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
Filed by the Registrant
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Filed by a Party other than the Registrant
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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 Rule 14a-12
DOLLAR FINANCIAL CORP.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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DOLLAR
FINANCIAL CORP.
1436 LANCASTER AVENUE,
SUITE 300
BERWYN, PA 19312
(610) 296-3400
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 11, 2010
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders of Dollar Financial Corp., a Delaware corporation,
to be held at The Boca Raton Bridge Hotel located at 999 East
Camino Real, Boca Raton, Florida 33432 on Thursday,
November 11, 2010, at 8:30 a.m., local time. The
purpose of the meeting is to consider and take action on the
proposals listed below:
1. To elect two persons to serve as Class C directors
on our board of directors for a three-year term and until their
successors are duly elected and qualified;
2. To amend and restate the Dollar Financial Corp. 2007
Equity Incentive Plan to increase the number of shares of our
common stock, par value $0.001, available for issuance under the
Plan from 2,500,000 to 7,000,000 and to make certain other
changes to the Plan;
3. To approve an amendment to our Amended and Restated
Certificate of Incorporation to increase the number of
authorized shares of common stock, par value $0.001, from
55,500,000 to 100,000,000;
4. To ratify the appointment of Ernst & Young LLP
as our independent registered public accounting firm for the
fiscal year ending June 30, 2011; and
5. To transact such other business as may properly come
before the meeting and any adjournments or postponements of the
meeting.
The board of directors has fixed the close of business on
September 24, 2010 as the record date for the determination
of the stockholders entitled to notice of, and to vote at, the
meeting and any adjournments or postponements of the meeting.
Only holders of record of common stock at the close of business
on the record date will be entitled to receive notice of, and to
vote, at the meeting and at any adjournments or postponements of
the meeting. At the annual meeting, such stockholders will be
asked to consider and take action on the proposals discussed in
the accompanying proxy statement and any other matter that
properly comes before the annual meeting or any adjournment or
postponement thereof.
Sincerely,
Roy W. Hibberd Senior Vice President,
General Counsel and Secretary
October 14, 2010
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
ACT PROMPTLY TO VOTE YOUR SHARES. YOU MAY VOTE YOUR
SHARES BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY
CARD AND RETURNING IT IN THE POSTAGE PAID ENVELOPE PROVIDED. YOU
MAY ALSO VOTE YOUR SHARES BY TELEPHONE OR THROUGH THE
INTERNET BY FOLLOWING THE INSTRUCTIONS SET FORTH ON THE
PROXY CARD. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR
SHARES IN PERSON, EVEN IF YOU HAVE PREVIOUSLY SUBMITTED A
PROXY IN WRITING, BY TELEPHONE OR THROUGH THE INTERNET.
DOLLAR
FINANCIAL CORP.
1436 LANCASTER AVENUE,
SUITE 300
BERWYN, PA 19312
(610) 296-3400
PROXY
STATEMENT
DATED
OCTOBER 14, 2010
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
To be held on November 11,
2010
Introduction
The enclosed proxy is solicited by and on behalf of the board of
directors of Dollar Financial Corp., a Delaware corporation,
which we refer to in this proxy statement as the company, we or
us, for use at the annual meeting of stockholders to be held on
Thursday, November 11, 2010 at 8:30 a.m., local time,
and at any postponement or adjournment thereof, which we refer
to in this proxy statement as the annual meeting. This proxy
statement and the enclosed form of proxy are first being mailed
to stockholders on or about October 14, 2010.
Only stockholders of record at the close of business on
September 24, 2010, which we refer to in this proxy
statement as the record date, will be entitled to notice of, and
to vote, at the annual meeting and any adjournments or
postponements thereof. At the annual meeting, such stockholders
will be asked to consider and take action on the proposals
discussed in this proxy statement and any other matter that
properly comes before the annual meeting or any adjournment or
postponement thereof.
Our 2010 Annual Report to Stockholders containing our
consolidated financial statements for our fiscal year ended
June 30, 2010, which we refer to in this proxy statement as
our fiscal 2010, is being mailed together with this proxy
statement to all stockholders entitled to vote at the annual
meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
NOVEMBER 11, 2010: The Notice of Annual Meeting, this Proxy
Statement and our 2010 Annual Report to Stockholders are
available on our website at
http://www.dfg.com/ir.
TABLE OF
CONTENTS
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Proposed Amendment to Amended and Restated Certificate of
Incorporation
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A-1
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B-1
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ii
VOTING
The
Purpose of the Annual Meeting
At our annual meeting, stockholders will act upon the matters
outlined in the notice of annual meeting above, including:
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the election of two Class C directors;
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the amendment and restatement of the Dollar Financial Corp. 2007
Equity Incentive Plan, which we refer to in which proxy
statement as our 2007 equity incentive plan, to increase the
number of shares of our common stock, par value $0.001 per
share, which we refer to in this proxy statement as our common
stock, available for issuance under our 2007 equity incentive
plan from 2,500,000 to 7,000,000 and to make certain other
changes to our 2007 equity incentive plan;
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an amendment to our Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock from 55,500,000 to 100,000,000; and
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ratification of the appointment of Ernst & Young LLP
as our independent registered public accounting firm for the
fiscal year ended June 30, 2011, which we refer to in this
proxy statement as our fiscal 2011.
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Persons
Entitled to Vote at the Annual Meeting
The record date for the determination of stockholders entitled
to notice of, and to vote at, the annual meeting is the close of
business on September 24, 2010. Each holder of shares of
our common stock as of the record date is entitled to vote. On
the record date, there were 24,372,947 shares of our common
stock issued and outstanding. Each share of our common stock
outstanding on the record date is entitled to one vote on each
matter to be voted on at the annual meeting. Stockholders have
no cumulative voting rights.
How To
Vote
Registered Holders
. If you are a
registered holder (meaning that your shares are held directly in
your name), you are not required to attend the annual meeting in
order to be able to vote. While you may attend the annual
meeting and vote your shares in person, you also may choose to
submit your proxies by any of the following methods:
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Voting by Mail
. If you choose to vote
by mail, simply complete the enclosed proxy card, date and sign
it, and return it in the postage-paid envelope provided. If you
sign your proxy card and return it without marking any voting
instructions, your shares will be voted
FOR
the election
of all director nominees,
FOR
the amendment and
restatement of the Dollar Financial Corp. 2007 Equity Incentive
Plan,
FOR
the amendment to our Amended and Restated
Certificate of Incorporation and
FOR
ratification of the
appointment of Ernst & Young LLP as our independent
registered public accounting firm for fiscal 2011. If any other
matter should be properly presented at the annual meeting for
action by our stockholders, the persons named in the proxy card
will vote in accordance with the recommendations of our board of
directors, or if no recommendation is given, in their own
discretion on such matter.
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Voting by Telephone
. You may vote your
shares by telephone by calling the toll-free telephone number
provided on the proxy card. Telephone voting is available
24 hours a day, and the procedures are designed to
authenticate votes cast by using a personal identification
number located on the proxy card. The procedures allow you to
appoint a proxy to vote your shares and to confirm that your
instructions have been properly recorded. If you vote by
telephone, you should not return your proxy card.
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Voting by Internet
. You may vote
through the Internet by signing onto the website identified on
the proxy card and following the procedures described in that
website. Internet voting is available 24 hours a day, and
the procedures are designed to authenticate votes cast by using
a personal identification number located on the proxy card. The
procedures allow you to appoint a proxy to vote your shares and
to confirm that your instructions have been properly recorded.
If you vote through the Internet, you should not return your
proxy card.
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1
Shares Held in Street
Name
.
If you are a stockholder whose
shares are held in street name (
i.e.
, in the
name of a broker, bank or other record holder), you must either
direct the record holder of your shares how to vote your shares
or obtain a proxy, executed in your favor, from the record
holder to be able to vote at the annual meeting. You will
receive separate instructions from the broker, bank or other
record holder describing how to vote your shares. The
availability of telephonic or Internet voting will depend on the
voting process of the broker, bank or other record holder.
Please check with the broker, bank or other record holder and
follow the voting procedures that they provide to you.
Recommendations
of our Board of Directors
The recommendations of our board of directors are set forth
below, together with the description of each item in this proxy
statement. In summary, our board of directors recommends a vote:
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FOR
the election of the nominated Class C directors
(see
Proposal 1: Election of Directors
);
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FOR
the amendment and restatement of the Dollar Financial
Corp. 2007 Equity Incentive Plan in order to increase the number
of shares of our common stock available for issuance under the
plan and to make certain other changes to the plan (see
Proposal 2: Amendment of Dollar Financial Corp.
2007 Equity Incentive Plan
);
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FOR
the amendment of our Amended and Restated Certificate
of Incorporation to increase the number of authorized shares of
common stock from 55,500,000 to 100,000,000 (see
Proposal 3: Amendment to Amended and Restated
Certificate of Incorporation
); and
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FOR
the ratification of the appointment of
Ernst & Young LLP as our independent registered public
accounting firm for fiscal 2011 (see
Proposal 4:
Ratification of the Appointment of Independent Registered Public
Accounting Firm
).
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With respect to any other matter that properly comes before the
annual meeting, the proxy holders will vote as recommended by
our board of directors or, if no recommendation is given, in
their own discretion.
IF YOU SIGN AND RETURN YOUR PROXY CARD BUT DO NOT SPECIFY HOW
YOU WANT TO VOTE YOUR SHARES, THE PERSONS NAMED AS PROXY HOLDERS
ON THE PROXY CARD WILL VOTE IN ACCORDANCE WITH THE
RECOMMENDATIONS OF OUR BOARD OF DIRECTORS.
How to
Revoke Your Vote
You may revoke your proxy at any time before it is voted at the
annual meeting by any of the following methods:
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Submitting a later-dated proxy by mail, over the telephone or
through the Internet.
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Sending a written notice, including by telegram or telecopy, to
our Secretary. You must send any written notice of a revocation
of a proxy so as to be delivered before the taking of the vote
at the annual meeting to:
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Dollar Financial Corp.
1436 Lancaster Avenue, Suite 300
Berwyn, PA 19312
Attention: Roy W. Hibberd, Senior Vice President, General
Counsel and Secretary
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Attending the annual meeting and voting in
person. Your attendance at the annual meeting will
not in and of itself revoke your proxy. You must also vote your
shares at the annual meeting. If your shares are held in the
name of a bank, broker or other record holder, you must obtain a
proxy, executed in your favor, from the record holder to be able
to vote at the annual meeting.
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Quorum
and Votes Required
Our bylaws provide that at any meeting of stockholders, the
holders of a majority of the issued and outstanding shares of
common stock entitled to vote at the annual meeting, present in
person or by proxy, constitute a quorum for the transaction of
business. Both abstentions and broker non-votes are counted as
present for purposes of
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determining the presence of a quorum. The election of directors
will be decided by a plurality of the votes cast, in person or
by proxy, at the annual meeting. Accordingly, abstentions and
broker non-votes will not affect the outcome of the election of
directors. 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 for that proposal and has not received voting instructions
from the beneficial owner.
Approval of the proposal to amend our Amended and Restated
Certificate of Incorporation to increase the number of
authorized shares of common stock requires the affirmative vote
of a majority of the outstanding shares of common stock entitled
to vote at the meeting. On all other matters being submitted to
stockholders, including the proposal to amend and restate our
2007 equity incentive plan to increase the number of shares
available for issuance under our 2007 equity incentive plan and
the proposal to ratify the selection of auditors for fiscal
2011, the affirmative vote of a majority of the votes cast
affirmatively or negatively on the matter is required for
approval. Accordingly, abstentions and broker non-votes will not
affect the outcome with respect to such proposals, but they will
have the effect of a vote against the proposal to amend our
Amended and Restated Certificate of Incorporation to increase
the number of authorized shares of common stock.
The persons named as proxies and attorneys-in-fact are our
officers. All properly executed proxies returned in time to be
counted at the annual meeting will be voted. Where a choice has
been specified on the proxy with respect to the foregoing
matters, the shares represented by the proxy will be voted in
accordance with the specifications, and will be voted FOR the
proposal if no specification is indicated. IN THE ABSENCE OF
SPECIFIC DIRECTION, SHARES REPRESENTED BY A PROXY WILL BE
VOTED
FOR
THE ELECTION OF ALL DIRECTORS,
FOR
THE AMENDMENT AND RESTATEMENT OF OUR 2007
EQUITY INCENTIVE PLAN,
FOR
THE AMENDMENT OF
OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND
FOR
THE RATIFICATION OF ERNST &
YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR FISCAL 2011.
PROPOSAL 1:
ELECTION OF DIRECTORS
We currently have seven directors. Our bylaws provide for a
classified board of directors, consisting of three classes of
directors (Class A, Class B and Class C), with
each class serving a staggered three-year term. As a result,
only a portion of our board of directors is elected each year.
The two director nominees identified below are to be elected by
our stockholders at our upcoming annual meeting as Class C
directors, each to hold office for a three-year term expiring in
2013 or until his successor is duly elected and qualified. The
directors have no reason to believe that either of the nominees
will be unable or unwilling to be a candidate for election at
the time of the annual meeting. If either nominee is unable or
unwilling to serve, the persons named in the proxy will use
their best judgment in selecting and voting for a substitute
candidate or our board of directors may reduce the number of
directors.
Each individual elected as a director at the annual meeting will
serve until the annual meeting of stockholders to be held in
2013 or until his successor is duly elected and qualified.
Proposed
Nominees for Election as Class C Directors for a Three-Year
Term Continuing Until the 2013 Annual Meeting of
Stockholders
The following table sets forth information with respect to the
directors nominated for re-election as Class C directors at
the annual meeting.
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Name
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Age
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Position
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Clive Kahn
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52
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Director
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John Gavin
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54
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Director
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The nominees for election as Class C directors were
recommended for nomination to our board by the corporate
governance and nominating committee.
The following are biographical summaries of the directors
identified above:
Clive Kahn
has served as a director since 2007.
Mr. Kahn, a chartered accountant, has served since August
2007 as the Chief Executive Officer of Cardsave Group, Ltd., a
provider of point of sale terminals and credit
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card processing facilities. Prior to that, Mr. Kahn was the
Chief Executive Officer of Travelex Limited. Prior to becoming
Chief Executive Officer, Mr. Kahn was the Chief Financial
Officer of Travelex Limited. Mr. Kahn was employed by
Travelex for 21 years. Prior to his employment with
Travelex, Mr. Kahn practiced as a chartered accountant with
the firm of BDO Stoy Hawyard. We believe that Mr. Kahn is
qualified to serve on our board of directors because of his
extensive management and operational experience, including his
experience in the foreign exchange industry, as well as his
financial and accounting experience.
John Gavin
has served as a director since 2007.
Presently, Mr. Gavin is serving as an Operating Partner
with LLR Partners, a growth oriented private equity firm with
$1.3 billion under management. Mr. Gavin previously
served as the Vice Chairman, and was the Chief Executive Officer
and President of DBM (Drake, Beam, Morin), an international
career management and transitions management firm. Before
joining DBM in 2006, Mr. Gavin was President and Chief
Operating Officer of Right Management Consultants, a global
provider of integrated consulting solutions across the
employment lifecycle. Mr. Gavin originally joined Right
Management as Executive Vice President of Business Development
in 1996. Prior to joining Right Management, Mr. Gavin
worked for Andersen Worldwide. Mr. Gavin is a director of
Interline Brands, Inc., a distributor of maintenance, repair and
operating products, and CSS Industries, Inc., a consumer
products company. From 2000 to 2005, Mr. Gavin was a
director of Opinion Research Corporation. We believe that
Mr. Gavin is qualified to serve on our board of directors
because of his extensive management and operational experience,
his current and prior service on the board of directors of other
publicly and privately held companies and his financial and
accounting experience, including his experience as a certified
public accountant with a nationally recognized public accounting
firm and his service on the audit committees of other publicly
held companies.
Required
Vote
Directors are elected by a plurality of votes cast at the annual
meeting.
Our board of directors unanimously recommends that
stockholders vote FOR Proposal 1 to elect each
of the nominated directors.
Directors
Whose Terms Do Not Expire at the Annual Meeting
The following table sets forth information with respect to the
remaining members of our board of directors:
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Annual Meeting at
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Name
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Position
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Which Term Expires
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Jeffrey A. Weiss
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67
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Chairman of the Board and Chief Executive Officer
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2011
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Ronald McLaughlin
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59
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Director
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2011
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David Jessick
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Director
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2012
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Kenneth Schwenke
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Director
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2012
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Michael Kooper
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Director
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2012
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The following are biographical summaries of the remaining
members of our board of directors:
Jeffrey A. Weiss
has served as our Chairman and Chief
Executive Officer since an affiliate of Bear Stearns &
Co. Inc., an investment banking firm, acquired us in 1990. Until
1992, Mr. Weiss was also a Managing Director at Bear
Stearns & Co. with primary responsibility for that
firms investments in small to mid-sized companies, in
addition to serving as chairman and chief executive officer for
several of these companies. We believe that Mr. Weiss is
qualified to serve on our board of directors because of his
extensive operational experience with us and his knowledge of
our industry.
Ronald McLaughlin
has served as a director 2008.
Mr. McLaughlin founded Chapman Inc. in 2000 and since that
time has worked with a variety of clients, directly and through
Chapman Inc. or a partnership with McLaughlin-Moses on a diverse
array of mandates, including raising investment capital,
strategic government relations and developing strategic
alternatives for businesses that would benefit from effective
partnering with the Canadian government. From 1997 to 2000,
Mr. McLaughlin was the Chief of Staff for the Premier of
the
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Province of Ontario. He currently serves on the board of
directors of Pro-Demnity Insurance Company. We believe that
Mr. McLaughlin is qualified to serve on our board of
directors because of his extensive management and operational
experience and his understanding of matters relating to the
Canadian marketplace.
David Jessick
has served as a director since 2005.
Self-employed since 2005, Mr. Jessick served as a
consultant to the Chief Executive and Senior Financial staff at
Rite Aid Corporation from July 2002 to February 2005.
Mr. Jessick served as Rite Aids Senior Executive Vice
President and Chief Administrative Officer from December 1999 to
June 2002. Prior to that, from February 1997 to June 1999,
Mr. Jessick was the Chief Financial Officer and Executive
Vice President of Finance and Investor Relations for Fred Meyer,
Inc. From 1979 to 1996, he held various roles of increasing
responsibility at Thrifty Payless Holdings, Inc., including
Executive Vice President and Chief Financial Officer from 1993
to 1996. Mr. Jessick began his career as a Certified Public
Accountant for Peat, Marwick, Mitchell & Co. He
currently serves on the board of directors of Big 5 Sporting
Goods Corporation (audit committee chair and nominating
committee member and compensation committee) and Rite Aid
Corporation (audit committee chair). From 2005 to 2007,
Mr. Jessick served as a member of the board of directors of
Pathmark Stores, Inc., from 2005 to 2008, Mr. Jessick
served as a member of the board of directors of Pinnacle Foods
Group, Inc., and from 2005 to 2009, Mr. Jessick served as a
member of the board of directors of Source Interlink Companies,
Inc. We believe that Mr. Jessick is qualified to serve on
our board of directors because of his extensive accounting and
financial experience, his current and prior service on the board
of directors of other publicly and privately held companies,
including membership on multiple audit committees, and his
management and operational experience, including his more than
30 years experience as a corporate executive and
chief financial officer of publicly traded companies in the
retail sector.
Kenneth Schwenke
has served as a director since 2006.
After graduation from Syracuse University and service as an
officer in the U.S. Marine Corps, Mr. Schwenke
received an MBA degree from Duke University in 1986. He then
served as a Senior Human Resources Executive for companies
including PepsiCo, Honeywell, and Aramark, leaving Aramark as
SVP HR in 2001 to found the Off-Campus Dining Network, exiting
with a sale to Sodexo, Inc. in 2006. Mr. Schwenke then
founded Gravitas LLC in 2007, where he currently serves as
managing partner. Mr. Schwenke additionally serves as an
Adjunct Professor of Business at Villanova University, on the
boards of four privately-held companies, as a board member for
the Marine Corps Association Foundation, and as a Trustee of the
Haverford School. We believe that Mr. Schwenke is qualified
to serve on our board of directors because of his extensive
management and operational experience, including his experience
in the human resources field.
Michael Kooper
has served as a director since 2008. Since
November 2004, Mr. Kooper has been the Area Chairman of
Gallagher Benefit Services, Inc., a benefits consulting firm.
From December 1998 until November 2004, Mr. Kooper was the
President of The Kooper Group, a benefits consulting firm. We
believe that Mr. Kooper is qualified to serve on our board
of directors because of his extensive management and strategic
experience, including his experience in the employee benefits
area.
5
Director
Compensation
The following table sets forth compensation paid to our
non-employee directors during the year ended June 30, 2010:
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Change in
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Pension
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Value and
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Non-qualified
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Non-Equity
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Deferred
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Fees Earned or
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Name
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Paid in Cash ($)
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Awards ($)(1)
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Awards ($)(1)
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Compensation ($)
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Earnings
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Compensation ($)
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Total ($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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David Jessick
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$
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94,000
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$
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90,938
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$
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98,936
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$
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283,874
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Kenneth Schwenke
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$
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102,000
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$
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90,938
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$
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99,934
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$
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292,872
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John Gavin
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$
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96,500
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$
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90,938
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$
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100,744
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$
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288,182
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Clive Kahn
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$
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86,000
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$
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90,938
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$
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100,744
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$
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277,735
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Michael Kooper
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$
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88,500
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$
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90,938
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$
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90,937
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$
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270,375
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Ronald McLaughlin
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$
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88,000
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$
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90,938
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$
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90,937
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$
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269,875
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(1)
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The amounts shown in this column reflect the aggregate grant
date fair value computed in accordance with FASB ASC Topic 718
of awards pursuant to our equity compensation plans and
therefore include amounts from awards granted in and prior to
fiscal 2010. The valuation assumptions for our stock options are
described in Note 4 to our audited consolidated financial
statements included in our Annual Report on
Form 10-K
for fiscal 2010. On November 11, 2009, each of
Messrs. Gavin, Jessick, Kahn, Kooper, McLaughlin and
Schwenke received an option to purchase 7,068 shares of our
common stock with a grant date fair value of $84,000 and each
was granted an award of restricted stock units to purchase
3,675 shares of our common stock with a grant date fair
value of $84,000. As of June 30, 2010, Mr. Jessick
held options to purchase an aggregate of 49,981 shares of
common stock and 17,017 restricted stock units,
Mr. Schwenke held options to purchase an aggregate of
51,856 shares of common stock and 18,775 restricted stock
units, Mr. Gavin held options to purchase an aggregate of
42,481 shares of common stock and 17,017 restricted stock
units, Mr. Kahn held options to purchase an aggregate of
42,481 shares of common stock and 21,602 restricted stock
units, Mr. Kooper held options to purchase an aggregate of
34,846 shares of common stock and 16,947 restricted stock
units, and Mr. McLaughlin held options to purchase an
aggregate of 34,846 shares of common stock and 16,947
restricted stock units.
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Compensation
of Independent Directors
Our independent directors are eligible to receive the following
annual compensation:
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Annual retainer of $40,000;
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Annual retainer for members of the audit committee of $5,000;
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Annual retainer for members of the human resources and
compensation committee of $3,000;
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Annual retainer for members of the corporate governance and
nominating committee of $3,000;
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Annual retainer for chairman of the audit committee of $10,500;
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Annual retainer for chairman of the human resources and
compensation committee of $7,500;
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Annual retainer for chairman of the corporate governance and
nominating committee of $6,500;
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Board meeting attendance fee of $2,000 per meeting
attended; and
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Committee meeting attendance fee of $1,500 per meeting attended.
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In addition, at the first board meeting after each annual
meeting of stockholders, the then-current non-employee members
of our board of directors are entitled to receive a grant of
restricted stock units as well as options to purchase shares of
our common stock. These awards vest on the earliest of
(a) the date of the next annual meeting of stockholders,
(b) the first anniversary of the grant, (c) the death
of the recipient, or (d) our change in control. The
aggregate annual award to each non-employee board member is made
in an amount, calculated in accordance with
6
generally accepted accounting principles, equal to two-times the
average annual cash compensation for the non-employee members
who served on our board of directors for the entire prior fiscal
year, with one-half of such value represented as an option grant
to purchase shares of our common stock and one-half of such
value represented as restricted stock units. If a board member
joins our board of directors after a grant date, such director
will receive a prorated award on the date of joining our board.
The shares of our common stock purchased on exercise of the
options issued to non-employee directors cannot be sold until
the earlier of (a) our change in control, or (b) the
91st day after the recipient ceases to serve on our board
of directors, except to the extent necessary to generate funds
to pay taxes incurred upon exercise of options. Shares of our
common stock underlying restricted stock units granted to our
non-employee directors will be delivered upon the first to occur
of (a) our change in control, or (b) the earlier of
(i) the 91st day after the recipient ceases to serve
on the board or (ii) the 15th day of the third month
following the calendar year in which the recipient ceases to
serve on the board, except to the extent (subject to compliance
with Section 409A of the Internal Revenue Code) necessary
to generate funds to pay taxes incurred with regard to the units.
At the election of a non-employee member of our board of
directors, such members board retainer and meeting fees
will be paid in vested restricted stock units (subject to the
delivery rules set forth in the paragraph above) rather than in
cash. The election to receive board retainer and meeting fees in
vested restricted stock units must be made by the non-employee
director prior to December 31st of the calendar year
preceding the fiscal year in which such fees are earned.
In addition, Messrs. Gavin, Jessick, Kooper, McLaughlin and
Schwenke participate in our health benefit program with the full
cost paid by us.
7
CORPORATE
GOVERNANCE
Our board of directors maintains standing audit, corporate
governance and nominating and human resources and compensation
committees, each of which is described below.
Audit Committee
. The audit committee
assists our board of directors in overseeing: (i) the
integrity of our financial statements; (ii) our compliance
with legal and regulatory requirements; (iii) the
independence and qualifications of our independent registered
public accounting firm; and (iv) the performance of our
internal audit function and independent registered public
accounting firm. The audit committees charter was adopted
by our board of directors in February 2005, and was amended most
recently in April 2005. A current copy of the audit committee
charter was attached to our proxy statement for our 2008 annual
meeting of stockholders filed with the Securities and Exchange
Commission on October 7, 2008.
Our
Code of Business Conduct and Ethics
includes
information regarding procedures established by the audit
committee for the submission of complaints about our accounting
or auditing matters. Our
Code of Business Conduct and Ethics
is applicable to our executives, employees and directors,
and reflects and reinforces our commitment to integrity in the
conduct of our business. Amendments to our
Code of Business
Conduct and Ethics
and any grant of a waiver from a
provision of our
Code of Business Conduct and Ethics
requiring disclosure under applicable Securities and
Exchange Commission rules will be disclosed on our website
(www.dfg.com). A copy of our
Code of Business Conduct and
Ethics
is available on our website (www.dfg.com/ethics.asp).
A copy of the Code may also be obtained upon request from our
Secretary at the following address: Dollar Financial Corp.,
1436 Lancaster Avenue, Suite 300, Berwyn, PA 19312.
The audit committee currently consists of Messrs. Jessick
(Chairman), Gavin and Kahn, each of whom is independent within
the meaning of the Securities and Exchange Commission
regulations and the listing requirements of the Nasdaq Stock
Market, which we refer to in this proxy statement as Nasdaq. The
audit committee met 7 times during fiscal 2010.
Each member of the audit committee is financially literate,
knowledgeable and qualified to review financial statements. Our
board of directors has determined that Mr. Jessick is
qualified as an audit committee financial expert
within the meaning of Securities and Exchange Commission
regulations. Our board of directors reached its conclusion as to
the qualifications of Mr. Jessick based on his education
and experience in analyzing financial statements of a variety of
companies, most notably as the Chief Financial Officer and
Executive Vice President of Finance and Investor Relations for
Fred Meyer, Inc. from February 1997 to June 1999 and as the
Executive Vice President and Chief Financial Officer at Thrifty
Payless Holdings, Inc. from 1993 to 1996. He is currently a
director of Rite Aid Corporation (where he also serves the audit
committee chairman) and Big 5 Sporting Goods Corporation (where
he also serves as the audit committee chairman and a nominating
committee member and compensation committee). Consistent with
Nasdaq listing requirements, our board of directors has
determined that Mr. Jessicks concurrent service on
these boards and committees does not impair his ability to
effectively serve on the audit committee.
Corporate Governance and Nominating
Committee
. The corporate governance and
nominating committee is responsible for: (i) identifying
individuals qualified to become board members and recommending
to our board of directors the nominees for election to our
board; (ii) leading our board of directors in its annual
review of our boards performance, and making
recommendations to our board of directors regarding board
organization, membership, function and effectiveness, as well as
committee structure, membership, function and effectiveness;
(iii) recommending to our board of directors nominees for
each committee of our board; (iv) reviewing our efforts to
promote diversity among directors, officers, employees and
contractors; and (v) arranging for an orientation for all
directors.
The corporate governance and nominating committee amended its
charter on September 24, 2008. A current copy of the
amended and restated corporate governance and nominating
committee charter was attached to our proxy statement for our
2008 annual meeting of stockholders filed with the Securities
and Exchange Commission on October 7, 2008. The corporate
governance and nominating committee met one time during fiscal
2010.
8
The corporate governance and nominating committee currently
consists of Messrs. Gavin (Chairman), Kahn, Jessick,
McLaughlin and Schwenke, each of whom is independent within the
meaning of Nasdaq listing requirements and the charter of the
corporate governance and nominating committee.
Human Resources and Compensation
Committee
. The human resources and
compensation committee is authorized to determine compensation
for our senior executives and non-employee directors. The human
resources and compensation committee met 11 times during fiscal
2010. The human resources and compensation committee amended its
charter on September 24, 2008. A current copy of the
amended and restated human resources and compensation committee
charter was attached to our proxy statement for our 2008 annual
meeting of stockholders filed with the Securities and Exchange
Commission on October 7, 2008.
The human resources and compensation committee currently
consists of Messrs. Schwenke (Chairman), Kooper and
McLaughlin, each of whom is independent within the meaning of
Nasdaq listing requirements, a nonemployee director
within the meaning of
Rule 16b-3
promulgated under Section 16 of the Securities Exchange Act
of 1934, as amended, and an outside director within
the meaning of Section 162(m) of the Internal Revenue Code.
See
Executive Officer and Executive Compensation
Compensation Discussion and
Analysis
,
Report of
the Compensation Committee
and
Human Resources and Compensation Committee
Process and Procedures
below for more information
regarding the human resources and compensation committee.
Meetings
of Our Board of Directors and Annual Meeting of
Stockholders
Our board of directors met 14 times during fiscal 2010. Each
incumbent director attended at least 75% of the aggregate
meetings of our board during fiscal 2010 that were held
following his election and of the meetings held by all
committees on which he served.
It is our policy that all of our board members attend annual
meetings of stockholders, except where the failure to attend is
due to unavoidable circumstances or conflicts. All of our
directors attended our 2009 annual meeting of stockholders.
Director
Independence
No director is deemed to be independent unless our board of
directors affirmatively determines that the director has no
material relationship with us, directly or as an officer,
stockholder or partner of an organization that has a material
relationship with us and, in doing so, our board of directors
considers information regarding the relationships between each
director and his family, on the one hand, and us, on the other.
In assessing director independence, our board of directors
considers all commercial, charitable or other business
relationships that any director may have with us and our
affiliates, including those reported under
Certain
Relationships and Related Transactions
below.
Nasdaqs independence definition includes a
series of objective tests, such as that the director is not an
employee of ours and has not engaged in various types of
business dealings with us. In addition, as further required by
Nasdaq listing requirements, our board of directors has made a
subjective determination with respect to each independent
director that no relationships exist which, in the opinion of
our board, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. In
making these determinations, our board of directors reviewed and
discussed information provided by the directors and us with
regard to each directors business and personal activities
as they may relate to us and our management. As a result of its
review, our board of directors affirmatively determined that all
of our directors (other than Mr. Weiss) are independent of
us and our management under Nasdaqs
independence definition and that the audit
committee, corporate governance and nominating committee and
human resources and compensation committee are comprised
exclusively of independent directors under applicable Nasdaq
rules. Mr. Weiss is not considered to be independent
because of his employment as one of our executives. Our board of
directors also determined that the directors who serve as
members of the audit committee are also independent
for purposes of Section 10(A)(3) of the Securities Exchange
Act of 1934, as amended.
9
Board
Leadership Structure
Our board of directors does not have a policy regarding the
separation of the roles of Chief Executive Officer and Chairman
of our board of directors as our board of directors believes it
is in our best interests to make that determination based on the
position and direction of our company and the membership of our
board of directors. Our board of directors has determined that
having our Chief Executive Officer serve as Chairman of our
board of directors is in the best interest of the our
stockholders at this time. This structure makes the best use of
our Chief Executive Officers extensive knowledge of us and
our industry, as well as fostering greater communication between
our management and our board of directors. Our board of
directors has not appointed a lead independent director. The
non-management members of our board, however, meet periodically,
and no less than twice per fiscal year, in executive session to
discuss the effectiveness of our management, the quality of the
board of directors meetings and any other issues or concerns.
Director
Nominations
In making its recommendations as to nominees for election to our
board of directors, the corporate governance and nominating
committee may consider, in its sole judgment, recommendations of
our Chief Executive Officer, other directors, senior executives,
stockholders and third parties. The corporate governance and
nominating committee may also retain third-party search firms to
identify potential nominees.
Stockholders desiring to recommend nominees should submit their
recommendations in writing to Roy W. Hibberd, Senior Vice
President, General Counsel and Secretary, Dollar Financial
Corp., 1436 Lancaster Avenue, Suite 300, Berwyn, PA 19312.
Recommendations from stockholders should include pertinent
information concerning the proposed nominees background
and experience. The corporate governance and nominating
committee may consider, as one of the factors in its evaluation
of stockholder recommended nominees, the size and duration of
the interest of the recommending stockholder or stockholder
group in our capital stock. The corporate governance and
nominating committee may also consider the extent to which the
recommending stockholder intends to continue holding its
interest in our capital stock, including, in the case of
nominees recommended for election at an annual meeting of
stockholders, whether the recommending stockholder intends to
continue holding its interest at least through the time of such
annual meeting.
Based on the information provided to the corporate governance
and nominating committee, it will make an initial determination
whether to conduct a full evaluation of a candidate. As part of
the full evaluation process, the corporate governance and
nominating committee may conduct interviews, obtain additional
background information and conduct reference checks of potential
nominees. The corporate governance and nominating committee may
also ask potential nominees to meet with management and other
members of our board of directors. After completing this
evaluation process, the corporate governance and nominating
committee makes a recommendation to the full board of directors,
which makes the final determination whether to nominate the
candidate as a director.
In evaluating a candidate, our board of directors, with the
assistance of the corporate governance and nominating committee,
takes into account a variety of factors as it deems appropriate,
including the following:
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the nominees understanding of our business and the
industries in which we operate in general;
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the nominees ability to regularly attend meetings of our
board of directors and of any committees on which the director
would serve;
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the nominees ability to review in a timely manner and
understand materials circulated to our board of directors
regarding us or our industry;
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the nominees ability to participate in meetings and
decision making processes in an objective and constructive
manner; and
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the nominees ability to be reasonably available, upon
request, to advise our officers and management.
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The corporate governance and nominating committee also considers
such other factors as it deems appropriate, including a
nominees integrity, experience, achievements, judgment,
intelligence, personal character and capacity to make
independent analytical inquiries, ability and willingness to
devote adequate time to board duties, and the
10
likelihood that he or she will be able to serve on our board for
a sustained period. The corporate governance and nominating
committee also considers factors such as global experience,
experience as a director of a public company and knowledge of
relevant industries. Although neither the corporate governance
and nominating committee nor our board of directors has a
specific policy with regard to the consideration of diversity in
identifying director nominees, the corporate governance and
nominating committee gives due consideration to our boards
overall balance of diversity of perspectives, backgrounds and
experiences when selecting individuals for nomination for
election to our board of directors.
Risk
Oversight
Our board of directors assumes an active role, as a whole and
also at the committee level, in overseeing management of our
risks. Our board of directors regularly receives reports from
senior management on areas of material risk to us, including our
credit, liquidity, operational and legal and regulatory risks.
Pursuant to its charter, the audit committee reviews our major
financial risk exposures and the steps management has taken to
monitor and control such exposures, and it also meets
periodically with management to discuss risk assessment and risk
management. In addition, the human resources and compensation
committee oversees the management of risks relating to our
executive and non-executive compensation plans and arrangements,
and the nominating and corporate governance committee manages
risks associated with the independence of our board of directors
and potential conflicts of interest. Although each committee
oversees certain risks and the management of such risks, our
entire board of directors is regularly informed through
committee reports about such risks.
Ethics
Hotline
We encourage our employees to raise possible ethical issues. We
maintain an ethics hotline that is available 24 hours a
day, seven days a week, and which is centrally answered by an
independent, third-party service. Callers may remain anonymous
and, to further protect the callers anonymity, the
telephone compliance hotline staff does not identify the gender
of the caller, tape record the call or use caller ID
or other methods to identify the telephone number of the caller.
We prohibit retaliatory action against any individual for
raising possible ethical issues, and employees at all levels are
prohibited from retribution against anyone for reporting or
supplying information about an ethical concern.
Communications
with Our Board of Directors
Our board of directors recommends that stockholders deliver any
communications with our board in writing by sending them in care
of our Secretary. Stockholders may send such communications by
email to Roy W. Hibberd, our Senior Vice President, General
Counsel and Secretary at Roy.Hibberd@dfg.com, or by mail to Roy
W. Hibberd, Senior Vice President, General Counsel and
Secretary, Dollar Financial Corp., 1436 Lancaster Avenue,
Suite 300, Berwyn, PA 19312. The name(s) of any specific
intended board recipient(s) should be noted in the communication.
11
SECURITIES
OWNERSHIP
The following table sets forth information as of
September 24, 2010 regarding the beneficial ownership of
our common stock by each director, by each executive officer
named in the 2010 Summary Compensation Table appearing elsewhere
in this proxy statement, by all directors and executive officers
as a group, and by each person known to us to be the beneficial
owner of more than 5% of our outstanding common stock. Except as
indicated below, to our knowledge, all of such common stock is
owned directly, and the indicated person has sole voting and
investment power.
We have calculated beneficial ownership in accordance with the
rules of the Securities and Exchange Commission. Shares of our
common stock subject to options currently exercisable or
exercisable within 60 days of September 24, 2010 are
deemed to be outstanding for calculating the percentage of
outstanding shares of the person holding those options, but are
not deemed outstanding for calculating the percentage of any
other person. As of September 24, 2010, there were a total
of 24,372,947 shares of our common stock issued and
outstanding. Unless otherwise indicated below in the footnotes
to the table, the address of each officer and director is
c/o Dollar
Financial Corp., 1436 Lancaster Avenue, Suite 300, Berwyn,
Pennsylvania 19312.
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Amount of
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Beneficial
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Percent of
|
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Name and Address of Beneficial Owner:
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Ownership
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Class
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Directors
:
|
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Jeffrey A. Weiss
|
|
|
806,835
|
(1)
|
|
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3.31
|
%
|
John Gavin
|
|
|
59,498
|
(2)
|
|
|
*
|
|
Clive Kahn
|
|
|
64,083
|
(3)
|
|
|
*
|
|
Michael Kooper
|
|
|
51,793
|
(4)
|
|
|
*
|
|
David Jessick
|
|
|
66,998
|
(5)
|
|
|
*
|
|
Ronald McLaughlin
|
|
|
51,793
|
(6)
|
|
|
*
|
|
Kenneth Schwenke
|
|
|
70,631
|
(7)
|
|
|
*
|
|
Other Named Executive Officers
:
|
|
|
|
|
|
|
|
|
Sydney Franchuk
|
|
|
28,386
|
(8)
|
|
|
*
|
|
Silvio Piccini
|
|
|
26,965
|
(9)
|
|
|
*
|
|
Norman Miller
|
|
|
135,413
|
(10)
|
|
|
*
|
|
Randy Underwood
|
|
|
151,854
|
(11)
|
|
|
*
|
|
5% Stockholders
:
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
|
|
|
2,755,918
|
(12)
|
|
|
11.31
|
%
|
Wells Fargo and Company
|
|
|
2,668,030
|
(13)
|
|
|
10.95
|
%
|
Wellington Management Company, LLP
|
|
|
2,496,395
|
(14)
|
|
|
10.24
|
%
|
Alydar Capital, LLC
|
|
|
1,968,200
|
(15)
|
|
|
8.08
|
%
|
Wasatch Advisors, Inc.
|
|
|
1,629,781
|
(16)
|
|
|
6.69
|
%
|
FMR LLC
|
|
|
1,554,990
|
(17)
|
|
|
6.38
|
%
|
All directors and executive officers as a group (15 persons)
|
|
|
1,702,150
|
(18)
|
|
|
6.90
|
%
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Includes options to purchase 28,188 shares of common stock
and 48,233 restricted stock units which are exercisable within
60 days of September 24, 2010 and 100,562 restricted
shares of common stock.
|
|
(2)
|
|
Includes options to purchase 7,068 shares of common stock
and 3,675 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(3)
|
|
Includes options to purchase 7,068 shares of common stock
and 3,675 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(4)
|
|
Includes options to purchase 7,068 shares of common stock
and 3,675 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
12
|
|
|
(5)
|
|
Includes options to purchase 7,068 shares of common stock
and 3,675 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(6)
|
|
Includes options to purchase 7,068 shares of common stock
and 3,675 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(7)
|
|
Includes options to purchase 7,068 shares of common stock
and 3,675 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(8)
|
|
Includes options to purchase 1,755 shares of common stock
and 628 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(9)
|
|
Includes options to purchase 2,146 shares of common stock
and 1,000 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(10)
|
|
Includes options to purchase 5,457 shares of common stock
and 2,558 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(11)
|
|
Includes options to purchase 5,457 shares of common stock
and 2,558 restricted stock units which are exercisable within
60 days of September 24, 2010.
|
|
(12)
|
|
Information based on a Schedule 13G filed with the
Securities and Exchange Commission on January 8, 2010 by
BlackRock, Inc. BlackRock, Inc., a parent holding company, holds
or shares on its behalf of: BlackRock Advisors LLC; BlackRock
Asset Management Australia Limited; BlackRock Asset Management
Japan Limited; BlackRock Capital Management, Inc.; BlackRock
Fund Advisors; BlackRock Institutional Trust Company,
N.A.; BlackRock Investment Management, LLC; BlackRock
International Ltd; State Street Research & Management
Co. The address of BlackRock, Inc. is 40 East 52nd Street, New
York, NY 10022.
|
|
(13)
|
|
Information based on a Schedule 13G/A filed with the
Securities and Exchange Commission on June 11, 2010 by
Wells Fargo & Company. Wells Fargo &
Company, a parent holding company, holds or shares on its own
behalf and on the behalf of: Wells Capital Management
Incorporated, a registered investment advisor; Evergreen
Investment Management Company, LLC, a registered investment
advisor; Wells Fargo Advisors Financial Network, LLC; Wells
Fargo Advisors, LLC; Wells Fargo Bank, N.A., a bank; and Wells
Fargo Funds Management, LLC, a registered investment advisor.
The address of Wells Fargo & Company is
420 Montgomery Street, San Francisco, California 94163.
|
|
(14)
|
|
Information based on a Schedule 13G filed with the
Securities and Exchange Commission on September 10, 2010 by
Wellington Management Company, LLP, a registered investment
advisor, a Massachusetts limited liability partnership with its
principal place of business located at 75 State Street, Boston,
MA 02109
|
|
(15)
|
|
Information based on a Schedule 13G/A filed with the
Securities and Exchange Commission on February 16, 2010 by
Alydar Partners, LLC. John A. Murphy, an individual, is Manager
of Alydar Capital, LLC and Alydar Partners, LLC, both Delaware
limited liability companies. Alydar Capital, LLC is the general
partner of Alysheba Fund, L.P. and Alysheba QP Fund, L.P. Alydar
Partners, LLC is the investment manager of Alysheba
Fund L.P., Alysheba QP Fund, L.P. and Alysheba
Fund Limited. John A. Murphy disclaims beneficial ownership
of the securities. The address of Alydar Capital, LLC is 222
Berkeley Street, 17th Floor, Boston, MA, 02116.
|
|
(16)
|
|
Information based on a Schedule 13G/A filed with the
Securities and Exchange Commission on February 16, 2010 by
Wasatch Advisors, Inc., a registered investment advisor, with a
principal place of business at 150 Social Hall Avenue, Salt
Lake City, Utah 84111.
|
|
(17)
|
|
Information based on a Schedule 13G filed with the
Securities and Exchange Commission on February 16, 2010 by
FMR LLC. The principal business address of FMR LLC is 82
Devonshire Street, Boston, MA 02109
|
|
(18)
|
|
Includes options to purchase 90,863 shares of common stock
and 79,587 restricted stock units which are exercisable within
60 days of September 24, 2010 and 100,562 restricted
shares of common stock.
|
13
EXECUTIVE
OFFICERS AND EXECUTIVE COMPENSATION
Executive
Officers
Our executive officers, as of September 24, 2010, including
their respective ages and positions, are set forth below:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
Jeffrey A. Weiss
|
|
|
67
|
|
|
Chairman of the Board and Chief Executive Officer
|
Randy Underwood
|
|
|
60
|
|
|
Executive Vice President and Chief Financial Officer
|
Norman Miller
|
|
|
49
|
|
|
Executive Vice President and Chief Operating Officer
|
Sydney Franchuk
|
|
|
58
|
|
|
Executive Vice President and Chairman National Money
Mart
|
Silvio Piccini
|
|
|
47
|
|
|
Senior Vice President and Managing Director United
Kingdom Operations
|
Roy W. Hibberd
|
|
|
57
|
|
|
Senior Vice President, General Counsel and Secretary
|
Peter Sokolowski
|
|
|
49
|
|
|
Senior Vice President of Finance and Corporate Treasurer
|
William Athas
|
|
|
48
|
|
|
Senior Vice President of Finance and Corporate Controller
|
Melissa Soper
|
|
|
44
|
|
|
Senior Vice President of Corporate Administration
|
The following are biographical summaries of our executive
officers.
Jeffrey A. Weiss
has served as our Chairman and Chief
Executive Officer since an affiliate of Bear Stearns &
Co. Inc., an investment banking firm, acquired us in 1990. Until
1992, Mr. Weiss was also a Managing Director at Bear
Stearns & Co. with primary responsibility for that
firms investments in small to mid-sized companies, in
addition to serving as chairman and chief executive officer for
several of these companies.
Randy Underwood
has served as our Executive Vice
President, Chief Financial Officer and Assistant Secretary since
2004. Previously, Mr. Underwood served for three years as
Senior Vice President, Global Finance and Administration and
Chief Financial Officer for The Coleman Company, Inc., a
manufacturer of outdoor recreation products. Prior to his tenure
at The Coleman Company, Mr. Underwood held senior executive
positions with Strategic Development Partners, Inc. from 1999
through 2001 and with Thorn EMI, plc, the parent company of
Rent-A-Center,
Inc., an operator of retail
rent-to-own
stores, including Senior Vice President and Chief Financial
Officer and Division President, from 1988 through 1998.
Earlier in his career, he practiced as a Certified Public
Accountant with the firm of Peat, Marwick, Mitchell and Co., a
public accounting firm.
Norman Miller
has served as our Executive Vice President
and Chief Operating Officer since 2007. Previously,
Mr. Miller was employed by Aramark, Inc., a provider of
managed services to business, educational, healthcare,
governmental and other institutions, where he served from 2003
to 2006 as its Group President of Sports &
Entertainment. He also served from 2002 to 2003 as
Aramarks President of Correctional Services. From 1992 to
1997, Mr. Miller was a Regional General Manager at Nestle.
From 1989 to 1992, Mr. Miller was employed by
Kraft General Foods, as a Regional Sales Manager. From 1988
to 1989, Mr. Miller was employed by PepsiCo as a Regional
Operations Manager. Mr. Miller is a 1983 graduate of the
United States Military Academy at West Point.
Sydney Franchuk
has served as our Executive Vice
President and Chairman-National Money Mart since 2007.
Mr. Franchuk served as President of our North America
operations from November 1997 until January 2007. Previously,
Mr. Franchuk held the position of Vice President of Finance
and Administration for National Money Mart Company and Check
Mart, an affiliated company in the United States. Prior to
joining us in 1985, Mr. Franchuk was a public accountant
with Woods & Company and Ernst & Young LLP
Chartered Accountants, each an accounting firm, and is a
Certified Management Accountant.
Silvio Piccini
has served as our Senior Vice President
and Managing Director United Kingdom Operations
since 2008. From January 2007 until December 2007,
Mr. Piccini served as a Principal of Strategic Retail
Management, a retail consulting firm. Prior to that,
Mr. Piccini served for one year as the Executive Vice
President and Chief Merchandising Officer for Movie Gallery,
Inc., a retail store video chain which acquired his employer of
nine years, Hollywood Entertainment, in 2005. During
Mr. Piccinis collective 10 years of employment
in the video store industry, he held several positions including
Vice President of Operations, Senior Vice President of Planning
14
and Allocation, Senior Vice President of Merchandising, Senior
Vice President of Marketing, and finally, Executive Vice
President and Chief Merchandising Officer of the combined
organization. Prior to that, Mr. Piccini worked for Taco
Bell Corporation, then a subsidiary of Pepsico, Inc., for seven
years in increasing roles of responsibility.
Roy W. Hibberd
has served as our Senior Vice President,
General Counsel since July 2005, and as our Secretary since June
2008. Prior to joining us, Mr. Hibberd served as a Managing
Director of Smooth Engine, Inc., a consulting company, and as a
Managing Director of Millennium Services Corp., a franchise and
business consulting firm, from July 2002 to July 2005. From 2000
until 2002, he served as the General Counsel and Managing
Director (US) for the United States operations of Virtual
Internet, plc, a London based public company providing internet
services, and from 1996 to 1999 as the Vice President and
General Manager, The Americas, of the American Express Company.
Peter Sokolowski
has served as our Senior Vice President
of Finance and Corporate Treasurer since January 2008.
Mr. Sokolowski previously was our Senior Vice President of
Finance and Chief Credit Officer and also served as our Vice
President, Finance from 1991 to 2002. Prior to joining us in
1991, Mr. Sokolowski worked in various financial positions
in the commercial banking industry.
William Athas
has served as our Senior Vice President of
Finance and Corporate Controller since January 2007. Previously,
he was our Vice President, Finance and Corporate Controller.
Prior to joining us in 2000, he was the divisional controller of
Timet, a titanium metals company, from December 1998 until
January 2000. Mr. Athas worked at Asarco, Inc., a
non-ferrous metals company, from 1987 to 1998, where he was the
assistant corporate controller. Mr. Athas is a graduate of
Boston College and attained his Certified Public Accountant
certification in 1989.
Melissa Soper
has served as our Senior Vice President of
Corporate Administration since July 2007. Previously,
Ms. Soper served as our Vice President and General Manager,
We the People Division, from July 2005 until July 2007, and
previously served from October 1996 through July 2005 as our
Vice President, Corporate Human Resources, with overall
responsibility for development of our global human resources
department and for compliance with state and federal labor laws.
15
Compensation
Discussion and Analysis
As a global provider of financial products and services to the
unbanked and under-banked community, we believe that the value
we deliver to our customers and stockholders depends in large
part upon the quality and capabilities of our people. Our
business model is based on our ability both to attract new
customers and maintain relationships with existing customers as
well as to maintain our mission, customer focus and
entrepreneurial spirit. As with all of our employees, the
recruitment, retention and motivation of our executive officers
are critical factors to our business success. We believe that
the senior leadership provided by our Chairman and Chief
Executive Officer, as well as the other individuals included in
the
2010 Summary Compensation Table
below, to
whom we refer in this proxy statement as our named executive
officers, is the cornerstone to successfully implementing and
achieving our strategic plans. Through the following questions
and answers, we will explain the material elements of our
executive compensation programs.
What
are the objectives of our executive compensation
programs?
Our compensation philosophy is to provide a strong focus on
overall company financial performance, business development and
creation of stockholder value. As a growth-oriented and
entrepreneurial company, our executive compensation programs are
designed to align compensation with corporate performance and
the creation of stockholder value. We seek to compensate our
executives at levels that are competitive with our peer
companies in order to attract, retain and motivate superior
quality and highly experienced executives. Accordingly, our
executive compensation programs emphasize variable pay in the
form of annual and long-term incentive programs which tie a
significant portion of each executives compensation to our
success in achieving our key strategic and financial goals.
For our executive compensation programs for each of fiscal 2010
and 2011, the human resources and compensation committee of our
board of directors retained the Hay Group, a global management
consulting firm, to gather data regarding the types and amount
of compensation that our peer companies, which we identify
below, as well as other international retail and consumer
companies from which we recruit, pay their executives and other
key employees. The Hay Group assists our human resources and
compensation committee in the review of relevant data and the
determination of appropriate executive compensation levels.
These reviews provide us with valuable data regarding the
compensation levels and practices of our peer and other targeted
companies, which, in turn, assist us in setting our compensation
levels at competitive levels.
We set annual compensation for fiscal 2010 and fiscal 2011
based, in part, on a detailed report from the Hay Group
that we received prior to the start of each of those fiscal
years. In these reports, the Hay Group:
|
|
|
|
|
described the compensation elements and practices of the peer
companies selected by our human resources and compensation
committee;
|
|
|
|
compared the compensation levels and pay mix of each of our
named executive officers and certain other executives with those
of our peer companies;
|
|
|
|
compared the compensation levels of our named executive officers
and certain other executives to the Hay Groups
General Industry and Retail Industry compensation surveys using
the Hay Groups Job Evaluation Methodology; and
|
|
|
|
reviewed the long-term incentive plan design practices among our
peer group and the general market and provided recommendations
for our long-term incentive program.
|
Our Chairman and Chief Executive Officer and our Executive Vice
President and Chief Financial Officer, and our Chairman and
Chief Executive Officer with regard to our Executive Vice
President and Chief Financial Officer, provided our human
resources and compensation committee with:
|
|
|
|
|
an assessment of each other named executive officers
performance contributions for the prior year as well as
sustained performance contributions over a number of
years; and
|
|
|
|
significant changes in responsibilities delegated to each other
named executive officer during the year.
|
16
The human resources and compensation committee considered this
information in each instance, and discussed the data and
recommendations referenced above with our Chairman and Chief
Executive Officer for recommendations for named executive
officers other than himself, and representatives from the Hay
Group, with respect to our senior executives base pay and
our annual cash bonus and long-term incentive programs. The
human resources and compensation committee considered all of the
inputs described above, as well as additional factors such as
retention issues, our short and long-term performance goals and
our overall compensation philosophy, and presented its
recommendations to our board of directors for each element of
compensation then being considered. Based on the empirical
compensation data gathered by our compensation consultants,
combined with the compensation philosophy and objectives
communicated by the human resources and compensation committee,
our board of directors discussed, considered and approved these
recommendations.
With respect to the compensation of our Chairman and Chief
Executive Officer, the human resources and compensation
committee is responsible for reviewing and approving the goals
and objectives relating to our Chairman and Chief Executive
Officers compensation, evaluating the performance of our
Chairman and Chief Executive Officer in light of such goals and
objectives, and setting our Chairman and Chief Executive
Officers compensation level, perquisites and other
benefits based on this evaluation, which are also then approved
by our board of directors.
What
are the principal components of our executive compensation
programs?
Our executive compensation programs consist of three key
elements: (i) base salary; (ii) a performance-based
annual bonus, payable in cash; and (iii) long-term
incentive compensation, which for fiscal 2010 and fiscal 2011
included grants of shares of restricted common stock, restricted
stock units, options to purchase our common stock and long-term
cash incentives. Generally, as an executives
responsibilities increase, the human resources and compensation
committee allocates a greater portion of his or her total
compensation potential from fixed components such as base salary
to variable components such as annual bonus and long-term
incentive compensation. We believe that this allocation approach
reflects our
pay-for-performance
compensation philosophy due to the greater influence that most
of our senior executives have on our annual and long-term
business results. In addition, we offer certain additional
compensation items to our Chairman and Chief Executive Officer
and our Executive Vice President and Chief Financial Officer
pursuant to employment agreements that recognize and reflect the
respective roles each such individual undertakes within our
organization. Each of these principal components is described in
more detail below.
Base Salary:
We use base salary as a
significant retention tool to provide executives with a base
level of income. Historically, base salary determinations for
our named executive officers take into account many factors,
including:
|
|
|
|
|
the depth and breadth of an individuals past business
experience;
|
|
|
|
the individuals current and historical performance and
contributions to us;
|
|
|
|
the individuals future potential with us;
|
|
|
|
the individuals role and unique skills;
|
|
|
|
consideration of external market data relating to compensation
for similar positions at peer companies, adjusted to reflect the
relative scope of responsibilities and uniqueness of the
role; and
|
|
|
|
subjective positional performance criteria.
|
In addition to the factors described above, the human resources
and compensation committee also considered the findings of the
Hay Group in making its base salary determinations for fiscal
2010 and fiscal 2011. Consistent with our compensation
objectives of attracting and retaining top executive talent, we
believe that the base salaries of our named executive officers
should be set at levels which, while not always leading, are
strongly competitive with, our peer group. As such, our human
resources and compensation committee, our Chairman and Chief
Executive Officer and our Executive Vice President and Chief
Financial Officer has determined that the appropriate base
salary target for our named executive officers should reflect a
combination of the 50th percentile of the base salaries of
comparable executives at our peer companies as a group as well
as the aforementioned surveys and
17
methodological data provided by the Hay Group, with the ability
to move higher based on the factors noted above and other
variables deemed relevant by our human resources and
compensation committee. Given our international business model,
we seek executive talent with large, international public
company experience, preferably including substantial consumer
retail experience. Therefore, we consider benchmarking against
the consumer/retail services industries to be more relevant than
specialized financial services companies. We believe that
benchmarking our executive pay to this broader industry group
has enabled us to attract and retain high caliber executives
from that group.
In light of the challenging economic conditions that we faced in
fiscal 2010, and the fact that, based on input from the Hay
Group, the named executive officers were near the median in
total direct compensation (including base salaries and short and
long-term incentives) relative to similar executive officers in
our peer group, the human resources and compensation committee
elected not to increase the base salaries of any of our named
executive officers for fiscal year 2010 except with respect to
Mr. Weiss, whose salary increase (from $900,000 to
$985,000) was made effective as of July 1, 2009 under the
terms of the employment agreement that we entered into with him
on October 30, 2009. In lieu of base salary increases in
fiscal 2010, the human resources and compensation committee
awarded the named executive officers the following discretionary
cash bonus awards for fiscal 2009 based on the committees
subjective judgment and our performance against financial and
strategic objectives:
|
|
|
|
|
Named Executive Officer
|
|
Discretionary Cash Bonus Award
|
|
Jeffrey A. Weiss
|
|
|
$45,000
|
|
Randy Underwood
|
|
|
$66,750
|
|
Norman Miller
|
|
|
$67,500
|
|
Sydney Franchuk
|
|
|
CDN 40,000
|
|
Silvio Piccini
|
|
|
$13,750
|
|
Based upon input from the Hay Group, the human resources and
compensation committee increased the base salaries for fiscal
2011 for each of Messrs. Underwood (from $445,000 to
$505,000), Miller (from $450,000 to $505,000) and Piccini (from
$275,000 to $305,000) in order to maintain each executives
salary within the targeted percentile of our peer group, after
taking into account each executives respective role and
level of responsibility within our organization as well as his
expected contributions to our long-term business strategies and
objectives. These base salary increases were effective as of
July 1, 2010, except with respect to Mr. Underwood,
whose salary increase was effective May 17, 2010 under the
terms of the amended and restated employment agreement that we
entered into with him on that date. We did not increase
Mr. Weiss base salary for fiscal 2011 based on
information provided by the Hay Group. We did not increase
Mr. Franchuks base salary for fiscal 2011 based on an
assessment of his current role and responsibilities within our
organization.
Annual Bonus:
Each of Messrs. Weiss,
Underwood and Miller is entitled to receive annual cash bonuses
pursuant to the terms of his respective employment agreement
with us. Each of our other named executive officers is eligible
to receive an annual cash incentive award under our management
bonus program in which our other officers and key personnel
participate. The target annual bonus award for each of
Messrs. Weiss, Underwood and Miller is dictated by his
respective employment agreement. In general, participants in the
management bonus program fall within grade levels depending on
position title, level of responsibility and scope of duties,
with an executives target annual bonus opportunity
increasing as the executive progresses in grade level.
Our annual cash bonus program is designed to motivate our named
executive officers to improve our overall profitability through
the achievement of targeted financial goals. For fiscal 2010,
the annual bonus for each of our named executive officers other
than Messrs. Franchuk and Piccini were determined largely
based on the extent to which we achieved our consolidated
targeted annual earnings before income taxes, depreciation,
amortization and other items, to which we refer in this proxy
statement as EBITDA. Mr. Franchuks annual bonus was
determined based on the extent to which our Canadian retail
operation achieved its EBITDA target in fiscal 2010.
Mr. Piccinis annual bonus was determined in part
based on the extent to which our United Kingdom retail
operations achieved its EBITDA target in fiscal 2010 and in part
based on the extent to which we achieved our targeted
consolidated EBITDA target in fiscal 2010.
18
Each of our named executive officers was entitled to receive a
stated percentage of his base salary as a bonus to the extent we
satisfied the applicable EBITDA target(s) in fiscal 2010. Our
named executive officers were only entitled to receive a cash
bonus for fiscal 2010 if we achieved 90% of the applicable
EBITDA target(s), to which we refer as the lower threshold. To
the extent our actual EBITDA for fiscal 2010 was above the lower
threshold but less than the target amount, the named executive
officer was entitled to a bonus determined based on linear
interpolation between such amounts. Each named executive officer
was also eligible to receive a stretch bonus to the extent that
we exceeded the applicable EBITDA target(s), with the amount
determined based on linear interpolation between such amounts up
to the maximum bonus opportunity.
The table set forth below summarizes the annual cash bonus
opportunities for each of our named executive officers for
fiscal 2010 as approved by our human resources and compensation
committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Bonus Opportunity
|
|
Stretch Bonus Opportunity
|
|
Total Bonus Opportunity for
|
|
|
as a Percentage of Salary
|
|
as a Percentage of Salary
|
|
Fiscal 2010
|
|
|
Business
|
|
Company
|
|
Business
|
|
Company
|
|
|
|
Amount
|
|
|
Unit
|
|
Consolidated
|
|
Unit
|
|
Consolidated
|
|
% of Base
|
|
in Local
|
Executive
|
|
EBITDA
|
|
EBITDA
|
|
EBITDA
|
|
EBITDA
|
|
Salary
|
|
Currency
|
|
Jeffrey A. Weiss
|
|
|
N/A
|
|
|
|
125
|
%
|
|
|
N/A
|
|
|
|
50
|
%
|
|
|
175
|
%
|
|
$
|
1,723,750
|
|
Randy Underwood
|
|
|
N/A
|
|
|
|
90
|
%
|
|
|
N/A
|
|
|
|
90
|
%
|
|
|
180
|
%
|
|
$
|
909,000
|
|
Norman Miller
|
|
|
N/A
|
|
|
|
80
|
%
|
|
|
N/A
|
|
|
|
80
|
%
|
|
|
160
|
%
|
|
$
|
720,000
|
|
Sydney Franchuk
|
|
|
60
|
%
|
|
|
|
|
|
|
60
|
%
|
|
|
|
%
|
|
|
120
|
%
|
|
CDN
|
480,000
|
|
Silvio Piccini
|
|
|
40
|
%
|
|
|
10
|
%
|
|
|
32.5
|
%
|
|
|
17.5
|
%
|
|
|
100
|
%
|
|
$
|
275,000
|
|
The following cash bonuses were earned by our named executive
officers for fiscal 2010, and are reflected in the
2010
Summary Compensation Table
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Bonus Achieved as a
|
|
Stretch Bonus Achieved
|
|
Total Bonus Achieved for
|
|
|
Percentage of Salary
|
|
as a Percentage of Salary
|
|
Fiscal 2010
|
|
|
|
|
Company
|
|
|
|
Company
|
|
|
|
|
|
|
Business
|
|
Consolidated
|
|
Business
|
|
Consolidated
|
|
|
|
Amount
|
|
|
Unit
|
|
EBITDA
|
|
Unit
|
|
EBITDA
|
|
% of Base
|
|
In Local
|
Executive
|
|
EBITDA
|
|
Results
|
|
EBITDA
|
|
Results
|
|
Salary
|
|
Currency
|
|
Jeffrey A. Weiss
|
|
|
N/A
|
|
|
|
125
|
%
|
|
|
N/A
|
|
|
|
50
|
%
|
|
|
175
|
%
|
|
$
|
1,723,750
|
|
Randy Underwood
|
|
|
N/A
|
|
|
|
90
|
%
|
|
|
N/A
|
|
|
|
90
|
%
|
|
|
180
|
%
|
|
$
|
909,000
|
|
Norman Miller
|
|
|
N/A
|
|
|
|
80
|
%
|
|
|
N/A
|
|
|
|
80
|
%
|
|
|
160
|
%
|
|
$
|
720,000
|
|
Sydney Franchuk
|
|
|
60
|
%
|
|
|
|
%
|
|
|
58.076
|
%
|
|
|
|
|
|
|
118.076
|
%
|
|
CDN
|
472,305
|
|
Silvio Piccini
|
|
|
40
|
%
|
|
|
10
|
%
|
|
|
32.5
|
%
|
|
|
17.5
|
%
|
|
|
100
|
%
|
|
$
|
275,000
|
|
Final bonus payments are determined and paid after the
completion of our fiscal year audit. On August 25, 2010,
our board of directors approved the payment of the annual cash
bonuses for fiscal 2010 in accordance with the previously
approved bonus plan.
On June 7, 2010, the human resources and compensation
committee approved our cash bonus program for fiscal 2011 for
certain members of our executive management team and key
personnel based upon EBITDA operating targets to be determined
by our board of directors and the human resources and
compensation committee. The target bonus award and maximum bonus
opportunities for each of our named executive officers for
fiscal 2011 are set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
Target Bonus Achieved as a
|
|
|
|
Percentage of Base Salary
|
|
Executive
|
|
Minimum
|
|
|
Maximum
|
|
|
Jeffrey A. Weiss
|
|
|
125
|
%
|
|
|
175
|
%
|
Randy Underwood
|
|
|
90
|
%
|
|
|
180
|
%
|
Norman Miller
|
|
|
90
|
%
|
|
|
180
|
%
|
Sydney Franchuk
|
|
|
60
|
%
|
|
|
120
|
%
|
Silvio Piccini
|
|
|
50
|
%
|
|
|
100
|
%
|
19
Our board of directors has indicated that it may award
additional bonuses from time to time in its discretion based
upon individual and company-wide performance against strategic
objectives.
Long-Term Incentive Compensation:
Our
equity-based awards to executives have typically taken the form
of shares of restricted common stock, restricted stock units or
options to purchase shares of our common stock granted under our
2005 Equity Incentive Plan and our 2007 Equity Incentive Plan.
Awards are recommended by our Chairman and Chief Executive
Officer and the human resources and compensation committee, and
are based on discretionary factors including but not limited to
an executives position, level and breadth of
responsibility, and significant contributions to us.
Our human resources and compensation committee approved the
adoption of long-term incentive programs, to which we refer
collectively as our LTIP, for fiscal 2010 and fiscal 2011 on
August 11, 2009 and June 7, 2010, respectively. Our
LTIP is intended to achieve the following objectives:
|
|
|
|
|
to enhance our ability to attract and retain desired talent;
|
|
|
|
to reward both achievement of annual goals as well as sustained
performance over time;
|
|
|
|
to align executives interests with stockholders
interests;
|
|
|
|
to limit shareholder dilution; and
|
|
|
|
to assist executives in planning for retirement.
|
We consider a number of alternatives for our long-term
incentives to our executives and, after evaluating the various
alternatives in light of our long-term incentive compensation
objectives, the human resources and compensation committee
determined that including restricted stock units, non-qualified
options to purchase shares of our common stock and long-term
cash incentives in our LTIP for fiscal 2011, the same elements
used for the LTIP for fiscal 2010, would provide us with the
opportunity to achieve the largest number of these objectives.
All of our named executive officers participate in our LTIP for
fiscal 2011. All of our named executive officers, other than
Mr. Weiss, participated in our LTIP for fiscal 2010. The
parameters for each of the components of our LTIP are as follows:
Restricted Stock Units and Non-Qualified Stock
Options
: Restricted stock unit awards and option
awards for each of fiscal 2010 and 2011 vest ratably on a
quarterly basis over a three-year period beginning with the
quarter ending September 30 after the grant date, provided that
the grant recipient remains employed by us on each vesting date
over the three year period, thereby achieving what we believe to
be a desired balance between short-term and long-term retention
objectives for our key management and executives.
Long-Term Cash Incentives:
Awards for each of
fiscal 2010 and fiscal 2011 vest ratably on an annual basis over
a three-year period, provided that we meet certain EBITDA
targets (which are the same that apply to our annual bonus
programs discussed above)
and/or
other
strategic objectives as set by our board for fiscal 2010 and
fiscal 2011, respectively, and the award recipient remains
employed with us on each respective payment date over the three
year period.
The human resources and compensation committee intends to review
our LTIP program each fiscal year to determine whether, and to
what extent, new awards under our LTIP will be granted in
subsequent fiscal years.
For fiscal 2010, long-term incentives were provided to our named
executive officers in the form of restricted stock units,
options to purchase shares of our common stock and long-term
incentive cash awards. Restricted stock units and long-term
incentive cash awards each represent approximately forty percent
(40%) of the total value of the LTIP awards to each recipient,
with options to purchase shares of our common stock valued at
the remaining twenty percent (20%) of the total award value.
Based on the market volatility at the time, we believed
restricted stock units
20
and long-term cash incentives were more likely to enhance
management retention. For fiscal 2010, our named executive
officers received the following LTIP awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
Options
|
|
|
Long-Term
|
|
Executive
|
|
Units (in Shares)(1)
|
|
|
(in Shares)(1)
|
|
|
Cash Incentive(2)
|
|
|
Randy Underwood
|
|
|
18,425
|
|
|
|
18,425
|
|
|
$
|
257,950
|
|
Norman Miller
|
|
|
18,425
|
|
|
|
18,425
|
|
|
$
|
257,950
|
|
Sydney Franchuk
|
|
|
4,604
|
|
|
|
4,604
|
|
|
$
|
64,453
|
|
Silvio Piccini
|
|
|
7,370
|
|
|
|
7,370
|
|
|
$
|
103,180
|
|
|
|
|
(1)
|
|
Awards were granted under our 2007 Stock Incentive Plan,
effective July 1, 2009, and vest ratably on a quarterly
basis over a three-year period beginning with the quarter ending
September 30, 2009, subject to the named executive officer
remaining employed with us through the applicable vesting date.
|
|
(2)
|
|
Awards were effective July 1, 2009 and vest on an annual
basis over a three-year period, provided that we met our annual
EBITDA target and/or strategic objectives as determined by our
board of directors for the fiscal year ending June 30, 2010
and the named executive officer remains employed with us on each
respective payment date June 30, 2010,
June 30, 2011 and June 30, 2012. Our board of
directors and human resources and compensation committee
determined on June 29, 2010 that we had met the strategic
objectives previously determined by our board of directors for
fiscal 2010.
|
On August 27, 2009, the human resources and compensation
committee approved a discretionary grant of an equity award
under our 2007 Equity Incentive Plan to Mr. Weiss
consisting of 20,258 shares of restricted stock units and
options to purchase 12,909 shares of our common stock at an
exercise price equal to $16.66, the closing price of our common
stock on the date of grant. This award will vest in its entirety
on December 31, 2010, subject to Mr. Weiss remaining
employed with us through that date and subject to earlier
vesting upon certain termination events.
On November 11, 2009, pursuant to an employment agreement
that we entered into with Mr. Weiss dated October 30,
2009, the human resources and compensation committee approved
the grant of a equity award under our 2007 Equity Incentive Plan
to Mr. Weiss consisting of 31,899 shares of restricted
common stock and options to purchase 14,759 shares of our
common stock at an exercise price equal to $22.86, the closing
price of our common stock on the date of grant. This award will
vest ratably in equal annual installments over a three-year
period beginning on November 11, 2010, subject to
Mr. Weiss remaining employed with us through the applicable
vesting dates, subject to earlier vesting upon certain
termination events.
For fiscal 2011, long-term incentives were provided to our named
executive officers in the form of restricted stock units,
options to purchase shares of our common stock and long term
cash awards. The allocation of the total value of the LTIP
awards granted to each executive for fiscal 2011 is the same
that was used with respect to LTIP awards for fiscal 2010, with
restricted stock units and long-term incentive cash awards each
representing approximately 40% and options representing the
remaining 20%, of the total value of the award.
For fiscal 2011, our named executive officers received the
following awards under our LTIP program:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
Options
|
|
|
Long-Term
|
|
Executive
|
|
Units (in Shares)(1)
|
|
|
(in Shares)(1)
|
|
|
Cash(2)
|
|
|
Jeffrey A. Weiss
|
|
|
21,925
|
|
|
|
21,277
|
|
|
$
|
394,000
|
|
Randy Underwood
|
|
|
16,300
|
|
|
|
15,817
|
|
|
$
|
292,905
|
|
Norman Miller
|
|
|
16,300
|
|
|
|
15,817
|
|
|
$
|
292,905
|
|
Sydney Franchuk
|
|
|
4,064
|
|
|
|
3,943
|
|
|
$
|
73,024
|
|
Silvio Piccini
|
|
|
6,059
|
|
|
|
5,879
|
|
|
$
|
108,874
|
|
|
|
|
(1)
|
|
Awards were granted under our 2007 Stock Incentive Plan,
effective July 1, 2010, and vest ratably on a quarterly
basis over a three-year period beginning with the quarter ending
September 30, 2010, subject to the named executive officer
remaining employed with us through the applicable vesting date.
|
21
|
|
|
(2)
|
|
Awards were effective July 1, 2010 and vest on an annual
basis over a three-year period, provided that we meet our annual
EBITDA target and/or strategic objectives as determined by our
board for the fiscal year ending June 30, 2011 and the
named executive officer remains employed with us on each
respective payment date June 30, 2011,
June 30, 2012 and June 30, 2013.
|
Pursuant to Mr. Weiss current employment agreement
with us, Mr. Weiss is entitled to receive annual awards
beginning with fiscal 2011 equal to 200% of his base salary, one
half of which is payable in cash and one half of which is
payable in a combination of restricted stock units,
non-qualified stock options and cash. The latter awards are
granted under our LTIP and are described in the table above. See
below for a more detailed discussion of Mr. Weiss
annual awards. Pursuant to the employment agreements that we
have entered into with Mr. Underwood and Mr. Miller,
each such individual is entitled to receive annual LTIP awards
at a level commensurate with his position within our
organization and with other comparable senior executives. The
annual LTIP awards to Mr. Underwood is entitled under his
employment agreement must consist of 20% non-qualified stock
options, 40% restricted stock units and 40% cash, based on the
value of the awards. The LTIP awards for fiscal 2011 received by
Messrs. Weiss, Underwood and Miller and reflected in the
table above are consistent with the terms of their respective
employment agreements.
Deferred Compensation Plan:
Certain of our key
executives, including our named executive officers, are eligible
to participate in our executive Deferred Compensation Plan. Our
Deferred Compensation Plan provides participants with the
opportunity to save and accumulate additional income on a
pre-tax basis which otherwise would be lost under our tax
qualified 401(k) plan on account of Internal Revenue Code
provisions which limit the compensation that may be taken into
account, and the benefits that may be accrued under, a qualified
plan.
Similar to a qualified 401(k) plan, our Deferred Compensation
Plan enables each plan participant to defer a percentage of his
or her base salary and or bonus compensation and to choose how
such deferred amounts are invested. Furthermore, as with our
401(k) plan, our Deferred Compensation Plan allows each plan
participant to earn a rate of return, based on the
participants investment elections, on their account
balance on a tax-deferred basis. In addition, our Deferred
Compensation Plan offers the flexibility of saving for
retirement or for a shorter period of time. From
time-to-time,
we may make discretionary contributions to our Deferred
Compensation Plan on an executives behalf. These
contributions are subject to vesting conditions as established
by our board of directors. We made no discretionary
contributions to our Deferred Compensation Plan during fiscal
2010.
Other Compensation:
In addition to our
standard compensation elements, we have agreed to provide to
each of our Chairman and Chief Executive Officer and our
Executive Vice President and Chief Financial Officer certain
additional amounts pursuant to employment agreements with each
such officer.
Pursuant to the terms of his employment agreement with us,
Mr. Weiss is entitled to receive a supplemental retirement
benefit, which we refer to as the capstone award, upon certain
qualifying terminations of Mr. Weisss employment. The
capstone award is a lump-sum payment which is the actuarial
equivalent of an annual benefit of $300,000 payable to
Mr. Weiss in equal monthly installments during his lifetime
commencing the month that follows the applicable vesting date
and a $150,000 annual survivor benefit payable on his subsequent
death to his surviving spouse for her lifetime.
Under the terms of his employment agreement, Mr. Weiss is
also entitled to receive an additional supplemental retirement
benefit for each of fiscal 2010 and fiscal 2011, which we refer
to as the incremental capstone award, if (i) Mr. Weiss
remains continuously employed by us through such date(s) and his
employment terminates by reason of his retirement on or after
June 30, 2012 or the termination of his employment by us
for any reason after June 30, 2014,
(ii) Mr. Weiss employment is terminated by us
for reason of disability or without cause (as defined in his
employment agreement), (iii) Mr. Weiss resigns his
employment for good reason (as defined in his employment
agreement), or (iv) a change in control (as defined in his
employment agreement) occurs during the term of
Mr. Weiss employment with us, which such dates we
refer to as incremental vesting dates. The incremental capstone
award is a lump-sum payment which is the actuarial equivalent of
an annual benefit of $75,000 payable to Mr. Weiss in equal
monthly installments during his lifetime, commencing the first
business day of the calendar month that follows the applicable
incremental vesting date, with a $37,500 per year survivor
benefit payable on his subsequent death to his surviving spouse
for her lifetime. $1.0 million of the incremental capstone
award (or, if the value of the incremental capstone award is
less than $1.0 million, then all of such incremental
capstone award) will
22
be payable on the first anniversary of the incremental vesting
date, with any balance thereof payable on the first business day
of the calendar month that follows the applicable incremental
vesting date.
Under the terms of his employment agreement, if Mr. Weiss
is employed by us as of June 30 of each year during the term of
the agreement, Mr. Weiss is entitled to receive an award
equal to 200% of his base salary for such completed fiscal year
that is payable one-half in cash, which we refer to as the cash
awards, and one-half in a combination of restricted stock units,
non-qualified stock options and cash, which we refer to as the
plan awards. Each cash award is payable upon the appointment by
our board of directors of Mr. Weiss permanent
successor as Chief Executive Officer of the Company; provided
that a cash award will be payable (i) in a given year if
our board of directors concludes, in its reasonable discretion,
that satisfactory progress has been achieved by Mr. Weiss
in planning for the succession of his Chief Executive Officer
position, or (ii) upon a change of control, in each case
subject to the condition that Mr. Weiss has remained
continuously employed by us through such date. If
Mr. Weiss successor as our permanent Chief Executive
Officer is appointed by our board of directors prior to
June 30, 2012, and provided that he has remained
continuously employed by us through such date, Mr. Weiss is
entitled to receive payment, on the date such successor is
appointed by our board of directors, of the amount of the cash
awards to which Mr. Weiss would have otherwise been
entitled to receive under the terms of his employment agreement
had he remained employed by us through June 30, 2012. Each
plan award will be apportioned between restricted stock units,
non-qualified stock options and cash in the same proportion as
other members of our management that participate in our LTIP. If
Mr. Weiss successor as our permanent Chief Executive
Officer is appointed by our board of directors prior to
June 30, 2012, and provided that he has remained
continuously employed by us through such date, Mr. Weiss is
entitled to receive the pro rata portion of the plan awards that
would have been granted had he remained employed by us until the
end of the fiscal year that includes the date such successor is
appointed by our board of directors. The plan awards in the form
of restricted stock units and stock options vest ratably on a
quarterly basis over a three-year period from the grant date,
provided that Mr. Weiss remains continuously employed by us
through such dates. The cash component of the plan awards vest
annually over a three-year period from the grant date, provided
that we meet EBITDA targets
and/or
other
strategic objectives as determined by our board of directors.
Cash and plan awards will vest immediately upon a change in
control or upon certain qualifying termination of
Mr. Weiss employment.
On July 28, 2010, the human resources and compensation
committee approved the grant to Mr. Weiss of a cash award
for an amount equal to his current base salary of $985,000, and
determined that the requisite succession planning conditions had
been met and that such cash award was immediately payable to
Mr. Weiss.
For a further discussion of Mr. Weiss cash awards,
plan awards, capstone award and incremental capstone award, see
Potential Payments upon Termination or
Change in Control Jeffrey A. Weiss
below.
Pursuant to the terms of his employment agreement with us,
Mr. Underwood is entitled to receive an annual retention
bonus at the rate of $150,000 per year, which we refer to as the
annual retention bonus, upon certain qualifying terminations of
Mr. Underwoods employment described below.
Mr. Underwoods annual retention bonus is payable to
him in equal monthly installments during his lifetime (and, upon
his death, if Mr. Underwood has remained married to his
spouse through the date of his death, his spouse will be
entitled to receive an annual benefit of $75,000 payable in
equal monthly installments during her lifetime).
Mr. Underwoods right to the annual retention bonus
will become vested upon the occurrence of the following:
(i) the termination of Mr. Underwoods employment
for any reason on or after June 30, 2011, (ii) the
termination of Mr. Underwoods employment by us
without cause (as defined in his employment agreement) or by
Mr. Underwood with good reason (as defined in his
employment agreement), or (iii) by reason of
Mr. Underwoods death or disability.
Mr. Underwood will be entitled to receive the annual
retention bonus commencing the first month after such a
qualifying termination, except in the case of a termination by
Mr. Underwood of his employment for good reason or
termination by us without cause prior to June 30, 2011, in
which case payments with respect to the annual retention bonus
would not commence until the expiration of a severance period of
12 months during which Mr. Underwood would be entitled
to receive his base salary and cash bonus at the time of such
termination. Upon a change of control (as defined in his
employment agreement), Mr. Underwood will be entitled to
receive in a lump sum equal to the actuarial equivalent of the
value of the annual retention bonus in lieu of any future
payments with respect to the annual retention bonus (and
regardless
23
of whether Mr. Underwoods right to the annual
retention bonus had otherwise vested at the time of the change
of control).
Under the terms of his employment agreement, Mr. Underwood
is also entitled to receive an incremental retention bonus,
which we refer to as the incremental retention bonus, upon
certain qualifying terminations of Mr. Underwoods
employment described below. Mr. Underwoods
incremental retention bonus is an annual benefit of $50,000
payable to Mr. Underwood in equal monthly installments
during his lifetime (and, upon his death, if Mr. Underwood
has remained married to his spouse through the date of his
death, in which case his spouse will be entitled to receive an
annual benefit of $25,000 payable in equal monthly installments
during her lifetime). Pursuant to the terms of the
Mr. Underwoods employment agreement, the incremental
retention bonus will become payable if Mr. Underwoods
employment is terminated (i) for any reason on or after
December 31, 2012, (ii) by the Company without cause,
or by Mr. Underwood with good reason, or (iii) by
reason of Mr. Underwoods death or disability.
Mr. Underwood will be entitled to receive the incremental
retention bonus commencing the first month after such a
qualifying termination, except in the case of a termination by
Mr. Underwood of his employment for good reason or
termination by us without cause prior to June 30, 2012, in
which case payments with respect to the incremental retention
bonus would not commence until the expiration of a severance
period of 12 months during which Mr. Underwood would
be entitled to receive his base salary and cash bonus at the
time of such termination. Upon a change of control (as defined
in his employment agreement), Mr. Underwood will be
entitled to receive in a lump sum equal to the actuarial
equivalent of the value of the incremental retention bonus in
lieu of any future payments with respect to the incremental
retention bonus (and regardless of whether
Mr. Underwoods right to the incremental retention
bonus had otherwise vested at the time of the change of control).
For a further discussion of Mr. Underwoods annual
retention bonus and incremental retention bonus, see
Potential Payments upon Termination or Change in
Control Randy Underwood
below.
What
do we seek to reward and accomplish through our executive
compensation programs?
We believe that our compensation programs, collectively, should
enable us to attract, retain and motivate high quality
executives with international and public company experience. We
provide annual bonus awards primarily to motivate key employees
to meet business unit and corporate annual performance targets
that take into account, and that we believe enhance, our
performance. We evaluate our performance by reference both to
our annual performance targets as compared to our annual
internal EBITDA goals and to strategic objectives established by
our board of directors. Strategic objectives are annual
objectives which contribute to our long-term growth strategies.
We design long-term incentive awards primarily to retain as well
as to motivate and reward key employees over longer periods,
generally ranging up to three years. Through the vesting and
forfeiture provisions that we include in annual awards of stock
options, restricted stock units, and long-term cash incentives,
we believe that provide an additional incentive to executives to
act in furtherance of our long-term and our stockholders
interests.
Why
have we selected each principal component of our executive
compensation programs?
We have selected programs that we have found to be commonly used
by international public companies, both within and outside of
our industry, because believe that such commonly used programs
are well understood by our stockholders, our executives,
executives we seek to hire, and analysts and credit rating
agencies. Moreover, we selected each program only after we have
first confirmed, with the assistance of outside professional
advisors, that the program comports with settled legal and tax
rules.
How
do we determine the amount of each principal component of
compensation to our executives?
The human resources and compensation committee exercises
judgment and discretion in setting compensation for our senior
executives only after it has first reviewed industry data and
peer company practices, Hay Group compensation surveys,
addressed targeted compensation with an independent compensation
consultant, evaluated the recommendations of our Chairman and
Chief Executive Officer and our Executive Vice President and
Chief Financial Officer, and evaluated our corporate
performance. The human resources and compensation committee has
generally attempted to set our executive compensation as a whole
within the middle range of comparative pay based
24
on our peer group companies and compensation surveys, as
described in more detail below under the heading
To
what extent do we benchmark total compensation and material
elements of compensation and what are the benchmarks that we
use?
Employment agreements that we have entered into with certain of
our named executive officers provide for salary and, other than
with respect to the employment agreement with our Executive Vice
President and Chairman National Money Mart, target
annual bonus percentages, at fixed rates agreed to by the
parties, and therefore, these components cannot be reduced at
the discretion of our human resources and compensation committee.
What
specific items of corporate performance do we take into account
in setting compensation policies and making compensation
decisions?
Historically, achievement of our targeted EBITDA at the
consolidated and business unit levels and the achievement of
strategic objectives established by our board of directors have
been the primary incentive targets under our annual bonus and
long-term incentive compensation programs. For purposes of
determining whether annual EBITDA targets have been achieved,
our human resources and compensation committee may make
adjustments to our EBITDA results in any objective manner it
deems appropriate in its discretion to take into account the
impact of extraordinary or non-recurring events such as a
significant investment, disposition or acquisition, or
performance toward and achievement of our strategic objectives.
Additionally, under our LTIP for fiscal 2010 and fiscal 2011, we
make payments for the long-term cash incentive compensation
component if we meet certain EBITDA targets
and/or
other
strategic objectives as set by our board for the respective
fiscal years and, the named executive officer remains employed
with us on each respective payment date.
What
factors do we consider in decisions to increase or decrease
compensation materially?
As stated above under the heading
How do we determine
the amount of each principal component of compensation to our
executives?
, we have contractual commitments with
Messrs. Weiss, Underwood, Miller and Franchuk and certain
of our other executives who are not named executive officers
with respect to a rate of base salary, and with
Messrs. Weiss, Underwood and Miller and certain of our
other executives who are not named executive officers regarding
annual target bonuses, mutually agreed upon as a result of the
arms length negotiation of each such named executive
officers employment agreement with us, thereby limiting
our ability to decrease those components of their compensation
during the respective terms of their employment agreements. The
factors that we consider in decisions to increase compensation
include the individual performance of the executive, our
corporate performance, and the annual benchmarking initiatives
as discussed throughout this Compensation Discussion and
Analysis.
How
do accounting considerations impact our compensation
practices?
Prior to implementation of a compensation program and the
granting of awards under the program, we evaluate the cost of
the program and awards in light of our current performance and
anticipated budgeted performance. We also review the design of
compensation programs to assure that the recognition of expense
for financial reporting purposes is consistent with our
financial modeling. We designed our fiscal 2010 and fiscal 2011
programs so that overall costs fell within a budgeted dollar
amount and that the awards under those programs would be
accounted for under standards governing equity-based
arrangements and, more specifically, so that they would be
afforded fixed treatment under those standards.
How
do tax considerations impact our compensation
practices?
Prior to our implementation of a compensation program and awards
under the program, we evaluate the Federal and international
income tax consequences, both to us and to our executives, of
the contemplated program and awards. Before approving a program,
our human resources and compensation committee receives an
explanation from our outside professionals as to the tax
treatment of the program and awards under the program, and
assurances from our outside professionals that the tax treatment
should be respected by domestic and international taxing
authorities.
25
Section 162(m) of the Internal Revenue Code limits our tax
deduction each year for compensation to each of our Chairman and
Chief Executive Officer and our three other highest paid
executive officers (not including our Chief Financial Officer)
to $1 million unless, in general, the compensation is paid
under a plan that is performance-related, non-discretionary and
has been approved by our shareholders. The human resources and
compensation committee monitors, and will continue to monitor,
the effect of Section 162(m) on our compensation programs;
however, given our significant net operating losses, we have not
attempted to structure compensation to be fully deductible under
Section 162(m).
We adopted our Deferred Compensation Plan primarily for our
U.S. executives to provide them with an opportunity to save
for the future without paying a current tax on the deferred
amounts.
Why
have we entered into agreements with named executive officers
that provide for post-employment payments following a
change-in-control?
We believe that it is in our best interest to have agreements
with certain of our named executive officers to assure that we
will have the continued dedication and objectivity of those
individuals, notwithstanding the possibility, threat or
occurrence of a change in control. The agreements with our
Chairman and Chief Executive Officer, Executive Vice President
and Chief Financial Officer, Executive Vice President and Chief
Operating Officer, and Executive Vice President and
Chairman-National Money Mart provide for post-employment
payments following a change in control as described under
Payments upon Termination of Employment and
Change in Control
below.
To
what extent do we benchmark total compensation and material
elements of compensation and what are the benchmarks that we
use?
In setting compensation for our named executive officers for
fiscal 2010 and 2011, the human resources and compensation
committee compared the elements of total compensation to
compensation provided by peer groups of industry, financial
services and broader consumer/retail services peers, preferably
with international operations. The human resources and
compensation committee used peer group data and Hay Group
compensation surveys primarily as a frame of reference to set
executive compensation as a whole within the middle range of
comparative pay at the peer group companies. We maintained for
fiscal 2011 the group of peer companies that was utilized for
fiscal 2010, which included financial services and broader
consumer/retail services peers, since we believe that such
companies are frequently more reflective of the companies with
which we compete for executive talent than our industry peers.
These peer companies are listed in alphabetical order below:
|
|
|
|
|
Industry Peers
|
|
Financial Services Peers
|
|
Retail Peers
|
|
Advance America
|
|
Coinstar, Inc.
|
|
Aeropostale, Inc.
|
Cash America International, Inc.
|
|
Euronet Worldwide, Inc.
|
|
Aaron Rents, Inc. *
|
EZCorp, Inc.
|
|
Global Cash Access Holdings, Inc.
|
|
American Eagle Outfitters, Inc.
|
First Cash Financial Services, Inc.
|
|
Global Payments, Inc.
|
|
Cheesecake Factory, Inc.
|
|
|
Heartland Payment Systems, Inc.
|
|
Collective Brands, Inc.
|
|
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Jackson Hewitt Tax Services, Inc.*
|
|
Dennys Corp.
|
|
|
Ocwen Financial Corp.
|
|
Dicks Sporting Goods, Inc.
|
|
|
Verifone Holdings Inc.
|
|
Dollar Thrifty Automotive Group, Inc.
|
|
|
World Acceptance Corp.*
|
|
OReilly Automotive, Inc.*
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|
|
|
|
Rent-A-Center, Inc.*
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Ruby Tuesday, Inc.
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|
|
|
Urban Outfitters, Inc.
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|
|
*
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|
Services our customer demographic base
|
We have not adopted a policy that provides for recovery of an
award if a performance measure used to calculate the award is
subsequently adjusted in a manner that would reduce the size of
the award. Although, we have not previously experienced any such
restatements or adjustments, if we were to experience such an
adjustment, the human resources and compensation committee would
assess the circumstances relating to the adjustment and take
such actions as it believes to be appropriate.
26
What
is the role of our executive officers in the compensation
process?
The human resources and compensation committee meets
periodically with our Chairman and Chief Executive Officer and
our Executive Vice President and Chief Financial Officer to
address executive compensation, including the rationale for our
compensation programs and the efficacy of the programs in
achieving our compensation objectives. The human resources and
compensation committee invites representatives of the Hay Group
to join pertinent meetings and occasionally requests one or more
other members of senior management to participate in certain
meetings. Through these meetings, the human resources and
compensation committee directs senior management and the
compensation consultant to provide industry data, including
levels and forms of compensation provided at peer companies, and
legal, tax and financial analyses and counsel. The human
resources and compensation committee also relies on senior
management to evaluate compensation programs to assure that they
are designed and implemented in compliance with laws and
regulations, including SEC reporting requirements. The human
resources and compensation committee principally relies on the
recommendations of our Chairman and Chief Executive Officer
regarding the performance of his direct reports. At meetings
held in June 2010, the human resources and compensation
committee received recommendations from our Chairman and Chief
Executive Officer regarding salary adjustments, discretionary
bonus awards and long-term incentive awards for fiscal 2011 for
our executive officers other than himself. The human resources
and compensation committee accepted these recommendations after
concluding that the recommendations comported with the human
resources and compensation committees objectives and
philosophy and its evaluation of our performance, and industry
and other supporting data.
Do
we consider the relative risks of our compensation programs to
us and our business?
When establishing and reviewing our executive compensation
programs, the human resources and compensation committee and our
board of directors consider whether the programs encourage risks
which are reasonably likely to have a material adverse affect on
us. In April 2010, the human resources and compensation
committee received from its compensation consultant, the Hay
Group, factors to consider in determining the extent to which
the features of our compensation programs aggravate or mitigate
risk. In reviewing these considerations, in light of the our
broad-based plans, including those in which our named executive
officers participate, the human resources and compensation
committee determined that our compensation programs are not
reasonably likely to have a material adverse effect on us. A
review of those features and our compensation programs is
highlighted below:
|
|
|
Risk Aggravating Feature
|
|
Our Compensation Programs
|
A compensation mix overly weighted toward short-term
incentives
|
|
The mix of pay, and blend of equity, is appropriately balanced
between fixed and variable, short- and long-term, and time and
performance based.
|
Highly leveraged payout curves and uncapped payouts
|
|
Maximum payout levels for our annual cash bonuses upon
achievement of financial goals are capped; the payout curves are
appropriately calibrated to afford for reasonable leverage;
there is direct alignment between pay and performance.
|
Unreasonable goals or thresholds
|
|
Considering our performance history, the goals and thresholds
are appropriate.
|
Use of inappropriate metrics
|
|
Our performance based programs consider EBITDA targets and
strategic objectives as set by our board of directors. These
metrics are within the influence of managements
performance and are aligned with stockholders interests.
|
Contiguous performance periods (without additional holding or
vesting requirements)
|
|
The long-term incentive plan is built on overlapping annual
cycles.
|
27
The human resources and compensation committee has noted that we
do not engage in the practices that aggravate risk and further
noted a number of design features of our annual cash bonus plan
and long-term incentive plan reduce the likelihood of excessive
risk taking. For example, the human resources and compensation
committee believes that our annual cash bonus program
appropriately balances risk and the desire to focus executives
on specific short-term financial goals important to our success.
Furthermore, a significant portion of the compensation provided
to our named executive officers is in the form of long-term
equity awards that are important to help further align
executives interests with those of our stockholders. The
human resources and compensation committee determined and the
our board of directors concurred that, for all employees, our
compensation programs do not encourage excessive risk and
instead encourage behaviors that support sustainable value
creation.
Compensation
Committee Report
Our human resources and compensation committee has reviewed and
discussed the Compensation Discussion and Analysis with our
management and, based on the review and discussion, recommended
to our board of directors that the Compensation Discussion and
Analysis be included in this proxy statement and thereby
incorporated by reference into our Annual Report on
Form 10-K.
Our board of directors accepted the recommendation of the human
resources and compensation committee. This report is made by the
undersigned members of the human resources and compensation
committee.
Kenneth Schwenke (Chair)
Ron McLaughlin
Michael Kooper
Notwithstanding anything to the contrary set forth in any of
our previous or future filings under the Securities Act or the
Exchange Act that might incorporate this proxy statement or
future filings with the Securities and Exchange Commission, in
whole or in part, the above report shall not be deemed to be
soliciting material or filed with the
Securities and Exchange Commission and shall not be deemed to be
incorporated by reference into any such filing.
Human
Resources and Compensation Committee Process and
Procedures
The human resources and compensation committees charter
has been approved by our board of directors upon the
recommendation of the corporate governance and nominating
committee. The human resources and compensation committee and
the corporate governance and nominating committee review the
charter no less frequently than annually. Under its charter, the
human resources and compensation committees
responsibilities include:
|
|
|
|
|
reviewing and approving our goals and objectives relating to our
Chairman and Chief Executive Officers compensation,
evaluating the performance of our Chairman and Chief Executive
Officer in light of such goals and objectives, and setting our
Chairman and Chief Executive Officers compensation level,
perquisites and other benefits based on this evaluation;
|
|
|
|
in consultation with our Chairman and Chief Executive Officer,
reviewing and approving the compensation, perquisites and other
benefits (including, but not limited to, (i) annual base
salary level, (ii) annual incentive compensation,
(iii) long-term incentive compensation,
(iv) employment, severance and
change-in-control
agreements, if any, and (v) retirement benefits, if any,
for each of our executive officers, including the named
executive officers, in each such case taking into account the
recommendations of our Chairman and Chief Executive Officer and
such other information as the human resources and compensation
committee believes appropriate;
|
|
|
|
periodically reviewing and approving new compensation programs
for our executive officers; reviewing annually our executive
compensation programs to determine whether they are properly
coordinated and achieving their intended purposes; and
establishing and periodically reviewing policies for the
administration of executive compensation programs;
|
|
|
|
reviewing and recommending to our board of directors the
appropriate structure and amount of compensation for the
non-employee directors;
|
28
|
|
|
|
|
establishing and periodically reviewing policies in the area of
senior management perquisites;
|
|
|
|
reviewing and approving material changes in our employee benefit
plans; making recommendations to our board of directors
generally with respect to incentive-compensation plans,
equity-based plans and deferred compensation plans; establishing
criteria for the granting of options and other stock-based
awards to our executive officers and other employees and review
and approving the granting of options and other stock-based
awards to our executive officers, including administering our
2005 stock incentive plan, our 2007 equity incentive plan and
any other incentive-compensation plans, equity-based plans and
deferred compensation plans; and administering our incentive and
equity-based plans and programs;
|
|
|
|
reviewing and approving the terms of any employment agreement
executed by us with an executive officer, including any of our
named executive officers;
|
|
|
|
exercising sole authority to retain, and to terminate, any third
party consultants to assist in the evaluation of director,
Chairman and Chief Executive Officer or executive compensation
and exercising sole authority to approve such consultants
fees and other retention terms;
|
|
|
|
reviewing and reassessing annually the adequacy of the human
resources and compensation committee charter and recommending
any proposed changes to our board and annually evaluating its
own performance;
|
|
|
|
reviewing the Compensation Discussion and Analysis section to be
included in our annual proxy statement or other report or
filing, discussing the Compensation Discussion and Analysis with
our management, and recommending to our board of directors that
the Compensation Discussion and Analysis be included in our
annual report on Form
10-K
and/or
proxy
statement; and
|
|
|
|
reviewing our succession planning process for our Chairman and
Chief Executive Officer and all executive officers and making
recommendations to our board of directors regarding succession
planning issues.
|
In the questions and answers set forth above under the caption
Compensation Discussion and Analysis
above, we have addressed the role of executive officers in
the executive compensation process. See the question
What is the role of our executive officers in the
compensation process?
under the caption
Compensation Discussion and Analysis
above. With respect to compensation of directors, the role
of our executive officers is limited to furnishing such industry
data, summaries and legal and financial analyses as the human
resources and compensation committee requests from time to time.
As discussed under the caption
Compensation
Discussion and Analysis
above, our human resources and
compensation committee has engaged the Hay Group since fiscal
2008 to provide it with peer group and industry compensation
data, compensation surveys and advice on compensation best
practices. The instructions given by our human resources and
compensation committee to the Hay Group will vary yearly but
typically will include a request: (i) that the firm prepare
an executive compensation peer group analysis that covers our
senior executives; (ii) that the firm compile current data
with regard to industry compensation trends and practices; and
(iii) for a recommendation as to ranges for base salary,
annual incentives and long-term incentives for executives
officers and directors. Pursuant to the terms of its engagement
by the human resources and compensation committee, the Hay Group
is directed to recommend programs that are fair, reasonable and
balanced and designed to attract, retain, motivate and reward
executives for performance, while closely aligning the interests
of executives with those of our stockholders. We paid the Hay
Group less than $120,000 in the aggregate for all the services
that it provided to us in fiscal 2010.
29
2010
Summary Compensation Table
The following table sets forth summary information concerning
compensation of our principal executive officer and principal
financial officer and each of the next three most highly
compensated current executive officers whose total compensation
(excluding any compensation as a result of a change in pension
value and non-qualified deferred compensation earnings) exceeded
$100,000 during fiscal 2010. We refer to these persons in this
proxy statement as our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Deferred
|
|
All Other
|
|
|
Name and
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
Total
|
Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)(2)
|
|
($)(3)
|
|
($)
|
|
Earnings
|
|
($)(20)
|
|
($)
|
|
Jeffrey A. Weiss,
|
|
|
2010
|
|
|
$
|
985,000
|
|
|
|
|
|
|
$
|
1,460,702
|
|
|
$
|
495,125
|
|
|
$
|
1,723,750
|
(4)
|
|
$
|
618,941
|
(13)
|
|
$
|
193,592
|
|
|
$
|
5,477,110
|
|
Chairman of the Board and
|
|
|
2009
|
|
|
$
|
882,692
|
|
|
|
|
|
|
$
|
907,534
|
|
|
$
|
226,885
|
|
|
$
|
911,520
|
(9)
|
|
$
|
1,335,537
|
(13)
|
|
$
|
198,586
|
|
|
$
|
4,462,754
|
|
Chief Executive Officer
|
|
|
2008
|
|
|
$
|
831,044
|
(1)
|
|
|
|
|
|
$
|
367,191
|
|
|
$
|
217,383
|
|
|
$
|
1,134,421
|
(14)
|
|
$
|
2,848,353
|
(13)
|
|
$
|
208,986
|
|
|
$
|
5,607,378
|
|
Randy Underwood,
|
|
|
2010
|
|
|
$
|
451,923
|
(1)
|
|
|
|
|
|
$
|
584,947
|
|
|
$
|
306,471
|
|
|
$
|
1,174,983
|
(5)
|
|
$
|
471,457
|
(13)
|
|
$
|
125,169
|
|
|
$
|
3,114,950
|
|
Executive Vice President
|
|
|
2009
|
|
|
$
|
445,000
|
(1)
|
|
|
|
|
|
$
|
300,000
|
|
|
$
|
138,381
|
|
|
$
|
545,114
|
(10)
|
|
|
|
|
|
$
|
187,398
|
|
|
$
|
1,615,893
|
|
and Chief Financial Officer
|
|
|
2008
|
|
|
$
|
392,500
|
(1)
|
|
|
|
|
|
$
|
208,000
|
|
|
$
|
242,375
|
|
|
$
|
660,851
|
(15)
|
|
$
|
1,239,369
|
(13)
|
|
$
|
253,960
|
|
|
$
|
2,997,055
|
|
Norman Miller,
|
|
|
2010
|
|
|
$
|
450,000
|
(1)
|
|
|
|
|
|
$
|
584,947
|
|
|
$
|
306,471
|
|
|
$
|
985,983
|
(6)
|
|
|
|
|
|
$
|
22,380
|
|
|
$
|
2,349,781
|
|
Executive Vice President
|
|
|
2009
|
|
|
$
|
450,000
|
(1)
|
|
|
|
|
|
$
|
300,000
|
|
|
$
|
138,381
|
|
|
$
|
549,216
|
(18)
|
|
|
|
|
|
$
|
21,750
|
|
|
$
|
1,459,347
|
|
and Chief Operating Officer
|
|
|
2008
|
|
|
$
|
425,000
|
(1)
|
|
|
|
|
|
$
|
208,000
|
|
|
$
|
242,375
|
|
|
$
|
667,528
|
(16)
|
|
|
|
|
|
$
|
27,410
|
|
|
$
|
1,570,313
|
|
Sydney Franchuk,
|
|
|
2010
|
|
|
$
|
369,907
|
|
|
|
|
|
|
$
|
146,003
|
|
|
$
|
76,494
|
|
|
$
|
558,820
|
(7)
|
|
|
|
|
|
$
|
33,778
|
|
|
$
|
1,185,002
|
|
Executive Vice President
|
|
|
2009
|
|
|
$
|
358,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
191,250
|
(17)
|
|
|
|
|
|
$
|
31,204
|
|
|
$
|
580,723
|
|
and Chairman National
|
|
|
2008
|
|
|
$
|
396,296
|
|
|
|
|
|
|
$
|
83,200
|
|
|
$
|
96,950
|
|
|
$
|
313,931
|
(11)
|
|
|
|
|
|
$
|
33,393
|
|
|
$
|
923,770
|
|
Money Mart Company (12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silvio Piccini,
|
|
|
2010
|
|
|
$
|
275,000
|
|
|
|
|
|
|
$
|
225,695
|
|
|
$
|
118,442
|
|
|
$
|
401,393
|
(8)
|
|
|
|
|
|
$
|
342,953
|
|
|
$
|
1,363,483
|
|
Senior Vice President and Managing Director
United Kingdom Operations
|
|
|
2009
|
|
|
$
|
291,712
|
|
|
|
|
|
|
$
|
127,497
|
|
|
$
|
58,811
|
|
|
$
|
260,107
|
(19)
|
|
|
|
|
|
$
|
233,893
|
|
|
$
|
972,020
|
|
|
|
|
(1)
|
|
Includes salary deferred by the named executive officer under
our Deferred Compensation Plan. Payment of such salary is
deferred until retirement, or in some instances, until a
specified date prior to retirement.
|
|
(2)
|
|
The amounts shown in this column reflect the aggregate grant
date fair value for stock awards granted in fiscal 2008, fiscal
2009 and fiscal 2010, respectively, in accordance with FASB ASC
Topic 718, pursuant to our equity compensation plans. The
valuation assumptions used in the calculation of this amount are
described in Note 4 to our financial statements included in
our Annual Report on
Form 10-K
for fiscal 2008, fiscal 2009, and fiscal 2010, respectively.
|
|
(3)
|
|
The amounts shown in this column reflect the aggregate grant
date fair value for option awards granted in fiscal 2008, fiscal
2009 and fiscal 2010, respectively, in accordance with FASB ASC
Topic 718, pursuant to our equity compensation plans. The
valuation assumptions used in the calculation of this amount are
described in Note 4 to our financial statements included in
our Annual Report on
Form 10-K
for fiscal 2008, fiscal 2009, and fiscal 2010, respectively.
|
|
(4)
|
|
Consists of a $1,723,750 cash bonus award pursuant to our annual
cash bonus program, which is determined largely based on the
extent to which we achieved our fiscal 2010 consolidated
targeted annual earnings before interest, taxes, depreciation
and amortization and other items, which we refer to in this
proxy statement as EBITDA objectives.
|
|
(5)
|
|
Consists of (i) a $909,000 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2010 consolidated
targeted EBITDA objectives, (ii) the vesting and payment of
$85,983 of the $257,950 long-term cash incentive awarded in
fiscal 2010, (iii) the vesting and payment of $80,000 of
the $240,000 long-term cash incentive awarded in fiscal 2009,
(iv) the vesting of $33,333 of the $100,000 fiscal year
2008 company contribution to the Deferred Compensation Plan
and the deposit of such amount to the participants account
and (v) the vesting and payment of $66,667 of the $200,000
long-term cash incentive granted in fiscal 2008. The $85,983
portion of the long-term cash incentive was awarded effective
July 1, 2009 and was conditioned upon achieving our fiscal
2010 annual EBITDA target and/or strategic objectives as
established by our board of directors. The $80,000 portion of
the long-term cash incentive was awarded effective July 1,
2008 and was conditioned upon achieving our fiscal
|
30
|
|
|
|
|
2009 annual EBITDA target and/or strategic objectives as
established by our board of directors. The $33,333 portion of
the company contribution to our Deferred Compensation Plan and
the $66,667 portion of the long-term cash incentive were granted
effective July 1, 2007 and were conditioned upon achieving
our fiscal 2010 strategic objectives as established by our board
of directors. The human resources and compensation committee and
our board of directors determined that we met the strategic
objectives for fiscal year 2010 and, accordingly, these awards
vested.
|
|
(6)
|
|
Consists of (i) a $720,000 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2010 consolidated
targeted EBITDA objectives, (ii) the vesting and payment of
$85,983 of the $257,950 long-term cash incentive awarded in
fiscal 2010, (iii) the vesting and payment of $80,000 of
the $240,000 long-term cash incentive awarded in fiscal 2009,
(iv) the vesting of $33,333 of the $100,000 fiscal year
2008 company contribution to the Deferred Compensation Plan
and the deposit of such amount to the participants account
and (v) the vesting and payment of $66,667 of the $200,000
long-term cash incentive granted in fiscal 2008. The $85,983
portion of the long-term cash incentive was awarded effective
July 1, 2009 and was conditioned upon achieving our fiscal
2010 annual EBITDA target and/or strategic objectives as
established by our board of directors. The $80,000 portion of
the long-term cash incentive was awarded effective July 1,
2008 and was conditioned upon achieving our fiscal 2009 annual
EBITDA target and/or strategic objectives as established by our
board of directors. The $33,333 portion of the company
contribution to our Deferred Compensation Plan and the $66,667
portion of the long-term cash incentive were granted effective
July 1, 2007 and were conditioned upon achieving our fiscal
2010 strategic objectives as established by our board of
directors. The human resources and compensation committee and
our board of directors determined that we met the strategic
objectives for fiscal year 2010 and, accordingly, these awards
vested.
|
|
(7)
|
|
Consists of (i) a $445,336 cash bonus award pursuant to our
annual cash bonus program, which is determined based on the
extent to which our Canadian retail operation achieved its
fiscal 2010 targeted EBITDA objectives, (ii) the vesting
and payment of $21,484 of the $64,453 long-term cash incentive
awarded in fiscal 2010, (iii) the vesting and payment of
$32,000 of the $96,000 long-term cash incentive awarded in
fiscal 2009, (iv) the vesting of $20,000 of the $60,000
fiscal year 2008 company contribution to the Deferred
Compensation Plan and the deposit of such amount to the
participants account and (v) the vesting and payment
of $40,000 of the $120,000 long-term cash incentive granted in
fiscal 2008. The $21,484 portion of the long-term cash incentive
was awarded effective July 1, 2009 and was conditioned upon
achieving our fiscal 2010 annual EBITDA target and/or strategic
objectives as established by our board of directors. The $32,000
portion of the long-term cash incentive was awarded effective
July 1, 2008 and was conditioned upon achieving our fiscal
2009 annual EBITDA target and/or strategic objectives as
established by our board of directors. The $20,000 portion of
the company contribution to our Deferred Compensation Plan and
the $40,000 portion of the long-term cash incentive were granted
effective July 1, 2007 and were conditioned upon achieving
our fiscal 2010 strategic objectives as established by our board
of directors. The human resources and compensation committee and
our board of directors determined that we met the strategic
objectives for fiscal year 2010 and, accordingly, these awards
vested.
|
|
(8)
|
|
Consists of (i) a $275,000 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which our U.K. retail operation achieved its
fiscal 2010 targeted EBITDA objectives, (ii) the vesting
and payment of $34,393 of the $103,180 long-term cash incentive
awarded in fiscal 2010, (iii) the vesting and payment of
$32,000 of the $96,000 long-term cash incentive awarded in
fiscal 2009, (iv) the vesting of $20,000 of the $60,000
fiscal year 2008 company contribution to the Deferred
Compensation Plan and the deposit of such amount to the
participants account and (v) the vesting and payment
of $40,000 of the $120,000 long-term cash incentive granted in
fiscal 2008. The $34,393 portion of the long-term cash incentive
was awarded effective July 1, 2009 and was conditioned upon
achieving our fiscal 2010 annual EBITDA target and/or strategic
objectives as established by our board of directors. The $32,000
portion of the long-term cash incentive was awarded effective
July 1, 2008 and was conditioned upon achieving our fiscal
2009 annual EBITDA target and/or strategic objectives as
established by our board of directors. The $20,000 portion of
the company contribution to our Deferred Compensation Plan and
the $40,000 portion of the long-term cash incentive were granted
effective July 1, 2007 and were conditioned upon achieving
our fiscal 2010 strategic objectives as established by our board
of directors. The human resources and compensation
|
31
|
|
|
|
|
committee and our board of directors determined that we met the
strategic objectives for fiscal year 2010 and, accordingly,
these awards vested.
|
|
(9)
|
|
Consists of a $911,520 cash bonus award pursuant to our annual
cash bonus program, which is determined largely based on the
extent to which we achieved our fiscal 2009 consolidated
targeted annual earnings before interest, taxes, depreciation
and amortization and other items, which we refer to in this
proxy statement as EBITDA objectives.
|
|
(10)
|
|
Consists of (i) a $365,114 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2009 consolidated
targeted EBITDA objectives, (ii) the vesting and payment of
$80,000 of the $240,000 long-term cash incentive awarded in
fiscal 2009, (iii) the vesting of $33,333 of the $100,000
fiscal year 2008 company contribution to the Deferred
Compensation Plan and the deposit of such amount to the
participants account and (iv) the vesting and payment
of $66,667 of the $200,000 long-term cash incentive granted in
fiscal 2008. The $80,000 portion of the long-term cash incentive
was awarded effective July 1, 2008 and was conditioned upon
achieving our fiscal 2009 annual EBITDA target and/or strategic
objectives as established by our board of directors. The $33,333
portion of the company contribution to our Deferred Compensation
Plan and the $66,667 portion of the long-term cash incentive
were granted effective July 1, 2007 and were conditioned
upon achieving our fiscal 2009 strategic objectives as
established by our board of directors. The human resources and
compensation committee and our board of directors determined
that we met the strategic objectives for fiscal year 2009 and,
accordingly, these awards vested.
|
|
(11)
|
|
Consists of (i) a $253,931 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2008 consolidated
targeted EBITDA objectives, (ii) the vesting of $20,000 of
the $60,000 fiscal year 2008 company contribution to the
Deferred Compensation Plan and the deposit of such amount to the
participants account, and (iii) the vesting and
payment of $40,000 of the $120,000 long-term cash incentive
awarded in fiscal 2008. The $20,000 portion of the company
contribution to our Deferred Compensation Plan and the $40,000
portion of the long-term cash incentive were awarded effective
July 1, 2007 and were conditioned upon achieving our fiscal
2008 strategic objectives as established by our board of
directors. We achieved these objectives and, accordingly, these
awards vested.
|
|
(12)
|
|
The dollar amounts shown for Mr. Franchuk were converted to
U.S. dollars from Canadian dollars using the exchange rate on
the last business day of the applicable fiscal year. On that
basis, for fiscal 2010, CDN1.00 was equal to $0.9429.
|
|
(13)
|
|
This amount reflects the present value of the Capstone Award and
Incremental Capstone Award contained in the employment agreement
of Mr. Weiss and the Retention Bonus and Incremental
Retention Bonus contained in the employment agreement
Mr. Underwood, as if such individuals retired as of
June 30, 2011 and December 31, 2012, respectively
(which are the dates upon which they first become eligible for
the respective awards). Because these awards were not in place
in fiscal 2007, the amounts disclosed for fiscal 2008 in this
table are the present value of the Capstone Award and the
Retention Bonus. In fiscal 2009, only the change in the present
value of the Capstone Award is reflected in the table for
Mr. Weiss. For fiscal 2009, there was no change in the
present value of the Retention Bonus for Mr. Underwood. In
fiscal 2010, pursuant to the terms of their employment
agreements, Mr. Weiss is also entitled to an Incremental
Capstone Award and Mr. Underwood is entitled to an
Incremental Retention Bonus. In fiscal 2010, the amount for
Mr. Weiss represents the change in the present value of the
Capstone Award and the present value of the Incremental Capstone
Award and the amount for Mr. Underwood represents the
present value of the Incremental Retention Bonus.
|
|
(14)
|
|
Consists of a $1,134,421 cash bonus award pursuant to an
employment agreement, which is determined largely based on the
extent to which we achieved our fiscal 2008 consolidated
targeted EBITDA objectives.
|
|
(15)
|
|
Consists of (i) a $560,851 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2008 consolidated
targeted EBITDA objectives, (ii) the vesting of $33,333 of
the $100,000 fiscal year 2008 company contribution to the
Deferred Compensation Plan and the deposit of such amount to the
participants account and (iii) the vesting and
payment of $66,667 of the $200,000 long-term cash incentive
awarded in fiscal 2008. The $33,333 portion of the company
contribution to our Deferred Compensation Plan and the $66,667
portion of the long-term cash incentive were
|
32
|
|
|
|
|
awarded effective July 1, 2007 and were conditioned upon
achieving our fiscal 2008 strategic objectives as established by
our board of directors. We achieved these objectives and,
accordingly, these awards vested.
|
|
(16)
|
|
Consists of (i) a $567,528 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2008 targeted EBITDA
objectives, (ii) the vesting of $33,333 of the $100,000
fiscal year 2008 company contribution to the Deferred
Compensation Plan and the deposit of such amount to the
participants account, and (iii) the vesting and
payment of $66,667 of the $200,000 long-term cash incentive
awarded in fiscal 2008. The $33,333 portion of the company
contribution to our Deferred Compensation Plan and the $66,667
portion of the long-term cash incentive were awarded effective
July 1, 2007 and were conditioned upon achieving our fiscal
2008 strategic objectives as established by our board of
directors. We achieved these objectives and, accordingly, these
awards vested.
|
|
(17)
|
|
Consists of (i) a $99,250 cash bonus award pursuant to our
annual cash bonus program, which is determined based on the
extent to which our Canadian retail operation achieved its
fiscal 2009 consolidated targeted EBITDA objectives and
(ii) the vesting and payment of $32,000 of the $96,000
long-term cash incentive awarded in fiscal 2009, (iii) the
vesting of $20,000 of the $60,000 fiscal year 2008 company
contribution to the Deferred Compensation Plan and the deposit
of such amount to the participants account, and
(iv) the vesting and payment of $40,000 of the $120,000
long-term cash incentive granted in fiscal 2008. The $32,000
portion of the long-term cash incentive was granted effective
July 1, 2008 and was conditioned upon achieving our fiscal
2009 annual EBITDA target and/or strategic objectives as
established by our board of directors. The $20,000 portion of
the company contribution to our Deferred Compensation Plan and
the $40,000 portion of the long-term cash incentive were awarded
effective July 1, 2007 and were conditioned upon achieving
our fiscal 2009 strategic objectives as established by our board
of directors. The human resources and compensation committee and
our board of directors determined that we met the strategic
objectives for fiscal year 2009 and, accordingly, these awards
vested.
|
|
(18)
|
|
Consists of (i) a $369,216 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which we achieved our fiscal 2009 consolidated
targeted EBITDA objectives, (ii) the vesting and payment of
$80,000 of the $240,000 long-term cash incentive awarded in
fiscal 2009, (iii) the vesting of $33,333 of the $100,000
fiscal year 2008 company contribution to the Deferred
Compensation Plan and the deposit of such amount to the
participants account, and (iv) the vesting and
payment of $66,667 of the $200,000 long-term cash incentive
granted in fiscal 2008. The $80,000 portion of the long-term
cash incentive was awarded effective July 1, 2008 and was
conditioned upon achieving our fiscal 2009 annual EBITDA target
and/or strategic objectives as established by our board of
directors. The $33,333 portion of the company contribution to
our Deferred Compensation Plan and the $66,667 portion of the
long-term cash incentive were granted effective July 1,
2007 and were conditioned upon achieving our fiscal 2009
strategic objectives as established by our board of directors.
The human resources and compensation committee and our board of
directors determined that we met the strategic objectives for
fiscal year 2009 and, accordingly, these awards vested.
|
|
(19)
|
|
Consists of (i) a $228,107 cash bonus award pursuant to our
annual cash bonus program, which is determined largely based on
the extent to which our U.K. retail operation achieved its
fiscal 2009 targeted EBITDA objectives and (ii) the vesting
and payment of $32,000 of the $96,000 long-term cash incentive
awarded in fiscal 2009. The $32,000 portion of the long-term
cash incentive was awarded effective July 1, 2008 and was
conditioned upon achieving our fiscal 2009 annual EBITDA target
and/or strategic objectives as established by our board of
directors. The human resources and compensation committee and
our board of directors determined that we met the strategic
objectives for fiscal year 2009 and, accordingly, this award
vested.
|
33
|
|
|
(20)
|
|
Includes the following additional compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting of
|
|
|
Contributions
|
|
|
Discretionary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
a Special
|
|
|
Subject to
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k)
|
|
|
Plan
|
|
|
Retention
|
|
|
Vesting
|
|
|
Compensation
|
|
|
Life
|
|
|
|
|
Name
|
|
Year
|
|
|
Match
|
|
|
Contributions
|
|
|
Bonus
|
|
|
Conditions
|
|
|
Contributions
|
|
|
Insurance(b)
|
|
|
Perquisites(d)
|
|
|
Jeffery A. Weiss
|
|
|
2010
|
|
|
$
|
8,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,595
|
|
|
$
|
130,850
|
|
|
$
|
52,942
|
|
|
|
|
2009
|
|
|
$
|
9,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
129,160
|
|
|
$
|
59,957
|
|
|
|
|
2008
|
|
|
$
|
8,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
127,550
|
|
|
$
|
73,429
|
|
Randy Underwood
|
|
|
2010
|
|
|
$
|
8,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,678
|
|
|
$
|
6,510
|
|
|
$
|
108,858
|
|
|
|
|
2009
|
|
|
$
|
8,752
|
|
|
|
|
|
|
$
|
66,600
|
(c)
|
|
|
|
|
|
|
|
|
|
$
|
6,060
|
|
|
$
|
105,986
|
|
|
|
|
2008
|
|
|
$
|
6,548
|
|
|
|
|
|
|
$
|
133,400
|
(c)
|
|
|
|
|
|
$
|
2,366
|
|
|
$
|
5,660
|
|
|
$
|
105,986
|
|
Norm Miller
|
|
|
2010
|
|
|
$
|
2,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,880
|
|
|
$
|
2,130
|
|
|
$
|
12,000
|
|
|
|
|
2009
|
|
|
$
|
4,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,207
|
|
|
$
|
1,980
|
|
|
$
|
12,000
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,319
|
|
|
$
|
26,091
|
|
Sydney Franchuk
|
|
|
2010
|
|
|
|
|
|
|
$
|
25,166
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,612
|
|
|
|
|
2009
|
|
|
|
|
|
|
$
|
22,864
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,340
|
|
|
|
|
2008
|
|
|
|
|
|
|
$
|
23,553
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,840
|
|
Silvio Piccini
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
342,953
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
233,893
|
|
|
|
|
(a)
|
|
This amount represents our annual contribution, equal to ten
percent of his base salary, to Mr. Franchuks personal
registered retirement plan, a form of tax favored
retirement arrangement under Canadian law.
|
|
(b)
|
|
Consists of premiums paid by us for life insurance for which we
are not the named beneficiary under this policy.
|
|
(c)
|
|
Mr. Underwood was granted a special retention bonus on
July 13, 2007 of which one-third vested upon issuance,
one-third vested as of June 30, 2008 and one-third vested
as of June 30, 2009. The disclosed amount reflects the
portion of the award vested as of June 30, 2008 and
June 30, 2009.
|
|
(d)
|
|
Includes the following perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Country
|
|
Housing
|
|
Benefits
|
|
Personal
|
Name
|
|
Year
|
|
Automobile(i)
|
|
Club(ii)
|
|
Allowance(iii)
|
|
Allowance(iv)
|
|
Expenses
|
|
Jeffery A. Weiss
|
|
|
2010
|
|
|
$
|
1,510
|
|
|
$
|
34,523
|
|
|
|
|
|
|
|
|
|
|
$
|
16,909
|
(v)
|
|
|
|
2009
|
|
|
$
|
1,325
|
|
|
$
|
39,951
|
|
|
|
|
|
|
|
|
|
|
$
|
18,681
|
(v)
|
|
|
|
2008
|
|
|
$
|
7,111
|
|
|
$
|
41,797
|
|
|
|
|
|
|
|
|
|
|
$
|
24,521
|
(v)
|
Randy Underwood
|
|
|
2010
|
|
|
$
|
24,000
|
|
|
|
|
|
|
$
|
36,000
|
|
|
$
|
48,858
|
|
|
|
|
|
|
|
|
2009
|
|
|
$
|
24,000
|
|
|
|
|
|
|
$
|
36,000
|
|
|
$
|
45,986
|
|
|
|
|
|
|
|
|
2008
|
|
|
$
|
24,000
|
|
|
|
|
|
|
$
|
36,000
|
|
|
$
|
45,986
|
|
|
|
|
|
Norm Miller
|
|
|
2010
|
|
|
$
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
$
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
$
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,091
|
(vi)
|
Sydney Franchuk
|
|
|
2010
|
|
|
$
|
8,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
$
|
8,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
$
|
9,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Silvio Piccini
|
|
|
2010
|
|
|
$
|
10,436
|
|
|
|
|
|
|
$
|
76,143
|
|
|
|
|
|
|
$
|
256,374
|
(vii)
|
|
|
|
2009
|
|
|
$
|
9,967
|
|
|
|
|
|
|
$
|
80,737
|
|
|
|
|
|
|
$
|
143,189
|
(viii)
|
|
|
|
(i)
|
|
Includes the personal benefits associated with the use of a car
paid by us in the case of Messrs. Weiss, Franchuk and
Piccini. In calculating these benefits, we took the annual cost
of the car to the company (which included its depreciation,
insurance premiums, maintenance and repair and fuel costs) and
multiplied it by the percent of personal use claimed by the
executive. Messrs. Underwood and Miller received an annual
car allowance for the amounts shown.
|
|
(ii)
|
|
Includes the personal benefits associated with the use of
country club memberships paid by us. In calculating this
benefit, we took the annual cost of the applicable country club
membership and multiplied it by the percent of personal use
claimed by the executive.
|
|
(iii)
|
|
Messrs. Underwood and Piccini receive a monthly housing
allowance.
|
34
|
|
|
(iv)
|
|
Mr. Underwood receives a monthly benefits allowance for the
reimbursement of life and long term disability insurance
premiums and in 2008, 2009 and 2010 a tax
gross-up
allowance for allowances received.
|
|
(v)
|
|
Represents personal tax and legal services paid by us.
|
|
(vi)
|
|
Represents personal travel related costs paid by us.
|
|
(vii)
|
|
Represents a tuition allowance for Mr. Piccinis
children of $35,692 and foreign tax reimbursement of $220,682.
Mr. Piccini is working as an expatriate in the United
Kingdom and we pay the difference between the payroll taxes in
the United Kingdom and the taxes Mr. Piccini would
otherwise have paid in the United States.
|
|
(viii)
|
|
Represents a tuition allowance for Mr. Piccinis
children of $44,550 and foreign tax reimbursement of $98,639.
Mr. Piccini is working as an expatriate in the United
Kingdom and we pay the difference between the payroll taxes in
the United Kingdom and the taxes Mr. Piccini would
otherwise have paid in the United States.
|
Grants of
Plan Based Awards
The following table sets forth information regarding grants of
plan based awards to our named executive officers for fiscal
2010 and, with respect to non-equity incentive plan awards,
represents the threshold, target and maximum payouts designated
under our annual bonus plans discussed above under
Compensation Discussion and
Analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Awards:
|
|
or Base
|
|
Grant Date
|
|
|
|
|
Estimated Future Payments Under
|
|
Number of
|
|
Number of
|
|
Price of
|
|
Fair Value
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
Shares of
|
|
Securities
|
|
Option
|
|
of Stock
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Stock or
|
|
Underlying
|
|
Awards
|
|
and Option
|
Name
|
|
Grant Date
|
|
($)
|
|
($)
|
|
($)
|
|
Units (#)
|
|
Options (#)
|
|
($/Sh)
|
|
Awards(4)
|
|
Jeffrey A. Weiss
|
|
|
|
|
|
$
|
123,125
|
(1)
|
|
$
|
1,231,250
|
(1)
|
|
$
|
1,723,750
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,258
|
(6)
|
|
|
|
|
|
|
|
|
|
$
|
337,498
|
|
|
|
|
8/27/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,909
|
(3)(6)
|
|
$
|
16.66
|
|
|
$
|
115,845
|
|
|
|
|
11/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,899
|
(5)
|
|
|
|
|
|
|
|
|
|
$
|
729,217
|
|
|
|
|
11/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,759
|
(3)(5)
|
|
$
|
22.86
|
|
|
$
|
182,303
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,925
|
(7)
|
|
|
|
|
|
|
|
|
|
$
|
393,992
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,277
|
(3)(7)
|
|
$
|
17.97
|
|
|
$
|
197,004
|
|
Randy Underwood
|
|
|
|
|
|
$
|
45,450
|
(1)
|
|
$
|
454,500
|
(1)
|
|
$
|
909,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
85,983
|
(2)
|
|
$
|
257,950
|
(2)
|
|
$
|
257,950
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,425
|
(8)
|
|
|
|
|
|
|
|
|
|
$
|
292,036
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,425
|
(3)(8)
|
|
$
|
15.85
|
|
|
$
|
160,021
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,300
|
(7)
|
|
|
|
|
|
|
|
|
|
$
|
292,911
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,817
|
(3)(7)
|
|
$
|
17.97
|
|
|
$
|
146,450
|
|
Sydney Franchuk
|
|
|
|
|
|
$
|
22,630
|
(1)
|
|
$
|
226,296
|
(1)
|
|
$
|
452,592
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21,484
|
(2)
|
|
$
|
64,453
|
(2)
|
|
$
|
64,453
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,604
|
(8)
|
|
|
|
|
|
|
|
|
|
$
|
72,973
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,604
|
(3)(8)
|
|
$
|
15.85
|
|
|
$
|
39,986
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,064
|
(7)
|
|
|
|
|
|
|
|
|
|
$
|
73,030
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,943
|
(3)(7)
|
|
$
|
17.97
|
|
|
$
|
36,508
|
|
Norman Miller
|
|
|
|
|
|
$
|
36,000
|
(1)
|
|
$
|
360,000
|
(1)
|
|
$
|
720,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
85,983
|
(2)
|
|
$
|
257,950
|
(2)
|
|
$
|
257,950
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,425
|
(8)
|
|
|
|
|
|
|
|
|
|
$
|
292,036
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,425
|
(3)(8)
|
|
$
|
15.85
|
|
|
$
|
160,021
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,300
|
(7)
|
|
|
|
|
|
|
|
|
|
$
|
292,911
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,817
|
(3)(7)
|
|
$
|
17.97
|
|
|
$
|
146,450
|
|
Silvio Piccini
|
|
|
|
|
|
$
|
13,750
|
(1)
|
|
$
|
137,500
|
(1)
|
|
$
|
275,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,393
|
(2)
|
|
$
|
103,180
|
(2)
|
|
$
|
103,180
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,370
|
(8)
|
|
|
|
|
|
|
|
|
|
$
|
116,815
|
|
|
|
|
8/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,370
|
(3)(8)
|
|
$
|
15.85
|
|
|
$
|
64,008
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,059
|
(7)
|
|
|
|
|
|
|
|
|
|
$
|
108,880
|
|
|
|
|
6/7/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,879
|
(3)(7)
|
|
$
|
17.97
|
|
|
$
|
54,434
|
|
35
|
|
|
(1)
|
|
Includes the fiscal 2010 threshold, target and maximum payouts
designated under our annual cash bonus program. For a discussion
of the terms of our annual cash bonus program and the amounts
earned thereunder by the named executive officer during fiscal
2010, see
Compensation Discussion and
Analysis Annual Bonus
above.
|
|
(2)
|
|
Includes the threshold, target and maximum payouts designated
under the long term cash component of our long term incentive
plan. For a discussion of the terms of our long term incentive
plan and the amounts earned thereunder by the named executive
officer during fiscal 2010, see
Compensation Discussion and
Analysis Long-Term Incentive Compensation
above.
|
|
(3)
|
|
Non-Qualified Stock Option grants with an exercise price not
less than 100% of the fair market value which is the closing
stock price on the day on which our board of directors approved
the grant.
|
|
(4)
|
|
This column shows the full grant date fair value of restricted
stock and non-qualified stock options under FASB ASC Topic 718
granted to our named executive officers during fiscal 2010.
Generally, the full grant date fair value is the amount that we
would expense in our financial statements over the awards
vesting schedule not taking into account certain expected
forfeitures. For restricted stock, fair value is calculated
using the closing price of our common stock on the grant date.
For non-qualified stock options, fair value is calculated using
the valuation assumptions described in Note 4 to our
financial statements included in our Annual Report on
Form 10-K
for fiscal year 2010.
|
|
(5)
|
|
Awards vest in equal annual installments over a three year
period beginning November 11, 2009, subject to
Mr. Weiss remaining employed with us through the applicable
vesting date. Such awards were granted pursuant to our 2007
Stock Incentive Plan in connection with Mr. Weiss
employment agreement with us.
|
|
(6)
|
|
The award will vest as of December 31, 2010, subject to
certain terms and conditions of the award as set forth in the
grant agreement. Such award was granted pursuant to our 2007
equity incentive plan.
|
|
(7)
|
|
Awards vest in quarterly installments over a twelve quarter
period beginning July 1, 2010, subject to the named
executive officer remaining employed with us through the
applicable vesting date. Such awards were granted pursuant to
our 2007 equity incentive plan.
|
|
(8)
|
|
Awards vest in quarterly installments over a twelve quarter
period beginning July 1, 2009, subject to the named
executive officer remaining employed with us through the
applicable vesting date. Such awards were granted pursuant to
our 2007 equity incentive plan.
|
Narrative
Disclosure Relating to 2010 Summary Compensation Table and 2010
Grants of Plan-Based Awards Table
As required by the rules of the Securities and Exchange
Commission, the information set forth above under
2010 Summary Compensation Table
and the
2010 Grants of Plans-Based Awards
Table
reflects not only compensation earned and paid
in the respective fiscal year, but also amounts representing the
opportunity to earn future compensation under performance-driven
compensation incentives that may be forfeited based on future
performance
and/or
time
vesting. As a result of mixing compensation earned/paid and
contingent compensation, the total shown under
2010 Summary Compensation Table
includes amounts that the named executive officers may never
receive.
We have current employment agreements with each of our named
executive officers other than Mr. Piccini. The material
terms of each employment agreement are summarized below, except
that termination payments provided under each agreement are
summarized below under the heading
Potential
Payments Upon Termination or Change of Control
. In
addition, pursuant to each employment agreement, each named
executive officer is eligible to receive annual cash incentive
awards if performance objectives established by our board of
directors
and/or
human
resources and compensation committee are met and to receive
future equity grants under such long-term incentive programs as
we may maintain from time to time. See
Compensation Discussion and Analysis
above for more
information on our long term incentive program.
36
Jeffrey
A. Weiss
Effective October 30, 2009, we entered into a new
employment agreement with Mr. Weiss, our Chairman and Chief
Executive Officer. Mr. Weiss new agreement replaces
his prior employment agreement with us, which was entered into
on October 5, 2007 and which was amended on
December 18, 2008. The initial term of Mr. Weiss
new employment agreement expires on June 30, 2012, after
which time it will renew for successive one-year periods unless
either party provides a notice of nonrenewal.
Under the terms of his employment agreement, Mr. Weiss will
receive an annual base salary of $985,000, subject to increase
as determined by our board of directors or the human resources
and compensation committee, and an annual target bonus
opportunity based on the achievement of certain metrics, as
determined by the human resources and compensation committee,
equal to 125% of his base salary, with the ability to receive a
maximum bonus of 175% of his base salary.
If Mr. Weiss is employed by us as of June 30 of each year
during the initial term of his employment agreement,
Mr. Weiss is also entitled to receive an award equal to
200% of his base salary for such completed fiscal year, one-half
of which is payable in cash, which we refer to as the cash
awards, and one-half of which is payable in a combination of
restricted stock units, non-qualified stock options and cash,
which we refer to as the plan awards.
The cash awards are payable upon the appointment by our board of
directors of Mr. Weiss permanent successor as Chief
Executive Officer of the Company; provided that a cash award
will be payable (i) in a given year if our board of
directors concludes, in its reasonable discretion, that
satisfactory progress has been achieved by Mr. Weiss in
planning for the succession of his Chief Executive Officer
position, or (ii) upon a change of control, in each case
subject to the condition that Mr. Weiss has remained
continuously employed by us through such date. If
Mr. Weiss successor as our permanent Chief Executive
Officer is appointed by our board of directors prior to
June 30, 2012, and provided that he has remained
continuously employed by us through such date, Mr. Weiss is
entitled to receive payment, on the date such successor is
appointed by our board of directors, of the amount of the cash
awards to which Mr. Weiss would have otherwise been
entitled to receive under the terms of his employment agreement
had he remained employed by us through June 30, 2012. On
July 28, 2010, the human resources and compensation
committee approved the grant to Mr. Weiss of a cash award
for an amount equal to his current base salary of $985,000, and
determined that the requisite succession planning conditions had
been met and that such cash award was immediately payable to
Mr. Weiss.
Each plan award granted to Mr. Weiss is required by the
terms of his employment agreement to be apportioned between
restricted stock units, non-qualified stock options and cash in
the same proportion as other members of our management that
participate in our long term incentive plan. If
Mr. Weiss successor as our permanent Chief Executive
Officer is appointed by our board of directors prior to
June 30, 2012, and provided that he has remained
continuously employed by us through such date, Mr. Weiss
will be entitled to receive the pro rata portion of any plan
awards that would have been granted to him had he remained
employed by us until the end of the fiscal year that includes
the date such successor is appointed by our board of directors.
The plan awards in the form of restricted stock units and stock
options vest ratably on a quarterly basis over a three-year
period from the grant date provided Mr. Weiss remains
continuously employed by us through such dates. The cash
component of the plan awards vest annually over a three-year
period from the grant date, provided that we meet EBITDA targets
and/or
other
strategic objectives as determined by our board of directors.
For fiscal 2010, Mr. Weiss received options to purchase
21,277 shares of our common stock, 21,925 restricted share
units and long term cash inventive award for $394,000. These
awards were made under our long term incentive program for
fiscal 2011, and are consistent with the terms our current
employment agreement with Mr. Weiss. Notwithstanding the
foregoing, all outstanding plan awards granted to Mr. Weiss
will vest immediately upon a change in control, which is
discussed in more detail below under
Potential Payments Upon Termination or
Change of Control Jeffrey A. Weiss
below.
Notwithstanding the renewal of Mr. Weiss employment
agreement for any renew terms after the expiration of the
initial term of his agreement on June 30, 2012,
Mr. Weiss is not entitled to receive any plan awards under
his employment agreement for any period after fiscal 2012.
In making its compensation decisions, our human resources and
compensation committee compared Mr. Weiss total
target compensation opportunity against our selected peer group.
In addition, our human resources
37
and compensation committee believes that the mix between fixed
cash compensation and variable performance-based compensation
provided for in Mr. Weiss employment agreement is
consistent with our compensation objectives, namely, to align
pay with corporate performance and the creation of stockholder
value and to retain and motivate superior performance by
compensating our Chairman and Chief Executive Officer at a level
competitive with our selected peer group.
In addition, in recognition of Mr. Weiss service on
our board, including his service as Chairman, and in recognition
of Mr. Weiss prior and future service to us,
Mr. Weiss will be entitled pursuant to the terms of his
employment agreement to receive certain supplemental retirement
benefits. See
Compensation Discussion and
Analysis What are the principal components of our
executive compensation programs? Other
Compensation
above.
Under Mr. Weiss current employment agreement, we
provide him with health, welfare and tax qualified retirement
benefits generally available to our other senior management
employees and, in addition: (i) a leased automobile;
(ii) reimbursement of up to $100,000 annually for the
payment of premiums for a life insurance policy on
Mr. Weiss of which his designees are the beneficiaries;
(iii) reimbursement of tax and financial planning costs,
not to exceed $15,000 annually; (iv) uninsured medical and
dental costs, not to exceed $15,000 annually; and (v) five
weeks paid vacation.
Randy
Underwood
We entered into an amended and restated employment agreement
with Mr. Underwood on May 17, 2010, which amends and
restates the prior employment agreement that we entered into
with Mr. Underwood on May 15, 2008. Pursuant to the
terms of his employment agreement, Mr. Underwood will
continue to serve as our Executive Vice President and Chief
Financial Officer.
Under the terms of his employment agreement, Mr. Underwood
receives an annual base salary of $505,000, subject to increase
as determined by our board of directors or the human resources
and compensation committee, and an annual target bonus
opportunity based on the achievement of certain metrics, as
determined by the human resources and compensation committee,
equal to 90% of his base salary, with the ability to receive a
maximum bonus of 180% of his base salary.
Mr. Underwood is entitled to receive annual awards under
our long term incentive plans that are at a level commensurate
with his position within our organization and with other
comparable senior executives. The awards to Mr. Underwood
under our long term incentive plan must consist of 20%
non-qualified stock options, 40% restricted stock units and 40%
cash, based on the value of the awards. The long term incentive
plan award for fiscal 2011 received by Mr. Underwood and
reflected under
2010 Summary Compensation
Table
and
Compensation Discussion
and Analysis
What are the principal
components of our executive compensation programs?
Long Term Incentive Compensation
above are consistent
with the terms of his employment agreement.
In addition, in recognition of Mr. Underwoods prior
and future service to us, Mr. Underwood will be entitled
pursuant to the terms of his employment agreement to receive
certain supplemental retirement benefits. See
Compensation Discussion and Analysis
What are the principal components of our
executive compensation programs? Other
Compensation
above. Mr. Underwood will also be
entitled to receive retiree medical coverage upon the occurrence
of the following: (i) Mr. Underwood terminates
employment for any reason on or after June 30, 2011;
(ii) Mr. Underwoods employment is terminated by
us without cause, by Mr. Underwood with good reason or by
reason of Mr. Underwoods death or disability; or
(iii) our change in control.
Norman
Miller
On May 14, 2008, we entered into an amended and restated
employment agreement with Norman Miller, pursuant to which
Mr. Miller serves as our Executive Vice President and Chief
Operating Officer. Mr. Millers employment agreement
provides that he will receive an annual base salary of not less
than $425,000 and will be entitled to an annual target cash
bonus, as determined by our board of directors or the human
resources and compensation committee, of not less than 80% of
Mr. Millers then current salary, if specified
corporate performance goals are met for that year.
38
Sydney
Franchuk
Effective July 1, 2009, Mr. Franchuk and National
Money Mart Company, one of our wholly-owned subsidiaries,
entered into an employment agreement. Mr. Franchuks
agreement provides that he will serve as the Chairman of
National Money Mart Company and as one of our Executive
Vice-Presidents. Under his agreement, Mr. Franchuk will
receive an annual base salary of CAD 400,000 and will also be
entitled to participate in certain of our incentive programs,
including our management cash bonus program. All performance
targets pursuant to such plan shall be set by National Money
Mart Company in its sole discretion and be based solely on the
operations of National Money Mart Company.
Outstanding
Equity Awards at Fiscal Year-End
The following table sets forth unexercised stock options, stock
that has not yet vested and equity incentive plan awards
outstanding as of June 30, 2010 for each of our named
executive officers.
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Option Awards
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Stock Awards
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Equity
|
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Equity
|
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Equity
|
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Incentive
|
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Incentive
|
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Incentive
|
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Plan Awards:
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Plan Awards:
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Plan Awards:
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Market
|
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Number of
|
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Market or
|
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Number of
|
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Number of
|
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Number of
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|
|
|
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Number of
|
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Value of
|
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Unearned
|
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Payout Value
|
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Securities
|
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Securities
|
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Securities
|
|
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|
|
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Shares or
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Shares or
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Shares, Units
|
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of Unearned
|
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Underlying
|
|
Underlying
|
|
Underlying
|
|
Option
|
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|
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Units of
|
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Units of
|
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or Other
|
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Shares, Units
|
|
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Unexercised
|
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Unexercised
|
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Unexercised
|
|
Exercise
|
|
Option
|
|
Stock That
|
|
Stock That
|
|
Rights That
|
|
of Other Rights
|
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Price
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
That Have Not
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
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($)(3)
|
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Date
|
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Vested (#)
|
|
Vested
|
|
Vested (#)
|
|
Vested ($)
|
(a)
|
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(b)
|
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(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
Jeffrey A. Weiss
|
|
|
210,283
|
|
|
|
|
|
|
|
|
|
|
$
|
11.70
|
|
|
|
4/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
210,283
|
|
|
|
|
|
|
|
|
|
|
$
|
16.00
|
|
|
|
4/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,745
|
(4)
|
|
|
5,373
|
(4)
|
|
|
|
|
|
$
|
29.42
|
|
|
|
11/15/17
|
|
|
|
4,161
|
(4)
|
|
$
|
82,346
|
|
|
|
|
|
|
|
|
|
|
|
|
16,122
|
(8)
|
|
|
32,244
|
(8)
|
|
|
|
|
|
$
|
9.38
|
|
|
|
11/13/18
|
|
|
|
64,502
|
(8)
|
|
$
|
1,276,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,909
|
(5)
|
|
|
|
|
|
$
|
16.66
|
|
|
|
8/27/19
|
|
|
|
31,899
|
(6)
|
|
$
|
631,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,759
|
(6)
|
|
|
|
|
|
$
|
22.86
|
|
|
|
11/11/19
|
|
|
|
20,258
|
(16)
|
|
$
|
400,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,277
|
(12)
|
|
|
|
|
|
$
|
17.97
|
|
|
|
6/7/20
|
|
|
|
21,925
|
(14)
|
|
$
|
433,896
|
|
|
|
|
|
|
|
|
|
Randy Underwood
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
11.70
|
|
|
|
4/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
16.00
|
|
|
|
4/27/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
19.80
|
|
|
|
9/8/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,833
|
(10)
|
|
|
10,417
|
(10)
|
|
|
|
|
|
$
|
16.64
|
|
|
|
6/26/18
|
|
|
|
4,166
|
(7)
|
|
$
|
82,445
|
|
|
|
|
|
|
|
|
|
|
|
|
10,016
|
(9)
|
|
|
30,048
|
(9)
|
|
|
|
|
|
$
|
6.98
|
|
|
|
12/4/18
|
|
|
|
32,235
|
(11)
|
|
$
|
637,931
|
|
|
|
|
|
|
|
|
|
|
|
|
6,142
|
(13)
|
|
|
12,283
|
(13)
|
|
|
|
|
|
$
|
15.85
|
|
|
|
8/11/19
|
|
|
|
12,283
|
(15)
|
|
$
|
243,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,817
|
(12)
|
|
|
|
|
|
$
|
17.97
|
|
|
|
6/7/20
|
|
|
|
16,300
|
(14)
|
|
$
|
322,577
|
|
|
|
|
|
|
|
|
|
Sydney Franchuk
|
|
|
2,083
|
(10)
|
|
|
4,167
|
(10)
|
|
|
|
|
|
$
|
16.64
|
|
|
|
6/26/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,500
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
19.80
|
|
|
|
9/8/16
|
|
|
|
1,666
|
(7)
|
|
$
|
32,970
|
|
|
|
|
|
|
|
|
|
|
|
|
768
|
(13)
|
|
|
3,069
|
(13)
|
|
|
|
|
|
$
|
15.85
|
|
|
|
8/11/19
|
|
|
|
3,069
|
(15)
|
|
$
|
60,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,943
|
(12)
|
|
|
|
|
|
$
|
17.97
|
|
|
|
6/7/20
|
|
|
|
4,064
|
(14)
|
|
$
|
80,427
|
|
|
|
|
|
|
|
|
|
Norman Miller
|
|
|
50,000
|
(2)
|
|
|
|
|
|
|
|
|
|
$
|
23.74
|
|
|
|
4/2/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,833
|
(10)
|
|
|
10,417
|
(10)
|
|
|
|
|
|
$
|
16.64
|
|
|
|
6/26/18
|
|
|
|
4,166
|
(7)
|
|
$
|
82,445
|
|
|
|
|
|
|
|
|
|
|
|
|
10,016
|
(9)
|
|
|
30,048
|
(9)
|
|
|
|
|
|
$
|
6.98
|
|
|
|
12/4/18
|
|
|
|
32,235
|
(11)
|
|
$
|
637,931
|
|
|
|
|
|
|
|
|
|
|
|
|
6,142
|
(13)
|
|
|
12,283
|
(13)
|
|
|
|
|
|
$
|
15.85
|
|
|
|
8/11/19
|
|
|
|
12,283
|
(15)
|
|
$
|
243,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,817
|
(12)
|
|
|
|
|
|
$
|
17.97
|
|
|
|
6/7/20
|
|
|
|
16,300
|
(14)
|
|
$
|
322,577
|
|
|
|
|
|
|
|
|
|
Silvio Piccini
|
|
|
8,333
|
(10)
|
|
|
4,167
|
(10)
|
|
|
|
|
|
$
|
16.64
|
|
|
|
6/26/18
|
|
|
|
1,666
|
(7)
|
|
$
|
32,970
|
|
|
|
|
|
|
|
|
|
|
|
|
4,257
|
(9)
|
|
|
12,770
|
(9)
|
|
|
|
|
|
$
|
6.98
|
|
|
|
12/4/18
|
|
|
|
13,700
|
(11)
|
|
$
|
271,123
|
|
|
|
|
|
|
|
|
|
|
|
|
2,457
|
(13)
|
|
|
4,913
|
(13)
|
|
|
|
|
|
$
|
15.85
|
|
|
|
8/11/19
|
|
|
|
4,913
|
(15)
|
|
$
|
97,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,879
|
(12)
|
|
|
|
|
|
$
|
17.97
|
|
|
|
6/7/20
|
|
|
|
6,059
|
(14)
|
|
$
|
119,908
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
These option awards vested monthly over three years beginning
July 31, 2006.
|
|
(2)
|
|
These option awards vested annually over three years beginning
April 2, 2008.
|
|
(3)
|
|
Non-Qualified Stock Option grants with an exercise price equal
to or greater than 100% of the fair market value of our common
stock on the date of grant.
|
|
(4)
|
|
Awards vest in equal annual installments over a three year
period beginning November 15, 2007.
|
|
(5)
|
|
Discretionary grant of option awards on August 27, 2009.
These option awards vest on December 31, 2010.
|
|
(6)
|
|
Awards vest in equal annual installments over a three year
period beginning November 11, 2009.
|
|
(7)
|
|
Discretionary grant of restricted stock units on June 26,
2008. These restricted stock unit awards vest quarterly over 12
quarters beginning September 30, 2008.
|
39
|
|
|
(8)
|
|
Awards vest in equal annual installments over a three year
period beginning November 13, 2008
|
|
(9)
|
|
Discretionary grant of option awards on December 4, 2008.
One quarter of each award vested as of December 31, 2009,
one quarter will vest as of December 31, 2010 and the
remaining one-half will vest as of December 31, 2011,
subject to certain terms and conditions of each award as set
forth in the grant agreement for each recipient.
|
|
(10)
|
|
Discretionary grant of option awards on June 26, 2008.
These option awards vest quarterly over 12 quarters beginning
September 30, 2008.
|
|
(11)
|
|
Discretionary grant of restricted stock units on
December 4, 2008. One quarter of each award will vest as of
December 31, 2009, one quarter will vest as of
December 31, 2010 and the remaining one-half will vest as
of December 31, 2011, subject to certain terms and
conditions of each award as set forth in the grant agreement for
each recipient.
|
|
(12)
|
|
Discretionary grant of option awards on June 7, 2010. These
option awards vest quarterly over 12 quarters beginning
September 30, 2010.
|
|
(13)
|
|
Discretionary grant of option awards on August 11, 2009.
These option awards vest quarterly over 12 quarters beginning
September 30, 2009.
|
|
(14)
|
|
Discretionary grant of restricted stock units on June 7,
2010. These restricted stock unit awards vest quarterly over 12
quarters beginning September 30, 2010.
|
|
(15)
|
|
Discretionary grant of restricted stock units on August 11,
2009. These restricted stock unit awards vest quarterly over 12
quarters beginning September 30, 2009.
|
|
(16)
|
|
Discretionary grant of restricted stock units on August 27,
2009. These restricted stock unit awards vest on
December 31, 2010.
|
Options
Exercised and Stock Vested (2010)
The following table sets forth certain information regarding the
exercise of stock options by our named executive officers during
fiscal 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
Name
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
Vesting (#)
|
|
|
Vesting ($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Jeffrey A. Weiss
|
|
|
|
|
|
|
|
|
|
|
36,410
|
|
|
$
|
832,333
|
|
Randy Underwood
|
|
|
|
|
|
|
|
|
|
|
25,726
|
|
|
$
|
566,775
|
|
Sydney Franchuk
|
|
|
19,017
|
|
|
$
|
122,455
|
|
|
|
5,874
|
|
|
$
|
122,628
|
|
Norman Miller
|
|
|
|
|
|
|
|
|
|
|
25,726
|
|
|
$
|
566,775
|
|
Silvio Piccini
|
|
|
|
|
|
|
|
|
|
|
11,358
|
|
|
$
|
249,744
|
|
Pension
Benefits (2010)
The following table sets forth certain information regarding
certain supplemental retirement benefits granted to two of our
executive officers as of June 30, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
Present Value of
|
|
|
|
|
|
|
Credited Service
|
|
Accumulated
|
|
Payments During
|
Name
|
|
Plan Name
|
|
(3)
|
|
Benefits
|
|
Last Fiscal Year
|
|
Jeffrey A. Weiss
|
|
|
(1
|
)
|
|
|
N/A
|
|
|
$
|
5,143,706
|
|
|
$
|
0
|
|
Randy Underwood
|
|
|
(2
|
)
|
|
|
N/A
|
|
|
$
|
1,710,826
|
|
|
$
|
0
|
|
|
|
|
(1)
|
|
Pursuant to the terms of his employment agreement,
Mr. Weiss will be entitled to receive an annual retirement
benefit and a supplemental retirement benefit which we refer to
as the capstone award and incremental capstone award,
respectively. Pursuant to the terms of the capstone award and
the incremental capstone award, Mr. Weiss will be entitled
to receive a lump-sum payment on the first business day of the
calendar month following the award triggering event which will
equal the actuarial equivalent of an annual benefit of $300,000
and $75,000, respectively, payable to Mr. Weiss in equal
monthly installments during his lifetime commencing on such
|
40
|
|
|
|
|
payment date, with a $150,000 and $37,500 per year,
respectively, survivor benefit payable on his subsequent death
to his surviving spouse. The actuarial present value of these
awards at June 30, 2010 assumes Mr. Weiss
retirement as of December 31, 2010, with respect to the
capstone award, and June 30, 2012, with respect to the
incremental capstone award, which are the respective dates upon
which he first becomes eligible for the awards, and a discount
rate of 4.37% and was calculated utilizing the Social Security
Actuarial Publications as updated July 9, 2007. For a
discussion of Mr. Weiss capstone award and
incremental capstone award, see
Potential
Payments upon Termination or Change in Control
Jeffrey A. Weiss
below.
|
|
(2)
|
|
Pursuant to the terms of his employment agreement,
Mr. Underwood is entitled to receive an annual retention
bonus and an incremental retention bonus. Pursuant to the terms
of the annual retention bonus and the incremental retention
bonus, Mr. Underwood will be entitled to receive a lump-sum
payment on the first business day of the calendar month
following the award triggering event which will equal the
actuarial equivalent of an annual benefit of $150,000 and
$50,000, respectively, payable to Mr. Underwood in equal
monthly installments during his lifetime commencing on such
payment date, with a $75,000 and $25,000 per year, respectively,
survivor benefit payable on his subsequent death to his
surviving spouse. The actuarial present value of this award at
June 30, 2010 assumes Mr. Underwoods retirement
as of June 30, 2011, with respect to the annual retention
bonus, and December 31, 2012, with respect to the
incremental retention bonus, which are the dates upon which he
first becomes eligible for the awards, and a discount rate of
6.98% and was calculated utilizing the Social Security Actuarial
Publications as updated July 9, 2007. For a discussion of
Mr. Underwoods annual retention bonus and incremental
retention bonus, see
Potential Payments
upon Termination or Change in Control Randy
Underwood
below.
|
|
(3)
|
|
Years of service is not relevant in determining the amount of
the benefit.
|
Non-Qualified
Deferred Compensation (2010)
The following table sets forth certain information with respect
to our Deferred Compensation Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Company
|
|
|
Aggregate
|
|
|
Aggregate/
|
|
|
Aggregate
|
|
|
|
Contributions in
|
|
|
Contributions in
|
|
|
Earnings in Last
|
|
|
Withdrawals/
|
|
|
Balance at Last
|
|
Name
|
|
Last FY ($)(1)(2)
|
|
|
Last FY ($)(2)(3)
|
|
|
FY ($)(4)
|
|
|
Distributions ($)
|
|
|
FYE ($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
Jeffrey A. Weiss
|
|
|
|
|
|
$
|
1,572
|
|
|
$
|
19,428
|
|
|
|
|
|
|
$
|
1,148,053
|
|
Randy Underwood
|
|
$
|
22,481
|
|
|
$
|
34,503
|
|
|
$
|
65,305
|
|
|
$
|
(182,066
|
)
|
|
$
|
267,224
|
|
Sydney Franchuk
|
|
|
|
|
|
$
|
20,000
|
|
|
$
|
15,666
|
|
|
|
|
|
|
$
|
174,092
|
|
Norman Miller
|
|
$
|
45,000
|
|
|
$
|
41,805
|
|
|
$
|
9,189
|
|
|
|
|
|
|
$
|
231,699
|
|
Silvio Piccini
|
|
|
|
|
|
$
|
19,710
|
|
|
$
|
2,373
|
|
|
|
|
|
|
$
|
41,793
|
|
|
|
|
(1)
|
|
Participants in our Deferred Compensation Plan can defer 50% of
base salary and 100% of cash bonuses.
|
|
(2)
|
|
Amounts shown in this column represent a portion of the amounts
shown in column entitled Non Equity Incentive Plan
Compensation of the 2010 Summary Compensation Table above.
|
|
(3)
|
|
For fiscal 2008, we made awards of non-qualified deferred
compensation pursuant to our LTIP in the following amounts:
Mr. Underwood $200,000;
Mr. Franchuk $120,000; and
Mr. Miller $200,000. Such awards were effective
July 1, 2007 and vest ratably on an annual basis over a
three-year period, provided that we meet our strategic
objectives as established by the board for the fiscal year
preceding each June 30 vesting date in the three year cycle. The
amount set forth in this column represents the portion of the
award that was deposited to the executives account upon
achievement of our fiscal 2010 strategic objectives.
|
|
(4)
|
|
Executives invest monies in their deferred compensation accounts
using investment vehicles with investment risk profiles similar
to those offered in our 401(k) plan. Earnings will depend on
what investment decisions the named executive officers make.
|
Potential
Payments upon Termination or Change in Control
We have entered into agreements with certain of our named
executive officers that provide for payments and benefits to the
executive in the event of his termination of employment under
various circumstances, including a change of control. The
following tables reflect the amount of compensation payable to
each of our named executive officers upon: (i) an
involuntary termination with cause; (ii) a
voluntary resignation without good reason;
(iii) a
41
termination due to death; (iv) a termination due to
disability; (v) retirement; (vi) an involuntary
termination without cause; (vii) a resignation
for good reason; and (viii) an involuntary
termination without cause or resignation for
good reason following a change in control. The
amounts shown assume that such termination was effective as of
June 30, 2010, the last business day of our fiscal year.
The actual amounts to be paid out could only be determined at
the time the events described above could occur.
General Amounts Due Upon
Termination.
Generally, upon a termination of
employment for any reason, each named executive officer is
entitled to receive an immediate cash payment of certain accrued
obligations, including:
|
|
|
|
|
base salary through the date of termination, to the extent not
paid;
|
|
|
|
any accrued, but unused, vacation pay; and
|
|
|
|
any unreimbursed business expenses.
|
These payments and benefits are in addition to any regular
retirement benefits that the named executive officers are
entitled to receive under our 401(k) plan and under our Deferred
Compensation Plan.
Jeffrey
A. Weiss
The following describes the potential payments to Mr. Weiss
upon a termination of employment or change of control pursuant
to the terms of his employment agreement.
Termination Without Cause or Resignation for
Good Reason.
Under the terms of his employment
agreement, Mr. Weiss may be terminated by us without
cause or he may resign for good reason.
Mr. Weiss employment may be terminated by us for
cause upon the occurrence of any of the following:
(i) his willful and continued failure to substantially
perform his material duties for us; (ii) his conviction of,
or entry of a plea of guilty or nolo contendere to (A) a
felony (other than a minor traffic violation) or (B) a
crime involving moral turpitude; or (iii) his willful gross
neglect in carrying out his employment duties which causes
material harm to us or our business or his willful and material
misconduct relating to our business.
Mr. Weiss may resign for good reason, after
providing us with 30 days written notice of his
intention to do so, upon the occurrence of any of the following:
(i) any material diminution in his authorities, titles or
offices; (ii) any change in the reporting structure so that
Mr. Weiss reports to someone other than our board of
directors as Chief Executive Officer or to the board of Dollar
Financial Group, Inc., which we refer to in this proxy statement
as DFG, as Chief Executive Officer of DFG; (iii) any
material diminution in his base salary, target bonus
opportunity, maximum bonus opportunity, or LTIP award
opportunity; (iv) failure to appoint or re-elect
Mr. Weiss as a member of our board of directors and the
board of directors of DFG and as our Chief Executive Officer or
the Chief Executive Officer of DFG, or removal of Mr. Weiss
from any such position; (v) failure of Mr. Weiss to be
our (including DFG) sole senior most executive officer or,
following a change in control, his failure to be a member of the
board of directors and the chief executive officer of the
successor entities; (vi) any material breach of the
employment agreement committed by us, DFG or any of our
affiliates; or (vii) the dissolution or liquidation of us
or DFG or any failure by us or DFG to obtain the assumption in
writing of its obligation to perform his employment agreement by
any successor to all or substantially all of its assets at the
time of any merger, consolidation, sale or similar transaction,
except where such assumption occurs by operation of law.
Upon a termination of employment by us without cause
or as a result of Mr. Weiss resignation for
good reason, Mr. Weiss will be entitled to the
following payments
and/or
benefits:
|
|
|
|
|
continuation of his base salary as in effect at the time of
termination, for a period of 24 months following
termination of employment, payable in bi-weekly installments,
the amount of which we refer to as Mr. Weiss base
severance;
|
|
|
|
two times his annual target bonus, payable in 24 equal monthly
installments, the amount of which we refer to as
Mr. Weiss bonus severance;
|
|
|
|
a pro-rata portion of his target annual bonus with respect to
the fiscal year during which the termination of
Mr. Weiss employment occurs, with such amount payable
in a lump sum;
|
42
|
|
|
|
|
contribution by us to the cost of coverage under our group
health plan for a period of 24 months or, if shorter, the
maximum period of time allowable under COBRA. In the event
Mr. Weiss eligibility for COBRA coverage expires
sooner than 24 months following the termination of his
employment, we will make payments to him, on an after-tax basis,
of an amount equal to the premium we would have otherwise
contributed to COBRA coverage had he been eligible for the
entire
24-month
period;
|
|
|
|
accelerated vesting of his outstanding equity awards, cash
awards and plan awards (as further described below) and, if
applicable, the equity component of such awards will remain
exercisable for a period ending on the sooner of
(i) 24 months following his termination of employment,
(ii) the latest date the award would have expired by its
original terms if he had remained employed with us or
(iii) the 10th anniversary of the original date of grant of
the award, and any cash award will be paid within thirty
(30) days following such termination; and
|
|
|
|
(i) unpaid base salary Mr. Weiss earned through the
termination date and any accrued but unpaid vacation time;
(ii) any unpaid annual bonus with respect to any fiscal
year which ended prior to the termination date to which
Mr. Weiss is entitled; (iii) any unpaid reimbursement
or payment due on or prior to the date of termination related to
appropriate business or entertainment expenses, car allowances,
employee benefits or LTIP awards to which Mr. Weiss is
entitled; (iv) any unpaid right, payment or benefit that
accrued or became due to Mr. Weiss prior to the termination
date related to retirement benefits, LTIP awards or pursuant to
any of our or our affiliates applicable plans, programs,
policies or arrangements in which Mr. Weiss participated as
of the termination date; and (v) any right, payment or
benefit due or that becomes payable pursuant to his employment
agreement related to Section 280G of the Code,
indemnification, or attorneys fees and expenses, which we
collectively refer to as the accrued and other obligations.
|
If Mr. Weiss is employed by us as of June 30 of each year
during the term of the agreement, Mr. Weiss is entitled to
receive an award equal to 200% of his base salary for such
completed fiscal year that is payable one-half in cash, which we
refer to as the cash awards, and one-half in a combination of
restricted stock units, non-qualified stock options and cash,
which we refer to as the plan awards. Each cash award is payable
upon the appointment by our board of directors of
Mr. Weiss permanent successor as Chief Executive
Officer of the Company; provided that a cash award will be
payable (i) in a given year if our board of directors
concludes, in its reasonable discretion, that satisfactory
progress has been achieved by Mr. Weiss in planning for the
succession of his Chief Executive Officer position, or
(ii) upon a change of control, in each case subject to the
condition that Mr. Weiss has remained continuously employed
by us through such date.
If (i) Mr. Weiss successor as our permanent
Chief Executive Officer is appointed by our board of directors
prior to June 30, 2012 or (ii) Mr. Weiss
employment is terminated by us without cause or as a
result of Mr. Weiss resignation for good
reason prior to June 30, 2012, and provided that he
has remained continuously employed by us through such date,
Mr. Weiss is entitled to receive payment, on the date such
successor is appointed by our board of directors or on the date
of termination, as applicable, of the amount of the cash awards
to which Mr. Weiss would have otherwise been entitled to
receive under the terms of his employment agreement had he
remained employed by us through June 30, 2012. Each plan
award will be apportioned between restricted stock units,
non-qualified stock options and cash in the same proportion as
other members of our management that participate in our LTIP. If
(i) Mr. Weiss successor as our permanent Chief
Executive Officer is appointed by our board of directors prior
to June 30, 2012 or (ii) Mr. Weiss
employment is terminated by us without cause or as a
result of Mr. Weiss resignation for good
reason prior to June 30, 2012, and provided that he
has remained continuously employed by us through such date,
Mr. Weiss is entitled to receive the pro rata portion of
the plan awards that would have been granted had he remained
employed by us until the end of the fiscal year that includes
the date such successor is appointed by our board of directors
or the date of termination, as applicable. The equity component
of such plan awards will remain exercisable for a period ending
on the sooner of (i) 24 months following his
termination of employment, (ii) the latest date upon which
the award would have expired by its original terms if he had
remained employed with us or (iii) the 10th anniversary of
the original date of grant of the award. The plan awards vest as
described above in the discussion of our LTIP awards; provided,
however, that all outstanding awards will vest immediately upon
a change in control. See
Narrative Disclosure
Relating to Summary Compensation Table and Grants of Plan-Based
Awards Table Jeffrey A. Weiss
above.
43
Upon certain qualified terminations of his employment, including
a termination of his employment by us without cause
or as a result of Mr. Weiss resignation for
good reason, Mr. Weiss will be entitled to
receive pursuant to the terms of his employment agreement a
capstone award in the form of a lump-sum payment on the first
business day of the calendar month following the qualified
termination event in an amount equal to the actuarial equivalent
of an annual benefit of $300,000 payable to Mr. Weiss in
equal monthly installments during his lifetime commencing on
such payment date and a $150,000 per year survivor benefit
payable on his subsequent death to his surviving spouse for her
lifetime.
Under the terms of his employment agreement, if Mr. Weiss
remains employed by the Company through each of June 30,
2010 and June 30, 2011, Mr. Weiss is also entitled to
receive an incremental capstone award upon certain qualified
terminations of his employment, including a termination of
employment by us without cause or as a result of
Mr. Weiss resignation for good reason.
Mr. Weiss will be entitled to receive the incremental
capstone award in the form of a lump-sum payment in an amount
equal to the actuarial equivalent of an annual benefit of
$75,000 payable to Mr. Weiss in equal monthly installments
during his lifetime commencing on the first business day of the
calendar month following the qualified termination event and a
$37,500 per year survivor benefit payable on his subsequent
death to his surviving spouse for her lifetime. $1,000,000 of
such lump sum will be payable on the first anniversary of such
qualified termination of Mr. Weiss employment by us,
with the remaining balance being paid on the first business day
of the calendar month that follows the first anniversary of such
termination event. If Mr. Weiss employment with us is
terminated by us without cause or by him for
good reason prior to June 30, 2011, the
incremental capstone award will become fully vested as of the
termination date as if he remained continuously employed by us
through June 30, 2011.
Death or Disability.
In the event that
Mr. Weiss employment with us terminates due to his
death or disability, he will be entitled to the same payments
and/or
benefits described above under
Termination
Without Cause or Resignation for Good
Reason
as if such termination for death or
disability was without cause or for good
reason, except that he will not be entitled to receive
base severance or bonus severance.
Retirement.
Under the terms of his employment
agreement, Mr. Weiss may terminate his employment by reason
of retirement, which is defined in his employment
agreement as the voluntary termination by Mr. Weiss of his
employment on or after December 31, 2010 and before
June 30, 2012 or the termination by us of
Mr. Weiss employment for cause on or
after December 31, 2010 and before June 30, 2014, or
delayed retirement, which is defined in his
employment agreement as the voluntary termination by
Mr. Weiss of his employment after June 30, 2012 or the
termination by us of Mr. Weiss employment for any
reason after June 30, 2014.
In the event of Mr. Weiss retirement or delayed
retirement, Mr. Weiss will be entitled to the following
payments
and/or
benefits:
|
|
|
|
|
contribution by us to the cost of coverage under our group
health plan for a period of 24 months or, if shorter, the
maximum period of time allowable under COBRA. In the event
Mr. Weiss eligibility for COBRA coverage expires
sooner than 24 months following the termination of his
employment, we will make payments to him, on an after-tax basis,
of an amount equal to the premium we would have otherwise
contributed to COBRA coverage had he been eligible for the
entire
24-month
period;
|
|
|
|
a pro-rata portion of his target annual bonus with respect to
the fiscal year during which the termination of
Mr. Weiss employment occurs (determined assuming he
met any personal or subjective performance objectives at no less
than target), with such amount payable in a lump sum;
|
|
|
|
any of Mr. Weiss equity awards held at the date of
termination will immediately become fully vested and, if
applicable, remain exercisable for the period ending on the
sooner of (i) twenty four (24) months from the
termination date, (ii) the latest date upon which the
equity award would have expired by its original terms if
Mr. Weiss remained employed with us or (iii) the 10th
anniversary of the original date of grant of the equity
award; and
|
|
|
|
the accrued and other obligations described under
Termination Without Cause or
Resignation for Good Reason
above.
|
44
In the case of Mr. Weiss retirement or delayed
retirement, he will also be entitled to immediate vesting of his
capstone award and in the case of Mr. Weiss delayed
retirement, he will also be entitled to immediate vesting of his
incremental capstone award on the terms described under
Termination Without Cause or
Resignation for Good Reason
above.
In the case of Mr. Weiss delayed retirement, he will
also be entitled to immediate vesting of any outstanding plan
award held by him as of the termination date and such awards, as
applicable, will remain exercisable for the period ending on the
sooner of (i) twenty four (24) months from the
termination date, (ii) the latest date upon which the award
would have expired by its original terms if Mr. Weiss
remained employed with us or (iii) the 10th anniversary of
the original date of grant of the award.
Change in Control.
In the event of a
change in control, Mr. Weiss will be entitled
to receive the capstone award and the incremental capstone
award, and any equity awards, cash awards and plan awards
granted to Mr. Weiss at the time of a change in
control will become immediately vested and payable, in
each case as described above under
Termination
Without Cause or Resignation for Good
Reason
. In addition, in the event
Mr. Weiss employment is terminated by us without
cause, or if he resigns for good reason,
within 24 months following a change in control,
he will be entitled to receive the same payments
and/or
benefits described above under
Termination
Without Cause or Resignation for Good
Reason
as if such termination was without
cause or for good reason, except that he
will not be entitled to receive base severance or bonus
severance, and instead, he will receive an amount equal to two
times his base salary and target bonus at the time of
termination, payable in a lump sum within 60 days following
such termination.
The change in control provisions of
Mr. Weiss employment agreement will be triggered upon
the first to occur of:
|
|
|
|
|
a sale or transfer of substantially all of our assets or the
assets of DFG in any transaction or series of related
transactions (other than sales in the ordinary course of
business);
|
|
|
|
any person becoming a beneficial owner of twenty five percent
(25%) or more of our voting securities except as a result of
(i) any acquisition of the voting securities by us or DFG
or (ii) any acquisition of our voting securities directly
from us or DFG, as authorized by our board of directors;
|
|
|
|
any sale or series of sales of shares of our capital stock by
the holders thereof which results in any person or group of
affiliated persons owning capital stock holding twenty five
percent (25%) or more of the voting power of DFG at the time of
such sale or series of sales;
|
|
|
|
if after the effective date of the employment agreement, the
individuals who, at the beginning of such period, constitute our
board of directors, cease for any reason to constitute at least
a majority of our board of directors, unless the election or
nomination for election of each director who is not a director
on the effective date of the employment agreement was approved
by a vote of no less than two-thirds (2/3) of the directors then
still in office who are directors on the date hereof or are new
directors approved by such vote;
|
|
|
|
any merger, consolidation or reorganization to which either we
or DFG is a party, except for an internal reorganization or a
merger, consolidation or reorganization in which we are the
surviving corporation and, after giving effect to such merger,
consolidation or reorganization, the holders of our outstanding
common stock (on a fully-diluted basis) immediately prior to the
merger, consolidation or reorganization will own, immediately
following the merger, consolidation or reorganization, capital
stock holding a majority of our voting power;
|
|
|
|
a liquidation, dissolution or winding up of either us or
DFG; or
|
|
|
|
if our common stock is no longer publicly traded on a major
United States stock exchange such as the New York Stock
Exchange or Nasdaq.
|
In addition to the benefits described above, in the event that
it is determined that any payment by us to or for the benefit of
Mr. Weiss would be a so-called golden parachute
payment and, therefore, result in the imposition on
Mr. Weiss of an excise tax under Section 4999 of the
Code, Mr. Weiss shall receive a payment sufficient to place
him in the same after tax position as if no excise tax had been
imposed. We refer to this payment as the parachute
45
gross-up
payment. However, if the imposition of the excise tax could be
avoided by the reduction of payments due to Mr. Weiss by an
amount of 10% or less, then the total of all such payments will
be reduced to an amount $1.00 below the amount that would
otherwise cause an excise tax to apply, and no parachute
gross-up
payment will be made.
Mr. Weiss is bound by certain non-competition and
non-solicitation covenants which extend for a period of
24 months following termination of employment.
Additionally, in order to receive any severance or termination
payments or benefits described above, Mr. Weiss is required
to execute and deliver a general release and non-disparagement
agreement in a form prescribed by us.
Assuming one of the following events occurred on June 30,
2010, Mr. Weiss payments and benefits have an
estimated value of:
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Value of
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Restricted
|
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Cash
|
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Pro-Rata
|
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Stock and
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Portion
|
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|
Annual Bonus,
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Value of
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Restricted
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of Plan
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|
Change in
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Cash Award
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Welfare
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Options
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Stock Units
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Award
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Parachute
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Salary
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Control
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and Plan
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Capstone
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Benefit
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Subject to
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Subject to
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Subject to
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Gross-up
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Continuation
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Bonus
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Severance
|
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Award
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Award(1)
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Continuation
|
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Acceleration
|
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Acceleration
|
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Acceleration
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Payment
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Termination For Cause or Voluntary Resignation (without Good
Reason)
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Termination Without Cause or Voluntary Resignation for Good
Reason
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$
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1,970,000
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(2)
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$
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2,462,500
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(3)
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$
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5,171,250
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(4)
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$
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4,802,831
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(5)
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$
|
21,728
|
(6)
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$
|
414,789
|
(10)
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$
|
2,824,924
|
(7)
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$
|
394,000
|
(11)
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Termination Without Cause or Voluntary Resignation for Good
Reason Following a Change in Control
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$
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4,432,500
|
(8)
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$
|
5,171,250
|
(4)
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|
|
|
|
$
|
21,728
|
(6)
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|
$
|
414,789
|
(10)
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$
|
2,824,924
|
(7)
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$
|
394,000
|
(11)
|
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$
|
4,643,669
|
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Payment Upon a Change in Control(9)
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$
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4,802,831
|
(5)
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Death
|
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$
|
5,171,250
|
(4)
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|
$
|
2,913,522
|
(5)
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|
$
|
21,728
|
(6)
|
|
|
414,789
|
(10)
|
|
$
|
2,824,924
|
(7)
|
|
$
|
394,000
|
(11)
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|
Disability
|
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|
$
|
5,171,250
|
(4)
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|
$
|
4,802,831
|
(5)
|
|
$
|
21,728
|
(6)
|
|
|
414,789
|
(10)
|
|
$
|
2,824,924
|
(7)
|
|
$
|
394,000
|
(11)
|
|
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(1)
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On the earliest to occur, if any, of (i) the date that
Mr. Weiss employment is terminated by reason of
retirement or delayed retirement;
(ii) the date Mr. Weiss employment is terminated
by us without cause or Mr. Weiss resigns for
good reason; (iii) the date that
Mr. Weiss employment terminates by reason of his
disability; or (iv) the date that a change in
control occurs during the term of his employment
agreement, Mr. Weiss will be entitled to commence receiving
payments due pursuant to his capstone award. Mr. Weiss will
be entitled to commence receiving payments due pursuant to his
incremental capstone award on each of the dates mentioned above,
with the exception of retirement, in which case Mr. Weiss
will not be entitled to receive an incremental capstone award.
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(2)
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This amount represents the continuation of Mr. Weiss
base salary for 24 months and is payable over a
24 month period.
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(3)
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This amount represents two times Mr. Weiss annual
target bonus and is payable over a 24 month period.
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(4)
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|
This amount represents the annual target bonus of $1,231,250,
the cash award of $2,955,000 and the plan award of $985,000
payable to Mr. Weiss. Because we are assuming that his
termination of employment occurred on the last business day of
our fiscal year, the amount above does not reflect any
pro-ration that would occur in the event his employment was
terminated at an earlier time during the fiscal year.
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(5)
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|
This amount represents the actuarial present value of
Mr. Weiss capstone award and incremental capstone
award as of June 30, 2010 as if Mr. Weiss , or in the
case of his death, his surviving spouse, had received his lump
sum payment on the first business day of the calendar month
following such date.
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|
(6)
|
|
This amount represents our portion of the premium payments for
24 months of health coverage.
|
|
(7)
|
|
This amount represents the value of unvested grants of an
aggregate of 142,745 shares of our common stock, based on
$19.79, the closing price of our common stock on June 30,
2010.
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|
(8)
|
|
This amount represents two times Mr. Weiss base
salary and annual target bonus and is payable in a lump sum.
|
46
|
|
|
(9)
|
|
Mr. Weiss will be entitled to receive his capstone award
upon a change in control. For a discussion of other payments to
be received by Mr. Weiss in the event of his termination
without cause or resignation for good
reason following a change in control, see the preceding
row of this table.
|
|
(10)
|
|
This amount represents the value of unvested stock options to
purchase an aggregate of 66,430 shares of our common stock,
based on $19.79, the closing price of our common stock on
June 30, 2010. Such amount does not represent unvested
stock options to purchase an aggregate of 20,132 shares of
our common stock that were out of the money, based
on $19.79, the closing price of our common stock on
June 30, 2010, and thus would have no value upon
acceleration. The actual value realized will vary depending on
the date the options are exercised.
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|
(11)
|
|
This amount represents the value of the unvested cash component
of Mr. Weiss plan award.
|
Randy
Underwood
The following describes the potential payments to
Mr. Underwood upon a termination of employment or change of
control pursuant to the terms of his employment agreement.
Termination Without Cause or Resignation for
Good Reason.
Under the terms of his
employment agreement, Mr. Underwood may be terminated by us
without cause or he may resign for good
reason.
Mr. Underwoods employment may be terminated by us for
cause upon the occurrence of any of the following:
(i) a material breach of any promise or obligation imposed
under his employment agreement; (ii) material acts of
embezzlement or misappropriation of funds; (iii) a serious
breach of his fiduciary obligations; (iv) his conviction of
a felony, plea of guilty or nolo contendere to a felony charge
or any criminal act involving moral turpitude; (v) his
willful unauthorized disclosure of confidential information;
(vi) an intentional violation of any of our rules,
regulations or policies; (vii) any willful act materially
adverse to our interests or that is reasonably likely to result
in material harm to us or to bring us into disrepute; or
(viii) engaging in behavior that would constitute grounds
for liability for harassment or other egregious conduct that
violates laws governing the workplace.
Mr. Underwood may resign for good reason upon
the occurrence of any of the following: (i) any failure by
us to pay the compensation and benefits provided under his
employment agreement or any other material breach by us of any
provision of his employment agreement, after written notice by
Mr. Underwood to cure such failure or breach, and failure
by us to cure, within a period of fifteen (15) days
following such written notice; (ii) any material adverse
change in his position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities,
or any other action by us made without his permission after
written notice by Mr. Underwood to cure such material
adverse change and failure by us to cure, within a period of
fifteen (15) days following such written notice which
results in: (A) a diminution in any material respect in his
position, authority, duties, responsibilities or compensation,
which diminution continues in time over at least thirty
(30) days, such that it constitutes an effective demotion
or (B) relocation of his regular work address to a location
more than thirty (30) miles from his location at the
effective date of the employment agreement; or (iii) our
failure to include him under any applicable directors and
officers insurance policy provided by us after receiving
written notice by Mr. Underwood and our continued failure
to cure.
Upon a termination of employment by us without cause
or a resignation by Mr. Underwood for good
reason, Mr. Underwood will be entitled to the
following payments
and/or
benefits:
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|
|
continuation of his base salary as in effect at the time of
termination for a period of 12 months, payable in bi-weekly
installments, the amount of which we refer to as his base
severance;
|
|
|
|
an amount equal to the average of the annual bonuses he received
for the prior two years, payable in 12 equal monthly
installments, the amount of which we refer to as his bonus
severance;
|
|
|
|
contribution by us to the cost of continued coverage under our
group health plan for a period of 12 months;
|
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|
|
continued payment by us (or reimbursement by us) of life,
disability insurance and other benefit programs that were in
effect at the time of his termination for a period of
12 months. In addition, we will continue to pay for his car
lease/allowance payment for 12 months;
|
47
|
|
|
|
|
continued payment by us (or reimbursement by us) of fringe
benefits consisting of a housing allowance of $3,000 per month
for a period of 12 months or such shorter time as required
by applicable law, but only to the extent such payment is
without any material adverse tax or financial accounting or
reporting consequences to us;
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|
|
all vested equity awards will remain exercisable for a period
ending on the sooner of (i) 12 months following his
termination of employment, (ii) the latest date the equity
award would have expired by its original terms if he had
remained employed with us or (iii) the 10th anniversary of
the original date of grant of the equity award;
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|
retiree medical coverage, with survivor benefits, under our
retiree medical plan as then in effect, commencing
12 months after his termination or resignation; and
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|
|
(i) any unpaid base salary and accrued but unpaid vacation
time earned by Mr. Underwood through the termination date;
(ii) any unpaid annual cash bonus payable pursuant to with
respect to any fiscal year which ended prior to
Mr. Underwoods termination; (iii) any
reimbursement or payment due to Mr. Underwood prior to his
termination that remains unpaid relating to deferred
compensation, certain business or entertainment expenses, car
allowance or other fringe benefits; (iv) any right, payment
or benefit that accrued or became due to Mr. Underwood
prior to his termination which remains unpaid related to his
retention bonus, LTIP awards, or pursuant to any of our or our
affiliates applicable plans, programs, policies or
arrangements in which Mr. Underwood participated as of his
termination date; and (v) any right, payment or benefit due
or that becomes payable to Mr. Underwood related to
Section 280G of the Code, indemnification or
attorneys fees and expenses.
|
Upon certain qualifying terminations of his employment,
including a termination of his employment by us without
cause or as a result of Mr. Underwoods
resignation for good reason, Mr. Underwood is
entitled to receive an annual retention bonus at the rate of
$150,000 per year. Mr. Underwoods annual retention
bonus is payable to him in equal monthly installments during his
lifetime (and, upon his death, if Mr. Underwood has
remained married to his spouse through the date of his death,
his spouse will be entitled to receive an annual benefit of
$75,000 payable in equal monthly installments during her
lifetime). Mr. Underwood will be entitled to receive the
annual retention bonus commencing the first month after the
expiration of the 12 month period during which
Mr. Underwood would be entitled to receive his base
severance and his bonus severance, except in the event
Mr. Underwoods employment terminates for any reason
on or after June 30, 2011, in which event payments with
respect to the annual retention bonus would commence the month
following the termination date.
Under the terms of his employment agreement, Mr. Underwood
is also entitled to receive an incremental retention bonus upon
certain qualifying terminations of Mr. Underwoods
employment, including a termination of his employment by us
without cause or as a result of
Mr. Underwoods resignation for good
reason. Mr. Underwoods incremental retention
bonus is an annual benefit of $50,000 payable to
Mr. Underwood in equal monthly installments during his
lifetime (and, upon his death, if Mr. Underwood has
remained married to his spouse through the date of his death, in
which case his spouse will be entitled to receive an annual
benefit of $25,000 payable in equal monthly installments during
her lifetime). Mr. Underwood will be entitled to receive
the incremental retention bonus commencing the first month after
the expiration of the 12 month period during which
Mr. Underwood would be entitled to receive his base
severance and his bonus severance, except in the event
Mr. Underwoods employment terminates for any reason
on or after December 31, 2012, in which event payments will
commence the month following the termination date.
Death or Disability.
In the event that
Mr. Underwoods employment terminates due to his death
or disability, he will be entitled to receive the same benefits
described above under
Termination Without
Cause or Resignation for Good
Reason,
provided, that in the event of his
death, his retention bonus, incremental retention bonus and
retiree medical benefits shall commence in the month following
his death, and in the event of his disability, his retention
bonus and incremental retention bonus shall commence in the
month following his termination by reason of disability and his
retiree medical benefits shall commence 12 months after
termination by reason of disability.
48
Termination after June 30, 2011 and December 31,
2012.
Under the terms of his employment
agreement, if Mr. Underwoods employment is terminated
for any reason after June 30, 2011, he will be entitled to
receive the retention bonus and retiree medical benefits as
described above in
Termination Without
Cause or Resignation for Good
Reason
commencing in the month following
his termination of employment. If Mr. Underwoods
employment is terminated for any reason after December 31,
2012, he will also be entitled to receive the incremental
retention bonus described above in
Termination Without Cause or
Resignation for Good Reason
commencing in the month following his termination of
employment.
Termination Following a Change in Control.
In
the event Mr. Underwoods employment is terminated by
us without cause or he resigns for good
reason within 18 months following a change in
control, he will be entitled to receive the same benefits
described above under
Termination without
Cause or Resignation for Good
Reason,
except that he will receive his
base severance for a period of 18 months and his bonus
severance will be increased by 50% and will be payable over an
18 month period. In addition, the vesting of any unvested
non-equity based LTIP awards will be accelerated upon his
termination, and with respect to any equity awards: (i) to
the extent that Mr. Underwood has received or is eligible
to receive any equity awards that are not fully exercisable and
vested as of the termination date, such equity awards will
become fully vested as of the day immediately prior to the
termination date and (ii) all such equity awards will
thereafter become immediately exercisable for a period ending on
the sooner of (A) 12 months following his termination
of employment, (B) the latest date the equity award would
have expired by its original terms if he had remained employed
with us or (C) the 10th anniversary of the original date of
grant of the equity award.
Retention Bonus, Incremental Retention Bonus and Retiree
Medical Coverage Upon a Change in Control.
If the
retention bonus or incremental retention bonus has commenced
prior to a change in control, any unpaid retention bonus will be
paid to Mr. Underwood or his surviving spouse, as
applicable, in the form of an actuarially equivalent lump sum
within 60 days following such change in control. If the
annual retention bonus or incremental retention bonus has not
commenced as of the date of the change in control, such benefits
will be paid to Mr. Underwood or his surviving spouse, as
applicable, in the form of an actuarially equivalent lump sum
within 60 days following such change in control unless
(i) with respect to the retention bonus, Mr. Underwood
had previously terminated his employment without good
reason or we had previously terminated his employment for
cause and such prior termination had occurred prior
to June 30, 2011 or (ii) with respect to the
incremental retention bonus, Mr. Underwood had previously
terminated his employment without good reason or we
had previously terminated his employment for cause
and such prior termination had occurred prior to
December 31, 2012. Upon a change in control,
Mr. Underwoods retiree medical coverage shall become
non-forfeitable (to the extent it was not already), unless
Mr. Underwood terminated his employment without good
reason or we terminated Mr. Underwood for
cause and such termination had occurred prior to
June 30, 2011, in which case Mr. Underwood will not be
entitled to retiree medical coverage.
The change in control provisions of
Mr. Underwoods employment agreement will be triggered
upon the same events as described above with respect to
Mr. Weiss.
Mr. Underwood is bound by certain non-competition and
non-solicitation covenants which extend for a period of
24 months following termination of employment.
Additionally, in order to receive any severance or termination
payments or benefits described above, Mr. Underwood is
required to execute and deliver a general release and
non-disparagement agreement in a form prescribed by us.
49
Assuming one of the following events occurred on June 30,
2010, Mr. Underwoods payments and benefits have an
estimated value of:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retention
|
|
|
|
|
|
Value of
|
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|
|
|
|
|
|
|
|
Bonus and
|
|
|
|
Value of
|
|
Restricted
|
|
Cash Portion of
|
|
|
|
|
|
|
Welfare
|
|
Incremental
|
|
Retiree
|
|
Options
|
|
Stock
|
|
Plan Award
|
|
|
Salary
|
|
|
|
Benefit
|
|
Retention
|
|
Medical
|
|
Subject to
|
|
Units Subject to
|
|
Subject to
|
|
|
Continuation
|
|
Bonus
|
|
Continuation
|
|
Bonus
|
|
Coverage
|
|
Acceleration
|
|
Acceleration
|
|
Acceleration
|
|
Termination For Cause or Voluntary Resignation (without Good
Reason)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or Voluntary Resignation for Good
Reason
|
|
$
|
505,000
|
(1)
|
|
$
|
637,057
|
(2)
|
|
$
|
89,193
|
(3)
|
|
$
|
1,710,826
|
(4)
|
|
$
|
8,653
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or Voluntary Resignation for Good
Reason following a Change in Control
|
|
$
|
757,500
|
(6)
|
|
$
|
955,585
|
(7)
|
|
$
|
133,789
|
(8)
|
|
|
|
|
|
|
|
|
|
$
|
494,910
|
(9)
|
|
$
|
1,286,033
|
(10)
|
|
$
|
544,872
|
(12)
|
Payment Upon a Change in Control (11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,710,826
|
(4)
|
|
$
|
8,653
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
$
|
505,000
|
(1)
|
|
$
|
637,057
|
(2)
|
|
$
|
89,193
|
(3)
|
|
$
|
889,088
|
(4)
|
|
$
|
8,653
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability
|
|
$
|
505,000
|
(1)
|
|
$
|
637,057
|
(2)
|
|
$
|
89,193
|
(3)
|
|
$
|
1,710,826
|
(4)
|
|
$
|
8,653
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This amount represents the continuation of
Mr. Underwoods base salary for one year.
|
|
(2)
|
|
This amount represents the average of Mr. Underwoods
annual bonus payments for the prior two years.
|
|
(3)
|
|
This amount represents our portion of the premium payments for
12 months of health, life, and disability coverage and
12 months of Mr. Underwoods monthly auto and
housing allowance.
|
|
(4)
|
|
This amount represents the actuarial present value of
Mr. Underwoods Retention Bonus and Incremental
Retention Bonus as of June 30, 2010 as if
Mr. Underwood, or in the case of his death, his surviving
spouse, had received his lump sum payment on the first business
day of the calendar month following such date.
|
|
(5)
|
|
This amount represents the present value of our expenses for
providing Mr. Underwood with retiree medical coverage.
|
|
(6)
|
|
This amount represents the continuation of
Mr. Underwoods base salary for 18 months.
|
|
(7)
|
|
This amount represents 1.5 times the average of
Mr. Underwoods annual bonus payments for the prior
two years.
|
|
(8)
|
|
This amount represents our portion of the premium payments for
18 months of health, life, and disability coverage and
18 months of Mr. Underwoods monthly auto and
housing allowance.
|
|
(9)
|
|
This amount represents the value of unvested stock options to
purchase an aggregate of 68,565 shares of our common stock,
based on $19.79, the closing price of our common stock on
June 30, 2010. The actual value realized will vary
depending on the date the options are exercised.
|
|
(10)
|
|
This amount represents the value of unvested grants of an
aggregate of 64,984 shares of our common stock, based on
$19.79, the closing price of our common stock on June 30,
2010.
|
|
(11)
|
|
Mr. Underwood will be entitled to receive his annual
retention bonus, incremental retention bonus and certain retiree
medical benefits upon a change in control. For a discussion of
other payments to be received by Mr. Underwood in the event
of his termination without cause or resignation for
good reason following a change in control, see the
preceding line of this table.
|
|
(12)
|
|
This amount represents the value of the unvested cash component
of Mr. Underwoods LTIP awards..
|
Sydney
Franchuk
Termination Without Cause or Resignation For Good
Reason.
Under the terms of his employment
agreement, Mr. Franchuk may be terminated by us without
cause upon us giving Mr. Franchuk
12 months notice or he may resign for good reason.
Although not specifically defined in his employment agreement,
we may terminate Mr. Franchuks employment for
cause at any time for any just cause permitted by
law, without notice.
50
Mr. Franchuk may resign for good reason upon
the occurrence of any of the following: (i) a willful
material breach by us of any provision of his employment
agreement; (ii) a material adverse change in
Mr. Franchuks duties, responsibilities or salary;
(iii) relocation of Mr. Franchuks regular work
address to a location more than 30 miles from his location
at the commencement of his employment agreement; or
(iv) failure by us to include Mr. Franchuk under any
directors and officers liability insurance that we maintain for
our officers and directors, provided that such failure is not
remedied within 30 days of written notice of such default
by Mr. Franchuk to us.
We may terminate Mr. Franchuk without cause
upon us giving Mr. Franchuk 12 months notice. At our
option, we may pay compensation to Mr. Franchuk in lieu of
all or part of such twelve month notice period consisting of the
following:
|
|
|
|
|
continuation of his base salary as in effect at the time of
termination for the completion of such twelve month period,
payable in accordance with our normal payroll practices; and
|
|
|
|
continuation of certain welfare benefits.
|
Mr. Franchuk will also be entitled to the above
compensation for a 12 month period upon his resignation for
good reason.
In addition, upon Mr. Franchuks termination without
cause or resignation for good reason, he
will be entitled to a pro rated bonus which shall be calculated
comparing our actual results in the year in which the notice of
termination is given including all months through to and
including the month in which notice of termination is given plus
the following twelve months to the applicable bonus targets for
that time period.
Mr. Franchuk is bound by certain non-competition and
non-solicitation covenants which extend for a period of
12 months following termination of employment.
Additionally, in order to receive any severance or termination
payments or benefits described above, Mr. Franchuk is
required to execute and deliver a general release in a form
acceptable to us.
Assuming one of the following events occurred on June 30,
2010, Mr. Franchuks payments and benefits have an
estimated value of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Welfare Benefit
|
|
|
Continuation
|
|
Bonus
|
|
Continuation
|
|
Termination For Cause or
Voluntary Resignation (without
Good Reason)
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause
Without Providing Twelve
Months Notice or Voluntary
Resignation for Good Reason
|
|
$
|
377,160
|
(1)
|
|
|
|
|
|
$
|
7,305
|
(2)
|
|
|
|
(1)
|
|
This amount represents the continuation of
Mr. Franchuks base salary for twelve months.
|
|
(2)
|
|
This amount represents our portion of the premium payments for
12 months (i.e., the period of time remaining in his
initial employment term) of health and life coverage.
|
Norman
Miller
Termination Without Cause or Resignation for
Good Reason.
Under the terms of his employment
agreement, Mr. Miller may be terminated by us without
cause or he may resign for good reason.
Mr. Millers employment may be terminated by us for
cause which is defined substantially as described
above with respect to Mr. Underwoods
cause definition.
Mr. Miller may resign for good reason which is defined
substantially as described above with respect to
Mr. Underwoods good reason definition.
Upon a termination of employment by us without cause
or a resignation by Mr. Miller for good reason,
Mr. Miller will be entitled to the following payments
and/or
benefits:
|
|
|
|
|
continuation of his base salary as in effect at the time of
termination for a period of 12 months, payable in bi-weekly
installments, the amount of which we refer to as his base
severance;
|
51
|
|
|
|
|
an amount equal to the average of the annual bonuses he received
for the prior two years, payable in 12 equal monthly
installments, the amount of which we refer to as his bonus
severance;
|
|
|
|
contribution by us to the cost of continued coverage under our
group health plan for a period 12 months;
|
|
|
|
continued payment by us (or reimbursement by us) of life,
disability insurance and other benefit programs that were in
effect at the time of his termination for a period of
12 months. In addition, we will continue to pay for his car
lease/allowance payment for 12 months; and
|
|
|
|
all vested equity awards will remain exercisable for a period
ending on the sooner of (i) 12 months following his
termination of employment or (ii) the date the equity award
would have expired by its original terms if he had remained
employed with us.
|
Death or Disability.
In the event that
Mr. Millers employment terminates due to his death or
disability, he will be entitled to receive the same benefits
described above under
Termination Without
Cause or Resignation for Good
Reason
above.
Termination Following a Change in Control.
In
the event Mr. Millers employment is terminated by us
without cause or he resigns for good
reason within 18 months following a change in
control, he will be entitled to receive the same benefits
described above under
Termination without
Cause or Resignation for Good
Reason,
above, except that he will receive
his base severance for a period of 18 months and his bonus
severance will be increased by 50% and will be payable over an
18 month period. In addition, any unvested equity awards
will be accelerated upon his termination and, if applicable,
will remain exercisable for a period ending on the sooner of
(i) 12 months following his termination of employment
or (ii) the date the equity award would have expired by its
original terms if he had remained employed with us.
The change in control provisions of
Mr. Millers employment agreement will be triggered
upon the same events as described above with respect to
Mr. Weiss.
Mr. Miller is bound by certain non-competition and
non-solicitation covenants which extend for a period of
24 months following termination of employment.
Additionally, in order to receive any severance or termination
payments or benefits described above, Mr. Miller is
required to execute and deliver a general release and
non-disparagement agreement in a form prescribed by us.
Assuming one of the following events occurred on June 30,
2010, Mr. Millers payments and benefits have an
estimated value of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Restricted
|
|
|
|
|
|
|
|
|
Value of Options
|
|
Stock Units
|
|
|
Salary
|
|
|
|
Welfare Benefit
|
|
Subject to
|
|
Subject to
|
|
|
Continuation
|
|
Bonus
|
|
Continuation
|
|
Acceleration
|
|
Acceleration
|
|
Termination For Cause or Voluntary Resignation (without Good
Reason)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or Voluntary Resignation for Good
Reason
|
|
$
|
450,000
|
(1)
|
|
$
|
544,608
|
(2)
|
|
$
|
22,864
|
(3)
|
|
|
|
|
|
|
|
|
Termination Without Cause or Voluntary Resignation for Good
Reason following a Change in Control
|
|
$
|
675,000
|
(4)
|
|
$
|
816,912
|
(5)
|
|
$
|
34,296
|
(6)
|
|
$
|
494,910
|
(7)
|
|
$
|
1,286,033
|
(8)
|
Death
|
|
$
|
450,000
|
(1)
|
|
$
|
544,608
|
(2)
|
|
$
|
22,864
|
(3)
|
|
|
|
|
|
|
|
|
Disability
|
|
$
|
450,000
|
(1)
|
|
$
|
544,608
|
(2)
|
|
$
|
22,864
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This amount represents the continuation of
Mr. Millers base salary for one year.
|
|
(2)
|
|
This amount represents the average of Mr. Millers
annual bonus payments for the prior two years.
|
|
(3)
|
|
This amount represents our portion of the premium payments for
12 months of health, life and disability coverage and
12 months of Mr. Millers monthly auto allowance.
|
|
(4)
|
|
This amount represents the continuation of
Mr. Millers base salary for 18 months.
|
52
|
|
|
(5)
|
|
This amount represents 1.5 times the average of
Mr. Millers annual bonus payments for the prior two
years.
|
|
(6)
|
|
This amount represents our portion of the premium payments for
18 months of health, life and disability coverage and
18 months of Mr. Millers monthly auto allowance.
|
|
(7)
|
|
This amount represents the value of unvested stock options to
purchase an aggregate of 68,565 shares of our common stock,
based on $19.79, the closing price of our common stock on
June 30, 2010. The actual value realized will vary
depending on the date the options are exercised.
|
|
(8)
|
|
This amount represents the value of unvested grants of an
aggregate of 64,984 shares of our common stock, based on
$19.79, the closing price of our common stock on June 30,
2010.
|
Employee
Benefit Plans
We believe our ability to grant equity-based awards is a
valuable and necessary compensation tool that aligns the
long-term financial interests of our employees and directors
with the financial interests of our stockholders. In addition,
we believe that our ability to grant options and other
equity-based awards helps us to attract, retain and motivate
qualified employees, and encourages them to devote their best
efforts to our business and financial success. The material
terms of our 2005 Stock Incentive Plan, which we refer to as our
2005 stock incentive plan, is described below. See
Proposal 2 Amendment of the Dollar
Financial Corp. 2007 Equity Incentive Plan
for a
description of the material terms of our 2007 equity incentive
plan.
Shares Subject to Plan
.
During
fiscal 2010, our board of directors did not approve any grants
of restricted stock, restricted stock units nor options to
purchase shares of common stock under our 2005 stock incentive
plan.
Administration
.
Our 2005 stock
incentive plan is administered by the human resources and
compensation committee as designated by our board of directors.
Each member of the human resources and compensation committee is
a nonemployee director (within the meaning of
Rule 16b-3
promulgated under Section 16 of the Exchange Act) and an
outside director (within the meaning of
Section 162(m) of the Internal Revenue Code). The human
resources and compensation committee has authority to construe
and interpret our 2005 stock incentive plan and any awards made
thereunder, to grant and determine the terms of awards and to
make any necessary rules and regulations for the administration
of our 2005 stock incentive plan.
Eligibility
.
All of our and our
subsidiaries directors, officers, employees, consultants and
advisors are eligible to participate in our 2005 stock incentive
plan.
Type of Awards
.
Our 2005 stock
incentive plan permits the human resources and compensation
committee to grant stock options, stock purchase rights, shares
of common stock, restricted stock units or a combination thereof
upon the terms and conditions determined by the administrators
of the plan. Stock options may be incentive stock options or
non-qualified stock options that do not qualify as incentive
stock options. Our board of directors amended and restated our
2005 equity incentive plan on June 28, 2007 to permit the
issuance of restricted stock units under our 2005 equity
incentive plan.
Amendment and Termination
.
Our 2005
stock incentive plan may be amended or terminated by our board
of directors, at any time, subject to approval by our
stockholders where necessary to satisfy federal tax or other
applicable laws or stock market requirements. Our 2005 stock
incentive plan will terminate no later than ten years after its
adoption.
Exercisability, Vesting and Price of
Awards
.
Stock options under our 2005 stock
incentive plan will vest at the times and upon the conditions
that the human resources and compensation committee may
determine, and the price at which shares, subject to the stock
option may be purchased will be reflected in each particular
stock option agreement. The stock purchase price, our right of
repurchase, if any, and other conditions determined by the human
resources and compensation committee, will be reflected in each
particular stock purchase right agreement.
53
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last fiscal year, Messrs. Schwenke (Chairman),
Gavin, Kooper and McLaughlin served as members of our human
resources and compensation committee. Mr. Gavin resigned as
a member of our human resources and compensation committee on
June 29, 2010, and our board of directors appointed
Mr. McLaughlin to serve as a member of our human resources
and compensation committee on June 29, 2010. None of these
individuals was at any time since July 1, 2009 or at any
time prior thereto an officer or employee of ours. There are no
compensation committee interlocks between us and any other
entity involving us or such other entitys executive
officers or members of our board of directors.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Other than compensation agreements and other arrangements which
are described in the
Director Compensation
and
Executive Officers and Executive
Compensation
sections of this proxy statement and the
transactions described below, during our last fiscal year, there
was not, and there is not currently proposed, any transaction or
series of transactions to which we were or will be a party in
which the amount involved exceeded or will exceed $120,000 and
in which any of our directors, nominees for director, executive
officers, holders of more than five percent of any class of our
voting securities or any member of the immediate family of the
foregoing persons had or will have a direct or indirect material
interest.
We believe that all of the transactions set forth below are on
terms no less favorable to us than we could have obtained from
unaffiliated third parties.
Stockholders
Agreement
We are a party to an amended and restated stockholders agreement
with parties, including GS Mezzanine Partners, L.P., Bridge
Street Fund 1998, L.P., Stone Street Fund 1998, L.P.
and GS Mezzanine Partners Offshore, L.P., which we refer to
collectively in this proxy statement as GS, Ares Leveraged
Investment Fund, L.P. and Ares Leveraged Investment
Fund II, L.P., which we refer to together in this proxy
statement as Ares, Green Equity Investors II, L.P., Jeffrey
Weiss, Donald Gayhardt and C.L. and Sheila Jeffrey. Under the
stockholders agreement, provisions relating to tag-along and
first option rights, repurchase of shares, preemptive rights,
drag-along rights and grants of proxy terminated in connection
with our initial public offering in January 2005. Any
stockholder party to the stockholders agreement owning 20% or
more of the outstanding shares of our common stock has the right
to demand that we file a registration statement under the
Securities Act covering all or a portion of the shares of common
stock that it holds. In addition, if we propose to register any
common stock under the Securities Act (pursuant to a demand or
otherwise) other than on a registration statement on
Form S-4
or
S-8,
or
in connection with an exchange offer, each stockholder that is
party to the stockholders agreement, may elect to include in, or
piggyback on, the registration of all or a portion
of the shares of common stock that it holds. We would bear all
registration expenses incurred in connection with these
registrations. The stockholders would pay all underwriting
discounts, selling commissions and stock transfer taxes
applicable to the sale of their securities.
The stockholders agreement will terminate on November 13,
2013. To our knowledge, GS, Ares and Green Equity Investors II,
L.P. do not own any shares of our common stock and, therefore,
they no longer have rights under the stockholders agreement.
Our
Policies Regarding Related Party Transactions
The audit committee of our board of directors reviews
transactions where any of the following persons or entities is a
party: (i) any executive officer or vice president or board
member or board nominee or any immediate family member or
affiliate of any of the foregoing; (ii) any five percent or
more stockholder; or (iii) any entity in which any of the
foregoing has a one percent or more ownership interest.
Transactions subject to review may proceed if our audit
committee finds that the transaction is on terms comparable to
those that could be obtained in arms length dealings with
an unrelated third party, and, to the extent they involve
compensation, if they are approved by our human resources and
compensation committee.
54
REPORT OF
THE AUDIT COMMITTEE
The audit committee oversees our financial reporting process on
behalf of our board of directors. Management has the primary
responsibility for the financial statements and the reporting
process, including the systems of internal controls. Our
independent registered public accounting firm is responsible for
expressing an opinion on the conformity of our audited financial
statements with accounting principles generally accepted in the
United States.
In fulfilling its oversight responsibilities, the audit
committee has reviewed our audited financial statements for
fiscal 2010, and discussed them with management and the
independent registered public accounting firm (including
discussions in executive sessions without the presence of
management when appropriate), including the following aspects of
the financial statements: (i) the quality, not just the
acceptability, of their accounting principles; (ii) the
reasonableness of the significant judgments reflected in the
financial statements; and (iii) the clarity of their
disclosures. The audit committee has discussed with our
independent registered public accounting firm the matters
required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees, as amended.
The audit committee has also received the written disclosures
and the letters from our independent registered public
accounting firm required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit
Committees. The audit committee has discussed with the
independent registered public accounting firm their independence
from us and our management. In addition, the audit committee has
considered whether the provision of non-audit services by the
independent registered public accounting firm to us is
compatible with maintaining the independence of the independent
registered public accounting firm.
Based on the reviews and discussions referred to above, the
audit committee recommended to our board of directors that our
audited financial statements be included in our Annual Report on
Form 10-K
for fiscal 2010. The recommendation of the audit committee was
accepted by our board of directors.
This report is made by the undersigned members of the Audit
Committee.
David Jessick (Chairman)
John Gavin
Clive Kahn
Notwithstanding anything to the contrary set forth in any of
our previous or future filings under the Securities Act or the
Exchange Act that might incorporate this proxy statement or
future filings with the Securities and Exchange Commission, in
whole or in part, the above report shall not be deemed to be
soliciting material or filed with the
Securities and Exchange Commission and shall not be deemed to be
incorporated by reference into any such filing.
55
PROPOSAL 2:
AMENDMENT OF THE
DOLLAR FINANCIAL CORP. 2007 EQUITY INCENTIVE PLAN
On September 23, 2010, our board of directors unanimously
adopted a resolution approving, subject to approval by our
stockholders, the amendment and restatement of the Dollar
Financial Corp 2007 Equity Incentive Plan, which we refer to as
our 2007 equity incentive plan, in order to:
|
|
|
|
|
increase the number of shares available for issuance under our
2007 equity incentive plan by 4,500,000 shares, from
2,500,000 to 7,000,000 shares;
|
|
|
|
replace the current limitation that no more than
1,250,000 shares of restricted stock or shares with respect
to restricted stock unit awards be issued under our 2007 equity
incentive plan with a provision deducting from shares available
for grant under our 2007 equity incentive plan 1.67 shares
for each share that underlies an award granted under our 2007
equity incentive plan for restricted stock, restricted stock
units, performance awards or other awards under our 2007 equity
incentive plan for which the full value of such share is
transferred by us to the award recipient; and
|
|
|
|
make other clarifying and updating changes.
|
Our board of directors believes that the proposed amendment and
restatement of our 2007 equity incentive plan is in the best
interests of, and will provide long-term advantages to, us and
our stockholders and recommends its approval by our
stockholders. Our board of directors believes that the number of
shares of common stock currently available for issuance under
our 2007 equity incentive plan is insufficient in view of our
compensation structure and strategy. Our board of directors has
concluded that our ability to attract, retain and motivate top
quality employees and non-employee members of our board of
directors is material to our success and would be enhanced by
our continued ability to make grants under our 2007 equity
incentive plan.
Many companies have begun using full-value awards
such as restricted stock and restricted stock units to a greater
extent in order to retain and attract valuable employees.
Because such awards are typically issued in lesser numbers than
stock options, they can result in less overall dilution from
equity compensation awards than stock options. In some cases,
issuing lower numbers of full-value awards can also decrease the
amount of equity compensation expense companies recognize for
financial accounting purposes. In order for us to have greater
flexibility to use full-value awards, and to allow us to remain
competitive in structuring our equity compensation packages, our
board of directors believes that is in the best interests of us
and our stockholders that we replace the fixed
1,250,000 share limit on full-value awards under our
current 2007 equity incentive plan with a fungible share
provision, pursuant which each full-value award issued under the
amended and restated 2007 equity incentive plan will result in a
reduction of 1.67 shares from the shares then available for
grant under the 2007 equity incentive plan.
As of September 24 , 2010: (i) 455,848 shares of our
common stock remained available for future awards under our 2007
equity incentive plan; 419,202 shares of our common stock
were subject to unvested restricted stock or restricted stock
unit awards under our 2007 equity incentive plan; and
(iii) 36,646 shares of our common stock were subject
to outstanding options under our 2007 equity incentive plan
(with the outstanding options having a weighted average exercise
price of $14.67 per share and a weighted average term to
maturity of 8.49 years). Additionally, as of
September 24, 2010: (i) 27,983 shares of our common
stock remained available for future awards under our 2005 stock
incentive plan; zero shares of our common stock were subject to
unvested restricted stock or restricted stock unit awards under
our 2005 stock incentive plan; and (iii) 27,983 shares
of our common stock were subject to outstanding options under
our 2005 stock incentive plan (with the outstanding options
having a weighted average exercise price of $16.59 per share and
a weighted average term to maturity of 5.15 years). During
fiscal 2010, our board of directors approved the grant of
512,788 shares of restricted stock and restricted stock
units and options to purchase 489,657 shares of common
stock under our 2007 stock incentive plan.
Our board of directors has directed that the proposal to approve
the amendment and restatement of our 2007 equity incentive plan
be submitted to our stockholders for their approval at the
annual meeting.
56
The principal terms and provisions of our 2007 equity incentive
plan, as proposed to be amended and restated, are summarized
below. The summary, however, is not intended to be a complete
description of all the terms of our 2007 equity incentive plan
and is qualified in its entirety by reference to the complete
text of our 2007 equity incentive plan, as amended and restated,
which is included in Appendix A to this proxy statement.
Summary
of 2007 Equity Incentive Plan
Plan Administration.
Our 2007 equity incentive
plan is administered by our board of directors or the human
resources and compensation committee of our board. The term
plan administrator, as used in this summary, means
our board of directors or the human recourses and compensation
committee to the extent each such entity is acting within the
scope of its administrative authority under our 2007 equity
incentive plan.
Eligibility.
Officers and employees,
non-employee members of our board of directors as well as
independent consultants and contractors in our employ or service
or in the employ or service of our parent or subsidiary
companies (whether now existing or subsequently established) are
eligible to participate in our 2007 equity incentive plan.
Securities Subject to Our 2007 Equity Incentive
Plan.
Prior to the proposed amendment and
restatement of our 2007 equity incentive plan,
2,500,000 shares of our common stock are reserved for
issuance over the term of our 2007 equity incentive plan,
provided that no more than 1,250,000 shares under our 2007
equity incentive plan may be subject to stock awards or
restricted stock unit awards. As described above, if the
proposed amendment and restatement of our 2007 equity incentive
plan is approved by our stockholders at the annual meeting, the
number of shares of our common stock reserved for issuance over
the term of our 2007 equity incentive plan will be increased by
4,500,000, to a total of 7,000,000 shares. The share
reserve would be reduced by 1.67 shares for each share that
underlies an award granted under our 2007 equity incentive plan
on or after the date on which the amendment and restatement of
our 2007 equity incentive plan is approved by our stockholders
for restricted stock, restricted stock units, performance awards
or other awards under our 2007 equity incentive plan for which
the full value of such share is transferred by us to the award
recipient.
No participant in the 2007 equity incentive plan may receive
awards denominated in shares for more than 500,000 shares
of our common stock in any single fiscal year, subject to
adjustment for subsequent stock splits, stock dividends and
similar transactions. Stockholder approval of this proposal will
also constitute approval of that 500,000-share limitation for
purposes Section 162(m) of the Internal Revenue Code. Such
limitation assures that any deductions to which we would
otherwise be entitled upon the exercise of options or stock
appreciation rights granted under our 2007 equity incentive plan
will not be subject to the $1 million limitation on the
income tax deductibility of compensation paid per executive
officer imposed under Section 162(m). In addition, one or
more shares issued under stock awards, restricted stock unit
awards or performance awards may also qualify as
performance-based compensation that is not subject to the
Section 162(m) limitation, if the vesting of those shares
is tied to the attainment of the corporate performance
milestones discussed below.
The shares of common stock issuable under our 2007 equity
incentive plan may be drawn from shares of our authorized but
unissued common stock or from shares of our common stock that we
acquire, including shares purchased on the open market or in
private transactions.
Shares subject to outstanding awards under our 2007 equity
incentive plan that are forfeited, expire or otherwise terminate
prior to the issuance of the shares subject to those awards will
be available for subsequent issuance under our 2007 equity
incentive plan, provided that each share underlying a full-value
award issued on or after November 11, 2010 that is
surrendered or forfeited will count as 1.67 shares
available for subsequent issuance under our 2007 equity
incentive plan.
Types of Awards.
Our 2007 equity incentive
plan allows for the grant of options, stock appreciation rights,
stock awards, restricted unit awards and performance awards.
Stock Options and Stock Appreciation
Rights.
Under our 2007 equity incentive plan,
eligible persons may be granted options to purchase shares of
our common stock or stock appreciation rights tied to the value
of our common stock. The plan administrator has complete
discretion to determine which eligible individuals are to
receive option grants or stock appreciation rights, the time or
times when those options or stock appreciation rights are to be
57
granted, the number of shares subject to each such grant, the
vesting schedule (if any) to be in effect for the grant, the
maximum term for which the granted option or stock appreciation
right is to remain outstanding and the status of any granted
option as either an incentive stock option or a non-statutory
option under the federal tax laws.
Each option granted under our 2007 equity incentive plan has an
exercise price per share determined by the plan administrator,
but the exercise price may not be less than one hundred percent
of the fair market value of the option shares on the grant date.
No granted option may have a term in excess of ten years. The
shares subject to each option generally vest in one or more
installments over a specified period of service measured from
the grant date. In addition, one or more awards may be
structured so that those awards will vest and become exercisable
only after the achievement of pre-established corporate
performance objectives. Upon cessation of service, the optionee
has a limited period of time in which to exercise his or her
outstanding options to the extent exercisable for vested shares.
Stock appreciation rights allow the holder to exercise those
rights as to a specific number of shares of our common stock and
to receive in exchange an appreciation distribution from us in
an amount equal to the excess of (i) the fair market value
of the shares of common stock as to which those rights are
exercised, over (ii) the aggregate base price in effect for
those shares. The base price per share may not be less than the
fair market value per share of our common stock on the date the
stock appreciation right is granted, and the right may not have
a term in excess of ten years.
The appreciation distribution on any exercised stock
appreciation right is payable in (i) cash, (ii) shares
of our common stock, or (iii) a combination of cash and
shares of our common stock. Upon cessation of service with us,
the holder of a stock appreciation right has a limited period of
time in which to exercise that right to the extent exercisable
at that time.
Repricing Prohibition.
The plan administrator
may not implement any of the following repricing programs
without obtaining stockholder approval: (i) the
cancellation of outstanding options or stock appreciation rights
in return for new options or stock appreciation rights with a
lower exercise price per share; (ii) the cancellation of
outstanding options or stock appreciation rights with exercise
prices per share in excess of the then current fair market value
per share of our common stock for consideration payable in our
equity securities; or (iii) the direct reduction of the
exercise price in effect for outstanding options or stock
appreciation rights.
Stock Awards and Restricted Stock Unit
Awards.
Shares may be issued under our 2007
equity incentive plan subject to performance or service vesting
requirements established by the plan administrator. Shares may
also be issued as a fully-vested bonus for past services without
any cash outlay required of the recipient. We may issue
restricted stock units which entitle the recipients to receive
shares (or an amount in cash based on the value of the shares)
on terms and conditions determined by the plan administrator.
The shares or cash underlying restricted stock units may be
delivered upon the attainment of designated performance goals or
the completion of a prescribed service period or upon the
expiration of a designated time period following the vesting of
those units, including (without limitation), a deferred
distribution date following the termination of the
recipients service with us. The plan administrator has
complete discretion under the program to determine which
eligible individuals are to receive stock or restricted stock
unit awards under our 2007 equity incentive plan, the time or
times when those awards are to be made, the form of those
awards, the number of shares subject to each such award, the
vesting schedule (if any) to be in effect for the award, the
issuance schedule for the shares which vest under the award and
the cash consideration (if any) payable per share.
Performance Awards.
Performance awards issued
under our 2007 equity incentive plan vest upon the attainment of
performance objectives over a specified performance period, all
as established by the plan administrator at the time of the
award. Performance awards may be paid in cash, shares of common
stock or other property. The plan administrator has complete
discretion to determine which eligible individuals are to
receive performance awards under our 2007 equity incentive plan,
the time or times when those awards are to be made, the form of
those awards, the number of shares subject to each such award,
the vesting and payment schedule (if any) to be in effect for
the award and the cash consideration (if any) payable per share.
In order to assure that the compensation attributable to one or
more awards made under our 2007 equity incentive plan will
qualify as performance-based compensation which will not be
subject to the $1 million limitation on the income tax
deductibility of the compensation paid to certain executive
officers which is imposed
58
under Section 162(m), the plan administrator also has the
discretionary authority to structure one or more awards so that
the shares of common stock subject to those awards will vest
only upon the achievement of certain pre-established corporate
performance goals based on one or more of the following
criteria: net sales; net revenue; pretax income; pro forma
pretax income; pretax income before allocation of corporate
overhead and bonus; budget; cash flow; net income or earnings
per share; net income or operating income; return on
stockholders equity; return on assets, capital or
investment; the price of our common stock or any of our other
publicly-traded securities; market share; gross profits;
operating margins; earnings before interest and taxes; earnings
before interest, taxes, depreciation and amortization; earnings
before interest, taxes, depreciation, amortization and
stock-based compensation; operating income before depreciation
and amortization; sales or revenue targets; capital or
investment; cash flow; cost reduction goals; budget comparisons;
implementation or completion of projects or processes strategic
or critical to our business operations; completion of targeted
acquisitions; entry into new markets; development of new
products and services; measures of customer satisfaction; any
combination of, or a specified increase in, any of the
foregoing; and the formation of joint ventures, marketing or
customer service collaborations, or the completion of other
corporate transactions intended to enhance our revenue or
profitability or expand our customer base. Such performance
goals may be stated with respect to us as a whole, or with
respect to a specified subsidiary, division or other operational
unit. Moreover, such performance goals may be stated in absolute
terms or may be expressed relative to performance in a specified
prior period or to the performance of other specified
enterprises. The measurement of the achievement of any of these
goals will be determined, to the extent applicable, according to
generally accepted accounting principles as in existence on the
date on which performance goal or goals were established;
provided, however, to the extent specified by the plan
administrator at the time the performance goals are established,
the measurement of specified performance goals may be subject to
adjustment to exclude items of gain, loss or expense that are
determined to be extraordinary or unusual in nature, infrequent
in occurrence, related to a corporate transaction (including,
without limitation, a disposition or acquisition) or related to
a change in accounting principle, all as determined in
accordance with standards established by Opinion No. 30 of
the Accounting Principles Board. Performance goals may include a
minimum threshold level of performance below which no award will
be earned, levels of performance at which specified portions of
an award will be earned, and a maximum level of performance at
which an award will be fully earned. The plan administrator may
provide that, if the actual level of attainment for any
performance objective is between two specified levels, the
amount of the award attributable to that performance objective
shall be interpolated on a straight-line basis. Equitable
adjustments will be made to any performance goal related to our
common stock (e.g., earnings per share) to reflect changes in
corporate capitalization, such as stock splits and
reorganizations.
Outstanding performance awards automatically terminate, and no
shares of our common stock may actually be issued in
satisfaction of those awards, if the performance goals or
service requirements established for such awards are not
attained. The plan administrator, however, has the discretionary
authority to issue shares of our common stock in satisfaction of
one or more outstanding awards as to which the designated
performance goals or service requirements are not attained.
However, no vesting requirements tied to the attainment of
performance objectives may be waived with respect to awards
which were intended at the time of issuance to qualify as
performance-based compensation under Section 162(m).
General
Provisions
Change in Control
.
In the event of a
change in control or a sale of a subsidiary or business, the
plan administrator, may, in its sole discretion, do one or more
of the following: (i) shorten the period during which
options and stock appreciation rights are exercisable;
(ii) accelerate any vesting schedule to which an award is
subject; (iii) arrange to have the surviving or successor
entity or purchaser entity or any parent entity thereof assume
the awards or grant replacement awards with appropriate
adjustments in the purchase and base prices and in the number
and kind of securities issuable under the awards;
(iv) assign any repurchase rights to the surviving or
successor entity or purchaser entity or parent thereof;
(vi) cancel awards upon payment to the participants in
cash, with respect to each award to the extent then exercisable
or vested, of an amount equal to the excess of the fair market
value of the common stock over the price payable for the shares
subject to the award; or (vii) make such
59
other adjustments to the consideration issuable upon exercise or
vesting of the awards and other terms of the awards as the plan
administrator deems appropriate in its sole and absolute
discretion.
The plan administrators authority above extends to any
awards intended to qualify as performance-based compensation
under Section 162(m), even though the accelerated vesting
of those awards may result in their loss of performance-based
status under Section 162(m).
Changes in Capitalization
.
In the event
any change is made to the outstanding shares of our common stock
by reason of any recapitalization, reclassification, stock
combination, stock dividend, stock split, reverse stock split,
spin-off transaction (resulting in a substantial reduction in
the value of outstanding shares of the common stock),
extraordinary corporate distribution or other similar
transactions, equitable adjustments will be made to:
(i) the maximum number
and/or
class
of securities issuable under our 2007 equity incentive plan;
(ii) the maximum number
and/or
class
of securities that may be issued as stock or restricted stock
unit awards; (iii) the maximum number
and/or
class
of securities for which any one person may be granted awards
under our 2007 equity incentive plan per fiscal year;
(iv) the number
and/or
class
of securities and the exercise price or base price per share in
effect for outstanding options and stock appreciation rights;
and (v) the number
and/or
class
of securities subject to each outstanding stock, restricted
stock unit and performance award. Such adjustments will be made
in such manner as the plan administrator deems appropriate in
order to preclude any dilution or enlargement of benefits under
our 2007 equity incentive plan or the outstanding awards
thereunder.
Valuation
.
The fair market value per
share of our common stock on any relevant date under our 2007
equity incentive plan will be deemed to be equal to the closing
selling price per share on that date on Nasdaq. On
September 24, 2010, the fair market value per share of our
common stock determined on such basis was $21.05.
Stockholder Rights and
Transferability
.
No optionee has any
stockholder rights with respect to the option shares until such
optionee has exercised the option and paid the exercise price
for the purchased shares. The holder of a stock appreciation
right does not have any stockholder rights with respect to the
shares subject to that right unless and until such person
exercises the right and becomes the holder of record of any
shares of our common stock distributed upon such exercise.
Options are not assignable or transferable other than by will or
the laws of inheritance following optionees death, and
during the optionees lifetime, the option may only be
exercised by the optionee. However, the plan administrator may
structure one or more non-qualified options under our 2007
equity incentive plan so that those options will be transferable
during optionees lifetime to one or more members of the
optionees family or to a trust established for the
optionee
and/or
one
or more such family members or to the optionees former
spouse, to the extent such transfer is in connection with the
optionees estate plan or pursuant to a domestic relations
order. Stock appreciation rights are subject to the same
transferability restrictions applicable to non-qualified options.
A participant has full stockholder rights with respect to any
shares of common stock issued to him or her under our 2007
equity incentive plan, whether or not his or her interest in
those shares is vested, provided that the dividends (other than
regular cash dividends) or distributions paid with respect to
any such shares which have not vested shall be subject to
forfeiture until the underlying shares have vested unless
otherwise provided by the plan administrator. A participant does
not have any stockholder rights with respect to the shares of
common stock subject to a restricted stock unit or performance
share award until that award vests and the shares of common
stock are actually issued thereunder. However,
dividend-equivalent units may be paid or credited, either in
cash or in actual or phantom shares of common stock, on
outstanding restricted stock units or performance awards,
subject to such terms and conditions as the plan administrator
may deem appropriate.
Special Tax Election
.
The plan
administrator may provide one or more holders of awards under
our 2007 equity incentive plan with the right to have us
withhold a portion of the shares otherwise issuable to such
individuals in satisfaction of the withholding taxes to which
they become subject in connection with the issuance, exercise or
settlement of those awards. Alternatively, the plan
administrator may allow such individuals to deliver previously
acquired shares of our common stock in payment of such
withholding tax liability.
Amendment and Termination
.
Our board of
directors may amend or modify our 2007 equity incentive plan at
any time; provided, however, that stockholder approval will be
required for any amendment which materially increases the number
of shares of common stock authorized for issuance under our 2007
equity incentive plan (other
60
than in connection with certain changes to our capital structure
as explained above), materially increases the benefits accruing
to participants, materially expands the class of individuals
eligible to participate in our 2007 equity incentive plan,
expands the types of awards which may be made under our 2007
equity incentive plan or extends the term of the 2007 equity
incentive plan. Unless sooner terminated by our board of
directors, our 2007 equity incentive plan will terminate on
October 5, 2017.
Summary
of Federal Income Tax Consequences
The following is a summary of the general Federal income
taxation treatment currently applicable to us and the
participants who receive awards under our 2007 equity incentive
plan.
Option Grants.
Options granted under our 2007
equity incentive plan may be either incentive stock options
which satisfy the requirements of Section 422 of the
Internal Revenue Code or non-qualified options which are not
intended to meet such requirements. The Federal income tax
treatment for the two types of options differs as follows:
Incentive Options
.
No taxable income is
recognized by the optionee at the time of the option grant, and
no taxable income is recognized for regular tax purposes at the
time the option is exercised, although taxable income may arise
at that time for alternative minimum tax purposes. The optionee
will recognize taxable income in the year in which the purchased
shares are sold or otherwise made the subject of certain other
dispositions. For Federal tax purposes, dispositions are divided
into two categories: (i) qualifying, and
(ii) disqualifying. A qualifying disposition occurs if the
sale or other disposition is made more than two (2) years
after the date the option for the shares involved in such sale
or disposition is granted and more than one (1) year after
the date the option is exercised for those shares. If the sale
or disposition occurs before these two periods are satisfied,
then a disqualifying disposition will result.
Upon a qualifying disposition, the optionee will recognize
long-term capital gain in an amount equal to the excess of
(i) the amount realized upon the sale or other disposition
of the purchased shares over (ii) the exercise price paid
for the shares. If there is a disqualifying disposition of the
shares, then the excess of (i) the fair market value of
those shares on the exercise date or (if less) the amount
realized upon such sale or disposition over (ii) the
exercise price paid for the shares will be taxable as ordinary
income to the optionee. Any additional gain recognized upon the
disposition will be a capital gain.
If the optionee makes a disqualifying disposition of the
purchased shares, then we will be entitled to an income tax
deduction, for the taxable year in which such disposition
occurs, equal to the amount of ordinary income recognized by the
optionee as a result of the disposition. We will not be entitled
to any income tax deduction if the optionee makes a qualifying
disposition of the shares.
Non-qualified Options
.
No taxable
income is recognized by an optionee upon the grant of a
non-qualified option. The optionee will in general recognize
ordinary income in the year in which the option is exercised
equal to the excess of the fair market value of the purchased
shares on the exercise date over the exercise price paid for the
shares, and the optionee will be required to satisfy the tax
withholding requirements applicable to such income. We will be
entitled to an income tax deduction equal to the amount of
ordinary income recognized by the optionee with respect to the
exercised non-qualified option. The deduction will in general be
allowed for our taxable year in which such ordinary income is
recognized by the optionee.
Stock Appreciation Rights.
No taxable income
is recognized upon receipt of a stock appreciation right. The
holder will recognize ordinary income in the year in which the
stock appreciation right is exercised in an amount equal to the
excess of the fair market value of the underlying shares of
common stock on the exercise date over the base price in effect
for the exercised right, and the holder will be required to
satisfy the tax withholding requirements applicable to such
income. We will be entitled to an income tax deduction equal to
the amount of ordinary income recognized by the holder in
connection with the exercise of the stock appreciation right.
The deduction will be allowed for the taxable year in which such
ordinary income is recognized.
Stock Awards.
The recipient of a stock award
will recognize taxable income as and when those shares vest in
an amount equal to the excess of (i) the fair market value
of the shares on the vesting date, over (ii) the cash
consideration (if any) paid for the shares. The recipient may,
however, elect under Section 83(b) of the Internal
61
Revenue Code to include as ordinary income in the year any
unvested shares are issued an amount equal to the excess of
(i) the fair market value of those shares on the issue
date, over (ii) the cash consideration (if any) paid for
such shares. If the Section 83(b) election is made, the
recipient will not recognize any additional income as and when
the shares subsequently vest. We will be entitled to an income
tax deduction equal to the amount of ordinary income recognized
by the recipient with respect to the unvested shares. The
deduction will in general be allowed for our taxable year in
which such ordinary income is recognized by the recipient.
Restricted Stock Units.
No taxable income is
recognized upon receipt of restricted stock units. The holder
will recognize ordinary income in the year in which the shares
subject to the units are actually issued to the holder. The
amount of that income will be equal to the fair market value of
the shares on the date of issuance, and the holder will be
required to satisfy the tax withholding requirements applicable
to such income. We will be entitled to an income tax deduction
equal to the amount of ordinary income recognized by the holder
at the time the shares are issued. The deduction will be allowed
for the taxable year in which such ordinary income is recognized.
Performance Awards.
No taxable income is
recognized upon receipt of performance awards. The holder will
recognize ordinary income in the year in which the performance
awards are settled. The amount of that income will be equal to
the fair market value of the shares of common stock or cash
received in settlement of the performance awards, and the holder
will be required to satisfy the tax withholding requirements
applicable to such income. We will be entitled to an income tax
deduction equal to the amount of the ordinary income recognized
by the holder of the performance awards at the time those units
are settled. That deduction will be allowed for the taxable year
in which such ordinary income is recognized.
Deductibility of Executive Compensation.
We
anticipate that any compensation deemed paid by us in connection
with the exercise of non-qualified options or stock appreciation
rights will qualify as performance-based compensation for
purposes of Section 162(m) and will not have to be taken
into account for purposes of the $1 million limitation per
covered individual on the deductibility of the compensation paid
to certain of our executive officers. Accordingly, the
compensation deemed paid with respect to options and stock
appreciation rights granted under the 2007 equity incentive plan
will remain deductible by us without limitation under
Section 162(m). However, any compensation deemed paid by us
in connection with shares issued under stock awards, restricted
stock unit awards or performance awards will be subject to the
$1 million limitation, unless the issuance of the shares or
cash is tied to one or more of the performance milestones
described above.
Accounting
Treatment
Pursuant to the accounting standards established by FASB ASC
Topic 718, we are required to expense all share-based payments,
including grants of options, stock appreciation rights,
restricted stock, restricted stock units and performance awards
under our 2007 equity incentive plan. Accordingly, options and
stock appreciation rights which are granted to our employees and
non-employee board members and payable in shares of our common
stock are valued at fair value as of the grant date under an
appropriate valuation formula, and that value is then charged as
a direct compensation expense against our reported earnings over
the designated vesting period of the award. For shares issuable
upon the vesting of restricted stock units awarded under our
2007 equity incentive plan, we are required to amortize over the
vesting period a compensation cost equal to the fair market
value of the underlying shares on the date of the award. If any
other shares are unvested at the time of their direct issuance,
then the fair market value of those shares at that time will be
charged to our reported earnings ratably over the vesting
period. Such accounting treatment for restricted stock units and
direct stock issuances is applicable whether vesting is tied to
service periods or performance goals. The issuance of a
fully-vested stock bonus will result in an immediate charge to
our earnings equal to the fair market value of the bonus shares
on the issuance date.
For performance awards granted under the 2007 equity incentive
plan and payable in stock, we are required to amortize, over the
applicable performance period and any subsequent service vesting
period, a compensation cost equal to the fair market value of
the underlying shares on the date of the award. Dividends or
dividend equivalents paid on the portion of an award that vests
is charged against our retained earnings. If the award holder is
not required to return the dividends or dividend equivalents if
they forfeit their awards, dividends or dividend equivalents
paid on instruments that do not vest are recognized by us as
additional compensation cost.
62
Benefits
Under Our 2007 Equity Incentive Plan
All awards under our 2007 equity incentive plan are granted at
the discretion of the human resources and compensation
committee. As a result, it is not possible at this time to
indicate the number, name or positions of persons who will
receive future awards or the nature and terms of future awards.
The equity awards granted to our named executive officers during
fiscal 2010 are set forth under
Executive Officers and
Compensation Grants of Plan-Based Awards
above. The equity awards to our directors during fiscal 2010 are
set forth above under
Proposal 1: Election of
Directors Director Compensation
above.
Securities
Authorized For Issuance Under Our Equity Compensation
Plans
The following table sets forth, as of June 30, 2010,
information concerning equity compensation plans under which our
securities are authorized for issuance. The table does not
reflect grants, awards, exercises, terminations or expirations
since that date or the proposed increase in the number of shares
available for issuance under our 2007 equity incentive plan
described above. All share amounts and exercise prices have been
adjusted to reflect stock splits that occurred after the date on
which any particular underlying plan was adopted, to the extent
applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
Securities
|
|
|
Securities to
|
|
Weighted-Average
|
|
Remaining
|
|
|
be Issued
|
|
Exercise Price of
|
|
Available for
|
|
|
Upon
|
|
Outstanding
|
|
Future Issuance
|
|
|
Exercise of
|
|
Options,
|
|
Under Equity
|
|
|
Outstanding Options,
|
|
Warrants and
|
|
Compensation
|
Plan Category
|
|
Warrants and Rights
|
|
Rights
|
|
Plans
|
|
Equity Compensation Plans approved by Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
1,938,723
|
|
|
$
|
15.33
|
|
|
|
437,017
|
(a)
|
Restricted Shares/Restricted Stock Unit Awards
|
|
|
706,539
|
|
|
|
|
(b)
|
|
|
|
(a)
|
Equity Compensation Plans not approved by Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,645,262
|
|
|
$
|
15.33
|
|
|
|
437,017
|
|
|
|
|
(a)
|
|
401,836 of these shares may be issued as restricted
shares/restricted stock unit awards under our 2007 Equity
Incentive Plan.
|
|
(b)
|
|
Not applicable
|
Vote
Required
The affirmative vote of the holders of a majority of the shares
of common stock present in person or represented by proxy and
entitled to vote on Proposal 2 at the annual meeting is
required for approval of our amended and restated 2007 equity
incentive plan. Should such approval not be obtained, then our
2007 equity incentive plan as currently drafted will remain in
effect. Abstentions and broker non-votes will have the same
effect as votes against the proposal.
Our board of directors unanimously recommends that
stockholders vote FOR Proposal 2 to adopt the
amendment and restatement of our 2007 equity incentive plan.
63
PROPOSAL 3:
CHARTER AMENDMENT
On September 23, 2010, our board of directors unanimously
adopted a resolution approving, subject to approval by our
stockholders, an amendment to our Amended and Restated
Certificate of Incorporation that would increase the number of
authorized shares of our common stock from 55,500,000 to
100,000,000.
Our board of directors believes that approval of the proposed
amendment to our Amended and Restated Certificate of
Incorporation is in best interests of us and our stockholders,
and recommends its approval by our stockholders.
As of September 24, 2010, 24,372,947 of our 55,500,000
currently authorized shares of common stock were issued and
outstanding. Of the remaining authorized shares of common stock,
as of such date 483,831 shares were reserved for issuance
in connection with our 2005 stock incentive plan and our 2007
equity incentive plan. In addition, if our stockholders approve
the amendment and restatement of our 2007 equity incentive plan
described in
Proposal 2 Amendment of
the Dollar Financial Corp. 2007 Equity Incentive Plan
,
an additional 4,500,000 shares will be reserved for
issuance under our 2007 equity incentive plan. Under the terms
of our 2.875% Senior Convertible Notes due 2027 and our
3.00% Senior Convertible Notes due 2028, we may also be
obligated to issue a presently indeterminate number of shares of
common stock upon the conversion of those notes (although the
aggregate number of shares of common stock that we are required
to issue with respect to those notes cannot exceed the maximum
number of shares that we are permitted to issue without
shareholder approval pursuant to Nasdaq Rule 5635, as
amended from time to time). As of September 24, 2010, none
of our 10,000,000 currently authorized shares of preferred stock
were issued and outstanding.
The purpose of the proposed amendment is to allow us to have a
sufficient number of shares of authorized and unissued common
stock which can be used for such corporate purposes as may, from
time to time, be considered advisable by our board of directors.
Having such shares available for issuance in the future will
give us greater flexibility and will allow the shares to be
issued as determined by our board of directors without the
expense and delay of a special meeting of our stockholders to
approve the additional authorized capital stock. The corporate
purposes for which we may issue common stock could include,
without limitation, exchange offers of debt for equity, new
equity offerings to raise capital, restructuring of existing
debt, acquisitions, and providing incentives to employees,
officers and directors pursuant to our various stock plans or in
connection with the adoption of additional stock-based incentive
plans. Our board of directors will determine the terms of any
such issuance of additional shares.
The increase in our authorized common stock will not have any
immediate effect on the rights of our existing stockholders. To
the extent that the additional authorized shares are issued in
the future, such shares will have a dilutive effect on the
voting power and percentage equity ownership of our existing
stockholders and, depending on the price at which they are
issued, may have a dilutive effect on both the book value and
market value of shares owned by our existing stockholders. The
holders of our common stock have no preemptive rights to
subscribe for or purchase any additional shares of our common
stock that may be issued in the future.
We have not proposed the increase in the authorized number of
shares with the intention of using the additional shares for
anti-takeover purposes, although we could theoretically use the
additional shares to make more difficult or to discourage an
attempt to acquire control of us because the issuance of such
additional shares could be used to dilute the stock ownership or
voting rights of a person seeking to obtain control of us.
If this proposal is approved, the paragraph A of
Article FOURTH of our Amended and Restated Certificate of
Incorporation will be amended to read as follows:
FOURTH
: A. The total number of
shares of all classes of stock which the Corporation shall have
the authority to issue is One Hundred Ten Million (110,000,000),
consisting of:
1. One Hundred Million (100,000,000) shares of Common
Stock, par value $.001 per share (hereinafter referred to as the
Common Stock
), and
2. Ten Million (10,000,000) shares of Preferred Stock, par
value $.001 per share (hereinafter referred to as the
Preferred Stock
).
64
A complete copy of the proposed amendment to our amended and
restated certificate of incorporation is included in
Appendix B to this proxy statement.
Vote
Required
The affirmative vote of a majority of the outstanding shares of
common stock on the record date is required for approval of the
proposed amendment to our Amended and Restated Certificate of
Incorporation. Abstentions and broker non-votes will have the
same effect as votes against the proposal.
Our board of directors unanimously recommends that
stockholders vote FOR Proposal 3 to approve the
amendment to our Amended and Restated Certificate of
Incorporation.
65
PROPOSAL 4:
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our board of directors has appointed
Ernst & Young LLP as our independent registered public
accounting firm for fiscal 2011. Ernst & Young LLP was
first engaged as our independent registered public accounting
firm in 1990 and has audited our financial statements for fiscal
2010. Ratification of the appointment of Ernst & Young
LLP requires the affirmative vote, affirmatively or negatively,
of a majority of the votes cast on the matter.
Although stockholder ratification of the appointment of
Ernst & Young LLP as our independent registered public
accounting firm is not required by our bylaws or otherwise, our
board of directors has decided to afford our stockholders the
opportunity to express their opinions on the matter of our
independent registered public accounting firm. Even if the
selection is ratified, the audit committee in its discretion may
select a different independent registered public accounting firm
at any time if it determines that such a change would be in the
best interests of us and our stockholders. If our stockholders
do not ratify the appointment, the audit committee will take
that fact into consideration, together with such other facts as
it deems relevant, in determining its next selection of an
independent registered public accounting firm.
Representatives of Ernst & Young LLP will be present
at the annual meeting to make any statement they may desire and
to respond to appropriate questions from stockholders.
The board unanimously recommends that stockholders vote FOR
Proposal 4 to ratify the appointment of Ernst &
Young LLP as our independent registered public accounting firm
for fiscal 2011.
Fees to
Independent Registered Public Accounting Firm
Aggregate fees for professional services rendered to us or on
our behalf by Ernst & Young LLP for the fiscal years
ended on June 30, 2009 and June 30, 2010 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2009
|
|
|
Fiscal 2010
|
|
|
Audit Fees
|
|
$
|
1,088,933
|
|
|
$
|
1,651,277
|
|
Audit-Related Fees
|
|
$
|
227,466
|
|
|
$
|
188,969
|
|
Tax Fees
|
|
$
|
250,250
|
|
|
$
|
258,804
|
|
All Other Fees
|
|
$
|
44,182
|
|
|
|
|
|
Audit Fees.
Audit fees for fiscal 2009 and
fiscal 2010 were for professional services rendered for the
audits of our consolidated financial statements, review of the
interim consolidated financial statements included in the
quarterly reports, attestation services related to our internal
controls over financial reporting for compliance with
Section 404 of the Sarbanes-Oxley Act of 2002 and services
that generally only the independent registered public accounting
firm can reasonably provide, including statutory audits,
consents and assistance with and review of documents filed with
the Securities and Exchange Commission. Audit fees for fiscal
2010 also included professional services rendered in connection
with the offering of $600 million aggregate principal
amount by our Canadian subsidiary of its 10.375% senior notes
due 2016 and related
Form S-4
filing with the Securities and Exchange Commission, and other
fees related to our debt restructuring.
Audit-Related Fees.
During fiscal 2009 and
fiscal 2010, there were no fees billed for assurance and related
services by Ernst & Young LLP that are reasonably
related to the performance of the audits or reviews of our
financial statements, the effectiveness of our internal control
over financial reporting and the effectiveness of
managements assessment of our internal control over
financial reporting, and are not reported under Audit Fees
above. Audit related fees for fiscal 2009 and fiscal 2010 were
related to the audit of our 401(k) plan and merger and
acquisition due diligence services.
Tax Fees.
Tax fees for fiscal 2009 and fiscal
2010 were for compliance, tax advice, and tax planning.
All Other Fees.
Fees for other services
provided during fiscal 2009 and fiscal 2010 were for online
research services and continuing education courses.
66
Pre-Approval of Services.
All services
provided by Ernst & Young LLP were pre-approved by the
audit committee, which concluded that the provision of such
services by Ernst & Young LLP was compatible with the
maintenance of that firms independence in the conduct of
its auditing functions. The audit committee has adopted
pre-approval policies and procedures for audit and non-audit
services. The audit services provided by Ernst & Young
LLP are approved in advance by the audit committee. Under its
pre-approval policy, the audit committee has delegated authority
to its chairman to pre-approve audit-related and non-audit
services the cost of which will not exceed $50,000; provided,
that the chairman is required to report any pre-approval
decisions to the audit committee at its next meeting. Any
services that exceed the pre-approved dollar limit require
specific pre-approval by the audit committee. The engagement of
Ernst & Young LLP for non-audit accounting and tax
services is limited to circumstances where these services are
considered to be integral to the audit services that
Ernst & Young LLP provides or where there is another
compelling rationale for using Ernst & Young LLP. All
audit, audit-related and permitted non-audit services for which
Ernst & Young LLP was engaged were pre-approved by the
audit committee in compliance with applicable Securities and
Exchange Commission requirements.
67
OTHER
INFORMATION
The expense of solicitation of proxies on behalf of our board of
directors, including printing and postage, will be paid by us.
Requests will be made of brokerage houses and other custodians,
nominees and fiduciaries to forward the solicitation material,
at our expense, to the beneficial owners of common stock held of
record by such persons. In addition to being solicited through
the mails, proxies may also be solicited personally or by
telephone by our board of directors and officers. We have also
retained BNY Mellon Shareowner Services to solicit proxies for a
fee of less than $10,000 plus a reasonable amount to cover
expenses. We know of no business which will be presented at the
annual meeting other than as set forth in this proxy statement.
However, if other matters should properly come before the annual
meeting, it is the intention of the persons named in the
enclosed proxy to vote in accordance with the recommendations of
our board of directors, or if no recommendation is given, in
their own discretion on such matter.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our officers, board and persons who own more than 10%
of our common stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers,
directors and greater than 10% stockholders are required by
regulation to furnish us with copies of all Section 16(a)
forms that they file. Based solely on a review of the copies of
such forms furnished to us, or written representations that no
annual statements of beneficial ownership of securities on
Form 5 were required to be filed, we believe that during
fiscal 2010 our officers, directors and greater than 10%
stockholders complied with all applicable Section 16(a)
filing requirements.
Other
Matters
Only the proposals set forth in the proxy statement are
currently intended to be presented for vote at the annual
meeting. Our board of directors knows of no other matters that
are to be brought before the annual meeting, and in accordance
with our bylaws, no other substantive proposals may be
introduced at the annual meeting. If any other business properly
comes before the annual meeting, including the consideration of
a motion to adjourn such meeting (including for purposes of
soliciting additional votes), it is the intention of the persons
named in the enclosed form of proxy to vote the shares they
represent as our board of directors may recommend or, if no
recommendation is given, in their own discretion.
Stockholder
Proposals for the 2011 Annual Meeting of Stockholders
Stockholders are entitled to present proposals for action at a
forthcoming meeting if they comply with the requirements of the
proxy rules promulgated by the Securities and Exchange
Commission.
Proposals for Inclusion in Our 2011 Proxy
Statement
.
Proposals of stockholders intended
to be presented for consideration at our 2011 annual meeting of
stockholders must be received by us no later than June 16,
2011 in order to be included in our 2011 proxy statement and
form of proxy related to that meeting.
Proposals Not for Inclusion in Our Proxy
Statement
.
If a stockholder intends to timely submit a proposal for action
at our 2011 annual meeting of stockholders which is not required
to be included in our 2011 proxy statement and form of proxy
relating to that meeting, the stockholder must satisfy certain
requirements set forth in our bylaws and deliver a written
notice (as such term is defined in our bylaws) to our Secretary
at the following address: Dollar Financial Corp., 1436 Lancaster
Avenue, Suite 300, Berwyn, PA 19312 and in the manner set
forth in the bylaws not later than September 12, 2011 and
not earlier than August 13, 2011; provided, however, if the
2011 annual meeting is held 30 days prior to, or
60 days after, the date of the 2010 annual meeting, a
timely notice with respect to the meeting must be delivered not
later than the close of business on the later of the
(i) 60th day prior to the 2011 annual meeting or
(ii) if the first public announcement of the date of the
2011 annual meeting is less than 100 days prior to the date
of such annual meeting, the 10th day following the day on which
public announcement of the date of such meeting is first made.
68
If such stockholder fails to timely deliver a written notice to
our Secretary in the manner set forth above, or otherwise fails
to satisfy the requirements set forth in our bylaws and
Securities and Exchange Commission rules, the proxy holders will
be allowed to use their discretionary voting authority when any
such proposal is raised at the 2011 annual meeting. We reserve
the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not
comply with these and other applicable requirements.
A copy of the full text of our bylaws may be obtained by writing
to our Secretary at the following address: Dollar Financial
Corp., 1436 Lancaster Avenue, Suite 310, Berwyn, PA, 19312.
Our
Annual Report on
Form 10-K
We will provide, without charge, to each person solicited by
this proxy statement, on the written request of any such person,
a copy of our annual report on
Form 10-K
for fiscal 2010 including our consolidated financial statements
and the schedules thereto. Such written requests should be
directed to us at 1436 Lancaster Avenue, Suite 300, Berwyn,
PA 19312, Attention: Secretary.
69
DOLLAR
FINANCIAL CORP.
2007
EQUITY INCENTIVE PLAN
(as
amended effective November 11, 2010)
1.
Purposes of the Plan
.
The
purposes of this Plan are:
(a) to attract and retain the best available personnel for
positions of substantial responsibility,
(b) to provide additional incentive to selected Employees,
Consultants and Directors, and
(c) to promote the success of the Companys business.
2.
Definitions
.
For the purposes
of this Plan, the following terms will have the following
meanings:
(a)
Administrator
means the Board or any
of its Committees that administer the Plan in accordance with
Section 4.
(b)
Applicable Laws
means the legal
requirements relating to the administration of and issuance of
securities under stock incentive plans, including, without
limitation, the requirements of state corporations law, federal,
state and foreign securities law, federal, state and foreign tax
law, and the requirements of any stock exchange or quotation
system upon which the Shares may then be listed or quoted. For
all purposes of this Plan, references to statutes and
regulations shall be deemed to include any successor statutes
and regulations, to the extent reasonably appropriate as
determined by the Administrator.
(c)
Award
means any of the following
awards authorized for issuance or grant under the Plan: Option,
SAR, Stock Award, Restricted Stock Unit Award or Performance
Award.
(d)
Award Agreement
means, with respect
to any Award, the written document(s) evidencing the terms and
conditions of the Award.
(e)
Board
means the Board of Directors
of the Company.
(f)
Canadian Participant
means a Grantee
who is subject to Canadian federal personal income tax.
(g)
Cause
shall have the meaning set
forth in a Grantees employment or consulting agreement
with the Company (if any), or if not defined therein, shall mean
(i) acts or omissions by the Grantee which constitute
intentional material misconduct or a knowing violation of a
material policy of the Company or any of its subsidiaries,
(ii) the Grantee personally receiving a benefit in money,
property or services from the Company or any of its subsidiaries
or from another person dealing with the Company or any of its
subsidiaries, in material violation of applicable law or Company
policy, (iii) an act of fraud, conversion,
misappropriation, or embezzlement by the Grantee or his
conviction of, or entering a guilty plea or plea of no contest
with respect to, a felony, or the equivalent thereof (other than
DUI), or (iv) any material misuse or improper disclosure of
confidential or proprietary information of the Company.
(h)
Change in Control
means a change in
ownership or control of the Company effected through any of the
following transactions:
(i) a shareholder-approved merger or consolidation in which
securities possessing more than fifty percent (50%) of the total
combined voting power of the Companys outstanding
securities are transferred to a person or persons different from
the persons holding those securities immediately prior to such
transaction, or
(ii) a shareholder-approved sale, transfer or other
disposition of all or substantially all of the Companys
assets in complete liquidation or dissolution of the
Company, or
(iii) the acquisition, directly or indirectly by any person
or related group of persons (other than the Company or a person
that directly or indirectly controls, is controlled by, or is
under common control with, the Company), of beneficial ownership
(within the meaning of
Rule 13d-3
of the Exchange Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the
Companys outstanding securities pursuant to a tender or
exchange offer made directly to the Companys shareholders
A-2
or pursuant to a private transaction or series of transactions
with one or more of the Companys shareholders.
(i)
Code
means the Internal Revenue Code
of 1986, as amended.
(j)
Committee
means a Committee
appointed by the Board in accordance with Section 4.
(k)
Common Stock
means the common stock,
$0.001 par value per share, of the Company.
(l)
Company
means Dollar Financial
Corp., a Delaware corporation.
(m)
Consultant
means any natural person,
including an advisor, engaged by the Company or a Parent or
Subsidiary to render bona fide services and who is compensated
for such services, provided that the term Consultant
does not include any person who provides services in connection
with the offer or sale of securities in a capital-raising
transaction, or who directly or indirectly promotes or maintains
a market for the securities of the Company.
(n)
Continuous Status as an Employee, Director or
Consultant
means continued performance of services for
the Company (or any Parent or Subsidiary) in the capacity of an
Employee, Director or Consultant. Continuous Status as an
Employee, Director or Consultant will not be considered
interrupted in the case of any leave of absence approved by the
Board or required by Applicable Law, including sick leave,
military leave, or any other personal leave,
provided
,
however
, that should such leave of absence exceed three
(3) months, then for purposes of determining the period
within which an Incentive Stock Option may be exercised as such
under the federal tax laws, the Grantees Continuous Status
as an Employee, Director or Consultant shall be deemed to cease
on the first day immediately following the expiration of such
three (3)-month period, unless the Grantee is provided with the
right to return to employment following such leave either by
statute or by written contract. Except to the extent otherwise
required by law or expressly authorized by the Administrator or
by the Companys written policy on leaves of absence or in
the Award Agreement, no service credit shall be given for
vesting purposes for any period the Grantee is on a leave of
absence. For purposes of the Plan, a Grantee shall be deemed to
cease Continuous Status as an Employee, Director or Consultant
immediately upon the occurrence of either of the following
events: (i) the Grantee no longer performs services in any
of the foregoing capacities for the Company or any Parent or
Subsidiary or (ii) the entity for which the Grantee is
performing such services ceases to remain a Parent or Subsidiary
of the Company, even though the Grantee may subsequently
continue to perform services for that entity.
(o)
Director
means a non-employee member
of the Board or the board of directors of any Parent or
Subsidiary of the Company.
(p)
Disability
means total and permanent
disability as defined in Section 22(e)(3) of the Code.
(q)
Employee
means any person, employed
as a common law employee by the Company or any Parent or
Subsidiary of the Company.
(r)
Exchange Act
means the Securities
Exchange Act of 1934, as amended.
(s)
Fair Market Value
means, as of any
date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including, without
limitation, the Nasdaq Global Select Market, the Fair Market
Value of a Share of Common Stock will be the closing sales price
for such stock as quoted on that system or exchange (or the
system or exchange with the greatest volume of trading in Common
Stock)
at the close of regular hours trading
on the day
of determination, as reported in the Wall Street Journal or any
other source the Administrator considers reliable.
(ii) If the Common Stock is regularly quoted by recognized
securities dealers but selling prices are not reported, the Fair
Market Value of a Share of Common Stock will be the mean between
the high bid and low asked prices for the Common Stock
at the
close of regular hours trading
on the day of determination,
as reported in the
Wall Street Journal
or any other
source the Administrator considers reliable.
A-3
(iii) If the Common Stock is not traded as set forth above,
the Fair Market Value will be determined in good faith by the
Administrator taking into consideration such factors as the
Administrator considers appropriate, such determination by the
Administrator to be final, conclusive and binding.
(t)
Family Member
means any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother-in-law,
or
sister-in-law,
including adoptive relationships.
(u)
Full Value Award
means any Stock
Award, Restricted Stock Unit Award, Performance Award or other
Award that results in the Company transferring the full value of
any underlying Share granted pursuant to such Award, but shall
not include Options and SARs.
(v)
Grantee
shall mean any person to
whom an Award has been granted pursuant to this Plan.
(w)
Incentive Stock Option
means an
Option intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(x)
Nonqualified Stock Option
means an
Option not intended to qualify as an Incentive Stock Option.
(y)
Officer
means a person who is an
officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated
thereunder.
(z)
Option
means a stock option granted
under Section 6 of the Plan.
(aa)
Optionee
means an Employee,
Consultant or Director who holds an outstanding Option.
(bb)
Parent
means a parent
corporation with respect to the Company, whether now or
later existing, as defined in Section 424(e) of the Code.
(cc)
Performance Award
means an Award
made under Section 10 of the Plan.
(dd)
Plan
means this 2007 Equity
Incentive Plan.
(ee)
Restricted Stock Unit Award
means
an award of restricted stock units granted under Section 9
of the Plan.
(ff)
SAR
means a stock appreciation
right granted under Section 8 of the Plan.
(gg)
Share
means a share of the Common
Stock.
(hh)
Stock Award
means a grant or sale
by the Company of a specified number of Shares under
Section 8 of the Plan.
(ii)
Subsidiary
means (i) a
subsidiary corporation with respect to the Company,
whether now or later existing, as defined in Section 424(f)
of the Code, or (ii) a limited liability company, whether
now or later existing, which would be a subsidiary
corporation with respect to the Company under
Section 424(f) of the Code if it were a corporation.
3.
Stock Subject to the Plan
.
(a)
Shares Available.
Subject to the
provisions of Section 12 of the Plan, the maximum aggregate
number of Shares which may be issued under the Plan will be
7,000,000, including Shares previously issued under the Plan and
including an increase of 4,500,000 Shares effective as of
November 11, 2010. The Shares may be authorized but
unissued, or reacquired, Common Stock. Any Shares underlying
Full-Value Awards granted on or after November 11, 2010
will be counted against the foregoing authorized reserve of
Shares under the Plan as 1.67 Shares.
(b) No Grantee may be granted Awards denominated in Shares
(whether payable in Shares, cash or a combination of both) for
more than 500,000 Shares in the aggregate per fiscal year
of the Company.
(c) To the extent an Award expires or terminates or is
surrendered or forfeited, in whole or in part, the Shares
subject to such Award or portion thereof so forfeited, expired,
terminated or surrendered again will become available for future
grant or sale under the Plan; provided, however, that if any
Full-Value Award granted on or after
A-4
November 11, 2010 expires or terminates or is surrendered
or forfeited, in whole or in part, then 1.67 times the number of
Shares underlying such Full-Value Award or portion thereof so
forfeited, expired, terminated or surrendered will again become
available for future grant or sale under the Plan. Should the
exercise price of an Option be paid with Shares underlying such
Option, then the authorized reserve of Shares under the Plan
shall be reduced by the gross number of Shares for which that
Option is exercised, and not by the net number of Shares issued
under the exercised Option. If Shares otherwise issuable under
the Plan are withheld by the Company in satisfaction of the
withholding taxes incurred in connection with an Award, then the
number of Shares available for issuance under the Plan shall be
reduced by the gross number of Shares issuable under the Award,
calculated in each instance prior to any such Share withholding
and, to the extent such Shares are issued pursuant to a
Full-Value Award issued on or after November 11, 2010,
after giving effect to the last sentence of Section 3(a).
Upon the exercise of any SAR, the authorized reserve of Shares
under the Plan shall be reduced by the gross number of Shares as
to which such SAR is exercised
4.
Administration of the Plan
.
(a)
Procedure
.
(i)
Composition of the Administrator.
The
Plan will be administered by (A) the Board, or (B) a
Committee designated by the Board, which Committee will be
constituted to satisfy Applicable Laws. Once appointed, a
Committee will serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the
Committee and appoint additional members, remove members (with
or without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and
thereafter directly administer the Plan. Notwithstanding the
foregoing, unless the Board expressly resolves to the contrary,
the Plan will be administered only by a Committee, which will
then consist solely of persons who are both non-employee
directors within the meaning of
Rule 16b-3
promulgated under the Exchange Act and outside
directors within the meaning of Section 162(m) of the
Code; provided, however, the failure of the Committee to be
composed solely of individuals who are both non-employee
directors and outside directors shall not
render ineffective or void any awards or grants made by, or
other actions taken by, such Committee.
(ii)
Multiple Administrative Bodies
. The
Plan may be administered by different bodies with respect to
Directors, Officers, and Employees and Consultants.
(b)
Powers of the
Administrator
.
Subject to the provisions of
the Plan, and in the case of a Committee, subject to the
specific duties delegated by the Board to that Committee, the
Administrator will have the authority, in its discretion:
(i) to determine (A) the Employees, Directors or
Consultants to whom Awards may be granted; (B) whether and
to what extent Options, SARs, Stock Awards, Restricted Stock
Unit Awards or Performance Awards are granted, and whether
Options are intended as Incentive Stock Options or Nonqualified
Stock Options; (C) the number of Shares to be covered by
each Award; (D) the purchase price or base price in effect
for each Award; (E) the time or times when each Award is to
become exercisable or vest and (F) the maximum term for
which an Award is to remain outstanding;
(ii) to accelerate the vesting or exercisability of an
Award and to modify or amend each Award, subject to
Section 15(b);
(iii) to extend the period of time for which an Option or
SAR is to remain exercisable following a Grantees
termination of Continuous Status as an Employee, Director or
Consultant from the limited period otherwise in effect for that
Option or SAR to such greater period of time as the
Administrator deems appropriate, but in no event beyond the
expiration of the term of the Option or SAR;
(iv) to authorize any person to execute on behalf of the
Company any instrument required to evidence the grant of an
Award previously granted by the Administrator;
(v) to construe and interpret the terms of this Plan; to
prescribe, amend, and rescind rules and regulations relating to
the administration of this Plan; and to approve forms of Award
Agreements; and
(vi) to make all other determinations it considers
necessary or advisable for administering the Plan.
A-5
(c)
Effect of Administrators
Decision
.
The Administrators decisions,
determinations and interpretations will be final and binding on
all holders of Awards. The Administrator shall not be required
to exercise its authority or discretion on a uniform or
nondiscriminatory basis.
5.
Eligibility
.
The persons
eligible to participate in the Plan shall be Employees,
Directors and Consultants. The Administrator shall determine
which eligible persons are to receive Awards under the Plan.
6.
Options
.
(a)
Types of Options
.
Options
granted under the Plan may be Incentive Stock Options or
Nonqualified Stock Options, as determined by the Administrator
at the time of grant. Incentive Stock Options may be granted
only to Employees; provided, however, that Incentive Stock
Options shall not be granted to Employees of a Subsidiary that
is a limited liability company. Each Option will be designated
in the Award Agreement as either an Incentive Stock Option or a
Nonqualified Stock Option.
(b) Limitations on Grants of Incentive Stock Options. If
the Shares subject to an Optionees Incentive Stock Options
(granted under all plans of the Company or any Parent or
Subsidiary), which become exercisable for the first time during
any calendar year, have a Fair Market Value in excess of
$100,000, the Options accounting for this excess will be treated
as Nonqualified Stock Options. For purposes of this
Section 6(b), Incentive Stock Options will be taken into
account in the order in which they were granted (except to the
extent otherwise provided under applicable law or regulation),
and the Fair Market Value of the Shares will be determined as of
the respective date or dates of grant.
(c)
Exercise and Term of
Option
.
Each option shall be exercisable at
such time or times, during such period and for such number of
Shares as shall be determined by the Administrator and set forth
in the Award Agreement. The term of each Option will be stated
in the Award Agreement;
provided
,
however
, that in
no event may the term be more than ten years from the date of
grant. In addition, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock
Option is granted, owns stock representing more than 10% of the
voting power of all classes of capital stock of the Company or
any Parent or Subsidiary, the term of the Incentive Stock Option
will be five years from the date of grant or any shorter term
specified in the Award Agreement.
(d)
Exercise Price
.
The exercise
price per Share will be determined by the Administrator provided
that the per Share exercise price will be no less than 100% of
the Fair Market Value per Share on the date of grant of the
option; provided, further that in the case of an Incentive Stock
Option granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than 10%
of the voting power of all classes of capital stock of the
Company or any Parent or Subsidiary, the per Share exercise
price will be no less than 110% of the Fair Market Value per
Share on the date of grant.
(e)
Procedure for Exercise
.
An
Option will be deemed exercised when the Company receives:
(i) written notice of exercise (in accordance with the
Award Agreement) from the person entitled to exercise the Option
and (ii) full payment for the Shares with respect to which
the Option is exercised. The Administrator will determine the
acceptable forms of payment of the exercise price. Such form may
consist partially or entirely of:
(i) cash;
(ii) other Shares which have a Fair Market Value on the
date of exercise equal to the aggregate exercise price of the
Shares as to which an Option will be exercised and held for the
period (if any) necessary to avoid any additional charges to the
Companys earnings for financial reporting purposes;
(iii) delivery of a properly executed exercise notice
together with any other documentation as the Administrator and
the Optionees broker, if applicable, require to effect an
exercise of the Option and delivery to the Company of the
proceeds required to pay the exercise price; or
(iv) any other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
(f)
Rights as a
Shareholder
.
Shares issued upon exercise of
an Option will be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his
or her spouse. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the
books of the Company or
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of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder
will exist with respect to the Shares subject to the Option,
notwithstanding the exercise of the Option.
(g)
Termination of Employment or Consulting
Relationship or Directorship
.
The following
provisions shall govern the exercise of any Options held by an
Optionee at the time of termination of Continuous Status as an
Employee, Director or Consultant:
(i) If an Optionee holds exercisable Options on the date
his or her Continuous Status as an Employee, Director or
Consultant terminates (other than because of termination due to
Cause, death or Disability), the Optionee may exercise the
Options that were vested and exercisable as of the date of
termination for a period of three (3) months following such
termination (or such other period as is set forth in the Award
Agreement or the Optionees employment agreement or
determined by the Administrator) but in no event later than the
expiration of the respective Option terms. The Administrator may
determine in its sole discretion that any unexercisable portion
of the Option will become exercisable at such times and on such
terms as the Administrator may determine in its sole discretion.
If the Optionee does not exercise an Option within the limited
time specified above after termination, that Option will expire
upon the expiration of such limited time period.
(ii)
Disability of Optionee
.
If an
Optionee holds exercisable Options on the date his or her
Continuous Status as an Employee, Director or Consultant
terminates because of Disability, the Optionee may exercise the
Options that were vested and exercisable as of the date of
termination for a period of twelve months following such
termination (or such other period as is set forth in the Award
Agreement or the Optionees employment agreement or
determined by the Administrator) but in no event later than the
expiration of the respective Option terms. The Administrator may
determine in its sole discretion that any unexercisable portion
of the Option will become exercisable at such times and on such
terms as the Administrator may determine in its sole discretion.
To the extent the Optionee does not exercise an Option within
the limited time specified above, after termination, that Option
will expire upon the expiration of such limited time period.
(iii)
Death of Optionee
.
If an
Optionee holds exercisable Options on the date his or her death,
the Optionees estate or a person who acquired the right to
exercise the Option by will or the laws of descent and
inheritance may exercise the Options that were vested and
exercisable as of the date of death for a period of twelve
months following the date of death (or such other period as is
set forth in the Award Agreement or the Optionees
employment agreement or determined by the Administrator) but in
no event later than the expiration of the Option terms. To the
extent the Option is not exercised within the limited time
specified above following the Optionees death, the Option
will expire upon the expiration of such limited time period.
(iv)
Termination for Cause
.
If an
Optionees Continuous Status as an Employee, Director or
Consultant is terminated for Cause, then all Options (including
any vested Options) held by Optionee shall immediately be
terminated and cancelled.
(h)
Non-Transferability of Options
.
(i)
No Transfer
.
An Option may not
be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. Notwithstanding
the foregoing, to the extent that the Administrator so
authorizes at the time a Nonqualified Stock Option is granted or
amended, (i) such Option may be assigned pursuant to a
qualified domestic relations order as defined by the Code, and
exercised by the spouse or former spouse of the Optionee who
obtained such Option pursuant to such qualified domestic
relations order, or (ii) such Option may be assigned, in
whole or in part, during the Optionees lifetime to one or
more Family Members of the Optionee or to a trust established
exclusively for the Optionee
and/or
one
or more such Family Members, to the extent such assignment is in
connection with the Optionees estate plan. Rights under
the assigned portion may be exercised by the person(s) who
acquire a proprietary interest in such Option pursuant to the
assignment. The terms applicable to the assigned portion shall
be the same as those in effect for the Option immediately before
such assignment and shall be set forth in such documents issued
to the assignee as the Administrator deems appropriate.
(ii)
Designation of
Beneficiary
.
An Optionee may file a
written designation of a beneficiary who is to receive any
Options that remain unexercised in the event of the
Optionees death. The Optionee may change such
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designation of beneficiary at any time by written notice to the
Administrator. Such beneficiary or beneficiaries shall take the
transferred Options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred
Option, including (without limitation) the limited time period
during which the Option may be exercised following the
Optionees death.
(i)
Canadian Participant
Election
.
A Grantee who is at the time a
Canadian Participant may elect to surrender an Option, to the
extent such Option has become exercisable, in lieu of exercising
same, and to receive upon such surrender a cash payment equal to
the amount of the excess, if any, of the Fair market Value of a
Share on the date the Canadian Participant so elects over the
exercise price, multiplied by the number of Shares purchasable
upon exercise of the Option so surrendered. The election
described herein shall be made in writing in the manner
prescribed by the Administrator. Notwithstanding anything in
this Section 5(j) to the contrary, the Administrator has
the right to decline a Canadian Participants election
described in Section 5(j), provided, however, that if the
Administrator declines the election, the Canadian Participant
may elect to exercise the Option or may continue to hold the
Option unexercised, subject to the terms and conditions set
forth in the Plan.
7.
Stock Appreciation Rights
.
(a)
Nature of Award
.
The
Administrator may grant a SAR separately or in tandem with any
Option. Upon the exercise of a SAR, its holder will be entitled
to receive an amount equal to the excess (if any) of:
(i) the Fair Market Value of the Shares as to which the SAR
is then being exercised, over (ii) the aggregate base price
of those Shares. Except for a Canadian Participant, such amount
may be paid in either cash
and/or
Shares, as determined by the Administrator in its discretion.
The Company agrees that such amount payable to a Canadian
Participant shall be paid in Shares issued by the Company.
However, a Canadian Participant may elect to receive such
payment in cash, provided such election shall be made in writing
in the manner prescribed by the Administrator. Notwithstanding
anything in this
Section 7(a)
to the contrary, the
Administrator has the right to decline a Canadian
Participants election to receive a cash payment upon
exercise of a SAR in which event the Canadian Participant may
elect to exercise the SAR and receive the payment in the form of
Shares issued by the Company or continue to hold the SAR,
subject to the terms and conditions set forth the Plan.
(b)
Number of Shares and Base
Price
.
The number of Shares underlying each
SAR and the base price in effect for those Shares shall be
determined by the Administrator in its sole discretion at the
time the SAR is granted. In no event, however, may the base
price per Share be less than the Fair market Value per Share on
the grant date.
(c)
Term of SAR
.
The term of a SAR
will be determined by the Administrator but no SAR may have a
term in excess of ten years.
(d)
Exercisability
.
SARs will vest
and become exercisable at such time or times and subject to such
terms and conditions as will be determined by the Administrator.
(e)
Method of Exercise
.
Subject to
the exercisability and termination provisions set forth herein
and in the applicable Award Agreement, SARs may be exercised in
whole or in part from time to time during their term by delivery
of written notice to the Company specifying the portion of the
SAR to be exercised.
(f)
Termination of Continuous Status as an Employee,
Director or Consultant
.
Unless otherwise
specified in the Award Agreement, SARs will be subject to the
same procedures applicable to Options upon termination of a
Participants Continuous Status as an Employee, Director or
Consultant.
(g)
Transferability
.
Unless
otherwise specified in the Award Agreement, SARs will be subject
to the same provisions applicable to Nonqualified Options with
respect to the transferability of such Award
8.
Stock Awards
.
(a)
Grant
.
The Administrator, in
its sole and absolute discretion, may grant Stock Awards for any
of the following items of consideration which the Administrator
may deem appropriate in each individual instance: (i) cash
or check made payable to the Company, (ii) past services
rendered to the Company (or any Parent or Subsidiary); or
(iii) any other valid consideration under the Delaware
General Corporation Law.
(b)
Restrictions
.
The
Administrator, in its sole and absolute discretion, may impose
restrictions in connection with any Stock Award, including
without limitation, (i) imposing a restricted period during
which all or a
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portion of the Shares subject to the Stock Award may not be
sold, assigned, transferred, pledged or otherwise encumbered
(the
Restricted Period
), (ii) providing
for a vesting schedule with respect to such Shares such that if
a Grantee ceases to be an Employee, Consultant or Director
during the Restricted Period, some or all of the Shares subject
to the Stock Award shall be immediately forfeited and returned
to the Company. The Administrator may, at any time, reduce or
terminate the Restricted Period. Each certificate issued in
respect of Shares pursuant to a Stock Award which is subject to
restrictions shall be registered in the name of the Grantee,
shall be deposited by the Grantee with the Company together with
a stock power endorsed in blank and shall bear an appropriate
legend summarizing the restrictions imposed with respect to such
Shares.
(c)
Rights as a
Shareholder
.
Subject to the terms of any
Award Agreement, the Grantee of a Stock Award shall have all the
rights of a shareholder with respect to the Shares issued
pursuant to a Stock Award, including the right to vote such
Shares and receive any regular cash dividends paid on such
Shares; provided, however, that dividends (other than regular
cash dividends) or distributions paid with respect to any such
Shares which have not vested shall be deposited with the Company
and shall be subject to forfeiture until the underlying Shares
have vested unless otherwise provided by the Administrator in
its sole discretion. A Grantee shall not be entitled to interest
with respect to the dividends or distributions so deposited.
9.
Restricted Stock Unit Awards
.
(a)
Nature of Award
.
Each
Restricted Stock Unit shall represent the right of the Grantee
to receive a Share or an amount based on the value of a Share.
The Administrator shall determine the number of Restricted Stock
Units to be granted and the requirements applicable to such
Restricted Stock Units. All Restricted Stock Units shall be
credited to bookkeeping accounts on the Companys records
for purposes of the Plan.
(b) Terms of Restricted Stock Units. The Administrator may
grant Restricted Stock Units that are payable on terms and
conditions determined by the Administrator, which may include
payment based on achievement of performance goals or
satisfaction of specified service requirements. Restricted Stock
Units may be paid at the end of a specified vesting or
performance period, or payment may be deferred to a date
authorized by the Administrator consistent with the provisions
of Code Section 409A. The Administrator may at any time
accelerate the vesting of any Restricted Stock Unit Award.
(c)
Payment
.
Payment with respect
to Restricted Stock Units shall be made in cash, in shares, or
in a combination of the two, as determined by the Administrator.
(d)
Requirement of Employment or
Service
.
The Administrator shall determine in
the Grant Agreement under what circumstances a Grantee may
retain Restricted Stock Units after termination of the
Grantees Continuous Status as an Employee, Director or
Consultant, and the circumstances under which Restricted Stock
Units may be forfeited.
(e)
Rights as a Shareholder
.
The
Grantee shall not have any shareholder rights with respect to
the Shares subject to a Restricted Stock Unit Award until that
award vests and the Shares are actually issued thereunder.
However, dividend-equivalent units may be paid or credited,
either in cash or in actual or phantom Shares, on outstanding
Restricted Stock Units, subject to such terms and conditions as
the Administrator may deem appropriate.
10.
Performance Awards
.
(a)
Generally
.
The Administrator
may grant Performance Awards on the terms and conditions as the
Administrator deems advisable. Performance Awards shall be
denominated in Shares which may be earned upon achievement or
satisfaction of one or more performance goals specified by the
Administrator. In addition, the Administrator may specify that
any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or
have it settled, and the timing thereof, upon achievement or
satisfaction of such performance conditions as may be specified
by the Administrator. The Administrator may use such business
criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions, and may
exercise its discretion to reduce or increase the amounts
payable under any Award subject to performance conditions,
except as limited under Section 10(b) in the case of a
Performance Award intended to qualify as performance-based
compensation under Code Section 162(m).
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(b)
Performance Awards Granted to Covered
Employees
.
To the extent the Board intends
for a Performance Award to satisfy the requirements for
treatment as performance-based compensation for
purposes of Code Section 162(m), such Award will be subject
to the terms of this Section 10(b).
(i)
Performance Goal
Generally
.
The performance goal for such
Performance Awards shall consist of one or more business
criteria specified by the Committee consistent with this
Section 10(b). The performance goal shall be objective and
shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder (including
Regulation 1.162-27 and successor regulations thereto),
including the requirement that the level or levels of
performance targeted by the Administrator result in the
achievement of performance goals being substantially
uncertain. Performance goals may differ for Performance
Awards granted to any one Participant or to different
Participants.
(ii)
Performance Goals
.
The
Administrator shall use the following performance measures
(either individually or in any combination) to set performance
goals with respect to Awards intended to qualify as Performance
Awards: net sales; net revenue; pretax income; pro forma pretax
income; pretax income before allocation of corporate overhead
and bonus; budget; cash flow; net income or earnings per share;
net income or operating income; return on shareholders
equity; return on assets, capital or investment; the price of
the Common Stock or any other publicly-traded securities of the
Company; market share; gross profits; operating margins;
earnings before interest and taxes; earnings before interest,
taxes, depreciation and amortization; earnings before interest,
taxes, depreciation, amortization and stock-based compensation;
operating income before depreciation and amortization; sales or
revenue targets; capital or investment; cash flow; cost
reduction goals; budget comparisons; implementation or
completion of projects or processes strategic or critical to the
Companys business operations; completion of targeted
acquisitions; entry into new markets; development of new
products and services; measures of customer satisfaction; any
combination of, or a specified increase in, any of the
foregoing; and the formation of joint ventures, marketing or
customer service collaborations, or the completion of other
corporate transactions intended to enhance the Companys
revenue or profitability or expand its customer base. Such
performance goals may be stated with respect to the Company as a
whole, or with respect to a specified subsidiary, division or
other operational unit. Moreover, such performance goals may be
stated in absolute terms or may be expressed relative to
performance in a specified prior period or to the performance of
other specified enterprises. The measurement of the achievement
of any of these goals will be determined, to the extent
applicable, according to generally accepted accounting
principles as in existence on the date on which performance goal
or goals were established;
provided, however
, to the
extent specified by the Committee at the time the performance
goals are established, the measurement of specified performance
goals may be subject to adjustment to exclude items of gain,
loss or expense that are determined to be extraordinary or
unusual in nature, infrequent in occurrence, related to a
corporate transaction (including, without limitation, a
disposition or acquisition) or related to a change in accounting
principle, all as determined in accordance with standards
established by Opinion No. 30 of the Accounting Principles
Board. Performance goals may include a minimum threshold level
of performance below which no award will be earned, levels of
performance at which specified portions of an award will be
earned, and a maximum level of performance at which an award
will be fully earned. The Administrator may provide that, if the
actual level of attainment for any performance objective is
between two specified levels, the amount of the award
attributable to that performance objective shall be interpolated
on a straight-line basis. Equitable adjustments will be made to
any performance goal related to Common Stock (e.g., earnings per
share) to reflect changes in corporate capitalization, such as
stock splits and reorganizations.
(iii)
Performance Period; Timing for Establishing
Performance Goals
.
Achievement of performance
goals in respect of such Performance Awards shall be measured
over a performance period as specified by the Administrator,
which performance period shall not be less than one month. A
performance goal shall be established not later than the earlier
of (A) 90 days after the beginning of any performance
period applicable to such Performance Award or (B) the time
at which 25% of such performance period has elapsed. In all
cases, the maximum Performance Award of any Participant shall be
subject to the limitations set forth in Section 3(b).
(iv)
Settlement of Performance Awards; Other
Terms
.
Settlement of such Performance Awards
shall be in cash, Shares, other Awards or other property, in the
discretion of the Administrator. The Administrator may not
exercise discretion to increase any such amount payable to a
Covered Employee (as defined in section 162(m)(3) of the
Code) in respect of a Performance Award subject to this
Section 10(b).
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(v)
Written
Determinations
.
Determinations by the
Administrator as to the establishment of performance goals, the
amount potentially payable in respect of Performance Awards and
the actual achievement of the specified performance goals
relating to Performance Awards will be recorded in writing.
(c)
Settlement of Performance
Awards
.
Settlement of Performance Awards
shall be in cash, Shares, other Awards or other property, in the
discretion of the Administrator.
(d)
Rights as a Shareholder
.
The
Grantee shall not have any shareholder rights with respect to
the Shares subject to a Performance Award until that award vests
and the Shares are actually issued thereunder. However,
dividend-equivalent units may be paid or credited, either in
cash or in actual or phantom Shares, on outstanding Performance
Awards, subject to such terms and conditions as the
Administrator may deem appropriate.
11.
Withholding Taxes
.
The Company
will have the right to take whatever steps the Administrator
deems necessary or appropriate to comply with all applicable
federal, state, foreign and local income and employment tax and
other withholding requirements, and the Companys
obligations to deliver Shares upon the exercise of an Option or
SAR or in connection with a Stock Award, Restricted Stock Unit
or Performance Award will be conditioned upon compliance with
all such withholding requirements. Without limiting the
generality of the foregoing, the Administrator in its discretion
may authorize the Grantee to satisfy all or part of any
withholding liability by (a) having the Company withhold
from the Shares which would otherwise be issued in connection
with an Award that number of Shares having a Fair Market Value,
as of the date the withholding liability arises, equal to or
less than the amount of the Companys withholding
liability, or (b) by delivering to the Company
previously-owned and unencumbered Shares having a Fair Market
Value, as of the date the withholding liability arises, equal to
or less than the amount of the Companys withholding
liability.
12.
Adjustments Upon Changes in Capitalization,
Dissolution, Change in Control
.
(a)
Changes in Capitalization
.
If
any change is made to the outstanding shares of Common Stock
through recapitalization, reclassification, stock combination,
stock dividend, stock split, reverse stock split, spin off
(resulting in a substantial reduction in the value of the
outstanding shares of Common Stock), extraordinary corporate
distribution or other similar transaction, an equitable
adjustment will be made by the Administrator to (i) the
maximum number
and/or
class
of securities issuable under the Plan, (ii) the maximum
number
and/or
class
of securities issuable as Stock Awards or Restricted Stock
Units, (iii) the maximum number
and/or
class
of securities for which any one person may be granted Awards
under the Plan per fiscal year, (iv) the number
and/or
class
of securities and the exercise or base price per share (or any
other cash consideration payable per share) in effect under each
outstanding Option and SAR and (v) the number
and/or
class
of securities subject to each outstanding Stock Award,
Restricted Stock Unit Award and Performance Award and the cash
consideration (if any) payable per share thereunder. To the
extent such adjustments are to be made to outstanding Awards,
those adjustments shall be effected in a manner that shall
preclude the enlargement or dilution of rights and benefits
under those Awards. Such adjustment will be made by the
Administrator, whose determination in that respect will be
final, binding, and conclusive.
(b)
Dissolution or Liquidation
.
In
the event of the proposed dissolution or liquidation of the
Company, to the extent that an Award had not been previously
exercised or vested, it will terminate immediately prior to the
consummation of such proposed dissolution or liquidation. In
such instance, the Administrator may, in the exercise of its
sole discretion, declare that any Award shall become vested or
any Option or SAR will terminate as of a date fixed by the
Administrator and give each Grantee the right to exercise his or
her Option or SAR as to all or any part of the Shares subject
thereto, including Shares as to which the Option would not
otherwise be exercisable.
(c)
Change in Control/Sale of Subsidiary or
Business
.
Except to the extent otherwise
provided in the Optionees employment agreement, in the
event of a Change in Control or a sale of a subsidiary or
business, the Administrator, may, in its sole discretion, do one
or more of the following: (i) shorten the period during
which Options and SARs are exercisable (provided they remain
exercisable for at least 30 days after the date notice of
such shortening is given to the Grantees); (ii) accelerate
any vesting schedule to which an Award is subject;
(iii) arrange to have the surviving or successor entity or
purchaser entity or any parent entity thereof assume the Options
and SARs or grant replacement options and stock appreciation
rights with appropriate adjustments in the option and base
prices and adjustments in the number and kind of securities
issuable upon exercise or adjustments so that the
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Options and SARs or their replacements represent the right to
purchase or receive the shares of stock, securities or other
property (including cash) as may be issuable or payable as a
result of such transaction with respect to or in exchange for
the number of Shares of Common Stock purchasable and receivable
upon exercise of the Options and SARs had such exercise occurred
in full prior to such transaction; (iv) arrange to have the
surviving or successor entity or purchaser entity or any parent
entity thereof assume the Restricted Stock Unit Awards or
Performance Awards with appropriate adjustments so that the
awards apply to the number and kind of securities into which the
Shares subject to the awards immediately prior to such
transaction would have converted in consummation of such
transaction had those Shares been outstanding at that time;
(v) assign any repurchase rights to the surviving or
successor entity or purchaser entity or parent thereof;
(vi) cancel Awards upon payment to the Grantees in cash,
with respect to each Award to the extent then exercisable or
vested (including, if applicable, any Awards as to which the
vesting schedule has been accelerated as contemplated in
clause (ii) above), of an amount that is the equivalent of
the excess of the Fair Market Value of the Common Stock (at the
effective time of the merger, reorganization, sale or other
event) over the price payable for the Shares subject to the
Award; or (vii) make such other adjustments to the
consideration issuable upon exercise or vesting of Awards and
other terms of the Awards as the Administrator deems appropriate
in its sole and absolute discretion.
13.
Date of Grant
.
The date of
grant of an Award will be, for all purposes, the date as of
which the Administrator makes the determination granting such
Award, or any other, later date determined by the Administrator
and specified in the Award Agreement.
14.
Effective Date and Term of the
Plan
.
The Plan will become effective upon its
approval by the shareholders of the Company at the 2007 Annual
Shareholders Meeting. Subject to such approval, it will continue
in effect for a term of ten years unless terminated earlier
under Section 15. Unless otherwise provided in this Plan,
its termination will not affect the validity of any Award
outstanding at the date of termination, which shall continue to
be governed by the terms of this Plan as though it remained in
effect.
15.
Amendment and Termination of the Plan
.
(a)
Amendment and Termination
.
The
Board may at any time amend, alter or suspend or terminate the
Plan. However, shareholder approval will be required for any
amendment to the Plan that (i) materially increases the
number of Shares available for issuance under the Plan,
(ii) materially expands the class of individuals eligible
to receive Awards under the Plan, (iii) materially
increases the benefits accruing to the Grantees under the Plan
or materially reduces the price at which Shares may be issued or
purchased under the Plan, (iv) materially extends the term
of the Plan or (v) expands the types of awards available
for issuance under the Plan.
(b)
Effect of Amendment or
Termination
.
No amendment, alteration,
suspension or termination of the Plan will impair the rights of
a Grantee, unless mutually agreed otherwise between the Grantee
and the Administrator. Any such agreement must be in writing and
signed by the Grantee and the Company.
16.
Prohibition on Repricing
Programs
.
The Administrator shall not
(i) implement any cancellation/regrant program pursuant to
which outstanding Options or SARs under the Plan are cancelled
and new Options or SARs are granted in replacement with a lower
exercise or base price per share, (ii) cancel outstanding
Options or SARs under the Plan with exercise prices or base
prices per share in excess of the then current Fair Market Value
per share of Common Stock for consideration payable in equity
securities of the Company or (iii) otherwise directly
reduce the exercise price or base price in effect for
outstanding Options or SARs under the Plan, without in each such
instance obtaining shareholder approval.
17.
Conditions Upon Grant of Awards and Issuance of
Shares
.
(a) The implementation of the Plan, the grant of any Award
and the issuance of Shares in connection with the issuance,
exercise or vesting of any Award made under the Plan shall be
subject to the Companys procurement of all approvals and
permits required by regulatory authorities having jurisdiction
over the Plan, the Awards made under the Plan and the Shares
issuable pursuant to those Awards.
(b) No Shares or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance
with all applicable requirements of Applicable Laws, including
the filing and effectiveness of the
A-12
Form S-8
registration statement for the Shares issuable under the Plan,
and all applicable listing requirements of any stock exchange on
which Common Stock is then listed for trading.
18.
Liability of Company
.
(a)
Inability to Obtain
Authority
.
If the Company cannot, by the
exercise of commercially reasonable efforts, obtain authority
from any regulatory body having jurisdiction for the sale of any
Shares under this Plan, and such authority is deemed by the
Companys counsel to be necessary to the lawful issuance of
those Shares, the Company will be relieved of any liability for
failing to issue or sell those Shares.
(b)
Grants Exceeding Allotted
Shares
.
If Shares subject to an Award exceed,
as of the date of grant, the number of Shares which may be
issued under the Plan without additional shareholder approval,
that Award will be contingent with respect to such excess
Shares, unless and until shareholder approval of an amendment
sufficiently increasing the number of Shares subject to this
Plan is obtained within twelve (12) months after the date
of such amendment.
(c)
Rights of Participants and
Beneficiaries
.
The Company will pay all
amounts payable under this Plan only to the Grantee, or
beneficiaries entitled thereto pursuant to this Plan. The
Company will not be liable for the debts, contracts, or
engagements of any Grantee or his or her beneficiaries, and
rights to cash payments under this Plan may not be taken in
execution by attachment or garnishment, or by any other legal or
equitable proceeding while in the hands of the Company.
19.
Legending Stock
Certificates
.
In order to enforce any
restrictions imposed upon Common Stock issued in connection with
an Award, the Administrator may cause a legend or legends to be
placed on any certificates representing such Common Stock, which
legend or legends will make appropriate reference to such
restrictions, including, but not limited to, a restriction
against sale of such Common Stock for any period of time as may
be required by Applicable Laws. Additionally, and not by way of
limitation, the Administrator may impose such restrictions on
any Common Stock issued pursuant to the Plan as it may deem
advisable.
20.
No Employment Rights
.
Neither
this Plan nor any Award will confer upon a Grantee any right
with respect to continuing the Grantees employment or
consulting relationship with the Company, or continuing service
as a Director, nor will they interfere in any way with the
Grantees right or the Companys right to terminate
such employment or consulting relationship or directorship at
any time, with or without cause.
21.
Governing Law
.
The Plan will
be governed by, and construed in accordance with the laws of the
State of Delaware (without giving effect to conflicts of law
principles).
A-13
APPENDIX B
CERTIFICATE
OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DOLLAR FINANCIAL CORP.
Pursuant
to Section 242 of
the General Corporation Law of the State of Delaware
Dollar Financial Corp., a Delaware corporation (the
Corporation), does hereby certify as follows:
1. The name of the Corporation is Dollar Financial Corp.
2. This Amendment to the Amended and Restated Certificate
of Incorporation of the Corporation (the Amendment)
has been duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of
Delaware.
3. This Amendment amends Article FOURTH of the Amended
and Restated Certificate of Incorporation of the Corporation by
deleting the paragraph A of Article FOURTH and
substituting in lieu thereof the following new paragraph A
of Article FOURTH, to read in its entirety as follows:
FOURTH
:
A. The total number of
shares of all classes of stock which the Corporation
shall have the authority to issue is One Hundred ten Million
(110,000,000), consisting of:
1. One Hundred Million (100,000,000) shares of Common
Stock, par value $.001 per share (hereinafter referred to as the
Common Stock
), and
2. Ten Million (10,000,000) shares of Preferred Stock, par
value $.001 per share (hereinafter referred to as the
Preferred Stock
).
4. This Amendment will become effective at
[ ]
Eastern Time on November [ ], 2010.
IN WITNESS WHEREOF, the Corporation has caused this certificate
to be executed by its officer thereunto duly authorized, this
[ ] day of [ ], 2010.
DOLLAR FINANCIAL CORP.
Name:
Title:
B-1
DOLLAR FINANCIAL CORP. ANNUAL MEETING OF STOCKHOLDERS NOVEMBER 11, 2010 THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DOLLAR FINANCIAL CORP. The undersigned, revoking
all previous proxies, hereby appoints Jeffrey A. Weiss and Randy Underwood, and each of them acting
individually, with full power of substitution, as the proxy of the undersigned to vote, as
indicated below and in their discretion upon such other matters as may properly come before the
meeting, all shares of Common Stock of Dollar Financial Corp., a Delaware corporation (the
Company), that the undersigned may be entitled to vote at the Annual Meeting of Stockholders to
be held at 8:30 a.m. (local time) on November 11, 2010, at The Boca Raton Bridge Hotel and at any
adjournment or postponement thereof. This proxy when properly executed will be voted in the manner
directed herein by the undersigned. If this proxy is returned without direction being given, this
proxy will be voted FOR all proposals. (Continued and to be signed on the reverse side) 14475
|
ANNUAL MEETING OF STOCKHOLDERS OF DOLLAR FINANCIAL CORP. November 11, 2010 IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
NOVEMBER 11, 2010: The Notice of Annual Meeting, Proxy Statement and fiscal 2010 Annual Report to
Stockholders are available on our website at http://www.dfg.com/ir Please sign, date and mail your
proxy card in the envelope provided as soon as possible. Please detach along perforated line and
mail in the envelope provided. 20230303000000000000 8 111110 The Board of Directors of
Dollar Financial Corp. recommends a vote FOR the following actions set forth below: PLEASE SIGN,
DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS
SHOWN HERE x FOR AGAINST ABSTAIN 1. Election of Class C Directors for Terms of Three Years: 2. To
amend and restate the Dollar Financial Corp. 2007 Equity Incentive Plan to increase the number of
shares of our common stock, par NOMINEES: value $0.001, available for issuance under the Plan from
2,500,000 FOR ALL NOMINEES O Clive Kahn to 7,000,000 and to make certain other changes to the Plan.
O John Gavin WITHHOLD AUTHORITY 3. To approve an amendment to our Amended and Restated FOR ALL
NOMINEES Certificate of Incorporation to increase the number of authorized shares of common stock,
par value $0.001, from 55,500,000 to FOR ALL EXCEPT 100,000,000. (See instructions below) 4.
Ratification of Ernst & Young LLP as the Companys independent registered accountants for the
fiscal year ending June 30, 2011. 5. In their discretion to act on any other matter or matters
which may properly come before the Annual Meeting or any adjournment or postponement thereof. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE 2010 ANNUAL MEETING OF STOCKHOLDERS,
THE 2010 PROXY INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark FOR
ALL EXCEPT STATEMENT AND THE ANNUAL REPORT FOR THE FISCAL YEAR ENDING and fill in the circle next
to each nominee you wish to withhold, as shown here: JUNE 30, 2010 PRIOR TO THE EXECUTION OF THIS
PROXY. To change the address on your account, please check the box at right and indicate your new
address in the address space above. Please note that changes to the registered name(s) on the
account may not be submitted via this method. Signature of Stockholder Date: Signature of
Stockholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares
are held jointly, each holder should sign. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such. If the signer is a corporation, please sign
full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
|
ANNUAL MEETING OF STOCKHOLDERS OF DOLLAR FINANCIAL CORP. November 11, 2010 PROXY VOTING
INSTRUCTIONS INTERNET Access www.voteproxy.com and follow the on-screen instructions. Have
your proxy card available when you access the web page, and use the Company Number and Account
Number shown on your proxy card. TELEPHONE Call toll-free 1-800-PROXIES (1-800-776-9437) in the
United States or 1-718-921-8500 from foreign countries from any COMPANY NUMBER touch-tone telephone
and follow the instructions. Have your proxy card available when you call and use the Company
Number and Account Number shown on your proxy card. ACCOUNT NUMBER Vote online/phone until 11:59 PM
EST the day before the meeting. MAIL Sign, date and mail your proxy card in the envelope
provided as soon as possible. IN PERSON You may vote your shares in person by attending the
Annual Meeting. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 11, 2010: The Notice of Annual Meeting, Proxy
Statement and fiscal 2010 Annual Report to Stockholders are available on our website at
http://www.dfg.com/ir Please detach along perforated line and mail in the envelope provided IF you
are not voting via telephone or the Internet. 20230303000000000000 8 111110 The
Board of Directors of Dollar Financial Corp. recommends a vote FOR the following actions set forth
below: PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN
BLUE OR BLACK INK AS SHOWN HERE x FOR AGAINST ABSTAIN 1.Election of Class C Directors for Terms of
Three Years: 2. To amend and restate the Dollar Financial Corp. 2007 Equity Incentive Plan to
increase the number of shares of our common stock, par NOMINEES: value $0.001, available for
issuance under the Plan from 2,500,000 FOR ALL NOMINEES O Clive Kahn to 7,000,000 and to make
certain other changes to the Plan. O John Gavin WITHHOLD AUTHORITY 3. To approve an amendment to
our Amended and Restated FOR ALL NOMINEES Certificate of Incorporation to increase the number of
authorized shares of common stock, par value $0.001, from 55,500,000 to FOR ALL EXCEPT 100,000,000.
(See instructions below) 4. Ratification of Ernst & Young LLP as the Companys independent
registered accountants for the fiscal year ending June 30, 2011. 5. In their discretion to act on
any other matter or matters which may properly come before the Annual Meeting or any adjournment or
postponement thereof. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE 2010 ANNUAL
MEETING OF STOCKHOLDERS, THE 2010 PROXY INSTRUCTIONS: To withhold authority to vote for any
individual nominee(s), mark FOR ALL EXCEPT STATEMENT AND THE ANNUAL REPORT FOR THE FISCAL YEAR
ENDING and fill in the circle next to each nominee you wish to withhold, as shown here: JUNE 30,
2010 PRIOR TO THE EXECUTION OF THIS PROXY. JOHN SMITH 1234 MAIN STREET APT. 203 NEW YORK, NY 10038
To change the address on your account, please check the box at right and indicate your new address
in the address space above. Please note that changes to the registered name(s) on the account may
not be submitted via this method. Signature of Stockholder Date: Signature of Stockholder Date:
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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