UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 240.14a-12
First Cash Financial Services, 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:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Dear Stockholder:
We cordially invite you to attend our Annual Meeting, which will be
held on Thursday, May 26, 2005, at 10:00 a.m. CDT 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 May 26.
Very truly yours,
/s/ Rick Powell
-------------------------
Rick Powell
Chairman of the Board
First Cash Financial Services, Inc.
690 East Lamar Boulevard, Suite 400
Arlington, Texas 76011
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 26, 2005
_______________
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. CDT on Thursday,
May 26, 2005, for the following purposes:
1. To elect one Director;
2. To ratify the selection of Hein & Associates LLP as independent
auditors of the Company for the year ending December 31, 2005; and
3. To transact such other business as may properly come before the
meeting.
Common stockholders of record at the close of business on April 12,
2005 will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
/s/ Rick L. Wessel
----------------------------------
Arlington, Texas Rick L. Wessel
April 22, 2005 President, 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. CDT, on Thursday,
May 26, 2005, 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 April 22, 2005.
The close of business on April 12, 2005 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 16,093,640 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.
Abstentions and broker non-votes will be counted as present for the purposes
of determining the presence of a quorum. 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.
Stockholders may not cumulate their votes in the election of directors.
Abstentions and broker non-votes will not be counted as having been voted on
Item 1 and will have no effect on the vote. The affirmative vote of a
majority of the shares of Common Stock present or represented by proxy and
represented at the Annual Meeting is required for the approval of Item 2.
Broker non-votes will not be counted as having been voted on Item 2 and will
have no effect on the vote while asbstentions will have the same effect as
votes against Item 2.
All shares represented by properly executed proxies, unless such
proxies previously have been revoked, will be voted at the Annual Meeting in
accordance with the directions on the proxies. If no direction is
indicated, the shares will be voted (i) TO ELECT ONE DIRECTOR; (ii) TO
RATIFY THE SELECTION OF HEIN & ASSOCIATES LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 2005; 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, 2004, 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,
Secretary and Treasurer at 690 East Lamar Boulevard, Suite 400, Arlington,
Texas 76011. The Company will provide exhibits to its Annual Report on Form
10-K, upon payment of the reasonable expenses incurred by the Company in
furnishing such exhibits.
ITEM 1
TO ELECT ONE DIRECTOR
The Bylaws of the Company provide that the board of directors will
determine the number of directors, but shall consist of at least one
director and no more than 15 directors. The stockholders of the Company
elect the directors. At each annual meeting of stockholders of the Company,
successors of the class of directors whose term expires at the annual
meeting will be elected for a three-year term. Any director elected to fill
a vacancy or newly created directorship resulting from an increase in the
authorized number of directors shall hold office for a term that shall
coincide with the remaining term of that class. In no case will a decrease
in the number of directors shorten the term of any incumbent director. Any
vacancy on the board howsoever resulting may be filled by a majority of the
directors then in office, even if less than a quorum, or by a sole remaining
director. The stockholders will elect one director for the coming year; the
nominee, Mr. Phillip E. Powell, presently serves as a director of the
Company and will be elected for a term of three years.
Unless otherwise instructed or unless authority to vote is withheld,
the enclosed proxy will be voted for the election of the nominee listed
herein. Although the board of directors of the Company does not contemplate
that the nominee will be unable to serve, if such a situation arises prior
to the Annual Meeting, the person named in the enclosed proxy will vote for
the election of such other person as may be nominated by the board of
directors.
The board of directors of the Company consists of five 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: 2005 - Mr. Phillip E. Powell; 2006 - Messrs. Rick L. Wessel,
Richard T. Burke and Joe R Love; and 2007 - Ms. Tara U. MacMahon. All
officers serve at the discretion of the board of directors. No family
relationships exist between any director and executive officer, except that
Mr. John C. Powell, vice president of information technology, is the brother
of Mr. Phillip E. Powell, the chairman of the board of the Company. The
Director standing for election at the Annual Meeting of Stockholders is the
following:
Phillip E. Powell, age 54, has served as a director of the Company
since March 1990, served as president from March 1990 until May 1992, and
served as chief executive officer from May 1992 until December 2004. Mr.
Powell has been engaged in the financial services industry for over 29
years.
Directors Not Standing For Election
Tara U. MacMahon, age 47, has served as a director of the Company since
June 2001. Ms. MacMahon is the founder and has served as managing general
partner of Tara Capital Management LP, an investment management and advisory
firm for ten years. Ms. MacMahon has 24 years experience in the financial
services industry. Ms. MacMahon holds an MBA from the Harvard University
Graduate School of Business Administration.
Rick L. Wessel, age 46, has served as secretary and treasurer of the
Company since May 1992, as president since May 1998, as a director since
November 1992 and as chief financial officer from May 1992 to December 2002.
Prior to February 1992, Price Waterhouse LLP employed Mr. Wessel for
approximately nine years.
Richard T. Burke, age 61, has served as a director of the Company since
December 1993. Mr. Burke is the founder and, until February 1988, was the
chief executive officer of UnitedHealth Group, a leading company in the
managed health care industry. Mr. Burke remains a director of UnitedHealth
Group. From 1995 until February 2001, Mr. Burke was the owner and chief
executive officer of the Phoenix Coyotes, a professional sports franchise of
the National Hockey League. Mr. Burke is also a director of Meritage Homes
Corporation.
Joe R. Love, age 66, has served as a director of the Company since
December 1991. Mr. Love has served as chairman of CCDC, Inc., a real estate
development firm, since October 1976. Mr. Love is the owner of Surrey, LLC,
a golf and residential community in Oklahoma City, Oklahoma.
Board of Directors, Committees and Meetings
The board of directors held eight meetings during the year ended
December 31, 2004. Each director attended, either telephonically or in
person, 100% of the board meetings during the year ended December 31, 2004.
The Audit, Compensation, and Nominating and Corporate Governance Committees
each consist of Richard T. Burke, Joe R. Love and Tara U. MacMahon. The
Audit Committee held eight meetings during the year ended December 31, 2004,
the Compensation Committee held two meetings during the year ended December
31, 2004 and the Nominating and Corporate Governance Committee held one
meeting during the year ended December 31, 2004. Each member attended 100%
of the committee meetings, either in person or telephonically.
Audit Committee. The Audit Committee is responsible for the oversight
of the Company's accounting and financial reporting processes. This
includes the selection and engagement of the Company's independent auditors
and review of the scope of the annual audit, audit fees and results of the
audit. The Audit Committee reviews and discusses with management and the
board of directors such matters as accounting policies, internal accounting
controls, procedures for preparation of financial statements and other
financial disclosures, scope of the audit, the audit plan and the
independence of such accountants. In addition, the Audit Committee has
oversight over the Company's internal audit function. The Board has
determined that Mssrs. Burke and Love are each an audit committee financial
expert as defined by Item 401(h) of Regulation S-K of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and each are independent
under the listing standards of The Nasdaq Stock Market ("Nasdaq").
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 plans and the incentive plans.
Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee is responsible for making recommendations to
the board of directors concerning the governance structure and practices of
the Company, including the size of the board of directors and the size and
composition of various committees of the board of directors. In addition,
the Nominating and Corporate Governance Committee is responsible for
identifying individuals believed to be qualified to become board members,
and to recommend to the board the nominees to stand for election as
directors at the annual meeting of stockholders.
Directors' Fees
For the year ended December 31, 2004, Ms. MacMahon and Messrs. Burke
and Love each received $25,000 as compensation for attending the 2004
meetings of the board of directors and committee meetings thereof. In
addition, 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.
Corporate Governance
The board of directors has adopted a Code of Ethics to govern the
conduct of all of the officers, directors and employees of the Company. In
addition, the board has adopted charters for the Audit Committee, the
Compensation Committee and the Nominating and Corporate Governance
Committee. The Code and committee charters can be accessed on the Company's
website at www.firstcash.com.
Director Independence
The board of directors has determined that, with the exception of
Phillip E. Powell, chairman and former chief executive officer of the
Company, and Rick L. Wessel, president of the Company, all of its directors,
including all of the members of the Audit, Compensation, and Nominating and
Corporate Governance Committees, are "independent" as defined by Nasdaq and
the Securities and Exchange Commission ("SEC") and for purposes of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). No director is deemed independent unless the board affirmatively
determines that the director has no material relationship with the Company,
either directly or as an officer, stockholder or partner of an organization
that has a relationship with the Company. In making its determination, the
board observes all criteria for independence established by the rules of the
SEC and Nasdaq. In addition, the board considers all commercial, banking,
consulting, legal, accounting, charitable or other business relationships
any director may have with the Company.
Director Qualifications
In discharging its responsibilities to nominate candidates for election
to the Board, the Nominating and Corporate Governance Committee has not
specified any minimum qualifications for serving on the Board. However, the
Nominating and Corporate Governance Committee endeavors to evaluate, propose
and approve candidates with business experience and personal skills in
finance, marketing, financial reporting and other areas that may be expected
to contribute to an effective Board. The Nominating and Corporate Governance
Committee seeks to assure that the Board is composed of individuals who have
experience relevant to the needs of the Company and who have the highest
professional and personal ethics, consistent with the Company's values and
standards. Candidates should be committed to enhancing stockholder value and
should have sufficient time to carry out their duties and to provide insight
and practical wisdom based on experience. Each director must represent the
interests of all shareholders.
Identifying and Evaluating Nominees for Directors
The Nominating and Corporate Governance Committee will utilize a
variety of methods for identifying and evaluating nominees for director.
Candidates may come to the attention of the Nominating and Corporate
Governance Committee through current Board members, professional search
firms, shareholders or other persons. These candidates will be evaluated at
regular or special meetings of the Nominating and Corporate Governance
Committee, and may be considered at any point during the year. As described
above, the Nominating and Corporate Governance Committee will consider
properly submitted shareholder nominations for candidates for the Board.
Following verification of the shareholder status of persons proposing
candidates, recommendations will be aggregated and considered by the
Nominating and Corporate Governance Committee. If any materials are provided
by a shareholder in connection with the nomination of a director candidate,
such materials will be forwarded to the Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee will also
review materials provided by professional search firms or other parties in
connection with a nominee who is not proposed by a shareholder.
Procedure for Contacting Directors
The board of directors has established a procedure for stockholders to
send communications to the board. Stockholders may communicate with the
board generally or with a specific director at any time by writing to the
Company's Corporate Secretary at the Company's address, 690 East Lamar
Blvd., Suite 400, Arlington, Texas 76011. The Secretary will review all
messages received and will forward any message that reasonably appears to be
a communication from a stockholder about a matter of stockholder interest
that is intended for communication to the board. Communications will be
sent as soon as practicable to the director to whom they are addressed, or
if addressed to the board generally, to the Chairman of the Nominating and
Corporate Governance Committee. Because other appropriate avenues of
communication exist for matters that are not of stockholder interest, such
as general business complaints or employee grievances, communications that
do not relate to matters of stockholder interest will not be forwarded to
the board. The Corporate Secretary has the option, but not the obligation,
to forward these other communications to appropriate channels within the
Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on the reports furnished pursuant to Section 16a-3(e) of
the Exchange Act, all reports as required under Section 16(a) of the
Exchange Act were filed on a timely basis during the year ending December
31, 2004, except in November 2004 Mr. Joe R. Love reported one transaction
(a sale of 10,000 shares of common stock) four days late on a Form 4.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
The Compensation Committee reviews compensation paid to management and
recommends to the board of directors appropriate executive compensation.
Ms. MacMahon and Messrs. Burke and Love serve as members of the Compensation
Committee and are not employed by the Company.
BASED UPON THE RECOMMENDATION OF THE NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE, THE BOARD HAS NOMINATED THE ABOVE-REFERENCED DIRECTOR
FOR ELECTION BY THE STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" SUCH ELECTION.
THE ELECTION OF THIS DIRECTOR REQUIRES A PLURALITY OF THE VOTES OF THE
SHARES OF COMMON STOCK PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE
ANNUAL MEETING.
ITEM 2
RATIFY THE SELECTION OF HEIN & ASSOCIATES LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 2005
On March 12, 2004, the Company, at the direction of the Audit
Committee, notified its independent accountant, Deloitte & Touche LLP, of
its dismissal as independent accountants, except with respect to audit and
audit related services pertaining to the year ended December 31, 2003. The
change was the result of a proposal and competitive bidding process
involving several accounting firms. Effective April 16, 2004, Deloitte &
Touche LLP's engagement was terminated and they no longer provide audit
services nor do they serve as the Company's auditor.
The Audit Committee selected Hein & Associates LLP as independent
accountants to audit the books, records and accounts of the Company for the
year ending December 31, 2004. The board has endorsed this appointment.
Hein & Associates LLP was engaged in March 2004 as the Company's principal
accountant.
Deloitte & Touche, LLP previously audited the consolidated financial
statements of the Company and during the two years ended December 31, 2003
provided both audit and non-audit services. Deloitte & Touche LLP's report
on the Company's 2003 financial statements was issued on March 8, 2004 in
conjunction with the filing of the Company's Annual Report on Form 10-K for
the year ended December 31, 2003. The audit reports of Deloitte & Touche
LLP on the consolidated financial statements of the Company as of and for
the years ended December 31, 2003 and 2002, did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles, except as set forth
below. The audit reports for 2002 and 2003 were modified to reflect a
change in the Company's method of accounting for amortization of goodwill in
2002 in accordance with FASB Statement No. 142, Goodwill and Other
Intangible Assets. The audit report for 2003 was modified to reflect a
change in the Company's method of accounting for its 50% owned joint
venture, Cash & Go, Ltd., in 2003 in accordance with FASB Interpretation
46(R), Consolidation of Variable Interest Entities. The audit reports for
2003 and 2002 were restated to correct the classification of certain
transactions between sections of the Statement of Cash Flows.
During the fiscal years ended December 31, 2003 and 2002, and
the subsequent interim period through April 16, 2004, there were no
disagreements between the Company and Deloitte & Touche LLP on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure (within the meaning of Item 304(a)(1)(iv) of
Regulation S-K) and there were no reportable events (as defined by Item
304(a)(1)(v) of Regulation S-K).
During the fiscal years ended December 31, 2003 and 2002, and the
subsequent interim period through March 12, 2004, neither the Company nor
anyone on its behalf consulted with Hein & Associates LLP regarding
any of the matters or events set forth in Item 304(a)(2)(i) and
(ii) of Regulation S-K. Hein & Associates LLP has served as the independent
accountant engaged to audit the First Cash 401(k) Plan for the three most
recent years ended December 31, 2003 and is currently engaged to audit the
First Cash 401(k) Plan for the year ended December 31, 2004.
Principal Accountant Fees and Services
Aggregate fees for professional services rendered for the Company by
Hein & Associates LLP and Deloitte & Touche, LLP for the years ended
December 31, 2004 and 2003, respectively, were as follows:
Services Provided: 2004 2003
----------------- -------- --------
Audit $ 195,900 (1) $ 140,000
Audit Related - -
Tax - -
Financial Information Systems - -
Design & Implementation Fees
All Other 8,000 -
-------- --------
Total $ 203,900 $ 140,000
======== ========
(1) Of these fees paid by the Company, $158,300 was paid to Hein &
Associates LLP and $37,600 was paid to Deloitte & Touche, LLP.
The audit fees for the years ended December 31, 2004 and 2003 were for
the audits of the consolidated financial statements of the Company, internal
control auditing and reporting as required by Sarbanes Oxley Section 404,
issuance of consents, and review of the Company's Securities and Exchange
Commission filings.
All fees included under the category "All Other" were paid to Hein &
Associates LLP in connection with the audit of the Company's 401(K) Plan for
the year ended December 31, 2003.
Audit Committee Pre-Approval Policies and Procedures
The 2004 and 2003 audit and non-audit services provided by Hein &
Associates LLP and Deloitte & Touche, LLP were approved by the Audit
Committee. The non-audit services which were approved by the Audit
Committee were also reviewed to ensure compatibility with maintaining the
auditor's independence.
The Audit Committee implemented pre-approval policies and procedures
related to the provision of audit and non-audit services. Under these
procedures, the Audit Committee pre-approves both the type of services to be
provided by the Company's independent accountants and the estimated fees
related to these services. During the approval process, the Audit Committee
considers the impact of the types of services and the related fees on
the independence of the auditor. The services and fees must be deemed
compatible with the maintenance of the auditor's independence, including
compliance with SEC rules and regulations.
Throughout the year, the Audit Committee reviews any revisions to the
estimates of audit and non-audit fees initially approved.
Ratification of Independent Auditors
In the event the stockholders do not ratify the appointment of Hein &
Associates LLP as independent auditors for the year ending December 31,
2005, 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, 2005, it is contemplated that the
appointment for the year ending December 31, 2005 will be permitted to stand
unless the board finds other good reason for making a change.
Representatives of Hein & Associates 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.
BASED UPON THE RECOMMENDATION OF THE AUDIT COMMITTEE, THE BOARD HAS
RECOMMENDED THE RATIFICATION OF HEIN & ASSOCIATES LLP AS INDEPENDENT
AUDITORS. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF
A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK PRESENT OR REPRESENTED
BY PROXY AND REPRESENTED 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
-------------- --- --------
J. Alan Barron 44 Chief Executive Officer and Chief
Operating Officer
Rick L. Wessel 46 President, Secretary and Treasurer
R. Douglas Orr 44 Executive Vice President and Chief
Financial Officer
John C. Powell 50 Senior Vice President and Director
of Information Technology
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 from January 2003 to the present. For the
period from May 1998 to January 2003 Mr. Barron served as the president -
pawn operations. Effective January 1, 2005, Mr. Barron was elected chief
executive officer. Prior to joining the Company, Mr. Barron spent two years
as chief financial officer for a nine-store privately held pawnshop chain.
Prior to his employment as chief financial officer of this privately held
pawnshop chain, Mr. Barron spent five years in the Fort Worth office of
Price Waterhouse LLP.
R. Douglas Orr joined the Company in July 2002 as the vice president of
finance. In January 2003, Mr. Orr was promoted to chief financial officer.
Effective January 1, 2005, Mr. Orr was elected executive vice president and
chief financial officer. Prior to joining the Company, Mr. Orr spent 14
years at Ray & Berndtson, a global executive search firm, where he served in
a variety of management and financial roles including vice president of
financial planning and analysis, vice president and controller and vice
president of knowledge. Prior to his employment at Ray & Berndtson, Mr. Orr
spent four years in the Fort Worth office of Price Waterhouse LLP.
John C. Powell served as a systems consultant to the Company from
February 2002 through July 2002 and joined the Company on a full-time basis
in August 2002. In January 2003, Mr. Powell was promoted to vice president
of information technology. Effective January 1, 2005, Mr. Powell was
elected senior vice president and director of information technology. Prior
to joining the Company, Mr. Powell spent 18 years with AMR/American Airlines
as a senior system engineer and software architect and an additional two
years in the same capacity with Sabre/EDS after its spin-off from AMR in
March of 2000.
Biographical information with respect to Mr. 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 April 12, 2005. On that date, there were 16,093,640
shares of voting Common Stock issued and outstanding.
Shares Beneficially
Officers, Directors Owned (2)
and 5% Stockholders (1) Number Percent
------------------------------- --------- -------
Richard T. Burke (3) 2,374,500 14.38%
Rick L. Wessel (4) 959,950 5.74
Phillip E. Powell (5) 607,000 3.69
J. Alan Barron (6) 605,115 3.66
Joe R. Love (7) 452,609 2.76
R. Douglas Orr (8) 226,875 1.39
John C. Powell (9) 106,875 0.66
Tara U. MacMahon (10) 85,000 0.53
All officers and directors
as a group (8 persons) 5,417,924 29.07
------------------
(1) The addresses of the persons shown in the above table are 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 April 12, 2005, upon exercise of outstanding warrants and
options.
(3) Includes a warrant to purchase 150,000 shares at a price of $5.33 per
share to expire in February 2013, a warrant to purchase 37,500 shares at a
price of $5.33 per share to expire in April 2012, a stock option to purchase
75,000 shares at a price of $1.33 per share to expire in December 2010, a
stock option to purchase 15,000 shares at a price of $6.67 per share to
expire in January 2013, a stock option to purchase 37,500 shares at a price
of $19.33 per share to expire in January 2014, a stock option to purchase
15,000 shares at a price of $25.00 per share to expire in January 2015, a
stock option to purchase 15,000 shares at a price of $30.00 per share to
expire in January 2015, a stock option to purchase 15,000 shares at a price
of $35.00 per share to expire in January 2015, a stock option to purchase
15,000 shares at a price of $40.00 per share to expire in January 2015, a
stock option to purchase 15,000 shares at a price of $45.00 per share to
expire in January 2015, a stock option to purchase 15,000 shares at a price
of $50.00 per share to expire in January 2015, and a stock option to
purchase 15,000 shares at a price of $55.00 per share to expire in January
2015. Excludes 15,000 shares of Common Stock owned by Mr. Burke's wife,
which Mr. Burke disclaims beneficial ownership.
(4) Includes a warrant to purchase 93,500 shares at a price of $5.33 per
share to expire in April 2012, a warrant to purchase 120,000 shares at a
price of $7.67 per share to expire in May 2013, a stock option to purchase
90,000 shares at a price of $19.33 per share to expire in January 2014, a
stock option to purchase 45,000 shares at a price of $25.00 per share to
expire in January 2015, a stock option to purchase 45,000 shares at a price
of $30.00 per share to expire in January 2015, a stock option to purchase
45,000 shares at a price of $35.00 per share to expire in January 2015, a
stock option to purchase 45,000 shares at a price of $40.00 per share to
expire in January 2015, a stock option to purchase 45,000 shares at a price
of $45.00 per share to expire in January 2015, a stock option to purchase
45,000 shares at a price of $50.00 per share to expire in January 2015, and
a stock option to purchase 45,000 shares at a price of $55.00 per share to
expire in January 2015.
(5) Includes a warrant to purchase 100,000 shares at a price of $6.73 per
share to expire in April 2013, a stock option to purchase 112,500 shares at
a price of $19.33 per share to expire in January 2014, a stock option to
purchase 20,000 shares at a price of $25.00 per share to expire in January
2015, a stock option to purchase 20,000 shares at a price of $30.00 per
share to expire in January 2015, a stock option to purchase 20,000 shares at
a price of $35.00 per share to expire in January 2015, a stock option to
purchase 20,000 shares at a price of $40.00 per share to expire in January
2015, a stock option to purchase 20,000 shares at a price of $45.00 per
share to expire in January 2015, a stock option to purchase 20,000 shares at
a price of $50.00 per share to expire in January 2015, and a stock option to
purchase 20,000 shares at a price of $55.00 per share to expire in January
2015.
(6) Includes a warrant to purchase 19,500 shares at a price of $8.67 per
share to expire in June 2013, a stock option to purchase 67,500 shares at a
price of $19.33 per share to expire in January 2014, a stock option to
purchase 50,000 shares at a price of $25.00 per share to expire in January
2015, a stock option to purchase 50,000 shares at a price of $30.00 per
share to expire in January 2015, a stock option to purchase 50,000 shares at
a price of $35.00 per share to expire in January 2015, a stock option to
purchase 50,000 shares at a price of $40.00 per share to expire in January
2015, a stock option to purchase 50,000 shares at a price of $45.00 per
share to expire in January 2015, a stock option to purchase 50,000 shares at
a price of $50.00 per share to expire in January 2015, and a stock option to
purchase 50,000 shares at a price of $55.00 per share to expire in January
2015.
(7) Includes a warrant to purchase 150,000 shares at a price of $5.33 per
share to expire in February 2013, a warrant to purchase 25,000 shares at a
price of $5.33 per share to expire in April 2012, a stock option to purchase
37,500 shares at a price of $6.67 per share to expire in April 2009, a stock
option to purchase 15,000 shares at a price of $6.67 per share to expire in
January 2013, a stock option to purchase 15,000 shares at a price of $19.33
per share to expire in January 2014, a stock option to purchase 10,000
shares at a price of $25.00 per share to expire in January 2015, a stock
option to purchase 10,000 shares at a price of $30.00 per share to expire in
January 2015, a stock option to purchase 10,000 shares at a price of $35.00
per share to expire in January 2015, a stock option to purchase 10,000
shares at a price of $40.00 per share to expire in January 2015, a stock
option to purchase 10,000 shares at a price of $45.00 per share to expire in
January 2015, a stock option to purchase 10,000 shares at a price of $50.00
per share to expire in January 2015, a stock option to purchase 10,000
shares at a price of $55.00 per share to expire in January 2015, and 140,109
shares of common stock all of which are beneficially owned by an affiliate
of Mr. Love.
(8) Includes a stock option to purchase 4,175 shares at a price of $19.33
per share to expire in October 2013, a stock option to purchase 30,000
shares at a price of $25.00 per share to expire in January 2015, a stock
option to purchase 30,000 shares at a price of $30.00 per share to expire in
January 2015, a stock option to purchase 30,000 shares at a price of $35.00
per share to expire in January 2015, a stock option to purchase 30,000
shares at a price of $40.00 per share to expire in January 2015, a stock
option to purchase 30,000 shares at a price of $45.00 per share to expire in
January 2015, a stock option to purchase 30,000 shares at a price of $50.00
per share to expire in January 2015, and a stock option to purchase 30,000
shares at a price of $55.00 per share to expire in January 2015.
(9) Includes a stock option to purchase 1,875 shares at a price of $19.33
per share to expire in October 2013, a stock option to purchase 15,000
shares at a price of $25.00 per share to expire in January 2015, a stock
option to purchase 15,000 shares at a price of $30.00 per share to expire in
January 2015, a stock option to purchase 15,000 shares at a price of $35.00
per share to expire in January 2015, a stock option to purchase 15,000
shares at a price of $40.00 per share to expire in January 2015, a stock
option to purchase 15,000 shares at a price of $45.00 per share to expire in
January 2015, a stock option to purchase 15,000 shares at a price of $50.00
per share to expire in January 2015, and a stock option to purchase 15,000
shares at a price of $55.00 per share to expire in January 2015.
(10) Includes a stock option to purchase 15,000 shares at a price of $19.33
per share to expire in January 2014, a stock option to purchase 10,000
shares at a price of $25.00 per share to expire in January 2015, a stock
option to purchase 10,000 shares at a price of $30.00 per share to expire in
January 2015, a stock option to purchase 10,000 shares at a price of $35.00
per share to expire in January 2015, a stock option to purchase 10,000
shares at a price of $40.00 per share to expire in January 2015, a stock
option to purchase 10,000 shares at a price of $45.00 per share to expire in
January 2015, a stock option to purchase 10,000 shares at a price of $50.00
per share to expire in January 2015, and a stock option to purchase 10,000
shares at a price of $55.00 per share to expire in January 2015.
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, 2004 in excess
of $100,000. Also included in the following table is compensation for the
years ended December 31, 2003 and 2002:
Summary Compensation Table
--------------------------
Long-Term
Annual Compensation Compensation - Awards
------------------- ---------------------
Securities
Underlying
Name and Principal Fiscal Options/ All Other
Position Year Salary Bonus Warrants (1) Compensation (2)
-------- ---- ------ ----- ------------ ------------
Phillip E. Powell 2004 $660,000 $333,000 112,500 -
Chief Executive 2003 600,000 810,000 375,000 -
Officer 2002 500,000 500,000 225,000 -
Rick L. Wessel 2004 $495,000 $322,000 90,000 -
President, 2003 450,000 610,000 210,000 -
Secretary 2002 350,000 387,500 150,000 -
and Treasurer
J. Alan Barron 2004 $385,000 $300,000 67,500 -
Chief Operating 2003 350,000 400,000 135,000 -
Officer 2002 285,000 250,000 75,000 -
R. Douglas Orr 2004 $185,000 $125,000 37,500 -
Chief Financial 2003 160,000 100,000 45,000 -
Officer 2002 65,591 25,000 15,000 -
John C. Powell 2004 $165,000 $ 50,000 7,500 -
Vice President of 2003 140,000 40,000 30,000 -
Information 2002 95,010 10,000 15,000 -
Technology
(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 the lesser of
$50,000 or 10% of the sum of such executive officer's annual salary and
bonus.
Employment Agreements
On March 14, 2005, Mr. Barron has entered into an employment agreement,
effective January 1, 2005, with the Company through December 31, 2009 to
serve as the chief executive officer and the chief operating officer of the
Company; at the discretion of the board this agreement may be extended for
additional successive periods of one year each on each January 1
anniversary. The agreement provides for: (i) a base salary of $500,000 with
increases at the discretion of the Compensation Committee; (ii) an annual
bonus at the discretion of the Compensation Committee; (iii) participation
in compensation plans at the discretion of the Compensation Committee; (iv)
certain fringe benefits including club membership, car, vacation, a term
life insurance policy with a beneficiary designated by Mr. Barron in the
amount of $2 million; and (v) reimbursement of business related expenses.
Mr. Barron has agreed not to compete with the Company, not to solicit
employees of the Company, and not to solicit customers of the Company for a
period of time following his termination.
On March 14, 2005, Mr. Wessel has entered into an employment agreement,
effective January 1, 2005, with the Company through December 31, 2009 to
serve as the president of the Company; at the discretion of the board this
agreement may be extended for additional successive periods of one year each
on each January 1 anniversary. The agreement provides for: (i) a base
salary of $550,000 with increases at the discretion of the Compensation
Committee; (ii) an annual bonus at the discretion of the Compensation
Committee; (iii) participation in compensation plans at the discretion of
the Compensation Committee; (iv) certain fringe benefits including club
membership, car, vacation, a term life insurance policy with a beneficiary
designated by Mr. Wessel in the amount of $4 million; and (v) reimbursement
of business related expenses. Mr. Wessel has agreed not to compete with the
Company, not to solicit employees of the Company, and not to solicit
customers of the Company for a period of time following his termination.
Consulting Agreement
On March 14, 2005, Mr. Powell has entered into a consulting agreement,
effective January 1, 2005, with the Company through December 31, 2014 to
perform such services as may be requested by the Board of Directors. The
agreement provides for: (i) annual payments of $500,000; (ii) certain other
benefits including club membership, car, health insurance, a term life
insurance policy with a beneficiary designated by Mr. Powell in the amount
of $4 million; and (iii) reimbursement of business related expenses. Mr.
Powell has agreed not to compete with the Company, not to solicit employees
of the Company, and not to solicit customers of the Company while serving as
a consultant and for a period of time following termination of the
consulting agreement.
Stock Options and Warrants
The following table shows stock option and warrant grants made to named
executive officers during the year ended December 31, 2004:
Individual Grants of Stock Option/Warrant Grants Made
During the Year Ended December 31, 2004
-----------------------------------------------------
Percentage Potential Realizable
of Total Value at
Options/ Assumed Annual
Options/ Warrants Rates of Stock
Warrants Granted to Exercise Price Appreciation
Granted Employees in Price Expiration for Option and
Name (Shares) Each Period (Per Share) Date Warrant Terms (1)
----------------- -------- ------------ ----------- ----------------- ----------------------
5% 10%
---------- ----------
Phillip E. Powell 112,500 24.8% $ 19.33 January 29, 2014 $ 1,367,600 $ 3,465,800
Rick L. Wessel 90,000 19.8 19.33 January 29, 2014 1,094,100 2,772,600
J. Alan Barron 67,500 14.9 19.33 January 29, 2014 820,600 2,079,500
R. Douglas Orr 37,500 8.3 19.33 January 29, 2014 455,900 1,155,300
John C. Powell 7,500 1.7 19.33 January 29, 2014 91,200 231,100
-----------------
(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 would be at or near the present value.
December 31, 2004 Stock Option and Warrant Values
-------------------------------------------------
Number of Unexercised Value of Unexercised
Stock Options and Warrants In-The-Money
Shares at December 31, 2004 Stock Options and Warrants
Acquired on Value (Shares) December 31, 2004 (1)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------------- ---------- ---------- ----------- ------------- ----------- -------------
Phillip E. Powell 1,059,500 $17,726,000 352,500 (2) - $ 2,862,500 -
Rick L. Wessel 183,000 2,561,200 618,500 (3) - 5,024,700 -
J. Alan Barron 138,000 1,638,600 437,000 (4) - 935,500 -
R. Douglas Orr 8,000 88,300 214,200 (5) 73,100 (5) 82,100 $ 1,029,000
John C. Powell 7,500 76,800 106,900 (6) 43,100 (6) 39,500 762,800
-----------------
(1) Computed based upon the differences between aggregate fair market value
and aggregate exercise price.
(2) Includes a warrant to purchase 100,000 shares at a price of $6.73 per
share and options to purchase 252,500 shares at prices ranging from $19.33
to $55.00 per share.
(3) Includes warrants to purchase 213,500 shares at prices ranging from
$5.33 to $7.67 per share and options to purchase 405,000 shares at prices
ranging from $19.33 to $55.00 per share.
(4) Includes a warrant to purchase 19,500 shares at a price of $8.67 per
share and options to purchase 417,500 shares at prices ranging from $19.33
to $55.00 per share.
(5) Includes options to purchase 287,300 shares at prices ranging from
$5.33 to $55.00 per share.
(6) Includes a warrant to purchase 15,000 shares at a price of $5.33 per
share and options to purchase 135,000 shares at prices ranging from $6.67
to $55.00 per share.
Warrants and options held by other directors: On April 12, 2005, other
directors held warrants to purchase 362,500 shares at a price of $5.33 per
share, expiring between April 2012 and February 2013 and options to purchase
455,000 shares at prices ranging from $1.33 to $55.00 per share, expiring
between April 2009 and January 2015.
Warrants and options held by other employees: On April 12, 2005, other
employees held warrants to purchase 90,900 shares at a price of $5.33 per
share, expiring between February 2008 and April 2012 and options to purchase
901,350 shares at prices ranging from $2.67 to $55.00 per share, expiring
between February 2008 and January 2015.
Options issued to named executive officers and non-employee directors
in 2004 and 2005: During the period January 1, 2004 through April 12, 2005,
the Company has issued to named executive officers and non-employee
directors options to purchase 1,747,500 shares at prices ranging from $19.33
to $55.00 per share, expiring between January 2014 and January 2015.
Except for the stock option plans and the issuance of warrants
described herein, the Company has not established, nor does it provide for,
defined benefit or actuarial plans. The Company has not granted any stock
appreciation rights.
Certain Transactions
In January 2004, Mr. Joe R. Love was issued an option to purchase
15,000 shares of common stock at an exercise price of $19.33 per share
expiring in January 2014. In January 2004, Mr. Richard T. Burke was issued
an option to purchase 37,500 shares of common stock at an exercise price of
$19.33 per share expiring in January 2014. In January 2004, Ms. Tara U.
MacMahon was issued an option to purchase 15,000 shares of common stock at
an exercise price of $19.33 per share expiring in January 2014.
Report of the Audit Committee
The ultimate responsibility for good corporate governance rests with
the board, whose primary role is oversight, counseling and direction to the
Company's management in the best long-term interests of the Company and its
stockholders. The Audit Committee, in accordance with its charter, has been
established for the purpose of overseeing the accounting and financial
reporting processes of the Company and audits of the Company's annual
financial statements. As described more fully in its charter, the purpose
of the Audit Committee is to assist the board in its general oversight of
the Company's financial reporting, internal controls and audit functions.
Management is responsible for the preparation, presentation and integrity of
the Company's financial statements; establishing and applying accounting and
financial reporting principles; designing and implementing systems of
internal controls; and establishing procedures designed to reasonably assure
compliance with accounting standards, applicable laws and regulations. The
Company's independent auditing firm is responsible for performing an
independent audit of the consolidated financial statements in accordance
with generally accepted auditing standards. In accordance with law, the
Audit Committee has ultimate authority and responsibility to select,
compensate, evaluate and, when appropriate, replace the Company's
independent auditors. The Audit Committee has the authority to engage its
own outside advisers, including experts in particular areas of accounting,
as it determines appropriate, apart from counsel or advisers hired by
management. All of the members of the Audit Committee meet the independence
and experience requirements of Nasdaq and the SEC. The board of directors
has determined that two of the Committee's members, Richard T. Burke and Joe
R. Love, qualify as "audit committee financial experts" as defined by the
SEC.
The Audit Committee members are not professional accountants or
auditors, and their functions are not intended to duplicate or to certify
the activities of management and the independent auditors, nor can the Audit
Committee certify that the independent auditors are "independent" under
applicable rules. The Audit Committee serves a board-level oversight role,
in which it provides advice, counsel and direction to management and the
auditors on the basis of the information it receives, discussions with
management and the auditors, and the experience of the Audit Committee's
members in business, financial and accounting matters. Stockholders should
understand that the designation of "an audit committee financial expert" is
an SEC disclosure requirement related to Messrs. Burke's and Love's
experience and understanding with respect to certain accounting and auditing
matters. The designation does not impose on Messrs. Burke or Love any
duties, obligations or liability greater than generally imposed on them as
members of the Audit Committee and the board, and this designation as an
audit committee financial expert pursuant to this SEC requirement does not
affect the duties, obligations or liability of any other member of the Audit
Committee or the board.
In this context, the committee has met and held discussions with
management and Hein & Associates LLP ("Hein"), the Company's independent
public accountants for the year ended December 31, 2004. Management
represented to the committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the committee has reviewed and discussed the consolidated
financial statements with management and Hein. The committee discussed with
Hein the matters required to be discussed by Statement of Auditing Standard
No. 61, under which Hein must provide us with additional information
regarding the scope and results of its audit of the Company's financial
statements.
In addition, the committee has discussed with Hein its independence
from the Company and its management, including matters in the written
disclosures required by the Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees).
The committee discussed with the Company's independent public
accountants the overall scope and plans for their respective audits. The
committee met with Hein, with and without management present, to discuss the
results of its examinations, the evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the
committee recommended to the board of directors, and the board has approved,
that the audited financial statements be included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2004 filed with the
Securities and Exchange Commission.
The Audit Committee: Richard T. Burke, Joe R. Love and Tara U. MacMahon
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/short-term
advance industry and other companies of comparable size, growth, performance
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.
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 pawnshop/short-term advance industry
or other companies of comparable size, growth, performance and complexity,
taking into consideration the executive officer's position, 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. Certain senior executives receive annual incentive
compensation through the stockholder approved Executive Performance
Incentive Plan that provides for the payment of annual incentive
compensation to participants based upon the achievement of performance goals
established annually by the Compensation Committee based on one or more
specified performance criteria. The Compensation Committee also administers
the calculation of amounts earned under the Executive Performance Incentive
Plan.
Long-Term Incentive Compensation
The Company provides long-term incentive compensation through its stock
option plans, which are 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 $600,000 to $660,000
effective January 1, 2004. Mr. Powell received a bonus under the Executive
Performance Incentive Plan in the amount of $333,000 during the year ended
December 31, 2004. Mr. Powell received common stock warrant and option
grants based upon the overall performance of the Company during the year
ended December 31, 2004, as described in the section "Compensation".
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 affected in the context of a compensation
program that includes base pay, annual incentive compensation and stock
ownership.
The Compensation Committee: Richard T. Burke, Joe R. Love and Tara U.
MacMahon
Report of the Nominating and Corporate Governance Committee
Overview
The Nominating and Corporate Governance Committee is responsible for
making recommendations to the board of directors concerning the governance
structure and practices of the Company, including the size of the board of
directors and the size and composition of various committees of the board of
directors. In addition, the Nominating and Corporate Governance Committee
is responsible for identifying individuals believed to be qualified to
become board members, and to recommend to the board the nominees to stand
for election as directors at the annual meeting of stockholders.
Nomination for 2005 Election of Director
The committee met and recommended to the board of directors that Mr.
Powell be nominated to stand for reelection to the board at the Annual
Meeting on May 26, 2005.
The Nominating and Corporate Governance Committee: Richard T. Burke, Joe R.
Love and Tara U. MacMahon
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 December 31, 1999 through December 31, 2004, 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 ACE Cash Express, Inc.
[ PERFORMANCE GRAPH APPEARS HERE ]
12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
-------- -------- -------- -------- -------- --------
FCFS 100 27.27 82.42 123.77 310.80 323.76
Peer Group 100 41.88 65.93 88.45 213.14 292.07
Nasdaq Composite 100 60.31 47.84 33.07 49.45 53.81
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, directors, officers and
regular employees of the Company in person or may solicit proxies 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 this Annual
Meeting of Stockholders must have been received by the Company for inclusion
in the Company's proxy statement and form of proxy relating to that meeting
no later than January 21, 2006. Moreover, with respect to any proposal by a
stockholder not seeking to have the proposal included in the proxy statement
but seeking to have the proposal considered at the Annual Meeting of
Stockholders to be held in 2006, such stockholder must provide written
notice of such proposal to the Secretary of the Company at the principal
executive offices of the Company by December 22, 2005. In addition,
stockholders must comply in all respects with the rules and regulations of
the Securities and Exchange Commission then in effect and the procedural
requirements of the Company's Bylaws.
By Order of the Board of Directors,
/s/ Rick L. Wessel
--------------------------------
Arlington, Texas Rick L. Wessel
April 22, 2005 President,
Secretary and Treasurer
REVOCABLE PROXY
FIRST CASH FINANCIAL SERVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 2005
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, May 26, 2005 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:
1. Election of Mr. Powell as director (the Board For Withhold
of Directors recommends a vote FOR) ----- --------
[ ] [ ]
2. Ratification of the selection of Hein &
Associates LLP as Independent auditors of the For Against Abstain
Company for the year ending December 31, 2005 ----- ------- -------
(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 April 22, 2005 as well as the Annual Report for the fiscal year ended
December 31, 2004.
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.