NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE RENT-A-CENTER, INC. 2006 LONG- TERM INCENTIVE PLAN
EXHIBIT 10.23
NON-QUALIFIED
STOCK OPTION AGREEMENT
UNDER THE RENT-A-CENTER, INC.
2006 LONG-TERM INCENTIVE PLAN
STOCK OPTION AGREEMENT
UNDER THE RENT-A-CENTER, INC.
2006 LONG-TERM INCENTIVE PLAN
THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into on October 2,
2006 (the “Grant Date”), by and between RENT-A-CENTER, INC., a Delaware corporation (the
“Company”), and XXXX X. XXXXXX (the “Optionee”).
W I T N E S S E T H:
WHEREAS, pursuant to the Rent-A-Center, Inc. 2006 Long-Term Incentive Plan (the
“Plan”) and the employment agreement made by the Company and the Optionee of even date
herewith (the “Employment Agreement”), the Company desires to grant to the Optionee, and the
Optionee desires to accept, an option to purchase shares of the Company’s common stock, par value
$0.01 per share (the “Common Stock”), upon the terms and conditions set forth in this
Agreement and the Plan.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and
other good and valuable consideration, the parties hereto agree as follows:
1. Grant & Tax Status. The Company hereby grants to the Optionee an option to purchase
up to seventy thousand (70,000) shares of Common Stock, at a purchase price of $29.29 per share
pursuant to the Plan. This option is not intended to qualify as an “incentive stock option” within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. Term. Unless sooner terminated in accordance herewith or the Plan, this option will
automatically expire on the tenth anniversary of the date hereof.
3. Vesting. This option shall be fully vested and exercisable at all times prior to
its expiration, provided, however, that, in accordance with Section 4, transfer restrictions may
apply to Common Stock acquired upon the exercise of this option.
4. Transfer Restrictions.
(a) Non-Transferability of Option. This option may not be assigned or transferred
except upon the Optionee’s death to a beneficiary designated by the Optionee in a manner prescribed
or approved for this purpose by the compensation committee of the Company’s board of directors (the
“Committee”) or, if no designated beneficiary shall survive the Optionee, pursuant to the
Optionee’s will or by the laws of descent and distribution. During the Optionee’s lifetime, this
option may be exercised only by the Optionee or the Optionee’s guardian or legal representative.
Notwithstanding the foregoing, the Committee, in its sole discretion, may permit the inter vivos
transfer of this option by gift to any “family member” (within the meaning of Item A.1.(5) of the
General Instructions to Form S-8 or any successor provision), on such terms and conditions as the
Committee deems appropriate.
(b) Restrictions on Transfer of Option Shares. Until the expiration of the Restricted
Period, the Optionee may not sell, assign, transfer, pledge, hedge, hypothecate, encumber or
otherwise dispose of (whether by operation of law or otherwise) any shares of Common Stock acquired
upon the exercise of this option, and such shares will not be subject to execution, attachment or
similar process. Any such sale or transfer, or purported sale or transfer, shall be null and void.
The Company will not be required to recognize on its books any action taken in contravention of
these restrictions. If this option is exercised during the Restricted Period, then (1) until the
expiration of the Restricted Period, (A) the Optionee will be treated as the owner of record of the
shares of Common Stock acquired upon such exercise (the “Restricted Shares”), and (B) the Company
will hold the share certificates for safekeeping, or otherwise retain the Restricted Shares in
uncertificated book entry form until the expiration of the Restriction Period, and any share
certificates (or electronic delivery) representing such Restricted Shares will include a legend to
the effect that the shares are subject to the transfer restrictions set forth above, and (2) upon
the expiration of the Restricted Period, the Company will deliver a share certificate for such
shares to the Optionee (or, if applicable, the Optionee’s beneficiary), or deliver such shares
electronically or in certificate form to a broker designated by the Optionee (or, if applicable,
the Optionee’s beneficiary), free and clear of the above restrictions.
(c) Definition of Restricted Period. For the purposes of this Agreement, the term
“Restricted Period” shall mean the period beginning on the date hereof and ending on the earliest
of (1) December 31, 2009 (or such earlier date as the Committee, acting in its discretion, may
specify), (2) the termination of the Optionee’s employment by the Company without “cause” or by the
Optionee for “good reason” (as such terms are defined in the Employment Agreement), (3) the day
preceding the consummation of a “change in control” (within the meaning of the Employment
Agreement), (4) the date the Optionee’s employment is terminated due to “disability” (as defined in
the Employment Agreement), and (5) the date of the Optionee’s death.
5. Termination of Employment or other Service.
(a) If the Optionee’s employment or other service with the Company or its subsidiaries is
terminated due to the Optionee’s death or “disability,” or if the Optionee dies after termination
of employment and before this option expires, then this option shall remain exercisable by the
Optionee (or, in the event of death, the Optionee’s designated beneficiary or, if no designated
beneficiary survives the Optionee, by the person or persons to whom the Optionee’s rights under
this option shall pass pursuant to the Optionee’s will or by the laws of descent and distribution,
whichever is applicable) during the twelve (12) month period following the date of termination (or
later death, as the case may be) but in no event after expiration of the stated term hereof and, to
the extent not exercised during such period, shall thereupon terminate.
(b) If the Optionee’s employment or other service with the Company or its affiliates
terminates for any reason other than those set forth in Section 5(a) above, then this option shall
remain exercisable by the Optionee during the three (3) month period following the date of
termination (or until one year from the Optionee’s death if the Optionee dies during such
three-month period), but in no event after expiration of the stated term hereof and, to the extent
not exercised during such three-month (or, if applicable, one-year) period, shall thereupon
terminate.
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6. Method of Exercise. This option may be exercised by transmitting to the Secretary
of the Company (or such other person designated by the Committee) a written notice identifying the
option being exercised and specifying the number of shares being purchased, together with payment
of the exercise price and the amount of the applicable tax withholding obligations (unless other
arrangements are made for the payment of such exercise price and/or the satisfaction of such
withholding obligations). The exercise price and withholding obligation may be paid in whole or in
part in cash or by check or, following the expiration of the Restricted Period, (a) by means of a
cashless exercise procedure to the extent permitted by law, (b) if permitted by the Committee, by
the surrender of previously-owned shares of Common Stock (to the extent of the fair market value
thereof), and/ or (c) subject to applicable law, by any other form of consideration deemed
appropriate by the Committee.
7. Stockholder Rights. No shares of Common Stock will be issued in respect of the
exercise of this option until payment of the exercise price and the applicable tax withholding
obligations have been made or arranged to the satisfaction of the Company. The holder of this
option shall have no rights as a stockholder with respect to any shares of Common Stock covered by
this option until the shares of Common Stock are issued pursuant to the exercise of this option.
Shares acquired upon the exercise of this option before the end of the Restricted Period will be
subject to the terms and conditions of Section 4(b).
8. Compliance with Law. The Company will not be obligated to issue or deliver shares
of Common Stock pursuant to this option unless the issuance and delivery of such shares complies
with applicable law, including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the requirements of any stock exchange or market
upon which the Common Stock may then be listed. The Company may prevent or delay the exercise of
this option if and to the extent the Company deems necessary or advisable in order to avoid a
violation of applicable law or its own policies regarding the purchase and sale of Common Stock.
If, during the period of any such ban or delay, the term of this option would expire, then the term
of this option will be extended for thirty (30) days after the Company removes the restriction
against exercise.
9. Transfer Orders; Legends. All certificates for shares of Common Stock delivered
under this option shall be subject to such stock-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange or market upon which the Common Stock may then be
listed, and any applicable federal or state securities law. The Company may cause a legend or
legends to be placed on any such certificates to make appropriate reference to such restrictions.
10. No Rights Conferred. Nothing contained in the Plan or this Agreement shall confer
upon the Optionee any right with respect to the continuation of his employment or other service
with the Company or its subsidiaries or interfere in any way with the right of the Company and its
subsidiaries at any time to terminate such employment or other service or to increase or decrease,
or otherwise adjust, the other terms and conditions of the Optionee’s employment or other service.
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11. Obligation to Execute and Return Agreement. This Agreement shall be null and void
and no option shall be granted hereby in the event the Optionee shall fail to execute and return a
counterpart hereof to the Company, at the address set forth in Section 13 hereof, within sixty (60)
days from the Grant Date.
12. Full Satisfaction/Release of Rights. Any payment or issuance or transfer of shares
of Common Stock to the Optionee or his legal representative, heir, legatee or distributee, in
accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Committee may require the Optionee, legal representative,
heir, legatee or distributee, as a condition precedent to such payment or issuance or transfer, to
execute a release and receipt therefor in such form as it shall determine. The parties acknowledge
that this Agreement and the option granted to the Optionee hereunder shall satisfy in full the
obligations of the Company under Section 6 of the Employment Agreement relating to the issuance of
this option.
13. Notices. Any notice to the Company relating to this Agreement shall be in writing
and delivered in person or by registered mail to the Company at the Company’s main office, 0000
Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, XX 00000, or to such other address as may be hereafter
specified by the Company, to the attention of its Secretary. All notices to the Optionee or other
person or persons then entitled to exercise this option shall be delivered to the Optionee or the
Optionee’s address set forth in the records of the Company.
14. Provisions of the Plan. The provisions of the Plan, the terms of which are hereby
incorporated by reference, shall govern if and to the extent that there are inconsistencies between
those provisions and the provisions hereof. The Optionee acknowledges receipt of a copy of the Plan
prior to the execution of this Agreement. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Plan.
15. Miscellaneous. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted assigns. This Agreement
constitutes the entire agreement between the parties with respect to the subject matter hereof and,
except as otherwise provided in the Plan, may not be modified other than by written instrument
executed by the parties.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.
| RENT-A-CENTER, INC. | ||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Xxxxxxxx X. Xxxxx, President and COO | ||||
| /s/ Xxxx X. Xxxxxx | ||||
| Xxxx X. Xxxxxx, Optionee | ||||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxxx Xxxxxxx (No X.X. Xxx xxxxxx) | ||||
| Xxxxx, Xxxxx 00000 | ||||
| Xxxx, Xxxxx and Zip Code | ||||
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