Advance America is the nation's
largest cash advance provider

Role of Directors

The business and affairs of the Company shall be managed by or under the direction of the Board. A director is expected to spend the time and effort necessary to properly discharge such director's responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and committees on which such director sits, and to review prior to meetings material distributed in advance for such meetings. A director who is unable to attend a meeting (which it is understood will occur on occasion) is expected to notify the Chairman of the Board or the chairperson of the appropriate committee in advance of such meeting.

Selection of the Chairman of the Board

The Board may separate or combine the offices of the Chairman of the Board and the Chief Executive Officer. The Board shall be free to choose its Chairman of the Board and Vice Chairman, if any, in any way that it deems best for the Company consistent with the Bylaws.

Size of the Board

The Company's Certificate of Incorporation and Bylaws provide that the number of directors shall be no less than one and no more than twelve. Within those limits, the size of the Board could be increased or decreased from time to time if determined to be appropriate by the Board.

Selection of New Directors

The Board shall be responsible for nominating members for election to the Board and for filling vacancies on the Board that may occur between annual meetings of stockholders. The Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the Board for Board membership. When formulating its Board membership recommendations, the Nominating and Corporate Governance Committee shall also consider advice and recommendations from others as it deems appropriate.

The Nominating and Corporate Governance Committee will consider candidates recommended by stockholders. In considering candidates submitted by stockholders, the Nominating and Corporate Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. The Nominating and Corporate Governance Committee may establish procedures, from time to time, regarding stockholder submission of candidates. To have a candidate considered by the Nominating and Corporate Governance Committee, a stockholder must submit the recommendation in writing and must include the following information: (1) the name of the stockholder and evidence of the person's ownership of Company stock; and (2) the name of the candidate, the candidate's resume or a listing of his or her qualifications to be a director of the Company and the person's consent to be named as a director if selected by the Nominating and Corporate Governance Committee and nominated by the Board.

The stockholder recommendation and information described above must be sent to the Corporate Secretary at 135 North Church Street, Spartanburg, South Carolina 29306. The Nominating and Corporate Governance Committee will accept recommendations of director candidates throughout the year; however, in order for a recommended director candidate to be considered for nomination to stand for election at an upcoming annual meeting of stockholders, the recommendation must be received by the Corporate Secretary not less than 120 days prior to the anniversary date of the Company's most recent annual meeting of stockholders.

Board Membership Criteria

At a minimum, a nominee for director must demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board's oversight of the business and affairs of the Company and have a reputation for honest and ethical conduct in both his or her professional and personal activities. Nominees for director shall be selected on the basis of, among other things, experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries, understanding of the Company's business environment, and willingness to devote adequate time and effort to Board responsibilities.

The Nominating and Corporate Governance Committee shall be responsible for assessing the appropriate balance of criteria required of Board members.

Other Public Company Directorships

The Company does not have a policy limiting the number of other public company boards of directors upon which a director may sit. However, the Nominating and Corporate Governance Committee shall consider the number of other public company boards and other boards (or comparable governing bodies) on which a prospective nominee is a member. Notwithstanding such other directorships, each director is expected to devote such time as is necessary to fulfill his or her responsibilities to the Company.

In addition, in recognition of the enhanced time commitments associated with membership on a public company's audit committee, no member of the Audit Committee may serve simultaneously on the audit committees of more than two (2) other public companies unless the Board determines that such simultaneous service would not impair the ability of the member to effectively serve on the Company's Audit Committee.

Independence of the Board

The Board shall consist of a majority of directors who qualify as independent directors ("Independent Directors") under the listing standards of the New York Stock Exchange (the "NYSE") and the rules and regulations promulgated by the U.S. Securities and Exchange Commission.

The Board shall review annually the relationships that each director has with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). Prior to each annual review, all directors will provide the Nominating and Corporate Governance Committee information regarding their relationships with the Company. Following each annual review, only those directors who the Board affirmatively determines have no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company) will be considered Independent Directors, subject to additional qualifications prescribed under the listing standards of the NYSE or under applicable law. The Board may adopt and disclose categorical standards to assist it in determining director independence. In the event that a director becomes aware of any change in circumstances that may result in such director no longer being considered independent, he or she shall promptly inform the chairperson of the Nominating and Corporate Governance Committee.

Directors Who Change Their Present Job Responsibility

Directors who are also employees of the Company are expected to resign from the Board at the same time they leave employment with the Company, which policy the Board in its discretion may determine to waive.

Non-employee directors who retire or change the position they held when they became a member of the Board are expected to submit their resignation from the Board to the Nominating and Corporate Governance Committee within a reasonable time following their change in status. The Nominating and Corporate Governance Committee shall review the change in status and make a determination to accept or decline the tendered resignation under the circumstances.

Retirement Age

Directors who have attained the age of 72 years are ineligible to stand for reelection as a director. However, the Board may determine to waive this policy in individual cases.

Director Tenure

In connection with each director nomination recommendation, the Nominating and Corporate Governance Committee shall consider the issue of continuing director tenure and take steps as may be appropriate to ensure that the Board maintains an openness to new ideas and a willingness to critically reexamine the status quo. An individual director's renomination is dependent upon such director's performance evaluation, as well as a suitability review, each to be conducted by the Nominating and Corporate Governance Committee in connection with each director nomination recommendation.

Board Compensation

A director who is also an officer of the Company shall not receive additional compensation for such service as a director.

The Company believes that compensation for non-employee directors should be competitive and should encourage increased ownership of the Company's stock through the payment of a portion of director compensation in Company stock, options to purchase Company stock or similar compensation. The Nominating and Corporate Governance Committee will periodically review the level and form of the Company's director compensation, including how such compensation relates to director compensation of companies of comparable size, industry and complexity. Such review will also include a review of both direct and indirect forms of compensation to the Company's directors. Changes to director compensation will be proposed to the full Board for consideration.

Director's fees (including any additional amounts paid to chairs of committees and to members of committees of the Board) are the only compensation a member of the Audit Committee may receive from the Company. According to the Company's policy, directors may elect to receive their fees in the form of Company common stock. Directors shall also be reimbursed for out-of-pocket expenses incurred in connection with attending meetings of the Board or committees.

Stock Ownership Guidelines

The Board may set stock ownership guidelines for officers and directors of the Company.

Separate Sessions of Non-Management Directors

The non-management directors of the Company shall meet in executive session without management on a regularly scheduled basis. The chairperson of the Nominating and Corporate Governance Committee (the "Lead Non-Management Director") shall preside at such executive sessions. In the absence of the Lead Non-Management Director, another non-management director designated by the non-management directors shall preside at such executive sessions.

If the group of non-management directors includes one or more directors who are not Independent Directors, the Independent Directors of the Company shall meet in an executive session at least twice per year.

Any interested parties desiring to communicate with any director (including the Lead Non-Management Director and the other non-management directors) regarding the Company may directly contact such director by submitting such communications in writing to the director or directors in care of the Corporate Secretary, 135 North Church Street, Spartanburg, South Carolina 29306.

All communications received as set forth in the preceding paragraph will be opened by the office of the Corporate Secretary for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service, or patently offensive material will be forwarded promptly to the addressee. In the case of communications to the Board or any group or committee of directors, the office of the Corporate Secretary will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope is addressed.

Self-Evaluation by the Board

The Nominating and Corporate Governance Committee will sponsor an annual self-assessment of the Board's performance as well as the performance of each committee of the Board, the results of which will be discussed with the full Board and each committee. The assessment should include a review of any areas in which the Board or management believes the Board can make a better contribution to the Company. The Nominating and Corporate Governance Committee will utilize the results of this self-evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and making recommendations to the Board with respect to assignments of Board members to various committees.

Board Access to Management

Board members shall have access to the Company's management and, as appropriate, to the Company's outside advisors. Board members shall coordinate such access through the Chairman of the Board, the Vice Chairman of the Board, the Chief Executive Officer or the Lead Non-Management Director and Board members will use judgment to assure that this access is not distracting to the business operation of the Company.

Board Materials Distributed in Advance

Information and materials that are important to the Board's understanding of the agenda items and other topics to be considered at a Board meeting should, to the extent practicable, be distributed sufficiently in advance of the meeting to permit prior review by the directors. In the event of a pressing need for the Board to meet on short notice or if such materials would otherwise contain highly confidential or sensitive information, it is recognized that written materials may not be available in advance of the meeting.

Board Interaction with Institutional Investors, Analysts, Press and Customers

The Board believes that management generally should speak for the Company. Each director should refer all inquiries from institutional investors, analysts, the press or customers to the Chief Executive Officer or his or her designee.

Board Orientation and Continuing Education

The Company shall provide new directors with a director orientation program to familiarize such directors with, among other things, the Company's business, strategic plans, significant financial, accounting and risk management issues, compliance programs, conflicts policies, code of business conduct and ethics, corporate governance guidelines, principal officers, internal audit department and independent auditors. Each director is expected to participate, at the Company's expense, in continuing educational programs from time to time, as appropriate.

Director Attendance at Annual Meetings of Stockholders

Directors are expected to attend the Company's annual meeting of stockholders. A director who is unable to attend the Company's annual meeting of stockholders (which it is understood will occur on occasion) is expected to notify the Chairman of the Board.

Frequency of Meetings

The Board shall meet as frequently as it deems necessary to carry out its duties. At least one regularly scheduled meeting of the Board shall be held quarterly.

The Board is responsible for the oversight and review of the management of the Company. The Board's oversight responsibilities shall include, but not be limited to:

Financial Information

The Board, with guidance from the Audit Committee, shall regularly receive and review reports of the key financial information of the Company. The reports shall be in sufficient detail, as deemed appropriate by the Board, to allow the members of the Board to monitor the financial performance of the Company.

Organizational Structure

The Board shall perform an annual review of the appropriateness of the Company's organization structure, including, except to the extent delegated to the Audit Committee, the appropriateness of financial reporting and information systems. The review by the Board or the Audit Committee shall focus on the following areas and any other areas deemed appropriate by the Board:

• Organizational structure in light of the Company's objectives, strategies and future plans;
• Responsibility and delegation of authority;
• Segregation of responsibilities for initiating and recording transactions and maintaining custody of assets; and
• Communication flow within the organization (upstream, downstream and across business functions).

Number and Names of Board Committees

The Company shall have three standing committees: Audit, Nominating and Corporate Governance and Compensation. The purpose and responsibilities for the Audit, Nominating and Corporate Governance and Compensation committees shall be outlined in committee charters adopted by the Board. The Board may want, from time to time, to form a new committee or disband a current committee depending on circumstances. In addition, the Board may determine to form ad hoc committees from time to time, and determine the composition and areas of competence of such committees.

Independence of Board Committees

Each of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee shall be composed entirely of Independent Directors satisfying applicable legal, regulatory and stock exchange requirements necessary for an assignment to any such committee (subject to any transition periods for newly public companies provided for under applicable rules).

Committee Membership

The Board shall appoint committee members and chairpersons of each Board committee. The Nominating and Corporate Governance Committee shall be responsible for making recommendations to the Board with respect to the assignment of Board members to various committees.

Selection of the Chief Executive Officer

The Board shall be responsible for identifying potential candidates for, and selecting, the Company's Chief Executive Officer. In identifying potential candidates for, and selecting, the Company's Chief Executive Officer, the Board shall consider, among other things, a candidate's experience, understanding of the Company's business environment, leadership qualities, knowledge, skills, expertise, integrity and reputation in the business community.

Evaluation of Chief Executive Officer

The Board will provide the Chief Executive Officer with an annual performance review. The following steps will be utilized to carry out this review:

• The Chief Executive Officer will develop an annual self-evaluation and provide this to the Board, either orally or in writing; and
• With this information, each non-management director will provide his or her assessment of the Chief Executive Officer's performance to the Nominating and Corporate Governance Committee. These assessments should include the director's appraisal of:
  • The Company's performance and the Chief Executive Officer's contribution to it, both compared to competitors and the Company's own strategic goals;
  • Achievement of personal goals set by the Chief Executive Officer for the year, as part of his or her self-evaluation; and
  • Other aspects of the Chief Executive Officer's performance that the non-management director deems relevant.