NICHOLAS FINANCIAL, INC.
Building C. #501B
2454 McMullen Booth Road
Clearwater, FL 33759-1340
(727) 726-0763
NOTICE OF ANNUAL GENERAL MEETING
To the Members of Nicholas Financial, Inc:
NOTICE IS HEREBY GIVEN that the 2003 Annual General Meeting of the
Members (the "Meeting") of Nicholas Financial, Inc. (hereinafter
called the "Company") will be held at the Company's Corporate
Headquarters, located at 2454 McMullen Booth Road, Clearwater,
Florida on Wednesday August 6, 2003, at the hour of 9:00AM for the
following purposes:
1. to receive the Report of the Directors;
2. to receive the financial statements of the Company for its
fiscal year ended March 31, 2003 and the report of the
Auditors thereon;
3. to elect one director to hold office until the 2006 Annual
General Meeting of Members or until his successor is duly
elected and qualified;
4. to appoint Auditors for the ensuing year and to authorize the
Directors to fix their remuneration.
5. to transact such other business as may properly come before
the Meeting.
Accompanying this Notice are a Proxy Statement and Information
Circular and Form of Proxy.
Members of record as of the close of business on July 2, 2003 will
be entitled to attend and vote at the Meeting, or any adjournment
or postponement thereof. A member entitled to attend and vote at
the Meeting is entitled to appoint a proxy holder to attend and
vote in his stead.
Your vote is important. If you are unable to attend the Meeting
(or any adjournment or postponement thereof) in person, please
read the Notes accompanying the Form of Proxy enclosed herewith
and then complete and return the Proxy within the time set out in
the Notes.
The enclosed Form of Proxy is solicited by the Board of Directors
of the Company but, as set out in the Notes accompanying the Form
of Proxy, you may amend it if you so desire by striking out the
names listed therein and inserting in the space provided the name
of the person you wish to represent you at the Meeting.
DATED at Clearwater, Florida, July 9, 2003.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Peter L. Vosotas
President
2
NICHOLAS FINANCIAL, INC.
Building C. #501B
2454 McMullen Booth Road
Clearwater, FL 33759-1340
(727) 726-0763
Supplemental Mailing List
Return Form
Dear Shareholder:
If you wish to have your name put on the Supplemental Mailing
List of Nicholas Financial, Inc. (the "Company"), such that you
shall be mailed copies of the Company's interim financial
statements in respect of the present fiscal year, then complete
this form and return it to the Company's registrar and transfer
agent, Computershare Trust Company, whose address is 510
Burrard Street, 4th Floor, Vancouver, BC Canada V6C 3B9 or at
the Corporate Headquarters of the Company, 2454 McMullen Booth
Road, Building C Suite 501B, Clearwater, FL 33759-1340.
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Name(Please Print)
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Address
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Phone Number:
Number and Class of
Voting Securities Held:
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Signature
1
NICHOLAS FINANCIAL, INC
BUILDING C #501B
2454 MCMULLEN BOOTH ROAD
CLEARWATER, FL 33759
(727) 726-0763
PROXY STATEMENT AND INFORMATION CIRCULAR
AS AT AND DATED JULY 9, 2003
This Proxy Statement and Information Circular accompanies the
Notice of the 2003 Annual General Meeting of Members (the "Meeting")
of Nicholas Financial, Inc. (hereinafter called the "Company") to be
held on Wednesday, August 6, 2003, at 9:00 a.m. (Clearwater, Florida
time), at the Company's Corporate Headquarters, located at 2454
McMullen Booth Road, Clearwater, Florida, and is being furnished in
connection with a solicitation of proxies on behalf of the Board of
Directors of the Company for use at that Meeting and at any
adjournment thereof.
The Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 2003, together with this Proxy Statement and
Information Circular and the accompanying proxy form ("Proxy"), are
first being mailed on or about July 9, 2003 to members entitled to
vote at the Meeting.
REVOCABILITY OF PROXY
If the accompanying Proxy is completed, signed and returned, the
shares represented thereby will be voted at the Meeting. The giving
of the Proxy does not affect the right to vote in person should the
member be able to attend the Meeting. The member may revoke the Proxy
at any time prior to the voting thereof.
In addition to revocation in any other manner permitted by law, a
proxy may be revoked by an instrument in writing executed by the
member or his attorney authorized in writing, or if the member is a
corporation, by a duly authorized officer or attorney thereof, and
deposited either at the registered office of the Company at any time
up to and including the last business day preceding the day of the
Meeting, or any adjournment thereof, or, as to any matter in respect
of which a vote shall not already have been cast pursuant to such
proxy, with the Chairman of the Meeting on the day of the Meeting, or
any adjournment thereof, and upon either of such deposits the proxy is
revoked.
PERSONS MAKING THE SOLICITATION
THE ENCLOSED PROXY IS BEING SOLICITED BY
THE BOARD OF DIRECTORS OF THE COMPANY
Solicitations will be made by mail and possibly supplemented by
telephone or other personal contact to be made without special
compensation by regular officers and employees of the Company. The
Company may reimburse members' nominees or agents (including brokers
holding shares on behalf of clients) for the cost incurred in
obtaining from their principals authorization to execute forms of
proxy. No solicitation will be made by specifically engaged employees
or soliciting agents. The cost of solicitation of proxies on behalf
of the Board of Directors will be borne by the Company.
2
VOTING SHARES AND OWNERSHIP
OF MANAGEMENT AND PRINCIPAL HOLDERS
The Company is authorized to issue 50,000,000 Common shares
without par value and 5,000,000 Preference shares without par value.
As of the close of business on July 2, 2003, the record date for
determining members entitled to notice of and to vote at the Meeting,
there were issued and outstanding 5,010,421 Common shares and no
Preference shares. At a General Meeting of the Company, on a show of
hands, every member present in person and entitled to vote shall have
one vote, and on a poll, every member present in person or represented
by proxy and entitled to vote shall have one vote for each share of
which such member is the registered holder. Shares represented by
proxy will only be voted on a poll.
The following table sets forth certain information regarding the
beneficial ownership of Common shares as of July 2, 2003 regarding (i)
each of the Company's directors, (ii) each of the Company's executive
officers, (iii) all directors and officers as a group, and (iv) each
person known by the Company to beneficially own, directly or indi
rectly, more than 5% of the outstanding Common shares. Except as
otherwise indicated, each of the persons listed below has sole voting
and investment power over the shares beneficially owned.
Name Number of Shares Percentage Owned
Peter L. Vosotas (1)(2) 1,607,017 31.1%
Dr. Ellis P. Hyman (3)(4) 138,833 2.8%
Stephen Bragin (5)(6) 71,805 1.4%
Melvin S. Cutler (7) 271,333 5.4%
Alton R. Neal (8)(9) 10,000 *
Marvin & Ingrid Mahan (10)(11) 724,820 14.5%
Mahan Children, LLC (12) 372,464 7.4%
Mahan Family, LLC (13) 473,820 9.5%
Ralph T. Finkenbrink (14)(15) 107,836 2.1%
All directors and officers as
a group (6 persons) (16) 1,935,491 36.5%
(1)Mr. Vosotas' business address is 2454 McMullen Booth Road,
Building C, Clearwater, Florida 33759.
(2)Includes 1,371,066 shares held in family trusts over which Mr.
Vosotas retains voting and investment power and 667 shares held by Mr.
Vosotas' spouse. Includes 150,000 shares issuable upon the exercise of
outstanding stock options.
(3)Dr. Hyman's business address is 2700 East Bay Drive, Largo,
Florida 33771. Dr. Hyman will cease to be a director of the Company
effective as of the Meeting.
(4)Includes 16,667 shares issuable upon the exercise of outstanding
stock options exercisable within 60 days and does not include 3,333
shares issuable upon the exercise of outstanding stock options which
are not exercisable within 60 days.
(5)Mr. Bragin's business address is 17757 US Highway 19 North, Suite
26, Clearwater, Florida 33764.
(6)Includes 16,667 shares issuable upon the exercise of outstanding
stock options exercisable within 60 days and does not include 3,333
shares issuable upon the exercise of outstanding stock options which
are not exercisable within 60 days.
(7)Mr. Cutler's business address is 306 Main Street, Worcester,
Massachusetts 01608-1518.
(8)Includes 6,666 shares issuable upon the exercise of outstanding
stock options exercisable within 60 days.
(9)Mr. Neal's business address is 100 North Tampa Street, Suite
1800, Tampa, Florida 33602.
(10)Marvin H. Mahan and Ingrid T. Mahan are husband and wife. Their
address is 6268 Palma Del Mar #110E, St. Petersburg, Florida 33715.
3
(11)Includes 34,000 shares owned directly by Marvin H. Mahan, 13,334
shares owned directly by Ingrid T. Mahan, 473,820 shares owned by
Mahan Family, LLC, and 203,666 shares owned by Grenma, Inc. Ingrid T.
Mahan is the majority equity holder in Mahan Family, LLC, a New Jersey
limited liability company. In addition, each of Marvin H. Mahan and
Ingrid T. Mahan is one of five managers of Mahan Family, LLC, and in
such capacity has a 47% voting interest with respect to any matter
submitted to a vote of its managers. Ingrid T. Mahan is the sole
shareholder of Grenma, Inc. a New Jersey corporation. Marvin H. Mahan
is the sole director of Grenma, Inc.
(12)The principal business address of Mahan Children, LLC, a New
Jersey limited liability company, is Stonehouse Road, P.O Box 407,
Millington, New Jersey.
(13)The principal business address of Mahan Family, LLC, a New Jersey
limited liability company, is Stonehouse Road, P.O Box 407,
Millington, New Jersey. See note (11) above.
(14)Mr. Finkenbrink's business address is 2454 McMullen Booth Road,
Building C, Clearwater, Florida 33759.
(15)Includes 100,000 shares issuable upon the exercise of
outstanding stock options.
(16)Includes an aggregate 290,000 shares issuable upon the
exercise of outstanding stock options exercisable within 60 days
and does not include an aggregate 6,666 shares under options which
are not exercisable within 60 days
The Board of Directors has determined that all members of record
as of the close of business on July 2, 2003 (the "Record Date") will
be entitled to receive notice of and to vote at the Meeting. Those
members so desiring may be represented by proxy at the Meeting. The
Proxy, and the power of attorney or other authority, if any, under
which it is signed or a notarially certified copy thereof, must be
deposited either at the office of the Registrar and Transfer Agent of
the Company, Computershare Trust Company of Canada, 510 Burrard
Street, Vancouver, B.C., V6C 3B9 or at the Head Office of the Company
at Building C #501B, 2454 McMullen Booth Road, Clearwater, FL
33759-1343 not less than 48 hours, Saturdays and holidays excepted,
prior to the time of the holding of the Meeting or any adjournment
thereof.
Votes cast by proxy or in person at the Meeting will be tabulated
by the inspector of elections appointed for the Meeting, who will also
determine whether a quorum is present for the transaction of business.
The Company's Articles of Incorporation provide that a quorum is
present if two or more members of the Company are present in person
(or represented by proxy) holding an aggregate of at least 33 1/3% of
the total issued and outstanding shares of the Company as of the
Record Date for the Meeting. Abstentions will be counted as shares
that are present and entitled to vote for purposes of determining
whether a quorum is present. Shares held by nominees for beneficial
owners will also be counted for purpose of determining whether a
quorum is present if the nominee has the discretion to vote on at
least one of the matters presented, even though the nominee may not
exercise discretionary voting power with respect to other matters and
even though voting instructions have not been received from the
beneficial owner (a "broker non-vote"). Neither abstentions nor
broker non-votes are counted in determining whether a proposal has
been approved.
If a quorum exists, directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election. The
proposal set forth herein to approve the appointment of the Company's
auditors will be adopted if a majority of the total votes present, or
represented, and entitled to vote at the Meeting vote in favor of such
proposal.
Members are urged to indicate their votes in the spaces provided
on the Proxy. Proxies solicited by the Board of Directors of the
Company will be voted in accordance with the directions given therein.
Where no instructions are indicated, signed Proxies will be voted FOR
each proposal listed in the Notice of the Meeting which are set forth
more completely herein. Returning your completed Proxy will not
prevent you from voting in person at the Meeting should you be present
and wish to do so.
Advance Notice of the Meeting was published pursuant to Section
111 of the Company Act at Vancouver, B.C. on June 10, 2003.
4
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors recommends the following nominees for
election as directors and urges each shareholder to vote "FOR" the
nominees. Proxies in the accompanying form will be voted at the
Meeting, unless authority to do so is withheld, in favor of the
election as directors of the nominees named below.
The Company's Board of Directors consists of five members divided
into three classes, with the members of each class serving three-year
terms expiring at the third Annual General Meeting of Members after
their elections. One Director is to be elected at the Meeting to hold
office for a term of three years expiring at the 2006 Annual General
Meeting of Members, and until his successor shall have been duly
elected and qualified. In the event such nominee is unable to serve,
the persons designated as proxies will cast votes for such other
person in their discretion as a substitute nominee. The Board of
Directors has no reason to believe that the nominee named below will
be unavailable, or if elected, will decline to serve. The nominee is a
resident of the United States.
The term of Dr. Ellis P. Hyman as a director of the Company also
expires effective as of the Meeting. The Board of Directors did not
nominate Dr. Hyman to stand for reelection at the Meeting. In
addition, the Board did not nominate any other person to stand for
election as his successor as a director of the Company. Consequently,
effective as of the Meeting, the Company's Board of Directors will
consist of four members with one unfilled vacancy.
Certain information is set forth below for the nominee for
director, as well as for each director whose term of office will
continue after the Meeting.
NOMINEE FOR DIRECTOR -TERM TO EXPIRE 2006
Nominee for Director -Term to expire 2006
Name Age Principal Occupation And Other Information
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Alton R. Neal 56 Mr. Neal has served as a director of the
Company since May 17, 2000. He has been
in the private practice of law since 1975
and has been a partner with the firm of
Johnson, Blakely, Pope, Bokor, Ruppel &
Burns, Tampa, Florida since 1999. From
1994 until 1999, he was a partner in the
firm of Forlizzo & Neal.
5
Director continuing in office -Term to expire 2005
Name Age Principal Occupation And Other Information
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Stephen Bragin 72 Mr. Bragin has served as a director of the
Company since February 10, 1999 and as a
director of the Company's two subsidiaries,
Nicholas Data Services, Inc. and Nicholas
Financial, Inc., since 1987 and 1990,
respectively. He has served as Regional
Development Director at the University of
South Florida as well as other related
positions for over five years.
Directors continuing in office -Term to expire 2004
Name Age Principal Occupation And Other Information
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Peter L. Vosotas 61 Mr. Vosotas founded the Company in 1985 and
has served as Chairman of the Board, Chief
Executive Officer and President of the Company
and each of its subsidiaries since inception.
Prior to founding the Company, Mr. Vosotas
held a variety of Sales and Marketing positions
with Ford Motor Company, GTE and AT&T Paradyne
Corporation. Mr. Vosotas attended the United
States Naval Academy and earned a Bachelor of
Science Degree in Electrical Engineering from
The University of New Hampshire.
Ralph Finkenbrink 41 Mr. Finkenbrink has served as Senior Vice
President - Finance of the Company since
July 1997 and served as Vice President
- Finance of the Company from 1992 to
July 1997. He joined the Company in 1988
and served as Controller of Nicholas
Financial and NDS until 1992. Prior to
joining the Company, he was a staff
accountant for MBI, Inc. from January
1984 to March 1985 and Inventory Control
Manager for the Dress Barn, Inc. from
March 1985 to December 1987. Mr.
Finkenbrink received his Bachelor of
Science Degree from Mount St. Mary's
University in Emmitsburg, Maryland.
6
"Director Not continuing in office"
Name Age Principal Occupation And Other Information
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Dr. Ellis P. Hyman, 64 Dr. Hyman has served as a director of the
D.D.S., P.A Company since February 10, 1999 and as a
director of the Company's two subsidiaries,
NDS and Nicholas Financial since 1987 and
1990 respectively. Dr. Hyman has been in
private dental practice for many years.
PROPOSAL 2: APPOINTMENT OF AUDITORS
The Board of Directors and Audit Committee recommend the approval
of the appointment of Ernst & Young LLP as Auditors of the Company for
the fiscal year ending March 31, 2004, and urge each member to vote
"FOR" such proposal. Executed and unmarked proxies in the accompanying
form will be voted at the Meeting in favor of such proposal.
The Board of Directors and Audit Committee propose the appointment
of Ernst & Young LLP as independent auditors of the Company for the
fiscal year ending March 31, 2004. Ernst & Young LLP have been the
Company's auditors since 1994. One or more representatives of Ernst &
Young are expected to be present at the Meeting. Such representatives
will be available to respond to appropriate questions and may make a
statement if they so desire.
The fees charged by Ernst & Young LLP for professional services
rendered in connection with all audit and non-audit related matters for
each of the fiscal years ended March 31, 2003 and 2002, respectively
were as follows:
Fiscal Year Ended March 31,
2003 2002
Audit Fees $73,763 $65,250
Audit Related Fees(1) $29,915 None
Tax Fees $40,515 $24,350
All Other Fees None None
(1) Audit Related Fees include amounts related to Securities & Exchange
Commission filings
The Audit Committee considered the provision of non-audit services
in their consideration of Ernst & Young's independence.
7
BOARD OF DIRECTORS
Directors Compensation
Directors who are not executive officers of the Company each
receive an annual retainer of $4,000, plus $500 per Board of Directors
meeting or committee meeting attended . Directors who are executive
officers of the Company receive no additional compensation for service
as a member of either the Board of Directors or any committee of the
Board. Directors are entitled to option grants under the Company's Non-
Employee Director Stock Option Plan. Under this Plan, each Non-Employee
Director is entitled to receive options to purchase 5,000 shares of
Common Stock at the time of his or her election to the Board of
Directors. Each Director also is entitled to receive options to
purchase 5,000 shares of Common Stock on the day following his or her
reelection to the Board at the Annual General Meeting of Members of the
Company. The exercise price of such options will be equal to 110% of
the Fair Market Value of the underlying shares on the date of grant of
such options. The above options vest over a three-year period and are
exercisable at the rate of one-third of the total option each year.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors has established an Audit Committee. (The
Board does not have a compensation or nominating committee.) The Audit
Committee is presently comprised of Messrs. Neal (Chair) and Hyman,
each of whom is "independent" (as defined under the applicable NASD
listing standards). Dr. Hyman was not nominated by the Board of
Directors to stand for reelection as a director of the Company at the
Meeting. Thus, effective as of the Meeting, Dr. Hyman will cease to be
a member of the Audit Committee. The Audit Committee is primarily
responsible for overseeing the Company's financial reporting process on
behalf of the Board and reporting the results of their activities to
the full Board. The Audit Committee reviews the independence,
qualifications and activities of the Company's independent certified
public accountants and the Company's financial policies, control
procedures and accounting staff. The Audit Committee recommends to the
Board the appointment of the independent certified public accountants
and reviews and approves the Company's financial statements. The Audit
Committee is also responsible for reviewing any transactions between
the Company and any officer or director of the Company or any entity in
which any officer or director has a material interest. The Audit
Committee is governed by a written charter approved by the Board of
Directors.
During the fiscal year ended March 31, 2003, the Board of
Directors held four meetings and the Audit Committee held two meetings.
All Directors attended all meetings of the Board of Directors and all
committees on which they served during the fiscal year ended March 31,
2003.
8
Report of the Audit Committee
The Audit Committee oversees the Company's financial reporting
process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the reporting
process including the systems of internal controls. In fulfilling its
oversight responsibilities, the Committee reviewed the audited
financial statements in the Annual Report with management including a
discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments,
and the clarity of disclosures in the financial statements.
The Committee reviewed with the Company's independent auditors,
who are responsible for expressing an opinion on the conformity of
those audited financial statements with generally accepted accounting
principles, their judgments as to the quality, not just the
acceptability, of the Company's accounting principles and such other
matters as are required to be discussed with the Committee under
generally accepted auditing standards. In addition, the Committee has
discussed with the independent auditors the auditor's independence
from management and the Company, including the matters in the written
disclosures required by the Independence Standards Board, and
considered the compatibility of nonaudit services with the auditors
independence.
The Committee discussed with the Company's independent auditors
the overall scope and plans for their respective audits. The
Committee meets with the internal and independent auditors, with and
without management present, to discuss the results of their
examinations , their evaluations of the Company's internal controls,
and the overall quality of the Company's financial reporting. The
Committee held two meetings during fiscal year 2003.
In reliance on the reviews and discussions referred to above,
the Committee recommended to the Board of Directors (and the Board
has approved) that the audited financial statements be included in
the Annual Report for filing with the Securities and Exchange
Commission (the "Commission"). The Committee and the Board have also
recommended, subject to shareholder approval, the selection of the
Company's independent auditors for the fiscal year ending March 31,
2004.
The foregoing report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the Company specifically incorporates such
report by reference therein.
Alton Neal, Audit Committee Chair
Ellis Hyman, Audit Committee Member
9
EXECUTIVE OFFICERS AND COMPENSATION
(Form 51-904, B.C. Securities Act and Regulations)
The Company has two (2) executive officers, Peter L. Vosotas,
Chairman of the Board , Chief Executive Officer and President, and
Ralph T. Finkenbrink, Sr. Vice-President-Finance. For additional
information regarding, Messrs. Vosotas and Finkenbrink, see
"Proposal 1: Election of Directors" above. For the fiscal year
ended March 31, 2003, total cash compensation of US $589,324 was
paid to the Company's executive officers. Except pursuant to option
grants as described below, there are no plans in effect pursuant
to which cash or non-cash compensation was paid or distributed to
the executive officers during the most recently completed financial
year or is proposed to be paid or distributed in a subsequent year.
The following table sets forth certain information concerning
compensation paid to or earned by each of the Company's executive
officers for the fiscal years ended March 31, 2003, 2002 and 2001:
Summary Compensation Table
Long-Term
Fiscal Compensation
Name Year Shares
& Principal Ended Annual Compensation underlying All Other
Position March 31, Salary Bonus Other Option Compensation
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PETER L. 2003 $174,000 $270,759 Nil 150,000 $10,453
VOSOTAS 2002 $144,000 $244,985 Nil 150,000 $8,788
Chairman of 2001 $144,000 $212,243 Nil 150,000 $9,378
the Board,
Chief Executive
Officer
& President
RALPH T. 2003 $100,000 $44,565 Nil 100,000 $7,135
FINKENBRINK 2002 $91,667 $51,776 Nil 100,000 $7,013
Sr. Vice 2001 $75,000 $60,000 Nil 100,000 $7,289
President
-Finance
Note: All of the above compensation amounts are expressed in
U.S. dollars.
10
The following table sets forth information with respect to
grants of stock options during the fiscal year ended March 31, 2003
to the executive officers of the Company:
Option Grants During Fiscal 2003
% of Total Market Value
Options of Securities
Granted to Underlying
Employees Exercise Options on
Name of Executive Option in Fiscal Price Date of Grant Expiration
Officer Granted 2003 ($/Share) ($/Share) Date
-------------------------------------------------------------------------------
Peter L. Vosotas Nil - - - -
Ralph T. Finkenbrink Nil - - - -
The following table sets forth information with respect
to aggregate stock option exercises during the fiscal year ended
March 31, 2003 by the executive officers of the Company and the
fiscal year end value of unexercised options held by such executive
officers.
Aggregated Option Exercises in Fiscal 2003
and Fiscal Year-End Option Values
Value of
Unexercised
Number of in-the-Money
Unexercised Options at
Options at Fiscal Fiscal Year End(2)
Number Of Shares Year End
Name of Executive Acquired on Aggregate Exercisable/ Exercisable/
Officer Exercise Value Realized(1) Unexercisable Unexercisable
----------------------------------------------------------------------------------------------
Peter L. Vosotas Nil Nil 150,000/0 $284,000/$0
Ralph T. Finkenbrink Nil Nil 100,000/0 $184,800/$0
(1) The aggregate value realized as shown above is calculated by
the difference between the exercise price and the market
price at the time of exercise, and does not necessarily mean
the shares were sold.
(2) Potential value of the exercisable/unexercisable in the money
options calculated by multiplying the number of shares that
may be acquired upon the exercise of options by the difference
between the closing sales price per share on March 31, 2003
and the exercise price per share.
11
Employment Agreements
Effective March 16, 2001, the Company entered into an
employment agreement with Peter L. Vosotas, Chairman of the Board,
President and Chief Executive Officer. The agreement provides for a
minimum base salary of $174,000 and annual performance bonuses as
determined by the Company's Board of Directors. The initial term of
this agreement was for a period of one year, however, the agreement
automatically renews for successive two - year terms unless the
Company provides to Mr. Vosotas, at least sixty days prior to the
expiration of any term, written notification that it intends not to
renew this agreement. Mr. Vosotas's employment agreement provides
that, if he is terminated by the Company without cause, he shall be
entitled to severance equal to the sum of two times his annual base
salary in effect at the time of such termination and his average
annual bonus and other compensation for the two full calendar years
immediately preceding such termination . Mr. Vosotas's agreement
further provides that , during the term of the agreement and for a
period of two years thereafter, Mr. Vosotas will not, directly or
indirectly, compete with the Company by engaging in certain
proscribed activities.
Effective November 22, 1999, the Company entered into an
employment agreement with Ralph T. Finkenbrink, Senior Vice-President
of Finance. The agreement provides for a minimum base salary of
$100,000 and annual performance bonuses as determined by the
Company's Board of Directors. The initial term of this agreement was
for a period of one year, however, the agreement automatically renews
for successive two-year terms unless the Company provides to Mr.
Finkenbrink, at least sixty days prior to the expiration of any term,
written notification that it intends not to renew this agreement. Mr.
Finkenbrink's employment agreement provides that, if he is terminated
by the Company without cause, he shall be entitled to severance equal
to the sum of two times his annual base salary in effect at the time
of such termination and his average annual bonus and other
compensation for the two full calendar years immediately preceding
such termination . Mr. Finkenbrink's agreement further provides that,
during the term of the agreement and for a period of two years
thereafter, Mr. Finkenbrink will not, directly or indirectly; compete
with the Company by engaging in certain proscribed activities.
In the event the Company terminated without cause, as of the
day of this proxy statement, the employment of Peter L. Vosotas, the
amount of severance would be equal to $887,744. In the event the
Company terminated without cause, as of the day of this proxy
statement, the employment of Ralph T. Finkenbrink, the amount of
severance would be equal to $308,342.
section 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers , directors and more than 10%
shareholders to file reports of their beneficial ownership of the
Company's Common shares with the Commission and furnish copies of
such reports to the Company. During the fiscal year ended March 31,
2003 the executive officers and directors of the Company filed with
the Commission on a timely basis all required reports relating to
transactions involving equity securities of the Company beneficially
owned by them, except that Mr. Vosotas filed two reports late
covering an aggregate of 2 transactions. The Company has relied on
the written representation of its executive officers and directors
and copies of the reports they have filed with the Commission in
providing this information.
12
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
No Director or executive officer of the Company, no proposed
nominee for election as a Director of the Company, and no associate
or affiliate of any of them, is or has been indebted to the Company
or its subsidiaries at any time since the beginning of the Company's
last completed financial year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 9, 2001 the Company issued 111 ,111 shares of its
Common Stock to the Mahan Family Trust (the Family Trust) pursuant
to the Family Trust's exercise of its conversion right under a
Convertible Promissory Note, dated November 30, 1992 (the Family
Trust Note), issued by the Company in favor of the Family Trust.
The aggregate principal amount of the Family Trust Note was $500,000
and the maturity date was November 30, 2001, subject to certain
prepayment rights granted to the Company thereunder. Pursuant to such
rights, the Company gave notice on July 10, 2001 that it intended to
prepay the Family Trust Note in full. Under the terms of the Family
Trust Note, this notification entitled the Family Trust to convert
the note into shares of Common Stock, at a conversion price of $4.50
per share. As result of such conversion, the Family Trust Note was
cancelled. The issuance of shares of the Company's Common Stock
pursuant to this transaction is claimed to be exempt from
registration under the Securities Act of 1933, as amended, pursuant
to Section 4(2) thereof. The above transaction, if adjusted for the
Company's two-for-one stock-split, would have resulted in the
issuance of 222,222 shares of Common Stock at a conversion price of
$2.25 per share.
The Company is indebted to Peter Vosotas, President, CEO and
Chairman of the Board for amounts totaling approximately $810,000.
These promissory notes are due upon thirty-day demand and carry an
interest rate equal to the average cost of funds for the Company plus
twenty-five basis points. The amount of these notes can change from
time to time but cannot exceed $1,000,000 without Board of Directors
approval.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director or executive officer of the Company, no nominee for
election as a director of the Company , no person who has been a
director or executive officer of the Company since the commencement
of the Company's last completed fiscal year and no associate or
affiliate of any of the foregoing has any material interest, direct
or indirect, by way of beneficial ownership or securities or
otherwise, in any matter to be acted upon at the Meeting.
MEMBER PROPOSALS
The deadline for submission of member proposals pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended
(Rule 14a-8), for inclusion in the Company's proxy statement for
its 2004 Annual General Meeting of Members is March 12, 2004. After
May 25, 2004, notice to the Company of a member proposal submitted
other than pursuant to Rule 14a-8 is considered untimely, and the
persons named in proxies solicited by the Board of Directors of the
Company for the 2004 Annual General Meeting may exercise
discretionary voting power with respect to any such proposal.
13
OTHER MATTERS
MANAGEMENT KNOWS OF NO OTHER MATTERS TO COME BEFORE THE
MEETING OTHER THAN THOSE REFERRED TO IN THE NOTICE OF MEETING.
HOWEVER, SHOULD ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING,
THE SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY WILL, ON A POLL,
BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE
PERSONS VOTING THE SHARES REPRESENTED BY THE PROXY.
APPROVAL AND CERTIFICATION
The contents of this Information Circular have been approved
and this mailing has been authorized by the Directors of the Company.
Where information contained in this Information Circular, rests
specifically within the knowledge of a person other than the Company,
the Company has relied upon information furnished by such person.
The foregoing contains no untrue statement of material fact and does
not omit to state a material fact that is required to be stated or
that is necessary to make a statement not misleading in the light of
the circumstances in which it was made.
Dated this 9th day of July, 2003
BY ORDER OF THE BOARD OF DIRECTORS
s/Peter L. Vosotas s/Ralph T. Finkenbrink
--------------------------- --------------------------------
Chairman of the Board, Chief Financial Officer
Chief Executive Officer and President
1
NICHOLAS FINANCIAL, INC.
Building C #501B
2454 McMullen Booth Road
Clearwater, FL 33759-1340
(727) 726-0763
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
NICHOLAS FINANCIAL, INC. (the "Company")
PROXY FOR THE 2003 ANNUAL GENERAL MEETING OF
MEMBERS TO BE HELD ON WEDNESDAY, AUGUST 6, 2003.
The undersigned member of Nicholas Financial, Inc. (the
"Company") hereby appoints Peter L. Vosotas, Chairman of the
Board, Chief Executive Officer and President of the Company, or
failing him, Ralph T. Finkenbrink, Vice-President-Finance of the
Company, or , as
nominee of the undersigned, to attend and act for and on behalf
of the undersigned at the 2003 Annual General Meeting of Members
of the Company to be held on August 6, 2003 and at any
adjournment thereof and, on a poll, the shares represented by
this proxy are specifically directed to be voted or to be
withheld from voting as indicated below:
1. To elect as a director:
Alton Neal In favour: Withhold Vote:
------- ------
(to serve until 2006)
2. To appoint Ernst & Young LLP, as Auditors of the Company for
the fiscal year ending March 31, 2004:
In favour: Against: Withhold vote:
------- ------- -------
2
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED OR WITHHELD
FROM VOTING ON ANY BALLOT THAT MAY BE CALLED FOR IN ACCORDANCE
WITH THE INSTRUCTIONS GIVEN AND, IF A CHOICE IS SPECIFIED WITH
RESPECT TO ANY MATTER TO BE ACTED UPON, THE SHARES SHALL BE VOTED
OR WITHHELD FROM VOTING ACCORDINGLY. WHERE NO CHOICE IS OR WHERE
BOTH CHOICES ARE SPECIFIED IN RESPECT OF ANY MATTER TO BE ACTED
UPON, THE SHARES REPRESENTED HEREBY SHALL, ON ANY BALLOT THAT MAY
BE CALLED FOR, BE VOTED FOR THE ADOPTION OF ALL SUCH MATTERS.
THIS PROXY CONFERS UPON EACH PERSON NAMED HEREIN AS A NOMINEE
DISCRETIONARY AUTHORITY WITH RESPECT TO AMENDMENTS OR VARIATIONS
TO MATTERS IDENTIFIED IN THE NOTICE AND OTHER MATTERS WHICH MAY
PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of the
2003 Annual General Meeting of Members and the accompanying Proxy
Statement and Information Circular dated July 9, 2003.
If this Form of Proxy is not dated by the member in the space
below, it is deemed to bear the date on which it is mailed by the
Company to the member.
The undersigned hereby revokes any proxy previously given in
respect of the Meeting.
DATED this day of , 2003.
---------- -------------------------------
----------------------------- ------------------------
Name Number of shares held
-----------------------------
Address
-----------------------------
-----------------------------
Signature
3
NOTES TO FORM OF PROXY
1. IF THE MEMBER DOES NOT WISH TO APPOINT ANY OF THE PERSONS
NAMED IN THIS FORM OF PROXY , HE SHOULD STRIKE OUT THEIR
NAMES AND INSERT IN THE BLANK SPACE THE NAME OF THE
PERSON HE WISHES TO ACT AS HIS PROXY. SUCH PERSON NEED
NOT BE A MEMBER OF THE COMPANY.
2. This Form of Proxy must be signed by the member or his
attorney authorized in writing or, if the member is a
corporation, under the hand of a duly authorized officer
or attorney of the corporation.
3. This Form of Proxy, and the power of attorney or other
authority, if any, under which it is signed, or a
notarially certified copy thereof, must be deposited
either at the office of the Registrar and Transfer Agent
of the Company, Computershare Trust Company of Canada, at
510 Burrard Street, Vancouver, B.C., V6C 3B9, or at the
Head Office of the Company at Building C #501B, 2454
McMullen Booth Road, Clearwater, FL 33759-1340 not less
than 48 hours, Saturdays and holidays excepted, prior to
the time of the holding of the Meeting or any adjournment
thereof.