-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CN1WkRbw8iNYVQXDNrDnaBxoQF+Eh9idIsYKeRwiPBylPe16KL5gfB8t9NkVAJjQ k+BLmtip/Tl7kY9lAOFcig== 0000950134-97-008343.txt : 19971113 0000950134-97-008343.hdr.sgml : 19971113 ACCESSION NUMBER: 0000950134-97-008343 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASH AMERICA INTERNATIONAL INC CENTRAL INDEX KEY: 0000807884 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 752018239 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09733 FILM NUMBER: 97715240 BUSINESS ADDRESS: STREET 1: 1600 W 7TH ST CITY: FT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173351100 MAIL ADDRESS: STREET 1: 1600 WEST 7TH STREET CITY: FORT WORTH STATE: TX ZIP: 76102 FORMER COMPANY: FORMER CONFORMED NAME: CASH AMERICA INVESTMENTS INC /TX/ DATE OF NAME CHANGE: 19920520 10-Q 1 FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1997 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _______________ Commission File Number 1-9733 CASH AMERICA INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) TEXAS 75-2018239 (State or other jurisdiction (I.R.S. Employer of incorporation or Identification No.) organization) 1600 WEST 7TH STREET FORT WORTH, TEXAS 76102 (Address of principal executive offices) (Zip Code) (817) 335-1100 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- APPLICABLE ONLY TO CORPORATE ISSUERS: 24,413,171 common shares, $.10 par value, were outstanding as of October 31, 1997. ================================================================================ 2 CASH AMERICA INTERNATIONAL, INC. INDEX TO 10-Q PART I. FINANCIAL STATEMENTS Page Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets - September 30, 1997 and 1996 and December 31, 1996............................ 1 Consolidated Statements of Income - Three Months and Nine Months Ended September 30, 1997 and 1996............. 2 Consolidated Statements of Stockholders' Equity - Nine Months Ended September 30, 1997 and 1996............. 3 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1997 and 1996............. 4 Notes to Consolidated Financial Statements................ 5 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition...... 8 PART II. OTHER INFORMATION...................................... 21 SIGNATURE......................................................... 22 3 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (UNAUDITED) - --------------------------------------------------------------------------------
September 30 December 31 1997 1996 1996 ----------- --------- --------- ASSETS Current assets: Cash and cash equivalents $ 3,781 $ 1,368 $ 1,334 Loans 116,391 104,561 107,679 Merchandise held for disposition, net 54,488 51,310 48,777 Finance and service charges receivable 17,564 14,451 15,248 Prepaid expenses and other 8,506 4,826 5,293 Deferred tax asset 13,098 12,255 11,643 ----------- --------- --------- Total current assets 2,118,828 188,771 189,974 Property and equipment, net 64,140 60,797 62,818 Intangible assets, net 65,677 61,731 66,065 ----------- --------- --------- Other assets 7,130 10,497 6,225 Total assets $ 348,775 $ 321,796 $ 325,082 =========== ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 15,295 $ 10,104 $ 13,959 Customer deposits 4,151 3,684 2,955 Income taxes currently payable 4,390 3,491 3,776 Current portion of long-term debt 4,286 4,286 4,286 ----------- --------- --------- Total current liabilities 28,122 21,565 24,976 Long-term debt: Bank lines of credit 117,608 70,689 100,365 Notes payable, net of current portion 41,429 45,714 45,714 ----------- --------- --------- 159,037 116,403 146,079 Stockholders' equity: Common stock, $.10 par value per share, 80,000,000 shares authorized 3,024 3,024 3,024 Paid in surplus 122,116 121,878 121,878 Retained earnings 85,306 70,092 75,973 Notes receivable - stockholders (1,337) (1,065) (1,065) Foreign currency translation adjustment (2,958) (3,454) (386) ----------- --------- --------- 206,151 190,475 199,424 Less - shares held in treasury, at cost 44,535 (6,647) (45,397) ----------- --------- --------- Total stockholders' equity 161,616 183,828 154,027 ----------- --------- --------- Total liabilities and stockholders' equity $ 348,775 $ 321,796 $ 325,082 =========== ========= ========= - ---------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements Page 1 4 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (UNAUDITED) - --------------------------------------------------------------------------------
Three Months Ended Nine Months Ended September 30 September 30 ------------------- --------------------- 1997 1996 1997 1996 REVENUES Finance and service charge revenues $27,025 $24,344 $ 77,463 $ 67,676 Proceeds from disposition of merchandise 42,773 40,330 136,912 131,465 Royalties and franchise fees 513 0 1,874 0 ------- ------- -------- -------- TOTAL REVENUES 70,311 64,674 216,249 199,141 Cost of disposed merchandise 27,174 25,379 87,373 82,078 ------- ------- -------- -------- NET REVENUES 43,137 39,295 128,876 117,063 ------- ------- -------- -------- OPERATING EXPENSES Operations 24,814 22,669 74,733 67,891 Administration 5,818 4,596 17,080 14,188 Amortization 812 871 2,466 2,658 Depreciation 3,101 3,114 9,490 9,324 ------- ------- -------- -------- Total operating expenses 34,545 31,250 103,769 94,061 ------- ------- -------- -------- INCOME FROM OPERATIONS 8,592 8,045 25,107 23,002 Interest expense, net 2,998 2,341 8,555 7,078 Other expense 105 184 256 671 ------- ------- -------- -------- INCOME BEFORE INCOME TAXES 5,489 5,520 16,296 15,253 Provision for income taxes 2,047 2,057 6,053 5,810 ------- ------- -------- -------- NET INCOME $ 3,442 $ 3,463 $ 10,243 $ 9,443 ======= ======= ======== ======== - --------------------------------------------------------------------------------------------------------- Earnings per share - Fully diluted $ 0.14 $ 0.12 $ 0.41 $ 0.33 Weighted average shares - Fully diluted 25,285 28,981 25,259 28,971 - ---------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements Page 2 5 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Nine Months Ended September 30, 1997 and 1996 (In thousands, except share data) (UNAUDITED) - --------------------------------------------------------------------------------
NOTES COMMON STOCK TREASURY STOCK RECEIVABLE ----------------------- PAID IN RETAINED -------------------- STOCK SHARES AMOUNT SURPLUS EARNINGS SHARES AMOUNT HOLDERS ---------- --------- ---------- -------- --------- -------- ------- Balance at December 31, 1996 30,235,164 $ 3,024 $ 121,878 $75,973 5,975,670 $(45,397) $(1,065) Net income 10,243 Dividends declared (910) Treasury shares acquired 144,294 (1,333) Treasury shares reissued (75) (287,763) 2,195 Tax benefit from exercise of option shares 313 Increase in stockholders notes receivable (272) Foreign currency translation adjustment Balance at ---------- --------- --------- ------- --------- -------- ------- September 30, 1997 30,235,164 $ 3,024 $ 122,116 $85,306 5,832,201 $(44,535) $(1,337) ========== ========= ========= ======= ========= ======== ======= - ---------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1995 30,235,164 $ 3,024 $ 121,840 $61,727 1,495,285 $ (6,734) $ (1,071) Net income 9,443 Dividends declared (1,078) Treasury shares reissued 27 (19,615) 87 Tax benefit from exercise of option shares 11 Reduction in stockholders notes receivable 6 Foreign currency translation adjustment Balance at ---------- --------- ---------- -------- --------- -------- ------- September 30, 1996 30,235,164 $ 3,024 $ 121,878 $70,092 1,475,670 $ (6,647) $(1,065) ========== ========= ========= ======= ========= ======== ======= FOREIGN CURRENCY TRANSLATION TOTAL ----------- --------- Balance at December 31, 1996 $ (386) $ 154,027 Net income 10,243 Dividends declared (910) Treasury shares acquired (1,333) Treasury shares reissued 2,120 Tax benefit from exercise of option shares 313 Increase in stockholders notes receivable (272) Foreign currency translation adjustment (2,572) (2,572) -------- --------- Balance at September 30, 1997 $ (2,958) $ 161,616 ======== ========= - ------------------------------------------------------------------- Balance at December 31, 1995 21,840 $ (3,834) $ 174,952 Net income 9,443 Dividends declared (1,078) Treasury shares reissued 114 Tax benefit from exercise of option shares 11 Reduction in stockholders notes receivable 6 Foreign currency translation adjustment 380 380 -------- --------- Balance at September 30, 1996 $ (3,454) $ 183,828 ======== =========
See notes to consolidated financial statements. Page 3 6 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (UNAUDITED) - --------------------------------------------------------------------------------
Nine Months Ended September 30 -------------------------- 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Reconciliation of Net Income to Net Cash Provided By Operating Activities: Net income $10,243 $9,443 Adjustments to reconcile net income to net cash provided by operating activities: Amortization 2,466 2,658 Depreciation 9,490 9,324 Increase in finance and service charges receivable (2,720) (2,524) (Increase) decrease in merchandise held for disposition (4,917) 5,456 Increase in prepaid expenses and other (1,151) (10) Increase in accounts payable and accrued expenses Increase in accounts payable and accrued expenses 1,170 506 Increase in layaway deposits, net 1,153 156 Increase in income taxes payable 1,045 904 Deferred taxes (1,923) 2 ------- ------ Net cash provided by operating activities 14,856 25,915 ------- ------ CASH FLOWS FROM INVESTING ACTIVITIES Loans forfeited and transferred to merchandise held for disposition 84,578 68,617 Loans repaid or renewed 198,706 185,671 Loans made, including loans renewed (294,142) (270,455) ------- ------ Net increase in loans (10,858) (16,167) Acquisitions (5,324) (799) Net (advances to) payments from affiliates (600) (2,100) Purchases of property and equipment (11,006) (5,215) Proceeds from sales of property and equipment 0 145 ------- ------ Net cash used by investing activities (27,788) (24,136) ------- ------ CASH FLOWS FROM FINANCING ACTIVITIES Net borrowings (payments) under bank lines of credit 20,108 (2,880) Payment on notes payable (4,286) 0 Net payments on notes receivable stockholders 243 6 Proceeds from issuance of stock, net 1,605 114 Treasury shares acquired (1,333) 0 Dividends paid (910) (1,078) ------- ------ Other 0 Net cash provided (used) by financing activities 15,427 (3,838) ------- ------ Effect of exchange rate changes on cash (48) (8) ------- ------ Increase (decrease) in cash and cash equivalents 2,447 (2,067) Cash and cash equivalents at beginning of period 1,334 3,435 ------- ------ Cash and cash equivalents at end of period $3,781 $1,368 ====== ======
- -------------------------------------------------------------------------------- See notes to consolidated financial statements. Page 4 7 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (UNAUDITED) - ------------------------------------------------------------ NOTE 1 - BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of Cash America International, Inc. and its wholly owned subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company has a 49% ownership interest in Express Rent A Tire, Ltd. ("Express"). The investment is being accounted for using the equity method of accounting, whereby the Company records its 49% share of earnings or losses in its consolidated financial statements. Effective December 31, 1996, the Company acquired the remaining 51% interest in its affiliate, Mr. Payroll Corporation ("Mr. Payroll") (see note 2). The financial statements as of September 30, 1997 and 1996 and for the three months and nine months then ended are unaudited but, in management's opinion, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. Operating results for the three months and nine months are not necessarily indicative of the results that may be expected for the full fiscal year. Certain amounts in the consolidated statements of income for the three months and nine months ended September 30, 1996, have been reclassified to conform with the presentation format adopted in 1997. These reclassifications have no effect on the net income previously reported. These financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1996 Annual Report to Stockholders. NOTE 2 - INVESTMENTS IN AFFILIATES Effective upon the close of business December 31, 1996, the Company acquired, in a purchase transaction, the remaining 51% interest in its affiliate, Mr. Payroll. The aggregate purchase price of the 51% interest is to be paid in three annual installments in an amount equal to .9775 times the defined after-tax net income of Mr. Payroll for the 1996, 1997 and 1998 fiscal years, respectively. No consideration is payable based on Mr. Payroll's results of operations in 1996. The Company has a 49% interest in Express, a private entity which offers automobile and truck tires and wheels on a rent-to-own basis. In conjunction with its investment, the Company has entered into a revolving credit agreement with Express which provides for maximum borrowings of $4 million from the Company. Interest is payable quarterly at a rate reset monthly that is equivalent to LIBOR Page 5 8 plus 4%. As of September 30, 1997, Express had borrowings outstanding of $3,000,000. The entire unpaid principal is due and payable on December 31, 1998. The amounts are included in other assets. NOTE 3 - LONG-TERM DEBT The Company's long-term debt at September 30 consisted of:
1997 1996 - ------------------------------------------------------------------------------------------------------ (In thousands) Debt Obligations: U.S. Line of Credit up to $125 million due June 30, 2001 $ 91,150 $ 41,400 U.K. Line of Credit up to(pound)5 million due April 30, 1999 2,019 1,409 Swedish Line of Credit up to SEK 30 million due June 30, 1998 -0- -0- Swedish Kronor term loan due September 30, 2002 24,439 27,880 8.33% senior unsecured notes due 2003 25,715 30,000 8.14% senior unsecured notes due 2007 20,000 20,000 -------- -------- 163,323 120,689 Less current portion 4,286 4,286 -------- -------- Total Long-Term Debt $159,037 $116,403 ======== ========
Interest on the U.S. Line of Credit is paid quarterly at rates determined, at the Company's option of either the base rate as specified by the Agent Bank, or a margin over LIBOR, based on the Company's debt-to-total capital ratio, measured quarterly. As of September 30, 1997, the Company has the option of borrowing at LIBOR plus 1%. As of September 30, 1997, the Company has entered into two interest rate cap agreements of $20,000,000 each, that limits the maximum LIBOR interest rate to 6%, maturing on December 10, 1999 and September 18, 2000, respectively. Interest on the U.K. Line of Credit is payable quarterly at an interest rate equal to the Bank's sterling cost of funds plus 60 basis points for borrowings less than 14 days and 55 basis points for borrowings of 14 days or more. Interest on the Swedish Line of Credit is payable quarterly at an interest rate equal to the Bank's base funding rate plus 1%, and interest on the Swedish Term Loan is payable periodically at the Stockholm InterBank Offered Rate (STIBOR) plus 1%. The Company has entered into a floating-to-fixed interest rate exchange agreement on SEK 118,750,000 (approximately $15,688,995 as of September 30, 1997) at 10.94% through August 17, 1998. The effective rate of interest under the loan at September 30, 1997, was 8.93% after taking into account the interest rate exchange agreement. Page 6 9 NOTE 4 - EARNINGS PER SHARE Primary and fully diluted earnings per share are computed based on net income. The weighted average number of common shares outstanding during each period is adjusted to give effect to stock options considered to be dilutive common stock equivalents. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 ("FAS128"), which is required to be adopted on December 31, 1997. At that time the Company will be required to change the method currently used to compute earnings per share ("EPS") and to restate EPS for all prior periods reported. The Company, in recognition of requirements under FAS128 has determined the impact of basic and dilutive earnings per share. Basic earnings per share is computed using net income divided by the weighted average number of common shares outstanding. Dilutive earnings per share is computed using net income divided by the weighted average number of shares adjusted to give effect to the dilution from unexercised stock options. The following table discloses the impact of FAS128 on the Company's earnings per share for the three and nine months ended September 30, 1997 and 1996, respectively.
Three Months Ended Nine Months Ended September 30 September 30 ----------------------------- -------------------------- (In thousands) 1997 1996 1997 1996 Weighted average common shares outstanding 24,279 28,759 24,238 28,750 Plus shares applicable to options 943 171 788 7 ------ ------ ------ ------ Adjusted weighted average shares outstanding 25,222 28,930 25,026 28,757 ====== ====== ====== ====== Net income $3,442 $3,463 $10,243 $9,443 Basic earnings per share $.14 $.12 $.42 $.33 Diluted earnings per share $.14 $.12 $.41 $.33
NOTE 5 - LITIGATION The Company is a defendant in certain lawsuits encountered in the ordinary course of its business. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company's financial position or results of operations. Page 7 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION SUMMARY CONSOLIDATED FINANCIAL DATA THIRD QUARTER ENDED SEPTEMBER 30, 1997 vs. THIRD QUARTER ENDED SEPTEMBER 30, 1996 - -------------------------------------------------------------------------------- The following table sets forth selected unaudited, consolidated financial data with respect to the Company for the three months ended September 30, 1997 and 1996.
1997 1996 Change ------- ------- ------- ($ in thousands) Finance and service charge revenues $27,025 $24,344 11% Proceeds from disposition of merchandise 42,773 40,330 6% Royalties and franchise fees 513 -- -- ------- ------- ------- Total Revenues 70,311 64,674 9% Cost of disposed merchandise 27,174 25,379 7% ------- ------- ------- Net Revenues $43,137 $39,295 10% ------- ------- ------- Other Data: Annualized yield on loans 95% 96% (1)% Average loan balance per average location in operation $ 284 $ 266 7% Average pawn loan amount at end of period (not in thousands) $ 96 $ 94 2% Margin on disposition of merchandise 36.5% 37.1% (2)% Average annualized merchandise turnover 2.1X 2.1X 0% Average merchandise held for disposition balance per average location $ 128 $ 130 (2)% Expenses as a percentage of net revenues: Operations and administration 71.0% 69.4% 2% Depreciation and amortization 9.1% 10.1% (10)% Interest, net 6.9% 6.0% 15% Pawn Locations in Operation: Beginning of period 395 377 Acquired 4 1 Established 2 2 Combined -- -- ------- ------- ------- End of period 401 380 6% ======= ======= ======= Average number of locations in operation during the period (a) 398 378 5% ======= ======= =======
(a) Averages based on accumulation of month-end balances and dividing aggregate total by total months in the period. Page 8 11 NINE MONTHS ENDED SEPTEMBER 30, 1997 vs NINE MONTHS ENDED SEPTEMBER 30, 1996 - -------------------------------------------------------------------------------- The following table sets forth selected consolidated financial data with respect to the Company for the nine months ended September 30, 1997 and 1996.
1997 1996 Change --------- --------- --------- ($ in thousands) Finance and service charge revenues $ 77,463 $ 67,676 14% Proceeds from disposition of merchandise 136,912 131,465 4% Royalties and franchise fees 1,874 --------- --------- --------- Total Revenues 216,249 199,141 9% Cost of disposed merchandise 87,373 82,078 6% --------- --------- --------- Net Revenues $ 128,876 $ 117,063 10% --------- --------- --------- Other Data: Annualized yield on loans 96% 97% (1)% Average loan balance per average location in operation $ 277 $ 247 12% Average pawn loan amount at end of period (not in thousands) $ 96 $ 94 2% Margin on disposition of merchandise 36.2% 37.6% (4)% Average annualized merchandise turnover 2.4X 2.1X 14% Average merchandise held for disposition balance per average location $ 125 $ 138 (9)% Expenses as a percentage of net revenues: Operations and administration 71.2% 70.1% 2% Depreciation and amortization 9.3% 10.2% (9)% Interest, net 6.6% 6.0% 10% Pawn Locations in Operation: Beginning of period 382 373 Acquired 10 2 Established 12 7 Combined (3) (2) --------- --------- End of period 401 380 6% ========= ========= ========= Average number of locations in operation during the period (a) 390 376 4% ========= ========= =========
(a) Averages based on accumulation of month-end balances and dividing aggregate total by total months in the period. Page 9 12 GENERAL The Company is a diversified provider of specialty financial services to individuals in the United States, Great Britain, and Sweden. The Company offers secured non-recourse loans to individuals, commonly referred to as pawn loans. The revenue generated from pawn loan balances is finance and service charge revenues. The revenue from the disposition of merchandise, primarily from forfeited collateral on pawn loans, is a related but secondary activity of the Company's lending function. In addition, the Company provides check cashing services through its wholly owned subsidiary, Mr. Payroll Corporation ("Mr. Payroll"). The Company expanded its pawn operations over the 21-month period from December 31, 1995 through September 30, 1997 with the addition of 28 locations. Twenty locations were established, sixteen operating units were acquired, and eight locations were combined for a net addition of twenty-eight pawn operating units. At September 30, 1997, the Company operated 401 pawn units--352 in 15 states in the United States, 38 jewelry-only and loan-only units in the United Kingdom, and 11 loan-only and primarily jewelry-only units in Sweden. The Company expanded its check cashing operations on December 31, 1996, when it acquired the remaining 51% interest in Mr. Payroll Corporation. Mr. Payroll is a franchiser of check-cashing kiosks and service centers and a seller of automated check cashing machines. The 1997 financial statement periods include the revenues and expenses of Mr. Payroll. Previously, the Company recorded its 49% share of Mr. Payroll's losses in its consolidated financial statements under the equity method of accounting. THIRD QUARTER ENDED SEPTEMBER 30, 1997 COMPARED TO THE THIRD QUARTER ENDED SEPTEMBER 30, 1996 RESULTS OF OPERATIONS Finance and service charge revenues are impacted by changes in the average outstanding amount of pawn loans and the annualized yield on such loans. Finance and service charge revenues increased $2.7 million, or 11%, in the third quarter of 1997 over the third quarter of 1996 because of a same unit increase in the average balance of pawn loans outstanding of 9%, combined with the impact of units in operation for less than one year. While the consolidated average pawn loan amount only increased 2% to $96, the domestic average pawn loan amount increased 6% to $76. The domestic increase is primarily a reflection of the increase in the number of loans in the portfolio that have been extended or renewed which, historically, are larger loans. There was also a 9% increase in the number of outstanding pawn loans as of September 30, 1997, compared to September 30, 1996, reflecting a higher customer demand for pawn loans in both domestic and foreign markets. Page 10 13 The consolidated annual loan yield, which represents a weighted average of the distinctive yields realized in the three countries in which the Company operates, decreased to 95% in the third quarter of 1997 from 96% in the third quarter of 1996. In its domestic operations, the Company had a decrease in its loan yield to 122% for the third quarter of 1997, compared to 124% for the third quarter of 1996. The decrease in the domestic loan yield can be attributed to a 15% increase in pawn loans at September 30, 1997, from the same period in 1996 which can have the effect of reducing the loan yield until revenues from these loans are fully realized. At September 30, 1997, same unit domestic pawn loan balances had increased 12% since September 30, 1996, with the additional 3% increase coming from new units. Internationally, the blended yield on average pawn loans outstanding decreased to 51% for the third quarter of 1997 from 56% for the same period in 1996. The decline was primarily the result of lower returns on unredeemed collateral disposed of at auction. Proceeds from the disposition of merchandise increased $2.4 million in the third quarter of 1997 over the third quarter of 1996. A 4% gain from same units (those in operation more than one year) combined with the impact of new units helped to offset a $.8 million decrease in proceeds from the disposition of scrap jewelry. The Company's margin on disposition of merchandise decreased to 36.5% in the third quarter of 1997, as compared to 37.1% for the third quarter of 1996. This decline in margin is due primarily to a lower margin on the disposition of scrap jewelry during the third quarter of 1997, compared to the same period of 1996, and the Company's continued emphasis on faster disposition of merchandise. The lower margin on the disposition of scrap jewelry in 1997 reflects a decline in the price of gold. The merchandise turnover rate remained constant at 2.1 times for both periods. Royalties and franchise fees revenue is generated from the Company's check cashing operations. The revenue consists of franchise fees for new check cashing franchises and royalties based on a percentage of check cashing fees from existing franchise operations. Operations and administration expense, as a percentage of net revenues, was 71.0% in the third quarter of 1997, compared to 69.4% for the same period in 1996. Total operations and administration expense increased $3.4 million in the third quarter of 1997, representing a 12% increase over the third quarter of 1996. Domestic pawn operations contributed $2.4 million of the increase, due primarily to higher personnel, occupancy costs and the development of a franchise program, while foreign operations contributed $.1 million and the consolidation of Mr. Payroll added $.9 million, to the increase. Page 11 14 Depreciation and amortization as a percentage of net revenues decreased to 9.1% in the third quarter of 1997, from 10.1% in the third quarter of 1996, due to a moderation in the Company's expansion during the past twenty-one months. Net interest expense, as a percentage of net revenues, increased to 6.9% in the third quarter of 1997 from 6.0% in the third quarter of 1996. The dollar amount of interest expense increased by $.7 million, or 28%, due primarily to additional debt incurred in the fourth quarter of 1996 to repurchase 4.5 million shares of the Company's common stock. Average debt outstanding increased 33% to $157.9 million for the third quarter of 1997 as compared to $119.1 million for the third quarter of 1996. The Company's effective rate of interest paid on its debt decreased to 7.4% for the third quarter of 1997 from 7.8% for the third quarter of 1996. Included in other expense for the third quarter of 1997, is a $148,000 loss from the Company's affiliate. In the third quarter of 1996, the Company recorded a $236,000 loss from affiliates. The loss from affiliates in 1996 consisted of a loss from Express of $98,000 and a loss from Mr. Payroll of $138,000. As stated in Note 2, the Company obtained 100% ownership of Mr. Payroll on December 31, 1996, therefore the 1997 operations of Mr. Payroll are included in the Consolidated Financial Statements. The Company's consolidated effective income tax rate remained constant at 37% in the third quarter of 1997. The domestic effective tax rate decreased to 39%, in 1997, from 41% in 1996, primarily due to a lesser effect of non-deductible items on the Company's taxable income. The effective tax rate for the Company's foreign operations increased to 34% in the third quarter of 1997, from 32% in the third quarter of 1996. NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1996 RESULTS OF OPERATIONS Finance and service charge revenues increased $9.8 million, or 14%, in 1997 over 1996, primarily due to a same unit increase in the average outstanding amount of pawn loans of 13%, the impact of units in operation for less than one year, and a slight decrease in the annualized yield from 1996 to 1997. The consolidated annual loan yield, which represents a weighted average of the distinctive yields realized in the three countries in which the Company operates, decreased to 96% for the nine month period in 1997, from 97% for the same period in 1996. In its domestic operations, the annual loan yield for the nine months ended September 30, 1997 decreased to 125% from 126% for the same period in 1996, due primarily to increased average loan Page 12 15 balances for the period. Internationally, the blended yield on average pawn loans outstanding decreased to 53% for the nine months ended September 30, 1997, from 56% for the corresponding period in 1996. The decline in the international yield resulted from a lower return on unredeemed collateral disposed of at auction. Proceeds from the disposition of merchandise increased $5.4 million, or 4%, during the first nine months of 1997, over the first nine months of 1996, primarily due to a 4% increase in same unit dispositions that was partially offset by a decrease in proceeds from the disposition of scrap jewelry, of $2.8 million. The Company's margin on disposition of merchandise decreased to 36.2% for the nine months ended September 30, 1997, from 37.6% for the same period in 1996. This decline in margin is due primarily to a lower margin on the disposition of scrap jewelry compared to the same period in 1996, and the Company's continued emphasis on faster disposition of merchandise. The lower margin on the disposition of scrap jewelry in 1997 reflects lower prices realized on the sale of pure gold in the open market. The merchandise turnover rate increased to 2.4 times in 1997 as compared to 2.1 times for 1996. Royalties and franchise fees revenue is generated from the Company's check cashing operations. The revenue consists of franchise fees for new check cashing franchises and royalties based on a percentage of check cashing fees from existing franchise operations. Operations and administration expense, as a percentage of net revenues, was 71.2% for the first nine months of 1997, compared to 70.1% for the corresponding period in 1996. Total operations and administration cost increased $9.7 million in the nine months ended September 30, 1997, over the nine month period ended September 30, 1996. Domestic pawn operations contributed $6.7 million of the increase, due primarily to higher personnel and occupancy costs, with foreign operations contributing $.5 million, and the consolidation of Mr. Payroll adding $2.5 million. Depreciation and amortization as a percentage of net revenues decreased to 9.3% of net revenues in the nine months ended September 30, 1997, from 10.2% in the same period in 1996, due to a moderation in the Company's expansion during the past twenty-one months. Net interest expense, as a percentage of net revenues, increased to 6.6% in the first nine months of 1997 from 6.0% in the first nine months of 1996. The dollar amount of interest expense increased by $1.5 million, or 21%, due primarily to additional debt incurred in the fourth quarter of 1996 to repurchase 4.5 million shares of the Company's common stock. Average debt outstanding increased 27% to $150.8 million in the nine month period ended Page 13 16 September 30, 1997 from $119.0 million for the same period in 1996. The Company's effective rate of interest paid on its debt decreased to 7.6% for the first nine months of 1997 from 8.0% for the first nine months of 1996. Included in other expense for the nine months ended September 30, 1997, is a $323,000 loss from the Company's affiliate, Express. In the nine months ended September 30, 1996, the Company recorded $766,000 in losses from its two affiliates (Express and Mr. Payroll). Of the $766,000 loss, Express had a loss of $388,000 and Mr. Payroll had a loss of $378,000. Effective December 31, 1996, the Company acquired 100% ownership in Mr. Payroll, therefore, its 1997 operations are included in the Consolidated Financial Statements. The Company's consolidated effective income tax rate decreased to 37% in the nine months ended September 30, 1997, from 38% in the comparable period in 1996. The domestic effective tax rate decreased to 39%, in 1997, from 41% in 1996, due in part to a $114,000 foreign dividend tax credit received in the second quarter of 1997. The Company's effective tax rate for the foreign operations remained constant at 34% for 1997 and 1996, respectively. LIQUIDITY AND CAPITAL RESOURCES The Company's cash flow and liquidity, in management's opinion, remains strong. Cash and cash equivalents increased $2.5 million to $3.8 million at September 30, 1997, from $1.3 million at December 31, 1996. The increase in cash and cash equivalents in the first nine months of 1997, was due to cash flows from operating activities of $14.9 million, and borrowings of $20.1 million in the bank lines of credit, proceeds from issuance of stock of $1.6 million and payments of $.2 million on notes receivable from stockholders. The funds generated were used to fund $11.0 million of property and equipment purchases (of which $3.5 million was expended for the development of Mr. Payroll's automated check cashing system), to pay $4.3 million on current maturities of long term debt, to acquire ten new pawn units for $5.3 million, to purchase $1.3 million of the Company's stock in open market transactions, to increase pawn loans by $10.9 million, to extend advances to an affiliate of $.6 million and to pay cash dividends of $.9 million. The Company expects to continue its plan of adding approximately 2 to 4 new pawn units during the remainder of 1997, which would add approximately 25 units in 1997. These additions may occur through new openings or acquisitions of existing locations. The Company also intends to invest in its check cashing operations through its wholly owned subsidiary, Mr. Payroll. On January 22, 1997, the Company announced that its Board of Directors had authorized management to purchase up to one million shares of its common stock in the open market. During the first nine months of 1997, Page 14 17 119,900 shares of the Company's common stock were repurchased and are now held as treasury shares. Management believes that borrowings available under its revolving credit facilities, (described in note 3), cash generated from operations and current working capital of $184 million should be sufficient to meet the Company's anticipated future capital requirements. IMPACT OF FOREIGN CURRENCY EXCHANGE RATES The Company is subject to the risk of unexpected changes in foreign currency rates by virtue of its operations in the United Kingdom and Sweden. The Company's foreign assets, liabilities, and earnings are converted into U.S. dollars in accordance with generally accepted accounting principles for consolidation into the Company's financial statements. At September 30, 1997, the Company had recorded a cumulative reduction to stockholder's equity of $2.96 million as a result of fluctuations in foreign currency exchange rates. Future earnings and comparisons with prior periods reported by the Company may fluctuate depending on applicable currency exchange rates in effect during the periods. Page 15 18 DOMESTIC PAWN OPERATIONS The following table sets forth selected financial data for the Company's domestic pawn operations as of September 30, 1997 and 1996 and for the three months then ended.
1997 1996 Change ------- ------- ------- ($ in thousands) Finance and service charge revenues $21,460 $18,654 15% Proceeds from disposition of merchandise 42,110 39,975 5% ------- ------- ------- Total Revenues 63,570 58,629 8% Cost of disposed merchandise 26,686 25,159 6% ------- ------- ------- Net Revenues $36,884 $33,470 10% ------- ------- ------- Other Data: Annualized yield on loans 122% 124% (2)% Average loan balance per average location in operation $ 200 $ 181 10% Average pawn loan amount at end of period (not in thousands) $ 76 $ 72 6% Margin on disposition of merchandise 36.6% 37.1% (1)% Annualized merchandise turnover 2.1X 2.1X 0% Average merchandise held for disposition balance per average location $ 144 $ 148 (3)% Expenses as a percentage of net revenues: Operations and administration 73.5% 73.9% (1)% Depreciation and amortization 9.3% 11.1% (16)% Interest, net 6.5% 4.9% 33% Domestic Pawn Locations in Operation: Beginning of period 347 330 Acquired 3 1 Established 2 2 Combined -- -- ------- ------ ------- End of period 352 333 6% ======= ======= ======= Average number of locations in operation during the period (a) 349 331 5% ======= ======= =======
(a) Averages based on accumulation of month-end balances and dividing aggregate total by total months in the period. Page 16 19 DOMESTIC PAWN OPERATIONS The following table sets forth selected financial data for the Company's domestic pawn operations as of September 30, 1997 and 1996 and for the nine months then ended.
1997 1996 Change --------- --------- --------- ($ in thousands) Finance and service charge revenues $ 60,361 $ 51,630 17% Proceeds from disposition of merchandise 135,457 130,439 4% --------- --------- --------- Total Revenues 195,818 182,069 8% Cost of disposed merchandise 86,318 81,416 6% --------- --------- --------- Net Revenues $ 109,500 $ 100,653 9% --------- --------- --------- Other Data: Annualized yield on loans 125% 126% (1)% Average loan balance per average location in operation $ 189 $ 166 14% Average pawn loan amount at end of period (not in thousands) $ 76 $ 72 6% Margin on disposition of merchandise 36.3% 37.6% (3)% Annualized merchandise turnover 2.4X 2.1X 14% Average merchandise held for disposition balance per average location $ 141 $ 156 (10)% Expenses as a percentage of net revenues: Operations and administration 74.3% 74.1% 0% Depreciation and amortization 9.7% 11.1% (13)% Interest, net 6.2% 4.9% 27% Domestic Pawn Locations in Operation: Beginning of period 334 327 Acquired 9 2 Established 12 5 Combined (3) (1) --------- --------- --------- End of period 352 333 6% ========= ========= ========= Average number of locations in operation during the period (a) 342 330 4% ========= ========= =========
(a) Averages based on accumulation of month-end balances and dividing aggregate total by total months in the period. Page 17 20 FOREIGN PAWN OPERATIONS The following tables set forth selected consolidated financial data for Harvey & Thompson and Svensk Pantbelaning as of September 30, 1997, and 1996 and for the three and nine month periods then ended. Balance sheet data for Harvey & Thompson has been translated from pounds sterling into U.S. dollars using the end of the period currency exchange rate of $1.6150 at September 30, 1997 and $1.565 at September 30, 1996, per pounds sterling, respectively. Income statement data has been translated at an average exchange rate of $1.623 and $1.555 per pounds sterling for the three month periods ending September 30, 1997, and 1996, respectively. Balance sheet data for Svensk Pantbelaning has been translated from Swedish Kronor into U.S. dollars using the end of the period currency exchange rate of 7.569 SEK per U.S. dollar and 6.635 SEK per U.S. dollar at September 30, 1997 and 1996 respectively. Income statement data has been translated at an average exchange rate of 7.80 SEK per U.S. dollar and 6.631 SEK per U.S. dollar for the three months ended September 30, 1997, and 1996, respectively.
Three Months Ended September 30, 1997 1996 Change -------------- -------------- ------------ ($ in thousands) Income Statement Data: Total revenues $6,028 $6,045 0% Net revenues 5,717 5,825 (2)% Operating expenses 2,944 2,822 4% Income from operations 2,773 3,003 (8)% Other Data: Annualized yield on loans 51% 56% (9)% Average loan balance per average location in operation $901 $863 4% Average pawn loan amount at end of period (not in thousands) $173 $178 (3)% Ending loan balance $43,469 $41,420 5% Expenses as a percentage of net revenues: Operations and administration 45.8% 43.7% 5% Depreciation and amortization 5.7% 4.7% 21% Interest expense, net 10.2% 12.0% (15)% Average number of locations in operation during the period (a) 49 47 4%
(a) Averages based on accumulation of month-end balances and dividing aggregate total by total months in the period. Page 18 21 Income statement data for Harvey & Thompson for the nine months ended September 30 has been translated from British pounds sterling into U.S. dollars at an average exchange rate of $1.6316 per pound sterling for 1997, compared to $1.538 per pound sterling for 1996. Income statement data for Svensk Pantbelaning has been translated from Swedish Kronor into U.S. dollars at average exchange rates of 7.607 SEK per U.S. dollar for 1997, compared to 6.699 SEK per U.S. dollar for 1996.
Nine Months Ended September 30, 1997 1996 Change --------- --------- ------ ($ in thousands) Income Statement Data: Total revenues $18,357 $17,072 8% Net revenues 17,479 16,410 7% Operating expenses 8,942 8,289 8% Income from operations 8,537 8,121 5% Other Data: Annualized yield on loans 53% 56% (5)% Average loan balance per average location in operation $901 $829 9% Expenses as a percentage of net revenues: Operations and administration 45.7% 45.6% 0% Depreciation and amortization 5.5% 5.0% 10% Interest expense, net 9.9% 12.8% (23)% Average number of locations in operation during the period (a) 48 46 4%
(a) Averages based on accumulation of month-end balances and dividing aggregate total by total months in the period. CHECK CASHING OPERATIONS The following table sets forth selected financial data for the Company's check cashing operations for the three and nine months ended September 30, 1997.
Three Months Nine Months ------------ ---------- ($ in thousands) Total revenues $713 $2,074 Less cost of machines sold 177 177 --- --- Net revenues 536 1,897 Operating expenses 1,034 2,865 ----- ----- Loss from operations $(498) $(968) ====== ======
The third quarter of 1997 loss is slightly higher than the loss for the second quarter of 1997, due primarily to increased operating expenses. Page 19 22 During the first nine months of 1997, the Company invested $3.6 million in the development of Mr. Payroll's new automated check cashing system. Management anticipates that marketing, development and operating costs will result in future losses from check cashing operations until Mr. Payroll generates sufficient revenues from the sale and operation of the automated check cashing system. During the third quarter of 1997, Mr. Payroll started marketing and completed the sale of initial automated check cashing machines, which generated a small amount of revenue. CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS Certain portions of this report contain forward-looking statements about the business, financial condition and prospects of the Company. The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation, changes in demand for the Company's services, changes in competition, the ability of the Company to open new operating units in accordance with its plans, economic conditions, real estate market fluctuations, interest rate fluctuations, changes in the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company's business, and other risks indicated in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, and, in many cases, the Company cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this report, the words "believes," "estimates," "plans," "expects," "anticipates" and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. Page 20 23 PART II Item 1. LEGAL PROCEEDINGS See Note 5 of Notes to Consolidated Financial Statements Item 2. CHANGES IN SECURITIES On August 5, 1997, the Board of Directors announced a dividend of one common share purchase right payable to the holder of record of each share of the Company's common stock outstanding as of the close of business on August 19, 1997, pursuant to a Rights Agreement between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent. For a summary of the Rights, see the Company's Form 8-A for the registration of the Rights, as filed with the Securities and Exchange Commission on August 8, 1997. Item 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable Item 5. OTHER INFORMATION Not Applicable Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 Amendment to 1994 Long-Term Incentive Plan dated July 22, 1997 10.2 Amended and Restated Executive Employment Agreements between the Company and Messrs. Jack R. Daugherty and Daniel R. Feehan, each dated as of August 1, 1997 27 Financial Data Schedule (b) Reports on Form 8-k On August 8, 1997, the Company filed a Current Report on Form 8-K reporting the planned issuance of common share purchase rights to shareholders of record as of the close of business on August 19, 1997. Page 21 24 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CASH AMERICA INTERNATIONAL, INC. -------------------------------- (Registrant) BY: /S/ Thomas A. Bessant, Jr. ------------------------------ Thomas A. Bessant, Jr. Senior Vice President and Chief Financial Officer Date: November 13, 1997 Page 22 25 EXHIBIT INDEX
Exhibit Number Description - -------------- ----------- 10.1 Amendment to 1994 Long-Term Incentive Plan dated July 22, 1997 10.2 Amended and Restated Executive Employment Agreements between the Company and Messrs. Jack R. Daugherty and Daniel R. Feehan, each dated as of August 1, 1997 27 Financial Data Schedule
EX-10.1 2 AMENDMENT TO 1994 LONG-TERM INCENTIVE PLAN 1 EXHIBIT 10.1 AMENDMENT ONE TO THE CASH AMERICA INTERNATIONAL, INC. 1994 LONG-TERM INCENTIVE PLAN By action of the Board of Directors of Cash America International, Inc. this day, the Cash America International, Inc. 1994 Long-Term Incentive Plan (the "Plan") is hereby amended as follows: 1. Section 2 of Plan is amended by revising the definition of the term "Award" to read as follows: "Award" shall mean a grant or award under Section 6 through 12, inclusive, of the Plan, as evidenced in a written document delivered to a recipient of an Award as provided in Section 13(b). 2. Section 2 of the Plan is amended by adding the following definitions: "Outside Director" shall mean a member of the Board of Directors who is not an Employee of the Company or of any affiliate. "Stockholders Meeting" shall mean the annual meeting of stockholders of the Company in each year. 3. Section 10, paragraph (a), is amended by revising the reference to "Section 11(b)" to read: "Section 13(b)." 4. Section 11 of the Plan is amended so as to renumber it to "Section 13" and to revise paragraph (b) of such Section to read as follows: (b) Awards. Each Award hereunder shall be evidenced in writing, delivered to the Participant or Outside Director and shall specify the terms and conditions thereof and any rules applicable thereto, including but not limited to the effect on such Award of the death, retirement, or other termination of employment of the Participant or Outside Director and the effect thereon, if any, of a Change in Control of the Company. 5. A new Section 11 is added to the Plan to read as follows: Section 11. Outside Directors' Options. (a) Grant of Options. Each Outside Director who joins the Board of Directors after 1994 shall automatically be granted an Option to purchase 5,000 shares of the common stock of the Company, $.10 par value; and on the date of each Stockholders Meeting after the 1997 Stockholders Meeting, each Outside 2 Director shall automatically be granted an Option to purchase 2,500 shares of the common stock of the Company. All such options shall be Nonqualified Stock Options. The price at which each share of common stock covered by such Options may be purchased shall be one hundred percent (100%) of the Fair Market Value of the stock on the date the Option is granted. (b) Exercise of Options. Except as set forth in this Section 11, an Option granted to an Outside Director shall become exercisable one year after date the option is granted. Any Option that has been outstanding for more than six (6) months shall immediately become exercisable in the event of a Change in Control. The Option may be exercised by the Outside Director during the period that the Outside Director remains a member of the Board of Directors and for a period of five (5) years following retirement, provided that only those Options exercisable at the date of the Outside Director's retirement may be exercised during the period following retirement and, provided further, that in no event shall the Option be exercisable more than ten (10) years after the date of grant. Shares issued upon the exercise of Options granted under this Section 11 will be issued from the Company's treasury shares. In the event of the death of an Outside Director, the Option shall be exercisable only within the twelve (12) months next succeeding the date of death, and then only (i) by the executor or administrator of the Outside Director's estate, by the person or persons to whom the Outside Director's rights under the Option shall pass by the Outside Director's will or the laws of descent and distribution or, by the Outside Director's designated beneficiary, and (ii) if and to the extent that the Outside Director was entitled to exercise the Option at the date of the Outside Director's death, provided that in no event shall the Option be exercisable more than ten (10) years after the date of grant. (c) Payment. An Option granted to an Outside Director shall be exercisable only upon payment to the Company of the full exercise price of the shares with respect to which the Option is being exercised. Payment for the shares shall be in United States dollars, payable in cash or by check. 6. A new Section 12 is added to the Plan to read as follows: Section 12. Outside Directors' Shares. Outside Directors may elect, on an annual basis, to purchase shares of common stock of the Company from the Company in lieu of receiving all or part (in 10% increments) of their annual retainer, meeting fees and committee meeting fees in cash. The purchase price of such shares shall be the Fair Market Value of the stock for the last trading day of the month in which the retainer, meeting fees, and committee meeting fees are earned. Commencing January 1, 1998, the annual retainer, meeting fees and committee meeting fees payable to each Outside Director for service on the Board of Directors may, at the election of the Outside Director (the "Annual Election''), be payable to a trust in shares of common stock of the Company. The Annual Election: (i) shall be irrevocable in respect of the one-year period to which 2 3 it pertains (the "Plan Year") and shall specify the applicable percentage (in increments of 10%) of such annual retainer and meeting fees that such Outside Director wishes to direct to the trust; (ii) must be received in writing by the administrator of the Plan by the established enrollment deadline of any year in which this Plan is in effect in order to cause the next succeeding Plan Year's annual retainer and fees to be subject to the provisions of this Plan; and (iii) must specify whether the ultimate distribution of the shares of common stock to the Outside Directors will be paid, following the Outside Director's death or termination of Board service, in a lump sum or in equal annual payments over a period of two to twenty years. The shares shall be purchased from the Company at the Fair Market Value of the stock for the last trading day of the month in which the fees are earned and shall be credited by the trustee to the account of the Outside Director. The certificates for common stock shall be issued in the name of the trustee of the trust and shall be held by such trustee in trust for the benefit of the Outside Directors; provided, however, that each Outside Director shall be entitled to vote the shares. The trustee shall retain all dividends (which shall be reinvested in shares of common stock) and other distributions paid or made with respect thereto in the trust. The shares credited to the account of an Outside Director shall remain subject to the claims of the Company's creditors, and the interests of the Outside Director in the trust may not be sold, hypothecated or transferred (including, without limitation, transferred by gift or donation) while such shares are held in the trust. If the Outside Director elects to receive a lump sum distribution, the trustee of the trust shall distribute such shares of common stock free of restrictions within 60 days after the Outside Director's termination date or a later date elected by the Outside Director (no later than the mandatory retirement age of the Outside Director). If the Outside Director elects to receive a lump sum distribution, the Outside Director may, by delivering notice in writing to the administrator of the Plan no later than December 31 of the year prior to the year in which the Outside Director terminates service as a Director, elect to receive any portion or all of the common stock in the form of cash determined by reference to the Fair Market Value of the common stock as of the termination date. Any such notice to the administrator must specify whether the distribution will be entirely in cash or whether the distribution will be in a combination of common stock and cash (in which case the applicable percentage must be specified). In the case of termination of the Outside Director's service as a result of his death, payment of the Outside Director's account shall be in shares of common stock and not in cash. If an Outside Director elects to receive payments in installments, the distribution will commence within 60 days after the Outside Director's termination date and will be made in shares of common stock and not in cash. Notwithstanding anything to the contrary contained herein, any fractional shares of common stock shall be distributed in cash to the Outside Director. CASH AMERICA INTERNATIONAL, INC. By: /s/ HUGH A. SIMPSON ---------------------------- Hugh A. Simpson, Senior Vice President, General Counsel and Secretary July 22, 1997 3 EX-10.2 3 AMENDED/RESTATED EXECUTIVE EMPLOYMENT AGREEMENTS 1 EXHIBIT 10.2 AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT THIS AGREEMENT, dated as of August 1, 1997, is made and entered into by and between CASH AMERICA INTERNATIONAL, INC., a Texas corporation, having an office at 1600 W. Seventh Street, Fort Worth, Texas 76102 and JACK R. DAUGHERTY, an executive employee of Employer (hereinafter referred to as "Executive"). WHEREAS, Executive is employed by Cash America Management L.P. (together with its parent corporation Cash America International, Inc., hereinafter referred to collectively as "Employer") in an executive capacity; WHEREAS, Employer and Executive entered into that certain Executive Employment Agreement dated as of April 25, 1990 (the "Original Agreement"); and WHEREAS, the parties desire to amend and restate the Original Agreement so as to provide for the terms and conditions set forth in this Agreement, and Executive has agreed to continue as an employee of Employer pursuant to the terms of this Agreement; and WHEREAS, Employer desires that the Executive continue as an employee of Employer to provide the necessary leadership and senior management skills that are important to the success of Employer. Employer believes that retaining the Executive's services as an employee of Employer and the benefits of his business experience are of material importance to Employer and Employer's shareholders. NOW, THEREFORE, in consideration of Executive's continued employment by Employer and the mutual promises and covenants contained herein, the receipt and sufficiency of which consideration is hereby acknowledged, Employer and Executive intend by this Agreement to specify the terms and conditions of Executive's employment relationship with Employer and the post- employment obligations of Executive. 1. General Duties of Employer and Employee: 1.1. Employer agrees to employ Executive and Executive agrees to accept employment by Employer and to serve Employer in an executive capacity upon the terms and conditions set forth herein. The duties and responsibilities of Executive shall include those described for the particular position held by Executive while employed hereunder in the By-laws of Employer or other documents of Employer, and shall also include such other or additional duties as may from time-to-time be assigned to Executive by the Board of Directors of Employer or any duly authorized committee thereof or an authorized officer of Employer. The executive capacity that Executive shall hold during the term hereof shall be that position as determined by the Board of Directors, or any duly authorized committee thereof, from time to time in its sole discretion. While employed hereunder, the initial position that Executive shall hold (until such time as such position may be changed as aforesaid) shall be the position of Chairman of the Board of Directors and Chief Executive Officer. 2 1.2. While employed hereunder, Executive shall obey the lawful directions of the Board of Directors of Employer, or any duly authorized committee thereof, or authorized officers of Employer and shall use his best efforts to promote the interests of Employer and to maintain and to promote the reputation thereof. While employed hereunder, Executive shall devote his time, efforts, skills and attention to the affairs of Employer in order that he shall faithfully perform his duties and obligations hereunder and such as may be assigned to or vested in him by the Board of Directors of Employer, or any duly authorized committee thereof, or any duly authorized officer of Employer. The parties agree that during the term of this Agreement, Executive shall be based in Fort Worth, Texas and may only be reassigned to another location that is mutually acceptable to Employer and Executive. 1.3. During the term of this Agreement, Executive may from time to time engage in any businesses or activities that do not compete directly and materially with Employer and any of its subsidiaries, provided that such businesses or activities do not materially interfere with his performance of the duties assigned to him in compliance with this Agreement by the Board of Directors of Employer or any duly authorized committee thereof or an authorized officer of Employer. In any event, Executive is permitted to (i) invest his personal assets as a passive investor in such form or manner as will not contravene the best interests of Employer and (ii) participate in various charitable efforts. 2. Compensation and Benefits: 2.1. As Compensation for services to Employer, Employer shall pay to Executive during the term of this Agreement a salary at an annual rate to be fixed from time-to-time by the Board of Directors of Employer or any duly authorized committee thereof, which annual rate shall in no event be less than $386,000 per annum while Executive is employed hereunder. The salary shall be payable in equal bi-weekly installments, subject only to such payroll and withholding deductions as may be required by law and other deductions applied generally to employees of Employer for insurance and other employee benefit plans. The Board of Directors or any authorized committee or officer of Employer shall review Executive's overall annual Compensation at least annually, with a view to ascertaining the adequacy thereof and such Compensation may be increased by the Board of Directors from time to time by an amount that in the opinion of the Board of Directors is justified by Executive's performance. 2.2. Upon Executive's furnishing to Employer customary and reasonable documentary support (such as receipts or paid bills) evidencing costs and expenses incurred by him in the performance of his services and duties hereunder (including, without limitation, travel and entertainment expenses) and containing sufficient information to establish the amount, date, place and essential character of the expenditure, Executive shall be reimbursed for such costs and expenses in accordance with Employer's normal expense reimbursement policy. Executive shall be entitled to participate in all insurance, stock option and other stock programs and compensation plans and such other benefits plans or programs as may be from time-to-time specifically adopted and approved by Employer for Executive. 2.3. As long as this Agreement is in effect, Employer shall maintain hospitalization and medical insurance coverage on Executive as may from time to time be specifically approved and adopted by Employer for its executive officers generally. In addition, Employer agrees to provide and maintain life insurance coverage on the life of Executive in the face amount of $2,000,000, with proceeds thereunder 2 3 payable one-half to such beneficiaries as Executive may designate and one-half to Employer, and Employer agrees to pay all premiums on such policy. Coverage shall continue throughout the employment term hereof. Such coverage may consist of term, group term, whole life, or any other form of coverage, and with such insurers as Employer may select. 2.4. While Executive is employed hereunder, Employer agrees to provide an allowance to Executive of $5,000 per annum for costs and expenses incurred by Executive for professional legal and/or accounting services rendered personally to Executive, which amount shall be paid to Executive on December 1 of each year (or such earlier time that Executive and Employer may otherwise agree). 2.5. Executive shall be eligible to receive cash bonuses or other incentive compensation as may be determined by the Board of Directors of Employer from time to time. As long as this Agreement is in effect, Employer shall maintain an Executive Compensation Program, and Executive shall be eligible to participate therein, all in accordance with Employer's regular practices with its senior officers. 2.6. In order to promote the interests of Employer, Executive shall be entitled to reimbursement from Employer for, or an allowance in respect of, the initiation fees and all annual dues incurred by him in connection with his membership in such luncheon clubs as may be agreed upon by Employer. 2.7. Executive shall have the right to participate in any additional compensation, benefit, life insurance, hospitalization, medical services or other plan or arrangement of Employer now or hereafter existing for the benefit of executives of Employer. 2.8. Executive shall be entitled to such vacation (in no event less than four weeks per year), holiday, and (subject to the provisions of Section 6.3 hereof) other paid or unpaid leave of absence as consistent with Employer's normal policies or as otherwise approved by the Board of Directors. 3. Preservation of Business: Fiduciary Responsibility: Executive shall use his best efforts to preserve the business and organization of Employer, to keep available to Employer the services of present employees and to preserve the business relations of Employer with suppliers, distributors, customers and others. The Executive shall not commit any act, or in any way assist others to commit any act, that would injure Employer. So long as the Executive is employed by Employer, Executive shall observe and fulfill proper standards of fiduciary responsibility attendant upon his service and office. 4. Executive's Obligation to Refrain From Using or Disclosing Information: 4.1. As part of Executive's fiduciary duties to Employer, Executive agrees, both during the term of this Agreement and thereafter, to protect, preserve the confidentiality of and safeguard Employer's secret or confidential information, knowledge, ideas, concepts, improvements, discoveries and inventions, and, except as may be expressly required by Employer or by court order or other legal process, Executive shall not, either during his employment by Employer or thereafter, directly or 3 4 indirectly, use for his own benefit or for the benefit of another, or disclose to another, any of such information, ideas, concepts, improvements, discoveries or inventions. 4.2. Upon termination of his employment with Employer, or at any other time upon request, Executive shall immediately deliver to Employer all documents embodying any of Employer's secret or confidential information, ideas, concepts, improvements, discoveries and inventions. 5. Initial Term: Extensions of the Term: 5.1. The initial term of this Agreement shall commence on the effective date hereof and shall end on July 31, 2002. 5.2. The Executive Compensation Committee of Employer's Board of Directors may extend the term of this Agreement for additional successive one-year renewal terms commencing August 1, 2002 by notifying Executive in writing, at least sixty (60) days prior to the expiration of the then current term, of its intention to extend this Agreement. 6. Termination other than by Expiration of the Term: Employer or Executive may terminate Executive's employment under this Agreement at any time, but only on the following terms: 6.1. Executive may terminate his employment under this Agreement at any time upon at least sixty (60) days' prior written notice to Employer. 6.2. Employer may terminate Executive's employment under this Agreement at any time, without prior notice, for "due cause" upon the good faith determination by the Board of Directors of Employer that "due cause" exists for the termination of the employment relationship. As used herein, the term "due cause" shall mean any of the following events: (i) any intentional and material misapplication by Executive of Employer's funds, or any other material act of dishonesty committed by Executive; or (ii) Executive's conviction of a felony involving moral turpitude; or (iii) Executive's unlawful use or possession of any controlled substance or abuse of alcoholic beverages; or (iv) Executive's material breach, nonperformance or nonobservance of any of the terms of this Agreement if such breach, nonperformance or nonobservance shall continue beyond a period of thirty (30) days immediately after notice thereof by Employer to Executive; or (v) any other action by the Executive involving willful and material malfeasance or gross negligence in the performance of Executive's duties. 4 5 6.3. In the event Executive is incapacitated by accident, sickness or otherwise so as to render Executive mentally or physically incapable of performing the services required under Section 1 of this Agreement for a period of one hundred eighty (180) consecutive business days, and such incapacity is confirmed by the written opinion of two (2) practicing medical doctors licensed by and in good standing in the state in which they maintain offices for the practice of medicine, upon the expiration of such period or at any time reasonably thereafter, or in the event of Executive's death, Employer may terminate Executive's employment under this Agreement upon giving Executive or his legal representative written notice at least thirty (30) days' prior to the termination date. Executive agrees, after written notice by the Board of Directors of Employer or a duly authorized committee or officer of Employer, to submit to examinations by such practicing medical doctors selected by the Board of Directors of Employer or a duly authorized committee or officer of Employer. 6.4. Employer may terminate Executive's employment under this Agreement at any time for any reason whatsoever, even without "due cause," by giving a written notice of termination to Executive, in which case the employment relationship shall terminate immediately upon the giving of such notice. 7. Effect of Termination: 7.1. In the event the employment relationship is terminated (a) by Executive upon sixty (60) days' written notice pursuant to Section 6.1 hereof, (b) by Employer for "due cause" pursuant to Section 6.2 hereof, or (c) by Executive breaching this Agreement by refusing to continue his employment and failing to give the requisite sixty (60) days' written notice, all Compensation and benefits shall cease as of the date of termination other than: (i) those benefits that are provided by retirement and benefit plans and programs specifically adopted and approved by Employer for Executive that are earned and vested by the date of termination, and (ii) Executive's pro rata annual salary plus all earned and vested bonuses through the date of termination. Executive's right to exercise stock options and Executive's rights in other stock plans, if any, shall remain governed by the terms and conditions of the appropriate stock plan. 7.2. If Executive's employment relationship is terminated pursuant to Section 6.3 hereof due to Executive's incapacity or death, Executive (or, in the event of Executive's death, Executive's legal representative) will be entitled to those benefits that are provided by retirement and benefits plans and programs specifically adopted and approved by Employer for Executive that are earned and vested at the date of termination and, even though no longer employed by Employer, shall continue to receive the salary Compensation (payable in the manner as prescribed in the second sentence of Section 2.1) for one (1) year following the date of termination. Executive (or, in the event of Executive's death, Executive's legal representative) shall not, however, be entitled to any bonuses not yet paid at the date of the termination of employment. Executive's right to exercise stock options and Executive's rights in other stock plans, if any, shall remain governed by the terms and conditions of the appropriate stock plan. 7.3. If Employer (i) allows the initial term or any renewal term of this Agreement to expire without further extending this Agreement pursuant to Section 5.2, (ii) terminates the employment of Executive other than pursuant to Section 6.2 hereof for "due cause" or other than for a disability or death 5 6 pursuant to Section 6.3 hereof, (iii) demotes the Executive to a nonexecutive position, or (iv) decreases the Executive's salary below the level or reduces the employee benefits and perquisites below the level provided for by the terms of Section 2 hereof, other than as a result of any amendment or termination of any employee and/or executive benefit plan or arrangement, which amendment or termination is applicable to all executives of Employer, then such action by Employer, unless consented to in writing by Executive, shall be deemed to be a constructive termination by Employer of Executive's employment (a "Constructive Termination"). In the event of a Constructive Termination, Executive shall be entitled to receive, in a lump sum within thirty (30) days after the date of the Constructive Termination, an amount equal to the remainder of Executive's current year's salary. In such event, Executive shall also be entitled to receive an amount equal to Executive's salary, at the rate in effect immediately prior to the event giving rise to the Constructive Termination, for a period equal to the greater of three (3) years or the remainder of the initial term under Section 5.1, with such amount payable in thirty-six (36) equal monthly installments on the first day of each month beginning with the month after the Constructive Termination; provided, however, that Employer's obligation to pay such monthly installments shall be expressly conditioned on Executive's continuing compliance with the non-competition requirements of Section 9.1. For purposes of this Section 7.3, the term "salary" shall mean the sum of (i) the annual rate of Compensation provided to Executive under Section 2.1 hereof immediately prior to the event giving rise to the Constructive Termination, plus (ii) the average annual cash bonuses or other cash incentive Compensation paid to Executive by Employer under Section 2.5 hereof for the three years in the three year period immediately preceding the year in which there shall occur a Constructive Termination. In the event of such Constructive Termination, all other rights and benefits Executive may have under the employee and/or executive benefit plans and arrangements of Employer generally shall be determined in accordance with the terms and conditions of such plans and arrangements. 8. Change of Control: 8.1. Notwithstanding anything to the contrary otherwise provided in this Agreement, if a "change of control" (as defined below) of Employer occurs and within twelve (12) months from the date of such "change of control", Executive voluntarily terminates the employment relationship under this Agreement by giving sixty (60) days' written notice to Employer under Section 6.1 hereof, or Employer allows the initial term or any renewal term of this Agreement to expire within such twelve (12) month period by not extending this Agreement pursuant to Section 5.2 or terminates Employee's employment relationship without "due cause" pursuant to Section 6.4, then Executive, even though no longer employed by Employer, shall be entitled to earned and vested bonuses at the date of termination plus a payment in the amount of the remainder of Executive's current year's salary (undiscounted) plus the present value (employing an interest rate of 8%) of five additional years'salary, based on the salary in effect immediately prior to the "change of control", payable at the option of the Executive either in a lump sum within 30 days after the date of termination or in four payments as follows: one-fourth of the total amount payable within 30 days after the date of termination and one-third of the remainder payable together with interest at the rate of 8% per annum on each of the first three anniversary dates of the date of termination. For purposes of this Section 8.1, the term "salary" shall mean the sum of (i) the annual rate of Compensation provided to Executive under Section 2.1 hereof immediately prior to the "change of control," plus (ii) the average annual cash bonuses or other 6 7 cash incentive Compensation paid to Executive by Employer under Section 2.5 hereof for the three years in the three year period immediately preceding the year in which there shall occur a "change of control" (or, if the "change of control" shall occur in 1991 or prior thereto, for the two years in the two year period immediately preceding the year in which there shall occur a "change of control"). Executive's right to exercise stock options and Employee's rights in other stock plans, if any, shall remain governed by the terms and conditions of the appropriate stock plan. "Change of control" shall be deemed to have occurred if (i) any "person" (as such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), becomes the beneficial owner, directly or indirectly, of securities of Employer representing 30% or more of the combined voting power of Employer's then outstanding securities, (ii) during any period of 12 months, individuals who at the beginning of such period constitute the Board of Directors of Employer cease for any reason to constitute a majority thereof unless the election, or the nomination for election by Employer's stockholders of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period or (iii) a person (as defined in clause (i) above) acquires (or, during the 12-month period ending on the date of the most recent acquisition by such person or group of persons, has acquired) gross assets of Employer that have an aggregate fair market value greater than or equal to over 50% of the fair market value of all of the gross assets of Employer immediately prior to such acquisition or acquisitions. 8.2. Notwithstanding any other provision of this Agreement, if (a) there is a change in the ownership or effective control of Employer or in the ownership of a substantial portion of the assets of Employer [within the meaning of Section 280G(b)(2)(A) of the Internal Revenue Code (the "Code")], and (b) the payments otherwise to be made pursuant to Section 8.1 and any other payments or benefits otherwise to be paid to Executive in the nature of Compensation to be received by or for the benefit of Employee and contingent upon such event (the "Termination Payments") would create an "excess parachute payment" within the meaning of Section 280G of the Code, then Employer shall make the Termination Payments in substantially equal installments, the first installment being due within thirty days after the date of termination and each subsequent installment being due on January 31 of each year, such that the aggregate present value of all Termination Payments, whether pursuant to this Agreement or otherwise, will be as close as possible to, but not exceed, 299% of the Executive's base amount, within the meaning of Section 280G. 9. Executive's Non-Competition Obligation: 9.1. Executive acknowledges and agrees that he serves in a special capacity for Employer pursuant to which he has acquired unique knowledge of the operations and business of Employer and, as such, is not engaged in a common calling. During the existence of Executive's employment by Employer hereunder and, if the employment of Executive is terminated by Employer for any reason pursuant to Section 6.2 or Executive voluntarily terminates his employment pursuant to Section 6.1 (unless such voluntary termination occurs within twelve months after a "change of control," as defined in Section 8.1), for a period of three (3) years from the date on which he shall cease to be employed by Employer, Executive shall not, acting alone or in conjunction with others, directly or indirectly, and whether as principal, agent, officer, director, partner, employee, consultant, broker, dealer or otherwise, in any of the Business Territories (as defined below), engage in any business in competition with the business 7 8 conducted by Employer or any subsidiary of Employer, whether for his own account or otherwise, or solicit, canvass or accept any business or transaction for or from any other company or business in competition with such business of Employer in any of the Business Territories. For purposes hereof, the term "Business Territories" means the geographical regions within the geographic borders of each State in which Employer is doing business during the term of this Agreement and (and, in the case of post-employment non-competition obligations) at the date of the termination of Executive's employment with Employer and any State in which Employer had reasonable prospects of engaging in business during the three-year noncompetition period following termination of employment. 9.2. It is the desire and intent of the parties that the provisions of Section 9.1 shall be enforced to the fullest extent permissible under the laws and public policies of the State of Texas. Accordingly, if any particular portion of Section 9.1 shall be adjudicated to be invalid or unenforceable, Section 9.1 shall be deemed amended to (i) reform the particular portion to provide for such maximum restrictions as will be valid and enforceable, or if that is not possible, then (ii) delete therefrom the portion thus adjudicated to be invalid or unenforceable. The parties acknowledge and agree that if Executive shall enter into any license or franchise agreement or comparable arrangement with Employer or any subsidiary or affiliate of Employer for the operation of a business also conducted by Employer or such subsidiary or affiliate, Executive shall not be deemed to be "engage[d] in any business in competition with the business conducted by Employer or any subsidiary of Employer" for purposes of Section 9.1., provided Executive has first obtained the approval of the Executive Compensation Committee of Employer's Board of Directors. 10. Obligations to Refrain From Competing Unfairly: 10.1. In addition to the other obligations agreed to by Executive in this Agreement, Executive agrees that during his employment with Employer and following the termination of his employment by Employer he shall not at any time, directly or indirectly, (a) induce, entice, or solicit any employee of Employer to leave his employment, or (b) contact, communicate or solicit any customer of Employer derived from any customer list, customer lead, mail, printed matter or other information secured from Employer or its present or past employees, or (c) in any other manner use any customer lists or customer leads, mail, telephone numbers, printed material or material of Employer relating thereto. Notwithstanding the above, the parties acknowledge and agree that if Executive shall enter into any license or franchise agreement or comparable arrangement with Employer or any subsidiary or affiliate of Employer for the operation of a business also conducted by Employer or such subsidiary or affiliate, then Executive's operation of such business in the ordinary course shall not be deemed to be a violation of the restrictions in clauses (b) and (c) of the preceding sentence, provided Executive has first obtained the approval of the Executive Compensation Committee of Employer's Board of Directors. 11. Miscellaneous: 11.1. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when mailed by registered mail or certified mail, return receipt requested, as follows (provided that notice of change of address shall be deemed given only when received): 8 9 If to Employer, to: Cash America International, Inc. 1600 West 7th Street Fort Worth, Texas 76102 Attention: President If to Executive, to: Jack R. Daugherty 1600 West 7th Street Fort Worth, Texas 76102 or to such other names or addresses as Employer or Executive, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section 11.1. 11.2. This Agreement shall be binding upon and inure to the benefit of Employer, its successors, legal representatives and assigns, and upon Executive, his heirs, executors, administrators, representatives and assigns. It is specifically agreed that upon the occurrence of any of the events specified in Section 8.1, the provisions of this Employment Agreement shall be binding upon and inure to the benefit of and be assumed by the surviving or resulting corporation or the corporation to which such assets shall be transferred. Executive agrees that his rights and obligations hereunder are personal to him and may not be assigned without the express written consent of Employer. 11.3. This Agreement replaces and merges all previous agreements and discussions relating to the same or similar subject matters between Executive and Employer with respect to the subject matter of this Agreement. Without limiting the generality of the foregoing, this Agreement replaces and merges all provisions of the 1989 Key Employee Stock Option Plan of Employer contained in the second paragraph of Section 7(a), the last sentence of Section 7(d) and Section 7(e) regarding the payment of amounts upon the termination of Executive's employment or upon the occurrence of a "change in control" of Employer, and the comparable provisions of any Option Agreements issued thereunder, it being intended that this Agreement shall govern in all respects with respect to the subject matter thereof. This Agreement may not be modified in any respect by any verbal statement, representation or agreement made by any employee, officer, or representative of Employer or by any written agreement unless signed by an officer of Employer who is expressly authorized by Employer to execute such document. 11.4. (a) If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application. (b) Without intending to limit the remedies available to Employer, it is mutually understood and agreed that Executive's services are of a special, unique, unusual, extraordinary and intellectual character giving them a peculiar value, the loss of which cannot be reasonably or adequately 9 10 compensated in damages in an action at law, and, therefore, in the event of a breach by Executive, Employer shall be entitled to equitable relief by way of injunction or otherwise. (c) Executive acknowledges that Sections 4, 9 and 10 are expressly for the benefit of Employer, that Employer would be irreparably injured by a violation of Sections 4, 9 and/or 10 and that Employer would have no adequate remedy at law in the event of such violation. Therefore, Executive acknowledges and agrees that injunctive relief, specific performance or any other appropriate equitable remedy (without any bond or other security being required) are appropriate remedies to enforce compliance by Employer with Section 4, Section 9 and Section 10. 11.5. Executive acknowledges that, from time to time, Employer may establish, maintain and distribute employee manuals or handbooks or personnel policy manuals, and officers or other representatives of Employer may make written or oral statements relating to personnel policies and procedures. Such manuals, handbooks and statements are intended only for general guidance. No policies, procedures or statements of any nature by or on behalf of Employer (whether written or oral, and whether or not contained in any employee manual or handbook or personnel policy manual), and no acts or practices of any nature shall be construed to modify this Agreement or to create express or implied obligations of any nature to Executive. 11.6. The laws of the State of Texas will govern the interpretation, validity and effect of this Agreement without regard to the place of execution or the place for performance thereof, and Employer and Executive agree that the state and federal courts situated in Tarrant County, Texas shall have personal jurisdiction over Employer and Executive to hear all disputes arising under this Agreement. This Agreement is to be at least partially performed in Tarrant County, Texas, and, as such, Employer and Executive agree that venue shall be proper with the state or federal courts in Tarrant County, Texas to hear such disputes. In the event either Employer or Executive is not able to effect service of process upon the other with respect to such disputes, Employer and Executive expressly agree that the Secretary of State for the State of Texas shall be an agent of Employer and/or the Executive to receive service of process on behalf of Employer and/or the Executive with respect to such disputes. 12. Additional Instruments: Executive and Employer shall execute and deliver any and all additional instruments and agreements that may be necessary or proper to carry out the purposes of this Agreement. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first written above. CASH AMERICA INTERNATIONAL, INC. EXECUTIVE By: /s/ DANIEL R. FEEHAN, President /S/ JACK R. DAUGHERTY ------------------------------- ------------------------------ Signature and Title Jack R. Daugherty 10 11 AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT THIS AGREEMENT, dated as of August 1, 1997, is made and entered into by and between CASH AMERICA INTERNATIONAL, INC., a Texas corporation, having an office at 1600 W. Seventh Street, Fort Worth, Texas 76102 and DANIEL R. FEEHAN, an executive employee of Employer (hereinafter referred to as "Executive"). WHEREAS, Executive is employed by Cash America Management L.P. (together with its parent corporation Cash America International, Inc., hereinafter referred to collectively as "Employer") in an executive capacity; WHEREAS, Employer and Executive entered into that certain Executive Employment Agreement dated as of April 25, 1990 (the "Original Agreement"); and WHEREAS, the parties desire to amend and restate the Original Agreement so as to provide for the terms and conditions set forth in this Agreement, and Executive has agreed to continue as an employee of Employer pursuant to the terms of this Agreement; and WHEREAS, Employer desires that the Executive continue as an employee of Employer to provide the necessary leadership and senior management skills that are important to the success of Employer. Employer believes that retaining the Executive's services as an employee of Employer and the benefits of his business experience are of material importance to Employer and Employer's shareholders. NOW, THEREFORE, in consideration of Executive's continued employment by Employer and the mutual promises and covenants contained herein, the receipt and sufficiency of which consideration is hereby acknowledged, Employer and Executive intend by this Agreement to specify the terms and conditions of Executive's employment relationship with Employer and the post- employment obligations of Executive. 1. General Duties of Employer and Employee: 1.1. Employer agrees to employ Executive and Executive agrees to accept employment by Employer and to serve Employer in an executive capacity upon the terms and conditions set forth herein. The duties and responsibilities of Executive shall include those described for the particular position held by Executive while employed hereunder in the By-laws of Employer or other documents of Employer, and shall also include such other or additional duties as may from time-to-time be assigned to Executive by the Board of Directors of Employer or any duly authorized committee thereof or an authorized officer of Employer. The executive capacity that Executive shall hold during the term hereof shall be that position as determined by the Board of Directors, or any duly authorized committee thereof, from time to time in its sole discretion. While employed hereunder, the initial position that Executive shall hold (until such time as such position may be changed as aforesaid) shall be the position of President and Chief Operating Officer. 12 1.2. While employed hereunder, Executive shall obey the lawful directions of the Board of Directors of Employer, or any duly authorized committee thereof, or authorized officers of Employer and shall use his best efforts to promote the interests of Employer and to maintain and to promote the reputation thereof. While employed hereunder, Executive shall devote his time, efforts, skills and attention to the affairs of Employer in order that he shall faithfully perform his duties and obligations hereunder and such as may be assigned to or vested in him by the Board of Directors of Employer, or any duly authorized committee thereof, or any duly authorized officer of Employer. The parties agree that during the term of this Agreement, Executive shall be based in Fort Worth, Texas and may only be reassigned to another location that is mutually acceptable to Employer and Executive. 1.3. During the term of this Agreement, Executive may from time to time engage in any businesses or activities that do not compete directly and materially with Employer and any of its subsidiaries, provided that such businesses or activities do not materially interfere with his performance of the duties assigned to him in compliance with this Agreement by the Board of Directors of Employer or any duly authorized committee thereof or an authorized officer of Employer. In any event, Executive is permitted to (i) invest his personal assets as a passive investor in such form or manner as will not contravene the best interests of Employer and (ii) participate in various charitable efforts. 2. Compensation and Benefits: 2.1. As Compensation for services to Employer, Employer shall pay to Executive during the term of this Agreement a salary at an annual rate to be fixed from time-to-time by the Board of Directors of Employer or any duly authorized committee thereof, which annual rate shall in no event be less than $386,000 per annum while Executive is employed hereunder. The salary shall be payable in equal bi-weekly installments, subject only to such payroll and withholding deductions as may be required by law and other deductions applied generally to employees of Employer for insurance and other employee benefit plans. The Board of Directors or any authorized committee or officer of Employer shall review Executive's overall annual Compensation at least annually, with a view to ascertaining the adequacy thereof and such Compensation may be increased by the Board of Directors from time to time by an amount that in the opinion of the Board of Directors is justified by Executive's performance. 2.2. Upon Executive's furnishing to Employer customary and reasonable documentary support (such as receipts or paid bills) evidencing costs and expenses incurred by him in the performance of his services and duties hereunder (including, without limitation, travel and entertainment expenses) and containing sufficient information to establish the amount, date, place and essential character of the expenditure, Executive shall be reimbursed for such costs and expenses in accordance with Employer's normal expense reimbursement policy. Executive shall be entitled to participate in all insurance, stock option and other stock programs and compensation plans and such other benefits plans or programs as may be from time-to-time specifically adopted and approved by Employer for Executive. 2.3. As long as this Agreement is in effect, Employer shall maintain hospitalization and medical insurance coverage on Executive as may from time to time be specifically approved and adopted by Employer for its executive officers generally. In addition, Employer agrees to provide and maintain life insurance coverage on the life of Executive in the face amount of $2,000,000, with proceeds thereunder 2 13 payable one-half to such beneficiaries as Executive may designate and one-half to Employer, and Employer agrees to pay all premiums on such policy. Coverage shall continue throughout the employment term hereof. Such coverage may consist of term, group term, whole life, or any other form of coverage, and with such insurers as Employer may select. 2.4. While Executive is employed hereunder, Employer agrees to provide an allowance to Executive of $5,000 per annum for costs and expenses incurred by Executive for professional legal and/or accounting services rendered personally to Executive, which amount shall be paid to Executive on December 1 of each year (or such earlier time that Executive and Employer may otherwise agree). 2.5. Executive shall be eligible to receive cash bonuses or other incentive compensation as may be determined by the Board of Directors of Employer from time to time. As long as this Agreement is in effect, Employer shall maintain an Executive Compensation Program, and Executive shall be eligible to participate therein, all in accordance with Employer's regular practices with its senior officers. 2.6. In order to promote the interests of Employer, Executive shall be entitled to reimbursement from Employer for, or an allowance in respect of, the initiation fees and all annual dues incurred by him in connection with his membership in such luncheon clubs as may be agreed upon by Employer. 2.7. Executive shall have the right to participate in any additional compensation, benefit, life insurance, hospitalization, medical services or other plan or arrangement of Employer now or hereafter existing for the benefit of executives of Employer. 2.8. Executive shall be entitled to such vacation (in no event less than four weeks per year), holiday, and (subject to the provisions of Section 6.3 hereof) other paid or unpaid leave of absence as consistent with Employer's normal policies or as otherwise approved by the Board of Directors. 3. Preservation of Business: Fiduciary Responsibility: Executive shall use his best efforts to preserve the business and organization of Employer, to keep available to Employer the services of present employees and to preserve the business relations of Employer with suppliers, distributors, customers and others. The Executive shall not commit any act, or in any way assist others to commit any act, that would injure Employer. So long as the Executive is employed by Employer, Executive shall observe and fulfill proper standards of fiduciary responsibility attendant upon his service and office. 4. Executive's Obligation to Refrain From Using or Disclosing Information: 4.1. As part of Executive's fiduciary duties to Employer, Executive agrees, both during the term of this Agreement and thereafter, to protect, preserve the confidentiality of and safeguard Employer's secret or confidential information, knowledge, ideas, concepts, improvements, discoveries and inventions, and, except as may be expressly required by Employer or by court order or other legal process, Executive shall not, either during his employment by Employer or thereafter, directly or 3 14 indirectly, use for his own benefit or for the benefit of another, or disclose to another, any of such information, ideas, concepts, improvements, discoveries or inventions. 4.2. Upon termination of his employment with Employer, or at any other time upon request, Executive shall immediately deliver to Employer all documents embodying any of Employer's secret or confidential information, ideas, concepts, improvements, discoveries and inventions. 5. Initial Term: Extensions of the Term: 5.1. The initial term of this Agreement shall commence on the effective date hereof and shall end on July 31, 2002. 5.2. The Executive Compensation Committee of Employer's Board of Directors may extend the term of this Agreement for additional successive one-year renewal terms commencing August 1, 2002 by notifying Executive in writing, at least sixty (60) days prior to the expiration of the then current term, of its intention to extend this Agreement. 6. Termination other than by Expiration of the Term: Employer or Executive may terminate Executive's employment under this Agreement at any time, but only on the following terms: 6.1. Executive may terminate his employment under this Agreement at any time upon at least sixty (60) days' prior written notice to Employer. 6.2. Employer may terminate Executive's employment under this Agreement at any time, without prior notice, for "due cause" upon the good faith determination by the Board of Directors of Employer that "due cause" exists for the termination of the employment relationship. As used herein, the term "due cause" shall mean any of the following events: (i) any intentional and material misapplication by Executive of Employer's funds, or any other material act of dishonesty committed by Executive; or (ii) Executive's conviction of a felony involving moral turpitude; or (iii) Executive's unlawful use or possession of any controlled substance or abuse of alcoholic beverages; or (iv) Executive's material breach, nonperformance or nonobservance of any of the terms of this Agreement if such breach, nonperformance or nonobservance shall continue beyond a period of thirty (30) days immediately after notice thereof by Employer to Executive; or (v) any other action by the Executive involving willful and material malfeasance or gross negligence in the performance of Executive's duties. 4 15 6.3. In the event Executive is incapacitated by accident, sickness or otherwise so as to render Executive mentally or physically incapable of performing the services required under Section 1 of this Agreement for a period of one hundred eighty (180) consecutive business days, and such incapacity is confirmed by the written opinion of two (2) practicing medical doctors licensed by and in good standing in the state in which they maintain offices for the practice of medicine, upon the expiration of such period or at any time reasonably thereafter, or in the event of Executive's death, Employer may terminate Executive's employment under this Agreement upon giving Executive or his legal representative written notice at least thirty (30) days' prior to the termination date. Executive agrees, after written notice by the Board of Directors of Employer or a duly authorized committee or officer of Employer, to submit to examinations by such practicing medical doctors selected by the Board of Directors of Employer or a duly authorized committee or officer of Employer. 6.4. Employer may terminate Executive's employment under this Agreement at any time for any reason whatsoever, even without "due cause," by giving a written notice of termination to Executive, in which case the employment relationship shall terminate immediately upon the giving of such notice. 7. Effect of Termination: 7.1. In the event the employment relationship is terminated (a) by Executive upon sixty (60) days' written notice pursuant to Section 6.1 hereof, (b) by Employer for "due cause" pursuant to Section 6.2 hereof, or (c) by Executive breaching this Agreement by refusing to continue his employment and failing to give the requisite sixty (60) days' written notice, all Compensation and benefits shall cease as of the date of termination, other than: (i) those benefits that are provided by retirement and benefit plans and programs specifically adopted and approved by Employer for Executive that are earned and vested by the date of termination, and (ii) Executive's pro rata annual salary plus all earned and vested bonuses through the date of termination. Executive's right to exercise stock options and Executive's rights in other stock plans, if any, shall remain governed by the terms and conditions of the appropriate stock plan. 7.2. If Executive's employment relationship is terminated pursuant to Section 6.3 hereof due to Executive's incapacity or death, Executive (or, in the event of Executive's death, Executive's legal representative) will be entitled to those benefits that are provided by retirement and benefits plans and programs specifically adopted and approved by Employer for Executive that are earned and vested at the date of termination and, even though no longer employed by Employer, shall continue to receive the salary Compensation (payable in the manner as prescribed in the second sentence of Section 2.1) for one (1) year following the date of termination. Executive (or, in the event of Executive's death, Executive's legal representative) shall not, however, be entitled to any bonuses not yet paid at the date of the termination of employment. Executive's right to exercise stock options and Executive's rights in other stock plans, if any, shall remain governed by the terms and conditions of the appropriate stock plan. 7.3. If Employer (i) allows the initial term or any renewal term of this Agreement to expire without further extending this Agreement pursuant to Section 5.2, (ii) terminates the employment of Executive other than pursuant to Section 6.2 hereof for "due cause" or other than for a disability or death 5 16 pursuant to Section 6.3 hereof, (iii) demotes the Executive to a nonexecutive position, or (iv) decreases the Executive's salary below the level or reduces the employee benefits and perquisites below the level provided for by the terms of Section 2 hereof,of any amendment or termination of any employee and/or executive benefit plan or arrangement, which amendment or termination is applicable to all executives of Employer, then such action by Employer, unless consented to in writing by Executive, shall be deemed to be a constructive termination by Employer of Executive's employment (a "Constructive Termination"). In the event of a Constructive Termination, the Executive shall be entitled to receive, in a lump sum within 30 days after the date of the Constructive Termination, an amount equal to the remainder of Executive's current year's salary. In such event, Executive shall also be entitled to receive an amount equal to Executive's salary, at the rate in effect immediately prior to the event giving rise to the Constructive Termination, for a period equal to the greater of three (3) years or the remainder of the initial term under Section 5.1, with such amount payable in thirty-six (36) equal monthly installments on the first day of each month beginning with the month after the Constructive Termination; provided, however, that Employer's obligation to pay such monthly installments shall be expressly conditioned on Executive's continuing compliance with the non-competition requirements of Section 9.1. For purposes of this Section 7.3, the term "salary" shall mean the sum of (i) the annual rate of Compensation provided to Executive under Section 2.1 hereof immediately prior to the event giving rise to the Constructive Termination, plus (ii) the average annual cash bonuses or other cash incentive Compensation paid to Executive by Employer under Section 2.5 hereof for the three years in the three year period immediately preceding the year in which there shall occur a Constructive Termination. In the event of such Constructive Termination, all other rights and benefits Executive may have under the employee and/or executive benefit plans and arrangements of Employer generally shall be determined in accordance with the terms and conditions of such plans and arrangements. 8. Change of Control: 8.1. Notwithstanding anything to the contrary otherwise provided in this Agreement, if a "change of control" (as defined below) of Employer occurs and within twelve (12) months from the date of such "change of control", Executive voluntarily terminates the employment relationship under this Agreement by giving sixty (60) days' written notice to Employer under Section 6.1 hereof or if Employer allows the initial term or any renewal term of this Agreement to expire within such twelve (12) month period by not extending this Agreement pursuant to Section 5.2 or terminates Employee's employment relationship without "due cause" pursuant to Section 6.4, then Executive, even though no longer employed by Employer, shall be entitled to earned and vested bonuses at the date of termination plus a payment in the amount of the remainder of Executive's current year's salary (undiscounted) plus the present value (employing an interest rate of 8%) of five additional years' salary, based on the salary in effect immediately prior to the "change of control", payable at the option of the Executive either in a lump sum within 30 days after the date of termination or in four payments as follows: one-fourth of the total amount payable within 30 days after the date of termination and one-third of the remainder payable together with interest at the rate of 8% per annum on each of the first three anniversary dates of the date of termination. For purposes of this Section 8.1, the term "salary" shall mean the sum of (i) the annual rate of Compensation provided to Executive under Section 2.1 hereof immediately prior to the "change of control," plus (ii) the average annual cash bonuses or other 6 17 cash incentive Compensation paid to Executive by Employer under Section 2.5 hereof for the three years in the three year period immediately preceding the year in which there shall occur a "change of control" (or, if the "change of control" shall occur in 1991 or prior thereto, for the two years in the two year period immediately preceding the year in which there shall occur a "change of control"). Executive's right to exercise stock options and Employee's rights in other stock plans, if any, shall remain governed by the terms and conditions of the appropriate stock plan. "Change of control" shall be deemed to have occurred if (i) any "person" (as such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), becomes the beneficial owner, directly or indirectly, of securities of Employer representing 30% or more of the combined voting power of Employer's then outstanding securities, (ii) during any period of 12 months, individuals who at the beginning of such period constitute the Board of Directors of Employer cease for any reason to constitute a majority thereof unless the election, or the nomination for election by Employer's stockholders of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period or (iii) a person (as defined in clause (i) above) acquires (or, during the 12-month period ending on the date of the most recent acquisition by such person or group of persons, has acquired) gross assets of Employer that have an aggregate fair market value greater than or equal to over 50% of the fair market value of all of the gross assets of Employer immediately prior to such acquisition or acquisitions. 8.2 Notwithstanding any other provision of this Agreement, if (a) there is a change in the ownership or effective control of Employer or in the ownership of a substantial portion of the assets of Employer [within the meaning of Section 280G(b)(2)(A) of the Internal Revenue Code (the "Code")], and (b) the payments otherwise to be made pursuant to Section 8.1 and any other payments or benefits otherwise to be paid to Executive in the nature of Compensation to be received by or for the benefit of Employee and contingent upon such event (the "Termination Payments") would create an "excess parachute payment" within the meaning of Section 280G of the Code, then Employer shall make the Termination Payments in substantially equal installments, the first installment being due within thirty days after the date of termination and each subsequent installment being due on January 31 of each year, such that the aggregate present value of all Termination Payments, whether pursuant to this Agreement or otherwise, will be as close as possible to, but not exceed, 299% of the Executive's base amount, within the meaning of Section 280G. 9. Executive's Non-Competition Obligation: 9.1. Executive acknowledges and agrees that he serves in a special capacity for Employer pursuant to which he has acquired unique knowledge of the operations and business of Employer and, as such, is not engaged in a common calling. During the existence of Executive's employment by Employer hereunder and, if the employment of Executive is terminated by Employer for any reason pursuant to Section 6.2 or Executive voluntarily terminates his employment pursuant to Section 6.1 (unless such voluntary termination occurs within twelve months after a "change of control," as defined in Section 8.1), for a period of three (3) years from the date on which he shall cease to be employed by Employer, Executive shall not, acting alone or in conjunction with others, directly or indirectly, and whether as principal, agent, officer, director, partner, employee, consultant, broker, dealer or otherwise, in any of the Business Territories (as defined below), engage in any business in competition with the business 7 18 conducted by Employer or any subsidiary of Employer, whether for his own account or otherwise, or solicit, canvass or accept any business or transaction for or from any other company or business in competition with such business of Employer in any of the Business Territories. For purposes hereof, the term "Business Territories" means the geographical regions within the geographic borders of each State in which Employer is doing business during the term of this Agreement and (and, in the case of post-employment non-competition obligations) at the date of the termination of Executive's employment with Employer and any State in which Employer had reasonable prospects of engaging in business during the three-year noncompetition period following termination of employment. 9.2. It is the desire and intent of the parties that the provisions of Section 9.1 shall be enforced to the fullest extent permissible under the laws and public policies of the State of Texas. Accordingly, if any particular portion of Section 9.1 shall be adjudicated to be invalid or unenforceable, Section 9.1 shall be deemed amended to (i) reform the particular portion to provide for such maximum restrictions as will be valid and enforceable, or if that is not possible, then (ii) delete therefrom the portion thus adjudicated to be invalid or unenforceable. The parties acknowledge and agree that if Executive shall enter into any license or franchise agreement or comparable arrangement with Employer or any subsidiary or affiliate of Employer for the operation of a business also conducted by Employer or such subsidiary or affiliate, Executive shall not be deemed to be "engage[d] in any business in competition with the business conducted by Employer or any subsidiary of Employer" for purposes of Section 9.1, provided Executive has first obtained the approval of the Executive Compensation Committee of Employer's Board of Directors. 10. Obligations to Refrain From Competing Unfairly: 10.1. In addition to the other obligations agreed to by Executive in this Agreement, Executive agrees that during his employment with Employer and following the termination of his employment by Employer he shall not at any time, directly or indirectly, (a) induce, entice, or solicit any employee of Employer to leave his employment, or (b) contact, communicate or solicit any customer of Employer derived from any customer list, customer lead, mail, printed matter or other information secured from Employer or its present or past employees, or (c) in any other manner use any customer lists or customer leads, mail, telephone numbers, printed material or material of Employer relating thereto. Notwithstanding the above, the parties acknowledge and agree that if Executive shall enter into any license or franchise agreement or comparable arrangement with Employer or any subsidiary or affiliate of Employer for the operation of a business also conducted by Employer or such subsidiary or affiliate, then Executive's operation of such business in the ordinary course shall not be deemed to be a violation of the restrictions in clauses (b) and (c) of the preceding sentence, provided Executive has first obtained the approval of the Executive Compensation Committee of Employer's Board of Directors. 11. Miscellaneous: 11.1. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when mailed by registered mail or certified mail, return receipt requested, as follows (provided that notice of change of address shall be deemed given only when received): 8 19 If to Employer, to: Cash America International, Inc. 1600 West 7th Street Fort Worth, Texas 76102 Attention: Chief Executive Officer If to Executive, to: Daniel R. Feehan 1600 West 7th Street Fort Worth, Texas 76102 or to such other names or addresses as Employer or Executive, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section 11.1. 11.2. This Agreement shall be binding upon and inure to the benefit of Employer, its successors, legal representatives and assigns, and upon Executive, his heirs, executors, administrators, representatives and assigns. It is specifically agreed that upon the occurrence of any of the events specified in Section 8.1, the provisions of this Employment Agreement shall be binding upon and inure to the benefit of and be assumed by the surviving or resulting corporation or the corporation to which such assets shall be transferred. Executive agrees that his rights and obligations hereunder are personal to him and may not be assigned without the express written consent of Employer. 11.3. This Agreement replaces and merges all previous agreements and discussions relating to the same or similar subject matters between Executive and Employer with respect to the subject matter of this Agreement. Without limiting the generality of the foregoing, this Agreement replaces and merges all provisions of the 1989 Key Employee Stock Option Plan of Employer contained in the second paragraph of Section 7(a), the last sentence of Section 7(d) and Section 7(e) regarding the payment of amounts upon the termination of Executive's employment or upon the occurrence of a "change in control" of Employer, and the comparable provisions of any Option Agreements issued thereunder, it being intended that this Agreement shall govern in all respects with respect to the subject matter thereof. This Agreement may not be modified in any respect by any verbal statement, representation or agreement made by any employee, officer, or representative of Employer or by any written agreement unless signed by an officer of Employer who is expressly authorized by Employer to execute such document. 11.4. (a) If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application. (b) Without intending to limit the remedies available to Employer, it is mutually understood and agreed that Executive's services are of a special, unique, unusual, extraordinary and intellectual character giving them a peculiar value, the loss of which cannot be reasonably or adequately 9 20 compensated in damages in an action at law, and, therefore, in the event of a breach by Executive, Employer shall be entitled to equitable relief by way of injunction or otherwise. (c) Executive acknowledges that Sections 4, 9 and 10 are expressly for the benefit of Employer, that Employer would be irreparably injured by a violation of Sections 4, 9 and/or 10 and that Employer would have no adequate remedy at law in the event of such violation. Therefore, Executive acknowledges and agrees that injunctive relief, specific performance or any other appropriate equitable remedy (without any bond or other security being required) are appropriate remedies to enforce compliance by Employer with Section 4, Section 9 and Section 10. 11.5. Executive acknowledges that, from time to time, Employer may establish, maintain and distribute employee manuals or handbooks or personnel policy manuals, and officers or other representatives of Employer may make written or oral statements relating to personnel policies and procedures. Such manuals, handbooks and statements are intended only for general guidance. No policies, procedures or statements of any nature by or on behalf of Employer (whether written or oral, and whether or not contained in any employee manual or handbook or personnel policy manual), and no acts or practices of any nature shall be construed to modify this Agreement or to create express or implied obligations of any nature to Executive. 11.6. The laws of the State of Texas will govern the interpretation, validity and effect of this Agreement without regard to the place of execution or the place for performance thereof, and Employer and Executive agree that the state and federal courts situated in Tarrant County, Texas shall have personal jurisdiction over Employer and Executive to hear all disputes arising under this Agreement. This Agreement is to be at least partially performed in Tarrant County, Texas, and, as such, Employer and Executive agree that venue shall be proper with the state or federal courts in Tarrant County, Texas to hear such disputes. In the event either Employer or Executive is not able to effect service of process upon the other with respect to such disputes, Employer and Executive expressly agree that the Secretary of State for the State of Texas shall be an agent of Employer and/or the Executive to receive service of process on behalf of Employer and/or the Executive with respect to such disputes. 12. Additional Instruments: Executive and Employer shall execute and deliver any and all additional instruments and agreements that may be necessary or proper to carry out the purposes of this Agreement. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first written above. CASH AMERICA INTERNATIONAL, INC. EXECUTIVE By: /s/ JACK R. DAUGHERTY, CEO /s/ DANIEL R. FEEHAN ------------------------------ ------------------------------ Signature and Title Daniel R. Feehan 10 EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 3,781 0 133,955 0 54,488 211,828 117,450 53,310 348,775 28,122 159,037 0 0 3,024 158,592 348,775 136,912 216,249 87,373 162,106 29,036 0 8,555 16,296 6,053 10,243 0 0 0 10,243 0.41 0.41
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