1
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 2001 Annual General Meeting of the
Members (the "Meeting") of Nicholas Financial, Inc. (hereinafter
called the "Company") will be held at the Company's Corporate
Office, located at 2454 McMullen Booth Road, Building C, Suite
501B, Clearwater, Florida on Tuesday August 7, 2001.
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, 2001 and the report of the
Auditors thereon;
3. to elect two directors to hold office until the 2004 Annual
General Meeting of Members and until each of their respective
successors 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 June 28, 2001
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 02, 2001.
BY ORDER OF THE BOARD OF DIRECTORS
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.
Name: (Please Print)
___________________________________________________________
Address:
_______________________________________________________________
_______________________________________________________________
Phone Number: _______________________________
Number and Class of
Voting Securities Held:_______________________________________
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 2, 2001
This Proxy Statement and Information Circular accompanies the
Notice of the 2001 Annual General Meeting of Members (the "Meeting")
of Nicholas Financial, Inc. (hereinafter called the "Company") to be
held on Tuesday, August 7, 2001, at 9:00 a.m. (Clearwater, Florida
time), at the Company's Corporate Office, located at 2454 McMullen
Booth Road, Building C, Suite 501B, Clearwater, Florida, and is
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, 2001, together with this Proxy Statement and
Information Circular and the accompanying proxy form ("Proxy"), are
first being mailed on or about July 3, 2001 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.
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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 June 28, 2001, the record date for
determining members entitled to notice of and to vote at the Meeting,
there were issued and outstanding 2,322,775 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 June 28, 2001 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
indirectly, 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) 792,902 32.6%
Dr. Ellis P. Hyman (3)(4) 66,083 2.7%
Stephen Bragin (5)(6) 32,569 1.3%
Melvin S. Cutler (7)(8) 133,800 5.5%
Alton R. Neal (9)(10) 1,667 *
Ralph T. Finkenbrink (11)(12) 39,335 1.6%
--------- ------
All directors and officers as
a group (6 persons)(13) 1,066,356 43.9%
========= ======
(1) Mr. Vosotas' business address is 2454 McMullen Booth Road,
Building C Clearwater, Florida 33759.
(2) Includes 689,983 shares held in family trusts over which Mr.
Vosotas retains voting and investment power and 333 shares held
by Mr. Vosotas' spouse. Includes 58,333 shares issuable upon the
exercise of outstanding stock options which are exercisable
within 60 days and does not include 16,667 shares issuable upon
the exercise of outstanding stock options which are not
exercisable within 60 days.
(3) Dr. Hyman's business address is 2700 East Bay Drive, Largo,
Florida 33771
(4) Includes 5,000 shares issuable upon the exercise of outstanding
stock options exercisable within 60 days.
(5) Mr. Bragin's business address is 17757 US Highway 19 North,
Suite 26, Clearwater, Florida 33764.
(6) Includes 5,000 shares issuable upon the exercise of outstanding
stock options exercisable within 60 days.
(7) Mr. Cutler's business address is 306 Main Street, Worcester,
Massachusetts 01608-1518.
(8) Includes 1,667 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.
(9) Mr. Neal's business address is 100 North Tampa Street, Suite 1800,
Tampa, Florida 33602
(10) Includes 3,333 shares issuable upon the exercise of outstanding
stock options which are not exercisable within 60 days.
(11) Mr. Finkenbrink's business address is 2454 McMullen Booth Road,
Building C Clearwater, Florida 33759.
(12) Includes 36,667 shares issuable upon the exercise of outstanding
stock options exercisable within 60 days and does not include
13,333 shares issuable upon the exercise of outstanding stock
options which are not exercisable within 60 days.
(13) Includes an aggregate 106,667 shares issuable upon the exercise of
outstanding stock options exercisable within 60 days and does not
include an aggregate 36,666 shares under options which are not
exercisable within 60 days
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The directors have determined that all members of record as of
the close of business on June 28, 2001 (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 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 7, 2001.
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. Two Directors are to be elected at the Meeting to
hold office for a term of three years expiring at the 2004 Annual
General Meeting of Members, and until each of their respective
successors shall have been duly elected and qualified. In the event
any of such nominees 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 nominees named below will be unavailable, or if elected, will
decline to serve. All of the nominees are residents of the United
States.
Certain information is set forth below for the nominees for
directors, as well as for each director whose term of office will
continue after the Meeting.
NOMINEES FOR DIRECTOR -TERM TO EXPIRE 2004
Name Age Principal Occupation And Other
Information
---------------- ----- --------------------------------
Melvin S. Cutler 69 Mr. Cutler has served as a
director of the Company since
May 17, 2000. In 1972 he
founded Cutler Associates,
Inc., an architectural and
engineering firm based in
Worcester, Massachusetts and
Mr. Cutler has served as
Chairman of the Board and Chief
Executive Officer of Cutler
Associates, Inc since its
inception. He also founded
Madison Bank in Palm Harbor,
Florida in 1985 and has served
as its Chairman since that
time.
Peter L. Vosotas 59 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.
5
DIRECTOR CONTINUING IN OFFICE -TERM TO EXPIRE 2003
Name Age Principal Occupation And Other
Information
---------------------- ----- -------------------------------
Alton R. Neal 55 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 Johnson, Blakely,
Pope, Bokor, Ruppel & Burns,
Tampa, Florida since1999. From
1994 until 1999, he was a
partner in the firm of Forlizzo
& Neal.
Dr. Ellis P. Hyman, 64 Dr. Hyman has served as a
D.D.S., P.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. Dr. Hyman
has been in private dental
practice for many years.
DIRECTOR CONTINUING IN OFFICE -TERM TO EXPIRE 2002
Name Age Principal Occupation And Other
Information
-------------------- ----- -------------------------------
Stephen Bragin 71 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.
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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, 2002, 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, 2002. 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 the fiscal year ended March 31, 2001 were as follows:
Audit Fees $53,000
Financial Information Systems
Design and Implementation Fees None
All Other Fees $21,000
The Audit Committee of the Board of Directors has determined that
the services provided by Ernst & Young LLP which were not directly
related to the most recent audit are compatible with maintaining the
principal accountant's independence.
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BOARD OF DIRECTORS
Directors Compensation
Directors who are not executive officers of the Company each
receive an annual retainer of $2,000 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.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors has established an Audit Committee and a
Compensation Committee. (The Board does not have a nominating
committee.) The Audit Committee is presently comprised of Messrs. Neal
(Chair) and Hyman, each of whom is "independent" (as defined under
applicable NASD rules). 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. A copy of this charter is included as Appendix A hereto.
The Compensation Committee is presently comprised of Messrs.
Cutler (Chair) and Bragin, and is responsible for establishing the
compensation of the Company's senior management, including salaries,
bonuses, termination arrangements and other benefits.
During the fiscal year ended March 31, 2001, the Board of
Directors held four meetings, the Audit Committee held two meetings
and the Compensation Committee held one meeting. All Directors
attended all meetings of the Board of Directors and all committees on
which they served during the fiscal year ended March 31, 2001, except
that Mr. Cutler did not attend two of the four meetings of the Board
of Directors.
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.
8
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 internal and
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 one meeting during fiscal year 2001.
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 on Form 10-KSB for the year ended March 31, 2001 for
filing with the Securities and Exchange Commission. The Committee and
the Board have also recommended, subject to shareholder approval, the
selection of the Company's independent auditors.
Alton Neal, Audit Committee Chair
Ellis Hyman, Audit Committee Member
EXECUTIVE OFFICERS AND COMPENSATION
(Form 41, 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, Vice-President-Finance. Mr. Finkenbrink, age
40, has served as Vice President-Finance of the Company since 1992.
For the fiscal year ended March 31, 2001, total cash compensation of
US $491,243 was paid to the 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.
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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, 2001, 2000 and 1999:
Summary Compensation Table
--------------------------------------------------------------------------------
Fiscal Long-Term
Name & Year Annual Compensation Compensation All
Principal Ended Shares under Other
Position March 31 Salary Bonus Other Option Compensation
--------------------------------------------------------------------------------
PETER L. VOSOTAS 2001 $144,000 $212,243 Nil 75,000 $9,378
Chairman of the
Board, Chief 50,000
Executive Officer 2000 $122,000 $117,595 Nil 333,333(1) $8,200
& President
50,000
1999 $118,224 $60,000 Nil 333,333(1) Nil
RALPH T.
FINKENBRINK 2001 $75,000 $60,000 Nil 50,000 $7,289
Sr. Vice
President 2000 $75,000 $40,000 Nil 50,000 $6,174
-Finance
1999 $75,000 $14,500 Nil 50,000 Nil
(1) Represents a bonus warrant exercisable at US $5.28/share until
September 3, 2000 issued to Mr. Vosotas for guaranteeing the
Company's indebtedness to BankAmerica under a US $45,000,000
line of credit.
Note: All of the above compensation amounts are expressed in
U.S. dollars and for the fiscal year ended March 31, 2001 each
executive officer's salary exceeded $100,000 Cdn.
10
The following table sets forth information with respect to grants
of stock options during the fiscal year ended March 31, 2001 to the
executive officers of the Company:
Option Grants During Fiscal 2001
----------------------------------------------------------------------------
% of Total Market Value
Options of Securities
Name of Granted to Exercise Underlying Options
Executive Option Employees in Price on Date of Grant Expiration
Officer Granted Fiscal 2001 ($/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, 2001 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 2001
and Fiscal Year-End Option Values
-------------------------------------------------------------------------------
Number of Value of
Unexercised Unexercised
Options at in-the-Money
Number Of Fiscal Year Options at
Name of Shares Aggregate End Fiscal Year End(2)
Executive Acquired on Value Exercisable/ Exercisable/
Officer Exercise Realized(1) Unexercisable Unexercisable
-------------------------------------------------------------------------------
Peter L.
Vosotas Nil Nil 41,666/33,334 $57,917/$32,833
Ralph T.
Finkenbrink Nil Nil 26,667/23,333 $35,267/$20,733
(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 was calculated by multiplying the number of
shares that may be acquired upon the exercise of options by the
difference between the closing price per share on March 31,
2001 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 $144,000 and annual performance bonuses as determined by the
Company's Board of Directors. The initial term of this agreement is
for a period of one year, however, the agreement will automatically
renew for successive two-year terms unless the Company provides to the
Executive, at least sixty days prior to the expiration of the initial
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
$75,000 and annual performance bonuses as determined by the Company's
Board of Directors. The initial term of this agreement is for a period
of one year, however, the agreement will automatically renew for
successive two-year terms unless the Company provides to the
Executive, at least sixty days prior to the expiration of the initial
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.
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 U.S Securities and Exchange Commission (the
"Commission") and furnish copies of such reports to the Company.
During the fiscal year ended March 31, 2001, 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 three reports late covering an aggregate of six
transactions and Mr. Cutler filed one report late covering an
aggregate of three 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 June 3, 1994, Peter L. Vosotas, Chairman of the Board, Chief
Executive Officer and President of the Company, was granted a warrant
to purchase 333,333 Common shares at a price of US $5.28 per share.
This bonus warrant was granted in exchange for Mr. Vosotas' guarantee
of the Company's indebtedness to BankAmerica under its line of credit
facility. On September 3, 2000 the warrant expired unexercised.
In April 1996, Dr. Ellis Hyman, currently a Director of the
Company, agreed to subordinate $200,000 of debt at 12% interest with
semi-annual interest payments only. The entire principal balance plus
accrual interest was due on April 20, 2000. Dr. Hyman had the option
of converting the note into Common shares of the Company at a price of
$5.00 per share. On April 20, 2000 the Company elected, pursuant to
the terms of the above note, to repay the entire principal balance
plus all accrued interest.
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 2002
Annual General Meeting of Members was March 4, 2002. After May 18,
2002, 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
2002 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.
BY ORDER OF THE BOARD OF DIRECTORS
Peter L. Vosotas
Chairman of the Board,
Chief Executive Officer and President
A-1
Appendix A
Nicholas Financial, Inc.
Audit Committee Charter
(Originally Adopted June 15, 2000)
Organization
This charter governs the operations of the audit committee.
The committee shall review and reassess the charter at least
annually and obtain the approval of the board of directors. The
committee shall be appointed by the board of directors and shall
comprise at least two directors, each of whom are independent of
management and the Company. Members of the committee shall be
considered independent if they have no relationship that may
interfere with the exercise of their independence from management
and the Company.
Statement of Policy
The audit committee shall provide assistance to the board of
directors in fulfilling their oversight responsibility to the
shareholders, potential shareholders, the investment community,
and others relating to the Company's financial statements and the
financial reporting process, the systems of internal accounting
and financial controls, the internal audit function, the annual
independent audit of the Company's financial statements, and the
legal compliance and ethics programs as established by management
and the board. In so doing, it is the responsibility of the
committee to maintain free and open communication between the
committee, independent auditors, the internal auditors and
management of the Company. In discharging its oversight role, the
committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities, and
personnel of the Company and the power to retain outside counsel,
or other experts for this purpose.
Responsibilities and Processes
The primary responsibility of the audit committee is to
oversee the Company's financial reporting process on behalf of
the board and report the results of their activities to the
board. Management is responsible for preparing the Company's
financial statements, and the independent auditors are
responsible for auditing those financial statements. The
committee in carrying out its responsibilities believes its
policies and procedures should remain flexible, in order to best
react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk
practices, and ethical behavior.
A-2
Audit Committee Charter (continued)
The following shall be the principal recurring processes of
the audit committee in carrying out its oversight
responsibilities. The processes are set forth as a guide with the
understanding that the committee may supplement them as
appropriate.
- The committee shall have a clear understanding with
management and the independent auditors that the independent
auditors are ultimately accountable to the board and the
audit committee, as representatives of the Company's
shareholders.The committee shall have the ultimate authority
and responsibility to evaluate and, where appropriate,
replace the independent auditors. The committee shall
discuss with the auditors their independence from management
and the Company and the matters included in the written
disclosures required by the Independence Standards Board.
Annually, the committee shall review and recommend to the
board the selection of the Company's independent auditors,
subject to shareholders' approval.
- The committee shall discuss with the internal auditors and
the independent auditors the overall scope and plans for
their respective audits including the adequacy of staffing
and compensation. Also, the committee shall discuss with
management, the internal auditors, and the independent
auditors the adequacy and effectiveness of the accounting
and financial controls, including the Company's system to
monitor and manage business risk, and legal and ethical
compliance programs. Further, the committee shall meet
separately with the internal auditors and the independent
auditors, with and without management present, to discuss
the results of their examinations.
- The committee shall review the interim financial statements
with management and the independent auditors prior to the
filing of the Company's Quarterly Report on Form l0-Q. Also,
the committee shall discuss the results of the quarterly
review and any other matters required to be communicated to
the committee by the independent auditors under generally
accepted auditing standards. The chair of the committee may
represent the entire committee for the purposes of this
review.
- The committee shall review with management and the
independent auditors the financial statements to be included
in the Company's Annual Report on Form 10-K (or the annual
report to shareholders if distributed prior to the filing of
Form 10-K), including their judgment about the quality,
not just acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of
the disclosures in the financial statements. Also, the
committee shall discuss the results of the annual audit and
any other matters required to be communicated to the
committee by the independent auditors under generally
accepted auditing standards.
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 2001 ANNUAL GENERAL MEETING OF
MEMBERS TO BE HELD ON TUESDAY, AUGUST 7, 2001.
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 2001 Annual General Meeting of Members
of the Company to be held on August 7, 2001 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. a. To elect as directors all the persons named in
1.(b) below:
In favour: Against Withhold Vote:
--------- --------- -------
OR
b. To elect as a director:
Peter L. Vosotas In favour: Withhold Vote:
(to serve until 2004) --------- -------
Melvin S. Cutler In favour: Withhold Vote:
(to serve until 2004) --------- -------
2. To appoint Ernst & Young LLP, as Auditors of the Company for
the fiscal year ending March 31, 2002:
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
2001 Annual General Meeting of Members and the accompanying Proxy
Statement and Information Circular dated July 02, 2001.
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 _____________________________, 2001.
Number of Shares Held:
______________________________ ______________________________
Name (Please Print)
______________________________
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.