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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
Cash America International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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CASH AMERICA INTERNATIONAL, INC.
1600 WEST 7TH STREET
FORT WORTH, TEXAS 76102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
To Our Shareholders:
The Annual Meeting of Shareholders of Cash America International, Inc. (the
"Company") will be held at the Fort Worth Club, 12th Floor, Fort Worth Club
Building, 306 West 7th Street, Fort Worth, Texas on Tuesday, April 21, 1998 at
9:00 a.m., Fort Worth Time, for the following purposes:
(1) Election of eleven (11) persons to serve as directors of the
Company to hold office until the next annual meeting of shareholders or
until their successors are duly elected and qualified;
(2) To consider and act upon a proposal to ratify the appointment of
Coopers & Lybrand L.L.P. as independent auditors of the Company for the
year 1998; and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only holders of record of the Common Stock of the Company at the close of
business on March 3, 1998 are entitled to notice of and to vote at the Annual
Meeting. The presence, in person or by proxy, of the holders of a majority of
the issued and outstanding Common Stock entitled to vote at the meeting is
required for a quorum to transact business. The stock transfer books will not be
closed.
Management sincerely desires your presence at the meeting. However, so that
we may be sure that your shares are represented and voted in accordance with
your wishes, please sign and date the enclosed proxy and return it promptly in
the enclosed stamped envelope. If you attend the meeting, you may revoke your
proxy and vote in person.
By Order of the Board of Directors,
HUGH A. SIMPSON
Secretary
Fort Worth, Texas
March 16, 1998
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CASH AMERICA INTERNATIONAL, INC.
1600 WEST 7TH STREET
FORT WORTH, TEXAS 76102
(PRINCIPAL EXECUTIVE OFFICES)
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
SOLICITATION OF PROXIES
The proxy statement and accompanying proxy are furnished in connection with
the solicitation by the Board of Directors of Cash America International, Inc.,
a Texas corporation (the "Company"), of proxies to be voted at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at the Fort Worth Club
located on the 12th Floor of the Fort Worth Club Building, 306 West 7th Street,
Fort Worth, Texas on Tuesday, April 21, 1998 at 9:00 a.m., Fort Worth Time and
at any recess or adjournment thereof. The solicitation will be by mail, and this
Proxy Statement and the accompanying form of proxy will be mailed to
shareholders on or about March 16, 1998.
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by giving written notice of revocation
to the Secretary of the Company at its principal executive offices or by
executing and delivering a later-dated proxy or by attending the Annual Meeting
and voting in person. However, no such revocation shall be effective until such
notice has been received by the Company at or before the Annual Meeting. Such
revocation will not affect a vote on any matters taken prior to receipt of such
revocation. Mere attendance at the Annual Meeting will not of itself revoke the
proxy.
The expense of such solicitation will be borne by the Company and will
include reimbursement paid to brokerage firms and other custodians, nominees and
fiduciaries for their expenses in forwarding solicitation material regarding the
meeting to beneficial owners. The Company has retained Kissel-Blake Inc. to
assist in the solicitation of proxies from shareholders, and will pay such firm
a fee for its services of approximately $5,000.00. Further solicitation of
proxies may be made by telephone, telegraph or oral communication following the
original solicitation by directors, officers and regular employees of the
Company or by its transfer agent who will not be additionally compensated
therefor, but will be reimbursed by the Company for out-of-pocket expenses.
A copy of the Annual Report to Shareholders of the Company for its fiscal
year ended December 31, 1997 is being mailed with this Proxy Statement to all
shareholders entitled to vote, but does not form any part of the information for
solicitation of proxies.
VOTING SECURITIES OUTSTANDING; QUORUM
The record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting was the close of business on March 3, 1998
(the "Record Date"). At the close of business on March 3, 1998, there were
24,445,218 shares of Common Stock, par value $.10 per share, issued and
outstanding, each of which is entitled to one vote on all matters properly
brought before the meeting. There are no cumulative voting rights. The presence
in person or by proxy of the holders of a majority of the issued and outstanding
shares of Common Stock on the Record Date is necessary to constitute a quorum at
the Annual Meeting. Assuming the presence of a quorum, 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 necessary for the election of
directors and for ratification of the appointment of independent auditors.
Shares voted for a proposal and shares represented by returned proxies that do
not contain instructions to vote against a proposal
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or to abstain from voting will be counted as shares cast for the proposal.
Shares will be counted as cast against the proposal if the shares are voted
either against the proposal or to abstain from voting. Broker non-votes will not
change the number of votes for or against the proposal and will not be treated
as shares entitled to vote, but such shares will be counted for purposes of
determining the presence of a quorum.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the shareholders of the Company will consider and
vote on the following matters:
(1) Election of eleven (11) persons to serve as directors of the
Company to hold office until the next annual meeting of shareholders or
until their successors are duly elected and qualified;
(2) Ratification of the appointment of Coopers & Lybrand L.L.P. as
independent auditors of the Company for the year 1998; and
(3) Such other business as may properly come before the meeting or any
adjournments thereof.
ELECTION OF DIRECTORS
The Company's Board of Directors for the ensuing year will consist of
eleven (11) members who are to be elected for a term expiring at the next annual
meeting of shareholders or until their successors shall be elected and shall
have qualified. The following slate of eleven nominees has been chosen by the
Board of Directors and the Board recommends that each be elected. Unless
otherwise indicated in the enclosed form of Proxy, the persons named in such
proxy intend to nominate and vote for the election of the following nominees for
the office of director. All of such nominees except Clifton H. Morris, Jr. are
presently serving as directors.
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE DURING PAST FIVE YEARS SINCE
------------ ---------------------- --------
Jack Daugherty Chairman of the Board and Chief Executive Officer of 1983
(50) the Company since its inception. Mr. Daugherty has
owned and operated pawnshops since 1971.
A. R. Dike Mr. Dike has owned and served as Chairman of the Board 1988
(62) and Chief Executive Officer of The Dike Co., Inc. (a
private insurance agency) for the past twenty years.
He was Chairman and Chief Executive Officer of The
Insurance Alliance, Inc. from January 1988 to September
1991 and has been Chairman of Willis Corroon Life, Inc.
of Texas since September 1991.
Daniel R. Feehan President and Chief Operating Officer of the Company 1984
(47) since January 1990.
James H. Graves Managing Director of J. C. Bradford & Co., a Nashville 1996
(49) based securities firm, where he has worked for more
than five years.
B. D. Hunter Mr. Hunter is the founder of Huntco, Inc., an 1984
(68) intermediate steel processing company, and for more
than five years has served as its Chairman of the Board
and Chief Executive Officer.
Timothy J. McKibben Chairman of the Board of Ancor Holdings, a private 1996
(49) investment firm, since 1993, and prior to that,
Chairman of the Board and President of Anago
Incorporated, a company he co-founded in 1978 that
manufactures disposable medical products.
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PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE DURING PAST FIVE YEARS SINCE
------------ ---------------------- --------
Alfred M. Micallef President since 1974, and currently Chief Executive 1996
(55) Officer, of JMK International, Inc., a holding company
of rubber and plastics manufacturing businesses.
Carl P. Motheral Mr. Motheral has served over twenty-five years as 1983
(71) President and Chief Executive Officer and also Director
of Motheral Printing Company (a commercial printing
company).
Samuel W. Rizzo Consultant and private investor since 1995, and prior 1984
(62)(a)(c) to that Executive Vice President of Service Corporation
International ("SCI"), a publicly held company that
owns and operates funeral homes and related businesses,
since February 1990.
Rosalin Rogers Private investor since 1986, and prior to that a 1996
(47) principal with the brokerage firm of Financial First,
Inc. in New York, New York.
Clifton H. Morris, Jr. Chairman of the Board and Chief Executive Officer of --
(62) AmeriCredit Corp., a national automobile consumer finance
company, since July 1988. (Mr. Morris served as a director
of the Company from 1984 to 1996.)
Each nominee for election as a director has consented to serve if elected.
The Board of Directors does not contemplate that any of the above-named nominees
for director will be unable to accept election as a director of the Company.
Should any of them become unavailable for election as a director of the Company
then the persons named in the enclosed form of proxy intend to vote such shares
represented in such proxy for the election of such other person or persons as
may be nominated or designated by the Board of Directors.
Certain nominees for director of the Company hold directorships in
companies with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934. Mr. Hunter is a director of Mark Twain
Bancshares, Inc., Celebrity, Inc., SCI, and Huntco Inc. Messrs. Daugherty, Rizzo
and Graves are directors of Hallmark Financial Services, Inc. Mr. Feehan is a
director of KBK Capital Corporation. Mr. Morris is a director of AmeriCredit
Corp. and SCI. Also, Mr. Rizzo is a director of Tanknology Environmental, Inc.
and Mr. Micallef is a director of Snyder Oil Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held six meetings during the fiscal year ended
December 31, 1997. Standing committees of the Board include the Executive
Committee, Audit Committee, Executive Compensation Committee, and Stock Option
Committee. The Company does not have a Nominating Committee.
The Audit Committee's principal responsibilities consist of (a)
recommending the selection of independent accountants, (b) reviewing the scope
of the audit conducted by such auditors, as well as the audit itself, and (c)
reviewing the Company's internal audit activities and matters concerning
financial reporting, accounting and audit procedures, and policies generally.
Its members are Messrs. Rizzo and McKibben and Ms. Rogers. The Audit Committee
held three meetings during fiscal 1997.
The Executive Compensation Committee oversees and administers the Company's
executive compensation program and administers the Company's 1994 Long-Term
Incentive Plan. Its decisions relating to executive compensation are reviewed by
the full Board of Directors. Its members are Messrs. Hunter, Dike and Graves.
The Committee held three meetings during fiscal 1997.
The Stock Option Committee has the general duty to administer the Company's
1987 Stock Option Plan (with Stock Appreciation Rights) and the 1989 Key
Employee Plan. Its members are Messrs. Dike, Micallef and Motheral. The Stock
Option Committee held no meetings during fiscal year 1997.
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All directors attended 75% or more of the total number of meetings of the
Board and of committees on which they serve.
DIRECTORS' COMPENSATION
Directors each receive a retainer of $2,500 per quarter. In addition, Board
members receive $2,500 per Board meeting attended, Executive Committee members
receive $1,500 for each Executive Committee meeting attended, and all other
committee members receive $1,000 for each committee meeting attended.
During 1989, the Company adopted the 1989 Non-Employee Director Stock
Option Plan (the "Non-Employee Director Plan"), which provided for the grant to
the Company's non-employee directors of options to purchase the Company's $.10
par value Common Stock. The Non-Employee Director Plan was approved by the
Company's shareholders at the 1990 Annual Meeting. Effective October 25, 1989,
options were granted under the Non-Employee Director Plan in the following
amounts (after adjustment for stock splits in 1990 and 1992): 225,000 shares to
each non-employee director serving on the Executive Committee of the Board of
Directors (i.e., Messrs. Rizzo, Motheral and Morris), 150,000 shares to each
other non-employee director with at least each two years of service on the Board
of Directors as of the date of grant (i.e., Mr. Hunter) and 120,000 shares to
each other non-employee director (i.e., Mr. Dike). The exercise price for all
shares underlying such options was the last reported sale price of the Common
Stock on the American Stock Exchange on the day preceding the date of grant
($6.33 after adjustment for stock splits in 1990 and 1992). The options expire
15 years from the date of grant. The options may be exercised with respect to 40
per cent of the number of shares subject to the options six months after the
date of grant, and an additional 10 per cent of the shares subject to the
options shall be exercisable as of the first, second, third, fourth, fifth and
sixth anniversaries of the date of grant, except that in the event of the death
or termination of service as a director by reason of disability, or in the event
of a "change in control" of the Company (as that term is defined in the
Non-Employee Director Plan), the options shall be immediately exercisable in
full. An option holder may use already-owned Common Stock as full or partial
payment for the exercise of options granted under the Non-Employee Director
Plan. As a condition to participation in the Non-Employee Director Plan, each
director named above in this paragraph entered into a Consultation Agreement
with the Company dated as of April 25, 1990. Under these Agreements, the
non-employee directors have agreed to serve the Company in an advisory and
consultive capacity. They do not receive any additional compensation under these
Agreements, however.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company has only one outstanding class of equity securities, its Common
Stock, par value $.10 per share.
The following table sets forth certain information, as of the Record Date,
with respect to each person or entity who is known to the Company to be the
beneficial owner of more than five percent (5%) of the Company's Common Stock.
The information below was derived solely from filings made by such owners with
the Securities and Exchange Commission.
AMOUNT OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS
------------------- ---------- ----------
Eagle Asset Management, Inc................................. 2,245,985(1) 9.25%
880 Carillon Parkway
St. Petersburg, Florida 33716
David L. Babson & Co., Inc.................................. 1,828,790(2) 7.49%
One Memorial Drive
Cambridge, Massachusetts 02142
- ------------------
(1) Based upon information contained in a Schedule 13G, filed with the Company,
which indicates that Eagle Asset Management, Inc. has sole voting power with
regard to all 2,245,985 shares and the sole right to dispose of all
2,245,985 shares.
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(2) Based upon information contained in a Schedule 13G, filed with the Company,
which indicates that David L. Babson & Co., Inc. has sole voting power with
regard to all 1,828,790 shares and the sole right to dispose of all
1,828,790 shares.
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock, as of February 23, 1998 by its
directors, nominees for election as directors, named executive officers, and all
directors and executive officers as a group.
AMOUNT AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP(1)(2) CLASS
---- -------------------------- ----------
Jack Daugherty...................................... 1,016,493 4.00%
A. R. Dike.......................................... 136,000 .55%
Daniel R. Feehan.................................... 497,582(3) 2.00%
James H. Graves..................................... 3,200 *
B. D. Hunter........................................ 165,000(4) .67%
Timothy J. McKibben................................. 2,900 *
Alfred M. Micallef.................................. 10,000 *
Carl P. Motheral.................................... 444,065 1.79%
Samuel W. Rizzo..................................... 303,710(5) 1.23%
Rosalin Rogers...................................... 10,000 *
James H. Kauffman................................... 39,186 .16%
Robert D. Brockman.................................. 8,750 *
Michael C. Stinson.................................. 200(6) *
Clifton H. Morris, Jr............................... 227,000(7) .92%
All Directors and Executive Officers as a group (18
persons).......................................... 2,924,692(8) 10.96%
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* Indicates ownership of less than .1% of the Company's Common Stock.
(1) Beneficial ownership as reported in the above table has been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Unless otherwise indicated, each of the persons named has sole
voting and investment power with respect to the shares reported.
(2) Except for the percentages of certain parties that are based on options
exercisable within sixty days of February 23, 1998, as indicated below, the
percentages indicated are based on 24,445,218 shares of Common Stock issued
and outstanding on February 23, 1998. In the case of parties holding
options, the percentage ownership is calculated on the assumption that the
shares presently purchasable or purchasable within the next sixty days
underlying such options are outstanding. The shares subject to options that
are exercisable within sixty days of February 23, 1998 are as follows: Mr.
Daugherty -- 900,500 shares; Messrs. Motheral, Rizzo and Morris -- 225,000
shares each; Mr. Dike -- 120,000 shares; Mr. Feehan -- 349,100 shares; Mr.
Hunter -- 150,000 shares; Mr. Kauffman -- 6,250 shares; and Mr.
Brockman -- 8,750 shares;.
(3) This amount includes 2,400 shares owned by Mr. Feehan's wife and 600 shares
in the name of Mr. Feehan's children.
(4) This amount includes 15,000 shares held by a corporation that Mr. Hunter
indirectly controls. Mr. Hunter disclaims beneficial ownership of such
shares.
(5) This amount includes 19,500 shares owned by trusts of which Mr. Rizzo is
trustee and 4,000 shares owned by Mr. Rizzo's wife.
(6) This amount represents shares held in the name of Mr. Stinson's children.
(7) This amount includes 2,000 shares owned by Mr. Morris' wife.
(8) This amount includes 2,235,100 shares that directors and executive officers
have the right to acquire within the next sixty days through the exercise of
stock options.
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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers and directors are required to file under
Section 16(a) of the Securities Exchange Act of 1934 reports of ownership and
changes of ownership with the Securities and Exchange Commission. Based solely
upon its review of the copies of such reports received by it, and written
representations from individual directors and executive officers, the Company
believes that during the fiscal year ended December 31, 1997 all filing
requirements applicable to executive officers and directors have been complied
with, except that Mr. William R. Horne, Senior Vice President, reported a
September 1997 cashless option exercise on Form 5 instead of on a current report
on Form 4.
EXECUTIVE COMPENSATION
The following sets forth information for each of the Company's last three
fiscal years concerning the compensation of the Company's Chief Executive
Officer and each of the other four most highly compensated executive officers
who were serving as executive officers at the end of the last fiscal year.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION --
AWARDS
---------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME AND -------------------- OPTIONS/ COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS (#) ($)(1)
------------------ ---- --------- -------- --------------- ------------
Jack R. Daugherty, 1997 395,900 229,939 133,344 40,750
Chairman and CEO 1996 378,000 196,727 -- 40,628
1995 378,000 -- -- 48,534
Daniel R. Feehan, 1997 395,000 229,459 233,486 41,694
President and Chief 1996 341,750 177,834 -- 30,953
Operating Officer 1995 315,000 -- -- 30,464
James H. Kauffman, 1997 238,900 125,640 99,100 12,637
President -- Cash America 1996 112,500 46,840 25,000 4,754
Pawn(2)
Robert D. Brockman, 1997 174,700 87,312 63,204 6,208
Executive Vice President -- 1996 169,200 70,447 -- 10,515
Administration(3) 1995 87,500 21,045 7,500 33,534
Michael C. Stinson, 1997 207,692 51,185 54,000 2,217
President -- Mr. Payroll
Corporation(4)
- ---------------
(1) The amounts disclosed in this column for 1997 include:
(a)Company contributions of the following amounts under the Company's
401(k) Savings Plan on behalf of Mr. Daugherty: $4,013; Mr. Feehan:
$14,014; Mr. Kauffman: $7,537; Mr. Brockman: $4,742; and Mr. Stinson:
$1,041.
(b)Payment by the Company of premiums for term life insurance on behalf of
Mr. Daugherty: $1,737; Mr. Feehan: $2,680; Mr. Kauffman: $5,100; Mr.
Brockman: $1,466; and Mr. Stinson: $1,176.
(c)Annual premium payments under split-dollar life insurance policies on
Mr. Feehan ($25,000) and on Mr. Daugherty's spouse ($35,000).
(2) Mr. Kauffman joined the Company on July 1, 1996.
(3) Mr. Brockman joined the Company on June 21, 1995.
(4) Mr. Stinson became an executive officer in 1997.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information concerning option exercises in
fiscal 1997 and the value of unexercised options held by each of the named
executive officers at the end of the Company's last fiscal year.
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE VALUE($)(1)
---- ------------ ------------ ----------- ---------- -----------
Jack R. Daugherty 133,344(2) 13.0 10.8125 09/30/07 547,244
Daniel R. Feehan 101,200(3) 9.8 8.3750 01/21/07 341,044
132,286(2) 12.9 10.8125 09/30/07 542,902
James H. Kauffman 24,100(3) 2.3 8.3750 01/21/07 81,217
75,000(2) 7.3 10.8125 09/30/07 307,800
Robert D. Brockman 18,400(3) 1.8 8.3750 01/21/07 62,008
44,804(2) 4.4 10.8125 09/30/07 183,876
Michael C. Stinson 54,000(2) 5.3 10.8125 09/30/07 221,616
- ---------------
(1) As permitted by the Securities and Exchange Commission's rules on executive
compensation disclosure, the Company used the Black-Scholes model of option
valuation to determine grant date present value. The Company does not
advocate or necessarily agree that the Black-Scholes model can properly
determine the value of an option. Calculations are based upon the following
assumptions as of the grant date: (i) dividend yield per share of .68% for
the January options and .64% for the September options based on the
Company's history of dividend payments; (ii) volatility of 27.6% for the
January options and 29.8% for the September options; (iii) exercise of the
option at the end of the option term; (iv) a risk-free rate of return of
6.59% for the January options and 6.10% for the September options (based on
the then quoted yield of Treasury Notes maturing 10 years from the grant
date); and (v) a 3% annual discount factor for vesting limitations.
(2) These stock options were granted on September 30, 1997 and become
exercisable on September 30, 2004, subject to accelerated vesting as
follows: The options would vest 50% if the market price of the Company's
common stock equals or exceeds 150% of the exercise price for 20 consecutive
calendar days, and the options would vest 100% if the market price equals or
exceeds 200% of the exercise price for 20 consecutive calendar days.
(3) These stock options were granted on January 21, 1997 and become exercisable
on January 21, 2000.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table shows all individual grants of stock options to the
named executive officers of the Company during the fiscal year ended December
31, 1997.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END(#)(1) FY-END($)(2)
---------------------- --------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
---- ---------------------- --------------------
Jack R. Daugherty 900,500/183,344 5,702,280/543,523
Daniel R. Feehan 349,100/274,886 2,105,914/958,107
James H. Kauffman 6,250/117,850 39,438/387,959
Robert D. Brockman 8,750/ 71,954 56,478/235,814
Michael C. Stinson -0-/ 54,000 -0-/114,750
- ---------------
(1) These figures reflect the appropriate adjustments for the Company's
three-for-two stock split in May 1990 and the two-for-one stock split in
April 1992.
(2) Values stated are based upon the closing price of $12.9375 per share of the
Company's Common Stock on the New York Stock Exchange on December 31, 1997,
the last trading day of the fiscal year.
COMPENSATION COMMITTEE REPORT
- -- OVERALL EXECUTIVE COMPENSATION POLICIES
The basic philosophy of the Company's executive compensation program is to
link the compensation of its executive officers to their contribution toward the
enhancement of shareholder value. Consistent with that philosophy, the program
is designed to meet the following policy objectives:
- Attracting and retaining qualified executives critical to the long-term
success of the Company.
- Tying executive compensation to the Company's general performance and
specific attainment of long-term strategic goals.
- Rewarding executives for contributions to strategic management designed
to enhance long-term shareholder value.
- Providing incentives that align the executive's interest with those of
the Company's shareholders.
- -- ELEMENTS OF EXECUTIVE COMPENSATION
The Company's executive compensation program consists of the following
elements designed to meet the policy objectives set out above:
Base Salary
The Committee sets the annual salary of the Company's Chief Executive
Officer and the President and reviews the annual salaries of the Company's other
executive officers. In setting appropriate annual salaries, the Committee takes
into consideration the minimum salaries set forth in certain executives'
employment contracts (described elsewhere in this Proxy Statement), the level
and scope of responsibility, experience, and performance of the executive, the
internal fairness and equity of the Company's overall compensation structure,
and the relative compensation of executives in similar positions in the
marketplace. The Committee relies on information supplied by an outside
compensation consulting firm pertaining to competitive compensation. The
Company's executive compensation program is designed to position base salary at
the 50th percentile of the competitive market and total cash compensation,
including annual performance incentives, at the 75th percentile of the
competitive market. The Committee believes that very few of the
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companies in the peer groups described below under "Performance Graph" are
included in the surveys used for compensation comparisons. Those surveys
represent a much broader collection of U.S. companies.
Annual Incentive Compensation
In 1996, the Committee modified the Company's executive compensation
program to formalize its short-term and long-term components.
a. Short-Term Component
Under this component, the Company's executive officers are eligible to
receive annual incentive cash bonuses equal to certain percentages of their
annual base salaries. The bonus percentage varies depending upon the officer's
position with the Company, and the percentages increase if the Company's
earnings performance exceeds the financial plan. A portion of the bonus amount
is based on the officer's accomplishment of certain individual performance
objectives established at the outset of the year.
b. Long-Term Component
Under this component, the Company's executive officers are eligible to
receive long-term incentive grants in the form of restricted stock and/or stock
options, with the number of shares of stock and/or options to equal certain
percentages of the officers' annual base salaries. The applicable percentage
varies depending upon the officer's position with the Company. The allocation
between restricted stock and stock options is determined by the Committee at its
discretion. The Company's 1994 Long-Term Incentive Plan (the "1994 Plan"),
approved by the shareholders of the Company at the April 1994 Annual Meeting,
allows for these forms of stock-based long-term incentive compensation awards.
This long-term incentive component rewards effective management that results in
long-term increases in the Company's stock price. In this way, it is designed to
further the objective of fostering and promoting improvement in long-term
financial results and increases in shareholder value. The Company granted
options to certain of its executive officers in 1997 at an exercise price equal
to the closing price of the Company's common stock on the New York Stock
Exchange on the day preceding the date of grant. (See the "Options/SAR Grants in
Last Fiscal Year" table in this Proxy Statement.) This arrangement rewards
effective management that results in long-term increases in the Company's stock
price. The number of options granted to the Company's highest paid executive
officers, as reflected elsewhere in this Proxy Statement, is based in part on
many of the same considerations underlying the determination of annual base
salary. The options granted to certain of the Company's executive officers in
October 1997 vest seven years after the date of grant. However, vesting will
accelerate if the Company's stock price hits certain target levels: the options
vest 50% if the stock price equals or exceeds 150% of the exercise price for
twenty consecutive calendar days, and the options vest 100% if the stock price
equals or exceeds 200% of the exercise price for twenty consecutive calendar
days. Those executive officers covered by this grant would be scheduled to
receive a comparable grant of options three years after the grant date or upon
100% vesting of these options, whichever comes first. With this grant, the
Company further strengthened the link between its senior management's interests
and those of the Company's shareholders.
Deductibility Cap on Executive Compensation
A federal tax law enacted in 1994 disallows corporate deductibility for
certain compensation paid in excess of $1,000,000 to the Chief Executive Officer
and the four other most highly paid executive officers. "Performance-based
compensation," as defined in the tax law, is not subject to the deductibility
limitation, provided certain shareholder approval and other requirements are
met. Although the cash compensation paid to the Company's Chief Executive
Officer and the four other most highly paid executive officers is well below the
$1,000,000 level in each case, the Committee determined that the Company should
seek to ensure that future stock option and performance award compensation under
the 1994 Plan qualifies as "performance-based compensation." Accordingly, the
1994 Plan is intended to meet the requirements of this tax law and thereby
preserve full deductibility of both stock option and stock-based performance
award compensation expense.
9
12
- -- CEO'S COMPENSATION FOR FISCAL 1997
The fiscal 1997 salary of Mr. Jack R. Daugherty, Chief Executive Officer of
the Company, was based primarily on his rights under his employment agreement
with the Company, which is described elsewhere in this Proxy Statement. Under
that agreement, Mr. Daugherty's minimum base salary is $386,000. The Committee
believes that the total cash compensation paid to Mr. Daugherty was appropriate
in light of the Company's accomplishments in 1997, including a 22% increase in
earnings per share on the strength of continued improvement in the average unit
loan-to-merchandise ratio and a continuing rise in net revenue yield on
merchandise held for disposition.
These 1997 accomplishments also support the Committee's belief that the
fiscal 1997 cash compensation of the Company's other executive officers was set
at appropriate levels.
EXECUTIVE COMPENSATION COMMITTEE
B. D. Hunter, Chairman
A. R. Dike
James H. Graves
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings, including this Proxy Statement,
in whole or in part, the preceding report and the Performance Graph on Page 11
shall not be incorporated by reference into any such filings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Executive Compensation Committee of the
Company's Board of Directors is an officer, former officer, or employee of the
Company or any subsidiary of the Company.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
As a condition to receiving grants of options under the 1989 Key Employee
Stock Option Plan for Cash America International, Inc., Messrs. Daugherty and
Feehan entered into employment agreements with the Company dated April 25, 1990.
Effective August 1, 1997, Messrs. Daugherty and Feehan entered into amended and
restated employment agreements with the Company. The initial term of each of
these agreements expires July 31, 2002. Under these agreements, compensation is
determined annually by the Company's Board of Directors, subject to minimum
annual compensation of $386,000 for each of Messrs. Daugherty and Feehan.
Included in each agreement is a covenant of the employee not to compete with the
Company during the term of his employment and for a period of three years
thereafter. The employment agreements also provide that if the employee is
terminated by the Company other than for cause, the Company will pay to the
employee the remainder of his current year's salary plus an amount equal to the
employees' salary, at the then current rate, for a period equal to the greater
of three years or the remainder of the term of the agreement, with that amount
payable in thirty-six equal monthly installments. In the event the employee
resigns or is terminated other than for cause within twelve months after a
"change in control" of the Company (as that term is defined in the employment
agreement), the employee will be entitled to earned and vested bonuses at the
date of termination plus the remainder of his current year's salary
(undiscounted) plus the present value (employing an interest rate of 8%) of five
additional years' salary (for which purpose "salary" includes the annual rate of
compensation immediately prior to the "change in control" plus the average
annual cash bonus for the immediately preceding three year period).
10
13
PERFORMANCE GRAPH
The following Performance Graph shows the changes over the past five year
period in the value of $100 invested in: (1) the Company's Common Stock, (2) the
Standard & Poor's 500 Index, and (3) the common stock of a peer group of
companies whose returns are weighted according to their respective market
capitalizations. The values of each investment as of the beginning of each year
are based on share price appreciation and the reinvestment of dividends. The
peer group consists of the other companies in the pawnbroking industry with
publicly traded common stock.
COMPARISON OF CUMULATIVE SHAREHOLDER RETURN
CASH
MEASUREMENT PERIOD AMERICA INTL S&P 500
(FISCAL YEAR COVERED) INC. COMP INDEX PEER GROUP
DEC92 100.00 100.00 100.00
DEC93 86.73 110.08 61.32
DEC94 91.90 111.53 42.11
DEC95 51.56 153.45 23.24
DEC96 80.30 188.68 34.49
DEC97 122.81 251.63 52.68
DATA SOURCE: STANDARD & POOR'S COMPUSTAT
TRANSACTIONS WITH MANAGEMENT
The Board of Directors of the Company adopted an officer stock loan program
in 1994 and modified the program in 1996. The purpose of the program is (i) to
facilitate and encourage the ownership of Company common stock by the officers
of the Company and (ii) to establish the terms for stock loan transactions with
officers. Participants in the program can utilize loan proceeds to acquire and
hold common stock of the Company by means of option exercises or otherwise. The
stock to be held as a result of the loan must be pledged to the Company to
secure the obligation to repay the loan. Under the terms of the loan, interest
accrues at the "applicable Federal rate" for loans of this type, as published by
the Internal Revenue Service from time to time. Interest is payable annually and
may be paid with additional loan proceeds. Each loan has a one year maturity and
is renewable thereafter for successive one year terms, except that the Committee
could notify the borrower during any renewal term that the loan would not renew
again after the next succeeding renewal term. The aggregate principal balance of
all outstanding loans under the program may not exceed $5,000,000 at any time.
As of December 31, 1997, Messrs. Daugherty and Feehan had stock loans
outstanding under this program in the aggregate principal amounts of $899,296,
and $1,205,508, respectively.
11
14
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. of Fort Worth, Texas served as independent public
accountants for the Company for fiscal 1997 and has reported on the Company's
financial statements. The Board of Directors of the Company has selected Coopers
& Lybrand L.L.P. to audit the accounts of the Company for the fiscal year ending
December 31, 1998 and recommends to the shareholders that they ratify this
selection for the ensuing fiscal year ending December 31, 1998. The Company has
been advised that Coopers & Lybrand L.L.P. has no relationship with the Company
or its subsidiaries other than that arising from the firm's employment as
auditors. The affirmative vote of a majority of the outstanding shares of Common
Stock present at the Annual Meeting in person or by proxy is necessary for the
ratification of the appointment of Coopers & Lybrand L.L.P. as independent
public accountants.
A representative of Coopers & Lybrand L.L.P. is expected to be present at
the Annual Meeting and will be afforded an opportunity to make a statement and
will be available to respond to appropriate questions at such meeting.
While shareholder ratification is not required for the selection of Coopers
& Lybrand L.L.P. since the Board of Directors has the responsibility for the
selection of the Company's independent public accountants, the selection is
being submitted for ratification at the Annual Meeting with a view towards
soliciting the shareholders' opinion thereon, which opinion will be taken into
consideration in future deliberations.
THE BOARD RECOMMENDS A VOTE "FOR" THE RATIFICATION OF COOPERS & LYBRAND
L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE 1998 FISCAL
YEAR.
OTHER BUSINESS
Any proposal to be presented by a shareholder at the Company's 1999 Annual
Meeting of Shareholders must be presented to the Company by no later than
November 13, 1998.
It is important that proxies be returned promptly to avoid unnecessary
expense. Therefore, shareholders are urged, regardless of the number of shares
of stock owned, to date, sign and return the enclosed proxy in the enclosed
reply envelope.
By Order of the Board of Directors
HUGH A. SIMPSON
Secretary
March 16, 1998
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15
CASH AMERICA INTERNATIONAL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING APRIL 21, 1998
The undersigned hereby constitutes and appoints Jack R. Daugherty, Daniel R.
Feehan and Hugh A. Simpson, and each of them, my true and lawful attorneys
and proxies, with power of substitution, to represent the undersigned and
vote at the annual meeting of shareholders of Cash America International,
Inc. (the "Company") to be held in Fort Worth, Texas on April 21, 1998, and
at any adjournment thereof, all of the stock of the Company standing in my
name as of the record date of March 3, 1998 on all matters coming before
said meeting.
(CHANGE OF ADDRESS)
----------------------------------------
----------------------------------------
----------------------------------------
(If you have written in the above space,
please mark the corresponding box on
the reverse side of this card).
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
16
PLEASE MARK YOUR
VOTES AS INDICATED
IN THIS EXAMPLE [X]
FOR WITHHELD
Election of Directors, Nominees:
Jack R. Daugherty, A.R. Dike, Daniel R. Feehan, James H. Graves, [ ] [ ]
B.D. Hunter, Timothy J. McKibbon, Alfred M. Micallef, Carl P. Monthoral,
Samuel W. Rizzo, Rosalin Rogers, Clifton H. Morris, Jr.
except vote withheld from the following nominee(s).
- ---------------------------------------------------
FOR AGAINST ABSTAIN
Ratification of the appointment of Coopers & Lybrand L.L.P. as independent
auditors for the year 1998. [ ] [ ] [ ]
On their discretion the proxies are authorized to vote upon such other
matters as may come before the meeting or any adjournments thereof.
[ ]
CHANGE
OF [ ]
ADDRESS
SIGNATURE SIGNATURE DATE
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NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.