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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CASH AMERICA INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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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(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 20, 1999
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 20, 1999 at
9:00 a.m., Fort Worth Time, for the following purposes:
(1) To elect 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
PricewaterhouseCoopers LLP as independent auditors of the Company for the
year 1999;
(3) To consider and act upon a proposal to amend the Company's 1994
Long-Term Incentive Plan; and
(4) 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 2, 1999 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 23, 1999
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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 20, 1999
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 20, 1999 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 23, 1999.
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 or other electronic 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, 1998 is being mailed with this Proxy Statement to all
shareholders entitled to vote, but it 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 2, 1999
(the "Record Date"). At the close of business on March 2, 1999, there were
25,180,149 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, for ratification of the appointment of independent auditors, and for
approval of the proposed amendment to the Company's 1994 Long-Term Incentive
Plan. Shares voted for a proposal and
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shares represented by returned proxies that do not contain instructions to vote
against a proposal 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 PricewaterhouseCoopers LLP as
independent auditors of the Company for the year 1999;
(3) A proposal to amend the Company's 1994 Long-Term Incentive Plan;
and
(4) 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 are presently serving as directors.
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE DURING PAST FIVE YEARS SINCE
------------ ---------------------- --------
Jack Daugherty (51) Chairman of the Board and Chief Executive Officer of 1983
the Company since its inception. Mr. Daugherty has
owned and operated pawnshops since 1971.
A. R. Dike (63) Mr. Dike has owned and served as Chairman of the 1988
Board and Chief Executive Officer of The Dike Co.,
Inc. (a private insurance agency) for over twenty
years. He has served as Chairman of Willis Corroon
Life, Inc. of Texas since 1991.
Daniel R. Feehan (48) President and Chief Operating Officer of the Company 1984
since January 1990. (Chairman and Co-Chief Executive
Officer of the check cashing company Mr. Payroll
Corporation, formerly a wholly-owned subsidiary of
the Company, from February 1998 to February 1999.)
James H. Graves (50) Managing Director of J. C. Bradford & Co., a 1996
Nashville based securities firm, where he has worked
for more than five years.
B. D. Hunter (69) Mr. Hunter is the founder of Huntco, Inc., an 1984
intermediate steel processing company, and for more
than five years has served as its Chairman of the
Board and Chief Executive Officer.
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PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE DURING PAST FIVE YEARS SINCE
------------ ---------------------- --------
Timothy J. McKibben (50) Chairman of the Board of Ancor Holdings, a private 1996
investment firm, since 1993, and prior to that,
Chairman of the Board and President of Anago
Incorporated, a medical products manufacturing
company that he co-founded in 1978.
Alfred M. Micallef (56) President since 1974, and currently Chief Executive 1996
Officer, of JMK International, Inc., a holding
company of rubber and plastics manufacturing
businesses.
Clifton H. Morris, Jr. (63) Chairman of the Board and Chief Executive Officer of 1998
AmeriCredit Corp., a national automobile consumer
finance company, since July 1988. (Mr. Morris served
as a director of the Company from 1984 to 1996.)
Carl P. Motheral (72) Mr. Motheral has served over twenty-five years as 1983
President and Chief Executive Officer and also
Director of Motheral Printing Company (a commercial
printing company).
Samuel W. Rizzo (63) Consultant and private investor since 1995, and 1984
prior 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 (48) Private investor since 1986, and prior to that a 1996
principal with the brokerage firm of Financial
First, Inc. in New York, New York.
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 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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during the fiscal year ended
December 31, 1998. 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 Executive
Committee did not meet during fiscal 1998.
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 Morris and Ms. Rogers. The Audit Committee
held three meetings during fiscal 1998.
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
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executive compensation are reviewed by the full Board of Directors. Its members
are Messrs. Hunter, Dike, Graves and Morris. The Committee held two meetings
during fiscal 1998.
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, McKibben, Micallef and Motheral.
The Stock Option Committee held no meetings during fiscal 1998.
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.
Effective October 25, 1989, options to purchase shares of the Company's
common stock were granted under the 1989 Non-Employee Director Stock Option Plan
(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 is $6.33 (after adjustment for stock splits in 1990 and 1992). The
options expire October 25, 2004. 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.
The Company's 1994 Long-Term Incentive Plan also provides for the grant of
stock options to non-employee directors. Under this Plan, non-employee directors
receive options to purchase 5,000 shares of the Company's common stock upon
joining the Board of Directors. Those directors continuing their service receive
options for 2,500 shares at the time of each annual meeting of shareholders. In
each case, the exercise price of the options is the closing price of the
Company's common stock on the New York Stock Exchange on the day preceding the
grant date. The options issued under this Plan vest one year after the grant
date and expire upon the earlier of five (5) years after the director's
retirement date or ten (10) years after the grant date.
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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................................. 2,607,755(1) 10.40%
880 Carillon Parkway
St. Petersburg, Florida 33716
David L. Babson & Co., Inc.................................. 2,280,790(2) 9.09%
One Memorial Drive
Cambridge, Massachusetts 02142
Barry R. Feirstein........................................ 1,337,192(3) 5.30%
Feirstein Capital Management, L.L.C.
Feirstein Partners, L.P.
767 Third Avenue, 28th Floor
New York, New York 10017
- ------------------
(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 2,607,755 shares and the sole right to dispose of all
2,607,755 shares.
(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 2,280,790 shares and the sole right to dispose of all
2,280,790 shares.
(3) Based upon information contained in a Schedule 13G, filed with the Company,
which indicates that Barry R. Feirstein has sole voting power and sole
dispositive power with regard to 180,000 shares and that all three named
owners have shared voting power and shared dispositive power with regard to
the other 1,157,192 shares.
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The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock, as of March 2, 1999 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....................................... 1,095,652 4.19%
A. R. Dike........................................... 138,500 .55%
Daniel R. Feehan..................................... 571,072 2.23%
James H. Graves...................................... 10,700 *
B. D. Hunter......................................... 167,500(3) .67%
Timothy J. McKibben.................................. 10,400 *
Alfred M. Micallef................................... 17,500 *
Clifton H. Morris, Jr. .............................. 232,000(4) .91%
Carl P. Motheral..................................... 446,565(5) 1.76%
Samuel W. Rizzo...................................... 306,210(6) 1.21%
Rosalin Rogers....................................... 17,500 *
James H. Kauffman.................................... 98,595 .39%
Michael C. Stinson................................... 2,410(7) *
Michael D. Gaston.................................... 27,650 .11%
All Directors and Executive Officers as a group (18
persons)........................................... 3,245,940(8) 11.74%
- ------------------
* 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 March 2, 1999, as indicated below, the
percentages indicated are based on 25,180,149 shares of Common Stock issued
and outstanding on March 2, 1999. 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 March 2, 1999 are as follows: Mr.
Daugherty -- 954,172 shares; Mr. Dike -- 122,500 shares; Mr.
Feehan -- 405,093 shares; Mr. Hunter -- 152,500 shares; Messrs. Graves and
McKibben and Ms. Rogers -- 7,500 shares each; Mr. Micallef -- 2,500 shares;
Mr. Morris -- 230,000 shares; Messrs. Motheral and Rizzo -- 227,500 shares
each; Mr. Kauffman -- 50,000 shares; and Mr. Gaston -- 20,453 shares.
(3) This amount includes 15,000 shares held by a corporation that Mr. Hunter
indirectly controls. Mr. Hunter disclaims beneficial ownership of such
shares.
(4) This amount includes 2,000 shares owned by Mr. Morris' wife.
(5) This amount includes 206,250 shares held by a limited partnership that Mr.
Motheral indirectly controls. Mr. Motheral disclaims beneficial ownership of
such shares.
(6) 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.
(7) This amount includes 200 shares held in the name of Mr. Stinson's children.
(8) This amount includes 2,457,316 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, 1998 all filing
requirements applicable to executive officers and directors have been complied
with.
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, 1998 386,495 -- -- 38,785
Chairman and CEO 1997 395,900 229,939 133,344 40,750
1996 378,000 196,727 -- 40,628
Daniel R. Feehan, 1998 383,438 -- -- 31,963
President and Chief 1997 395,000 229,459 233,486 41,694
Operating Officer(2) 1996 341,750 177,834 -- 30,953
James H. Kauffman, 1998 256,663 43,538 -- 6,772
CEO -- Rent-A-Tire, 1997 238,900 125,640 99,100 12,637
Inc.(3) 1996 112,500 46,840 25,000 4,754
Michael C. Stinson, 1998 246,154 -- -- 4,276
President -- Mr. Payroll 1997 207,692 51,185 54,000 2,217
Corporation(4)
Michael D. Gaston, 1998 178,889 -- -- 2,810
Executive Vice 1997 130,576 65,271 40,906 37,230
President(5)
- ------------------
(1) The amounts disclosed in this column for 1998 include:
(a) Company contributions of the following amounts under the Company's
401(k) Savings Plan on behalf of Mr. Daugherty: $2,024; Mr. Feehan:
$5,018; Mr. Kauffman: $3,434; Mr. Stinson: $3,844; and Mr. Gaston:
$2,435.
(b) Payment by the Company of premiums for term life insurance on behalf of
Mr. Daugherty: $1,760; Mr. Feehan: $1,945; Mr. Kauffman: $3,338; Mr.
Stinson: $432; and Mr. Gaston: $374.
(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. Feehan served as Chairman and Co-Chief Executive Officer of Mr. Payroll
Corporation from February 1998 to February 1999 before returning to the
position of President and Chief Operating Officer of the Company.
(3) Mr. Kauffman joined the Company on July 1, 1996.
(4) Mr. Stinson became an executive officer in 1997.
(5) Mr. Gaston joined the Company on April 1, 1997. The amount in the last
column for 1997 includes $36,749.63 for moving and temporary living
expenses.
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The following table provides information concerning option exercises in
fiscal 1998 and the value of unexercised options held by each of the named
executive officers at the end of the Company's last fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END(#)(1) FY-END($)(2)
--------------- --------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ----------- --------------- --------------------
Jack R. Daugherty 25,500 156,060 954,172/104,172 7,949,964/570,604
Daniel R. Feehan 20,500 125,460 405,093/198,393 3,127,559/1,209,742
James H. Kauffman -- -- 50,000/74,100 271,094/435,275
Michael C. Stinson 27,000 177,187 -0-/27,000 -0-/118,125
Michael D. Gaston -- -- 20,453/20,453 89,482/89,482
- ------------------
(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 $15.1875 per share of the
Company's Common Stock on the New York Stock Exchange on December 31, 1998,
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
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the 75th percentile of the competitive market. The Committee believes that very
few of the 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
The Company's executive compensation program consists of both short-term
and long-term incentive 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 per share performance exceeds the financial plan.
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 is designed to further the objective of
fostering and promoting improvement in long-term financial results and increases
in shareholder value. The Company has granted options to its executive officers
in recent years 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. This arrangement rewards effective management that results in long-term
increases in the Company's stock price. 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 the 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.
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- -- CEO'S COMPENSATION FOR FISCAL 1998
The fiscal 1998 salary of Mr. Jack R. Daugherty, Chief Executive Officer of
the Company, was based primarily on his rights under his ten-year 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 1998,
most notably the significant growth in the Company's core lending business.
These 1998 accomplishments also support the Committee's belief that the
fiscal 1998 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
Clifton H. Morris, Jr.
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).
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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.
TOTAL RETURN PERFORMANCE
[PERFORMANCE CHART]
CASH
AMERICA
MEASUREMENT PERIOD INTERNATIONAL,
(FISCAL YEAR COVERED) INC. S&P 500 PEER GROUP
12/31/93 100 100 100
12/31/94 105.98 101.32 68.62
12/31/95 59.47 139.39 37.80
12/31/96 92.64 171.26 56.12
12/31/97 141.70 228.42 85.53
12/31/98 166.94 293.69 78.91
1997
1998
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, 1998, Messrs. Daugherty and Feehan had stock loans
outstanding under this program in the aggregate principal amounts of $1,219,732,
and $1,490,720, respectively.
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PROPOSAL TO APPROVE AMENDMENT TO THE
1994 LONG-TERM INCENTIVE PLAN
INTRODUCTION
At the Annual Meeting, the Company's shareholders will be requested to
consider and act upon a proposal to amend Section 5 of the Company's 1994
Long-Term Incentive Plan (the "Plan"). The amendment provides for the
authorization of an additional 1,200,000 shares available for issuance under and
in accordance with the terms of the Plan.
On January 26, 1999, the Board of Directors adopted the proposed amendment
to the Plan, subject to approval by the Company's shareholders. The purpose of
the amendment is to authorize sufficient shares for issuance under the Plan to
meet the needs of the Company's executive compensation program for a period of
approximately four to five years. The Board of Directors believes that the
proposed amendment is desirable since it will serve to promote the Company's
interests and those of its shareholders by strengthening the Company's ability
to attract and retain key employees who can make substantial contributions to
the success of the Company. The operation of the Plan will also facilitate
equity ownership of the Company by its officers, key management, and other
employees, thereby providing them with a direct personal interest in the
Company's continued success and progress, and in the market price of its stock.
If the proposed amendment to the Plan is approved by shareholders, the
Board of Directors intends, with respect to future grants, to utilize the
remaining shares previously authorized in respect of the Plan for future grants
before utilizing the additional shares recommended for approval at the 1999
Annual Meeting.
DESCRIPTION
Set forth below is a summary of certain important features of the Plan and
the proposed amendment to it. This description is qualified in its entirety by
reference to the complete text of the Plan, including the proposed amendment,
which is set forth as Appendix A to this Proxy Statement and entitled the "Cash
America International, Inc. 1994 Long-Term Incentive Plan."
PLAN PROVISIONS
The Plan provides that it shall be administered by the Executive
Compensation Committee of the Board of Directors, who shall be "disinterested
persons" within the meaning of the Securities Exchange Act of 1934, as amended
to administer the Plan (the "Committee"). Employees of the Company and its
affiliates are eligible for grants under the Plan. Such grants may consist of
stock options, restricted stock, restricted stock units, performance shares, or
other stock-based grants, on terms and conditions determined by the Committee,
including such terms and conditions as the number of shares subject to the
grant, and the exercise price (if applicable), vesting schedule, and forfeiture
provisions of the grant. Awards of restricted stock and restricted units must
bear a restriction for such period as may be determined by the Committee at its
discretion. The Committee also has sole and complete authority to set
performance cycles and performance goals for any performance shares granted.
Grants under the Plan have generally taken the form of stock options. Outside
directors of the Company are also eligible to receive grants of stock options
under the Plan. (See "ELECTION OF DIRECTORS -- Directors' Compensation.")
The options granted under the Plan are "non-qualified options" under the
federal income tax laws. The recipients of options incurred no tax upon the
grant of the options, and the Company received no expense deduction. At the time
of the exercise of an option, the excess of the fair market value over the
exercise price will constitute ordinary income to the holder, and the Company
will be allowed a deduction in the same amount. (On March 2, 1999, the closing
price per share of the Company's common stock on the New York Stock Exchange was
$13.50.)
The total number of shares authorized for issuance pursuant to the Plan was
set at 1,400,000 in 1994, when it was approved by shareholders; as of December
31, 1998, 33,412 shares remained available for grants of new awards under the
Plan.
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NEW PLAN BENEFITS
It cannot be determined at this time what grants, if any, will be made to
any person or group of persons under the Plan if the amendment is approved by
shareholders. If the amendment had been in effect for the last fiscal year, the
amount of grants under the Plan would not have differed from the grants actually
made.
VOTE REQUIRED
Approval of the amendment to the Plan required the affirmative vote of a
majority of votes cast by the holders of common stock of the Company present or
represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED
AMENDMENT TO THE 1994 LONG-TERM INCENTIVE PLAN.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP of Fort Worth, Texas served as independent
public accountants for the Company for fiscal 1998 and has reported on the
Company's financial statements. The Board of Directors of the Company has
selected PricewaterhouseCoopers LLP to audit the accounts of the Company for the
fiscal year ending December 31, 1999 and recommends to the shareholders that
they ratify this selection for the ensuing fiscal year ending December 31, 1999.
The Company has been advised that PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP
as independent public accountants.
A representative of PricewaterhouseCoopers LLP 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
PricewaterhouseCoopers LLP 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
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR
THE 1999 FISCAL YEAR.
OTHER BUSINESS
Any proposal to be presented by a shareholder at the Company's 2000 Annual
Meeting of Shareholders must be presented to the Company by no later than
November 12, 1999.
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 23, 1999
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APPENDIX A
CASH AMERICA INTERNATIONAL, INC.
1994 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of the Cash America International, Inc. 1994 Long-Term
Incentive Plan (the "Plan") is to promote the interests of the Company and its
shareholders by (i) attracting and retaining executive personnel and other key
employees of outstanding ability; (ii) motivating executive personnel and other
key employees, by means of performance-related incentives, to achieve
longer-range performance goals; and (iii) enabling such employees to participate
in the long-term growth and financial success of the Company.
SECTION 2. DEFINITIONS
"Act" shall mean the Securities Exchange Act of 1934, as amended.
"Affiliate" shall mean any corporation or other entity which is not a
Subsidiary but as to which the Company possesses a direct or indirect ownership
interest and has representation on the board of directors or any similar
governing body.
"Award" shall mean a grant or award under Section 6 through 12, inclusive,
of the Plan, as evidenced in a written document delivered to a recipient of an
Award as provided in Section 13(b).
"Board of Directors" shall mean the Board of Directors of the Company.
"Change in Control" shall be deemed to have occurred if (i) any person(s)
(as such term is used in Sections 13(d) and 14(d)2 of the Act) or party becomes
the beneficial owner (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or (ii) the
stockholders of the Company approve a merger, consolidation, sale or disposition
of all or substantially all of the Company's assets or plan of liquidation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" shall mean the Executive Compensation Committee of the Board of
Directors. The committee shall be made up of at least three outside directors,
and only outside directors may serve on the Committee. The outside director
cannot be a former officer of the company or a former employee receiving
deferred compensation. The director cannot be an employee or 5% shareholder of
another company that receives more than 5% of its gross receipts or $60,000
worth of business from the Company, whichever is less. The director cannot
receive any remuneration, other than directors' fees, from the Company or any
Subsidiary, nor can the director beneficially own more than 50% of an entity
that receives any remuneration from the Company or any Subsidiary.
"Common Stock" or "Stock" shall mean the Common Stock of the Company.
"Company" shall mean Cash America International, Inc.
"Designated Beneficiary" shall mean the beneficiary designated by the
Participant, in a manner determined by the Committee, to receive amounts due the
Participant in the event of the Participant's death. In the absence of an
effective designation by the Participant, Designated Beneficiary shall mean the
Participant's estate.
"Employee" shall mean any key employee of the Employer.
"Employer" shall mean the Company and any Subsidiary or Affiliate.
"Fair Market Value" shall mean the closing price of the Stock on the last
day prior to the date in question on which the Stock was traded.
"Fiscal Year" shall mean the fiscal year of the Company.
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"Incentive Stock Option" shall mean a stock option granted under Section 6
which is intended to meet the requirements of Section 422 of the Code.
"Non-Stock Based Incentive Compensation" refers to incentive compensation
whose value is not based in whole or in part on the value of Common Stock.
"Nonqualified Stock Option" shall mean a stock option granted under Section
6 which is not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option.
"Outside Director" shall mean a member of the Board of Directors who is not
an Employee.
"Participant" shall mean an individual who is selected by the Committee to
receive an Award under the Plan.
"Payment Value" shall mean the dollar amount assigned to a Performance
Share which shall be equal to the Fair Market Value of the Common Stock on the
day of the Committee's determination under Section 8(c)(1) with respect to the
applicable Performance Cycle.
"Performance Cycle" or "Cycle" shall mean the period of years selected by
the Committee during which the performance is measured for the purpose of
determining the extent to which an award of Performance Shares has been earned.
"Performance Goals" shall mean the objectives established by the Committee
for a Performance Cycle, for the purpose of determining the extent to which
Performance Shares which have been contingently awarded for such Cycle are
earned.
"Performance Share" shall mean an award granted pursuant to Section 8 of
the Plan expressed as a share of Common Stock.
"Restricted Period" shall mean the period of years selected by the
Committee during which a grant of Restricted Stock or Restricted Stock Units may
be forfeited to the Company.
"Restricted Stock" shall mean shares of Common Stock contingently granted
to a Participant under Section 9 of the Plan.
"Restricted Stock Unit" shall mean a fixed or variable dollar denominated
unit contingently awarded under Section 9 of the Plan.
"Stock Appreciation Right" shall mean a right granted under Section 7.
"Stock Exchange" shall mean the national securities exchange on which the
Common Stock is traded as of the particular time in question.
"Stock Unit Award" shall mean an award of Common Stock or units granted
under Section 10.
"Stockholders Meeting" shall mean the annual meeting of stockholders of the
Company in each year.
"Subsidiary" shall mean any business entity in which the Company possesses
directly or indirectly fifty percent (50%) or more of the total combined voting
power.
SECTION 3. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
sole and complete authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing the operation of the Plan as it shall
from time to time deem advisable, and to interpret the terms and provisions of
the Plan. The Committee may delegate to one or more executive officers of the
Company the power to make Awards to Participants who are not executive officers
or directors of the Company, provided the Committee shall fix the maximum amount
of such Awards for the group and a maximum for any one Participant. The
Committee's decisions shall be binding upon all persons, including the Company,
stockholders, an Employer, Employees, Participants and Designated Beneficiaries.
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SECTION 4. ELIGIBILITY
All Employees and non-employee consultants and advisors (other than members
of the Committee) who, in the opinion of the Committee, have the capacity for
contributing in a substantial measure to the successful performance of the
Company are eligible to be Participants in the Plan.
SECTION 5. MAXIMUM AMOUNT AVAILABLE FOR AWARDS
(a) The maximum number of shares of Stock in respect of which Awards may be
made under the Plan shall be a total of 2,600,000 shares of Common Stock. In
addition, no Employee may be granted Options for more than 700,000 shares of
Common Stock in the aggregate during the ten-year period beginning on the
effective date of the Plan. Shares of Common Stock may be made available from
the authorized but unissued shares of the Company or from shares reacquired by
the Company, including shares purchased in the open market. In the event that
(i) an Option or Stock Appreciation Right is settled for cash or expires or is
terminated unexercised as to any shares of Common Stock covered thereby, or (ii)
any Award in respect of shares is canceled or forfeited for any reason under the
Plan without the delivery of shares of Common Stock, such shares shall
thereafter be again available for award pursuant to the Plan. In the event that
any Option or other Award granted hereunder is exercised through the delivery of
shares of Common Stock, the number of shares of Common Stock available for
Awards under the Plan shall be increased by the number of shares so
surrendered, to the extent permissible under Rule 16b-3, as promulgated under
the Act and as interpreted from time to time by the Securities and Exchange
Commission or its staff.
(b) In the event that the Committee shall determine that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price substantially below fair
market value, or other similar corporate event affects the Common Stock such
that an adjustment is required in order to preserve the benefits or potential
benefits intended to be made available under this Plan, then the Committee shall
adjust appropriately any or all of (1) the number and kind of shares which
thereafter may be awarded or optioned and sold or made the subject of Stock
Appreciation Rights under the Plan, (2) the number and kind of shares subject of
Stock Options and other Awards, and (3) the grant, exercise or conversion price
with respect to any of the foregoing and/or, if deemed appropriate, make
provision for cash payment to a Participant or a person who has an outstanding
Option or other Award; provided, however, that the number of shares subject to
any Option or other Award shall always be a whole number.
SECTION 6. STOCK OPTIONS
(a) Grant.
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees to whom Options shall be granted,
the number of shares to be covered by each Option, the option price therefor and
the conditions and limitations applicable to the exercise of the Option. The
Committee shall have the authority to grant Incentive Stock Options, or to grant
Nonqualified Stock Options, or to grant both types of options. In the case of
Incentive Stock Options, the terms and conditions of such grants shall be
subject to and comply with such rules as may be prescribed by Section 422 of the
Code, as from time to time amended, and any implementing regulations.
(b) Option Price.
The Committee shall, in its discretion, establish the option price at the
time each Option is granted, which for Incentive Stock Options shall not be less
than 100% of the Fair Market Value of the Common Stock on the date of grant.
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(c) Exercise.
(1) Each Option shall be exercisable at such times and subject to such
terms and conditions as the Committee may, in its sole discretion, specify in
the applicable Award or thereafter; provided, however, that in no event may any
Option granted hereunder be exercisable after the expiration of ten years from
the date of such grant. The Committee may impose such conditions with respect to
the exercise of Options, including without limitation, any relating to the
application of federal or state securities laws, as it may deem necessary or
advisable.
(2) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment may be made in cash, or its equivalent, or, if and to the extent
permitted by the Committee, by exchanging shares of Common Stock owned by the
optionee (which are not the subject of any pledge or other security interest),
or by a combination of the foregoing, provided that the combined value of all
cash and cash equivalents and the Fair Market Value of any such Common Stock so
tendered to the Company, valued as of the date of such tender, is at least equal
to such option price.
(3) The Company, in its sole discretion, may lend money to an Employee,
guarantee a loan to an Employee or otherwise assist an Employee to obtain the
cash necessary to exercise all or any portion of an Option granted under the
Plan.
SECTION 7. STOCK APPRECIATION RIGHTS
(a) The Committee may, with sole and complete authority, grant Stock
Appreciation Rights in tandem with an Option, in addition to an Option, or
freestanding and unrelated to an Option. Stock Appreciation Rights granted in
tandem with or in addition to an Option may be granted either at the same time
as the Option or at a later time. Stock Appreciation Rights shall not be
exercisable earlier than six months after grant, shall not be exercisable after
the expiration of ten years from the date of grant and shall have an exercise
price of not less than 100% of the Fair Market Value of the Common Stock on the
date of grant.
(b) A Stock Appreciation Right shall entitle the Participant to receive
from the Company an amount equal to the excess of the Fair Market Value of a
share of Common Stock on the exercise of the Stock Appreciation Right over the
exercise price thereof, provided that the Committee may for administrative
convenience determine that, for any Stock Appreciation Right which is not
related to an Incentive Stock Option which Stock Appreciation Right can only be
exercised during limited periods of time in order to satisfy the conditions of
certain rules of the Securities and Exchange Commission, the exercise of any
Stock Appreciation Right for cash during such limited period shall be deemed to
occur for all purposes hereunder on the day during such limited period on which
the Fair Market Value of the Stock is the highest. Any such determination by the
Committee may be changed by the Committee from time to time and may govern the
exercise of Stock Appreciation Rights granted prior to such determination as
well as Stock Appreciation Rights thereafter granted. The Committee shall
determine upon the exercise of a Stock Appreciation Right whether such Stock
Appreciation Right shall be settled in cash, shares of Common Stock, Stock
Options, or a combination thereof.
(c) A Limited SAR related to an Option which can only be exercised during
limited periods following a Change in Control of the Company, may entitle the
Participant to receive an amount based upon the highest price paid or offered
for Common Stock in any transaction relating to the Change in Control or paid
during the thirty-day period immediately preceding the occurrence of the Change
in Control in any transaction reported on the Stock Exchange.
SECTION 8. PERFORMANCE SHARES
(a) The Committee shall have sole and complete authority to determine the
Employees who shall receive Performance Shares, the number of such shares for
each Performance Cycle, the Performance Goals on which each Award shall be
contingent, the duration of each Performance Cycle, and the value of each
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Performance Share. There may be more than one Performance Cycle in existence at
any one time, and the duration of Performance Cycle may differ from each other.
(b) The Committee shall establish Performance Goals for each Cycle on the
basis of such criteria and to accomplish such objectives as the Committee may
from time to time select. During any Cycle, the Committee may adjust the
Performance Goals for such Cycle as it deems equitable in recognition of unusual
or non-recurring events affecting the Company, changes in applicable tax laws or
accounting principles, or such other factors as the Committee may determine.
(c) (1) As soon as practicable after the end of a Performance Cycle, the
Committee shall determine the number of Performance Shares which have been
earned on the basis of performance in relation to the established Performance
Goals.
(2) Payment Values of earned Performance Shares shall be distributed to the
Participant or, if the Participant has died, to the Participant's Designated
Beneficiary, as soon as practicable after the expiration of the Performance
Cycle and the Committee's determination under paragraph (1), above. The
Committee shall determine whether Payment Values are to be distributed in the
form of cash or shares of Common Stock.
SECTION 9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
(a) Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Employees to whom shares of Restricted
Stock and Restricted Stock Units shall be granted, the number of shares of
Restricted Stock and the number of Restricted Stock Units to be granted to each
Participant, the duration of the Restricted Period during which, and the
conditions under which, the Restricted Stock and Restricted Stock Units may be
forfeited to the Company, and the other terms and conditions of such awards. The
Restricted Period may be shortened, lengthened or waived by the Committee at any
time in its discretion with respect to one or more Participants or Awards
outstanding.
(b) Shares of Restricted Stock and Restricted Stock Units may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as herein
provided, during the Restricted Period. Certificates issued in respect of shares
of Restricted Stock shall be registered in the name of the Participant and
deposited by such Participant, together with a stock power endorsed in blank,
with the Company. At the expiration of the Restricted Period, the Company shall
deliver such certificates to the Participant or the Participant's legal
representative, except to the extent such Restricted Stock or Restricted Stock
Units have been forfeited to the Company under the terms and conditions of the
Award. Payment for Restricted Stock Units shall be made to the Company in cash
and/or shares of Common Stock, as determined at the sole discretion of the
Committee.
SECTION 10. OTHER STOCK BASED AWARDS
(a) In addition to granting Options, Stock Appreciation Rights, Performance
Shares, Restricted Stock and Restricted Stock Units, the Committee shall have
authority to grant to Participants Stock Unit Awards which can be in the form of
Common Stock or units, the value of which is based, in whole or in part, on the
value of Common Stock. Subject to the provisions of the Plan, including Section
13(b) below, Stock Unit Awards shall be subject to such terms, restrictions,
conditions, vesting requirements and payment rules (all of which are sometimes
hereinafter collectively referred to as "rules") as the Committee may determine
in its sole and complete discretion at the time of grant. The rules need not be
identical for each Stock Unit Award.
(b) In the sole and complete discretion of the Committee, a Stock Unit
Award may be granted subject to the following rules:
(1) Any shares of Common Stock which are part of a Stock Unit Award
may not be assigned, sold, transferred, pledged or otherwise encumbered
prior to the date on which the shares are issued or, if later, the date
provided by the Committee at the time of grant of the Stock Unit Award.
(2) Stock Unit Awards may provide for the payment of cash
consideration by the person to whom such Award is granted or provide that
the Award, and any Common Stock to be issued in connection therewith, if
applicable, shall be delivered without the payment of cash consideration,
provided that for
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any Common Stock to be purchased in connection with a Stock Unit Award the
purchase price shall be at least 50% of the Fair Market Value of such
Common Stock on the date such Award is granted.
(3) Stock Unit Awards may relate in whole or in part to certain performance
criteria established by the Committee at the time of grant.
(4) Stock Unit Awards may provide for deferred payment schedules and/or
vesting over a specified period of employment.
(5) In such circumstances as the Committee may deem advisable, the
Committee may waive or otherwise remove, in whole or in part, any restriction or
limitation to which a Stock Unit Award was made subject at the time of grant.
(c) In the sole and complete discretion of the Committee, an Award, whether
made as a Stock Unit Award under this Section 10 or as an Award granted pursuant
to Sections 6 through 9, may provide the Participant with (i) dividends or
dividend equivalents (payable on a current or deferred basis) and (ii) cash
payments in lieu of or in addition to an Award.
SECTION 11. OUTSIDE DIRECTORS' OPTIONS.
(a) Grant of Options.
Each Outside Director who joins the Board of Directors after 1994 shall
automatically be granted an Option to purchase 5,000 shares of the common stock
of the Company, $.10 par value; and on the date of each Stockholders Meeting
after the 1997 Stockholders Meeting, each Outside Director shall automatically
be granted an Option to purchase 2,500 shares of the common stock of the
Company. All such options shall be Nonqualified Stock Options. The price at
which each share of common stock covered by such Options may be purchased shall
be one hundred percent (100%) of the Fair Market Value of the stock on the date
the Option is granted.
(b) Exercise of Options.
Except as set forth in this Section 11, an Option granted to an Outside
Director shall become exercisable one year after date the option is granted. Any
Option that has been outstanding for more than six (6) months shall immediately
become exercisable in the event of a Change in Control. The Option may be
exercised by the Outside Director during the period that the Outside Director
remains a member of the Board of Directors and for a period of five (5) years
following retirement, provided that only those Options exercisable at the date
of the Outside Director's retirement may be exercised during the period
following retirement and, provided further, that in no event shall the Option be
exercisable more than ten (10) years after the date of grant. Shares issued upon
the exercise of Options granted under this Section 11 will be issued from the
Company's treasury shares.
In the event of the death of an Outside Director, the Option shall be
exercisable only within the twelve (12) months next succeeding the date of
death, and then only (i) by the executor or administrator of the Outside
Director's estate, by the person or persons to whom the Outside Director's
rights under the Option shall pass by the Outside Director's will or the laws of
descent and distribution or, by the Outside Director's designated beneficiary,
and (ii) if and to the extent that the Outside Director was entitled to exercise
the Option at the date of the Outside Director's death, provided that in no
event shall the Option be exercisable more than ten (10) years after the date of
grant.
(c) Payment.
An Option granted to an Outside Director shall be exercisable only upon
payment to the Company of the full exercise price of the shares with respect to
which the Option is being exercised. Payment for the shares shall be in United
States dollars, payable in cash or by check.
A-6
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SECTION 12. OUTSIDE DIRECTORS' SHARES.
Outside Directors may elect, on an annual basis, to purchase shares of
common stock of the Company from the Company in lieu of receiving all or part
(in 10% increments) of their annual retainer, meeting fees and committee meeting
fees in cash. The purchase price of such shares shall be the Fair Market Value
of the stock for the last trading day of the month in which the retainer,
meeting fees, and committee meeting fees are earned.
Commencing January 1, 1998, the annual retainer, meeting fees and committee
meeting fees payable to each Outside Director for service on the Board of
Directors may, at the election of the Outside Director (the "Annual Election"),
be payable to a trust in shares of common stock of the Company. The Annual
Election: (i) shall be irrevocable in respect of the one-year period to which it
pertains (the "Plan Year") and shall specify the applicable percentage (in
increments of 10%) of such annual retainer and meeting fees that such Outside
Director wishes to direct to the trust; (ii) must be received in writing by the
administrator of the Plan by the established enrollment deadline of any year in
which this Plan is in effect in order to cause the next succeeding Plan Year's
annual retainer and fees to be subject to the provisions of this Plan; and (iii)
must specify whether the ultimate distribution of the shares of common stock to
the Outside Directors will be paid, following the Outside Director's death or
termination of Board service, in a lump sum or in equal annual payments over a
period of two to twenty years.
The shares shall be purchased from the Company at the Fair Market Value of
the stock for the last trading day of the month in which the fees are earned and
shall be credited by the trustee to the account of the Outside Director. The
certificates for common stock shall be issued in the name of the trustee of the
trust and shall be held by such trustee in trust for the benefit of the Outside
Directors; provided, however, that each Outside Director shall be entitled to
vote the shares. The trustee shall retain all dividends (which shall be
reinvested in shares of common stock) and other distributions paid or made with
respect thereto in the trust. The shares credited to the account of an Outside
Director shall remain subject to the claims of the Company's creditors, and the
interests of the Outside Director in the trust may not be sold, hypothecated or
transferred (including, without limitation, transferred by gift or donation)
while such shares are held in the trust.
If the Outside Director elects to receive a lump sum distribution, the
trustee of the trust shall distribute such shares of common stock free of
restrictions within 60 days after the Outside Director's termination date or a
later date elected by the Outside Director (no later than the mandatory
retirement age of the Outside Director). If the Outside Director elects to
receive a lump sum distribution, the Outside Director may, by delivering notice
in writing to the administrator of the Plan no later than December 31 of the
year prior to the year in which the Outside Director terminates service as a
Director, elect to receive any portion or all of the common stock in the form of
cash determined by reference to the Fair Market Value of the common stock as of
the termination date. Any such notice to the administrator must specify whether
the distribution will be entirely in cash or whether the distribution will be in
a combination of common stock and cash (in which case the applicable percentage
must be specified). In the case of termination of the Outside Director's service
as a result of his death, payment of the Outside Director's account shall be in
shares of common stock and not in cash. If an Outside Director elects to receive
payments in installments, the distribution will commence within 60 days after
the Outside Director's termination date and will be made in shares of common
stock and not in cash. Notwithstanding anything to the contrary contained
herein, any fractional shares of common stock shall be distributed in cash to
the Outside Director.
SECTION 13. GENERAL PROVISIONS
(a) Withholding.
The Employer shall have the right to deduct from all amounts paid to a
Participant in cash (whether under this Plan or otherwise) any taxes required by
law to be withheld in respect of Awards under this Plan. In the case of payments
of incentive awards in the form of Common Stock, the Employer may require the
Participant to pay to the Employer the amount of any taxes required to be
withheld with respect to such Common Stock. However, the Participant may pay all
or any portion of the taxes required to be withheld by the Employer or paid by
the Participant with respect to such Common Stock by electing to have the
Employer
A-7
23
withhold shares of Common Stock, or by delivering previously owned shares of
Common Stock, having a Fair Market Value equal to the amount required to be
withheld or paid. The Participant must make the foregoing election on or before
the date that the amount of tax to be withheld is determined ("Tax Date"). Any
such election is irrevocable and subject to disapproval by the Committee. If the
Participant is subject to the short-swing profits recapture provisions of
Section 16(b) of the Exchange Act, any such election shall be subject to the
following additional restrictions:
(i) Such election may not be made within six months of the grant of
the Award, provided that this limitation shall not apply in the event of
death or disability, and
(ii) Such election must be made either six months or more prior to the
Tax Date or in a Window Period (as hereinafter defined). Where the Tax Date
in respect of the exercise of all or any portion of an Option is deferred
until after such exercise and the Participant elects Common Stock
withholding, the full amount of shares of Common Stock will be issued or
transferred to the Participant upon exercise of the Option, but the
Participant shall be unconditionally obligated to tender back to the
Employer on the Tax Date the number of shares of Common Stock necessary to
discharge with respect to such Option exercise the greater of (i) the
Employer's withholding obligation and (ii) all or any portion of the
holder's federal and state tax obligation attributable to the Option
exercise. A "Window Period" is any period commencing on the third business
day following the Company's release of a quarterly or annual summary
statement of sales and earnings and ending on the twelfth business day
following such release.
(b) Awards.
Each Award hereunder shall be evidenced in writing, delivered to the
Participant or Outside Director and shall specify the terms and conditions
thereof and any rules applicable thereto, including but not limited to the
effect on such Award of the death, retirement, or other termination of
employment of the Participant or Outside Director and the effect thereon, if
any, of a Change in Control of the Company.
(c) Nontransferability.
No Award shall be assignable or transferable except by will or the laws of
descent and distribution, and no right or interest of any Participant shall be
subject to any lien, obligation or liability of the Participant. Notwithstanding
the above, in the discretion of the Committee, awards may be transferable
pursuant to a Qualified Domestic Relations Order ("QDRO"), as determined by the
Committee or its designee.
(d) No Right to Employment.
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Employer. Further, the Employer expressly reserves
the right at any time to dismiss a Participant free from any liability, or any
claim under the Plan, except as provided herein or in any agreement entered into
with respect to an Award.
(e) No Rights as Stockholder.
Subject to the provisions of the applicable Award, no Participant or
Designated Beneficiary shall have any rights as a stockholder with respect to
any shares of Common Stock to be distributed under the Plan until he or she has
become the holder thereof. Notwithstanding the foregoing, in connection with
each grant of Restricted Stock or Stock Unit Award hereunder, the applicable
Award shall specify if and to what extent the Participant shall not be entitled
to the rights of a stockholder in respect of such Restricted Stock or Stock Unit
Award.
(f) Construction of the Plan.
The validity, construction, interpretation, administration and effect of
the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the State of Texas.
A-8
24
(g) Effective Date.
Subject to the approval of the stockholders of the Company, the Plan shall
be effective on April 27, 1994. No Options or Awards may be granted under the
Plan after April 26, 2004; however, all previous awards made that have not
expired under their original terms at the time the Plan expires will remain
outstanding.
(h) Amendment of Plan.
The Board of Directors may amend, suspend or terminate the Plan or any
portion thereof at any time, provided that no amendment shall be made without
stockholder approval if such approval is necessary to comply with any tax or
regulatory requirement, including for these purposes any approval requirement
which is a prerequisite for exemptive relief under Section 16(b) of the Act.
Notwithstanding anything to the contrary contained herein, the Committee may
amend the Plan in such manner as may be necessary so as to have the Plan conform
with local rules and regulations.
(i) Amendment of Award.
The Committee may amend, modify or terminate any outstanding Award without
the Participant's consent at any time prior to payment or exercise in any manner
not inconsistent with the terms of the Plan, including without limitation, (i)
to change the date or dates as of which (A) an Option or Stock Appreciation
Right becomes exercisable; (B) a Performance Share is deemed earned; (C)
Restricted Stock becomes nonforfeitable; or (ii) to cancel and reissue an Award
under such different terms and conditions as it determines appropriate.
(j) Change in Control
In order to preserve a Participant's rights under an Award in the event of
a Change in Control of the Company, the Committee in its discretion may, at the
time an Award is made or any time thereafter, take one or more of the following
actions: (i) provide for the acceleration of any time period relating to the
exercise of the Award, (ii) provide for the purchase of the Award upon the
Participant's request for an amount of cash or other property that could have
been received upon the exercise or realization of the Award had the Award been
currently exercisable or payable, (iii) adjust the terms of the Award in a
manner determined by the Committee to reflect the Change in Control, (iv) cause
the Award to be assumed, or new rights substituted therefor, by another entity,
or (v) make such other provision as the Committee may consider equitable and in
the best interests of the Company.
A-9
25
CASH AMERICA INTERNATIONAL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING APRIL 20, 1999
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 20, 1999, and
at any adjournment thereof, all of the stock of the Company standing in my
name as of the record date of March 2, 1999 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.
26
PLEASE MARK YOUR
VOTES AS INDICATED
IN THIS EXAMPLE [X]
FOR WITHHELD
1. Election of Directors, Nominees:
Jack R. Daugherty, A.R. Dike, Daniel R. Feehan, James H. Graves, [ ] [ ]
B.D. Hunter, Timothy J. McKibben, Alfred M. Micallef, Carl P. Motheral,
Samuel W. Rizzo, Rosalin Rogers, Clifton H. Morris, Jr.
except vote withheld from the following nominee(s).
- ---------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment of PricewaterhouseCoopers LLP
as independent auditors for the
year 1999. [ ] [ ] [ ]
3. Approval of the proposed amendment to the Company's 1994 Long-Term
Incentive Plan. [ ] [ ] [ ]
4. In 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
--------------------------------------------- ------------------------------------------ --------------------
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.
FOLD AND DETACH HERE