ADVANCE AMERICA, CASH ADVANCE CENTERS, INC. POLICY REGARDING MAJORITY ELECTION OF DIRECTORS
Effective February 21, 2007
In any uncontested election of directors (an election in which the only nominees are those recommended by the Board of Directors), any director nominee who receives a greater number of votes "withheld" from his or her election than votes "for" such election (a "Withheld Director") shall tender his or her resignation within 30 days after certification of the final vote tally.
The Nominating and Corporate Governance Committee (the "Committee"), excluding any Withheld Director(s) in question, shall promptly consider the resignation offer and recommend to the full Board of Directors (the "Board") whether to accept it. If a majority of the members of the Committee are Withheld Directors in the same election, the Board will appoint a committee comprised of independent directors solely for the purpose of considering the tendered resignations and making the recommendation to the Board in place of the Committee.
In reaching its decision, the Committee may consider any factors it considers relevant, including, without limitation, (i) any stated reasons why stockholders "withheld" votes for election of the Withheld Director; (ii) the length of service and qualifications of the Withheld Director; (iii) the Withheld Director's past and expected future contributions to the Company; (iv) the overall composition of the Board; (v) whether accepting the tendered resignation would cause the Company to fail to meet any applicable rule or regulation, including New York Stock Exchange listing requirements and federal securities laws; and (vi) whether the resignation of the Withheld Director could result in the triggering of change of control or similar provisions under any contract by which the Company is bound or any benefit plan of the Company, and if so, the potential impact thereof. In making its recommendation to the Board, the Committee may consider possible remedies in addition to acceptance of the resignation, including alternatives for curing the underlying cause of the "withheld" votes, if known.
The Board, excluding the Withheld Director(s) in question, will act on the Committee's recommendation within 90 days following certification of the stockholder vote. The Board will consider the factors considered by the Committee and such additional information and factors that the Board believes to be relevant to the Company's and its stockholders' best interests. The Board will disclose its decision whether to accept or reject the Withheld Director's resignation offer (and the reasons for rejecting the resignation offer, if applicable) in a Current Report on Form 8-K filed with the Securities and Exchange Commission within four business days of its decision.
To the extent that one or more Withheld Directors' resignations are accepted by the Board, the Committee will recommend to the Board whether to fill such vacancy or vacancies or reduce the size of the Board.
This policy will be summarized or included in the Company's proxy statement each time stockholders are asked to elect directors.
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