Dear Stockholder:
We cordially invite you to attend our 1999 Annual Meeting, which will be
held on Thursday, June 29, 2000, at 10:00 a.m. at the First Cash Financial
Services, Inc. corporate offices located at 690 East Lamar Boulevard, Suite 400,
Arlington, Texas, 76011. At this meeting you will be asked to act upon the
proposals as contained herein.
Your Board of Directors recommends that you vote in favor of each of these
proposals. You should read with care the attached Proxy Statement, which
contains detailed information about these proposals.
Your vote is important, and accordingly, we urge you to complete, sign,
date and return your Proxy card promptly in the enclosed postage-paid envelope.
The fact that you have returned your Proxy in advance will in no way affect your
right to vote in person should you attend the meeting. However, by signing and
returning the Proxy, you have assured representation of your shares.
We hope that you will be able to join us on June 29.
Very truly yours,
Rick Powell
Chairman of the Board and
Chief Executive Officer
First Cash Financial Services, Inc.
690 East Lamar Boulevard, Suite 400
Arlington, Texas 76011
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 29, 2000
------------------------
Notice is hereby given that the Annual Meeting of Stockholders of First
Cash Financial Services, Inc. (the "Company") will be held at the First Cash
Financial Services, Inc. corporate offices located at 690 East Lamar Boulevard,
Suite 400, Arlington, Texas 76011 at 10:00 a.m., Dallas/Fort Worth time, on
Thursday, June 29, 2000, for the following purposes:
1. To elect three Directors;
2. To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for the year ending December 31, 2000;
3. To transact such other business as may properly come before the
meeting.
Common stockholders of record at the close of business on May 29, 2000 will
be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
Arlington, Texas Rick L. Wessel
June 5, 2000 President, Chief Financial Officer,
Secretary and Treasurer
First Cash Financial Services, Inc.
690 East Lamar Boulevard, Suite 400
Arlington, Texas 76011
------------------------
PROXY STATEMENT
Annual Meeting of Stockholders
------------------------------
This Proxy Statement is being furnished to stockholders in connection with
the solicitation of proxies by the Board of Directors of First Cash Financial
Services, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders of the Company to be held at the First Cash Financial
Services, Inc. corporate offices located at 690 East Lamar Boulevard, Suite 400,
Arlington, Texas 76011 at 10:00 a.m., on Thursday, June 29, 2000, and at any
adjournments thereof for the purpose of considering and voting upon the matters
set forth in the accompanying Notice of Annual Meeting of Stockholders. This
Proxy Statement and the accompanying form of proxy are first being mailed to
stockholders on or about June 5, 2000.
The close of business on May 29, 2000 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof. As of the record date, there were
8,819,560 shares of the Company's common stock, par value $.01 per share
("Common Stock"), issued and outstanding. The presence, in person or by proxy,
of a majority of the outstanding shares of Common Stock on the record date is
necessary to constitute a quorum at the Annual Meeting. Each share of Common
Stock is entitled to one vote on all questions requiring a stockholder vote at
the Annual Meeting. A plurality of the votes of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting is required for
the approval of Item 1 as set forth in the accompanying Notice. The affirmative
vote of a majority of the shares of Common Stock present or represented by proxy
and entitled to vote at the Annual Meeting is required for the approval of Item
2 as set forth in the accompanying Notice. Stockholders may not cumulate their
votes in the election of directors. Abstentions are treated as votes against a
proposal and broker non-votes have no effect on the vote.
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Meeting in accordance
with the directions on the proxies. If no direction is indicated, the shares
will be voted (i) TO ELECT THREE DIRECTORS; (ii) TO RATIFY THE SELECTION OF
DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE YEAR ENDING
DECEMBER 31, 2000; AND (iii) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING. The enclosed proxy, even though executed and returned,
may be revoked at any time prior to the voting of the proxy (a) by the execution
and submission of a revised proxy, (b) by written notice to the Secretary of the
Company or (c) by voting in person at the Annual Meeting.
ANNUAL REPORT
-------------
The Annual Report to Stockholders, covering the fiscal year of the Company,
dated December 31, 1999, including audited financial statements, is enclosed
herewith. The Annual Report to Stockholders does not form any part of the
material for solicitation of proxies.
The Company will provide, without charge, a copy of its Annual Report on
Form 10-K upon written request to Rick L. Wessel, the President, Chief Financial
Officer, Secretary and Treasurer at 690 East Lamar Boulevard, Suite 400,
Arlington, Texas 76011. The Company will provide exhibits to its Annual Report
on Form 10-K, upon payment of the reasonable expenses incurred by the Company in
furnishing such exhibits.
ITEM 1
------
TO ELECT THREE DIRECTORS
------------------------
The Bylaws of the Company provide that the Board of Directors will
determine the number of directors, but shall consist of at least one director
and no more than 15 directors. The stockholders of the Company elect the
directors. At each annual meeting of stockholders of the Company successors of
the class of directors whose term expires at the annual meeting will be elected
for a three-year term. Any director elected to fill a vacancy or newly created
directorship resulting from an increase in the authorized number of directors
shall hold office for a term that shall coincide with the remaining term of that
class. In no case will a decrease in the number of directors shorten the term
of any incumbent director. Any vacancy on the Board howsoever resulting, may be
filled by a majority of the directors then in office, even if less than a
quorum, or by a sole remaining director. Any director elected to fill a vacancy
shall hold office for a term that shall coincide with the term of the class to
which such director shall have been elected. The stockholders will elect three
directors for the coming year; such nominees presently serve as directors of the
Company and will be appointed for terms of three years each.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted for the election of the nominees listed herein.
Although the Board of Directors of the Company does not contemplate that the
nominee(s) will be unable to serve, if such a situation arises prior to the
Annual Meeting, the person named in the enclosed proxy will vote for the
election of such other person(s) as may be nominated by the Board of Directors.
The Board of Directors of the Company consists of four directors divided
into three classes. At each annual meeting of stockholders, one class is
elected to hold office for a term of three years. Directors serving until the
earlier of (i) resignation or (ii) expiration of their terms at the annual
meeting of stockholders in the years indicated are as follows: 2001 - Mr.
Powell; and 1999 - Messrs. Wessel, Burke and Love. All officers serve at the
discretion of the Board of Directors. No family relationships exist between any
director and executive officer. The Directors standing for election at the 1999
annual meeting are as follows:
Rick L. Wessel has been associated with the Company since February 1992,
has served as chief financial officer, secretary and treasurer of the Company
since May 1992, has served as president since May 1998, and has served as a
director since November 1992. Prior to February 1992, Mr. Wessel was employed
by Price Waterhouse LLP for approximately nine years. Mr. Wessel is a certified
public accountant licensed in Texas.
Richard T. Burke has served as a director of the Company since December
1993. Mr. Burke is the founder and former chief executive officer and chairman,
from 1974 to 1988, of United HealthCare Corporation. Mr. Burke remains a
director of United HealthCare Corporation, a company engaged in the managed
health care industry. From 1977 to 1987, Mr. Burke also served as chief
executive officer of Physicians Health Plan of Minnesota (now MEDICA), the
largest client of United HealthCare Corporation. The securities of United
HealthCare Corporation are registered pursuant to the Exchange Act. Mr. Burke
is owner and chief executive officer of the Phoenix Coyotes, a professional
sports franchise of the National Hockey League.
Joe R. Love has served as a director of the Company since December 1991.
Mr. Love has served as chairman of CCDC, Inc., a venture capital firm, since
October 1976. Since July 1989, Mr. Love has served on the board of directors
of Phymed, Inc., a company operating radiology centers. Mr. Love has served
as a director of Atomic Burrito, Inc., a public company involved in the
entertainment and restaurant industry, since October 1996.
Director Not Standing For Election
- ----------------------------------
Phillip E. Powell, has served as director since March 1990, served as
president from March 1990 until May 1992, and has served as chief executive
officer since May 1992. Mr. Powell has been engaged in the financial services
business for over 16 years.
Board of Directors, Committees and Meetings
- -------------------------------------------
The Board of Directors held thirteen meetings during the five months months
ending December 31, 1998 and the year ending December 31, 1999. Each director
attended 100% of the Board meetings during the five months months ending
December 31, 1998 and the year ending December 31, 1999. The Audit and
Compensation Committees consist of Richard T. Burke and Joe R. Love. The Audit
Committee held two meetings during the five months months ending December 31,
1998 and the year ending December 31, 1999 and the Compensation Committee held
six meetings during the five months months ending December 31, 1998 and the year
ending December 31, 1999.
Audit Committee. The Audit Committee is responsible for making
recommendations to the Board of Directors concerning the selection and
engagement of the Company's independent auditors and reviews the scope of the
annual audit, audit fees, and results of the audit. The Audit Committee also
reviews and discusses with management and the Board of Directors such matters as
accounting policies, internal accounting controls, procedures for preparation of
financial statements, scope of the audit, the audit plan and the independence of
such accountants.
Compensation Committee. The Compensation Committee approves the standards
for salary ranges for executive, managerial and technical personnel of the
Company and establishes, subject to existing employment contracts, the specific
compensation and bonus plan of all corporate officers. In addition, the
Compensation Committee oversees the Company's stock option plan.
The Company has no nominating committee or any committee serving a similar
function.
Directors' Fees
- ---------------
For the five months months ending December 31, 1998 and the year ending
December 31, 1999, the outside directors received no compensation for attending
meetings of the Board of Directors or any committee thereof. The directors are
reimbursed for their reasonable expenses incurred for each Board and committee
meeting attended. See "Compensation - Stock Options and Warrants" for a
discussion of options and warrants issued to directors since August 1, 1998.
Reports
- -------
To the best knowledge of the Company, all reports as required under Section
16(a) of the Exchange Act were filed on a timely basis during the five months
ending December 31, 1998 and the year ending December 31, 1999.
Board Committees; Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------------------------
The Board of Directors has two standing committees. The Compensation
Committee reviews compensation paid to management and recommends to the Board of
Directors appropriate executive compensation. The Audit Committee reviews
internal controls, recommends to the Board of Directors engagement of the
Company's independent certified public accountants, reviews with such
accountants the plan for and results of their examination of the consolidated
financial statements, and determines the independence of such accountants.
Messrs. Burke and Love serve as members of each of these committees.
THE BOARD HAS NOMINATED THE ABOVE-REFERENCED DIRECTORS FOR ELECTION BY THE
STOCKHOLDERS AND RECOMMENDS A VOTE FOR SUCH ELECTIONS. THE ELECTION OF THESE
DIRECTORS REQUIRES A PLURALITY OF THE VOTES OF THE SHARES OF COMMON STOCK
PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING AND ENTITLED TO
VOTE ON THE ELECTION OF DIRECTORS.
ITEM 2
------
RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 2000
---------------------------------------------
The Board of Directors and the Audit Committee of the Board have approved
engagement of Deloitte & Touche LLP as independent auditors for the year ending
December 31, 2000 consolidated financial statements. The Board of Directors
wishes to obtain from the stockholders a ratification of the Board's action in
appointing Deloitte & Touche LLP as independent auditors of the Company for the
year ending December 31, 2000. Both the Audit Committee of the Board of
Directors and the Board itself has approved the engagement of Deloitte & Touche
LLP for audit services.
In the event the appointment of Deloitte & Touche LLP as independent
auditors for the year ending December 31, 2000 is not ratified by the
stockholders, the adverse vote will be considered as a direction to the Board of
Directors to select other auditors for the following year. However, because of
the difficulty in making any substitution of auditors so long after the
beginning of the year ending December 31, 2000, it is contemplated that the
appointment for the year ending December 31, 2000 will be permitted to stand
unless the Board finds other good reason for making a change.
Representatives of Deloitte & Touche LLP are expected to be present at the
meeting, with the opportunity to make a statement if desired to do so. Such
representatives are also expected to be available to respond to appropriate
questions.
THE BOARD HAS RECOMMENDED THE RATIFICATION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF THE
MAJORITY OF OUTSTANDING SHARES OF COMMON STOCK PRESENT OR REPRESENTED BY PROXY
AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
EXECUTIVE OFFICERS
------------------
The following table lists the executive officers of the Company as of the
date hereof and the capacities in which they serve.
Name Age Position
---- --- --------
Phillip E. Powell 49 Chairman of the Board and
Chief Executive Officer
Rick L. Wessel 41 President, Chief Financial Officer,
Secretary, Treasurer and Director
J. Alan Barron 39 President - Pawn Operations
Blake A. Miraglia 32 President - Check Cashing Operations
Scott Williamson 41 Executive Vice President
J. Alan Barron joined the Company in January 1994 as its chief operating
officer. Mr. Barron served as the chief operating officer from January 1994 to
May 1998 and has served as the president - pawn operations since May 1998.
Prior to joining the Company, Mr. Barron spent two years as chief financial
officer for a nine-store privately held pawnshop chain. Prior to his employment
as chief financial officer of this privately held pawnshop chain, Mr. Barron
spent five years in the Fort Worth office of Price Waterhouse LLP.
Blake A. Miraglia joined the Company in June 1998 as the president of check
cashing operations. Prior to joining the Company, Mr. Miraglia was the
president of Miraglia, Inc. from 1992 to May 1998. The Company acquired
Miraglia, Inc. in June 1998.
Scott Williamson joined the Company in January 1994 as its corporate
controller and in October 1994 was elected to senior vice president. Mr.
Williamson served a senior vice president from October 1994 to May 1998 and has
served as executive vice president since May 1998. Prior to joining the
Company, Mr. Williamson served as the director of internal audit for the Dallas
office of the Federal Deposit Insurance Corporation where he was employed since
1989. From 1985 to 1989, Mr. Williamson served as vice president and corporate
audit department manager for Bright Banc Savings Association of Dallas. Mr.
Williamson also spent a total of five years in public accounting firms,
including two years with Ernst & Young. Mr. Williamson is a certified public
accountant licensed in Texas and Oklahoma.
Biographical information with respect to Messrs. Powell and Wessel was
previously provided under Item 1.
STOCK OWNERSHIP
---------------
The table below sets forth information to the best of the Company's
knowledge with respect to the total number of shares of the Company's Common
Stock beneficially owned by each person known to the Company to beneficially own
more than 5% of its Common Stock, each director, each named executive officer,
and the total number of shares of the Company's Common Stock beneficially owned
by all directors and officers as a group, as reported by each such person, as of
May 29, 2000. On that date, there were 8,819,560 shares of voting Common Stock
issued and outstanding.
Shares Beneficially
Officers, Directors Owned (2)
and 5% Stockholders (1) Number Percent
----------------------- ------ -------
Richard T. Burke (3) 1,503,000 16.85%
Wasatch Advisors, Inc. 1,086,940 12.32
Phillip E. Powell (4) 1,149,727 11.94
Joe R. Love (5) 430,606 4.73
CCDC, Inc. (6) 430,606 4.73
Rick L. Wessel (7) 565,952 6.21
J. Alan Barron (8) 419,566 4.63
Blake A. Miraglia (9) 292,444 3.30
Scott Williamson (10) 299,064 3.33
All officers and directors
as a group (7 persons) 4,660,359 43.39
(1) The addresses of the persons shown in the table above who are directors or
5% stockholders are as follows: (i) Wasatch Advisors, Inc., 68 South Main, Salt
Lake City, UT 84101; and (ii) all other persons and/or entities listed, 690 East
Lamar Boulevard, Suite 400, Arlington, Texas 76011.
(2) Unless otherwise noted, each person has sole voting and investment power
over the shares listed opposite his name, subject to community property laws
where applicable. Beneficial ownership includes both outstanding shares of
Common Stock and shares of Common Stock such person has the right to acquire
within 60 days of May 29, 2000, upon exercise of outstanding warrants and
options.
(3) Includes a warrant to purchase 100,000 shares at a price of $8.00 per share
to expire in February 2003. Excludes 10,000 shares of Common Stock owned by Mr.
Burke's wife, which Mr. Burke disclaims beneficial ownership.
(4) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 100,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 60,000
shares at a price of $8.00 per share to expire in February 2003, a warrant to
purchase 225,000 shares at a price of $4.625 per share to expire in January
2001, a stock option to purchase 125,000 shares at a price of $10.00 per share
to expire in April 2009, and a stock option to purchase 100,000 shares at a
price of $4.625 per share to expire in January 2001.
(5) Includes a warrant to purchase 100,000 shares at a price of $8.00 per share
to expire in February 2003, a warrant to purchase 25,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 125,000
shares at a price of $4.625 per share to expire in January 2001, and a stock
option to purchase 25,000 shares at a price of $10.00 per share to expire in
April 2009 and 155,606 shares of common stock all of which are beneficially
owned by affiliates of Mr. Love.
(6) Includes a warrant to purchase 100,000 shares at a price of $8.00 per share
to expire in February 2003, a warrant to purchase 25,000 shares at a price of
$12.00 per share to expire in September 2003, and a warrant to purchase 125,000
shares at a price of $4.625 per share to expire in January 2001, and a stock
option to purchase 25,000 shares at a price of $10.00 per share to expire in
April 2009 all of which are beneficially owned by affiliates of Mr. Love.
(7) Includes a warrant to purchase 150,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 40,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 50,000
shares at a price of $8.00 per share to expire in February 2003, and a stock
option to purchase 50,000 shares at a price of $10.00 per share to expire in
April 2009.
(8) Includes a warrant to purchase 150,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 25,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 40,000
shares at a price of $8.00 per share to expire in February 2003, and a stock
option to purchase 25,000 shares at a price of $10.00 per share to expire in
April 2009.
(9) Includes a warrant to purchase 25,000 shares at a price of $12.00 per share
to expire in September 2003, and a stock option to purchase 25,000 shares at a
price of $10.00 per share to expire in April 2009.
(10) Includes a warrant to purchase 75,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 25,000 shares at a price of
$12.00 per share to expire in September 2003, a warrant to purchase 30,000
shares at a price of $8.00 per share to expire in February 2003, and , a stock
option to purchase 25,000 shares at a price of $10.00 per share to expire in
April 2009.
COMPENSATION
------------
Executive Compensation
- ----------------------
The following table sets forth compensation with respect to the chief
executive officer and other executive officers of the Company who received total
annual salary and bonus for the year ended December 31, 1999 in excess of
$100,000. Also included in the following table is compensation for the five
month period ended December 31, 1998 and the twelve month periods ended July 31,
1998 and July 31, 1997:
Summary Compensation Table
--------------------------
Long-Term
Annual compensation Compensation - Awards
------------------- ---------------------
Securities
Name and Principal Underlying All Other
Position Period Salary Bonus Options/Warrants (1) Compensation (2)
-------- ------ ------ ----- -------------------- ----------------
Phillip E. Powell Dec. 1999 $ 300,000 $ - 125,000 -
Chairman of the Dec. 1998 114,583 - 100,000 -
Board and Chief July 1998 235,000 75,000 60,000 -
Executive Officer July 1997 185,000 102,200 - -
Rick L. Wessel
President, Dec. 1999 $ 173,750 $ - 50,000 -
Chief Financial Dec. 1998 66,667 - 40,000 -
Officer, Secretary July 1998 135,000 50,000 50,000 -
and Treasurer July 1997 100,000 57,200 - -
J. Alan Barron Dec. 1999 $ 158,750 $ - 25,000 -
President - Pawn Dec. 1998 62,500 - 25,000 -
Operations July 1998 130,000 40,000 40,000 -
July 1997 100,000 57,200 - -
Blake A. Miraglia Dec. 1999 $ 158,750 $ - 25,000 -
President - Check Dec. 1998 62,500 - 25,000 -
Cashing Operations July 1998 21,700 - - -
July 1997 - - - -
Scott Williamson Dec. 1999 $ 118,750 $ - 25,000 -
Executive Vice Dec. 1998 45,833 - 25,000 -
President July 1998 95,000 25,000 30,000 -
July 1997 85,000 22,200 - -
(1) See "- Employment Agreements" and "- Stock Options and Warrants" for a
discussion of the terms of long-term compensation awards.
(2) The aggregate amount of other compensation is less than 10% of such
executive officer's annual compensation.
Employment Agreements
- ---------------------
Mr. Powell has entered into an employment agreement with the Company
through fiscal 2001 which provides for: (i) a base salary of $114,583 for the
five months ended December 31, 1998 and $206,250 from January 1, 1999 to
September 30, 1999 and $93,750 from October 1, 1999 to December 31, 1999; (ii)
the right to receive incentive compensation; and (iii) a lump-sum payment equal
to the greater of one-year base salary or the remaining base salary that would
have been paid in the initial term of employment in the event of constructive
termination of employment. This agreement contains provisions, which
automatically extend the agreement for one-year periods unless earlier
terminated.
Mr. Wessel has a one-year employment agreement with the Company,
substantially identical to the employment agreement described above, except that
the base salary is $66,667 for the five months ended December 31, 1998 and
$120,000 from January 1, 1999 to September 30, 1999 and $53,750 from October 1,
1999 to December 31, 1999. Mr. Wessel is not entitled to receive incentive
compensation. The initial term of this employment agreement expired on July 31,
1994; however, the agreement contains provisions which automatically extend the
agreement for one-year periods unless earlier terminated.
Stock Options and Warrants
- --------------------------
The following table shows stock option or warrant grants made to named
executive officers during the seventeen months ended December 31,1999:
Individual Grants of Stock Options and Warrant Grants Made During the
Seventeen Months Ended December 31, 1999
---------------------------------------------------------------------
Potential Realizable
Percentage Percentage Value at
of Total Options of Total Warrants Assumed Annual
Granted to Granted to Rates of Stock
Options Employees in Warrants Employees in Exercise Price Appreciation
Granted Each Granted Fiscal Price Expiration for Option and
Name (Shares) Period (Shares) 1998 (Per Share) Date Warrant Terms(1)
---- -------- ---- -------- ---- ----------- ---- ----------------
5% 10%
-- ---
Phillip E. Powell - - 100,000 28.4% $12.00 Sept 2003 $268,000 $ 652,000
125,000 26.0% - - 10.00 April 2009 633,750 1,748,750
Rick L. Wessel - - 40,000 11.4 12.00 Sept 2003 107,200 260,800
50,000 10.4 - - 10.00 April 2009 253,500 699,500
J. Alan Barron - - 25,000 7.1 12.00 Sept 2003 67,000 163,000
25,000 5.2 - - 10.00 April 2009 126,750 349,750
Blake Miraglia - - 25,000 7.1 12.00 Sept 2003 67,000 163,000
25,000 5.2 - - 10.00 April 2009 126,750 349,750
Scott Williamson - - 25,000 7.1 12.00 Sept 2003 67,000 163,000
25,000 5.2 - - 10.00 April 2009 126,750 349,750
(1) The actual value, if any, will depend upon the excess of the stock price
over the exercise price on the date of exercise, so that there is no assurance
the value realized will be at or near the present value.
December 31, 1999 Stock Option and Warrant Values
-------------------------------------------------
Number of Unexercised Value of Unexercised
Stock Options and Warrants In-The-Money
Shares at Dec. 31, 1999 Stock Options and Warrants
Acquired on Value (Shares) Dec 31 , 1999 (l)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
Phillip E. Powell 85,000 $ 380,980 810,000(2) - $1,193,125 -
Rick L. Wessel 60,000 276,280 290,000(3) - 12,500 -
J. Alan Barron 105,000 489,740 240,000(4) - 10,000 -
Blake Miraglia - - 50,000(5) - - -
Scott Williamson 55,000 257,840 155,000(6) - 7,500 -
(1) Computed based upon the differences between aggregate fair market value and
aggregate exercise price.
(2) Includes warrants to purchase 585,000 shares at prices ranging from $4.625
to $15.00 per share and options to purchase 225,000 shares at prices ranging
from $4.625 to $10.00 per share.
(3) Includes warrants to purchase 240,000 shares at prices ranging from $8.00
to $15.00 per share and options to purchase 50,000 shares at $10.00 per share.
(4) Includes warrants to purchase 215,000 shares at prices ranging from $8.00
to $15.00 per share and options to purchase 25,000 shares at $10.00 per share.
(5) Includes warrants to purchase 25,000 shares at $12.00 per share and options
to purchase 25,000 shares at $10.00 per share.
(6) Includes warrants to purchase 130,000 shares at prices ranging from $8.00
to $15.00 per share and options to purchase 25,000 shares at $10.00 per share.
Warrants held by other directors: On May 29, 2000, other directors held
warrants to purchase 350,000 shares at prices ranging from $4.625 to $12.00 per
share, expiring the later of September 2003 and options to purchase 25,000
shares at $10.00 per share, expiring April 2009.
Warrants and options held by other employees and third parties: On May 29,
2000, other employees and third parties own warrants and options to purchase an
aggregate of 611,250 shares at prices ranging from $4.00 to $15.00 per share,
expiring the later of April 2009.
The Company has not established, nor does it provide for, long-term
incentive plans or defined benefit or actuarial plans. The Company does not
grant any stock appreciation rights.
Certain Transactions
- --------------------
In June 1998, in conjunction with the purchase of Miraglia, Inc., the
Company entered into lease agreements for one of its check cashing locations, as
well as for certain office space located in Concorde, California. These
properties are partially owned by Mr. Blake Miraglia, president of check cashing
operations. Total lease payments made pursuant to these leases were $20,000,
$100,000 and $239,000 during the year ended July 31, 1998, five months ended
December 31, 1998 and the year ended December 31, 1999, respectively, which
approximated market rates. In addition, the Company has an outstanding,
unsecured note payable due July 5, 2003, bearing interest at 7%, to Mr. Miraglia
which amounted to $1,761,000 as of December 31, 1999 including accrued interest.
During the five months ended December 31, 1998 and the year ended December
31, 1999, Mr. Joe R. Love (i) was issued a warrant to purchase 25,000 shares of
common stock at an exercise price of $10.00 per share expiring in April 2009,
(ii) was issued a warrant to purchase 25,000 shares of common stock at an
exercise price of $12.00 per share expiring in September 2003, and (iii)
exercised a warrant to purchase 20,000 shares of common stock at an exercise
price of $4.625 per share.
At December 31, 1999 and 1998, the Company had notes receivable outstanding
from certain of its officers totaling $2,592,000 and $1,289,000, respectively.
These notes are secured by a total of 760,000 shares of common stock of the
Company owned by these individuals, and bear interest at the prime rate minus
one and a half percent. These notes are due upon the earlier of termination of
employment with the Company or the sale of the underlying shares of common
stock.
In April 1991, the Company adopted a policy prohibiting transactions with
its officers, directors or affiliates, unless approved by a majority of the
disinterested directors and on terms no less favorable to the Company than could
be obtained from an independent third party. The Company believes that all
prior related party transactions were on terms as favorable as could be obtained
from independent third parties.
Report of the Compensation Committee
- ------------------------------------
Overview
The Compensation Committee of the Board of Directors supervises the
Company's executive compensation. The Company seeks to provide executive
compensation that will support the achievement of the Company's financial goals
while attracting and retaining talented executives and rewarding superior
performance. In performing this function, the Compensation Committee reviews
executive compensation surveys and other available information and may from time
to time consult with independent compensation consultants.
The Company seeks to provide an overall level of compensation to the
Company's executives that are competitive within the pawnshop industry and other
companies of comparable size and complexity. Compensation in any particular
case may vary from any industry average on the basis of annual and long-term
Company performance as well as individual performance. The Compensation
Committee will exercise its discretion to set compensation where in its judgment
external, internal or individual circumstances warrant it.
In general, the Company compensates its executive officers through a
combination of base salary, annual incentive compensation in the form of cash
bonuses and long-term incentive compensation in the form of stock options and
warrants.
Base Salary
Base salary levels for the Company's executive officers are set generally
to be competitive in relation to the salary levels of executive officers in
other companies within the pawn shop industry or other companies of comparable
size, taking into consideration the position's complexity, responsibility and
need for special expertise. In reviewing salaries in individual cases the
Compensation Committee also takes into account individual experience and
performance.
Annual Incentive Compensation
The Compensation Committee has historically structured employment
arrangements with incentive compensation. Payment of bonuses has generally
depended upon the Company's achievement of pre-tax income targets established at
the beginning of each fiscal year or other significant corporate objectives.
Individual performance is also considered in determining bonuses.
Long-Term Incentive Compensation
The Company provides long-term incentive compensation through its stock
option plan and the issuance of warrants, which is described elsewhere in this
proxy statement. The number of shares covered by any grant is generally
determined by the then current stock price, subject in certain circumstances, to
vesting requirements. In special cases, however, grants may be made to reflect
increased responsibilities or reward extraordinary performance.
Chief Executive Officer Compensation
Mr. Powell was elected to the position of chief executive officer in May
1992. Mr. Powell's salary was increased from $235,000 to $275,000 on August 1,
1998 and from $275,000 to $375,000 on October 1, 1999. Mr. Powell received no
bonuses during the five months ended December 31, 1998 and the the year ended
December 31, 1999. Mr. Powell received option and warrant issuances based upon
the overall performance of the Company during the five months ended December 31,
1998 and the the year ended December 31, 1999.
The overall goal of the Compensation Committee is to insure that
compensation policies are established that are consistent with the Company's
strategic business objectives and that provide incentives for the attainment of
those objectives. This is effected in the context of a compensation program
that includes base pay, annual incentive compensation and stock ownership.
Compensation Committee:
Richard T. Burke
Joe R. Love
Stock Price Performance Graph
- -----------------------------
The Stock Price Performance Graph set forth below compares the cumulative
total stockholder return on the Common Stock of the Company for the period from
July 31, 1994 through December 31, 1999, with the cumulative total return on the
Nasdaq Composite Index and a peer group index over the same period (assuming the
investment of $100 in the Company's Common Stock, the Nasdaq Composite Index and
the peer group). The peer group selected by the Company includes the Company,
Cash America International, Inc., EZCORP, Inc., and U.S. Pawn, Inc.
FIRST CASH
FINANCIAL SERVICES, INC. PEER GROUP NASDAQ COMPOSITE
------------------------ ---------- ----------------
July 31, 1994 100.00 100.00 100.00
July 31, 1995 84.85 120.14 140.34
July 31, 1996 115.15 178.96 152.92
July 31, 1997 145.45 179.14 225.66
July 31, 1998 330.30 241.44 265.65
December 31, 1998 346.98 193.51 315.19
December 31, 1999 200.00 127.16 584.25
OTHER MATTERS
-------------
Management is not aware of any other matters to be presented for action at
the meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed form of proxy to vote in
accordance with their best judgment on such matter.
COST OF SOLICITATION
--------------------
The Company will bear the costs of the solicitation of proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and
employees of the Company will not be compensated additionally for the
solicitation but may be reimbursed for out-of-pocket expenses in connection with
the solicitation. Arrangements are also being made with brokerage houses and
any other custodians, nominees and fiduciaries of the forwarding of solicitation
material to the beneficial owners of the Company, and the Company will reimburse
the brokers, custodians, nominees and fiduciaries for their reasonable out-of
pocket expenses.
STOCKHOLDER PROPOSALS
---------------------
Proposals by stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by the Company for inclusion in the
Company's proxy statement and form of proxy relating to that meeting no later
than February 6, 2001.
By Order of the Board of Directors,
Arlington, Texas Rick L. Wessel
June 5, 2000 President, Chief Financial
Officer, Secretary and Treasurer
REVOCABLE PROXY
FIRST CASH FINANCIAL SERVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST CASH
FINANCIAL SERVICES, INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of First Cash Financial Services, Inc. (the
"Company") hereby appoints Rick Powell and Rick L. Wessel the true and lawful
attorneys, agents and proxies of the undersigned with full power of substitution
for and in the name of the undersigned, to vote all the shares of Common Stock
of First Cash Financial Services, Inc. which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders of First Cash Financial Services,
Inc. to be held at the First Cash Financial Services, Inc. corporate offices
located at 690 East Lamar Blvd., Suite 400, Arlington, Texas on Thursday, June
29, 2000 at 10:00 a.m., and any and all adjournments thereof, with all of the
powers which the undersigned would posses if personally present, for the
following purposes. Please indicate for, withhold, against, or abstain with
respect to each of the following matters:
For Against Abstain
1. Election of Messrs. Wessel, Burke and
Love as directors (the Board of
Directors recommends a vote FOR) [ ] [ ] [ ]
2. Ratification of the selection of
Deloitte & Touche LLP as independent
auditors of the Company for the year
ending December 31, 2000 (the Board of
Directors recommends a vote FOR) [ ] [ ] [ ]
3. Other Matters:
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy will be voted for the choice specified. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement dated
June 5, 2000 as well as the Annual Report for the fiscal year ended December 31,
1999.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
DATED:
------------------------ ---------------------------------------
(Signature)
---------------------------------------
(Signature if jointly held)
---------------------------------------
(Printed Name)
Please sign exactly as name appears on
stock certificate(s). Joint owners
should each sign. Trustees and others
acting in a representative capacity
should indicate the capacity in which
they sign.
