SHARES OF COMMON STOCK PRESENT OR REPRESENTED BY PROXY AND ENTITLED
TO VOTE AT THE ANNUAL MEETING.
ITEM 4
ADOPTION OF THE 1999 STOCK OPTION PLAN
--------------------------------------
The Board of Directors adopted the 1999 Stock Option Plan ("Plan") in
November 1998, subject to approval of the stockholders. If approved by the
stockholders, the Plan will allow stock option grants, performance stock awards,
restricted stock awards, and stock appreciation rights ("SAR") as determined by
the Compensation Committee. The Board has reserved 1,200,000 shares of Common
Stock for issuance pursuant to the Plan. The purpose of the Plan is to foster
and promote the financial success of the Company and increase stockholder value
by enabling eligible key employees and others to participate in the long-term
growth and financial success of the Company. A summary of the Plan is set forth
below, and the full text of the Plan is attached hereto as Exhibit "A".
Eligibility. The Plan is open to key employees, officers, directors and
consultants of the Company and its affiliates ("Eligible Persons").
Transferability. The grants are not transferable.
Changes in the Company's Capital Structure. The Plan will not affect the
right of the Company to authorize adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure. In the
event of an adjustment, recapitalization or reorganization, the award shall be
adjusted accordingly. In the event of a merger, consolidation, or liquidation,
the Eligible Person will be eligible to receive a like number of shares of stock
in the new entity he would have been entitled to if immediately prior to the
merger he had exercised his option. The Board may waive any limitations imposed
under the Plan so that all options are immediately exercisable. All outstanding
options may be canceled by the Board upon written notice to the Eligible Person
and by granting a period in which the options may be exercised.
Options and SARs. The Company may grant incentive or nonqualified stock
options.
Option price. The exercise price of incentive options shall not be
less than the greater of (i) 100% of fair market value on the date of grant, or
(ii) the aggregate par value of the shares of stock on the date of grant. The
Compensation Committee, at its option, may provide for a price greater than 100%
of fair market value. The price for 10% or more stockholders shall be not less
than 110% of fair market value.
Duration. No option or SAR may be exercisable after the period of 10
years. In the case of a 10% or more stockholder, no incentive option may be
exercisable after the expiration of five years.
Amount exercisable-incentive options. No option may be exercisable
within six months from its date of grant. In the event an Eligible Person
exercises incentive options during the calendar year whose aggregate fair market
value exceeds $100,000, the exercise of options over $100,000 will be considered
non qualified stock options.
Exercise of Options. Options may be exercised by written notice to
the Compensation Committee with:
(i) cash, certified check, bank draft, or postal or express money
order payable to the order of the Company for an amount equal
to the option price of the shares;
(ii) stock at its fair market value on the date of exercise;
(iii) an election to make a cashless exercise through a registered
broker-dealer, if approved in advance by the Compensation
Committee;
(iv) an election to have shares of stock, which otherwise would be
issued on exercise, withheld in payment of the exercise price,
if approved in advance by the Compensation Committee; and/or
(v) any other form of payment which is acceptable to the
Compensation Committee including without limitation, payment
in the form of a promissory note, and specifying the address
to which the certificates for the shares are to be mailed.
SARs. SARs may, at the discretion of the Compensation Committee, be
included in each option granted under the Plan to permit the Eligible Person to
surrender that option, or a portion of the part which is then exercisable, and
receive in exchange an amount equal to the excess of the fair market value of
the stock covered by the option, over the aggregate exercise price of the stock.
The payment may be made in shares of stock valued at fair market value, in cash,
or partly in cash and partly in shares of stock as the Compensation Committee
determines. SARs may be exercised only when the fair market value of the stock
covered by the option surrendered exceeds the exercise price of the stock. In
the event of a surrender of an option, or a portion of it, to exercise the SARs,
the shares represented by the option or that part of it which is surrendered,
shall not be available for reissuance under the Plan. Each SAR issued in tandem
with an option (a) will expire not later than the expiration of the underlying
option, (b) may be for no more than 100% of the difference between the exercise
price of the underlying option and the fair market value of share of stock at
the time the SAR is exercised, (c) is transferable only when the underlying
option is transferable, and under the same conditions, and (d) may be exercised
only when the underlying option is eligible to be exercised.
Termination of Options or SARs. Unless expressly provided in the option or
SAR agreement, options or SARs shall terminate one day less than three months
after an employee's severance of employment with the Company other than by
death, disability or retirement.
Death. Unless the option or SAR expires sooner, the option or SAR
will expire one year after the death of the Eligible Person.
Disability. Unless the option or SAR expires sooner, the option or
SAR will expire one day less than one year after the disability of the Eligible
Person.
Retirement. Unless it is expressly provided otherwise in the option
agreement, if before the expiration of an incentive option, if the employee
shall be retired in good standing from the employ of the Company under the then
established rules of the Company, the incentive option shall terminate on the
earlier of the option's expiration date or one day less than one year after his
retirement; provided, if an incentive option is not exercised within specified
time limits prescribed by the Internal Revenue Code (the "Code"), it will become
a nonqualified option by operation of law. Unless it is expressly provided
otherwise in the option agreement, if before the expiration of a nonqualified
option, the employee shall be retired in good standing from the employ of the
Company under the then established rules of the Company, the nonqualified option
shall terminate on the earlier of the nonqualified option's expiration date or
one day less than one year after his retirement. In the event of retirement,
the employee shall have the right prior to the termination of the nonqualified
option to exercise the nonqualified option, to the extent to which he was
entitled to exercise it immediately prior to his retirement, unless it is
expressly provided otherwise in the option agreement. Upon retirement, a SAR
shall continue to be exercisable for the remainder of the term of the SAR
agreement.
Reload Options. The Board or Compensation Committee shall have the
authority (but not an obligation) to include as part of any option agreement a
provision entitling the eligible person to a further option (a "Reload Option")
in the event the eligible person exercises the option in accordance with the
Plan and the terms and conditions of the option agreement. Any such Reload
Option (a) shall be for a number of shares equal to the number of shares
surrendered as part or all of the exercise price of such option, (b) shall have
an expiration date which is the greater of (i) the same expiration date of the
option the exercise of which gave rise to such Reload Option, or (ii) one year
from the date of grant of the Reload Option, and (c) shall have an exercise
price which is equal to one hundred percent (100%) of the fair market value of
the stock subject to the Reload Option on the date of exercise of the original
option. Notwithstanding the foregoing, a Reload Option which is an incentive
option and which is granted to a 10% Stockholder, shall have an exercise price
which is equal to one hundred ten percent (110%) of the fair market value of the
stock subject to the Reload Option on the date of exercise of the original
option and shall have a term which is no longer than five (5) years.
Restricted Stock Awards. The Compensation Committee may issue shares of
stock to an eligible person subject to the terms of a restricted stock
agreement. The restricted stock may be issued for no payment by the eligible
person or for payment below the fair market value on the date of grant.
Restricted stock shall be subject to restrictions as to sale, transfer,
alienation, pledge or other encumbrance and generally will be subject to vesting
over a period of time specified in the restricted stock agreement. The
Compensation Committee shall determine the period of vesting, the number of
shares, the price, if any, of stock included in a restricted stock award, and
the other terms and provisions which are included in a restricted stock
agreement.
Award of Performance Stock. The Compensation Committee may award shares of
stock, without any payment for such shares, to designated eligible persons if
specified performance goals established by the Compensation Committee are
satisfied. The terms and provision herein relating to these performance-based
awards are intended to satisfy Section 162(m) of the Code and regulations issued
thereunder. The designation of an employee eligible for a specific performance
stock award shall be made by the Compensation Committee in writing prior to the
beginning of the period for which the performance is measured (or within such
period as permitted by IRS regulations).
Amendment or Termination of the Plan. The Board may amend, terminate or
suspend the Plan at any time, in its sole and absolute discretion; provided,
however, that to the extent required to qualify the Plan under Rule 16b-3
promulgated under Section 16 of the Exchange Act, no amendment that would (a)
materially increase the number of shares of stock that may be issued under the
Plan, (b) materially modify the requirements as to eligibility for participation
in the Plan, or (c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval of the Company's
stockholders; provided further, however, that to the extent required to maintain
the status of any incentive option under the Code, no amendment that would (a)
change the aggregate number of shares of stock which may be issued under
incentive options, (b) change the class of employees eligible to receive
incentive options, or (c) decrease the option price for incentive options below
the fair market value of the stock at the time it is granted, shall be made
without the approval of the stockholders. Subject to the preceding sentence,
the Board shall have the power to make any changes in the Plan and in the
regulations and administrative provisions under it or in any outstanding
incentive option as in the opinion of counsel for the Company may be necessary
or appropriate from time to time to enable any incentive option granted under
this Plan to continue to qualify as an incentive stock option or such other
stock option as may be defined under the Code so as to receive preferential
federal income tax treatment.
THE BOARD OF DIRECTORS HAS APPROVED THE ADOPTION OF THE PLAN AND
UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSED PLAN. SUCH ADOPTION REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF COMMON STOCK PRESENT
OR REPRESENTED BY PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
<TABLE>
EXECUTIVE OFFICERS
------------------
The following table lists the executive officers of the Company as of the
date hereof and the capacities in which they serve.
Name Age Position
---- --- --------
<S> <C> <C>
Phillip E. Powell 48 Chairman of the Board and
Chief Executive Officer
Rick L. Wessel 40 President, Chief Financial Officer,
Secretary, Treasurer and Director
J. Alan Barron 38 President - Pawn Operations
Blake Miraglia 31 President - Check Cashing Operations
Scott Williamson 40 Senior Vice President
</TABLE>
J. Alan Barron joined the Company in January 1994 as its chief operating
officer. Mr. Barron served as the chief operating officer from January 1994 to
May 1998 and has served as the president of pawn operations since May 1998.
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.
Blake Miraglia joined the Company in June 1998 as the president of check
cashing operations. Prior to joining the Company, Mr. Miraglia was the
president of Miraglia, Inc., or its predecessors, from 1990 to May 1998.
Miraglia, Inc. owns and operates Answers, etc., a company based in California
that provides computer hardware and software for third-party operators of check
cashing stores. Miraglia, Inc. also owns and operates Cash & Go, a chain of
check cashing stores in California and Washington. The Company acquired
Miraglia, Inc. in June 1998.
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 Item 1.
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, each named executive officer,
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 20, 1998. On that date, there were 8,138,346 shares of voting Common
Stock issued and outstanding.
<TABLE>
Shares Beneficially
Officers, Directors Owned (2)
and 5% Stockholders (1) Number Percent
----------------------- ------ -------
<S> <C> <C>
Richard T. Burke (3) 1,595,000 19.36%
Wasatch Advisors, Inc. 1,097,550 13.49
Phillip E. Powell (4) 1,024,255 11.56
Joe R. Love (5) 570,000 6.80
CCDC, Inc. (6) 570,000 6.80
Rick L. Wessel (7) 514,294 6.13
J. Alan Barron (8) 419,973 5.02
Blake Miraglia (9) 359,305 4.40
Scott Williamson (10) 288,668 3.49
All officers and directors
as a group (7 persons) 4,771,495 48.52
</TABLE>
(1) The addresses of the persons shown in the table above who are directors or
5% stockholders are as follows: (i) Wasatch Advisors, Inc., 68 South Main, Salt
Lake City, UT 84101; and (ii) 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 30, 1998, upon exercise of outstanding warrants and
options.
(3) Includes a warrant to purchase 100,000 shares at a price of $8.00 per share
to expire in February 2003, and 10,000 shares of Common Stock owned by Mr.
Burke's wife, which Mr. Burke disclaims beneficial ownership.
(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 100,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 60,000
shares at a price of $8.00 per share to expire in February 2003, a warrant to
purchase 225,000 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, and a stock option to purchase 100,000 shares at a
price of $4.625 per share to expire in January 2001.
(5) Includes a warrant to purchase 100,000 shares at a price of $8.00 per share
to expire in February 2003, a warrant to purchase 25,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 125,000
shares at a price of $4.625 per share to expire in January 2001, and 320,000
shares of common stock all of which are beneficially owned by affiliates of Mr.
Love.
(6) Includes a warrant to purchase 100,000 shares at a price of $8.00 per share
to expire in February 2003, a warrant to purchase 25,000 shares at a price of
$12.00 per share to expire in September 2003, and a warrant to purchase 125,000
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.
(7) 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 40,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 50,000
shares at a price of $8.00 per share to expire in February 2003, and a stock
option to purchase 10,000 shares at a price of $4.625 per share to expire in
November 1999.
(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 25,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 40,000
shares at a price of $8.00 per share to expire in February 2003, and a stock
option to purchase 5,000 shares at a price of $4.625 per share to expire in
November 1999.
(9) Includes a warrant to purchase 25,000 shares at a price of $12.00 per share
to expire in September 2003.
(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 25,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 30,000
shares at a price of $8.00 per share to expire in February 2003.
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, 1998 in excess of
$100,000:
<TABLE>
Summary Compensation Table
--------------------------
Long-Term
Annual compensation Compensation - Awards
------------------- ---------------------
Securities Underlying
Name and Principal Fiscal Options/ All Other
Position Year Salary Bonus Warrants(1) Compensation(2)
-------- ---- ------ ----- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Phillip E. Powell
Chairman of the 1998 $235,000 $ 75,000 60,000 -
Board and Chief 1997 185,000 102,200 - -
Executive Officer 1996 175,000 20,000 575,000 -
Rick L. Wessel
President, 1998 $135,000 $ 50,000 50,000 -
Chief Financial 1997 100,000 57,200 - -
Officer, Secretary 1996 95,000 10,000 255,000 -
and Treasurer
J. Alan Barron 1998 $130,000 $ 40,000 40,000 -
President - Pawn 1997 100,000 57,200 - -
Operations 1996 95,000 10,000 250,000 -
Blake Miraglia 1998 $ 21,700 $ - - -
President - Check 1997 - - - -
Cashing Operations 1996 - - - -
Scott Williamson 1998 $ 95,000 $ 25,000 30,000 -
Senior Vice 1997 85,000 22,200 - -
President 1996 80,000 5,000 130,000 -
</TABLE>
- ----------
(1) See "- Employment Agreements" and "- Stock Options and Warrants" for a
discussion of the terms of long-term compensation awards.
(2) The aggregate amount of other compensation is less than 10% of such
executive officer's annual compensation.
Employment Agreements
- ---------------------
Mr. Powell has entered into an employment agreement with the Company
through fiscal 2000 which provides for: (i) a fiscal 1998 annual base salary of
$235,000; (ii) the right to receive incentive compensation; and (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. 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 $135,000. Mr. Wessel is not entitled to receive incentive
compensation. 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 1998:
<TABLE>
Individual Grants of Stock Options and Warrant Grants Made in Fiscal 1998
-------------------------------------------------------------------------
Potential Realizable
Percentage Percentage Value at
of Total Options of Total Warrants Assumed Annual
Granted to Granted to Rates of Stock
Options Employees in Warrants Employees in Exercise Price Appreciation
Granted Fiscal Granted Fiscal Price Expiration for Option and
Name (Shares) 1998 (Shares) 1998 (Per Share) Date Warrant Terms(1)
---- -------- ---- -------- ---- ----------- ---- ----------------
5% 10%
--- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Phillip E. Powell - - 60,000 12% $8.00 February 2003 $94,200 $244,800
Rick L. Wessel - - 50,000 10 8.00 February 2003 78,500 204,000
J. Alan Barron - - 40,000 8 8.00 February 2003 62,800 163,200
Blake Miraglia - - - - - - - -
Scott Williamson - - 30,000 6 8.00 February 2003 47,100 122,400
</TABLE>
(1) 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.
<TABLE>
July 31, 1998 Stock Option and Warrant Values
---------------------------------------------
Number of Unexercised Value of Unexercised
Stock Options and Warrants In-The-Money
Shares at July 31, 1998 Stock Options and Warrants
Acquired on Value (Shares) July 31 , 1998 (l)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Phillip E. Powell 200,000 $934,450 670,000(2) - $4,027,500 -
Rick L. Wessel 155,000 696,925 260,000(3) - 821,250 -
J. Alan Barron 50,000 228,150 295,000(4) - 1,170,000 -
Blake Miraglia - - - - - -
Scott Williamson 55,000 247,837 160,000(5) - 663,750 -
</TABLE>
(1) Computed based upon the differences between aggregate fair market value and
aggregate exercise price.
(2) Includes warrants to purchase 535,000 shares at prices ranging from $4.625
to $15.00 per share and options to purchase 135,000 shares at $4.625 per share.
(3) Includes warrants to purchase 250,000 shares at prices ranging from $4.625
to $15.00 per share and options to purchase 10,000 shares at $4.625 per share.
(4) Includes warrants to purchase 290,000 shares at prices ranging from $4.625
to $15.00 per share and options to purchase 5,000 shares at $4.625 per share.
(5) Includes warrants to purchase 160,000 shares at prices ranging from $4.625
to $15.00 per share.
Warrants held by other directors: On November 30, 1998, other directors
held warrants to purchase 350,000 shares at prices ranging from $4.625 to $12.00
per share, expiring the later of September 2003.
Warrants and options held by other employees and third parties: On November
30, 1998, other employees and third parties own warrants and options to purchase
an aggregate of 483,939 shares at prices ranging from $4.00 to $15.00 per share,
expiring the later of September 2003.
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
- --------------------
From August 1996 through March 1998, the Company was involved in a
management agreement to operate and manage pawnshops for JB Pawn, Inc., a Texas
corporation which, up until March 31, 1998, was 100% owned and controlled by Mr.
Jon Burke, the brother of Mr. Richard Burke, a director of the Company. Through
March 31, 1998, JB Pawn, Inc. owned and provided 100% of the financing for its
pawnshops, and incurred all direct costs to operate the pawnshops, including
payroll, store operating expenses, cost of inventory, and pawn loans. The
Company received a monthly management fee for each store managed, and provided
computer support, accounting, auditing, oversight and management of these
stores. The Company purchased 100% of the outstanding common stock of JB Pawn,
Inc. on April 1, 1998. The Company recorded management fee revenue of $247,000
and $212,000 under this agreement during fiscal 1998 and 1997, respectively.
In June 1998, in conjunction with the purchase of Miraglia, Inc., the
Company entered into lease agreements for one of its check cashing locations, as
well as for certain office space located in Concorde, California. These
properties are partially owned by Mr. Blake Miraglia, president of check cashing
operations. Total lease payments made pursuant to these leases were $20,000
during fiscal 1998, which approximated market rates. In addition, the Company
has an outstanding, unsecured note payable due July 5, 2003, bearing interest at
7%, to Mr. Miraglia which amounted to $2,387,000 as of July 31, 1998 including
accrued interest.
During fiscal 1998, Mr. Richard T. Burke (i) cancelled a warrant to
purchase 200,000 shares of common stock at an exercise price of $15.00 per share
expiring in July 2000, (ii) was issued a warrant to purchase 100,000 shares of
common stock at an exercise price of $8.00 per share expiring in February 2003,
(iii) exercised a warrant to purchase 250,000 shares of common stock at an
exercise price of $4.00 per share, and (iv) exercised warrants to purchase
150,000 shares of common stock at an exercise price of $4.625 per share. During
fiscal 1998, Mr. Joe R. Love (i) cancelled a warrant to purchase 200,000 shares
of common stock at an exercise price of $15.00 per share expiring in July 2000,
(ii) was issued a warrant to purchase 100,000 shares of common stock at an
exercise price of $8.00 per share expiring in February 2003, (iii) exercised a
warrant to purchase 223,000 shares of common stock at an exercise price of $4.00
per share, and (iv) exercised warrants to purchase 5,000 shares of common stock
at an exercise price of $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
- ------------------------------------
Overview
The Compensation Committee of the Board of Directors supervises the
Company's executive compensation. 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 are 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. Mr. Powell's salary was increased from $185,000 to $235,000 in fiscal
1998. Mr. Powell received bonus compensation and warrant issuances based upon
the overall performance of the Company in fiscal 1998.
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 from July 31, 1993 through July 31, 1998, 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, 1993 100.00 100.00 100.00
July 31, 1994 97.06 123.85 102.91
July 31, 1995 82.35 165.68 144.52
July 31, 1996 111.76 258.46 157.42
July 31, 1997 141.18 242.31 232.29
July 31, 1998 320.59 307.09 274.25
</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 1999 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 9, 1999.
By Order of the Board of Directors,
/s/ RICK L. WESSEL
Arlington, Texas Rick L. Wessel
December 8, 1998 President, Chief Financial
Officer, Secretary and Treasurer
Exhibit A
FIRST CASH FINANCIAL SERVICES, INC.
1999 STOCK OPTION PLAN
----------------------
ARTICLE I - PLAN
----------------
1.1 Purpose. This Plan is a plan for key employees, officers, directors,
and consultants of the Company and its Affiliates and is intended to advance the
best interests of the Company, its Affiliates, and its stockholders by providing
those persons who have substantial responsibility for the management and growth
of the Company and its Affiliates with additional incentives and an opportunity
to obtain or increase their proprietary interest in the Company, thereby
encouraging them to continue in the employ of the Company or any of its
Affiliates.
1.2 Rule 16b-3 Plan. The Company is subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
therefore the Plan is intended to comply with all applicable conditions of Rule
16b-3 (and all subsequent revisions thereof) promulgated under the 1934 Act. To
the extent any provision of the Plan or action by the Board of Directors or
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. In addition, the Board
of Directors may amend the Plan from time to time, as it deems necessary in
order to meet the requirements of any amendments to Rule 16b-3 without the
consent of the shareholders of the Company.
1.3 Effective Date of Plan. The Plan shall be effective November 3, 1998
(the "Effective Date"), provided that within one year of the Effective Date, the
Plan shall have been approved by at least a majority vote of stockholders voting
in person or by proxy at a duly held stockholders' meeting, or if the provisions
of the corporate charter, by-laws or applicable state law prescribes a greater
degree of stockholder approval for this action, the approval by the holders of
that percentage, at a duly held meeting of stockholders. No Incentive Option,
Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award shall be granted pursuant to the Plan ten years after
the Effective Date.
ARTICLE II - DEFINITIONS
------------------------
The words and phrases defined in this Article shall have the meaning set
out in these definitions throughout this Plan, unless the context in which any
such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
2.1 "Affiliate" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
action or transaction, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
2.2 "Award" means each of the following granted under this Plan: Incentive
Option, Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award.
2.3 "Board of Directors" means the board of directors of the Company.
2.4 "Change in Control" shall mean and include the following transactions
or situations:
(a) A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing thirty (30%) percent or more of the combined voting power of the
Company's then outstanding securities to any "Unrelated Person" or "Unrelated
Persons" acting in concert with one another. For purposes of this definition,
the term "Person" shall mean and include any individual, partnership, joint
venture, association, trust corporation, or other entity (including a "group" as
referred to in Section 13(d)(3) of the 1934 Act). For purposes of this
definition, the term "Unrelated Person" shall mean and include any Person other
than the Company, a wholly-owned subsidiary of the Company, or an employee
benefit plan of the Company; provided however, a sale to underwriters in
connection with a public offering of the Company's securities pursuant to a firm
commitment shall not be a Change of Control.
(b) A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
(c) A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least thirty (30%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that any pledge of voting securities is
not deemed to be the Beneficial Owner thereof prior to its acquisition of voting
rights with respect to such securities.
(d) Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
(e) During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason, to constitute at least a majority thereof, unless the election or
nomination for election of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period.
(f) A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
2.6 "Committee" means the Compensation Committee of the Board of Directors
or such other committee designated by the Board of Directors. The Committee
shall be comprised solely of at least two members who are both Disinterested
Persons and Outside Directors.
2.7 "Company" means First Cash Financial Services, Inc.
2.8 "Consultant" means any person, including an advisor, engaged by the
Company or Affiliate to render services and who is compensated for such
services.
2.9 "Disinterested Person" means a "disinterested person" as that term is
defined in Rule 16b-3 under the 1934 Act.
2.10 "Eligible Persons" shall mean, with respect to the Plan, those
persons who, at the time that an Award is granted, are (i) key personnel,
including officers and directors, of the Company or Affiliate, or (ii)
Consultants or independent contractors who provide valuable services to the
Company or Affiliate as determined by the Committee.
2.11 "Employee" means a person employed by the Company or any Affiliate to
whom an Award is granted.
2.12 "Fair Market Value" of the Stock as of any date means (a) the average
of the high and low sale prices of the Stock on that date on the principal
securities exchange on which the Stock is listed; or (b) if the Stock is not
listed on a securities exchange, the average of the high and low sale prices of
the Stock on that date as reported on the Nasdaq National Market System; or (c)
if the Stock is not listed on the Nasdaq National Market System, the average of
the high and low bid quotations for the Stock on that date as reported by the
National Quotation Bureau Incorporated; or (d) if none of the foregoing is
applicable, an amount at the election of the Committee equal to (x), the average
between the closing bid and ask prices per share of Stock on the last preceding
date on which those prices were reported or (y) that amount as determined by the
Committee in good faith.
2.13 "Incentive Option" means an option to purchase Stock granted under
this Plan which is designated as an "Incentive Option" and satisfies the
requirements of Section 422 of the Code.
2.14 "Nonqualified Option" means an option to purchase Stock granted under
this Plan other than an Incentive Option.
2.15 "Option" means both an Incentive Option and a Nonqualified Option
granted under this Plan to purchase shares of Stock.
2.16 "Option Agreement" means the written agreement by and between the
Company and an Eligible Person, which sets out the terms of an Option.
2.17 "Outside Director" shall mean a member of the Board of Directors
serving on the Committee who satisfies Section 162(m) of the Code.
2.18 "Plan" means the First Cash Financial Services, Inc. 1999 Stock
Option Plan, as set out in this document and as it may be amended from time to
time.
2.19 "Plan Year" means the Company's fiscal year.
2.20 "Performance Stock Award" means an award of shares of Stock to be
issued to an Eligible Person if specified predetermined performance goals are
satisfied as described in Article VI.
2.21 "Restricted Stock" means Stock awarded or purchased under a
Restricted Stock Agreement entered into pursuant to this Plan, together with (i)
all rights, warranties or similar items attached or accruing thereto or
represented by the certificate representing the stock and (ii) any stock or
securities into which or for which the stock is thereafter converted or
exchanged. The terms and conditions of the Restricted Stock Agreement shall be
determined by the Committee consistent with the terms of the Plan.
2.22 "Restricted Stock Agreement" means an agreement between the Company
or any Affiliate and the Eligible Person pursuant to which the Eligible Person
receives a Restricted Stock Award subject to Article VI.
2.23 "Restricted Stock Award" means an Award of Restricted Stock.
2.24 "Restricted Stock Purchase Price" means the purchase price, if any,
per share of Restricted Stock subject to an Award. The Committee shall
determine the Restricted Stock Purchase Price. It may be greater than or less
than the Fair Market Value of the Stock on the date of the Stock Award.
2.25 "Stock" means the common stock of the Company, $.01 par value or, in
the event that the outstanding shares of common stock are later changed into or
exchanged for a different class of stock or securities of the Company or another
corporation, that other stock or security.
2.26 "Stock Appreciation Right" and "SAR" means the right to receive the
difference between the Fair Market Value of a share of Stock on the grant date
and the Fair Market Value of the share of Stock on the exercise date.
2.27 "10% Stockholder" means an individual who, at the time the Option is
granted, owns Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any Affiliate. An individual shall
be considered as owning the Stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its stockholders, partners, or beneficiaries.
ARTICLE III - ELIGIBILITY
-------------------------
The individuals who shall be eligible to receive Awards shall be those
Eligible Persons of the Company or any of its Affiliates as the Committee shall
determine from time to time. However, no member of the Committee shall be
eligible to receive any Award or to receive Stock, Options, Stock Appreciation
Rights or any Performance Stock Award under any other plan of the Company or any
of its Affiliates, if to do so would cause the individual not to be a
Disinterested Person or Outside Director. The Board of Directors of Directors
may designate one or more individuals who shall not be eligible to receive any
Award under this Plan or under other similar plans of the Company.
ARTICLE IV - GENERAL PROVISIONS RELATING TO AWARDS
--------------------------------------------------
4.1 Authority to Grant Awards. The Committee may grant to those Eligible
Persons of the Company or any of its Affiliates, as it shall from time to time
determine, Awards under the terms and conditions of this Plan. The Committee
shall determine subject only to any applicable limitations set out in this Plan,
the number of shares of Stock to be covered by any Award to be granted to an
Eligible Person.
4.2 Dedicated Shares. The total number of shares of Stock with respect to
which Awards may be granted under the Plan shall be 1,200,000 shares. The shares
may be treasury shares or authorized but unissued shares. The number of shares
stated in this Section 4.2 shall be subject to adjustment in accordance with the
provisions of Section 4.5. In the event that any outstanding Award shall expire
or terminate for any reason or any Award is surrendered, the shares of Stock
allocable to the unexercised portion of that Award may again be subject to an
Award under the Plan.
4.3 Non-transferability. Awards shall not be transferable by the Eligible
Person otherwise than by will or under the laws of descent and distribution, and
shall be exercisable, during the Eligible Person's lifetime, only by him.
Restricted Stock shall be purchased by and/or become vested under a Restricted
Stock Agreement during the Eligible Person's lifetime, only by him. Any attempt
to transfer an Award other than under the terms of the Plan and the Agreement
shall terminate the Award and all rights of the Eligible Person to that Award.
4.4 Requirements of Law. The Company shall not be required to sell or
issue any Stock under any Award if issuing that Stock would constitute or result
in a violation by the Eligible Person or the Company of any provision of any
law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option or pursuant to any
Award, the Company shall not be required to issue any Stock unless the Committee
has received evidence satisfactory to it to the effect that the holder of that
Option or Award will not transfer the Stock except in accordance with applicable
law, including receipt of an opinion of counsel satisfactory to the Company to
the effect that any proposed transfer complies with applicable law. The
determination by the Committee on this matter shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to, register any
Stock covered by this Plan pursuant to applicable securities laws of any country
or any political subdivision. In the event the Stock issuable on exercise of an
Option or pursuant to an Award is not registered, the Company may imprint on the
certificate evidencing the Stock any legend that counsel for the Company
considers necessary or advisable to comply with applicable law. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or vesting under an Award, or the issuance of shares
pursuant thereto, to comply with any law or regulation of any governmental
authority.
4.5 Changes in the Company's Capital Structure.
(a) The existence of outstanding Options or Awards shall not affect
in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Stock or its rights, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise. If the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Eligible Person to receive upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have received had he exercised his
Option in full immediately prior to the event requiring the adjustment; and (b)
the number and class of shares of Stock then reserved to be issued under the
Plan shall be adjusted by substituting for the total number and class of shares
of Stock then reserved, that number and class of shares of Stock that would have
been received by the owner of an equal number of outstanding shares of each
class of Stock as the result of the event requiring the adjustment.
(b) If the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of substantially all its assets while
unexercised Options remain outstanding under this Plan:
(i) Subject to the provisions of clause (c) below, after the
effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, each holder of an outstanding Option shall be
entitled, upon exercise of the Option, to receive, in lieu of shares of Stock,
the number and class or classes of shares of stock or other securities or
property to which the holder would have been entitled if, immediately prior to
the merger, consolidation, liquidation, sale or other disposition, the holder
had been the holder of record of a number of shares of Stock equal to the number
of shares as to which the Option shall be so exercised;
(ii) The Board of Directors may waive any limitations set out in
or imposed under this Plan so that all Options, from and after a date prior to
the effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, specified by the Board of Directors, shall be
exercisable in full; and
(iii) All outstanding Options may be canceled by the Board of
Directors as of the effective date of any merger, consolidation, liquidation,
sale or other disposition, if (i) notice of cancellation shall be given to each
holder of an Option and (ii) each holder of an Option shall have the right to
exercise that Option in full (without regard to any limitations set out in or
imposed under this Plan or the Option Agreement granting that Option) during a
period set by the Board of Directors preceding the effective date of the merger,
consolidation, liquidation, sale or other disposition and, if in the event all
outstanding Options may not be exercised in full under applicable securities
laws without registration of the shares of Stock issuable on exercise of the
Options, the Board of Directors may limit the exercise of the Options to the
number of shares of Stock, if any, as may be issued without registration. The
method of choosing which Options may be exercised, and the number of shares of
Stock for which Options may be exercised, shall be solely within the discretion
of the Board of Directors.
(c) After a merger of one or more corporations into the Company or
after a consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, each Eligible Person shall be
entitled to have his Restricted Stock and shares earned under a Performance
Stock Award appropriately adjusted based on the manner the Stock was adjusted
under the terms of the agreement of merger or consolidation.
(d) In each situation described in this Section 4.5, the Committee
will make similar adjustments, as appropriate, in outstanding Stock Appreciation
Rights.
(e) The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe for them, or upon conversion of shares or obligations
of the Company convertible into shares or other securities, shall not affect,
and no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Awards.
4.6 Election under Section 83(b) of the Code. No Employee shall exercise
the election permitted under Section 83(b) of the Code without written approval
of the Committee. Any Employee doing so shall forfeit all Awards issued to him
under this Plan.
ARTICLE V - OPTIONS AND STOCK APPRECIATION RIGHTS
-------------------------------------------------
5.1 Type of Option. The Committee shall specify at the time of grant
whether a given Option shall constitute an Incentive Option or a Nonqualified
Option. Incentive Stock Options may only be granted to Employees.
5.2 Option Price. The price at which Stock may be purchased under an
Incentive Option shall not be less than the greater of: (a) 100% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares of
Stock may be purchased under an Incentive Option shall be more than 100% of Fair
Market Value. In the case of any 10% Stockholder, the price at which shares of
Stock may be purchased under an Incentive Option shall not be less than 110% of
the Fair Market Value of the Stock on the date the Incentive Option is granted.
The price at which shares of Stock may be purchased under a Nonqualified Option
shall be such price as shall be determined by the Committee in its sole
discretion but in no event lower than the par value of the shares of Stock on
the date the Option is granted.
5.3 Duration of Options and SARS. No Option or SAR shall be exercisable
after the expiration of ten (10) years from the date the Option or SAR is
granted. In the case of a 10% Stockholder, no Incentive Option shall be
exercisable after the expiration of five years from the date the Incentive
Option is granted.
5.4 Amount Exercisable -- Incentive Options. Each Option may be exercised
from time to time, in whole or in part, in the manner and subject to the
conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding, and further provided
that no Option may be exercisable within six (6) months of the date of grant.
To the extent that the aggregate Fair Market Value (determined as of the time an
Incentive Option is granted) of the Stock with respect to which Incentive
Options first become exercisable by the optionee during any calendar year (under
this Plan and any other incentive stock option plan(s) of the Company or any
Affiliate) exceeds $100,000, the portion in excess of $100,000 of the Incentive
Option shall be treated as a Nonqualified Option. In making this determination,
Incentive Options shall be taken into account in the order in which they were
granted.
5.5 Exercise of Options. Each Option shall be exercised by the delivery
of written notice to the Committee setting forth the number of shares of Stock
with respect to which the Option is to be exercised, together with:
(a) cash, certified check, bank draft, or postal or express money
order payable to the order of the Company for an amount equal to the option
price of the shares,
(b) stock at its Fair Market Value on the date of exercise,
(c) an election to make a cashless exercise through a registered
broker-dealer (if approved in advance by the Committee),
(d) an election to have shares of Stock, which otherwise would be
issued on exercise, withheld in payment of the exercise price (if approved in
advance by the Committee), and/or
(e) any other form of payment which is acceptable to the Committee,
including without limitation, payment in the form of a promissory note, and
specifying the address to which the certificates for the shares are to be
mailed.
As promptly as practicable after receipt of written notification and
payment, the Company shall deliver to the Eligible Person certificates for the
number of shares with respect to which the Option has been exercised, issued in
the Eligible Person's name. If shares of Stock are used in payment, the
aggregate Fair Market Value of the shares of Stock tendered must be equal to or
less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash, certified
check, bank draft, or postal or express money order payable to the order of the
Company. Delivery of the shares shall be deemed effected for all purposes when
a stock transfer agent of the Company shall have deposited the certificates in
the United States mail, addressed to the Eligible Person, at the address
specified by the Eligible Person.
Whenever an Option is exercised by exchanging shares of Stock owned by the
Eligible Person, the Eligible Person shall deliver to the Company certificates
registered in the name of the Eligible Person representing a number of shares of
Stock legally and beneficially owned by the Eligible Person, free of all liens,
claims, and encumbrances of every kind, accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by the
certificates (with signature guaranteed by a commercial bank or trust company or
by a brokerage firm having a membership on a registered national stock
exchange). The delivery of certificates upon the exercise of Options is subject
to the condition that the person exercising the Option provides the Company with
the information the Company might reasonably request pertaining to exercise,
sale or other disposition.
5.6 Stock Appreciation Rights. All Eligible Persons shall be eligible to
receive Stock Appreciation Rights. The Committee shall determine the SAR to be
awarded from time to time to any Eligible Person. The grant of a SAR to be
awarded from time to time shall neither entitle such person to, nor disqualify
such person from, participation in any other grant of awards by the Company,
whether under this Plan or any other plan of the Company. If granted as a
stand-alone SAR Award, the terms of the Award shall be provided in a Stock
Appreciation Rights Agreement.
5.7 Stock Appreciation Rights in Tandem with Options. Stock Appreciation
Rights may, at the discretion of the Committee, be included in each Option
granted under the Plan to permit the holder of an Option to surrender that
Option, or a portion of the part which is then exercisable, and receive in
exchange, upon the conditions and limitations set by the Committee, an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the portion of it that was surrendered, determined as of the date of
surrender, over the aggregate exercise price of the Stock. The payment may be
made in shares of Stock valued at Fair Market Value, in cash, or partly in cash
and partly in shares of Stock, as the Committee shall decide in its sole
discretion. Stock Appreciation Rights may be exercised only when the Fair
Market Value of the Stock covered by the Option surrendered exceeds the exercise
price of the Stock. In the event of the surrender of an Option, or a portion of
it, to exercise the Stock Appreciation Rights, the shares represented by the
Option or that part of it which is surrendered, shall not be available for
reissuance under the Plan. Each Stock Appreciation Right issued in tandem with
an Option (a) will expire not later than the expiration of the underlying
Option, (b) may be for no more than 100% of the difference between the exercise
price of the underlying Option and the Fair Market Value of a share of Stock at
the time the Stock Appreciation Right is exercised, (c) is transferable only
when the underlying Option is transferable, and under the same conditions, and
(d) may be exercised only when the underlying Option is eligible to be
exercised.
5.8 Conditions of Stock Appreciation Rights. All Stock Appreciation
Rights shall be subject to such terms, conditions, restrictions or limitations
as the Committee deems appropriate, including by way of illustration but not by
way of limitation, restrictions on transferability, requirement of continued
employment, individual performance, financial performance of the Company or
payment of any applicable employment or withholding taxes.
5.9 Payment of Stock Appreciation Rights. The amount of payment to which
the Eligible Person who reserves an SAR shall be entitled upon the exercise of
each SAR shall be equal to the amount, if any by which the Fair Market Value of
the specified shares of Stock on the exercise date exceeds the Fair Market Value
of the specified shares of Stock on the date of grant of the SAR. The SAR shall
be paid in either cash or Stock, as determined in the discretion of the
Committee as set forth in the SAR agreement. If the payment is in Stock, the
number of shares to be paid shall be determined by dividing the amount of such
payment by the Fair Market Value of Stock on the exercise date of such SAR.
5.10 Exercise on Termination of Employment. Unless it is expressly
provided otherwise in the Option or SAR agreement, Options and SAR's granted to
Employees shall terminate one day less than three months after severance of
employment of the Employee from the Company and all Affiliates for any reason,
with or without cause, other than death, retirement under the then established
rules of the Company, or severance for disability. The Committee shall
determine whether authorized leave of absence or absence on military or
government service shall constitute severance of the employment of the Employee
at that time.
5.11 Death. If, before the expiration of an Option or SAR, the Eligible
Person, whether in the employ of the Company or after he has retired or was
severed for disability, or otherwise dies, the Option or SAR shall continue
until the earlier of the Option's or SAR's expiration date or one year following
the date of his death, unless it is expressly provided otherwise in the Option
or SAR agreement. After the death of the Eligible Person, his executors,
administrators or any persons to whom his Option or SAR may be transferred by
will or by the laws of descent and distribution shall have the right, at any
time prior to the Option's or SAR's expiration or termination, whichever is
earlier, to exercise it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option or SAR's agreement.
5.12 Retirement. Unless it is expressly provided otherwise in the Option
Agreement, before the expiration of an Incentive Option, the Employee shall be
retired in good standing from the employ of the Company under the then
established rules of the Company, the Incentive Option shall terminate on the
earlier of the Option's expiration date or one day less than one year after his
retirement; provided, if an Incentive Option is not exercised within specified
time limits prescribed by the Code, it will become a Nonqualified Option by
operation of law. Unless it is expressly provided otherwise in the Option
Agreement, if before the expiration of a Nonqualified Option, the Employee shall
be retired in good standing from the employ of the Company under the then
established rules of the Company, the Nonqualified Option shall terminate on the
earlier of the Nonqualified Option's expiration date or one day less than one
year after his retirement. In the event of retirement, the Employee shall have
the right prior to the termination of the Nonqualified Option to exercise the
Nonqualified Option, to the extent to which he was entitled to exercise it
immediately prior to his retirement, unless it is expressly provided otherwise
in the Option Agreement. Upon retirement, a SAR shall continue to be
exercisable for the remainder of the term of the SAR agreement.
5.13 Disability. If, before the expiration of an Option or SAR, the
Employee shall be severed from the employ of the Company for disability, the
Option or SAR shall terminate on the earlier of the Option's or SAR's expiration
date or one day less than one year after the date he was severed because of
disability, unless it is expressly provided otherwise in the Option or SAR
agreement. In the event that the Employee shall be severed from the employ of
the Company for disability, the Employee shall have the right prior to the
termination of the Option or SAR to exercise the Option, to the extent to which
he was entitled to exercise it immediately prior to his retirement or severance
of employment for disability, unless it is expressly provided otherwise in the
Option Agreement.
5.14 Substitution Options. Options may be granted under this Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and
conditions of the substitute Options granted may vary from the terms and
conditions set out in this Plan to the extent the Committee, at the time of
grant, may deem appropriate to conform, in whole or in part, to the provisions
of the stock options in substitution for which they are granted.
5.15 Reload Options. Without in any way limiting the authority of the
Board of Directors or Committee to make or not to make grants of Options
hereunder, the Board of Directors or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling
the Eligible Person to a further Option (a "Reload Option") in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by surrendering other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement. Any such Reload Option
(a) shall be for a number of shares equal to the number of shares surrendered as
part or all of the exercise price of such Option; (b) shall have an expiration
date which is the greater of (i) the same expiration date of the Option the
exercise of which gave rise to such Reload Option or (ii) one year from the date
of grant of the Reload Option; and (c) shall have an exercise price which is
equal to one hundred percent (100%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Reload Option which is an Incentive Option and
which is granted to a 10% Stockholder, shall have an exercise price which is
equal to one hundred ten percent (110%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original Option and
shall have a term which is no longer than five (5) years.
Any such Reload Option may be an Incentive Option or a Nonqualified Option,
as the Board of Directors or Committee may designate at the time of the grant of
the original Option; provided, however, that the designation of any Reload
Option as an Incentive Option shall be subject to the one hundred thousand
dollar ($100,000) annual limitation on exercisability of Incentive Stock Options
described in the Plan and in Section 422(d) of the Code. There shall be no
Reload Options on a Reload Option. Any such Reload Option shall be subject to
the availability of sufficient shares under Section 4.2 herein and shall be
subject to such other terms and conditions as the Board of Directors or
Committee may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.
5.16 No Rights as Stockholder. No Eligible Person shall have any rights
as a stockholder with respect to Stock covered by his Option until the date a
stock certificate is issued for the Stock.
ARTICLE VI - RESTRICTED STOCK AWARDS
------------------------------------
6.1 Restricted Stock Awards. The Committee may issue shares of Stock to
an Eligible Person subject to the terms of a Restricted Stock Agreement. The
Restricted Stock may be issued for no payment by the Eligible Person or for a
payment below the Fair Market Value on the date of grant. Restricted Stock
shall be subject to restrictions as to sale, transfer, alienation, pledge or
other encumbrance and generally will be subject to vesting over a period of time
specified in the Restricted Stock Agreement. The Committee shall determine the
period of vesting, the number of shares, the price, if any, of Stock included in
a Restricted Stock Award, and the other terms and provisions which are included
in a Restricted Stock Agreement.
6.2 Restrictions. Restricted Stock shall be subject to the terms and
conditions as determined by the Committee, including without limitation, any or
all of the following:
(a) a prohibition against the sale, transfer, alienation, pledge or
other encumbrance of the shares of Restricted Stock, such prohibition to lapse
(i) at such time or times as the Committee shall determine (whether in annual or
more frequent installments, at the time of the death, disability or retirement
of the holder of such shares, or otherwise);
(b) a requirement that the holder of shares of Restricted Stock
forfeit, or in the case of shares sold to an Eligible Person, resell back to the
Company at his cost, all or a part of such shares in the event of termination of
the Eligible Person's employment during any period in which the shares remain
subject to restrictions;
(c) a prohibition against employment of the holder of Restricted
Stock by any competitor of the Company or its Affiliates, or against such
holder's dissemination of any secret or confidential information belonging to
the Company or an Affiliate;
(d) unless stated otherwise in the Restricted Stock Agreement,
(i) if restrictions remain at the time of severance of
employment with the Company and all Affiliates, other than for reason of
disability or death, the Restricted Stock shall be forfeited; and
(ii) if severance of employment is by reason of disability or
death, the restrictions on the shares shall lapse and the Eligible Person or his
heirs or estate shall be 100% vested in the shares subject to the Restricted
Stock Agreement.
6.3 Stock Certificate. Shares of Restricted Stock shall be registered in
the name of the Eligible Person receiving the Restricted Stock Award and
deposited, together with a stock power endorsed in blank, with the Company. Each
such certificate shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Stock
represented by it is restricted by and subject to the terms and
conditions (including conditions of forfeiture) contained in the First
Cash Financial Services, Inc. 1999 Stock Option Plan, and an agreement
entered into between the registered owner and the Company. A copy of
the Plan and agreement is on file in the office of the Secretary of
the Company.
6.4 Rights as Stockholder. Subject to the terms and conditions of the
Plan, each Eligible Person receiving a certificate for Restricted Stock shall
have all the rights of a stockholder with respect to the shares of Stock
included in the Restricted Stock Award during any period in which such shares
are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares. Dividends paid with respect to
shares of Restricted Stock in cash or property other than Stock in the Company
or rights to acquire stock in the Company shall be paid to the Eligible Person
currently. Dividends paid in Stock in the Company or rights to acquire Stock in
the Company shall be added to and become a part of the Restricted Stock.
6.5 Lapse of Restrictions. At the end of the time period during which any
shares of Restricted Stock are subject to forfeiture and restrictions on sale,
transfer, alienation, pledge, or other encumbrance, such shares shall vest and
will be delivered in a certificate, free of all restrictions, to the Eligible
Person or to the Eligible Person's legal representative, beneficiary or heir;
provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law. By accepting a Stock Award
and executing a Restricted Stock Agreement, the Eligible Person agrees to remit
when due any federal and state income and employment taxes required to be
withheld.
6.6 Restriction Period. No Restricted Stock Award may provide for
restrictions continuing beyond ten (10) years from the date of grant.
ARTICLE VII - PERFORMANCE STOCK AWARDS
--------------------------------------
7.1 Award of Performance Stock. The Committee may award shares of Stock,
without any payment for such shares, to designated Eligible Persons if specified
performance goals established by the Committee are satisfied. The terms and
provisions herein relating to these performance-based awards are intended to
satisfy Section 162(m) of the Code and regulations issued thereunder. The
designation of an employee eligible for a specific Performance Stock Award shall
be made by the Committee in writing prior to the beginning of the period for
which the performance is measured (or within such period as permitted by IRS
regulations). The Committee shall establish the maximum number of shares of
Stock to be issued to a designated Employee if the performance goal or goals are
met. The Committee reserves the right to make downward adjustments in the
maximum amount of an Award if in its discretion unforeseen events make such
adjustment appropriate.
7.2 Performance Goals. Performance goals determined by the Committee may
be based on specified increases in cash flow, net profits, Stock price, Company,
segment or Affiliate sales, market share, earnings per share, return on assets,
and/or return on stockholders' equity.
7.3 Eligibility. The employees eligible for Performance Stock Awards are
the senior officers (i.e., chief executive officer, president, vice presidents,
secretary, treasurer, and similar positions) of the Company and its Affiliates,
and such other employees of the Company and its Affiliates as may be designated
by the Committee.
7.4 Certificate of Performance. The Committee must certify in writing
that a performance goal has been attained prior to issuance of any certificate
for a Performance Stock Award to any Employee. If the Committee certifies the
entitlement of an Employee to the Performance Stock Award, the certificate will
be issued to the Employee as soon as administratively practicable, and subject
to other applicable provisions of the Plan, including but not limited to, all
legal requirements and tax withholding. However, payment may be made in shares
of Stock, in cash, or partly in cash and partly in shares of Stock, as the
Committee shall decide in its sole discretion. If a cash payment is made in
lieu of shares of Stock, the number of shares represented by such payment shall
not be available for subsequent issuance under this Plan.
ARTICLE VIII - ADMINISTRATION
-----------------------------
The Committee shall administer the Plan. All questions of interpretation
and application of the Plan and Awards shall be subject to the determination of
the Committee. A majority of the members of the Committee shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by a
majority of the members shall be as effective as if it had been made by a
majority vote at a meeting properly called and held. This Plan shall be
administered in such a manner as to permit the Options, which are designated to
be Incentive Options to qualify as Incentive Options. In carrying out its
authority under this Plan, the Committee shall have full and final authority and
discretion, including but not limited to the following rights, powers and
authorities, to:
(a) determine the Eligible Persons to whom and the time or times, at
which Options or Awards will be made,
(b) determine the number of shares and the purchase price of Stock
covered in each Option or Award, subject to the terms of the Plan,
(c) determine the terms, provisions and conditions of each Option and
Award, which need not be identical,
(d) accelerate the time at which any outstanding Option or SAR may be
exercised, or Restricted Stock Award will vest,
(e) define the effect, if any, on an Option or Award of the death,
disability, retirement, or termination of employment of the Employee,
(f) prescribe, amend and rescind rules and regulations relating to
administration of the Plan, and
(g) make all other determinations and take all other actions deemed
necessary, appropriate, or advisable for the proper administration of this Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
ARTICLE IX - AMENDMENT OR TERMINATION OF PLAN
---------------------------------------------
The Board of Directors of the Company may amend, terminate or suspend this
Plan at any time, in its sole and absolute discretion; provided, however, that
to the extent required to qualify this Plan under Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended, no amendment that
would (a) materially increase the number of shares of Stock that may be issued
under this Plan, (b) materially modify the requirements as to eligibility for
participation in this Plan, or (c) otherwise materially increase the benefits
accruing to participants under this Plan, shall be made without the approval of
the Company's stockholders; provided further, however, that to the extent
required to maintain the status of any Incentive Option under the Code, no
amendment that would (a) change the aggregate number of shares of Stock which
may be issued under Incentive Options, (b) change the class of employees
eligible to receive Incentive Options, or (c) decrease the Option price for
Incentive Options below the Fair Market Value of the Stock at the time it is
granted, shall be made without the approval of the Company's stockholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it or in any outstanding Incentive Option as in the opinion of
counsel for the Company may be necessary or appropriate from time to time to
enable any Incentive Option granted under this Plan to continue to qualify as an
incentive stock option or such other stock option as may be defined under the
Code so as to receive preferential federal income tax treatment.
ARTICLE X - MISCELLANEOUS
-------------------------
10.1 No Establishment of a Trust Fund. No property shall be set aside nor
shall a trust fund of any kind be established to secure the rights of any
Eligible Person under this Plan. All Eligible Persons shall at all times rely
solely upon the general credit of the Company for the payment of any benefit
which becomes payable under this Plan.
10.2 No Employment Obligation. The granting of any Option or Award shall
not constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Eligible Person. The right of the Company or any Affiliate to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that an Option or Award has been granted to him.
10.3 Forfeiture. Notwithstanding any other provisions of this Plan, if
the Committee finds by a majority vote after full consideration of the facts
that an Eligible Person, before or after termination of his employment with the
Company or an Affiliate for any reason (a) committed or engaged in fraud,
embezzlement, theft, commission of a felony, or proven dishonesty in the course
of his employment by the Company or an Affiliate, which conduct damaged the
Company or Affiliate, or disclosed trade secrets of the Company or an Affiliate,
or (b) participated, engaged in or had a material, financial or other interest,
whether as an employee, officer, director, consultant, contractor, stockholder,
owner, or otherwise, in any commercial endeavor in the United States which is
competitive with the business of the Company or an Affiliate without the written
consent of the Company or Affiliate, the Eligible Person shall forfeit all
outstanding Options and all outstanding Awards, and including all exercised
Options and other situations pursuant to which the Company has not yet delivered
a stock certificate. Clause (b) shall not be deemed to have been violated
solely by reason of the Eligible Person's ownership of stock or securities of
any publicly owned corporation, if that ownership does not result in effective
control of the corporation.
The decision of the Committee as to the cause of an Employee's discharge,
the damage done to the Company or an Affiliate, and the extent of an Eligible
Person's competitive activity shall be final. No decision of the Committee,
however, shall affect the finality of the discharge of the Employee by the
Company or an Affiliate in any manner.
10.4 Tax Withholding. The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Eligible Person any sums required
by federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option or SAR, lapse of restrictions on Restricted Stock, or
award of Performance Stock. In the alternative, the Company may require the
Eligible Person (or other person exercising the Option, SAR or receiving the
Stock) to pay the sum directly to the employer corporation. If the Eligible
Person (or other person exercising the Option or SAR or receiving the Stock) is
required to pay the sum directly, payment in cash or by check of such sums for
taxes shall be delivered within 10 days after the date of exercise or lapse of
restrictions. The Company shall have no obligation upon exercise of any Option
or lapse of restrictions on Stock until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise or lapse of restrictions is sufficient to cover all sums due with
respect to that exercise. The Company and its Affiliates shall not be obligated
to advise an Eligible Person of the existence of the tax or the amount which the
employer corporation will be required to withhold.
10.5 Written Agreement. Each Option and Award shall be embodied in a
written agreement which shall be subject to the terms and conditions of this
Plan and shall be signed by the Eligible Person and by a member of the Committee
on behalf of the Committee and the Company or an executive officer of the
Company, other than the Eligible Person, on behalf of the Company. The
agreement may contain any other provisions that the Committee in its discretion
shall deem advisable which are not inconsistent with the terms of this Plan.
10.6 Indemnification of the Committee and the Board of Directors. With
respect to administration of this Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors against, and each
member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors. However, this indemnity shall not include any expenses incurred by
any member of the Committee and/or the Board of Directors in respect of matters
as to which he shall be finally adjudged in any action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee and the Board of Directors. In addition,
no right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Company, in writing, the opportunity to handle and defend same at its own
expense. This right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each member of the Committee and the Board of
Directors and shall be in addition to all other rights to which a member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract, or otherwise.
10.7 Gender. If the context requires, words of one gender when used in
this Plan shall include the others and words used in the singular or plural
shall include the other.
10.8 Headings. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.
10.9 Other Compensation Plans. The adoption of this Plan shall not affect
any other stock option, incentive or other compensation or benefit plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.
10.10 Other Options or Awards. The grant of an Option or Award shall not
confer upon the Eligible Person the right to receive any future or other Options
or Awards under this Plan, whether or not Options or Awards may be granted to
similarly situated Eligible Persons, or the right to receive future Options or
Awards upon the same terms or conditions as previously granted.
10.11 Governing Law. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Delaware.
REVOCABLE PROXY
FIRST CASH, INC.
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 14, 1999
----------------
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 14, 1999
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 Against Abstain
--- ------- -------
1. Election of Mr. Powell as director (the Board
of Directors recommends a vote FOR) [ ] [ ] [ ]
2. Ratification of the selection of Deloitte &
Touche LLP as independent auditors of the
Company for the five months ending December 31,
1998 and for the year ending December 31,
1999 (the Board of Directors recommends a
vote FOR) [ ] [ ] [ ]
3. Approval of the name change of the Company
from "First Cash, Inc." to "First Cash
Financial Services, Inc." (the Board of
Directors recommends a vote FOR) [ ] [ ] [ ]
4. Approval of the 1999 Stock Option Plan (the
Board of Directors recommends a vote FOR) [ ] [ ] [ ]
5. 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 choice specified. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement dated
December 8, 1998 as well as the Annual Report for the fiscal year ended July 31,
1998.
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.
