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 ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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AMERICA’S CAR-MART, 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):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which the transaction applies:
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Aggregate number of securities to which the transaction applies:
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Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of the transaction:
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Fee paid previously with preliminary materials.
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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.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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AMERICA’S CAR-MART, INC.
1805 North 2nd Street, Suite 401
Rogers, Arkansas 72756
Notice of Annual Meeting of Stockholders
To be held August 26, 2020
To the holders of common stock of America’s Car-Mart, Inc.:
Notice is hereby given that the annual meeting
of stockholders of America’s Car-Mart, Inc., a Texas corporation, will be held at the Company’s principal executive
office, 1805 North 2nd Street, Suite 401, Rogers, Arkansas 72756, on Wednesday, August 26, 2020 at 10:00 a.m., local
time, for the following purposes:
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(1)
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To elect six directors to serve until the next annual meeting of stockholders and until their successors
have been elected and qualified;
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(2)
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To consider and approve an advisory resolution regarding the Company’s compensation of its
named executive officers;
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(3)
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To ratify the selection of Grant Thornton LLP as the independent registered public accounting firm
for the fiscal year ending April 30, 2021;
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(4)
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To approve an amendment to the Company’s Amended and Restated Stock Option Plan, increasing
the number of shares authorized for issuance under the plan by 200,000;
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(5)
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To conduct such other business as may properly come before the meeting or any adjournments or postponements
thereof.
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These items of business are more fully described in the
proxy statement accompanying this notice.
Only stockholders of record as of the close
of business on July 8, 2020 will be entitled to notice of and to vote at the annual meeting of stockholders or any adjournment
or postponement thereof.
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Very truly yours,
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/s/ Jeffrey A. Williams
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Jeffrey A. Williams
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President and Chief Executive Officer
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July 15, 2020
Your vote is important. Whether or not you plan to attend the
meeting in person, you are urged to vote as promptly as possible by the Internet. If you request a printed copy of the proxy materials,
you may complete and mail the proxy you will receive in response to your request or you may vote by the Internet. If you attend
the meeting and wish to change your vote, you may do so by voting in person at the meeting.
AMERICA’S CAR-MART, INC.
1805 North 2nd Street, Suite 401
Rogers, Arkansas 72756
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
AUGUST 26, 2020
PROXY STATEMENT
Unless the context indicates otherwise, all
references in this proxy statement to "we," "us," "our" and "the Company" refer to America’s
Car-Mart, Inc. and its subsidiaries.
INFORMATION ABOUT THE ANNUAL MEETING
This proxy statement, which is first being mailed
to stockholders on or about July 15, 2020, is furnished in connection with the solicitation of proxies by and on behalf of our
board of directors for use at the annual meeting of stockholders to be held at the Company’s principal executive office,
1805 North 2nd Street, Suite 401, Rogers, Arkansas 72756, on Wednesday, August 26, 2020 at 10:00 a.m., local time, and
at any or all adjournments or postponements thereof. To receive directions to the annual meeting, please call (479) 464-9944. The
address of our principal executive offices is 1805 North 2nd Street, Suite 401, Rogers, Arkansas 72756, and our telephone
number is (479) 464-9944.
Stockholders of record as of the record date,
July 8, 2020, can vote on the Internet, by mail or by attending the annual meeting and voting by ballot as described below. On
or about July 15, 2020, we will mail a Notice of Internet Availability of Proxy Materials to our stockholders advising them that
they can access this proxy statement, the 2020 Annual Report and voting instructions over the Internet at www.proxyvote.com. You
may then access these materials and vote your shares over the Internet. Please keep the notice for your reference through the meeting
date.
Alternatively, you may request that a printed
copy of the proxy materials be mailed to you for this meeting. If you want to receive a paper copy of the proxy materials, you
may request one by calling toll-free at 1-800-579-1639, or by sending an email to sendmaterial@proxyvote.com with the control number
in the subject line and in the body of the message include your full name, address, and request. There is no charge to you for
requesting a copy. Please make your request for a copy on or before August 12, 2020, to facilitate timely delivery. If you request
a paper copy of the proxy materials, you may vote by mail by completing and returning the proxy card you will receive in response
to your request or you may vote by the Internet.
We encourage you to vote your shares through
our Internet voting option. You can vote on the Internet by following the instructions in the notice that was mailed to you. Easy-to-follow
prompts allow you to vote your shares and confirm that your instructions have been properly recorded. The Internet voting procedures
are designed to authenticate stockholders by use of a control number and to allow you to confirm that your instructions have been
properly recorded. Internet and phone voting facilities for stockholders of record will be available 24 hours a day and will close
at 8:30 a.m. Central time on August 26, 2020 for shares held directly and at 11:59 p.m. Eastern time on August 23, 2020 for shares
held in a plan. If you vote on the Internet, you do not need to return your proxy card.
Please note: If you are a beneficial owner
of shares held in the name of a bank, broker or other holder, please refer to the Notice of Internet Availability of Proxy Materials
that was mailed to you by your bank, broker or other holder of record to see which voting options are available to you and for
instructions on how to vote your shares and how to request a printed copy of the proxy materials.
If you request a paper copy of the proxy materials
and choose to vote by mail, please complete, sign, date and promptly return the accompanying proxy card in the enclosed addressed
envelope that will be provided to you in response to your request, even if you plan to attend the annual meeting. Postage need
not be affixed to the envelope if mailed within the United States. The immediate return of your proxy card will be of great assistance
in preparing for the annual meeting and is, therefore, urgently requested. If you attend the annual meeting and vote in person,
your proxy card will not be used.
If you plan to attend the Annual Meeting, we
would appreciate it if you would notify our Investor Relations Manager by telephone at (479) 464-9944 or by e-mail at zachary.jennings@car-mart.com.
This will assist us with meeting preparations. You also can obtain directions to the meeting by calling this number. Please bring
the Notice of Internet Availability of Proxy Materials with you for admission to the meeting.
Any person giving a proxy pursuant to this proxy
statement may revoke it at any time before it is exercised at the annual meeting of stockholders by notifying, in writing, our
Secretary at the address above prior to the annual meeting date. In addition, if the person executing the proxy is present at the
annual meeting, he or she may, but need not, revoke the proxy by notice of such revocation to our Secretary at the annual meeting,
and vote his or her shares in person. Proxies in the form provided, if duly signed or authenticated electronically and received
in time for voting, and not so revoked, will be voted at the annual meeting in accordance with the instructions specified thereon.
Where no choice is specified, proxies will be voted “FOR” the election of the nominees for director named in the proxy
statement; “FOR” the resolution approving the Company’s compensation of its named executive officers; “FOR”
the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm; “FOR”
the approval of an amendment to the Company’s Amended and Restated Stock Option Plan, increasing the number of shares authorized
for issuance under the plan by 200,000; and, on any other matters presented for a vote, in accordance with the judgment of the
persons acting under the proxies.
Only stockholders of record at the close of
business on the record date, July 8, 2020, will be entitled to notice of and to vote at the annual meeting and any adjournments
or postponements thereof. Each share of our common stock issued and outstanding on such record date is entitled to one vote. As
of July 8, 2020, we had 6,824,322 shares of common stock outstanding.
The presence at the annual meeting of the holders
of a majority of the shares of our common stock issued and outstanding and entitled to vote as of the record date is necessary
to constitute a quorum. Stockholders will be counted as present at the annual meeting if they are present in person at the annual
meeting or if they have properly submitted a proxy card. In accordance with the bylaws of the Company, each director shall be elected
by a majority of the votes cast with respect to that director at the annual meeting. However, if the number of nominees is greater
than the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented
in person or by proxy at the annual meeting. The proposals regarding the advisory vote to approve the Company’s executive
compensation, the ratification of Grant Thornton LLP as our independent registered public accounting firm, and the approval of
the amendment to the Company’s Amended and Restated Stock Option Plan, increasing the number of shares authorized for issuance
under the plan by 200,000, require the affirmative vote of the holders of a majority of the shares entitled to vote on, and that
vote for or against or expressly abstain with respect to, the proposals.
Any abstaining votes and broker “non-votes”
will be counted as present and entitled to vote, and therefore will be included for purposes of determining whether a quorum is
present at the annual meeting. For the election of directors, abstentions and broker “non-votes” will not be deemed
to be “votes cast.” For each other proposal, abstentions will be treated as “votes cast,” but broker “non-votes”
will not be deemed to be “votes cast.” As a result, broker “non-votes” will not be included in the tabulation
of the voting results on the election of directors and the other proposals presented in this proxy statement, and therefore will
not have any effect on such votes. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and
has not received voting instructions from the beneficial owner. Abstentions will not be included in the tabulation of the voting
results on the election of directors, and therefore will not have any effect on such vote, but will have the same effect as a vote
against the proposals regarding the advisory vote on executive compensation, the ratification of Grant Thornton LLP as our independent
registered public accounting firm, and the approval of the amendment to the Company’s Amended and Restated Stock Option Plan,
increasing the number of shares authorized for issuance under the plan by 200,000.
The Dodd-Frank Wall Street Reform and Consumer
Protection Act, referred to in this proxy statement as the Dodd-Frank Act, directed national securities exchanges to prohibit broker
discretionary voting of uninstructed shares held in “street name” (through a broker or nominee) for the election of
directors, executive compensation and certain other matters. Under current stock exchange rules, broker discretionary voting is
not permitted for the election of directors and executive compensation matters, including proposals to approve the implementation
of, or material revisions to, any equity compensation plan. Therefore, if you hold shares through a broker or other nominee
and you do not give your broker or nominee specific instructions, including regarding the election of directors, the advisory vote
on our executive compensation, and the approval of the amendment to the Company’s Amended and Restated Stock Option Plan,
increasing the number of shares authorized for issuance under the plan by 200,000, your shares may not be voted on those matters
and will not be counted in determining the number of shares necessary for approval.
We will bear the entire cost of the proxy solicitation,
including preparation, assembly, printing and mailing of this proxy statement, the proxy card and any additional materials furnished
to stockholders. Individual stockholders of record will receive copies of the proxy solicitation materials even if they share the
same mailing address. Copies of proxy solicitation materials will be furnished to brokerage houses, fiduciaries and custodians
holding shares in their names that are beneficially owned by others to forward to such beneficial owners. In addition, we may reimburse
such persons for their cost of forwarding the solicitation materials to such beneficial owners. Solicitation of proxies by mail
may be supplemented by one or more of telephone, e-mail, facsimile or personal solicitation by our directors, officers or regular
employees. No additional compensation will be paid for such services. We have not engaged, and do not plan to engage, the services
of a professional proxy solicitation firm to aid in the solicitation of proxies from certain brokers, bank nominees and other institutional
owners. Our costs for such services, if any, will not be material.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information
as of July 8, 2020 with respect to ownership of our outstanding common stock by (i) all persons known to us to beneficially own
more than five percent of our outstanding common stock, (ii) each of our directors and nominees for director, (iii) each of our
named executive officers, and (iv) all directors and executive officers as a group.
Name of Beneficial Owner
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Number of Shares Beneficially owned(1)
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Percent of Shares Outstanding
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BlackRock, Inc.
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1,018,375
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(2)
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15.0
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%
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Dimensional Fund Advisors LP
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505,985
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(3)
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7.4
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%
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Daniel J. Englander
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254,478
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(4)
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3.7
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%
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William H. Henderson
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151,580
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(5)
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2.2
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%
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Joshua G. Welch
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140,761
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(6)
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2.1
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%
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Jeffrey A. Williams
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121,129
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(7)
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1.8
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%
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Jim von Gremp
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32,277
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(8)
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*
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Leonard L. Walthall
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19,132
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(9)
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*
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Ray C. Dillon
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17,500
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(10)
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*
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Vickie D. Judy
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15,744
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(11)
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*
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Ann G. Bordelon
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11,325
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(12)
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*
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All directors and executive officers as a group (9 persons)
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763,926
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(13)
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11.2
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%
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_________________________________
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Less than 1% of outstanding shares.
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(1)
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"Beneficial ownership" includes shares for which an individual, directly or indirectly, has or shares voting or investment power, or both, and also includes options that are exercisable within 60 days of July 8, 2020. Unless otherwise indicated, all of the listed persons have sole voting and investment power over the shares listed opposite their names. Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, referred to in this proxy statement as the Exchange Act. Pursuant to the rules of the Securities and Exchange Commission, referred to in this proxy statement as the SEC, certain shares of our common stock that a beneficial owner has the right to acquire within 60 days pursuant to the exercise of stock options are deemed to be outstanding for the purpose of computing the percentage ownership of such owner, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Applicable percentages are based on 6,824,322 shares of the Company’s common stock outstanding on July 8, 2020, adjusted as required by rules promulgated by the SEC.
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(2)
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Based on a Schedule 13G/A filed with the SEC on March 9, 2020 by
Blackrock, Inc. with an address of 55 East 52nd Street, New York, NY 10055. The reporting person reported beneficial
ownership of 1,018,375 shares for which it has sole voting power over 1,000,106 shares and sole dispositive power over 1,018,375
shares. The reporting person reported no shared voting or dispositive power with respect to the reported shares. We make no
representation as to the accuracy or completeness of the information reported.
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(3)
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Based on a Schedule 13G/A filed with the SEC on February 12, 2020
by Dimensional Fund Advisors LP with an address of Building One 6300 Bee Cave Road Austin, TX 78746. The reporting person reported
beneficial ownership of 505,985 shares for which it has sole voting power over 481,530 shares and sole dispositive power over 505,985
shares. The reporting person reported no shared voting or dispositive power with respect to the reported shares. We make no
representation as to the accuracy or completeness of the information reported.
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(4)
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Includes 182,965 shares held by Ursula
Capital Partners of which Mr. Englander is the sole general partner and 48,750 shares which Mr. Englander has the right to acquire
within 60 days of July 8, 2020 upon exercise of outstanding stock options. Mr. Englander disclaims beneficial ownership of the
shares held by Ursula Capital Partners except to the extent of his pecuniary interest therein.
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(5)
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Includes 30,000 shares which Mr. Henderson has the right to acquire
within 60 days of July 8, 2020 upon exercise of outstanding stock options, 1,874 shares held in the Company’s Employee Stock
Purchase Plan and 750 shares held as custodian for his children.
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(6)
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Includes 125,761 shares held by Vicuna Capital I, LP of which Mr.
Welch is the managing member and 15,000 shares which Mr. Welch has the right to acquire within 60 days of July 8, 2020 upon exercise
of outstanding stock options. Mr. Welch disclaims beneficial ownership of the shares held by Vicuna Capital I, LP except to the
extent of his pecuniary interest therein.
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(7)
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Includes 30,000 shares which Mr. Williams has the right to acquire within 60 days of
July 8, 2020 upon exercise of outstanding stock options, 2,014 shares held in the Company’s Employee Stock Purchase Plan,
5,015 shares held in the Company’s 401(k) Plan and 10,000 shares pledged as security.
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(8)
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Includes 10,000 shares which Mr. von Gremp has the right to acquire
within 60 days of July 8, 2020 upon exercise of outstanding stock options and 22,277 shares held in a family trust, of which Mr.
von Gremp and his wife are co-trustees. Mr. von Gremp and his wife share voting and investment power over the shares held
by the trust.
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(9)
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Includes 10,000 unvested shares of restricted stock, 7,500 shares
which Mr. Walthall has the right to acquire within 60 days of July 8, 2020 upon exercise of outstanding stock options and 1 share
held in the Company’s Employee Stock Purchase Plan.
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(10)
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Includes 15,000 shares which Mr. Dillon has the right to acquire within 60 days of July 8, 2020 upon exercise of outstanding stock options.
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(11)
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Includes 10,500 unvested shares of restricted stock, 3,750 shares which Ms. Judy has
the right to acquire within 60 days of July 8, 2020 upon exercise of outstanding stock options and 631 shares held in the Company’s
Employee Stock Purchase Plan.
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(12)
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Includes 10,000 shares which Ms. Bordelon has the right to acquire within 60 days of July 8, 2020 upon exercise of outstanding stock options.
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(13)
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Includes 145,000 shares which all current executive officers and directors in the aggregate have the right to acquire within 60 days of July 8, 2020 upon exercise of outstanding options.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to our bylaws, our board of directors
has set the number of directors for the ensuing year at seven, six of whom are proposed to be elected at the annual meeting of
stockholders. Jim von Gremp has announced that he will retire from our board of directors effective as of the 2020 Annual Meeting,
when his current term expires. As of the date of this proxy statement, the board of directors has not selected an additional nominee
to fill this position. Because the board of directors has named only six nominees in this proxy statement, proxies cannot be voted
for greater than six director candidates at the 2020 Annual Meeting.
In the event any nominee is unable or declines
to serve as a director at the time of the annual meeting, the persons named as proxies therein will have discretionary authority
to vote the proxies for the election of such person or persons as may be nominated in substitution by the present board of directors,
upon the recommendation of the nominating committee of the board of directors. Management knows of no current circumstances that
would render any nominee named herein unable to accept nomination for election.
In accordance with the bylaws of the Company,
each director shall be elected by a majority of the votes cast with respect to that director at the annual meeting. However, if
the number of nominees is greater than the number of directors to be elected, the directors shall be elected by the vote of a plurality
of the shares represented in person or by proxy at the annual meeting.
Members of our board of directors are elected
annually to serve until the next annual meeting and until their successors are elected and qualified. The following persons have
been nominated for election to our board of directors:
Ann G. Bordelon, age 53, has served as
a director since January 2019. She currently serves as chairman of the compensation committee and a member of the audit, compliance
and nominating committees of our board of directors. Ms. Bordelon assumed the role of Vice Chancellor for Finance and Administration
at the University of Arkansas, effective July 1, 2020. Until October 2019, Ms. Bordelon was the CFO of Mitchell Communications,
a leading integrated public relations agency. Ms. Bordelon served from October 2015 to March 2017 as Chief Financial and Administrative
Officer of NOWDiagnostics, Inc., an early stage company developing rapid medical diagnostic testing devices. Ms. Bordelon retired
from Walmart in 2015 after serving the company for nearly 13 years as CFO of Walmart's Sam's Club division, CFO of Walmart's Asia
Region, and as Chief Audit Executive, among other financial roles. Ms. Bordelon, a Certified Public Accountant, holds a Bachelor
of Science degree in Business Administration from the University of Arkansas. Ms. Bordelon also serves on the board of PHD Group
Holdings, LLC where she is a member of the audit committee. Ms. Bordelon’s qualifications to serve on the board include her
public and private company board, executive and financial experience.
Ray C. Dillon, age 64, has served as
a director since August 2017 and Chairman of the Board since August 2018. He currently serves as a member of the audit, compensation,
compliance and nominating committees of our board of directors. Mr. Dillon was the President, Chief Executive Officer and a director
of Deltic Timber Corporation (NYSE: DEL) from July 2003 until his retirement in October 2016. Mr. Dillon has over 40 years
of experience in the paper and forest products industry. Prior to joining Deltic Timber, Mr. Dillon served in various executive
positions with Gaylord Container Corporation from 1994 through mid-2003, including Executive Vice President from 2000 through mid-2003,
Vice President Primary Products from 1997 through 2000, and Vice President Mill Operations from 1994 through 1997. Mr. Dillon’s
other public company board experience includes U.S. Concrete, Inc. (NASDAQ: USCR) from 2009 to 2010. Mr. Dillon has also been a
director of Stone Bank in Little Rock, Arkansas since December 2017, and served as a director and chairman of the board of the
Little Rock Branch of the Federal Reserve Bank of St. Louis for seven years. Mr. Dillon graduated from Mississippi State University
where he received a B.S. in Chemical Engineering. He also holds a Master of Business Administration degree from the University
of Chicago. Mr. Dillon’s public and private company board and executive experience and operational and strategic expertise
qualifies him to serve on the Company’s board.
Daniel J. Englander, age 51, has served
as a director since February 2007. He currently serves as chairman of the audit committee and a member of the compensation, compliance
and nominating committees of our board of directors. Mr. Englander is the founder and currently the Managing Partner of Ursula
Capital Partners, an investment management partnership founded in 2004. From January 2005 to June 2006, Mr. Englander was a partner
of Prescott Securities, an investment fund, and from October 1994 to January 2005, he was employed by Allen & Company, an investment
merchant bank, most recently as Managing Director. Mr. Englander is also currently on the boards of directors of Copart, Inc. (NASDAQ:
CPRT) and CKX Lands, Inc. (NASDAQ: CKX). Mr. Englander’s qualifications to serve on the board include his financial and investment
experience. He also brings operational and strategic expertise, as well as business development expertise, to the board.
William H. Henderson, age 57, has served
as a director since September 2002. Mr. Henderson also served as our Chief Executive Officer from October 2007 to December 2017,
and as our President from May 2002 to March 2016. From 1999 until May 2002, Mr. Henderson served as Chief Operating Officer of
our wholly owned operating subsidiary. From 1992 until 1998, Mr. Henderson served as General Manager of our wholly owned operating
subsidiary. From 1987 until 1992, Mr. Henderson primarily held positions of District Manager and Regional Manager of our wholly
owned operating subsidiary. Mr. Henderson’s qualifications to serve on the board include his more than 30 years of experience
with our company and his in-depth knowledge of our company and its operations. In addition, Mr. Henderson provides significant
industry experience and expertise to the board.
Joshua
G. Welch, age 55, has served as a director since January 2018. He currently serves as chairman of the compliance committee
and a member of the audit, compensation and nominating committees of our board of directors. Mr. Welch is the founder and currently
the Managing Partner of Vicuna Capital I, LP, an investment management partnership founded in 1998. From June 1990 to June 1998,
Mr. Welch was a securities analyst with the Tisch Family Interests, where he served on the board of Equimark Corp, then a publicly
traded national bank. Mr. Welch is a graduate of Williams College and Columbia Business School and has served on numerous charitable
boards. Mr. Welch’s qualifications to serve on the board include his financial and analytical skills.
Jeffrey A. Williams, age 57, has served
as Chief Executive Officer of the Company since January 2018, President of the Company since March 2016, and as a director since
August 2011. Before becoming Chief Executive Officer, Mr. Williams served as Chief Financial Officer of the Company since 2005.
He also served as Vice President Finance from 2005 to March 2016 and as Secretary of the Company from 2005 to May 2018. Mr. Williams
is a Certified Public Accountant, inactive, and prior to joining the Company, his experience included approximately seven years
in public accounting with Arthur Andersen & Co. and Coopers and Lybrand LLC in Tulsa, Oklahoma and Dallas, Texas. His experience
also includes approximately five years as Chief Financial Officer and Vice President of Operations of Wynco, LLC, a nationwide
distributor of animal health products. Mr. Williams has also served on the board of directors of Mercy Health Northwest Arkansas
Communities since July 2019. Mr. Williams' qualifications to serve on the board include his financial and operational experience
and his significant knowledge of the Company and our industry.
The board of directors recommends a vote "FOR" each
of the six nominees to our board of directors.
PROPOSAL NO. 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Act and Section 14A of
the Exchange Act, the Company’s stockholders are entitled to vote to approve, on an advisory (non-binding) basis, the compensation
of the Company’s named executive officers as disclosed in this proxy statement in accordance with SEC rules.
At the 2019 Annual Meeting, the stockholders
approved (87.3% of votes cast), on an advisory basis, the compensation of the Company’s named executive officers. The Compensation
Committee believes this level of stockholder support reflects a strong endorsement of the Company’s compensation policies
and decisions. The Compensation Committee has considered the results of this advisory vote on executive compensation in determining
the Company’s compensation policies and decisions for 2020 and has determined that these policies and decisions are appropriate
and in the best interests of the Company and its stockholders at this time. At the 2017 Annual Meeting, the stockholders also recommended,
in an advisory vote, to hold future say-on-pay votes on an annual basis. As such, the board of directors has determined to hold
this advisory vote on the compensation of named executive officers each year. The next advisory vote to determine the frequency
with which stockholders will consider to approve an advisory vote on the Company’s compensation of its named executive officers
will be in 2023.
Accordingly, the board of directors is seeking
the advisory vote of stockholders on the compensation of the Company’s Chief Executive Officer, Chief Financial Officer and
Chief Operating Officer (collectively, our “named executive officers”) as disclosed in this proxy statement. This proposal,
commonly known as a “say-on-pay” proposal, gives the Company’s stockholders the opportunity to express their
views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation,
but rather the overall compensation of the named executive officers.
The Company’s named executive officers
made and effectively managed the execution of key business and strategic decisions that helped the Company achieve record operating
results while positioning the Company with continued investments to take advantage of market opportunities. Although the last two
months of fiscal 2020 were impacted by the global outbreak of COVID-19, the Company increased revenues by 11.3% to $745 million,
and added only $4.8 million in debt, net of cash, while growing net receivables by $50.7 million and repurchasing $16.0 million
of the Company’s common stock. Return on average assets and return on equity for fiscal 2020 were 8.8% and 18.2%, respectively.
Additionally, the Company has achieved a cumulative total stockholder return of 77% during the three years ended April 30, 2020,
which includes the impact of the pandemic during the last two months of fiscal 2020.
As discussed in our “Compensation Discussion
and Analysis” below, we have designed our executive compensation program to attract and retain the highest quality executive
officers, directly link pay to performance, reward current performance and drive future performance to align long term interests
with stockholders, and build value for our stockholders. The program provides total compensation opportunities at levels that are
competitive in our industry, ties a significant portion of each executive’s compensation to his or her individual performance
and contribution to achieving our business objectives, and closely aligns the interests of our executives with the interests of
our stockholders. Accordingly, the board of directors encourages you to review carefully the Compensation Discussion and Analysis
and the tabular and other disclosures on compensation under Executive Compensation, and asks you to cast a vote to approve the
compensation of our named executive officers through the following resolution:
“RESOLVED, that the Company’s stockholders
approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement
for the 2020 Annual Meeting pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and
Analysis, the compensation tables and related narrative discussion.”
The say-on-pay vote is advisory and therefore
not binding on the Company, the compensation committee or the board of directors. The board and compensation committee value the
opinions of our stockholders. To the extent there is any significant vote against the named executive officer compensation as disclosed
in this proxy statement, we will consider our stockholders’ concerns and the compensation committee will evaluate whether
any actions are necessary to address those concerns.
The board of directors recommends a vote "FOR" the approval
of the compensation of the Company’s named executive officers, as disclosed in this proxy statement.
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The audit committee has appointed Grant Thornton
LLP as our Company’s independent registered public accounting firm to audit the consolidated financial statements of our
Company for the fiscal year ending April 30, 2021. Grant Thornton LLP served as our independent registered public accounting firm
for the fiscal year ended April 30, 2020.
A representative of Grant Thornton LLP is expected
to be present at the annual meeting of stockholders, will have an opportunity to make a statement and will be available to respond
to appropriate questions that stockholders may have.
Principal Accountant Fees and Services
The aggregate fees billed by Grant Thornton
LLP through July 8, 2020 for professional services rendered for the fiscal years ended April 30, 2020 and 2019, respectively, were
as follows:
|
|
2020
|
|
2019
|
Audit fees
|
|
$
|
302,442
|
|
|
$
|
337,475
|
|
Audit related fees
|
|
|
-
|
|
|
|
-
|
|
Tax fees
|
|
|
-
|
|
|
|
-
|
|
All other fees
|
|
|
-
|
|
|
|
-
|
|
Total fees
|
|
$
|
302,442
|
|
|
$
|
337,475
|
|
The audit fees for the years ended April 30,
2020 and 2019 were for the audits of our annual financial statements included in our annual report on Form 10-K, the audit of the
effectiveness of our internal control over financial reporting, the review of the financial statements included in our quarterly
reports on Form 10-Q and consents for and review of other documents filed with the SEC.
Policy on Audit Committee Pre-Approval of Services of Independent Auditors
Our audit committee has established policies
and procedures regarding pre-approval of all services provided by our independent auditor. Our audit committee will annually review
and pre-approve the services that may be provided by our independent auditor without obtaining specific pre-approval from the audit
committee. Unless a type of service has received general pre-approval, it requires specific pre-approval by our audit committee
if it is to be provided by our independent auditor. During the fiscal year ended April 30, 2020, our audit committee pre-approved
all audit and permitted non-audit services that were provided to us by our independent auditors.
Ratification of the Independent Registered Public Accounting Firm
Although stockholder ratification is not required
by our bylaws or otherwise, the appointment of Grant Thornton LLP as our Company’s independent registered public accounting
firm to audit the consolidated financial statements for the fiscal year ending April 30, 2021 is being submitted to our stockholders
for ratification because we believe it is a matter of good corporate governance. In the event our stockholders do not ratify the
appointment of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending April 30, 2021,
the adverse vote will be considered as a recommendation to the audit committee to select other auditors for the following fiscal
year. However, due to the difficulty in making any substitution of auditors after the beginning of the fiscal year, it is contemplated
that the appointment of Grant Thornton LLP for the fiscal year ending April 30, 2021 will be permitted to stand unless the audit
committee finds other good reason for making a change. The audit committee may terminate Grant Thornton LLP’s engagement
as our company’s independent registered public accounting firm without the approval of our stockholders if it deems termination
appropriate and in our best interest and the best interests of our stockholders.
The board of directors recommends a vote
"FOR" the ratification of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year
ending April 30, 2021.
PROPOSAL NO. 4
APPROVAL OF AMENDMENT TO AMENDED AND RESTATED
STOCK OPTION PLAN
On July 6, 2020, the board of directors adopted,
subject to stockholder approval, an amendment to the Amended and Restated Stock Option Plan, referred to in this proxy statement
as the Restated Option Plan, to increase to 2,200,000 the number of shares of our common stock that may be issued under the Restated
Option Plan. The amendment to the Restated Option Plan will become effective upon stockholder approval.
The following summary of certain features of
the Restated Option Plan, as proposed to be amended by the stockholders, is qualified in its entirety by reference to the full
text of the Restated Option Plan, which is attached to this proxy statement as Appendix A and incorporated herein by reference.
The affirmative vote of the holders of a majority
of the shares entitled to vote on, and that vote for or against or expressly abstain with respect to, this proposal at the annual
meeting, if a quorum is present, shall be the act of the stockholders.
Nature and Purpose of the Restated Option Plan
The Restated Option Plan permits us to grant
incentive options to selected employees and non-qualified options to selected employees, directors and independent contractors.
The purpose of the Restated Option Plan is to encourage and enable selected employees, directors, and independent contractors to
acquire or increase their holdings of our common stock in order to promote a closer identification of their interests with those
of the company and our stockholders, thereby further stimulating their efforts to enhance the efficiency, soundness, profitability,
growth and stockholder value of the company.
Shares of Stock Subject to the Restated Option Plan
The America’s Car-Mart, Inc. 2007 Stock
Option Plan, referred to in this proxy statement as the 2007 Option Plan, originally set aside 1,000,000 shares of our common stock
for option grants to employees, directors and certain independent contractors, consultants and advisors. In October 2010, our stockholders
approved an amendment to the 2007 Option Plan to increase the number of shares available under the 2007 Option Plan by 500,000
shares to 1,500,000 shares. In August 2015, our stockholders approved the Restated Option Plan, which amended and restated the
2007 Option Plan. The Restated Option Plan extended the plan for a new ten-year term, increased the number of shares available
for stock option grants by 300,000 shares to 1,800,000 shares, and made certain other changes to the 2007 Option Plan. In August
2018, our stockholders approved an amendment to the Restated Option Plan to increase the number of shares available under the Restated
Option Plan by 200,000 shares to 2,000,000 shares. As of July 8, 2020, 45,000 options to purchase shares of common stock remained
available for grant under the Restated Option Plan. Pursuant to Section 12 of the Restated Option Plan, our board of directors
recommends that the number of shares that may be issued upon the exercise of options issued under the Restated Option Plan be increased
from 2,000,000 to 2,200,000.
If any shares covered by a stock option are
not purchased or are forfeited, or if an award is settled in cash or otherwise terminates without delivery of any common stock,
then the number of shares of common stock counted against the aggregate number of shares available under the Restated Option Plan
with respect to the award will, to the extent of any such forfeiture or termination, again be available for making awards. If,
however, the option price, a withholding obligation or any other payment is satisfied by tendering shares or by withholding shares,
or shares are purchased by the Company on the open market with the proceeds from a stock option exercise, those shares will not
again be available for issuance under the Restated Option Plan.
If there is any change in the shares of our
common stock because of a merger, consolidation or reorganization, or if the board of directors declares a stock dividend or stock
split distributable in shares of common stock, or if there is a change in our capital stock structure affecting our common stock,
the number of shares of common stock reserved for issuance under the Restated Option Plan will be correspondingly adjusted to prevent
dilution or enlargement of options granted under the Restated Option Plan.
Option Provisions
Options for shares of common stock granted under
the Restated Option Plan are issued at a price not less than the fair market value of the stock on the date of grant (or, in the
case of an owner of more than 10% of the total combined voting power of all classes of our stock receiving an incentive option,
110% of such fair market value). The closing market price of our common stock as reported on the NASDAQ Stock Market, referred
to in this proxy statement as NASDAQ, on July 8, 2020 was $88.19. The term of an option granted under the Restated Option Plan
is determined by the compensation committee. The term of incentive options may not be more than ten years (five years for a 10%
owner). Options are subject to vesting restrictions as our compensation committee deems advisable and/or as required by applicable
law or Federal or state securities laws. Unless otherwise provided in an award agreement, the exercise price of options granted
under the Restated Option Plan may be paid (1) by cash, (2) by delivery of written notice of exercise and irrevocable instructions
to a broker to promptly deliver the amount of sale or loan proceeds to pay the exercise price, (3) at the sole discretion of our
compensation committee, by delivery of other shares of common stock of the Company that have been held by the participant for more
than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes)
or by a “net exercise” arrangement in which the number of shares issued upon exercise of the option is reduced by a
number of shares with a fair market value that does not exceed the aggregate option price, or (4) by a combination of the foregoing
methods.
Administration
The Restated Option Plan is administered by
our compensation committee, and will continue to be so as long as the membership on such committee meets the requirements necessary
for awards under the Restated Option Plan to satisfy exemption from the short-swing profit provisions under Rule 16b-3 of the Exchange
Act and, to the extent available for existing awards, the performance-based exemption to the limitations of Section 162(m) of the
Code. See “Federal Income Tax Consequences – Limitation on Deduction of Certain Compensation” below for a discussion
of Section 162(m) of the Code. We believe that our compensation committee currently satisfies these requirements. If at any future
time the compensation committee fails to meet these requirements, our board of directors will serve in its place. Subject to the
provisions of the Restated Option Plan, our compensation committee has plenary authority in its discretion to select the individuals
to whom options are awarded, the number of options to be included in each award, the time or times at which options are awarded
and the terms, conditions, restrictions and limitations of awards, including vesting restrictions. Our compensation committee has
the discretionary authority to interpret the Restated Option Plan and to establish, amend and rescind rules and regulations relating
to it.
Term
The effective date of the Restated Option Plan
is June 10, 2015 and it will expire on June 10, 2025.
Eligibility
An award of options may be made only to those
persons selected by our compensation committee from among our employees, directors and independent contractors and the employees,
directors and independent contractors of any of our parents, predecessors and subsidiaries. As of April 30, 2020, approximately
1,750 persons were eligible to receive options pursuant to the Restated Option Plan. In addition, an incentive option may only
be granted to our employees or employees of one of our parents, predecessors or subsidiaries who do not own, immediately before
the option grant, stock representing more than 10% of the total combined voting power of all classes of our stock; provided, however,
that a 10% owner-employee may be granted an incentive option if the option price is at least 110% of the fair market value of the
common stock and the option period does not exceed five years.
In making awards of options to participants,
our compensation committee takes into account the duties of the respective participants, their present and potential contribution
to our success and the success of our parents, predecessors and subsidiaries, and such other factors as our compensation committee
deems relevant in connection with accomplishing the purposes of the Restated Option Plan.
Limitation of Awards
Stock options granted to any plan participant
in any one fiscal year may not exceed 250,000 shares of common stock authorized for issuance under the Restated Option Plan. Stock
options granted in any one fiscal year to any plan participant who is a non-employee director of the Company or any of its parents,
predecessors and subsidiaries may not exceed 25,000 shares of common stock authorized for issuance under the Restated Option Plan.
Repricing
The Restated Option Plan prohibits the repricing
of stock options awarded under the Restated Option Plan, unless such action is approved by the Company’s stockholders if
required by the applicable rules of NASDAQ.
Transferability
Unless otherwise permitted by the compensation
committee or provided for in a written agreement evidencing an award, stock options granted under the Restated Option Plan are
not transferable other than by will or by the laws of intestate succession. A plan participant may designate a beneficiary to exercise
the options in the event of the participant’s death.
Termination of Service
An option may not be exercised after the termination
date of such option as set forth in the stock option agreement. In the event a participant in the Restated Option Plan terminates
continuous service with the Company, a stock option may not be exercised except to the extent provided in the stock option agreement.
In the event of a participant’s death, disability or termination without cause, unless an option agreement provides otherwise,
the compensation committee may generally accelerate the exercisability or vesting of an option and the option may be exercised
for a certain time period following the participant’s termination of service. The option will terminate to the extent not
exercised on the last day of the period specified in the option agreement or the plan, or the last day of the original term of
the option, whichever comes first.
Change in Control
In the event of a change in control (as defined
in the Restated Option Plan), the Company or the surviving entity or successor to the Company may elect to cancel the outstanding
stock options. If such stock options are cancelled pursuant to the previous sentence, then each unvested stock option will vest
automatically immediately before the stock options are cancelled, and each participant holding outstanding options will be entitled
to receive a cash payment or distribution equal to the excess of the fair market value (as of the date of the change in control)
of each share of common stock exercisable under such options over the exercise price for such share, multiplied by the number of
shares covered by the stock options. However, if the exercise price exceeds the fair market value of the common stock as of the
date of the change in control, such stock option will be cancelled and forfeited and the participant will not receive any payment
or distribution for such option. If, in connection with a change in control (as defined in the Restated Option Plan), a plan participant’s
employment is terminated by the Company or the surviving entity or by such participant voluntarily with good reason (as defined
in the Restated Option Plan) within the period beginning six months before and ending two years after the change in control, all
stock options held by the affected participant will become fully vested and immediately exercisable on the later of the date of
the change in control or the date of termination of the participant’s employment in connection with a change in control.
New Plan Benefits
Although all of our executive and non-executive
officers, employees and directors will be eligible for awards under the Restated Option Plan if selected by our compensation committee
in its discretion, it is not possible, at this time, to predict the benefits and amounts that will actually be received by any
individual participants or groups of participants in the future. The Restated Option Plan does not mandate set benefits or amounts,
and no awards have been granted under the Restated Option Plan that are contingent upon approval of this Proposal Four.
Existing Plan Benefits
The following table sets forth the number of
shares of our common stock subject to all stock options granted under the Restated Option Plan through July 8, 2020 to each of
our named executive officers whose compensation is set forth in the Summary Compensation Table on page 31 of this proxy statement,
each person nominated for election as a director, and the other indicated persons and groups. These share numbers do not take in
to account the effect of options that have been exercised (or were cancelled or that expired unexercised).
Name and Position
|
Number of Option Shares Granted
|
Jeffrey A. Williams
President, Chief Executive Officer and Director
|
442,000
|
Vickie D. Judy
Chief Financial Officer
|
68,750
|
Leonard L. Walthall
Chief Operating Officer
|
90,500
|
Ann G. Bordelon
Director
|
10,000
|
Ray C. Dillon
Director
|
15,000
|
Daniel J. Englander
Director
|
60,000
|
William H. Henderson
Former Chief Executive Officer and Director
|
455,000
|
Joshua G. Welch
Director
|
15,000
|
All current executive officers as a group (3 persons)
|
601,250
|
All current directors (other than executive officers) as a group (6 persons)
|
580,000
|
All other employees, including current officers who are not executive officers, as a group
|
721,500
|
Amendment and Termination of the Restated Option Plan
Our board of directors may at any time amend
or terminate the Restated Option Plan and any award granted pursuant to the Restated Option Plan, in whole or in part; provided,
however, that to the extent required by applicable law, rule or regulation, any such amendment or termination will be subject to
the approval of our stockholders; and provided further, however, that such amendment or termination will not adversely affect any
outstanding awards unless the affected participant’s written consent is obtained.
Federal Income Tax Consequences
The following discussion of the Federal income
tax consequences of the issuance, vesting, payment, sale and forfeiture of options granted under the Restated Option Plan is based
on an analysis of the Code, existing laws, judicial decisions and administrative rulings and regulations, all of which are subject
to change. In addition to being subject to the Federal income tax consequences described below, a participant may also be subject
to state and local tax consequences in the jurisdiction in which he or she works and/or resides.
Non-Qualified Options. The grant of
a non-qualified option will not result in taxable income to the participant. Except as described below, the participant will realize
ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares of common stock
acquired over the exercise price for those shares, and the Company will be entitled to a corresponding deduction. Gains or losses
realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such
shares equal to the fair market value of the shares at the time of exercise.
The exercise of a non-qualified option through
the delivery of previously acquired shares will generally be treated as a non-taxable, like-kind exchange as to the number of shares
surrendered and the identical number of shares received under the option. That number of shares will take the same basis and, for
capital gains purposes, the same holding period as the shares that are given up. The value of the shares received upon such an
exchange that are in excess of the number of shares given up will be includible as ordinary income to the participant at the time
of the exercise. The excess shares will have a new holding period for capital gain purposes and a basis equal to the fair market
value of such shares of common stock determined at the time of exercise.
Incentive Stock Options. The grant of
an incentive stock option will not result in taxable income to the participant. The exercise of an incentive stock option will
not result in taxable income to the participant provided that the participant was, without a break in service, an employee of the
Company or a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months
prior to the date of exercise or ending one year prior to the date of exercise if the participant is disabled, as that term is
defined in the Code.
The excess of the fair market value of the shares
of common stock at the time of the exercise of an incentive stock option over the exercise price is an adjustment item that may
be included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the incentive
stock option is exercised. For purposes of determining the participant’s alternative minimum tax liability for the year of
disposition of the shares of common stock acquired pursuant to the incentive stock option exercise (other than a disposition that
occurs in the same year in which the option is exercised), the participant will have a basis in those shares equal to the exercise
price increased by the amount that the participant’s alternative minimum taxable income was increased due to the earlier
exercise of the incentive stock option.
If the participant does not sell or otherwise
dispose of the shares within two years from the date of the grant of the incentive stock option or within one year after the date
of exercise of the incentive stock option, then, upon disposition of such shares of common stock received upon exercise of the
incentive stock option, any amount realized in excess of the exercise price will be taxed to the participant as capital gain, and
the Company will not be entitled to any deduction. A capital loss will be recognized to the extent that the amount realized on
disposition is less than the exercise price.
If the foregoing holding period requirements
are not met, the participant will generally realize ordinary income, and a corresponding deduction will be allowed to the Company,
at the time of the disposition of the shares, in an amount equal to the lesser of (i) the excess of the fair market value of the
shares of common stock on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon
disposition of the shares over the exercise price. If the amount realized exceeds the fair market value of the shares on the date
of exercise, then the difference between the amount realized and the fair market value of the shares on the date of exercise will
be treated as a capital gain. If the amount realized is less than the exercise price, the participant will recognize no income,
and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of
the shares.
The exercise of an incentive stock option through
the exchange of previously acquired shares of common stock will generally be treated in the same manner as such an exchange would
be treated in connection with the exercise of a non-qualified option; that is, as a non-taxable, like-kind exchange as to the number
of shares given up and the identical number of shares received under the option. That number of shares will take the same basis
(increased, if applicable, by any amount included in gross income as compensation) and, for capital gain purposes, the same holding
period as the shares that are given up. However, such holding period will not be credited for purposes of the minimum incentive
stock option holding period required for the new shares to receive incentive stock option treatment (i.e., two years from the grant
date or one year from the date of exercise). Shares received in excess of the number of shares given up will have a new holding
period and will have a basis of zero or, if any cash was paid as part of the exercise price, the excess shares received will have
a basis equal to the amount of the cash paid. In the event of a disqualifying disposition, which is a disposition before the end
of the applicable holding period, with respect to any of the shares received upon exercise of the incentive stock option, the shares
with the lowest basis are deemed to be disposed of first.
If the exercise price of an incentive stock
option is paid with shares of common stock acquired through a prior exercise of an incentive stock option, ordinary income will
be realized on the shares given up if those shares have not been held for the minimum incentive stock option holding period, which
holding period is two years from the date of grant and one year from the date of exercise, but the exchange will not affect the
tax treatment, as described in the immediately preceding paragraph, of the shares received.
In general, an option granted under the Restated
Option Plan that is designated as an incentive stock option would be taxed as described above. However, in some circumstances an
option that is designated as an incentive stock option will be treated as a non-qualified stock option and the holder taxed accordingly.
For example, a change in the terms of an option that gives the employee additional benefits may be treated as the grant of a new
option. Unless all the criteria for treatment as an incentive stock option are met on the date the “new option” is
considered granted (such as the requirement that the option be granted only to an employee), the option will be treated and taxed
as a non-qualified stock option.
Withholding. In connection with the grant,
exercise or disposition of stock options, we will withhold all applicable amounts as required by the appropriate taxing authorities.
There is no required federal withholding with respect to the grant, exercise or disposition of incentive stock options, but there
will be withholding following the exercise or disposition of non-qualified stock options.
Limitation on Deduction of Certain Compensation.
A publicly held corporation may not deduct compensation over $1.0 million that is paid in any year to one of its executive
officers who is a “covered employee” under Section 162(m) of the Code, which includes the corporation’s
chief executive officer, chief financial officer and the three next highest compensated executive officers. Stock options granted
before November 2, 2017 which constitute “qualified performance-based compensation” under the Code and are not modified
in any material respect on or after such date may be exempted from this $1.0 million deduction limitation. As noted above, the
compensation committee considers many factors when designing its compensation arrangements in addition to the deductibility of
the compensation, and maintains the flexibility to grant awards pursuant to the Restated Option Plan that are non-deductible if
they believe it is in the best interest of our Company and our shareholders.
Section 409A. Options granted pursuant
to the Restated Option Plan are generally not intended to constitute “deferred compensation” subject to Section 409A
of the Code. If an award does constitute “deferred compensation,” it is intended to comply with Section 409A of the
Code. A violation of Section 409A of the Code may subject a participant to immediate taxation of an award plus a 20% excise tax
and interest.
Change In Control. Any acceleration
of the vesting or payment of options under the Restated Option Plan in the event of a change in control in the Company may cause
part or all of the consideration involved to be treated as an "excess parachute payment" under the Code, which may subject
the participant to a 20% excise tax and preclude deduction by the Company.
Tax Advice. The preceding discussion
is based on U.S. tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport
to be a complete description of the Federal income tax aspects of the Restated Option Plan. A participant may also be subject to
state and local taxes, or taxes in other jurisdictions, in connection with the grant of awards under the Restated Option Plan.
The Company suggests that participants consult with their individual tax advisors to determine the applicability of the tax rules
to the awards granted to them in their personal circumstances.
General. The Restated Option Plan is
not qualified under Section 401(a) of the Code and is not subject to the provisions of the Employee Retirement Income Security
Act of 1974.
The board of directors recommends a vote
"FOR" the approval of the amendment to the Company’s Amended and Restated Stock Option Plan, increasing the number
of shares authorized for issuance under the plan by 200,000.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information regarding outstanding
options and shares reserved for future issuance under the Restated Incentive Plan and the Restated Option Plan as of April 30,
2020:
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a))
|
Plan Category
|
(a)
|
(b)
|
(c)
|
Equity compensation plans
approved by the stockholders:
|
|
|
|
Amended and Restated Stock Incentive Plan
|
-
|
-
|
94,199
|
Amended and Restated Stock Option Plan
|
667,750
|
$68.55
|
75,000
|
2006 Employee Stock Purchase Plan
|
-
|
-
|
139,763
|
Total All Plans
|
667,750
|
$68.55
|
308,962
|
Equity compensation plans
not approved by the stockholders
|
-
|
-
|
-
|
CORPORATE GOVERNANCE AND BOARD MATTERS
Meetings of the Board of Directors
During our last fiscal year, our board of directors
held seven meetings. Each incumbent director attended at least 75% of the aggregate number of meetings held by the board of directors
and by the committees of the board of directors on which such director served.
It is the policy of our board of directors that
all directors should attend the annual meeting of stockholders unless unavoidably prevented from doing so by unforeseen circumstances.
All seven board members that were serving as of the 2019 annual meeting of stockholders attended the meeting.
Board Independence
Our board of directors currently consists of
seven members. Our board of directors has determined that Ann G. Bordelon, Ray C. Dillon, Daniel J. Englander, Jim von Gremp, and
Joshua G. Welch are “independent” as defined by the listing standards of NASDAQ. Our independent directors meet separately
at least twice each year.
Board Leadership Structure
Currently, Mr. Williams serves as President
and Chief Executive Officer and Mr. Dillon serves as the Chairman of the board. The board of directors believes that allowing Mr.
Williams to focus on the management of our business and our day-to-day operations rather than also serving as chairman of the board
is in the best interest of the Company. However, the board of directors does not have a policy that prohibits the Chief Executive
Officer from serving as the chairman of the board because it desires the flexibility to determine in the future that one person
should hold both positions if such leadership structure would be in our best interests and the best interests of our stockholders.
The Board’s Role in Risk Oversight
The audit committee reviews and discusses with
management our processes and policies with respect to risk assessment and risk management. In addition, our risk oversight process
involves the board receiving information from management on a variety of matters, including operations, legal, regulatory, finance,
reputation and strategy, as well as information regarding any material risks associated with each matter. The full board (or the
appropriate board committee, if the board committee is responsible for the oversight of the matter) receives this information through
updates from the appropriate members of management to enable it to understand and monitor the Company’s risk management practices.
When a board committee receives an update, the chairperson of the relevant board committee reports on the discussion to the full
board during the next board meeting. This enables the board and the board committees to coordinate the risk oversight role.
Stockholder Communications with the Board of Directors
Our board of directors has implemented a process
for stockholders to send communications to our board of directors. Any stockholder desiring to communicate with our board of directors,
or with specific individual directors, may do so by writing to our Secretary at 1805 North 2nd Street, Suite 401, Rogers,
Arkansas 72756. Our Secretary has been instructed by our board of directors to promptly forward all such communications to our
board of directors or such individual directors.
Committees of the Board of Directors
Our board of directors presently has four standing
committees: audit committee, compensation and stock option committee (referred to in this proxy statement as the compensation committee),
compliance committee and nominating committee. Each of these committees is described in the following paragraphs.
Audit Committee
Our audit committee assists our board of directors
in overseeing our accounting and financial reporting process and audits for our financial statements. It is directly responsible
for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. Our
audit committee reviews the auditing accountant’s audit of our financial statements and its report thereon, management’s
report on our system of internal controls over financial reporting, various other accounting and auditing matters and the independence
of the auditing accountants. The committee reviews and pre-approves all audit and non-audit services performed by our auditing
accountants, or other accounting firms, other than as may be allowed by applicable law. Our audit committee has established procedures
for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters,
and the confidential, anonymous submission by employees of concerns regarding questionable accounting and auditing matters. Our
audit committee meets with management to review any issues related to matters within the scope of the audit committee’s duties.
The committee operates pursuant to a written charter adopted by our board of directors, which may be found on our website at www.car-mart.com.
Our audit committee presently consists of Ann
G. Bordelon, Ray C. Dillon, Daniel J. Englander, Chairman, Jim von Gremp, and Joshua G. Welch, each of whom is “independent,”
as such term is defined by the NASDAQ listing standards and Rule 10A-3 of the Exchange Act. In addition, the board has determined
that each audit committee member is able to read and understand fundamental financial statements and, other than strictly in his
capacity as a member of our board of directors or a committee of our board of directors, has not participated in preparing our
financial statements in any of the past three years. Our board of directors has determined that Daniel J. Englander is an “audit
committee financial expert,” as defined by the rules of the SEC. Our audit committee held five meetings during the last fiscal
year. See “Audit Committee Report” for additional information regarding our audit committee.
Compensation Committee
Our compensation committee presently consists
of Ann G. Bordelon, Chairman, Ray C. Dillon, Daniel J. Englander, Jim von Gremp and Joshua G. Welch, each of whom the board of
directors has determined to be “independent” as defined by the NASDAQ listing standards. In addition, all compensation
committee members are “outside directors” within the meaning of Section 162(m) of the Code, and also “non-employee
directors” within the meaning of Rule 16b-3 under the Exchange Act. Our compensation committee assists our board of directors
with respect to our compensation programs and compensation of our executive officers and is authorized to administer our equity
and non-equity incentive plans. Our compensation committee operates pursuant to a written charter adopted by our board of directors,
which may be found on our website at www.car-mart.com. Our compensation committee held three meetings during the last fiscal year.
See “Executive Compensation – Compensation Discussion and Analysis – Role of Compensation Committee” for
additional information.
Compliance Committee
Our compliance committee presently consists
of Ann G. Bordelon, Ray C. Dillon, Daniel J. Englander, Jim von Gremp and Joshua G. Welch, Chairman, each of whom the board of
directors has determined to be “independent” as defined by the NASDAQ listing standards. Our compliance committee assists
our board of directors with respect to our compliance and ethics programs, policies and procedures. Our compliance committee operates
pursuant to a written charter adopted by our board of directors, which may be found on our website at www.car-mart.com. Our compliance
committee held four meetings during the last fiscal year.
Nominating Committee
Our nominating committee presently consists
of Ann G. Bordelon, Ray C. Dillon, Daniel J. Englander, Jim von Gremp, Chairman, and Joshua G. Welch. Our nominating committee
operates pursuant to a written charter adopted by our board of directors, which may be found on our website at www.car-mart.com.
Nominees for election to our board of directors are considered and recommended by our nominating committee. Our full board of directors
considers the recommendations of the nominating committee and recommends the nominees to our stockholders. Our nominating committee’s
process for identifying potential nominees includes soliciting recommendations from our directors and officers and considering
nominations from our stockholders. Absent special circumstances, our nominating committee will continue to nominate qualified incumbent
directors whom the nominating committee believes will continue to make important contributions to our board of directors. While
there are no minimum qualifications for nomination, our nominating committee generally requires that nominees be persons of sound
ethical character, be able to represent all stockholders fairly, have no material conflicts of interest, have demonstrated professional
achievement, have meaningful experience and have a general appreciation of the major issues facing us. In addition, the board of
directors believes that it, as a whole, should possess a combination of skills, professional experience and diversity of backgrounds
necessary to oversee our business. In seeking a diversity of background, the nominating committee seeks a variety of occupational
and personal backgrounds in order to obtain a range of viewpoints and perspectives. Accordingly, the nominating committee considers
the qualifications of directors and director candidates individually and in the broader context of the board’s overall composition
and our current and future needs. In evaluating nominees, and considering incumbent directors for nomination, the nominating committee
has considered all of the criteria described above and believes that all of the six director nominees listed above are highly qualified
and have the skills and experience required for service on our board of directors. The biographies above contain specific information
regarding the experiences, qualifications and skills of each of our director nominees. Our nominating committee held one meeting
during the last fiscal year.
Stockholder Nominations
Our nominating committee will consider persons
recommended by our stockholders in selecting nominees for election. Our nominating committee does not have a formal policy with
regard to the consideration of any director candidates recommended by stockholders because it believes that it can adequately evaluate
any such nominee on a case-by-case basis. However, our nominating committee would consider for possible nomination qualified nominees
recommended by stockholders. Stockholders who wish to propose a qualified nominee for consideration should submit complete information
as to the identity and qualifications of that person to our Secretary at 1805 North 2nd Street, Suite 401, Rogers, Arkansas
72756. See “Stockholder Proposals” for information regarding the procedures that must be followed by stockholders in
order to submit stockholder proposals, including proposals to nominate director candidates.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended April 30, 2020,
Ann G. Bordelon, Ray C. Dillon, Daniel J. Englander, Jim von Gremp and Joshua G. Welch served on the compensation committee. None
of the members of our compensation committee is or has been one of our officers or employees or has had any related party relationship
that is required to be disclosed in this proxy statement. In addition, none of our executive officers served on the board of directors
or compensation committee of any entity that has one or more executive officers who serve on our board of directors or compensation
committee.
Code of Ethics
We have adopted a code of business conduct and
ethics that applies to all employees, including executive officers and directors. A copy of our code was filed as Exhibit 14.1
to our current report on Form 8-K filed on July 22, 2016. In the event that we make any amendments to, or grant any waiver from,
a provision of the code that requires disclosure under applicable SEC or NASDAQ rules, we will disclose such amendment or waiver
and the reasons for such amendment or waiver as required.
Derivative Trading and Hedging
The Company has a policy that prohibits all
directors, officers and employees who have material non-public information relating to the Company from engaging in any hedging
or monetization transactions, such as zero-cost collars and forward sale contracts, involving Company securities that allow the
individual to lock in some or all of the value of his or her stock holdings. The policy also prohibits short sales of the Company’s
securities and trading in puts, calls or other derivative securities. The Company believes these types of transactions are contrary
to the interests of its stockholders and to the long-term performance of the Company.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act
requires our directors, executive officers and persons who own more than 10% of our outstanding common stock to file with the
SEC reports of changes in ownership of our common stock held by such persons. Based solely on a review of the reports filed
electronically with the SEC and written representations from the reporting persons that no other reports were required, we
believe that during the fiscal year ended April 30, 2020, our executive officers, directors and greater than 10% stockholders
complied on a timely basis with all Section 16(a) filing requirements applicable to them, except that one of our directors,
Jim von Gremp inadvertently failed to timely file a Form 4 to report four open market purchases.
Director Compensation Table
The following table provides certain information
concerning compensation for each director during the fiscal year ended April 30, 2020. Mr. Williams, who is a member of our board
of directors, has been omitted from this table since his compensation is included in the Summary Compensation Table on page 31
of this proxy statement. Mr. Williams received no compensation for serving on our board of directors during fiscal year 2020.
Name
|
Fees Earned or
Paid in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards 1, 2
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
Ann G. Bordelon
|
$40,000
|
-
|
$194,800
|
-
|
-
|
-
|
$234,800
|
Ray C. Dillon
|
$50,000
|
-
|
$194,800
|
-
|
-
|
-
|
$244,800
|
Daniel J. Englander
|
$50,000
|
-
|
$194,800
|
-
|
-
|
-
|
$244,800
|
William H. Henderson 3
|
$40,000
|
-
|
-
|
-
|
-
|
$33,276
|
$73,276
|
Jim von Gremp
|
$40,000
|
-
|
$194,800
|
-
|
-
|
-
|
$234,800
|
Joshua G. Welch
|
$40,000
|
-
|
$194,800
|
-
|
-
|
-
|
$234,800
|
___________________
1 In accordance with SEC
rules, the amount shown reflects the grant date fair value of stock options granted during the fiscal year ended April 30, 2020
calculated pursuant to Financial Accounting Standards Board Codification (ASC) 718, Compensation – Stock Compensation. Refer
to “Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note K: Stock-Based
Compensation Plans” included in our Annual Report on Form 10-K filed on June 24, 2020 for the relevant assumptions used to
determine the valuation of our option awards.
2 The following are the
aggregate number of option awards outstanding held by each of the directors as of April 30, 2020: Ms. Bordelon – 5,000; Mr.
Dillon – 10,000; Mr. Englander – 43,750; Mr. Henderson – 30,000; Mr. von Gremp – 5,000; and Mr. Welch –
10,000.
3 Mr. Henderson retired
from his position of Chief Executive Officer on December 31, 2017 and began serving as a consultant to senior management of the
Company effective January 1, 2018, through December 31, 2019. He continues to serve on the Company’s board of directors.
In accordance with his retirement agreement, Mr. Henderson was paid $16,000 as a consultant, in addition to the $40,000 a year
earned as a director. Mr. Henderson’s all other compensation also included $17,276 for premiums paid under our executive
health insurance plan, pursuant to his retirement agreement. Also in accordance with his retirement agreement, Mr. Henderson is
not eligible for the annual director stock option grant until fiscal 2021.
Discussion of Director Compensation
Currently, each of our non-employee directors
receives a $40,000 annual retainer and the chairman of the board receives an additional $10,000 annual retainer. The chairman of
our audit committee also receives an additional $10,000 annual retainer. Directors who are also our employees do not receive separate
compensation for their services as a director. On the first business day of May in each year, each of our non-employee directors
also receives an option under our stock option plan to purchase 5,000 shares of common stock. These options are issued at an exercise
price equal to the fair market value of our common stock on the date of grant. These options are vested upon grant and are exercisable
for a period of up to ten years from the date of grant or, in the event that a director ceases to be one of our directors for any
reason, one year following the date on which such director ceased to be a director, if earlier.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Philosophy
Our compensation philosophy is to align the
interests of our executive officers with those of our stockholders and induce our executive officers to remain in our employ. We
believe that this is best accomplished by the following:
|
·
|
paying executives a base salary commensurate with their backgrounds, industry knowledge, special
skill sets and responsibilities;
|
|
·
|
offering short-term incentive cash bonuses conditioned on our consolidated financial results; and
|
|
·
|
making periodic grants of restricted stock and/or stock options.
|
Our overall goal is to ensure that our executive
compensation program and policies are consistent with our strategic business objectives and that we provide incentives for the
attainment of those objectives. We strive to accomplish this goal in the context of a compensation program that includes annual
base salary, annual cash incentives and stock ownership.
Named Executive Officers
Our “named executive officers” for
fiscal year 2020 consisted of our Chief Executive Officer, Mr. Jeffrey A. Williams, our Chief Financial Officer, Ms. Vickie D.
Judy, and our Chief Operating Officer, Mr. Leonard L. Walthall.
Mr. Williams, age 57, has served as Chief Executive
Officer of the Company since January 2018, President of the Company since March 2016, and as a director since August 2011. Before
becoming Chief Executive Officer, Mr. Williams served as Chief Financial Officer of the Company since 2005. He also served as Vice
President Finance from 2005 to March 2016 and as Secretary of the Company from 2005 to May 2018. Mr. Williams is a Certified Public
Accountant, inactive, and prior to joining the Company, his experience included approximately seven years in public accounting
with Arthur Andersen & Co. and Coopers and Lybrand LLC in Tulsa, Oklahoma and Dallas, Texas. His experience also includes approximately
five years as Chief Financial Officer and Vice President of Operations of Wynco, LLC, a nationwide distributor of animal health
products. Mr. Williams has also served on the board of directors of Mercy Health Northwest Arkansas Communities since July 2019.
Ms. Judy, age 54, has served as Chief Financial
Officer of the Company since January 2018. Before becoming Chief Financial Officer in January 2018, Ms. Judy served a Principal
Accounting Officer since March 2016 and Vice President of Accounting since August 2015. Since joining the Company in May 2010,
Ms. Judy has also served as Controller and Director of Financial Reporting. Ms. Judy is a Certified Public Accountant and prior
to joining the Company her experience included approximately five years in public accounting with Arthur Andersen & Co. and
approximately 17 years at National Home Center, Inc., a home improvement products and building materials retailer, most recently
as Vice President of Financial Reporting. Ms. Judy has also served as a director of the board of the Little Rock Branch of the
Federal Reserve Bank of St. Louis since January 2018, and as chair since January 2020.
Mr. Walthall, age 54, has served as Chief Operating
Officer since August 2019. Before becoming Chief Operating Officer in August 2019, Mr. Walthall served as Field Operations Officer
since March 2016, Vice President of Operations since March 2009, and as a store manager since 1989.
Fiscal 2020 Changes to Executive Compensation
During fiscal 2020, the compensation committee
undertook a review of certain aspects of the Company’s executive compensation program. The Committee’s review included
an informal assessment of compensation amounts and practices of other comparably-sized public companies and an evaluation of the
Company’s performance during the past two fiscal years since Mr. Williams and Ms. Judy assumed the roles of Chief Executive
Officer and Chief Financial Officer, respectively. As a result of this review, the Committee determined to make certain adjustments
to the Company’s compensation of its named executive officers to enhance the market competitiveness of the Company’s
executive compensation program and to further incentivize and reward our executives for making decisions that promote the long-term
value of the Company and the best interests of our stockholders. The chart below summarizes the changes made by the Committee during
fiscal 2020 and the objectives of each change:
Element or Practice
|
Change
|
Objectives
|
Annual Base Salary
|
Increased annual base salaries by 60% to $750,000 for our CEO and $400,000 each for our CFO and COO.
|
·
Strengthen the market competitiveness of base compensation to attract and retain talented executives.
·
Enhance correlation with the executive’s background, industry knowledge, special skill sets and responsibilities.
·
Reward executives for recent Company and individual performance and further incentive future performance.
|
Short-Term Incentive Compensation
|
Approved short-term incentive programs for the CFO and COO for fiscal 2020 similar to
the CEO’s program.
The committee does not intend to adopt a short-term incentive program for the NEOs
for fiscal 2021 due to the substantial base salary increases in fiscal 2020.
|
·
For fiscal 2020, incentivize continued strong short-term operating and financial results for fiscal 2020 based on
attainable, but not assured, pre-determined performance metrics that are aligned with stockholder interests.
·
For fiscal 2021, mitigate the risk of short-term performance being emphasized over long-term value due to the substantial
base salary increases in fiscal 2020.
|
Long-Term Incentive Compensation
|
Granted stock options to the NEOs that vest in annual installments over a five-year period representing 100,000 shares for the CEO and 50,000 shares each for the CFO and COO.
|
·
Promote continued focus on stockholder value and long-term performance accountability.
·
Strengthen stockholder alignment by increasing the executives’ ownership stake in the Company.
·
Enhance market competitiveness and retention value of total compensation.
·
Reward executives for their contributions to recent stockholder returns.
|
Risk Mitigating Practices
|
Adopted stock ownership guidelines for executive officers.
|
· Further align the executives’ interests with stockholders by requiring the executives to maintain a meaningful ownership interest in the Company and promote stockholder value.
|
In evaluating the Company’s financial
performance and the individual performance of each executive for purposes of determining the salary increases and equity awards,
the Committee primarily considered the following achievements during the past two fiscal years and the interim period of fiscal
2020 that benefit the long-term interests of the Company’s stockholders:
Record Financial Performance
|
·
Cumulative total stockholder return (increase in stock value) of 144% during fiscal years 2018 and 2019 and the
first six months of fiscal year 2020.
·
Diluted earnings per share increases of:
ü
$2.41, or 97%, in fiscal 2018 (includes $1.40 for the effect of the enactment of the Tax Cut and Jobs Act in December
2017) compared to fiscal 2017.
ü
$1.83, or 37%, in fiscal 2019 compared to fiscal 2018.
ü
$1.10, or 35%, during the first six months of fiscal 2020 compared to the first six months of fiscal 2019.
·
Income before taxes increases of:
ü
$6.7 million, or 21%, in fiscal 2018 compared to fiscal 2017.
ü
$20.9 million, or 54% in fiscal 2019 compared to fiscal 2018.
ü
$10.5 million, or 39%, during the first six months of fiscal 2020 compared to the first six months of fiscal 2019.
·
Total revenue increases of:
ü
$24.5 million, or 4%, in fiscal 2018 compared to fiscal 2017.
ü
$56.9 million, or 9%, in fiscal 2019 compared to fiscal 2018.
ü
$31.0 million, or 9%, during the first six months of fiscal 2020 compared to the first six months of fiscal 2019.
|
Sustained Balance Sheet Growth
|
·
Net finance receivables growth of:
ü
$26.5 million, or 7%, in fiscal 2018.
ü
$31.9 million, or 8%, in fiscal 2019.
ü
$36.1 million, or 9%, during the first six months of fiscal 2020.
|
Improved Credit Loss Results
|
·
Decrease in provision for credit losses from 28.7% of sales in fiscal 2017 to:
ü
27.7% of sales in fiscal 2018.
ü
25.0% of sales in fiscal 2019.
ü
22.9% of sales during the first six months of fiscal 2020.
|
Strong Cash Flows
|
· Strong cash flows during fiscal 2018 and 2019 and the first six months of fiscal 2020 supporting an aggregate $120.2 million increase in finance receivables, $18.0 million increase in inventory, $7.9 million in net capital expenditures and $83.6 million in common stock repurchases (1,525,265 shares) with only a $59.0 million aggregate increase in total debt.
|
Policies Further Promoting Shareholder Alignment
The compensation committee believes the Company’s
stock ownership guidelines adopted during fiscal 2020, along with its anti-hedging and pledging policies further strengthen the
relationship between shareholder value and executive pay. The chart below summarizes each of these practices:
Stock Ownership Guidelines
|
In February 2020, the Company’s Board of Directors adopted
the following stock ownership guidelines for the named executive officers:
Chief Executive Officer 6x Base Salary
Chief Financial Officer 3x Base Salary
Chief Operating Officer 3x Base Salary
The executive officers are expected to meet the applicable target
multiple within five years after first becoming subject to the guidelines and are expected to continuously own sufficient shares
to meet the applicable guideline once attained. Executives who fall below the guidelines may exercise non-qualified stock options
in a cashless net exercise, but must hold the net shares acquired until such time that the guideline is met and must continue to
hold the number of shares necessary to maintain compliance with the guideline.
For purposes of the guidelines, ownership includes shares owned
directly, unvested restricted shares subject to time-based vesting, and shares held in Company stock ownership plans or other Company
benefit plans.
|
Anti-Hedging
|
The Company’s Insider Trading Policy prohibits directors,
executive officers and certain employees from engaging in any hedging or monetization transactions, such as zero-cost collars and
forward sale contracts, involving Company securities that allow the individual to lock in some or all of the value of his or her
stock holdings. The policy also prohibits short sales of the Company’s securities and trading in puts, calls or other derivative
securities. The Company believes these types of transactions are contrary to the interests of its stockholders and to the long-term
performance of the Company.
|
Pledging
|
The Company’s Insider Trading Policy also prohibits insiders
from holding Company securities in a margin account or pledging such securities as collateral for a loan. However, an exception
may be granted for pledges of Company securities as collateral for a loan (but not for margin debt) if the person pledging shares
is unaware of material nonpublic information at the time the pledge is entered into and demonstrates the financial capacity to
repay the loan without resort to the pledged securities.
|
Role of Compensation Committee
Our compensation committee retains broad flexibility
in the administration of our executive compensation program. We believe this flexibility is critical to retaining key executives.
Our compensation committee is focused on ensuring that executive compensation is directly tied to our economic performance.
Our compensation committee operates under a
written charter adopted by our board of directors. Our compensation committee has several duties and responsibilities, including
the following:
|
·
|
establish and review our overall executive compensation philosophy;
|
|
·
|
review and approve our goals and objectives relevant to the compensation of our Chief Executive
Officer and other executive officers, including annual performance objectives;
|
|
·
|
on an annual basis, review the compensation and performance of our officers, review and approve
corporate goals relevant to the compensation of our Chief Executive Officer and other executive officers, evaluate our Chief Executive
Officer’s performance in light of these goals and objectives, evaluate the performance of our other executive officers, and
based on such evaluation, approve the annual compensation of our Chief Executive Officer and other executive officers;
|
|
·
|
review the annual compensation discussion and analysis and produce an annual report on executive
compensation for inclusion in our annual proxy statement, in accordance with all applicable rules and regulations;
|
|
·
|
as requested by our board of directors, make recommendations to our board of directors with respect
to the approval of incentive compensation plans and equity-based incentive plans, and administer such plans;
|
|
·
|
periodically review the policies and criteria for the administration of all executive compensation
programs, the operations of the compensation programs and whether they are achieving their intended purposes;
|
|
·
|
monitor compliance by executives with the terms and conditions of our executive compensation plans
and programs;
|
|
·
|
establish and periodically review policies in the area of senior management perquisites;
|
|
·
|
review board of director compensation levels and practices periodically, and recommend to our board
of directors, from time to time, changes in such compensation levels and practices;
|
|
·
|
review and approve plans and processes for management development and succession; and
|
|
·
|
periodically review and reassess the adequacy of the compensation committee charter and recommend
any proposed changes to our board of directors for approval.
|
For additional information on the duties and
responsibilities of our compensation committee, see our compensation committee charter available on our website at www.car-mart.com.
Compensation Process
Our compensation committee reviews and administers
our compensation program for each of our named executive officers. Compensation is typically set at multi-year increments in order
to help ensure that longer-term results are the primary focus, which we believe is critically important in our industry. Our compensation
committee also periodically meets with our named executive officers, who provide insight into how other individual executives are
performing.
Consideration of 2019 Stockholder Say on Pay Vote
At our 2019 Annual Meeting of Stockholders,
the stockholders approved, on an advisory basis, the compensation of the named executive officers (87.3% of votes cast). The compensation
committee believes this level of stockholder support reflects a strong endorsement of our company’s compensation policies
and decisions. The compensation committee has considered the results of this advisory vote on executive compensation in determining
our compensation policies and decisions for 2020 and has determined that these policies and decisions are appropriate and in the
best interests of our company and its stockholders at this time. In addition, our board of directors has considered the 2017 stockholder
vote and management’s recommendation regarding the frequency of future stockholder advisory votes on the compensation of
our named executive officers and has adopted the stockholders’ recommendation of an annual advisory vote on the compensation
of our named executive officers until the next required vote on this matter which will be in 2023, or until the board of directors
otherwise determines that a different frequency for such advisory votes is in the best interests of our stockholders.
Employment Agreements
We have an employment agreement with our Chief
Executive Officer, Mr. Williams. We believe that the employment agreement, which includes a change-in-control provision, is necessary
to attract and retain the executive in light of all relevant factors, which includes the officer’s past employment experience,
desired terms and conditions of employment, and the strategic importance of the officer’s position. We believe that the change-in-control
provision is necessary to maintain stability among our executive leadership and that the terms of the provision are reasonable
based on our review of similar provisions for similar companies. Our compensation committee reviews the employment agreements at
the time such agreements are entered into in order to determine current market terms for the particular executive and agreement.
See “Executive Compensation – Employment Agreements,” “Executive Compensation – Payments Upon Termination
of Employment,” and “Executive Compensation – Change in Control Agreements” for a discussion of the terms
of the employment agreement.
We do not currently have an employment agreement
with our Chief Financial Officer, Ms. Judy or our Chief Operating Officer, Mr. Walthall.
Total Compensation and Elements of Compensation
Our principal focus is on total compensation,
a significant portion of which is based on each executive’s performance and is not guaranteed. Although we do informally
review what other companies within our industry or other companies of comparable size, growth, performance and complexity are offering
to their executives, we believe the appropriate level of compensation is determined through careful consideration of the individual
employee and our business goals. We consider a variety of factors in determining the total compensation for our named executive
officers, including their backgrounds, industry knowledge, special skill sets and responsibilities.
Our executive compensation program primarily
consists of base salary, annual short-term incentives in the form of cash awards, and long-term incentives in the form of restricted
stock and/or stock options. We also provide our named executive officers with minimal perquisites and personal benefits. In addition,
we provide our named executive officers with the ability to contribute a portion of their earnings to our 401(k) plan. Our 401(k)
plan is available generally to all of our employees. We also maintain a nonqualified deferred compensation plan under which our
named executive officers may defer a portion or all of their salary and bonus to be paid following the executive’s termination,
death or other date specified upon the executive’s election to make such deferrals. See “Executive Compensation –
Deferred Compensation Plan” and “Executive Compensation – Change in Control Agreements” for a discussion
of the terms of the nonqualified deferred compensation plan.
Base Salary
We offer what we believe to be competitive base
salaries to our named executive officers. The base salary must be sufficient to attract talented executives and provide a secure
base of cash compensation. Due to the relatively small size of our industry and the limited number of public competitors, the compensation
committee has not engaged in any formal benchmarking of base salary or other elements of compensation; however, the committee has
set base salary levels for our named executive officers to be generally competitive in relation to salary levels of executive officers
in other companies within our industry or other companies of comparable size, growth, performance and complexity, while also taking
into consideration the executive officer’s position, responsibility and special expertise. Annual base salary increases are
not assured, and adjustments to base salary take into account subjective factors such as the executive’s performance during
the prior year, responsibilities and experience. During fiscal year 2020, the compensation committee determined, based on an informal
review of market compensation practices and the Company’s performance in the past two fiscal years since Mr. Williams and
Ms. Judy assumed their current roles, that adjustments should be made to the base salaries for each of the named executive officers
to enhance the market competitiveness of the Company’s executive compensation program and to further incentivize and reward
our executives for making decisions that promote the long-term value of the Company and the best interests of our stockholders.
Effective December 1, 2019, Mr. Williams and Ms. Judy received a 60% increase in base salary to $750,000 and $400,000, respectively,
and Mr. Walthall’s base salary was also set at $400,000 base salary in connection with his promotion to COO. During fiscal
year 2019, Mr. Williams received a 9% increase in base salary to $467,500 and Ms. Judy received an 11% increase in base salary
to $250,000. These increases were primarily based on the Company’s strong financial performance during the prior fiscal year
following their promotions to CEO and CFO, respectively.
Short-Term Incentive Compensation
Our short-term incentive plans for our named
executive officers, which are based on the terms of Mr. Williams’ 2015 employment agreement, are intended to drive short-term
operating and financial results deemed crucial to our long-term success. The compensation committee adopted short-term incentive
plans for Ms. Judy and Mr. Walthall for fiscal year 2020 similar to the short-term incentive plan for Mr. Williams. Our program
entails granting annual cash incentive bonuses which are dependent on our performance. The purpose of the annual cash incentive
bonuses is to reflect each named executive officer’s breadth of experience and responsibility, and to make the cash component
of his or her compensation competitive. These cash incentive bonuses are a material portion of their overall compensation. All
such cash incentive bonuses are subject to our compensation committee’s discretion to award cash incentives greater than
the target if deemed appropriate. Our compensation committee also administers the calculation of amounts earned under the short-term
incentive plans.
The performance criteria for our short-term
incentive plans for Mr. Williams and Ms. Judy are based on fully diluted GAAP earnings per share. The performance criteria for
our short-term incentive plan for Mr. Walthall is based on net income. Under the short-term incentive plans, potential bonus payments
for fiscal 2020 ranged from zero to $133,000 for Mr. Williams, zero to $106,400 for Ms. Judy, and zero to $107,250 for Mr. Walthall,
depending on our performance as related to our fully diluted GAAP earnings per share or net income goals, as applicable, with target
amounts of $100,000, $80,000 and $65,000, respectively. Our compensation committee set the awards based on the executive’s
duration of employment with us, job responsibilities, industry knowledge, special skills and performance. The performance goals
are set at levels that our compensation committee considers attainable, but not assured, and representative of solid operating
and financial performance within our industry.
Under the short-term incentive plans, the actual
bonus amount received is based on a fraction or multiple of the target bonus amount depending on the Company’s achievement
of fully diluted GAAP earnings per share or net income goals for the fiscal year set forth in the respective short-term incentive
plans. Mr. Williams’ and Ms. Judy’s target bonuses are based on the achievement of fully diluted GAAP earnings per
share relative to projected fully diluted GAAP earnings per share. Mr. Walthall’s target bonus is based on the achievement
of actual net income relative to budgeted net income.
The following table shows the bonus amount payable
to Mr. Williams and Ms. Judy at certain percentages of actual fully diluted GAAP earnings per share to projected fully diluted
GAAP earnings per share:
Actual GAAP Earnings Per Share to Projected GAAP Earnings Per Share1
|
Bonus Amount Payable
|
95-99%
|
0.67 of Target Bonus Amount
|
100-104%
|
1.00 of Target Bonus Amount
|
105% or greater
|
1.33 of Target Bonus Amount
|
1 Actual and projected GAAP earnings per share amounts are
determined on a fully diluted basis.
The following
table shows the bonus amount payable to Mr. Walthall at certain percentages of actual net income to budgeted net income:
Actual Net Income to
Budgeted Net Income 1
|
Bonus Amount Payable
|
95-99%
|
0.67 of Target Bonus Amount
|
100-105%
|
1.00 of Target Bonus Amount
|
106% or greater
|
1.65 of Target Bonus Amount
|
1 Actual and projected GAAP earnings per share amounts are
determined on a fully diluted basis.
Based on the Company’s financial results
for fiscal 2020, the compensation committee determined that fully diluted earnings per share for fiscal 2020 exceeded the maximum
fully diluted earnings per goal, and therefore, Mr. Williams and Ms. Judy received short-term incentive plan awards of $133,000
and $106,400, respectively, or 1.33 times the target bonus amount. For Mr. Walthall, the compensation committee determined
that the Company’s actual net income for fiscal 2020 relative to budgeted net income fell within the target performance range;
however, actual net income would have exceeded the maximum performance range but for the increase in the Company’s allowance
for credit losses at April 30, 2020 due to the effects of the COVID-19 pandemic. Therefore, the committee exercised its discretion
to award Mr. Walthall a short-term incentive plan payment of $107,250, or 1.65 times the target bonus amount. The committee
believes this adjustment to Mr. Walthall’s short-term incentive award was appropriate in light of the unprecedented circumstances
caused by the pandemic in the Company’s fourth quarter.
The compensation committee does not intend to
adopt any short-term incentive plans for the Company’s named executive officers for fiscal year 2021 in light of the substantial
base salary increases for each executive effective in December 2019. The committee plans to continue to evaluate the Company’s
annual short-term cash incentive compensation program and objectives and may in the future adopt short-term incentive plans for
the named executive officers with performance criteria and other terms which may or may not be similar to the fiscal year 2020
short-term incentive plans.
Long-Term Incentive Compensation
Our compensation objective of inducing executives
to remain in our employ as well as aligning their interests with those of our stockholders leads us to make periodic equity awards.
These awards provide incentives for our named executive officers to remain with us over the long term and gives the compensation
committee additional flexibility to reward superior performance by our named executive officers. We believe that dependence on
equity for a significant portion of a named executive officer’s compensation more closely aligns such executive’s interests
with those of our stockholders, since the ultimate value of such compensation is linked directly to our stock price.
We utilize our two equity incentive plans for
our long-term incentive compensation, the America’s Car-Mart, Inc. Amended and Restated Stock Option Plan, referred to in
this proxy statement as the Restated Option Plan, and the America’s Car-Mart, Inc. Amended and Restated Stock Incentive Plan,
referred to in this proxy statement as the Restated Incentive Plan. The allocation of long-term incentive compensation between
stock options and restricted stock is generally made with the goal of rewarding long-term service with the issuance of restricted
shares and rewarding efforts related to increasing the stock price over the long-term with the issuance of stock options.
Under Mr. Williams’ prior employment agreement
effective May 1, 2015, Mr. Williams was granted stock options on the date of our 2015 annual meeting, which vested in full at the
end of fiscal year 2020. A portion of these stock options were subject to time-based vesting while the remainder were subject to
performance vesting based on the attainment of certain cumulative consolidated net income growth goals. See “Executive Compensation
– Employment Agreements” for a discussion of the terms of these long-term incentive compensation awards to our named
executive officers.
Based on the Company’s financial results
for fiscal 2018, on May 8, 2018, the compensation committee granted Mr. Williams an award of 120,000 stock options, which will
vest in their entirety (or “cliff” vest) on May 8, 2023.
On March 1, 2018, the compensation committee
granted 10,000 restricted shares of our common stock in connection with her promotion to Chief Financial Officer as an incentive
for her future performance with the Company. These shares will cliff vest on March 1, 2028.
On December 30, 2019, the compensation committee
granted 100,000, 50,000 and 50,000 shares of our common stock to Mr. Williams, Ms. Judy, and Mr. Walthall, respectively, which
will vest 20% per year for each of the next five years. The purpose of these awards was to enhance the market competitiveness and
retention value of total compensation of the Company’s named executives, to promote continued focus by executive management
on long-term performance and increasing stockholder value and to further align the executives’ interests with the interests
of our stockholders by increasing their ownership stake in the Company. These awards were also based on the Company’s performance
during fiscal years 2018 and 2019, primarily a 166% increase in the Company’s stock price, strong diluted earnings per share
growth, improved credit loss results, continued growth in finance receives, and strong cash flows.
The compensation committee does not have any
current plans to make additional specific grants of stock options or restricted stock to our named executive officers. The compensation
committee may in the future grant additional equity awards to our named executives as part of our strategy of providing meaningful
long-term performance-based incentives for our management team in order to more closely align management’s interest with
the interests of our stockholders. However, the committee does not intend to grant any comparably sized awards to the December
2019 awards during fiscal year 2021.
Perquisites and Personal Benefits
Our named executive officers receive additional
compensation consistent with our philosophy of hiring and retaining key personnel. Such perquisites include executive health insurance,
automobile allowances, club dues and matching contributions to our 401(k) plan. See “Executive Compensation – Summary
Compensation Table for Fiscal Years 2020, 2019 and 2018” for the aggregate incremental cost to us of such benefits.
Deductibility of Executive Compensation
Section 162(m) of the Code generally limits
the deductibility of compensation paid to our named executive officers to $1 million during any fiscal year. Historically, Section
162(m) has not been a material consideration for our compensation committee due to the levels and types of compensation paid to
our named executive officers. The compensation committee considers the potential consequences of the deduction limitation of Section
162(m) in relation to our compensation arrangements and may structure our compensation arrangements for our executive officers
in order to avoid the deduction limitation of Section 162(m). However, the compensation committee considers many factors when designing
its compensation arrangements in addition to the deductibility of the compensation and maintains the flexibility to grant awards
or pay compensation amounts that are non-deductible if they believe it is in the best interest of our Company and our stockholders.
Accounting for Stock-Based Compensation
Stock-based compensation expense is computed
in accordance with accounting rules that are a part of GAAP as set forth in Financial Accounting Standards Board’s Accounting
Standards Codification Topic 718. The expense related to equity compensation has been and will continue to be a material consideration
in our overall compensation program.
Risk Considerations in our Compensation Program
The compensation committee is responsible for
reviewing and overseeing the compensation and other benefits structure applicable to our employees generally. We do not believe
that our compensation policies and practices for our employees give rise to risks that are reasonably likely to have a material
adverse effect on our company. In reaching this conclusion, we considered the following factors:
|
·
|
Our compensation program is designed to provide a combination of both fixed and variable incentive
compensation.
|
|
·
|
The variable portions of compensation are designed to reward both annual performance and longer-term
performance. We believe this lessens any incentive for short-term risk taking that could be detrimental to our company’s
long-term best interests.
|
|
·
|
A significant portion of our management’s compensation is based on the performance of our
company as a whole.
|
Summary Compensation Table for Fiscal Years 2020, 2019, and 2018
The following table provides certain information
concerning compensation earned for services rendered in all capacities by our named executive officers during the fiscal years
ended April 30, 2020, 2019 and 2018.
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards 1
($)
|
Option
Awards 1
($)
|
Non-Equity Incentive Plan Compensation
($)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)
|
All Other Compensation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Jeffrey A. Williams,
President, Chief Executive Officer
|
2020
2019
2018
|
$572,894
$440,962
$401,609
|
-
-
-
|
-
-
-
|
$4,172,000
$2,496,000
-
|
$133,000
$119,700
$79,800
|
-
-
-
|
$45,947 2
$39,122 2
$36,399 2
|
$4,923,841 $3,095,784
$517,808
|
Vickie D. Judy,
Chief Financial Officer
|
2020
2019
2018
|
$305,962
$232,308
$165,577
|
$106,400
$75,000
$5,000
|
-
-
$504,500
|
$2,086,000
-
-
|
-
-
-
|
-
-
-
|
$39,991 3
$32,439 2
$12,155 2
|
$2,538,353
$339,747
$687,232
|
Leonard L. Walthall,
Chief Operating Officer
|
2020
|
$305,962
|
$107,250
|
-
|
$2,086,000
|
-
|
-
|
$35,464 4
|
$2,534,676
|
_________________
1 In accordance with SEC
rules, the amounts shown reflect grant date fair value of the awards calculated pursuant to Financial Accounting Standards Board
Codification (ASC) 718, Compensation – Stock compensation. Refer to “Financial Statements and Supplementary Data –
Notes to Consolidated Financial Statements – Note K: Stock-Based Compensation Plans” included in our Annual Report
on Form 10-K filed on June 24, 2020 for the relevant assumptions used to determine the valuation of our option awards. Performance
based awards are reflected assuming the performance criteria are met and awards become 100% vested.
2 For fiscal 2020, Mr.
Williams’ all other compensation included - $2,100 for use of company automobile, $4,111 for club dues, $10,396 for matching
contributions to our 401(k) plan, $576 for insurance premiums, $880 for Christmas bonus and $27,884 for premiums paid under our
executive health insurance plan.
3 For fiscal 2020, Ms.
Judy’s all other compensation included - $5,600 for use of company automobile, $9,063 for matching contributions to our 401(k)
plan, $576 for insurance premiums, $840 for Christmas bonus, and $23,912 for premiums paid under our executive health insurance
plan.
4 For fiscal 2020, Mr.
Walthall’s all other compensation included - $6,850 for use of company automobile, $5,350 for matching contributions to our
401(k) plan, $576 for insurance premiums, $1,060 for Christmas bonus, and $21,628 for premiums paid under our executive health
insurance plan.
Our named executive officers are entitled to
all benefits generally made available to our employees, including the eligibility to participate in our 401(k) plan. Our 401(k)
plan is intended to be a tax-qualified defined contribution plan under Section 401(k) of the Code. In general, all of our employees
who are at least 21 years of age are eligible to participate in our 401(k) plan immediately upon hire. Our 401(k) plan includes
a salary deferral arrangement pursuant to which the participants may contribute up to the maximum amount permitted by the Code.
We may make both matching and additional contributions, subject to certain Code limitations, at the discretion of our board of
directors. A separate account is maintained for each participant in our 401(k) plan. The portion of a participant’s account
attributable to his or her own contributions is 100% vested. Distributions from our 401(k) plan may be made in the form of a lump
sum cash payment or, for required minimum distribution, in installment payments.
Grants of Plan-Based Awards during Fiscal Year 2020
The following table provides certain information
concerning the grants of plan-based awards for each named executive officer during fiscal year 2020.
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
All Other Stock Awards:
Number of Shares of Stocks or Units
(#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
|
Name
|
Grant
Date
|
Threshold
($)1
|
Target
($)1
|
Maximum
($)1
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
Exercise or Base
Price of
Option
Awards
($/Sh)
|
Grant
Date Fair
Value of
Stock and
Option
Awards 2
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
Jeffrey A. Williams
|
12/30/2019
|
$67,000
|
$100,000
|
$133,000
|
-
|
-
|
-
|
-
|
100,000
|
$109.06
|
$4,172,000
|
Vickie D. Judy
|
12/30/2019
|
$53,600
|
$80,000
|
$106,400
|
-
|
-
|
-
|
-
|
50,000
|
$109.06
|
$2,086,000
|
Leonard L. Walthall
|
12/30/2019
|
$43,550
|
$65,000
|
$107,250
|
-
|
-
|
-
|
-
|
50,000
|
$109.06
|
$2,086,000
|
_________________
1 These amounts represent
the threshold, target and maximum amounts of possible cash incentive bonus payments to the named executive officer for fiscal 2020
based upon attainment of our projected fully diluted GAAP earnings per share (for Mr. Williams and Ms. Judy) or net income (for
Mr. Walthall) for such fiscal year pursuant to the named executive officers’ short-term incentive plans. See “Executive
Compensation – Compensation Discussion and Analysis – Short-Term Incentive Compensation” for additional information
regarding these possible cash incentive bonus payments. The actual cash incentive bonus payments earned, if any, are reported in
the Summary Compensation Table on page 31 of this proxy statement.
2 In accordance with SEC
rules, the amounts shown reflect grant date fair value of the awards calculated pursuant to Financial Accounting Standards Board
Codification (ASC) 718, Compensation – Stock compensation.
The stock options granted to Mr. Williams, Ms.
Judy and Mr. Walthall on December 30, 2019 will vest 20% per year for each of the next five years.
Employment Agreements
Jeffrey A. Williams. On
February 27, 2020, we entered into a new employment agreement with Mr. Williams to be effective as of May 1, 2020. This agreement
replaces our employment agreement with Mr. Williams covering his employment and compensation from May 1, 2015 through fiscal year
2020. The following is a discussion of certain terms of these agreements, including the compensation earned by and paid to Mr.
Williams for fiscal year 2020 pursuant to his prior employment agreement.
Under the terms of his new employment agreement,
Mr. Williams will continue to serve as a senior executive officer of the Company’s operating subsidiary and will receive
an annual base salary of $750,000, or such higher annual salary approved by the Board of Directors. Mr. Williams has the right
to participate in any operating subsidiary 401(k) profit sharing plan, as well as the medical and life insurance programs offered
by the Company’s operating subsidiary and the Company’s nonqualified deferred compensation plan. See “Executive
Compensation – Deferred Compensation Plan” for more information regarding the nonqualified deferred compensation plan.
He will also be entitled to earn an annual cash bonus under any incentive bonus plan in effect from time to time or as otherwise
determined by the Committee and will be eligible for long-term incentive awards under the Company’s Amended and Restated
Stock Option Plan and its Amended and Restated Stock Incentive Plan. The term of the employment agreement is for one year, which
will automatically renew for successive one-year periods on May 1 of each year until notice of termination is given by either party.
Prior to entering into his new employment agreement,
the board of directors approved an increase to Mr. Williams’ annual salary to $750,000 effective December 1, 2019. Mr. Williams
previously received an annual salary of $467,500 approved by our board of directors effective January 1, 2019. Mr. Williams also
had the right under his prior employment agreement to participate in any operating subsidiary 401(k) profit sharing plan, as well
as the medical and life insurance programs offered by our operating subsidiary and the Company’s nonqualified deferred compensation
plan.
The new employment agreement with Mr. Williams
contains an agreement not to compete and a covenant against the solicitation of employees and customers for the term of his employment
and a period of two years thereafter, provisions against the use and disclosure of trade secrets and other confidential information
for the term of employment and an indefinite period thereafter, and certain other customary covenants and restrictions. Mr. Williams’
prior employment agreement contained similar covenants not to compete and not to solicit the Company’s employees and customers
and provisions against the use and disclosure of trade secrets and confidential information. The non-compete and non-solicitation
covenants under the prior agreement covered his term of employment and one year thereafter.
Under his prior employment agreement, Mr. Williams
was entitled to earn an annual incentive bonus during the term beginning May 1, 2015 and ending April 30, 2020. Such incentive
bonus was based upon the attainment of our fully diluted GAAP earnings per share for each fiscal year. Mr. Williams’ targeted
bonus potential was $80,000 for fiscal year 2020. However, in light of Mr. Williams’ elevation to CEO in fiscal year 2018,
the compensation committee increased the targeted bonus amount for fiscal year 2020 to $100,000. If our actual fully diluted GAAP
earnings per share equaled 95-99% of the projected fully diluted GAAP earnings per share, the bonus for each fiscal year would
be the targeted bonus potential amount for such year multiplied by 0.67. If our actual fully diluted GAAP earnings per share equaled
100-104% of the projected fully diluted GAAP earnings per share, the bonus for each fiscal year would be the targeted bonus potential
amount for such year multiplied by 1.0. If our actual fully diluted GAAP earnings per share equaled 105% or more of the projected
fully diluted GAAP earnings per share, the bonus for each fiscal year would be the targeted bonus potential amount for such year
multiplied by 1.33. Mr. Williams earned a $133,000 bonus for fiscal year 2020 as the actual fully diluted GAAP earnings per share
of $7.12 was 136% of the projected fully diluted GAAP earnings per share of $5.23.
Under the prior employment agreement, in August
2015 Mr. Williams was granted non-qualified stock options to purchase an aggregate of 30,000 shares of our common stock pursuant
to our Restated Option Plan. Mr. Williams received an option for 10,000 shares subject to time-based vesting which “cliff”
vested on April 30, 2020. He also received an option for 20,000 shares subject to performance vesting based on the Company’s
consolidated net income growth during fiscal years 2016 through 2020. For the performance-based option, if the Company’s
cumulative consolidated net income growth, calculated on a compound basis, for the five fiscal years ending April 30, 2020 was
equal to 10% or more, the option would vest in full (20,000 shares) on the fifth anniversary of the grant date. If the Company’s
cumulative consolidated net income growth, calculated on a compound basis, for the five fiscal years ending April 30, 2020 was
equal to 5% or more but less than 10%, one half of the option (10,000 shares) would vest on the fifth anniversary of the grant
date. If the Company’s cumulative consolidated net income growth, calculated on a compound basis, for the five fiscal years
ending April 30, 2020 was less than 5%, the option would be forfeited. The Company’s cumulative consolidated net income growth
during the five-year period ended April 30, 2020, was 12%, and therefore, these performance-based options will vest in full on
August 5, 2020.
Each of Mr. Williams’ employment agreements
includes terms regarding certain payments to which he would be entitled upon termination of his employment with the Company or
in connection a change in control of the Company. See “Executive Compensation – Payments Upon Termination of Employment”
and “Executive Compensation – Change in Control Agreements,” respectively, for more information regarding payments
to which Mr. Williams would be entitled in connection with the termination of his employment with the Company or a change in control
of the Company.
Vickie D. Judy. We have
not previously had and do not currently have an employment agreement with Ms. Judy.
Leonard L. Walthall. We
have not previously had and do not currently have an employment agreement with Mr. Walthall.
Stock Plans
Restated Option Plan. In August
2007, our board of directors adopted the 2007 Option Plan, which was subsequently approved by our stockholders at our 2007 annual
meeting of stockholders. The 2007 Option Plan originally set aside 1,000,000 shares of our common stock for option grants to employees,
directors and certain independent contractors, consultants and advisors at a price not less than the fair market value of our common
stock on the date of grant or the par value per share of our common stock. Our stockholders approved an amendment to the 2007 Option
Plan on October 13, 2010 to increase the number of shares available under the 2007 Option Plan by 500,000 shares to 1,500,000 shares.
On June 10, 2015, our board of directors adopted the Restated Option Plan, which was subsequently approved by our stockholders
at our 2015 annual meeting of stockholders and which amended and restated the 2007 Option Plan. The Restated Option Plan extended
the plan for a new ten-year term, increased the number of shares available for stock option grants by 300,000 shares to 1,800,000
shares, and made certain other changes to the 2007 Option Plan. On August 29, 2018, our stockholders approved an amendment to the
Restated Option Plan to increase the number of shares available under the Restated Option Plan by 200,000 shares to 2,000,000 shares.
At July 8, 2020, there were 45,000 shares of common stock available for grant under the Restated Option Plan. See “Proposal
No. 4 – Approval of Amendment to Amended and Restated Stock Option Plan” for information regarding the proposal to
increase the authorized shares issuable under the Restated Option Plan. The Restated Option Plan will expire on June 10, 2025.
Under the Restated Option Plan, options may
be exercised in whole or in part, but in no event later than ten years from the date of grant with respect to incentive options.
Any incentive option granted to an individual who owns more than 10% of the total combined voting of all classes of our stock or
the stock of one of our subsidiaries may not be purchased at a price less than 110% of the fair market value on the date of grant,
and no such option may be exercised more than five years from the date of grant.
Stock Incentive Plan. In August
2005, our board of directors adopted the 2005 Incentive Plan, which was subsequently approved by our stockholders at our 2005 annual
meeting of stockholders. The 2005 Incentive Plan originally set aside 150,000 shares of our common stock for grants to our employees,
officers and directors. Our stockholders approved an amendment to the 2005 Incentive Plan on October 14, 2009 to increase the number
of shares available under the 2005 Incentive Plan by 200,000 shares to 350,000 shares. On June 10, 2015, our board of directors
adopted the Restated Incentive Plan, which was subsequently approved by our stockholders at our 2015 annual meeting of stockholders
and which amended and restated the 2005 Incentive Plan. The Restated Incentive Plan extended the plan for a new ten-year term,
included provisions designed to further the Company’s eligibility to deduct for federal income tax purposes certain performance-based
equity awards that may be granted to our named executive officers under the Restated Incentive Plan in accordance with Section 162(m)
of the Code (applicable to awards granted prior to November 2, 2017), and made certain other changes to the 2005 Incentive Plan.
The Restated Incentive Plan did not increase the number of shares available for issuance. However, on August 29, 2018, our stockholders
approved an amendment to the Restated Incentive Plan on August 29, 2018 to increase the number of shares available under the Restated
Incentive Plan by 100,000 shares to 450,000 shares. The Restated Incentive Plan will expire on June 10, 2025
Shares granted under the Restated Incentive
Plan have full voting rights prior to the date of vesting, if any; however, holders of any unvested shares must execute an irrevocable
proxy granting us the right to vote such shares until the shares vest. At July 8, 2020, there were 91,199 shares of common stock
available for grant under the Restated Incentive Plan.
Outstanding Equity Awards at 2020 Fiscal Year-End
The following table provides certain information
concerning the outstanding equity awards for each named executive officer as of April 30, 2020.
|
Option Awards
|
Stock Awards
|
Name
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights That Have Not Vested
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Jeffrey A. Williams
|
10,000
|
|
|
$ 46.47
|
08/05/25
|
|
|
|
|
|
|
20,0001
|
$ 46.47
|
08/05/25
|
|
|
|
|
|
120,0002
|
|
$ 54.85
|
05/08/28
|
|
|
|
|
|
100,0003
|
|
$ 109.06
|
12/30/29
|
|
|
|
|
Vickie D. Judy
|
|
1,2504
|
|
$ 53.02
|
05/22/25
|
5005
|
$ 32,9756
|
|
|
|
|
2,5004
|
$ 53.02
|
05/22/25
|
10,0007
|
$659,5006
|
|
|
|
10,0008
|
|
$ 26.37
|
03/02/26
|
|
|
|
|
|
50,0003
|
|
$ 109.06
|
12/30/29
|
|
|
|
|
Leonard L. Walthall
|
3,000
|
|
|
$ 50.25
|
11/20/24
|
10,0007
|
$659,5006
|
|
|
|
1,8754
|
|
$ 53.02
|
05/22/25
|
|
|
|
|
|
|
2,6254
|
$ 53.02
|
05/22/25
|
|
|
|
|
|
15,0008
|
|
$ 26.37
|
03/02/26
|
|
|
|
|
|
50,0003
|
|
$ 109.06
|
12/30/29
|
|
|
|
|
____________________
1 These options will vest
on August 5, 2020.
2 These options will “cliff”
vest on May 8, 2023.
3 These options will vest
in five annual installments beginning on December 30, 2020.
4 These options vested
on May 22, 2020.
5 These restricted shares
will “cliff” vest on May 22, 2022.
6 Fair value was calculated
by using the closing market price of our common stock on April 30, 2020 of $65.95.
7 These restricted shares
will “cliff” vest on March 1, 2028.
8 These options will “cliff”
vest on March 2, 2021.
Option Exercises and Stock Vested during Fiscal Year 2020
The following table provides certain information concerning the option
exercises and stock awards vested for each named executive officer during the fiscal year ended April 30, 2020.
|
Option Awards
|
Stock Awards
|
Name
|
Number of Shares
Acquired on Exercise
(#)
|
Value Realized on
Exercise 1
($)
|
Number of Shares
Acquired on Vesting
(#)
|
Value Realized on
Vesting
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
Jeffrey A. Williams
|
30,000 2
|
$2,409,300 2
|
-
|
-
|
Vickie D. Judy
|
2,500 3
|
$209,950 3
|
-
|
-
|
Leonard L. Walthall
|
1,000
|
$48,140
|
-
|
-
|
5,000 4
|
$397,250 4
|
-
|
-
|
____________________
1 Amount is calculated by using the closing
market price of our common stock as reported on NASDAQ on the date of exercise less the exercise price.
2 Includes 17,616 shares forfeited to pay the
exercise price and tax withholding pursuant to a net settlement arrangement.
3 Includes 1,637 shares forfeited to pay the
exercise price and tax withholding pursuant to a net settlement arrangement.
4 Includes 3,369 shares forfeited to pay the
exercise price and tax withholding pursuant to a net settlement arrangement.
Deferred Compensation Plan
On September 17, 2014, the compensation committee
of our board of directors approved the America’s Car-Mart, Inc. Nonqualified Deferred Compensation Plan, referred to in this
proxy statement as the Deferred Compensation Plan. The Deferred Compensation Plan is an unfunded, nonqualified deferred compensation
plan designed to allow a select group of management or highly compensated employees of the Company, including our named executive
officers, to save for retirement on a tax-deferred basis. The eligibility of each participant will be determined by the compensation
committee. The Deferred Compensation Plan is intended to comply with the requirements of Section 409A of the Code.
Under the terms of the Deferred Compensation
Plan, a named executive officer may defer a portion or all of his salary and bonus for any calendar year in which the plan is in
effect, provided that the executive makes an irrevocable election for such deferral prior to the end of the preceding calendar
year or, if permitted by the compensation committee, within 30 days after the executive first becomes eligible to participate in
the plan. Compensation amounts deferred under the Deferred Compensation Plan are credited or debited with earnings or losses based
on an investment fund, known as a “measurement fund,” elected by the executive at the time of his deferral election
from among several measurement funds that the compensation committee may select from time to time, although the deferred payments
are not actually invested in the measurement fund. The executive’s account balance under the Deferred Compensation Plan will
be distributed to the executive or his beneficiary upon the earliest of the executive’s termination, death or such other
date as selected by the executive upon his deferral election.
The Deferred Compensation Plan constitutes an
unsecured promise by the Company to pay benefits in the future. Participants in the Deferred Compensation Plan have the status
of general unsecured creditors of the Company. We (or one or more of our subsidiaries) are solely responsible for paying benefits
to plan participants and their beneficiaries.
No executives participated in the plan during fiscal year 2020.
Payments Upon Termination of Employment
The following narrative discusses potential
payments to which Mr. Williams, Ms. Judy and Mr. Walthall would be entitled upon termination of their employment not involving
a change in control of the Company and quantifies the payments to which they would have been entitled had their employment been
terminated as of April 30, 2020. See “Executive Compensation – Change in Control Agreements” for more information
regarding payments to which each named executive officer would be entitled in connection with a change in control of the Company.
Jeffrey A. Williams. Employment
Agreement effective through April 30, 2020. Pursuant to his prior employment agreement in effect through April 30, 2020, if
we terminated Mr. Williams without cause or due to disability, Mr. Williams’ base salary would have continued to be payable
through the term of the employment agreement. In addition, Mr. Williams would have been paid, within 60 days after termination,
the pro rata portion of any bonus earned through the date of termination, and all unvested restricted stock and stock options would
have immediately vested in full without regard to the achievement of any applicable performance goals; provided, however, that
any shares of restricted stock that were intended to constitute performance-based compensation within the meaning of Section 162(m)
of the Code (applicable to awards granted prior to November 2, 2017) would have become vested only to the extent provided under
the applicable restricted stock agreement. This provision has generally been in place in Mr. Williams’ employment agreement
since the inception of his earlier employment agreement in August 2007. Assuming Mr. Williams was terminated on April 30, 2020
and using the closing market price of our common stock on April 30, 2020 of $65.95, the aggregate estimated payment amounts to
Mr. Williams would have been $1,652,847.
If Mr. Williams’ employment was terminated
due to his death, pursuant to his prior employment agreement Mr. Williams’ estate would have been entitled to receive within
60 days after his death, or as soon thereafter as administratively practicable, his base salary then in effect through the end
of the calendar month in which his death occurred and the pro rata portion of any bonus earned through the date of his death. In
addition, all unvested restricted stock and stock options would have immediately vested in full without regard to the achievement
of any applicable performance goals, unless otherwise prohibited by the plans or award agreements applicable to such restricted
shares or stock options. Assuming Mr. Williams was terminated due to death on April 30, 2020 and using the closing market price
of our common stock on April 30, 2020 of $65.95, the aggregate estimated payment amounts to Mr. Williams would have been $902,847.
If Mr. Williams’ employment was terminated
due to his resignation or by the Company for cause, which includes an act involving moral turpitude detrimental to the economic
interests of the Company, conviction of a felony, intentional failure to perform or gross negligence in the performance of his
duties, and any other breach of the employment agreement not cured within 30 days, the Company would have had no obligation under
his current employment agreement to pay base salary or benefits beyond the last day worked. In addition, any unvested shares of
restricted stock or stock options would have been forfeited unless Mr. Williams’ service on our board of directors continued
uninterrupted.
Employment Agreement effective May 1, 2020.
Pursuant to his new employment agreement, if the Company terminates Mr. Williams without cause, Mr. Williams will be entitled
to receive, within 60 days after termination, a lump sum payment equal to 24 months of his base salary then in effect, plus the
pro rata portion of any bonus earned through the date of termination. If Mr. Williams’ employment is terminated due to disability,
he will be entitled to receive, within 60 days after termination, a lump sum payment equal to 24 months of his base salary then
in effect, less any amounts payable to Mr. Williams under the Company’s disability insurance policy. If Mr. Williams’
employment is terminated due to his death, his estate will be entitled to receive, within 60 days after his death or as soon thereafter
as practicable, his base salary then in effect through the end of the calendar month in which his death occurs, plus the pro rata
portion of any bonus earned through the date of his death. In addition, upon Mr. Williams’ termination without cause or due
to his death or disability, all of his unvested restricted stock and stock options will immediately vest in full without regard
to the achievement of any applicable performance goals, unless otherwise prohibited by the plans or award agreements applicable
to such restricted shares or stock options. If Mr. Williams resigns or is terminated for cause, the Company would have no obligation
to pay base salary or benefits beyond the last day worked, and any unvested shares of restricted stock or stock options would be
forfeited unless Mr. Williams’ service on our Board of Directors continues uninterrupted.
Vickie D. Judy. Because we do
not have an employment agreement with Ms. Judy, in the event her employment is terminated for any reason, the Company would have
no obligation to pay base salary or benefits beyond the last day worked. However, if her employment is terminated due to her death
or disability, a portion of her unvested shares of restricted stock will become fully vested as of the date of her death or termination
due to disability. Assuming Ms. Judy’s employment was terminated due to her death or disability on April 30, 2020 and using
the closing market price of our common stock on April 30, 2020 of $65.95, the aggregate estimated payment amounts to Ms. Judy would
have been $671,702.
Leonard L. Walthall. Because we
do not have an employment agreement with Mr. Walthall, in the event his employment is terminated for any reason, the Company would
have no obligation to pay base salary or benefits beyond the last day worked. However, if his employment is terminated due to his
death or disability, a portion of his unvested shares of restricted stock will become fully vested as of the date of his death
or termination due to disability. Assuming Mr. Walthall’s employment was terminated due to his death or disability on April
30, 2020 and using the closing market price of our common stock on April 30, 2020 of $65.95, the aggregate estimated payment amounts
to Mr. Walthall would have been $671,702.
Change in Control Agreements
Certain of our executive compensation plans
and agreements, including our employment agreements with Mr. Williams, our Restated Option Plan and certain of our restricted stock
agreements for shares granted under our Restated Incentive Plan, contain change in control provisions (collectively, the “Change
in Control Provisions”) entitling our executives to certain benefits upon the occurrence of certain events, involving a change
in control of the Company. Payments to our named executive officers under these Change in Control Provisions are triggered upon
an involuntary termination of the executive’s employment, or a voluntary termination of employment by the executive for good
reason (as defined in the Change in Control Provisions), in connection with a change in control of the Company (referred to as
a double trigger event). Under the Change in Control Provisions, a change in control generally means the following:
|
•
|
the acquisition by an individual, entity or group (within the meaning
of Section 409A of the Code) of ownership of our stock that, together with stock held by such person, constitutes more than 50%
of the total fair market value or total voting power of our stock;
|
|
|
|
|
•
|
the acquisition by an individual, entity or group (within the meaning
of Section 409A of the Code) during the twelve-month period ending on the date of the most recent acquisition by such person of
ownership of our stock possessing 35% or more of the total voting power of our stock;
|
|
|
|
|
•
|
the replacement of a majority of the members of our board of directors
during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of our board
of directors prior to the date of the appointment or election; or
|
|
|
|
|
•
|
the acquisition by an individual, entity or group (within the meaning
of Section 409A of the Code) during the twelve-month period ending on the date of the most recent acquisition by such person of
our assets that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of our
assets immediately prior to such acquisition.
|
If a double trigger event occurs in connection
with a change in control of the Company:
|
·
|
under Mr. Williams’ prior employment agreement in effect through April 30, 2020, we were
required to pay Mr. Williams a lump sum cash payment equal to 2.99 times his then current base salary on the 60-day anniversary
of such double trigger event and all unvested restricted stock and stock options previously granted vest in full, without regard
to the achievement of any applicable performance goals, unless otherwise prohibited by the applicable equity compensation plans
and award agreements;
|
|
·
|
under Mr. Williams’ new employment agreement effective May 1, 2020, we must pay Mr. Williams
a lump sum cash payment equal to 24 months of his then current base salary and all unvested restricted stock and stock options
previously granted vest in full, without regard to the achievement of any applicable performance goals, unless otherwise prohibited
by the applicable equity compensation plans and award agreements;
|
|
·
|
under the Restated Option Plan, all unvested stock options previously granted to plan participants
will vest in full, without regard to the achievement of any applicable performance goals, unless otherwise prohibited by the applicable
stock option agreements or the participant’s employment agreement; and
|
|
·
|
under certain of our restricted stock award agreements, all unvested shares of restricted stock
subject to such agreements held by the participant on the date of the double trigger event will automatically become fully vested.
|
Such payments are referred to in this proxy
statement as change in control payments.
A “double trigger event” (as defined
in the Change in Control Provisions) occurs if, within the period beginning six months before a change in control of the Company
and ending two years after such change in control, the executive’s employment is involuntarily terminated by the Company
or our operating subsidiary (or the surviving or acquiring entity, as the case may be), for any reason other than for cause, or
the executive terminates his or her employment for good reason. A termination for “cause” generally consists of a breach,
gross negligence or wrongdoing by the executive officer. For purposes of the Change in Control Provisions, “good reason”
generally means the executive’s resignation within 30 days after the occurrence of any of the following events:
|
·
|
a significant reduction of the executive’s duties, authority, responsibilities, or reporting
relationships or the assignment to him or her of such reduced duties, authority, responsibilities, or reporting relationships,
without his or her written consent; provided, however, that the change in control is not, in and of itself, a material adverse
change in the executive’s duties, authority, responsibilities or reporting relationships;
|
|
·
|
a material reduction in the executive’s base salary, bonus structure or benefits, with the
result that the executive’s overall benefits package is significantly reduced; or
|
|
·
|
the relocation of the executive’s principal work location to a facility or a location more
than 50 miles from his then present principal work location, without his or her written consent.
|
In addition, if, within six months prior to
the change in control, we terminated Mr. Williams, Ms. Judy or Mr. Walthall without cause and the termination is related to the
change in control, then, for purposes of his or her change in control payments, he or she will be treated as being employed on
the date the change in control becomes effective. In such case, Mr. Williams will receive the change in control payment in addition
to any other compensation to which he is entitled under his employment agreement as a result of his termination, except that under
his new employment agreement effective May 1, 2020, Mr. Williams will not be entitled to receive any additional payments or benefits
to which he would otherwise be entitled in the event his employment is terminated by the Company without cause..
Under the terms of Mr. Williams’ employment
agreements, in the event the change in control payments and any other payments to which Mr. Williams may be entitled in connection
with the change in control of the Company equal or exceed in the aggregate three times “base amount” (as defined by
Section 280G of the Code) with respect to his compensation, which would result in excise taxes being owed by him under Code Section
4999 and the loss of a tax deduction by the Company under Code Section 280G for the excess payment above the base amount, the Company
and Mr. Williams agree to retain an independent accounting firm to evaluate whether he would be better off by receiving the full
change in control payments and paying the excise tax or by the Company reducing the aggregate payment amount so that it would not
be subject to excise taxes under Section 4999 of the Code. Based on the accountant’s finding that Mr. Williams would be better
off receiving the full payment amount and paying the required excise taxes, no change will be made in the change in control payments
and the Company will forego its deduction for the amount of such payments above the base amount. Based on the accountant’s
finding that Mr. Williams would be better off receiving the reduced change in control payments and not being subject to excise
tax, the change in control payments will be reduced to an aggregate amount that does not equal or exceed three times the base amount
and the Company will retain its eligibility to deduct the amount actually paid.
Assuming that (1) a double trigger event occurred
on April 30, 2020, and (2) Mr. Williams’ employment was terminated by him for good reason in connection with the change in
control, and using the closing market price of our common stock on April 30, 2020 of $65.95, the aggregate estimated payment amount
to Mr. Williams would have been $3,145,347. Assuming that (1) a double trigger event occurred on April 30, 2020, and (2) Mr. Williams’
employment was terminated by the Company without cause in connection with the change in control, and using the closing market price
of our common stock on April 30, 2020 of $65.95, the aggregate estimated payment amount to Mr. Williams would have been $3,895,347,
which includes compensation to which he would be entitled for his termination without cause.
Assuming that a double trigger event occurred
on April 30, 2020, and using the closing market price of our common stock on April 30, 2020 of $65.95, the aggregate estimated
payment amount to Ms. Judy would have been $743,047 regardless of whether her employment was terminated by her for good reason
or by the Company without cause in connection with the change in control.
Assuming that a double trigger event occurred
on April 30, 2020, and using the closing market price of our common stock on April 30, 2020 of $65.95, the aggregate estimated
payment amount to Mr. Walthall would have been $764,174 regardless of whether his employment was terminated by him for good reason
or by the Company without cause in connection with the change in control.
If Mr. Williams is a “specified employee”
within the meaning of Section 409A of the Code, any benefits or payments that constitute a “deferral of compensation”
under the Section 409A of the Code that become payable as a result of his termination for reasons other than death, and become
due under the employment agreement during the first six months after termination of employment, will be delayed and all such delayed
payments will be paid to Mr. Williams in full in the seventh month after the date of termination and all subsequent payments will
be paid in accordance with their original payment schedule.
Chief Executive Officer Pay Ratio
The following information about the relationship
between the compensation of our associates and the compensation of our Chief Executive Officer is provided in compliance with the
requirements of Item 402(u) of Regulation S-K under the Exchange Act (“Item 402(u)”). In fiscal 2020, the estimated
median of the annual total compensation of our associates, excluding our Chief Executive Officer, Mr. Williams, was $46,500. Our
Chief Executive Officer’s annual total compensation for fiscal 2020, calculated at the summary compensation table above,
was $4,923,841. The resulting estimated ratio of the annual total compensation of the Chief Executive Officer to the median of
the annual total compensation of all associates was 106 to 1.
We took the following steps in identifying the
median of the annual compensation of all our associates. We determined that as of April 30, 2020, we employed 3,050 associates,
all located in the United States. This number includes all the individuals determined to be employees for federal tax purposes
during the year, whether full-time, part-time, seasonal, or temporary. Due to changes within our associate population, we determined
a new median associate for fiscal year 2020. We determined the median employee by conducting a full analysis of this employee population
using total pay, which included regular wages, overtime, bonuses, commissions and any other taxable income.
For full-time associates that were not employed
for the whole year, regular wages were annualized. For part-time associates that were not employed for the whole year, we calculated
the average hours worked per week for each associate, and annualized regular wages based on a 52-week fiscal year. No adjustments
were made for seasonal or temporary associates.
The resulting pay ratio was calculated in a
manner consistent with Item 402(u) and we believe it constitutes a reasonable estimate. However, as contemplated by Item 402(u),
we relied on methods and assumptions that we determined to be appropriate for calculating the Company’s pay ratio. Other
public companies will use methods and assumptions that differ from the ones we chose but are appropriate for their circumstances.
It may therefore be difficult to compare our reported pay ratio to pay ratios reported by other companies.
TRANSACTIONS WITH RELATED PERSONS
In accordance with our audit committee charter,
our audit committee is responsible for reviewing and approving, or rejecting, any transactions with “related persons”
as defined by SEC rules and any potential conflicts of interest between us and any third party. The audit committee reviews and
considers such transactions on a case-by-case basis in light of all facts and circumstances and does not use any prescribed criteria
for approving or rejecting any proposed transaction or relationship.
For the fiscal
year ended April 30, 2020, there were no transactions with related persons required to be disclosed in this proxy statement.
AUDIT COMMITTEE REPORT
In accordance with the written charter adopted
by our board of directors, a copy of which is available on our website, the audit committee assists the board of directors in fulfilling
its responsibility for oversight of the quality and integrity of our accounting, auditing and financial reporting practices. During
the fiscal year ended April 30, 2020, the audit committee met five times and discussed internal control, accounting, auditing and
our financial reporting practices with our Chief Financial Officer and our independent auditors and accountants, Grant Thornton
LLP. In discharging its oversight responsibility as to the audit process, each member of our audit committee has reviewed our audited
financial statements as of and for the fiscal year ended April 30, 2020 and the audit committee held one meeting with management
and Grant Thornton LLP to discuss the audited financial statements prior to filing our annual report on Form 10-K. Our audit committee
also met with Grant Thornton LLP to discuss the matters required to be discussed by Auditing Standard No. 1301, Communications
with Audit Committees, issued by the Public Company Accounting Oversight Board, prior to filing our annual report on Form 10-K.
In addition, the audit committee has received
from Grant Thornton LLP the written disclosures and the letter required by the applicable requirements of the Public Company Accounting
Oversight Board regarding Grant Thornton LLP’s communications with the audit committee concerning independence and has discussed
with Grant Thornton LLP its independence in connection with its audit of our financial statements for the fiscal year ended April
30, 2020. Our audit committee has also considered whether Grant Thornton LLP’s provision of non-audit services to us is compatible
with maintaining such firm’s independence with respect to us and has determined that the provision of certain non-audit services
is consistent with and compatible with Grant Thornton LLP maintaining its independence. See “Principal Accounting Fees and
Services.” Based upon the foregoing reviews and discussions, the audit committee recommended to our board of directors that
the audited financial statements be included in our annual report on Form 10-K for the fiscal year ended April 30, 2020.
Daniel J. Englander, Chairman
Ann G. Bordelon
Ray C. Dillon
Jim von Gremp
Joshua G. Welch
COMPENSATION COMMITTEE REPORT
The compensation committee has reviewed and
discussed the Compensation Discussion and Analysis section of this proxy statement with management. Based upon such review and
discussion, the compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included
in this proxy statement.
Ann G. Bordelon, Chairman
Ray C. Dillon
Daniel J. Englander
Jim von Gremp
Joshua G. Welch
ANNUAL REPORT ON FORM 10-K
Our annual report on Form 10-K for the fiscal
year ended April 30, 2020, as filed with the SEC, is available to stockholders who make a written request for such report to our
Secretary at our offices, 1805 North 2nd Street, Suite 401, Rogers, Arkansas 72756. Copies of exhibits filed with that
report or referenced therein will be furnished to stockholders of record upon request and payment of our expenses in furnishing
such documents. Our annual report on Form 10-K (including exhibits thereto) and this proxy statement are also available by the
following link on our website at www.car-mart.com under the “SEC Filings” section, which is under the “Investor
Relations” section.
STOCKHOLDER PROPOSALS
Any proposal to be presented at the 2021 annual
meeting of stockholders must be received at our principal executive offices no later than March 19, 2021, directed to the attention
of the Secretary, for consideration for inclusion in our proxy statement and form of proxy relating to that meeting. In connection
with next year’s annual meeting, our bylaws provide that we must receive notice of a matter or proposal, including any nomination
of a director candidate, on or before May 18, 2021 for such proposal or nomination to be considered or voted upon at the annual
meeting. The persons appointed by our board of directors to act as the proxies for such annual meeting (named in the form of proxy)
will be allowed to use their discretionary voting authority with respect to any such matter or proposal at the annual meeting if
such matter or proposal is raised at that annual meeting. Any such proposals must comply in all respects with applicable laws,
including the rules and regulations of the SEC, and any stockholder nominations of director candidates must set forth the information
required in Article V, Section 2 of our bylaws. A copy of our bylaws may be obtained upon written request to the Secretary at the
address stated above.
OTHER MATTERS
Management does not know of any matter to be
brought before the meeting other than those referred to above. If any other matter properly comes before the meeting, the persons
designated as proxies will vote on each such matter in accordance with their best judgment.
APPENDIX A
AMERICA’S CAR-MART, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
Effective June 10, 2015
1.
|
Establishment; Effective Date; Purpose
|
(a) This
Amended and Restated Stock Option Plan (the “Plan”) of America’s Car-Mart, Inc., a Texas corporation (the
“Corporation”), is an amendment and restatement of America’s Car-Mart, Inc. 2007 Stock Option Plan, which
was adopted by the Board of Directors of the Corporation (the “Board”) on August 27, 2007 and approved by the
Corporation’s stockholders on October 16, 2007, and subsequently amended on August 27, 2010 and October 7, 2013. The effective
date of the Plan shall be June 10, 2015 (the “Effective Date”), subject to the approval of the Corporation’s
stockholders at the 2015 Annual Meeting. Awards may be granted under the Plan on and after the Effective Date and may be made pursuant
to and in accordance with agreements for the issuance thereof entered into prior to the Effective Date, but no Awards will be granted
under the Plan after the tenth (10th) anniversary of the Effective Date.
(b) The
purpose of the Plan is to encourage and enable selected employees, directors and independent contractors of the Corporation and
its Related Corporations to acquire or to increase their holdings of common stock of the Corporation (the “Common Stock”)
and other proprietary interests in the Corporation in order to promote a closer identification of their interests with those of
the Corporation and its stockholders, thereby further stimulating their efforts to enhance the efficiency, soundness, profitability,
growth and stockholder value of the Corporation. This purpose will be carried out through the granting of benefits (collectively
referred to herein as “Awards”) to selected employees, independent contractors and directors, including the
granting of incentive stock options that qualify as statutory stock options under Section 422(b) of the Code (“Incentive
Options”) and stock options that do not qualify as statutory stock options (“Nonqualified Options”)
to such participants. Incentive Options and Nonqualified Options shall be referred to herein collectively as “Options.”
For purposes of the Plan, the following terms
shall have the meaning indicated:
(a) “Administrator”
shall have the meaning given the term in Section 3(a) of the Plan.
(b) “Code”
means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder from time to time by the Secretary
of the Treasury (“Treasury Regulations”).
(c) “Disability”
shall mean the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of
not less than twelve months (or, in the case of Incentive Options, such other definition as required by Section 422 of the Code).
The Administrator may require the Participant to furnish proof of the existence of the Disability in accordance with Code Section
22(e)(3).
(d) “Option
Agreement” means any written agreement or agreements between the Corporation and the recipient of an Award pursuant to
the Plan relating to the terms, conditions and restrictions of Options.
(e) “Parent”
means any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation if each corporation
other than the Corporation owns stock possessing 50% or more of the total combined voting power of all classes of stock in another
corporation in the chain.
(f) “Participant”
means an individual, being otherwise eligible under this Section 5, selected by the Administrator as an individual to whom an Award
shall be granted under the Plan.
(g) “Predecessor”
means a corporation which was a party to a transaction described in Section 424(a) of the Code (or which would be so described
if a substitution or assumption under that Section had occurred) with the Corporation, or a corporation which is a Parent or Subsidiary
of the Corporation, or a predecessor of any such corporation.
(h) “Related
Corporation” means any Parent, Subsidiary or Predecessor of the Corporation.
(i) “Subsidiary”
means any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation if each
corporation other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in another corporation in the chain.
3.
|
Administration of the Plan
|
(a) The Plan shall be administered by the Board
of Directors of the Corporation. The Board may, in its sole discretion, delegate all or part of its administrative authority with
respect to the Plan to a committee of the Board (the “Committee”). For purposes herein, the Board, and, upon
its delegation of the administrative responsibilities for the Plan to the Committee, the Committee shall be referred to as the
“Administrator.” The Committee shall be comprised solely of two or more “non-employee directors,”
as said term is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
unless the Board determines that such committee composition is not necessary or advisable. Further, the Committee shall, unless
the Board determines otherwise, be comprised solely of two or more “outside directors,” as such term is defined under
Section 162(m) of the Code, or otherwise in accordance with Code Section 162(m). Further, the composition of the Committee shall
be in compliance with the applicable rules and regulations of the Nasdaq Stock Market.
(b) Any action of the Administrator with respect
to the Plan may be taken by a written instrument signed by all of the members of the Administrator and any such action so taken
by written consent shall be as fully effective as if it had been taken by a majority of the members at a meeting duly held and
called. Subject to the provisions of the Plan and consistent with the requirements necessary under Section 409A of the Code to
prevent any Option granted hereunder from constituting the deferral of compensation, and unless authority is granted to the chief
executive officer or president as provided in Section 3(c), the Administrator shall have full and sole authority in its discretion
to take any action with respect to the Plan including, without limitation, the authority (i) to determine all matters relating
to Awards, including selection of individuals to be granted Awards, the types of Awards, the number of shares of the Common Stock,
if any, subject to an Award, and all terms, conditions, restrictions and limitations of an Award, (ii) to prescribe the form or
forms of the agreements evidencing any Awards granted under the Plan; (iii) to amend the Plan and any Award as provided in Sections
12 and 14 of the Plan; (iv) to establish, amend and rescind rules and regulations for the administration of the Plan; (v) to construe
and interpret the Plan and Option Agreements evidencing Awards granted under the Plan; (vi) to establish and interpret rules and
regulations for administering the Plan and to make all other determinations deemed necessary or advisable for administering the
Plan. The Administrator shall also have authority, in its sole discretion, to accelerate the date that any Award which was not
otherwise exercisable or vested shall become exercisable or vested in whole or in part without any obligation to accelerate such
date with respect to any other Award granted to any Participant. In addition, the Administrator shall have the authority and discretion
to establish terms and conditions of Awards as the Administrator determines to be necessary or appropriate to conform to the applicable
requirements or practices of jurisdictions outside of the United States.
(c) Notwithstanding the other provisions of
Section 3 herein, and provided such delegation is permitted under applicable law, including the law of the state of incorporation,
the Administrator may delegate to the chief executive officer or president of the Corporation the authority to grant Awards, and
to make any or all of the determinations reserved for the Administrator in the Plan and summarized in Section 3(b) herein with
respect to such Awards, to eligible individuals; provided, however, that, to the extent required by Section 16 of the Exchange
Act or Section 162(m) of the Code, the individual to whom such grant is made, at the time of said grant or other determination,
is not deemed to be an officer or director of the Corporation within the meaning of Section 16 of the Exchange Act and the Options
granted are not intended to constitute performance-based compensation within the meaning of Section 162(m) of the Code. To the
extent that the Administrator has delegated authority to grant Awards pursuant to this Section 3(c) to the chief executive officer
or president, references to the Administrator shall include references to such person, subject, however, to the requirements of
the Plan, Rule 16b-3 and other applicable law.
(d) The
Administrator’s determinations under the Plan need not be uniform and may be made by it selectively among individuals who
receive, or are eligible to receive, Awards under the Plan (whether or not such individuals are similarly situated). All determinations,
interpretations and constructions made by the Administrator in good faith shall not be subject to review by any person and shall
be final, binding and conclusive on all persons.
4.
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Shares of Stock Subject to the Plan; Award Limitations
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(a) The number of shares of Common Stock that
may be issued pursuant to Awards shall be one million eight hundred thousand (1,800,000) shares (which number includes all shares
available for delivery under this Section 4(a) since the establishment of the Plan in 2007). Such shares shall be authorized but
unissued shares or treasury shares of the Corporation, or shares purchased on the open market or by private purchase.
(b) The Corporation hereby reserves sufficient
authorized shares of Common Stock to meet the grant of Awards hereunder. Any shares subject to an Award which is subsequently forfeited,
expires or is terminated may again be the subject of an Award granted under the Plan. To the extent that any shares of Common Stock
subject to an Award are not delivered to a Participant (or his beneficiary) because the Award is forfeited, canceled, or settled
in cash, such shares shall not be deemed to have been issued for purposes of determining the maximum number of shares of Common
Stock available for issuance under the Plan. Notwithstanding the foregoing, shares of Common Stock subject to an Award may not
again be available for issuance under this Plan if such shares are: (i) shares that were subject to an Option and were not issued
upon the net exercise of such Option; (ii) existing shares used to pay the exercise price of an Option; (iii) shares delivered
to or withheld by the Corporation to pay the withholding taxes related to an Award in accordance with Section 7; or (iv) shares
repurchased on the open market with the proceeds of an Option exercise.
(c) If there is any change in the shares of
Common Stock because of a merger, consolidation or reorganization involving the Corporation or a Related Corporation, or if the
Board declares a stock dividend or stock split distributable in shares of Common Stock, or if there is a change in the capital
stock structure of the Corporation or a Related Corporation affecting the Common Stock, the number of shares of Common Stock reserved
for issuance under the Plan shall be correspondingly adjusted, the Administrator shall make such adjustments to Awards or to any
provisions of this Plan as the Administrator deems equitable to prevent dilution or enlargement of Awards and in compliance with
Section 409A of the Code.
(d) Subject
to the provisions of Section 4(c) herein relating to adjustments upon changes in the shares of Common Stock, the maximum number
of shares that may be covered by Options granted to any one Participant during any one fiscal year shall be 250,000 shares.
(e) Subject
to the provisions of Section 4(c) herein relating to adjustments upon changes in the shares of Common Stock, the maximum number
of shares that may be covered by Options granted to any one Participant who is a member of the Board but who is not an employee
of the Corporation or a related Corporation during any one fiscal year shall be 25,000 shares.
(f) Subject
to the provisions of Section 4(c) herein relating to adjustments upon changes in the shares of Common Stock, the maximum number
of shares that may be delivered to Participants with respect to Incentive Options under the Plan shall be 1,800,000 shares.
An Award may be granted only to an individual
who satisfies the following eligibility requirements on the date the Award is granted:
(a) The
individual is either (i) an employee of the Corporation or a Related Corporation, (ii) a director of the Corporation or a Related
Corporation, or (iii) an independent contractor, consultant or advisor (collectively, “independent contractors”)
providing bona fide services to the Corporation or a Related Corporation. For this purpose, an individual shall be considered to
be an “employee” if there exists between the individual and the Corporation or a Related Corporation the legal
and bona fide relationship of employer and employee, or if the individual otherwise is included in the definition of “employee”
contained in the General Instructions to the Registration Statement on Form S-8 under the Securities Act of 1933, as amended.
(b) With
respect to the grant of Incentive Options, the individual is an employee of the Corporation or a Related Corporation (within the
meaning of Section 1.421-1 of the Treasury Regulations) and does not own, immediately before the time that the Incentive Option
is granted, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation.
Notwithstanding the foregoing, an individual who otherwise qualifies but owns more than ten percent (10%) of the total combined
voting power of the Corporation (a “10% Owner”) may be granted an Incentive Option if the Option Price (as determined
pursuant to Section 6(b) herein), is at least 110% of the Fair Market Value of the Common Stock (as defined in Section 6(b) herein),
and the Option Period (as defined in Section 6(c) herein) does not exceed five years. For this purpose, an individual will be deemed
to own stock which is attributable to him or her under Section 424(d) of the Code.
(a) Grant
of Options: Subject to the limitations of the Plan, the Administrator may in its sole and absolute discretion grant Options
to such eligible individuals in such numbers, upon such terms and at such times as the Administrator shall determine. Both Incentive
Options and Nonqualified Options may be granted under the Plan. Each Option grant shall be evidenced by an option agreement (an
“Option Agreement”) specifying the type of Option being granted and all other terms and conditions as required
by this Plan. To the extent necessary to comply with Section 422 of the Code, if an Option is designated as an Incentive Option
but does not qualify as such under Section 422 of the Code, the Option (or portion thereof) shall be treated as a Nonqualified
Option.
(b) Option
Price: The price per share at which an Option may be exercised (the “Option Price”) shall be established
by the Administrator at the time the Option is granted and shall be set forth in the terms of the Option Agreement evidencing the
grant of the Option; provided that the Option Price shall in no event be less than the Fair Market Value (as defined in Section
6(b)(ii)herein) per share of the Common Stock on the date the Option is granted (or, in the case of an Incentive Option granted
to a 10% Owner, 110% of such Fair Market Value). In addition, the following rules shall apply:
(i) An Incentive Option shall be considered
to be granted on the date that the Administrator acts to grant the Option, or on any later date specified by the Administrator
as the effective date of the Option. A Nonqualified Option shall be considered to be granted on the date the Administrator acts
to grant the Option or any later date specified by the Administrator as the date of grant of the Option.
(ii) For the purposes of the Plan, the
“Fair Market Value” of the shares shall be determined in good faith by the Administrator in accordance with
the following provisions: (A) if the shares of Common Stock are listed or admitted for trading on an established national securities
exchange, the Fair Market Value shall be the closing sales price of the shares on the principal exchange on the date immediately
preceding the date the Option is granted, or, if there is no transaction on such date, then on the trading date nearest preceding
the date the Option is granted for which closing price information is available, or (B) if the shares of Common Stock are not listed
or admitted to trading on an established securities market, then the Fair Market Value shall be determined by the Administrator
by the reasonable application of any other reasonable valuation method which is consistently applied for all equity compensation
arrangements of the Corporation and which is in compliance with applicable law, is compliant with Section 409A of the Code, and
satisfies any applicable requirements for Incentive Options under Section 422 of the Code.
(iii) To the extent that there first
becomes exercisable by an employee in any one calendar year Incentive Options granted by the Corporation or any Related Corporation
with respect to shares having an aggregate Fair Market Value (determined at the time an Incentive Option is granted) greater than
$100,000, such excess Options shall be treated as Nonqualified Options.
(c) Option
Period and Limitations on the Right to Exercise Options
(i) The term during which an Option may
be exercised (the “Option Period”) shall be determined by the Administrator at the time the Option is granted.
With respect to Incentive Options, such period shall not extend more than ten (10) years (or, in the case of a 10% Owner, five
(5) years) from the date on which the Option is granted. Any Option or portion thereof not exercised before expiration of the Option
Period shall terminate.
(ii) An Option may be exercised by giving
written notice to the Corporation at such place as the Corporation or its designee shall direct. Such notice shall specify the
number of shares to be purchased pursuant to an Option and the aggregate Option Price to be paid therefor and shall be accompanied
by the payment of such Option Price. Unless an individual Option Agreement provides otherwise, such payment shall be in the form
of (A) cash; (B) delivery of written notice of exercise to the Corporation and delivery to a broker of written notice of exercise
and irrevocable instructions to promptly deliver to the Corporation the amount of sale or loan proceeds to pay the Option Price;
(C) if the Administrator, in its sole discretion, permits, (1) delivery of other shares of Common Stock of the Corporation that
that have been held by the Participant for more than six (6) months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes) or (2) a “net exercise” arrangement pursuant to which the Corporation
will reduce the number of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair Market
Value that does not exceed the aggregate Option Price; provided, however, that the Corporation shall accept a cash or other payment
from the Participant to the extent of any remaining balance of the aggregate Option Price not satisfied by such reduction in the
number of whole shares to be issued; or (D) a combination of the foregoing methods.
(iii) Unless an individual Option Agreement
provides otherwise, no Option granted to a Participant shall be exercised unless, at the time of exercise, the Participant’s
provision of services to the Corporation, whether as an employee, director or independent contractor, as described in Section 5(a),
of the Corporation or a Related Corporation has not been interrupted or terminated (“Continuous Service”) since
the date the Option was granted, subject to the following:
(A) The Continuous Service of a Participant
shall not be deemed to have terminated merely because of a change in the terms, conditions or capacity in which the Participant
renders service to the Corporation or a Related Corporation as an employee, director or independent contractor or a change in the
entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s
Continuous Service. For example, a change in status from an employee of the Corporation to a consultant of a Related Corporation
or a non-employee director will not constitute an interruption of Continuous Service.
(B) The Continuous Service of a Participant
shall be treated as continuing intact for any period that the Participant is on military or sick leave or other bona fide leave
of absence, provided that the period of such leave does not exceed ninety days (or such other period as required by applicable
law), or, if longer, as long as the Participant’s right to re-employment is guaranteed either by statute or by contract.
The Continuous Service of a Participant shall also be treated as continuing intact while the Participant is not actively performing
services as an employee, director or independent contractor because of Disability. The Administrator shall determine the date of
a Participant’s termination of Continuous Service for any reason (the “Termination Date”).
(C) Unless an individual Option Agreement
provides otherwise, if the Continuous Service of a Participant is terminated because of the Participant’s death or Disability,
or if the Participant dies after the termination of his Continuous Service because of Disability, the Option may be exercised only
to the extent exercisable on the Participant’s Termination Date, except that, to the extent permitted under Section 3(b)
of the Plan, the Administrator may in its discretion accelerate the date for exercising all or any part of the Option which was
not otherwise exercisable on the Termination Date. The Option must be exercised, if at all, prior to the first to occur of the
following, whichever shall be applicable: (X) the close of the period of twelve (12) months next succeeding the Termination Date;
or (Y) the close of the Option Period. In the event of the Participant’s death, such Option shall be exercisable by such
person or persons as shall have acquired the right to exercise the Option by will or by the laws of intestate succession or by
such person designated to exercise the Option upon the Participant’s death pursuant to Section 6(d) of the Plan.
(D) Unless an individual Option Agreement
provides otherwise, if the Continuous Service of the Participant is terminated for any reason other than Disability or death or
for Cause (as defined in Section 6(c)(iii)(E) herein), the Option may be exercised to the extent exercisable on such Termination
Date, except that, to the extent permitted under Section 3(b) of the Plan, the Administrator may in its discretion accelerate the
date for exercising all or any part of the Option which was not otherwise exercisable on the Termination Date. The Option must
be exercised, if at all, prior to the first to occur of the following, whichever shall be applicable: (X) the close of the period
of three (3) months next succeeding the Termination Date (or twelve (12) months next succeeding the Termination Date if the Participant
was a non-employee director or independent contractor at the Termination Date); or (Y) the close of the Option Period. If the Participant
dies following such Termination Date and prior to the earlier of the dates specified in (X) or (Y) of this subparagraph (D), the
Option shall be exercisable for the period specified in subparagraph (C) immediately preceding (treating for this purpose the Participant’s
date of termination of employment as the Termination Date). In the event of the Participant’s death, such Option shall be
exercisable by such person or persons as shall have acquired the right to exercise the Option by will or by the laws of intestate
succession or by such person designated to exercise the Option upon the Participant’s death pursuant to Section 6(d) of the
Plan.
(E) Unless an individual Option Agreement
provides otherwise, if the employment of the Participant is terminated for Cause (as defined herein), the Option shall immediately
lapse and no longer be exercisable as of such termination, as determined by the Administrator. For purposes of this subparagraph
(E) and subparagraph (D), the Participant’s termination shall be for “Cause” if such termination results
from the Participant’s: (W) termination, if any, for “cause” under the terms of the Participant’s employment
agreement with the Corporation or a Related Corporation; or, if there is no written employment agreement between the Participant
and the Corporation or one of its Related Corporations, termination shall be for “cause” if such termination results
from: (X) dishonesty or conviction of a crime; (Y) failure to perform his duties to the satisfaction of the Corporation; or (Z)
engaging in conduct that could be materially damaging to the Corporation without a reasonable good faith belief that such conduct
was in the best interest of the Corporation. The determination of “Cause” shall be made by the Administrator and its
determination shall be final and conclusive.
(F) Notwithstanding
the foregoing and subject to compliance with Section 409A of the Code, to the extent permitted under Section 3(b) of the Plan,
the Administrator shall have authority, in its discretion, to extend the period during which an Option may be exercised or modify
the other terms and conditions of exercise; provided that, in the event that any such extension or modification shall cause an
Incentive Option to be designated as a Nonqualified Option, no such extension or modification shall be made without the prior
written consent of the Participant.
(G) Notwithstanding the foregoing, in no event shall
an Option granted to any Participant become exercisable or vested prior to the first anniversary of the date on which it is granted
(subject to acceleration of exercisability and vesting, to the extent permitted by the Administrator, in the event of the Participant’s
death, Disability, involuntary termination without Cause or in connection with a Change in Control, or as permitted or required
pursuant to Section 14(c) herein).
(iv) A Participant or his legal representative,
legatees or distributees shall not be deemed to be the holder of any shares subject to an Option and shall not have any rights
as a stockholder unless and until certificates for such shares are delivered to him or them under the Plan or such shares have
been registered in book-entry form in the Participant’s name or otherwise credited to the Participant.
(v) A certificate or certificates or
a book-entry registration for shares of Common Stock acquired upon exercise of an Option shall be issued or made in the name of
the Participant (or his or her beneficiary) and distributed to the Participant (or his or her beneficiary) as soon as practicable
following receipt of notice of exercise and payment of the purchase price.
(d) Nontransferability
of Options: Incentive Options shall not be transferable other than by will or the laws of intestate succession. Nonqualified
Options shall not be transferable other than by will or the laws of intestate succession, except as may be permitted by the Administrator
in a manner consistent with the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”).
Except as may be permitted by the preceding sentence, an Option shall be exercisable during the Participant’s lifetime only
by him or by his guardian or legal representative. Notwithstanding the foregoing, the Participant may, by delivering written notice
to the Corporation, in a form satisfactory to the Corporation, designate a third party who, in the event of the death of the Participant,
shall thereafter be entitled to exercise the Option. The designation of a beneficiary does not constitute a transfer.
(e) No
Repricing. Except for adjustments pursuant to Section 4(c) herein (relating to adjustments upon changes in the shares of Common
Stock), or reductions of the Option Price approved by the Corporation’s stockholders, the Option Price for any outstanding
Option may not be decreased after the date of grant nor may an outstanding Option granted under the Plan be surrendered to the
Corporation as consideration for the grant of a replacement Option with a lower Option Price. Except as approved by the Corporation’s
stockholders, in no event shall any Option granted under the Plan be surrendered to Corporation in consideration for a cash payment
or the grant of any other award if, at the time of such surrender, the Option Price of the Option is greater than the then current
Fair Market Value of a share of Common Stock. In addition, no repricing of an Option shall be permitted without the approval of
Corporation’s stockholders if such approval is required under the rules of any stock exchange on which Common Stock is listed.
(f) No
Dividends. No dividend equivalents (current or deferred) with respect to any Option shall be granted under the Plan.
The Corporation shall withhold all required
local, state and federal taxes from any amount payable in cash with respect to an Award. The Corporation shall require any recipient
of an Award payable in shares of the Common Stock to pay to the Corporation in cash the amount of any tax or other amount required
by any governmental authority, to be withheld and paid over by the Corporation to such authority for the account of such recipient.
Notwithstanding the foregoing, the recipient may satisfy such obligation in whole or in part, and any other local, state or federal
income tax obligations relating to such an Award, by electing (the “Election”) to have the Corporation withhold
shares of Common Stock from the shares to which the recipient is entitled. The number of shares to be withheld shall have a Fair
Market Value as of the date that the amount of tax to be withheld is determined (the “Tax Date”) as nearly equal
as possible to (but not exceeding) the amount of such obligations being satisfied. Each Election must be made in writing to the
Administrator in accordance with election procedures established by the Administrator.
8.
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Performance-Based Compensation
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To the extent that Section 162(m) of the Code
is applicable, the Administrator shall determine the extent, if any, that Awards conferred under the Plan are intended to comply
with the qualified performance-based compensation exception to employer compensation deductions set forth in Section 162(m) of
the Code.
9.
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Section 16(b) Compliance
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It is the general intent of the Corporation
that transactions under the Plan which are subject to Section 16 of the Exchange Act shall comply with Rule 16b-3 under the Exchange
Act. Notwithstanding anything in the Plan to the contrary, the Administrator, in its sole and absolute discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the Plan to Participants who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Participants.
10.
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No Right or Obligation of Continued Employment
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Nothing contained in the Plan shall confer upon
a Participant any right to continue in the employment or service of the Corporation or a Related Corporation as an employee, director
or independent contractor or to interfere in any way with the right of the Corporation or a Related Corporation to terminate the
Participant’s employment or service at any time. Except as otherwise provided in the Plan, or a related agreement, Awards
granted under the Plan to employees of the Corporation or a Related Corporation shall not be affected by any change in the duties
or position of the Participant, as long as such individual remains an employee of the Corporation or a Related Corporation.
11.
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Unfunded Plan; Not a Retirement Plan
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(a) Neither a Participant nor any other person
shall, by reason of the Plan, acquire any right in or title to any assets, funds or property of the Corporation or any Related
Corporation including, without limitation, any specific funds, assets or other property which the Corporation or any Related Corporation,
in their discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right
to the Common Stock or amounts, if any, payable under the Plan, unsecured by any assets of the Corporation or any Related Corporation.
Nothing contained in the Plan shall constitute a guarantee that the assets of such corporations shall be sufficient to pay any
benefits to any person.
(b) In no event shall any amounts accrued, distributable
or payable under the Plan be treated as compensation for the purpose of determining the amount of contributions or benefits to
which any person shall be entitled under any retirement plan sponsored by the Corporation or a Related Corporation that is intended
to be a qualified plan within the meaning of Section 401(a) of the Code.
12.
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Amendment and Termination of the Plan
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Except as may be otherwise provided in the Plan,
the Plan and any Award granted pursuant to the Plan, may be amended or terminated at any time by the Board; provided, that (i)
amendment or termination of an Award shall not, without the consent of the applicable Participant, adversely affect the rights
of the Participant with respect to an outstanding Award; and (ii) approval of an amendment to the Plan by the stockholders of the
Corporation shall only be required in the event such stockholder approval of any such amendment is required for purposes of complying
with Section 422 of the Code or by other applicable law, rule or regulation.
13.
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Restrictions on Shares
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The Administrator may impose such restrictions
on any shares representing Awards hereunder as it may deem advisable, including without limitation restrictions under the Securities
Act, under the requirements of any stock exchange or similar organization and under any blue sky or state securities laws applicable
to such shares. The Corporation may cause a restrictive legend to be placed on any certificate issued pursuant to an Award hereunder
in such form as may be prescribed from time to time by applicable laws and regulations or as may be advised by legal counsel. As
a condition to the issuance and delivery of Common Stock hereunder, or the grant of any benefit pursuant to the terms of the Plan,
the Corporation may require a Participant or other person to become a party to a stockholders’ agreement, buy-sell agreement,
redemption agreement, repurchase agreement, restriction agreement or similar agreement between the Corporation and stockholders
of the Corporation or among stockholders of the Corporation restricting the transfer of the Common Stock.
(a) The
Plan shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflict of laws
provisions of any state. The Plan and all Awards granted hereunder shall comply at all times with all laws and regulations of any
governmental authority which may be applicable thereto. To the extent that an Award granted hereunder is designated as an Incentive
Option, it shall comply with Section 422 of the Code, and all provisions of the Plan and any Option Agreement for such Option shall
be construed in such manner as to effectuate that intent. Any provision of the Plan or any Option Agreement notwithstanding, the
Participant shall not be entitled to receive the benefits of Awards and the Corporation shall not be obligated to pay any benefits
to a Participant if such exercise, delivery, receipt or payment of benefits would constitute a violation by such individual or
the Corporation of any provision of any such law or regulation.
(b) Any
reference herein to “compliance with Section 409A of the Code” or words of similar import shall be interpreted to mean
application of the terms of the Plan or any Award, or administration of the Plan or any Award, as the case may be, in such a manner
that no additional tax is imposed on a Participant pursuant to Section 409A(a)(1)(B) of the Code; provided, however, that
nothing in this provision shall permit any Incentive Option to exceed the $100,000 annual limitation set forth in Treasury Regulation
Section 1.422-4(a)(2) and in Section 6(b)(iii) of the Plan or any recharacterization of an Option resulting therefrom. If additional
guidance is issued under or modifications are made to Section 409A of the Code or any other law affecting the Awards issued hereunder,
the Administrator shall take such actions (including amending the Plan or any Option Agreement without the necessity of obtaining
any Participant’s consent as otherwise required by the Plan) as it deems necessary, in its sole discretion, to ensure continued
compliance with such law.
The Plan is subject to approval by the stockholders
of the Corporation, which approval must occur, if at all, within twelve months of the Effective Date of the Plan. Awards granted
prior to such stockholder approval shall be conditioned upon and shall be effective only upon approval of the Plan by such stockholders
on or before such date.
(a) Notwithstanding
any other provision of the Plan to the contrary, if a Double Trigger Event (as defined in Section 16(c) herein) occurs in connection
with a Change in Control (as defined in Section 16(b) herein) of the Corporation, unless specifically modified by an individual’s
Option Agreement or employment agreement between the Participant and the Corporation or a Related Corporation (in which case the
terms of such Option Agreement or employment agreement shall supersede this Section 16), all Options outstanding as of the date
of such Double Trigger Event held by the affected Participant shall become fully exercisable, whether or not then otherwise exercisable.
In addition, in the event of a Change in Control of the Corporation, the Corporation or the surviving entity or successor to the
Corporation following such transaction, as the case may be, may elect to (i) to continue the outstanding Options subject to the
terms of the individual Option Agreements and this Plan and subject to such adjustments, if any, by the Administrator as permitted
by Section 4(c) of the Plan; or (ii) to terminate the outstanding Options in exchange for a cash payment or distribution to the
Participant as determined in the following sentence. In the event that the Corporation or its successor chooses to terminate the
Options upon a Change in Control, each unvested Option shall vest automatically immediately prior to termination of the Options,
and the Participant shall be entitled to a payment or distribution equal to the excess of the Fair Market Value of one share of
Common Stock as of the date of the Change in Control over the Option Price, multiplied by the number of shares covered by the Option;
provided that if Option Price exceeds the Fair Market Value of the Common Stock as of the date of the Change in Control, such Option
shall be cancelled and forfeited and no payment or distribution shall be made for such Option.
(b) For
purposes of this Section 16, “Change in Control” of the Corporation shall mean:
(i) Change in Ownership. The acquisition
by an individual, entity or group (within the meaning of Code Section 409A) (a “Person”) of ownership of stock
of the Corporation that, together with stock held by such Person, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Corporation. However, if any Person is considered to own more than 50% of the total fair market
value of total voting power of the stock of the Corporation, the acquisition of additional stock by the same Person is not considered
to cause a change in ownership of the Corporation (or to cause a change in the effective control of the Corporation). An increase
in the percentage of stock owned by any one Person as a result of a transaction in which the Corporation acquires its stock in
exchange for property will be treated as an acquisition of stock for purposes of this paragraph. This paragraph applies only when
there is a transfer of stock of the Corporation (or issuance of stock of the Corporation) and stock in the Corporation remains
outstanding after the transaction; or
(ii) Change in Effective Control.
(A) the acquisition by any Person during the 12-month period ending on the date of the most recent acquisition by such Person,
of ownership of stock of the Corporation possessing 35% or more of the total voting power of the stock of the Corporation; or (B)
the replacement of a majority of members of the Corporation’s Board of Directors during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Corporation’s Board of Directors prior
to the date of the appointment or election.
A change in effective control also may occur
in any transaction in which either of the two corporations involved in the transaction has a “Change in Ownership”
under paragraph (i) or “Change in Ownership of a Substantial Portion of the Company’s Assets” under paragraph
(iii). If any one Person is considered to effectively control the Corporation, the acquisition of additional control of the Corporation
by the same Person is not considered to cause a change in the effective control of the Corporation (or to cause a “Change
in Ownership” of the Corporation within the meaning of paragraph (i) above); or
(iii) Change in Ownership of a Substantial
Portion of Assets. The acquisition by any Person during the 12-month period ending on the date of the most recent acquisition
by such Person, of assets from the Corporation that have a total gross fair market value equal to or more than 40% of the total
gross fair market value of all of the assets of the Corporation immediately prior to such acquisition(s). For this purpose, gross
fair market value means the value of the assets of the Corporation, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets. No change in control shall be deemed to have occurred in the event of a
transfer to a related person or as described in Code Section 409A.
The definition of Change in Control in this
Section 16(b), and all other terms and provisions of this Section 16, shall be interpreted at all times in such a manner as to
comply with Code Section 409A, meaning that no additional income tax is imposed on the Participant pursuant to Code Section 409A(1)(a).
(c) For
purposes of this Section 16, a “Double Trigger Event” shall be deemed to occur with respect to an Option if,
within the period beginning six (6) months prior to a Change in Control and ending two (2) years following such Change in Control,
(i) the Participant’s employment is involuntarily terminated by the Corporation (or the surviving or acquiring corporation,
as the case may be), other than for Cause, or (ii) the Participant terminates his or her employment for Good Reason (as defined
in Section 16(d) herein). If the termination of the Participant’s employment, as contemplated by this paragraph (c), occurs
prior to the Change in Control, then the Participant shall be treated for purposes of this Section 16 as being employed on the
date the Change in Control becomes effective. For purposes of this Section 16, the date of the Double Trigger Event shall be the
later of the effective date of the Change in Control and the date of the Participant’s termination of employment as contemplated
in this paragraph (c).
(d) For
purposes of this Section 16, “Good Reason” shall mean:
(i) If
the Participant is a party to an employment or service agreement with the Corporation or a Related Corporation and such agreement
provides for a definition of Good Reason, the definition contained therein;
(ii) If
the Participant is subject to any other benefit plan of the Corporation that supersedes and replaces, in whole or in part, any
provisions of this Plan, and such other benefit plan provides for a definition of Good Reason, the definition contained therein;
or
(iii) If
no such agreement exists or other benefit plan is applicable, a Participant’s resignation from the Corporation within thirty
(30) days following the occurrence of any of the following events with respect to such Participant:
(A) Without
the Participant’s express written consent, the significant reduction of the Participant’s duties, authority, responsibilities,
or reporting relationships relative to the Participant’s duties, authority, responsibilities, or reporting relationships
as in effect immediately prior to such reduction, or the assignment to the Participant of such reduced duties, authority, responsibilities,
or reporting relationships, which reduction or assigned reduction remains in effect five (5) business days after written notice
by the Participant to the Chief Executive Officer or the Chief Financial Officer of the Corporation (or the surviving or acquiring
corporation, as the case may be) of such conditions; provided, however, that the mere occurrence of a Change in Control shall not,
in and of itself, constitute a material adverse change in the Participant’s duties, authority, responsibilities or reporting
relationships.
(B) A
material reduction by Corporation (or the surviving or acquiring corporation, as the case may be) in the base salary, bonus structure
or benefits of the Participant as in effect immediately prior to such reduction, with the result that the Participant’s overall
benefits package is significantly reduced; or
(C) The
relocation of the Participant’s principal work location to a facility or a location more than fifty (50) miles from the Participant’s
then present principal work location, without the Participant’s express written consent.
This will certify that the Plan was adopted
by vote of the Board and stockholders of the Corporation effective as of June 10, 2015 and August 5, 2015, respectively.
/s/ Jeffrey A. Williams
_____________________________________________
Name: Jeffrey A. Williams
Title: Chief Financial Officer
Date: June 10, 2015
Amendment to Amended and Restated Stock Option Plan
AMENDMENT TO AMERICA’S CAR-MART, INC.
Amended and Restated Stock Option Plan
Adopted May 23, 2018
America’s Car-Mart, Inc., a Texas corporation (the “Company”),
hereby amends (the “Amendment”) the America’s Car-Mart, Inc. Amended and Restated Stock Option Plan (the “Plan”),
as set forth herein.
1. Background
Information. The Company originally established the Plan effective as of August 27, 2007 and subsequently amended and restated
the Plan effective as of August 5, 2015. Section 12 of the Plan provides that the board of directors of the Company may at any
time amend the Plan, provided that such amendment is approved by the stockholders of the Corporation if required by applicable
law, rule or regulation. The listing rules of the NASDAQ Stock Market require the Company to obtain stockholder approval of any
amendment to an equity compensation of the Company that materially increases the number of shares to be issued under such plan.
The Company wishes to amend the Plan as set forth in this Amendment to increase the number of authorized shares that may be issued
under the Plan. The Company will submit this Amendment for approval by the requisite vote of stockholders of the Company entitled
to vote thereon at the 2018 annual meeting of stockholders to be held on August 29, 2018.
2. Amendment
to Section 4 – Shares of Stock Subject to the Plan; Award Limitation. Paragraph (a) of Section 4 of the Plan is hereby
amended in its entirety to read as follows:
“(a) The number of shares of Common Stock that may be
issued pursuant to Awards shall be two million (2,000,000) shares (which number includes all shares available for delivery under
this Section 4(a) since the establishment of the plan in 2007). Such shares shall be authorized but unissued shares or treasury
shares of the Corporation, or shares purchased on the open market or by private purchase.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
duly executed on this 23rd day of May, 2018.
America’s
Car-Mart, Inc.
By:
/s/ Vickie D. Judy
Vickie D. Judy
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
Amendment to Amended and Restated Stock Option Plan
AMENDMENT TO AMERICA’S CAR-MART, INC.
Amended and Restated Stock Option Plan
Adopted July 6, 2020
America’s Car-Mart, Inc., a Texas corporation (the “Company”),
hereby amends (the “Amendment”) the America’s Car-Mart, Inc. Amended and Restated Stock Option Plan (the “Plan”),
as set forth herein.
1. Background
Information. The Company originally established the Plan effective as of August 27, 2007 and subsequently amended and restated
the Plan effective as of August 5, 2015. Section 12 of the Plan provides that the board of directors of the Company may at any
time amend the Plan, provided that such amendment is approved by the stockholders of the Corporation if required by applicable
law, rule or regulation. The listing rules of the NASDAQ Stock Market require the Company to obtain stockholder approval of any
amendment to an equity compensation of the Company that materially increases the number of shares to be issued under such plan.
The Company wishes to amend the Plan as set forth in this Amendment to increase the number of authorized shares that may be issued
under the Plan. The Company will submit this Amendment for approval by the requisite vote of stockholders of the Company entitled
to vote thereon at the 2020 annual meeting of stockholders to be held on August 26, 2020.
2. Amendment
to Section 4 – Shares of Stock Subject to the Plan; Award Limitation. Paragraph (a) of Section 4 of the Plan is hereby
amended in its entirety to read as follows:
“(a) The number of shares of Common Stock that may be
issued pursuant to Awards shall be two million two hundred thousand (2,200,000) shares (which number includes all shares available
for delivery under this Section 4(a) since the establishment of the plan in 2007). Such shares shall be authorized but unissued
shares or treasury shares of the Corporation, or shares purchased on the open market or by private purchase.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
duly executed on this 6th day of July, 2020.
America’s
Car-Mart, Inc.
By:
/s/ Vickie D. Judy
Vickie D. Judy
Chief Financial Officer
(Principal Financial and Accounting Officer)
America’s Car-Mart, Inc.
1805 North 2nd Street, Suite 401
Rogers, AR 72756
Important Notice Regarding the Availability of Proxy
Materials for the
2020 Annual Meeting of Stockholders to be Held August
26, 2020
Notice of Internet Availability of Proxy Materials
Your name, Account Number and Control Number
appear in the upper-left-hand-corner of this Notice for online voting purposes. To vote your shares, please follow the instructions
listed below.
The America’s Car-Mart,
Inc. 2020 Annual Meeting will be held on August 26, 2020, at 10:00 a.m. local time, at America’s Car-Mart, Inc. principal
executive office, 1805 North 2nd Street, Suite 401, Rogers, Arkansas 72756.
A description of the matters
to be voted on and the recommendations of the Board of Directors of America’s Car-Mart, Inc. regarding these matters, appear
on the reverse side of this Notice. Instructions for voting your shares appear below.
This is not a ballot. This communication
presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access
and review all of the important information contained in the proxy materials before voting.
The 2020 Annual Report, the
Proxy Statement, and proxy card of America’s Car-Mart, Inc. are available at www.onlineproxyvote.com/CRMT.
If you want to receive a paper
or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request
for a copy as instructed below on or before August 12, 2020 to facilitate timely delivery.
How to vote online:
Step 1: Go to www.proxyvote.com
at any time 24 hours a day.
Step 2: Login using the Control
number located in the top left-hand corner of the Notice of Internet Availability of Proxy Materials that you received in the
mail to access the Proxy Materials.
Step 3: Access the proxy voting
link within that website to vote your proxy.
How to receive
a copy of the proxy materials by mail for this meeting or for future shareholder meetings:
Telephone: Call Broadridge at 1-800-579-1639
E-Mail: Send an e-mail to: sendmaterial@proxyvote.com
with the control number in the subject line and in the body of the message include your full name, address, and request.
How to attend the meeting and vote in person:
America’s Car-Mart, Inc.’s
2020 Annual Meeting will be held at on August 26, 2020, at 10:00 a.m. local time, at the America’s Car-Mart, Inc. principal
executive office, 1805 North 2nd Street, Suite 401, Rogers, Arkansas 72756.
If you plan to attend the
Annual Meeting, we would appreciate it if you would notify our Investor Relations Manager by telephone at (479)
464-9944 or by e-mail at zachary.jennings@car-mart.com. This will assist us with meeting preparations. You
also can obtain directions to the meeting by calling this number. Please bring this notice with you for admission to the meeting.
Proposals to be voted on at America’s Car-Mart,
Inc.’s 2020 Annual Meeting are listed on the reverse side along with the recommendations of the Board of Directors of America’s
Car-Mart, Inc.
Voting Items:
The Board of Directors of America’s Car-Mart, Inc. recommends that you vote FOR
ALL NOMINEES listed in Proposal 1.
Proposal 1
|
To elect six directors for a term of one year and until their successors are elected and qualified:
|
|
Ann G. Bordelon
|
William H. Henderson
|
|
Ray C. Dillon
|
Joshua G. Welch
|
|
Daniel J. Englander
|
Jeffrey A. Williams
|
The Board of Directors of America’s Car-Mart, Inc. recommends that you vote FOR
Proposals 2, 3 and 4:
Proposal 2
|
To approve an advisory resolution regarding the Company’s compensation of its named executive officers;
|
|
|
Proposal 3
|
To ratify the selection of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending April 30, 2021;
|
|
|
Proposal 4
|
To approve an amendment to the Company’s Amended and Restated Stock Option Plan, increasing the number of shares authorized for issuance under the plan by 200,000.
|
|
|
Proposal 5
|
To conduct such other business as may properly come before the meeting or any adjournments or postponements thereof.
|
This proxy is solicited on behalf of the Board of Directors
of AMERICA’S CAR-MART, INC.
The undersigned stockholder(s) of America’s
Car-Mart, Inc., a Texas corporation, hereby appoints Jeffrey A. Williams and Vickie D. Judy, and each of them, proxies and attorneys-in-fact,
with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the annual
meeting of the stockholders of America’s Car-Mart, Inc. to be held on August 26, 2020 at 10:00 a.m. local time at the Company’s
principal executive office, 1805 North 2nd Street, Rogers, AR 72756, to vote the shares of common stock which the undersigned
would be entitled to vote if then and there personally present, on the matters set forth below:
|
(1)
|
To elect six directors
for a term of one year and until their successors are elected and qualified:
|
|
|
|
|
|
Ann G. Bordelon
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
(2)
|
To approve an advisory resolution regarding the Company’s compensation of its named executive officers.
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
(3)
|
To ratify the selection of Grant Thornton LLP as the independent registered public accounting firm
for the fiscal year ending April 30, 2021.
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
(4)
|
To approve an amendment to the Company’s Amended and Restated Stock Option Plan, increasing
the number of shares authorized for issuance under the plan by 200,000.
|
|
¨
|
FOR ¨ AGAINST ¨ ABSTAIN
|
|
(5)
|
To conduct such other business as may properly come before the meeting or any adjournments or postponements
thereof.
|
How to vote online:
Instead of mailing your proxy, you may choose to vote
your shares online by following the instructions outlined below. Proxies submitted by the Internet must be received by 8:30 a.m.
Central Time on August 26, 2020.
Step 1: Go to www.proxyvote.com
at any time 24 hours a day.
Step 2: Login
using the Control number located in the top left-hand corner of the Notice of Internet Availability of Proxy Materials
that you received in the mail to access the Proxy Materials.
Step 3: Access the proxy
voting link within that website to vote your proxy.
How to vote on this paper form:
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. This
proxy, when properly executed, will be voted in accordance with directions given by the undersigned stockholder. If no direction
is made, it will be voted FOR each of the director nominees, FOR Proposals 2, 3 and 4, and as the proxies deem advisable on such
other matters as may come before the meeting.
|
|
Date: _________________________________
|
|
|
Signature: ______________________________
|
|
|
Signature: ______________________________
|
(This proxy should be marked, dated and signed by the stockholder(s)
exactly as his or her name appears hereon and returned promptly in the enclosed envelope. Persons signing in a fiduciary capacity
should so indicate. If shares are held by joint tenants or as community property, both should sign.)
1
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