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[LOGO] Rent A Center(R)
PROXY STATEMENT FOR
AND
NOTICE OF
2002 ANNUAL STOCKHOLDERS MEETING
Annual May 21, 2002
Meeting: 9:30 a.m. local time
Location: Rent-A-Center, Inc.
5700 Tennyson Parkway
Fourth Floor
Plano, Texas 75024
Record Close of business on March 28, 2002
Date:
If you were a stockholder of record at the close of business on March 28, 2002, you may
vote at the meeting.
Number Holders of our Common Stock are entitled to one vote for each share of Common Stock
of Votes: they owned on March 28, 2002. The holders of our Preferred Stock were entitled to convert
their 292,434 shares of Preferred Stock into 10,468,373 shares of our Common Stock on
March 28, 2002, and thus are entitled to an equal number of votes.
Agenda: 1. To elect two directors, one of whom is to be elected by all of the stockholders and one
of whom is to be elected by the holders of our Preferred Stock; and
2. To transact any other proper business.
Proxies: Unless you tell us on the proxy card to vote differently, we will vote signed returned proxies
"for" the Board's nominees. The proxy holders will use their discretion on other matters. If a
nominee cannot or will not serve as a director, the proxy holders will vote for a person
whom they believe will carry on our present policies.
Proxies The Board of Directors
Solicited By:
First Mailing This proxy statement is dated April 12, 2002. We are first mailing this proxy statement on or
Date: about April 19, 2002.
Revoking You may revoke your proxy before it is voted at the meeting. To revoke, follow the
Your Proxy: procedures listed on page 20 under "Voting Procedures/Revoking Your Proxy--How You
May Revoke Your Proxies."
PLEASE VOTE BY RETURNING YOUR PROXY--YOUR VOTE IS IMPORTANT
Prompt return of your proxy will help reduce the costs of resolicitation.
CONTENTS
ELECTION OF DIRECTORS......................................... 2
EXECUTIVE OFFICERS............................................ 5
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION....... 9
PERFORMANCE GRAPH............................................. 11
EXECUTIVE COMPENSATION AND OTHER INFORMATION.................. 12
OTHER BUSINESS................................................ 17
INDEPENDENT PUBLIC ACCOUNTANT INFORMATION..................... 17
AUDIT COMMITTEE REPORT ON RENT-A-CENTER'S FINANCIAL STATEMENTS 18
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......... 18
RENT-A-CENTER STOCK OWNERSHIP................................. 19
VOTING PROCEDURES / REVOKING YOUR PROXY....................... 20
SUBMISSION OF STOCKHOLDER PROPOSALS........................... 21
ANNUAL REPORT ON FORM 10-K.................................... 21
1
ELECTION OF DIRECTORS
Board Structure: The number of directors currently constituting our entire Board is eight. We currently have
seven members serving on our Board, with one vacant Class I position. The directors are
divided into three classes. In general, directors in each class serve for a term of three
years.
Mr. Arnette currently serves as one of our Class II directors with a term that expires at this
year's annual stockholders meeting. Mr. Arnette has advised us that he does not intend to
stand for re-election. Accordingly, our Board has fixed the number of directors constituting
our entire Board at seven including one vacant Class I position, such change to take effect
upon the election of the two Class II director positions at this year's annual stockholders
meeting. As a result, only two Class II director positions are available and being elected at
this year's annual meeting.
Under the terms of our Certificate of Incorporation, the holders of our Preferred Stock are
entitled to elect two of the seven directors, one of whom is a Class I director and one of
whom is a Class II director. Mr. Copses currently serves as the Class I director and
Mr. Berg currently serves as the Class II director elected by the holders of our Preferred
Stock. In addition, under the terms of our stockholders agreement between Apollo,
Mr. Speese and us, Apollo is entitled to nominate a third person as a Class III director who
is to be elected by all of our stockholders. Mr. Jhawar currently serves as the Class III
director designated by Apollo.
Number of Two directors are to be elected, one of whom is to be elected by all of our stockholders and
Directors to be one of whom is to be elected by the holders of our Preferred Stock, voting separately as a
Elected: class.
BOARD NOMINEES Our Board has nominated Mark E. Speese to be reelected by all of the stockholders.
Our Board has also nominated Laurence M. Berg to be reelected by the holders of
our Preferred Stock. We urge you to vote for Messrs. Speese and Berg.
Terms to Expire at Mark E. Speese Mr. Speese has served as our Chairman of the Board and
the 2005 Annual Chief Executive Officer since October 2001 and has served as one of
Meeting: our directors since 1990. Mr. Speese previously served as our Vice
Chairman from September 1999 until December 2000. From 1990
until April 1999, Mr. Speese served as our President. Mr. Speese also
served as our Chief Operating Officer from November 1994 until
March 1999. From our inception in 1986 until 1990, Mr. Speese
served as a Vice President responsible for our New Jersey
operations. Prior to joining us, Mr. Speese was a regional manager for
Thorn Americas from 1979 until 1986. Mr. Speese's term as a Class II
director expires at this year's annual stockholders meeting.
Mr. Speese is 44 years old.
Laurence M. Berg Mr. Berg has served as one of our directors since August 1998.
Mr. Berg is a partner of Apollo Management, L.P., where he has
worked since 1992. Prior to joining Apollo, Mr. Berg was a member of
the Mergers and Acquisition Group at Drexel Burnham Lambert.
Mr. Berg is also a director of Sylvan Learning Systems, a provider of
personalized instruction services, and AMC Entertainment, an
operator of movie theaters. Mr. Berg serves as one of the two
directors elected by the holders of our Preferred Stock. Mr. Berg's
term as a Class II director expires at this year's annual stockholders
meeting. Mr. Berg is 35 years old.
2
CONTINUING DIRECTORS
Terms to Expire at J.V. Lentell Mr. Lentell has served as one of our directors since February 1995.
the 2003 Annual Mr. Lentell was employed by Kansas State Bank & Trust Co., Wichita,
Meeting: Kansas, from 1966 until July 1993, serving as Chairman of the Board
from 1981 until July 1993. Since July 1993, he has served as a
director and Vice Chairman of the Board of Directors of Intrust Bank,
N.A., successor by merger to Kansas State Bank & Trust Co.
Mr. Lentell's term as a Class III director expires at our 2003 annual
stockholders meeting. Mr. Lentell is 63 years old.
Andrew S. Jhawar Mr. Jhawar has served as one of our directors since October 2001.
Mr. Jhawar has been associated with Apollo Management, L.P. since
February 2000. Prior to joining Apollo, Mr. Jhawar was an investment
banker at Donaldson, Lufkin, & Jenrette Securities from August 1999
until January 2000, and from July 1993 until December 1997, at
Jeffries & Company, Inc., primarily concentrating on the structuring and
execution of high yield and equity financing transactions. From January
1998 until July 1999, Mr. Jhawar attended Harvard Business School
where he received his MBA degree. Mr. Jhawar serves as the director
nominated by Apollo under the stockholders agreement between Apollo,
Mr. Speese and us. Mr. Jhawar's term as a Class III director expires at
our 2003 annual stockholders meeting. Mr. Jhawar is 30 years old.
Terms to Expire at Mitchell E. Fadel Mr. Fadel has served as our President since July 2000 and as a
the 2004 Annual director since December 2000. From November 1992 until July 2000,
Meeting: Mr. Fadel served as President and Chief Executive Officer of
ColorTyme. We acquired ColorTyme in May 1996. From 1983 until
1991, Mr. Fadel was a Regional Manager for Thorn Americas and its
affiliates. Mr. Fadel's term as a Class I director expires at our 2004
annual stockholders meeting. Mr. Fadel is 44 years old.
Peter P. Copses Mr. Copses has served as one of our directors since August 1998.
Mr. Copses is a partner of Apollo Management, L.P., where he has
worked since 1990. Prior to joining Apollo, Mr. Copses was an
investment banker at Drexel Burnham Lambert, and subsequently at
Donaldson, Lufkin, & Jenrette Securities, primarily concentrating on
the structuring, financing, and negotiation of mergers and acquisitions.
Mr. Copses is also a director of Zale Corporation, an operator of
specialty retail jewelry stores. Mr. Copses serves as one of the two
directors elected by the holders of our Preferred Stock. Mr. Copses'
term as a Class I director expires at our 2004 annual stockholders
meeting. Mr. Copses is 43 years old.
3
BOARD INFORMATION
Board Meetings: During 2001, our Board of Directors met eight times, including regularly scheduled and
special meetings. Each director attended all meetings of the Board during his service as a
director, except that Messrs. Lentell, Fadel, Arnette, and Jhawar each was unable to attend
one meeting after receiving or waiving proper notice. The Board took action by unanimous
written consent one time during 2001.
Board Committees: Under our stockholders agreement, each committee of our Board is to consist of three
directors, one of whom must be a director nominated by Apollo. Under our Certificate of
Incorporation and our stockholders agreement, so long as our Preferred Stock is
outstanding, one member of the Audit Committee, the Compensation Committee, the
Finance Committee, and the Executive Committee, if one is created, must be a director
who was elected by holders of our Preferred Stock, which also counts as Apollo's one
designee on such committee.
The Audit Committee recommends the appointment of our independent auditors. It also
approves audit reports and plans, accounting policies, audit fees and certain other
expenses. The Audit Committee held three meetings in 2001. All members of the Audit
Committee are "independent" as defined in the NASD listing standards. Under our
Certificate of Incorporation and our stockholders agreement, a director elected by the
holders of our Preferred Stock must be a member of the Audit Committee. The Board has
adopted a written charter for the Audit Committee. The Audit Committee reviews and
reassesses the adequacy of the written charter on an annual basis. Members: Mr. Copses,
Chairman, and Messrs. Lentell and Berg.
The Compensation Committee manages executive officer compensation. It also
administers our compensation and incentive plans, including our Long-Term Incentive
Plan. The Compensation Committee evaluates the competitiveness of our compensation
and the performance of our Chief Executive Officer. The Compensation Committee held
one regular meeting in 2001 and acted by unanimous written consent six times during
2001. All members of the Compensation Committee are non-employee directors. Under
our Certificate of Incorporation and our stockholders agreement, a director elected by the
holders of our Preferred Stock must be a member of the Compensation Committee.
Members: Mr. Lentell, Chairman, and Messrs. Berg and Copses.
The Finance Committee. Under our Certificate of Incorporation, the Finance Committee
must approve the issuance of debt and equity securities, except in limited circumstances.
In certain cases the approval must be unanimous. Under our Certificate of Incorporation
and our stockholders agreement, a director elected by the holders of our Preferred Stock
must be a member of the Finance Committee. The Finance Committee met two times
during 2001. Members: Messrs. Speese, Lentell and Copses.
BOARD COMPENSATION
Retainer and Fees: Non-employee directors each received $3,500 for each Board meeting and $1,000 for each
Committee meeting attended in 2001 and were reimbursed for their expenses in attending
such meetings. In 2002, non-employee directors will each receive $3,500 for each Board
meeting and $1,000 for each Committee meeting attended and will be reimbursed for their
expenses in attending such meetings. Messrs. Talley, Fadel and Arnette did not receive
any compensation for their services as a director during 2001. Mr. Speese received such
compensation prior to October 2001, during which time he served as only a director.
Option Grants: Non-employee directors receive options to purchase 9,000 shares of our Common Stock in
their first year of service as a director and options to purchase 5,000 shares of our
Common Stock on the first business day of each year thereafter. The exercise price of the
options is the fair market value of our shares of our Common Stock on the grant date.
These options vest and are exercisable immediately. Messrs. Talley, Fadel and Arnette
were not granted any options for their services as a director during 2001. Mr. Speese
received 9,000 options on January 1, 2001 because he was serving only as a director at
that time.
4
EXECUTIVE OFFICERS
The Board appoints our executive officers at the first Board meeting following
our Annual Meeting of Stockholders, and updates the executive officer positions
as needed throughout the year. Each executive officer serves at the behest of
the Board and until their successors are elected and appointed or until the
earlier of their death, resignation or removal.
The following table sets forth certain information with respect to our
executive officers:
Name Age Position
---- --- --------
Mark E. Speese...... 44 Chairman of the Board of Directors and Chief Executive
Officer
Mitchell E. Fadel... 44 President
Dana F. Goble....... 36 Executive Vice President--Operations
David A. Kraemer.... 40 Executive Vice President--Operations
Robert D. Davis..... 30 Senior Vice President--Finance, Chief Financial Officer
and Treasurer
Steven M. Arendt.... 45 Chief Executive Officer and President of ColorTyme,
Inc.
Christopher A. Korst 42 Senior Vice President--General Counsel
Anthony M. Doll..... 33 Senior Vice President
C. Edward Ford, III. 35 Senior Vice President
John H. Whitehead... 52 Senior Vice President
William C. Nutt..... 45 Senior Vice President
Timothy J. Stough... 46 Senior Vice President
Mark S. Connelly.... 39 Senior Vice President
David G. Ewbank..... 45 Senior Vice President
David R. Reed....... 48 Senior Vice President
Richard S. Lillard.. 34 Senior Vice President
David M. Glasgow.... 33 Corporate Secretary
Mark E. Speese Mr. Speese has served as our Chairman of the Board and
Chief Executive Officer since October 2001 and has served
as one of our directors since 1990. Mr. Speese previously
served as our Vice Chairman from September 1999 until
December 2000. From 1990 until April 1999, Mr. Speese
served as our President. Mr. Speese also served as our
Chief Operating Officer from November 1994 until March
1999. From our inception in 1986 until 1990, Mr. Speese
served as a Vice President responsible for our New Jersey
operations. Prior to joining us, Mr. Speese was a regional
manager for Thorn Americas from 1979 until 1986.
Mitchell E. Fadel Mr. Fadel has served as our President since July 2000 and
as a director since December 2000. From November 1992
until July 2000, Mr. Fadel served as President and Chief
Executive Officer of ColorTyme. We acquired ColorTyme in
May 1996. From 1983 to 1991, Mr. Fadel was a regional
manager for Thorn Americas and its affiliates.
5
Dana F. Goble Mr. Goble has served as Executive Vice President--
Operations since July 2001 and has served as an
Executive Vice President since March 1999. From March
2000 until June 2001, Mr. Goble also served as our Chief
Operating Officer. From December 1996 until March 1999,
Mr. Goble served as one of our Senior Vice Presidents,
and from May 1995 until December 1996, Mr. Goble
served as one of our Regional Vice Presidents. From April
1993 until May 1995, Mr. Goble served as our regional
manager for the Detroit, Michigan area.
David A. Kraemer Mr. Kraemer has served as Executive Vice President--
Operations since July 2001 and has served as an Executive
Vice President since May 2001. From September 1998 until
April 2001, Mr. Kraemer served as one of our Senior Vice
Presidents. From December 1995 until September 1998,
Mr. Kraemer served as one of our Regional Vice Presidents.
Mr. Kraemer served as a Divisional Vice President for
MRTO Holdings from November 1990 until September
1995, when we acquired MRTO Holdings.
Robert D. Davis Mr. Davis has served as our Senior Vice President--
Finance since September 1999, our Chief Financial Officer
since March 1999 and our Treasurer since January 1997.
From September 1998 until September 1999, Mr. Davis
served as our Vice President--Finance and Treasurer.
From June 1997 until September 1998, Mr. Davis served
as our Treasurer. From January 1997 until June 1997,
Mr. Davis served as our Assistant Secretary and
Treasurer. From June 1995 until January 1997, Mr. Davis
served as our Payroll Supervisor and from June 1993 until
June 1995 served as an accountant for us. Mr. Davis is a
licensed certified public accountant in the State of Texas.
Steven M. Arendt Mr. Arendt has served as President and Chief Executive
Officer of ColorTyme since July 2000. From January 1999
until July 2000, Mr. Arendt served as Chief Operating
Officer of ColorTyme. From January 1997 until December
1998, Mr. Arendt served as Vice President of Operations
for Cash America, a pawn-shop chain based in Fort Worth,
Texas. From July 1996 until December 1996, Mr. Arendt
served as Vice President of Special Projects for Thorn
Americas. From March 1995 until July 1996, Mr. Arendt
served as Vice President of Remco.
Christopher A. Korst Mr. Korst has served as our Senior Vice President--
General Counsel since May 2001. From January 2000 until
May 2001, Mr. Korst owned and operated AdvantEdge
Quality Cars, which he acquired in a management buyout.
From December 1997 until October 1999, Mr. Korst served
as Chief Operating Officer of AdvantEdge Quality Cars.
From November 1996 until November 1997, Mr. Korst
served as Vice President of Thorn Auto, a division of Thorn
Americas. During 1996, Mr. Korst served as Vice
President--Business Development of Thorn Americas.
From 1992 until 1996, Mr. Korst served as Vice
President--Assistant General Counsel of Thorn Americas.
6
Anthony M. Doll Mr. Doll has served as one of our Senior Vice Presidents
since September 1998. From September 1996 until
September 1998, Mr. Doll served as one of our Regional
Vice Presidents. From May 1995 until September 1996,
Mr. Doll served as our regional manager for the Detroit,
Michigan area.
C. Edward Ford, III Mr. Ford has served as one of our Senior Vice Presidents
since September 1998. From January 1997 until
September 1998, Mr. Ford served as one of our Regional
Vice Presidents. From November 1994 until January 1997,
Mr. Ford served as our regional manager for the
Tennessee region. From July 1993 until November 1994,
Mr. Ford served as one of our store managers.
John H. Whitehead Mr. Whitehead has served as one of our Senior Vice
Presidents since September 1997. From May 1995 until
September 1997, Mr. Whitehead served as one of our
Regional Vice Presidents. From July 1993 until May 1995,
Mr. Whitehead served as our regional manager for the
Atlanta, Georgia area.
William C. Nutt Mr. Nutt has served as one of our Senior Vice Presidents
since May 1998. From December 1995 until May 1998,
Mr. Nutt served as one of our Regional Vice Presidents.
From December 1992 until December 1995, Mr. Nutt
served as our regional manager for the Northeast Ohio
area.
Timothy J. Stough Mr. Stough has served as one of our Senior Vice
Presidents since February 2000. From September 1998
until February 2000, Mr. Stough served as one of our
Regional Directors. From January 1998 until September
1998, Mr. Stough served as a Regional Director of Thorn
Americas, overseeing stores from South Carolina to
Vermont. From 1987 until 1998, Mr. Stough served as a
Market Manager for Thorn Americas in North Carolina,
South Carolina and Tennessee.
Mark S. Connelly Mr. Connelly has served as one of our Senior Vice
Presidents since September 1999. From June 1998 until
September 1999, Mr. Connelly served as one of our
Regional Vice Presidents. From February 1998 until May
1998, Mr. Connelly served as a Division Manager of
Central Rents. From October 1997 until February 1998,
Mr. Connelly acted as Director of Operations/Acquisitions
of Spin Cycle, a start-up chain of coin-operated
laundromats. From April 1997 until October 1997,
Mr. Connelly was a group manager with Rent Mart, a rent-
to-own subsidiary of The Associates. From June 1996 until
March 1997, Mr. Connelly was the Vice President-
Operations of Trans Texas Capital, a franchisee of
ColorTyme. From January 1995 until May 1996,
Mr. Connelly served as the Midwest area manager of
Remco America.
7
David G. Ewbank Mr. Ewbank has served as one of our Senior Vice
Presidents since August 2000. From August 1999 until
August 2000, Mr. Ewbank served as one of our Regional
Directors. From October 1997 until August 1999,
Mr. Ewbank served as one of our Market Managers. From
August 1996 until October 1997, Mr. Ewbank served as
one of our store managers. Prior to joining us in August
1996, Mr. Ewbank served as a store manager for First
Cash Pawn.
David R. Reed Mr. Reed has served as one of our Senior Vice Presidents
since May 2001. From August 1998 until May 2001,
Mr. Reed served as one of our Regional Directors. From
November 1996 until August 1998, Mr. Reed served as
one of our Market Managers. From October 1996 until
November 1996, Mr. Reed served as one of our store
managers. From July 1996 until October 1996, Mr. Reed
served as a store manager for Central Rents. From May
1983 until July 1996, Mr. Reed served as a store manager
for Remco.
Richard S. Lillard Mr. Lillard has served as one of our Senior Vice Presidents
since May 2001. From December 1998 until May 2001,
Mr. Lillard served as one of our Regional Directors. From
October 1997 until December 1998, Mr. Lillard served as
one of our Market Managers. From October 1996 until
October 1997, Mr. Lillard served as one of our store
managers. From December 1995 until October 1996,
Mr. Lillard served as an assistant manager in various
capacities in one of our stores.
David M. Glasgow Mr. Glasgow has served as our Corporate Secretary since
June 1995. From June 1995 until June 1997, Mr. Glasgow
also served as our Treasurer. From March 1995 until June
1995, Mr. Glasgow served as our accounting operations
supervisor, and from June 1993 until March 1995,
Mr. Glasgow served as one of our accountants.
8
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The The Compensation Committee reviews and approves the compensation levels for our members
Committee: of senior management, evaluates the performance of senior management, considers
management succession and considers any related matters for us. The Compensation
Committee is charged with reviewing with our Board in detail all aspects of compensation for
our executive officers.
Overall We have developed a compensation program for executives and key employees designed to
Philosophy and meet the following goals:
Objectives:
. reward performance that increases the value of your stock;
. attract, retain and motivate executives and key employees with competitive compensation
opportunities;
. build and encourage ownership of our shares;
. balance short-term and long-term strategic goals; and
. address the concerns of our stockholders, employees, the financial community and the
general public.
To meet these objectives, we reviewed competitive compensation data and implemented the
base salary and annual and long-term incentive programs discussed below.
Executive The available forms of executive compensation include base salary, cash bonus awards and
Compensation: incentive stock options, restricted stock awards and stock appreciation rights. Our performance
is a key consideration in determining executive compensation. However, our compensation
policy recognizes that stock price performance is only one measure of performance and, given
industry business conditions and our long-term strategic direction and goals, it may not
necessarily be the best current measure of executive performance. Therefore, our
compensation policy also gives consideration to the achievement of specified business
objectives when determining executive officer compensation. The Compensation Committee, in
certain cases, offers employees and executive officers equity compensation in addition to
salary in keeping with our overall compensation philosophy, which attempts to place equity in
the hands of our employees in an effort to further instill stockholder considerations and values
in the actions of all the employees and executive officers.
Compensation paid to executive officers is based upon a company-wide salary structure
consistent for each position relative to its authority and responsibility compared to industry
peers. Stock option awards in fiscal year 2001 were used to reward certain officers and to
retain them through the potential of capital gains and equity buildup in Rent-A-Center. The
number of stock options granted is determined by the subjective evaluation of the officer's
ability to influence our long term growth and profitability. Stock options granted to our senior
management have been granted only pursuant to our Long-Term Incentive Plan. The Board
believes the award of options represents an effective incentive to create value for the
stockholders.
CEO Mr. Talley, our former Chief Executive Officer, had a base salary for fiscal year 2001 of
Compensation: $550,000. The Compensation Committee deemed this salary level for 2001 to be
commensurate with the Chief Executive Officer's position at comparable publicly owned
companies and in recognition of the increased responsibilities associated with our growth. In
determining the compensation of Mr. Talley, the Compensation Committee considered Mr.
Talley's performance, his compensation history and other subjective factors.
Upon Mr. Speese's appointment to the position of Chief Executive Officer in October 2001, the
Compensation Committee established a base salary for him of $550,000 per year. For the 2002
fiscal year, the Compensation Committee established a base salary for Mr. Speese of
$550,000. The Compensation Committee deemed this salary level for 2002 to be
9
commensurate with the Chief Executives Officer's position at comparable publicly owned
companies and in recognition of the increased responsibilities associated with our growth. In
determining Mr. Speese's salary, the Compensation Committee considered Mr. Speese's
industry experience, past performance, and other subjective factors.
The Compensation Committee believes that the Chief Executive Officer's 2001 and 2002
compensation level is justified by Rent-A-Center's financial progress and performance against
the goals set by the Compensation Committee.
COMPENSATION COMMITTEE
J. V. Lentell, Chairman
Laurence M. Berg
Peter P. Copses
10
PERFORMANCE GRAPH/(1)/
Comparison of Cumulative Total Return Among
Rent-A-Center, Nasdaq Stock Market--Market Index and Rent-A-Center's "Peer
Group"/(2)/
[CHART]
Rent-A-Center, Inc.
Performance Graph Data Points
12/31/96 12/31/97 12/37/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
Rent-A-Center, Inc. Index 100.00 141.38 218.97 136.64 237.93 231.52
Peer Group Index 100.00 168.13 156.02 152.39 97.40 115.95
NASDAQ Market Index 100.00 122.32 172.52 304.29 191.25 152.46
/(1)/ Assumes $100 invested on January 1, 1997 and dividends reinvested.
Historical performance does not necessarily predict future results.
/(2)/ Because of the consolidation in the rent-to-own industry, our peer group
has changed since December 31, 1996. Our peer group for the 2001 fiscal
year consists of Aaron Rents, Inc., Bestway, Inc., Heilig Meyers Company,
RentWay, Inc., and Rainbow Rentals, Inc.
11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of The following table summarizes the compensation we paid the two individuals who served as
Compensation: our Chairman and Chief Executive Officer and each of the four other most highly compensated
executive officers at the end of 2001, based on compensation paid to them in 2001. Also
included are two additional individuals who would have been among our four other most highly
compensated executive officers but for the fact that they were not serving as an executive officer
at the end of 2001.
Long-Term
Annual Compensation
Compensation/(1)/ ------------
Name & ---------------------- Securities All Other
Principal Position Salary($) Bonus($) Underlying Compensation($)
------------------ --------- -------- Options(#) ---------------
Mark E. Speese/(2)/........ 2001 $126,900/(3)/ -- 209,000/(4)/ --
Chairman of the Board & 2000 120,000 -- -- --
Chief Executive Officer 1999 124,700 $ 7,400 -- --
J. Ernest Talley/(5)/...... 2001 $425,200 -- -- --
Former Chairman of the 2000 500,000 -- -- --
the Board & Chief 1999 400,000 -- 100,000/(6)/ --
Executive Officer
Mitchell E. Fadel.......... 2001 $400,000 $ 15,700 100,000/(7)/ --
President 2000 315,000 76,600 35,000/(8)/ --
1999 245,000 121,200 5,000 /(9)/ --
Dana F. Goble.............. 2001 $250,000 $ 15,700 25,000/(10)/ --
Executive Vice President 2000 233,000 17,400 -- --
--Operations 1999 176,200 15,300 20,000/(11)/ --
David A. Kraemer........... 2001 $190,400 $ 25,000 35,000/(12)/ --
Executive Vice President 2000 152,900 17,400 -- --
--Operations 1999 150,000 15,300 5,000/(13)/ --
Steven M. Arendt........... 2001 $155,000 $ 49,500 -- --
Chief Executive Officer 2000 143,900 45,500 -- --
and President of 1999 127,500 -- 7,500/(14)/ --
ColorTyme
L. Dowell Arnette/(15)/.... 2001 $280,000 $ 21,700 -- --
Former Executive Vice 2000 264,800 17,400 -- --
President--Growth 1999 248,900 15,300 25,000/(16)/ --
Bradley W. Denison/(17)/... 2001 $115,700 $ 8,200 -- $235,000/(18)/
Former Senior Vice 2000 235,000 17,400 -- --
President & General 1999 235,000 15,300 -- --
Counsel
--------
/(1)/ Except for Mr. Denison as discussed in footnote 18 below, the
named executive officers did not receive any annual compensation
not properly categorized as salary or bonus, except for certain
perquisites or other benefits the aggregate cost of which did
not exceed the lesser of $50,000 or 10% of the total of annual
salary and bonus for each such officer.
/(2)/ On October 8, 2001, Mr. Speese was appointed as our Chairman of
the Board and Chief Executive Officer.
/(3)/ Salary amount represents salary paid to Mr. Speese from October
8, 2001 through December 31, 2001.
/(4)/ In January 2001, Mr. Speese, while serving as a non-employee
director, was granted 9,000 options to purchase our Common Stock
on a one-for-one basis pursuant to our Long-Term Incentive Plan.
The options vested immediately and expire ten years from the
date of grant. In addition, in November 2001, while serving as
our Chairman and Chief Executive Officer, Mr. Speese was granted
200,000 options to purchase our Common Stock on a one-for-one
basis, pursuant to our Long-Term Incentive Plan. These options
vest as follows: 12.5% one year from the date of grant, an
additional 12.5% two years from the date of grant, and
additional 37.5% three years from the date of grant, and an
additional 37.5% four
12
years from the date of grant. Mr. Speese has also agreed to a
lock-up period of two years following the date of grant during
which he will not be permitted to exercise any of the options
granted in the November 2001 grant.
/(5)/ On October 8, 2001, Mr. Talley resigned from his positions as
Chairman of the Board and Chief Executive Officer.
/(6)/ In December 1999, Mr. Talley was granted 100,000 options to
purchase our Common Stock on a one-for-one basis, pursuant to
our Long-Term Incentive Plan. Of these 100,000 options, 20,189
were to vest over four years and expire five years from the date
of grant. The remaining 79,811 options were to vest over four
years and expire 10 years from the date of grant. Upon Mr.
Talley's resignation as our Chairman of the Board and Chief
Executive Officer, 75,001 options under this grant expired.
/(7)/ In November 2001, Mr. Fadel was granted 100,000 options to
purchase our Common Stock on a one-for-one basis, pursuant to
our Long-Term Incentive Plan. The options vest over four years
and expire ten years from the date of grant.
/(8)/ In July 2000, Mr. Fadel was granted 35,000 options to purchase
our Common Stock on a one-for-one basis, pursuant to our
Long-Term Incentive Plan. The options vest over four years and
expire 10 years from the date of grant.
/(9)/ In December 1999, Mr. Fadel was granted 5,000 options to
purchase our Common Stock on a one-for-one basis, pursuant to
our Long-Term Incentive Plan. The options vest over four years
and expire 10 years from the date of grant.
/(10)/ In November 2001, Mr. Goble was granted 25,000 options to
purchase our Common Stock on a one-for-one basis, pursuant to
our Long-Term Incentive Plan. The options vest over four years
and expire ten years from the date of grant.
/(11)/ In January 1999, Mr. Goble was granted 10,000 options to
purchase our Common Stock on a one-for-one basis and in December
1999, was granted an additional 10,000 options to purchase our
Common Stock on a one-for-one basis, all pursuant to our Long
Term Incentive Plan. The options each vest over four years and
expire 10 years from the date of grant.
/(12)/ In July 2001, Mr. Kraemer was granted 10,000 options to purchase
our Common Stock on a one-for one basis and, in November 2001,
was granted an additional 25,000 options to purchase our Common
Stock on a one-for-one basis, all pursuant to our Long Term
Incentive Plan. The options each vest over four years and expire
ten years from the date of grant.
/(13)/ In December 1999, Mr. Kraemer was granted 5,000 options to
purchase our Common Stock on a one-for-one basis, pursuant to
our Long-Term Incentive Plan. The options vest over four years
and expire ten years from the date of grant.
/(14)/ In January 1999, Mr. Arendt was granted 7,500 options to
purchase our Common Stock on a one-for-one basis, pursuant to
our Long-Term Incentive Plan. The options vest over four years
and expire ten years from the date of grant.
/(15)/ On October 8, 2001, Mr. Arnette resigned from his position as
our Executive Vice President--Growth. Mr. Arnette is included in
this table as he would have been among our four other most
highly compensated officers but for the fact that he was not
serving as an executive officer at the end of 2001.
/(16)/ In January 1999, Mr. Arnette was granted 15,000 options to
purchase our Common Stock on a one-for-one basis and, in
December 1999, was granted and additional 10,000 options to
purchase our Common Stock on a one-for-one basis, all pursuant
to our Long-Term Incentive Plan. The options vest over four
years and expire 10 years from the date of the grant.
/(17)/ In May 2001, Mr. Denison resigned from his position as our
Senior Vice President--General Counsel. Mr. Denison is included
in this table as he would have been among our four other most
highly compensated officers but for the fact that he was not
serving as an executive officer at the end of 2001.
/(18)/ Upon his resignation, Mr. Denison received a severance payment
equal to one year's annual salary of $235,000 pursuant to the
terms of his employment agreement.
13
Stock Options The following table lists our grants during 2001 of stock options to the named executive officers
Granted in named in the Summary Compensation Table. The amounts shown as potential realizable values
2001: rely on arbitrarily assumed rates of share price appreciation prescribed by the SEC. In assessing
those values, please note that the ultimate value of the options, as well as your shares, depends
on actual future share values. Market conditions and the efforts of the directors, the officers and
others to foster the future success of Rent-A-Center can influence those future share values.
Potential
Realizable Value at
Assumed Annual
Number of % of Stock Price
Securities Total Appreciation for
Underlying Granted in Option Term/(1)/
Options Fiscal Exercise Expiration ---------------------
Name Granted 2001 Price/(2)/ Date 5% 10%
---- ---------- ---------- --------- ---------- ---------- ----------
Mark E. Speese.... 9,000 /(3)/ 0.41% $32.6875 01/02/11 $ 185,013 $ 468,859
200,000/(4)/ 9.08% $ 25.99 11/09/11 $3,268,994 $8,284,273
J. Ernest Talley.. N/A N/A N/A N/A N/A N/A
Mitchell E. Fadel. 100,000/(5)/ 4.54% $ 25.99 11/09/11 $1,634,497 $4,142,137
Dana F. Goble..... 25,000/(5)/ 1.14% $ 25.99 11/09/11 $ 408,624 $1,035,534
David A. Kraemer.. 10,000/(6)/ 0.45% $ 46.25 07/12/11 $ 290,864 $ 737,106
25,000/(5)/ 1.14% $ 25.99 11/09/11 $ 408,624 $1,035,534
Steven M. Arendt.. N/A N/A N/A N/A N/A N/A
L. Dowell Arnette. N/A N/A N/A N/A N/A N/A
Bradley W. Denison N/A N/A N/A N/A N/A N/A
--------
/(1)/ These amounts represent certain assumed rates of appreciation
only. Actual gains, if any, on stock option exercises are
dependent on the future performance of our Common Stock and
overall market conditions. There can be no assurance that the
amounts reflected in this table will be achieved.
/(2)/ The exercise price was fixed at the date of the grant and
represented the fair market value per share of Common Stock on
such date.
/(3)/ Options are immediately exercisable on the date of the grant.
/(4)/ Options are exercisable as follows: 12.5% one year from the date
of grant, an additional 12.5% two years from the date of grant,
an additional 37.5% three years from the date of grant, and an
additional 37.5% four years from the date of grant. Mr Speese
has also agreed to a lock-up period of two years following the
date of grant during which time he will not be permitted to
exercise any of these options.
/(5)/ Options are exercisable at 25% per year, beginning one year from
the date of grant. Additionally, the recipient of these options
has agreed to a lock-up period of two years following the date
of grant during which time he will not be permitted to exercise
any of these options.
/(6)/ Options are exercisable at 25% per year, beginning one year from
the date of grant. Mr. Kraemer is not subject to a lock-up
period with respect to these options.
14
2001 Option The following table contains the number of shares received, and the dollar value realized, upon
Holdings: the exercise of options by our named executive officers during 2001, as well as values for "in the
money" options, meaning a positive spread between the year-end share price of $33.57 and the
exercise price for the options held by our named executive officers. These values have not
been, and may never be, realized. The options might never be exercised, and the value, if any,
will depend on the share price on the exercise date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired at Fiscal Year End At Fiscal Year End
on Value Exercisable (E)/ Exercisable (E)/
Name Exercise Realized Unexercisable (U) Unexercisable (U)/(1)/
---- -------- -------- -------------------- -------------------------
Mark E. Speese.... -- N/A 9,000(E) 200,000(U) $ 7,943(E) $1,516,000(U)
J. Ernest Talley.. 24,999 $208,079 0(E) 0(U) $ 0(E) $ 0(U)
Mitchell E. Fadel. -- N/A 21,250(E) 128,750(U) $324,250(E) $1,086,263(U)
Dana F. Goble..... 5,000 $118,350 10,000(E) 35,000(U) $ 84,138(E) $ 273,638(U)
David A. Kraemer.. -- N/A 11,250(E) 38,750(U) $146,881(E) $ 232,731(U)
Steven M. Arendt.. -- N/A 3,750(E) 3,750(U) $ 11,513(E) $ 11,513(U)
L. Dowell Arnette. -- N/A 36,250(E) 0(U) $517,956(E) $ 0(U)
Bradley W. Denison 17,500 $240,625 0(E) 0(U) $ 0(E) $ 0(U)
--------
/(1)/ The closing market price of our Common Stock on December 31,
2001 of $33.57, as reported on the Nasdaq National Market of the
Nasdaq Stock Market, Inc., was used in the calculation to
determine the value of unexercised options.
EMPLOYMENT AGREEMENTS
Mr. Denison: We were a party to an employment agreement with Bradley W. Denison, dated October 1, 1998,
naming Mr. Denison our Senior Vice President--General Counsel. The employment agreement
provided for an annual salary of $235,000 plus bonus and a severance amount equal to one
year's salary in the event of termination. Mr. Denison resigned from Rent-A-Center in May 2001
and received his severance payment. No provisions of his employment agreement are currently
in effect.
We do not have employment agreements with any other executive officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Intrust Bank: J.V. Lentell, one of our directors, serves as Vice Chairman of the Board of Directors of Intrust
Bank, N.A., one of our lenders. Intrust Bank, N.A. is a $10.4 million participant in our senior
credit facility, of which approximately $3.8 million was advanced at March 28, 2002. We also
maintain a $10.0 million revolving line of credit with Intrust Bank, N.A. Although from time to time
we may draw funds from the revolving line of credit, no funds were advanced as of March 28,
2002. In addition, Intrust Bank, N.A. serves as trustee of the Company's 401(k) plan.
Apollo On August 5, 1998, affiliates of Apollo Management IV, L.P. purchased $250 million of our
Management Preferred Stock. Pursuant to the stock purchase agreement we entered into with affiliates of
IV, L.P.: Apollo Management IV, L.P., the affiliates of Apollo Management IV, L.P. have voting control of
100% of our Preferred Stock, which gives them the right to elect two individuals to our Board. In
addition, pursuant to the amended and restated stockholders agreement we entered into with
Apollo and Mr. Speese, Apollo has the right to nominate a third individual to our Board who is
elected by all stockholders. Messrs. Berg and Copses currently serve as the two directors
elected by the holders of our Preferred Stock and Mr. Jhawar serves as the director nominated
by Apollo under the stockholders agreement.
15
Talley In connection with Mr. Talley's retirement, we entered into an agreement with Mr. Talley to
Repurchase: repurchase $25.0 million worth of shares of our Common Stock held by Mr. Talley at a purchase
price equal to the average closing price of our Common Stock over the 10 trading days
beginning October 9, 2001, subject to a maximum of $27.00 per share and a minimum of $20.00
per share. Under this formula, the purchase price for the repurchase was calculated at $20.258
per share. Accordingly, on October 23, 2001 we repurchased 493,632 shares of our Common
Stock from Mr. Talley at $20.258 per share for a total purchase price of $10.0 million, and on
November 30, 2001, we repurchased an additional 740,448 shares of our Common Stock from
Mr. Talley at $20.258 per share, for a total purchase price of an additional $15.0 million. On
January 25, 2002, we exercised the option to repurchase all of the remaining 1,714,086 shares
of Common Stock held by Mr. Talley at $20.258 per share. We repurchased those remaining
shares on January 30, 2002, for a total purchase price of an additional $34.7 million.
Committee None of our executive officers served as a member of the compensation or similar committee or
Interlocks: as a member of the Board of Directors of any other entity of which an executive officer served on
the Compensation Committee or Board of Directors of Rent-A-Center.
16
OTHER BUSINESS
The Board does not intend to bring any business before the annual stockholders
meeting other than the matters referred to in this notice and at this date has
not been informed of any matters that may be presented to the annual
stockholders meeting by others. If, however, any other matters properly come
before the annual stockholders meeting, it is intended that the persons named
in the accompanying proxy will vote pursuant to the proxy in accordance with
their best judgment on such matters.
Representatives of Grant Thornton LLP, the Company's independent public
accountants for the fiscal year ended December 31, 2001, will attend the annual
stockholders meeting and be available to respond to appropriate questions which
may be asked by stockholders. These representatives will also have an
opportunity to make a statement at the meeting if they desire to do so.
INDEPENDENT PUBLIC ACCOUNTANT INFORMATION
Grant Thornton LLP served as our independent accounting firm for the 2001
fiscal year. We paid the following fees to Grant Thornton for professional and
other services rendered by them during fiscal 2001:
. Audit Fees. The aggregate fees billed for professional services rendered
by Grant Thornton for the audit of our financial statements for the 2001
fiscal year and the reviews of the financial statements included in our
quarterly reports on Form 10-Q for the fiscal year were approximately
$250,000;
. Financial Information Systems Design and Implementation Fees. The
aggregate fees billed for information technology services rendered by
Grant Thornton were 0; and
. All Other Fees. The aggregate fees billed for all other services rendered
by Grant Thornton to us during the 2001 fiscal year, exclusive of those
services described above, were approximately $200,000.
The Audit Committee of the Board has considered whether Grant Thornton's
provision of services, other than services rendered in connection with the
audit of our annual financial statements, is compatible with maintaining Grant
Thornton's independence.
The Audit Committee of the Board has not appointed an independent public
accounting firm for the 2002 fiscal year. The Board and the Audit Committee
annually review the performance of our independent public accountants and the
fees charged for their services. The Board anticipates, from time to time,
obtaining competitive proposals from other independent public accounting firms
for our annual audit. Based upon the Board and Audit Committee's analysis of
this information, we will determine which independent public accounting firm to
engage to perform our annual audit each year.
17
AUDIT COMMITTEE REPORT ON RENT-A-CENTER'S FINANCIAL STATEMENTS
The Committee: Our Board established the Audit Committee to recommend the appointment of our
independent accountants and approve audit reports and plans, accounting policies, audit
fees and certain other expenses. The Audit Committee is composed of three members, all of
which are "independent" as defined in the NASD listing standards, and operates under a
written charter, a copy of which was attached to last year's proxy statement relating to our
2001 Annual Meeting of Stockholders. The Audit Committee has prepared the following
report on its activities with respect to our financial statements for the fiscal year ended
December 31, 2001.
Review and Management is responsible for Rent-A-Center's financial reporting process including its
Discussion: system of internal control, and for the preparation of Rent-A-Center's consolidated financial
statements in accordance with generally accepted accounting principles. Grant Thornton is
responsible for auditing those financial statements. The Audit Committee's responsibility is
to monitor and review these processes. The members of the Audit Committee are not
employees of Rent-A-Center and do not represent themselves to be or to serve as,
accountants or auditors by profession or experts in the field of accounting or auditing.
In connection with the preparation of our audited financial statements for the fiscal year
ended December 31, 2001, the Audit Committee has
. reviewed and discussed the audited financial statements with management;
. discussed with Grant Thornton, the Company's independent accountants, the matters
required to be discussed by Statement on Auditing Standards No. 61; and
. received the written disclosures and the letter from Grant Thornton required by
Independence Standards Board Standard No. 1, and has discussed with Grant Thornton
its independence from Rent-A-Center.
Recommendation: Based on the review and discussion referred to above and relying thereon, the Audit
Committee has recommended to the Board of Directors that the audited financial statements
be included in our Annual Report on Form 10-K for the fiscal year ended December 31,
2001, for filing with the U.S. Securities and Exchange Commission.
AUDIT COMMITTEE
Peter P. Copses, Chairman
Laurence M. Berg
J.V. Lentell
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of reports filed by our directors, executive officers and
beneficial holders of 10% or more of our shares, and upon representations from
those persons, we believe that all SEC stock ownership reports required to be
filed by those reporting persons during 2001 were timely made, except for Mr.
Talley, who failed to file a Form 4 on a timely basis. A late Form 4 was filed.
In addition, Mr. Arendt failed to timely file a Form 3 during 2000 and
Mr. Connelly failed to timely file a Form 4 during 1999. Mr. Arendt filed a
late Form 3 and Mr. Connelly filed a late Form 4 during 2001.
18
RENT-A-CENTER STOCK OWNERSHIP
The following table lists our stock ownership for our directors, our named
executive officers, and our known 5% stockholders. Ownership includes direct
and indirect (beneficial) ownership, as defined by SEC rules. To our knowledge,
each person, along with his or her spouse, has sole voting and investment power
over the shares unless otherwise noted. Information in the table is as of March
28, 2002.
Shares of Series A
Shares of Preferred Stock
Common Stock Beneficially
Beneficially Owned Owned
-------------------------- -----------------
Name and Address of Percent Percent
Beneficial Owner Number of Class Number of Class
------------------- ---------- -------- ------- --------
Mark E. Speese................................... 1,185,832/(1)/ 4.91% -- --
J. Ernest Talley................................. 0 * -- --
Mitchell E. Fadel................................ 62,780 /(2)/ * -- --
Dana F. Goble.................................... 13,378/(3)/ * -- --
David A. Kraemer................................. 11,250/(4)/ * -- --
Steven M. Arendt................................. 5,625/(4)/ * -- --
L. Dowell Arnette................................ 0 * -- --
Bradley W. Denison............................... 0 * -- --
J.V. Lentell..................................... 27,000/(4)/ * -- --
Laurence M. Berg/(5)/............................ 20,000/(4)(5)/ * -- --
Peter P. Copses/(5)/............................. 20,000/(4)(5)/ * -- --
Andrew W. Jhawar/(5)/............................ 9,000/(4)(5)/ * -- --
Apollo/(6)/...................................... 10,468,373 30.26% 292,434 100.0%
Wasatch Advisors, Inc./(7)/...................... 5,907,552 24.48% -- --
American Century Investment Management, Inc./(8)/ 2,002,385 8.30% -- --
All officers and directors as a group (22 total). 1,442,399 5.92% -- --
--------
* Less than 1%
/(1)/ Includes (A) 773,157 shares held directly by him, (B) 9,000 shares
underlying stock options which are currently exercisable, (C) 151,875
shares held by the Mark Speese 2000 Grantor Retained Annuity Trust, a
trust organized under the laws of the State of Texas, of which Mr. Speese
is the sole trustee, (D) 151,961 shares held by the Carolyn Speese 2000
Grantor Retained Annuity Trust, a trust organized under the laws of the
State of Texas, of which Mr. Speese is the sole trustee, (E) 98,039
shares held by his spouse, Carolyn Speese, and (F) 1,800 held by his
children. Mr. Speese disclaims beneficial ownership of the 1,800 shares
held by his children.
/(2)/ Includes 21,250 shares issuable pursuant to options granted under the
Long-Term Incentive Plan, all of which are currently exercisable.
/(3)/ Includes 12,500 shares issuable pursuant to options granted under the
Long-Term Incentive Plan, all of which are currently exercisable.
/(4)/ All of which are issuable pursuant to currently exercisable options
granted under the Long-Term Incentive Plan.
/(5)/ Mr. Jhawar is a principal and Messrs. Berg and Copses are principals and
officers of certain affiliates of Apollo. Accordingly, each of Messrs.
Berg, Copses, and Jhawar may be deemed to beneficially own shares owned
by Apollo. Messrs. Berg, Copses and Jhawar each disclaim beneficial
ownership with respect to any such shares owned by Apollo.
/(6)/ The address of Apollo is 1999 Avenue of the Stars, Suite 1900, Los
Angeles, California 90067. The 10,468,373 shares of Common Stock
represent the shares of Common Stock into which the Preferred Stock is
convertible. Apollo owns 281,201 shares of our Preferred Stock, which
represents in excess of 96% of the outstanding shares of our Preferred
Stock. Apollo also has the right to vote RC Acquisition Corp.'s 11,233
shares of Preferred Stock. Apollo disclaims any beneficial ownership in
these 11,233 shares other than its right to vote these shares.
/(7)/ The address of Wasatch Advisors, Inc. is 150 Social Hall Avenue, Salt
Lake City, Utah 84111.
/(8)/ The address of American Century Investment Management, Inc. is 4500 Main
Street, P.O. Box 418210, Kansas City, Missouri 64141-9210.
19
VOTING PROCEDURES / REVOKING YOUR PROXY
Quorum: Because the holders of our Preferred Stock are entitled to elect one director as a separate
class, there are different standards for determining if a quorum is present. For purposes of
electing the director to be elected by the holders of our Preferred Stock, there must be a
majority of the outstanding shares of our Preferred Stock on the Record Date, present in
person or by proxy, at this year's annual stockholders meeting. For purposes of electing our
other director, the holders of a majority of the votes entitled to vote at this year's annual
stockholders meeting, including the votes entitled to vote held by the holders of our Preferred
Stock, present in person or by proxy, will constitute a quorum. For all other purposes, the
holders of the majority of the votes entitled to vote at this year's annual stockholders meeting,
present in person or by proxy, will constitute a quorum.
Votes Required To be elected, directors must receive a plurality of the shares voting in person or by proxy,
to Approve a provided a quorum exists. A plurality means receiving the largest number of votes, regardless
Proposal: of whether that is a majority. All other matters submitted to you at the meeting will be decided
by a majority of the votes cast on the matter, provided a quorum exists, except as otherwise
provided by law or our Certificate of Incorporation or Bylaws.
Shares On the Record Date, there were 24,130,487 shares of our Common Stock outstanding. Each
Outstanding share of Common Stock entitles the holder to one vote per share. On the Record Date, there
and Number of were 292,434 shares of Preferred Stock outstanding. Each share of Preferred Stock entitles
Votes: the holder to approximately 35.8 votes per share, or 10,468,373 votes in the aggregate.
Abstentions Those who fail to return a proxy or attend the meeting will not count towards determining any
and Broker required plurality, majority or quorum. Stockholders and brokers returning proxies or attending
Non-Votes: the meeting who abstain from voting on the election of our directors will count towards
determining a quorum. However, such abstentions will have no effect on the outcome of the
election of our directors.
Brokers holding shares of record for customers generally are not entitled to vote on certain
matters unless they receive voting instructions from their customers. In the event that a broker
does not receive voting instructions for these matters from its customers, a broker may notify
us that it lacks voting authority to vote those shares. These "broker non-votes" refer to votes
that could have been cast on the matter in question by brokers with respect to uninstructed
shares if the brokers had received their customers' instructions. These broker non-votes will
be included in determining whether a quorum exists, but will have no effect on the outcome of
the election of our directors.
How the Proxies The enclosed proxies will be voted in accordance with the instructions you place on the proxy
Will be Voted: card. Unless otherwise stated, all shares represented by your returned, signed proxy will be
voted as noted on the first page of this proxy statement.
How You May You may revoke your proxies by:
Revoke Your
Proxies: . Delivering a signed, written revocation letter, dated later than the proxy, to David M.
Glasgow, Corporate Secretary, at 5700 Tennyson Parkway, Third Floor, Plano, Texas
75024;
. Delivering a signed proxy, dated later than the first one, to Mellon Investor Services LLC,
600 Willow Tree Road, Leonia, NJ 07605, Attn: Norma Cianfaglione; or
. Attending the meeting and voting in person or by proxy. Attending the meeting alone will not
revoke your proxy.
Proxy Our employees will solicit proxies for no additional compensation. We will reimburse banks,
Solicitation: brokers, custodians, nominees and fiduciaries for reasonable expenses they incur in sending
these proxy materials to you if you are a beneficial holder of our shares.
20
SUBMISSION OF STOCKHOLDER PROPOSALS
Dates for From time to time, stockholders may seek to nominate directors or present proposals for
Submission of inclusion in the proxy statement and form of proxy for consideration at an annual stockholders
Stockholders' meeting. To be included in the proxy statement or considered at an annual or any special
Proposals: meeting, you must timely submit nominations of directors or proposals, in addition to meeting
other legal requirements. We must receive proposals for the 2003 annual stockholders meeting
no later than December 20, 2002 for possible inclusion in the proxy statement, or prior to
February 20, 2003 for possible consideration at the meeting, which is expected to take place on
May 20, 2003. Direct any proposals, as well as related questions, to the undersigned.
ANNUAL REPORT ON FORM 10-K
You may obtain a copy of our Annual Report on Form 10-K that we filed with the
Securities and Exchange Commission, without charge, by submitting a written
request to:
David M. Glasgow, Corporate Secretary
Rent-A-Center, Inc.
5700 Tennyson Parkway, Third Floor
Plano, Texas 75024.
You may also obtain our SEC filings through the internet at www.sec.gov.
By order of the Board of Directors,
/s/ David M. Glasgow
David M. Glasgow
Corporate Secretary
PLEASE VOTE--YOUR VOTE IS IMPORTANT
21
RENT-A-CENTER, INC.
5700 TENNYSON PARKWAY, FOURTH FLOOR
PLANO, TEXAS 75024
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
-------------------------------------
COMMON STOCK
The undersigned, hereby revoking all prior proxies, hereby appoints
Robert D. Davis and David M. Glasgow jointly and severally, with full power
P to act alone, as my true and lawful attorneys-in-fact, agents and proxies,
with full and several power of substitution to each, to vote all the shares
R of Common Stock of Rent-A-Center, Inc. which the undersigned would be
entitled to vote if personally present at the Annual Meeting of
O Stockholders of Rent-A-Center, Inc. to be held on May 21, 2002 and at any
adjournments and postponements thereof. The above-named proxies are hereby
X instructed to vote as shown on the reverse side of this card.
Y THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED HEREIN,
BUT WHERE NO DIRECTION IS GIVEN IT WILL BE VOTED "FOR" THE ELECTION OF THE
NOMINEE FOR THE BOARD OF DIRECTORS AND IN THE DISCRETION OF THE ABOVE-NAMED
PERSONS ACTING AS PROXIES ON SUCH OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE MEETING.
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS CHANGE ON REVERSE SIDE
(Continued and to be signed on other side)
--------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
Please mark
your votes as [X]
indicated in
this example
1. ELECTION OF CLASS II DIRECTOR for the Item set forth in the accompanying
proxy statement.
FOR the WITHHOLD
nominee AUTHORITY
listed below to vote for the nominee
listed below.
[_] [_]
Mark E. Speese
WITHHELD FOR: (To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.)
------------------------------------------------
2. In their discretion, upon such other business as may properly come before
the meeting.
I PLAN TO ATTEND [_]
The undersigned(s) acknowledges receipt of the Notice of 2002 Annual Meeting of
Stockholders and the proxy statement accompanying the same, each dated April 12,
2002.
Please date this proxy and sign your name exactly as it appears hereon. If there
is more than one owner, each should sign. When signing as an agent, attorney,
administrator, guardian or trustee, please indicate your title as such. If
executed by a corporation this proxy should be signed in the corporate name by a
duly authorized officer who should so indicate his or her title.
PLEASE DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
---------------------------------------
Date
---------------------------------------
Signature
---------------------------------------
Signature if held jointly
--------------------------------------------------------------------------------
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RENT-A-CENTER, INC.
5700 TENNYSON PARKWAY, FOURTH FLOOR
PLANO, TEXAS 75024
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
-------------------------------------
SERIES A PREFERRED STOCK
The undersigned, hereby revoking all prior proxies, hereby appoints
Robert D. Davis and David M. Glasgow jointly and severally, with full power
P to act alone, as my true and lawful attorneys-in-fact, agents and proxies,
with full and several power of substitution to each, to vote all the shares
R of Series A Preferred Stock of Rent-A-Center, Inc. which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
O Stockholders of Rent-A-Center, Inc. to be held on May 21, 2002 and at any
adjournments and postponements thereof. The above-named proxies are hereby
X instructed to vote as shown on the reverse side of this card.
Y THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED HEREIN,
BUT WHERE NO DIRECTION IS GIVEN IT WILL BE VOTED "FOR" THE ELECTION OF THE
NOMINEES FOR THE BOARD OF DIRECTORS AND IN THE DISCRETION OF THE ABOVE-
NAMED PERSONS ACTING AS PROXIES ON SUCH OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING.
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS CHANGE ON REVERSE SIDE
(Continued and to be signed on other side)
--------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
Please mark
your votes as [X]
indicated in
this example
1. ELECTION OF CLASS II DIRECTORS for the Item set forth in the accompanying
proxy statement.
FOR the WITHHOLD
nominee AUTHORITY
listed below to vote for the nominee
listed below.
[_] [_]
Mark E. Speese
Laurence M. Berg
WITHHELD FOR: (To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.)
------------------------------------------------
2. In their discretion, upon such other business as may properly come before
the meeting.
I PLAN TO ATTEND [_]
The undersigned(s) acknowledges receipt of the Notice of 2002 Annual Meeting of
Stockholders and the proxy statement accompanying the same, each dated April 12,
2002.
Please date this proxy and sign your name exactly as it appears hereon. If there
is more than one owner, each should sign. When signing as an agent, attorney,
administrator, guardian or trustee, please indicate your title as such. If
executed by a corporation this proxy should be signed in the corporate name by a
duly authorized officer who should so indicate his or her title.
PLEASE DATE, SIGN AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
---------------------------------------
Date
---------------------------------------
Signature
---------------------------------------
Signature if held jointly
--------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\