UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): September 30, 2009
EZCORP, Inc.
(Exact name of registrant as specified in its charter)
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| Delaware |
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0-19424 |
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74-2540145 |
| (State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
1901 Capital Parkway, Austin, Texas 78746
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (512) 314-3400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 — Entry into a Material Definitive Agreement
On
September 30, 2009, EZCORP, Inc. entered into an advisory services agreement with Madison Park,
LLC (“Madison Park”), a business and financial advisory firm wholly-owned by Phillip E. Cohen, the
beneficial owner of all of EZCORP’s outstanding Class B Voting Common Stock.
Summary of Terms — Pursuant to the agreement, Madison Park will provide advisory services related
to EZCORP’s business and long term strategic plan, including (a) identifying, evaluating, and
negotiating potential acquisitions and strategic alliances, (b) assessing operating and strategic
objectives, including new business development, (c) advising on investor relations and relations
with investment bankers, securities analysts, and other members of the financial services industry,
(d) assisting in international business development and strategic investment opportunities, and (e)
analyzing, evaluating, and advising on various financial matters. In exchange for those services,
EZCORP will pay Madison Park a retainer fee of $300,000 per month and will reimburse Madison Park
for its out-of-pocket expenses incurred in connection with the engagement. In addition, EZCORP
will indemnify Madison Park (and its officers, directors, employees, and affiliates) from and
against all claims, costs, liabilities, and damages related to or arising out of the engagement
(except to the extent that any claim, cost, liability, or damage results from the recklessness,
willful misconduct, or bad faith of the indemnified party).
The advisory services agreement is effective as of October 1, 2009, and the term of the engagement
runs through September 30, 2010. Either party may terminate the agreement at any time on thirty
days’ written notice to the other party.
A copy of the agreement is filed as Exhibit 10.1.
Board Governance Process — The engagement of Madison Park pursuant to the advisory services
agreement was identified and acknowledged by the EZCORP Board of Directors from the outset as a
related party transaction. Consequently, the Board of Directors implemented measures designed to
ensure that the agreement was considered, analyzed, negotiated, and approved objectively. Those
measures included the following:
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The Board of Directors appointed and commissioned a special committee consisting of the
independent members of the Board of Directors (the “Independent Directors Committee”) to (a)
evaluate EZCORP’s relationship with Madison Park, including reviewing the advisory services
provided to EZCORP by Madison Park during fiscal 2009, (b) determine whether EZCORP should
continue utilizing Madison Park’s services for fiscal 2010, and (c) determine whether to enter
into a new advisory agreement with Madison Park, and if so, negotiate and agree upon the terms
of such agreement. The Independent Directors Committee was authorized to engage independent
experts and advisers to assist it in the discharge of its responsibilities. |
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The Independent Directors Committee engaged a qualified, independent financial advisory
firm to evaluate the terms of the advisory services agreement relative to the reasonable
market rates for the services contemplated by the agreement, and that firm counseled and
advised the committee in the course of its consideration and evaluation of the Madison Park
relationship and the proposed terms of the new advisory services agreement. |
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The Independent Directors Committee sought, received, and relied upon an opinion from that
independent financial advisory firm to the effect that the consideration to be paid to Madison
Park pursuant to the advisory services agreement is fair to EZCORP from a financial point of
view. |
With those measures and after consideration and discussion of the relationships and the interests
of Mr. Cohen, the Independent Directors Committee concluded that the advisory services agreement
was fair to, and in the best interests of, EZCORP and its stockholders and, on that basis,
negotiated and approved the engagement of Madison Park pursuant to the advisory services agreement.
Item 9.01 — Financial Statements and Exhibits.
| 10.1 |
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Advisory Services Agreement, dated as of October 1, 2009, between EZCORP, Inc. and
Madison Park, LLC |
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