As filed with the Securities and Exchange Commission on June 1, 2000
Registration No. 333-________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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RENT-WAY, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1407782
(State or other (I.R.S. Employer
jurisdiction of incorporation or Identification No.)
organization)
One RentWay Place
Erie, Pennsylvania 16505
(814) 455-5378
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
William E. Morgenstern, Chief Executive Officer
One RentWay Place
Erie, Pennsylvania 16505
(814) 455-5378
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
John J. Zak, Esq.
Paul J. Vallone, Esq.
Hodgson, Russ, Andrews, Woods & Goodyear, LLP
One M & T Plaza, Suite 2000
Buffalo, New York 14203
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Approximate date of commencement of proposed sale to the public: from time
to time after this Registration Statement becomes effective.
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If the only securities on this Form are being offered pursuant to dividend
or interest reinvestment plans, please check the following box: o
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: X
If the Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ___ _________________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ___ __________________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ___
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-------------------------------
<S> <C> <C> <C> <C>
Title of each class Amount to be Proposed maximum Proposed maximum Amount of
of securities to be registered offering price per aggregate offering registration fee
registered price
---------------------------------------------------------------------------------------------------
Common Stock,
without par value 115,812 (1) $25.469 (2) $2,949,616 (2) $779
=================== ============ =================== ================== =================
</TABLE>
(1) Represents shares of common stock underlying stock options held by the
selling shareholders.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) based on the average of the high and low prices
for the shares of common stock as reported on the New York Stock Exchange
on May 25, 2000.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
RENT-WAY, INC.
115,812 SHARES OF COMMON STOCK
This prospectus relates to the public offering by the selling shareholders
listed in this prospectus of 115,812 shares of our common stock. The common
stock is being offered for the account of the selling shareholders and we will
not receive any proceeds from this offering.
The common stock offered by the selling shareholders consists of 115,812
shares of our common stock underlying options granted to the former shareholders
of McKenzie Leasing Corporation in connection with our acquisition of McKenzie
Leasing Corporation in July 1995. The selling shareholders purchased the options
from the former McKenzie Leasing Corporation shareholders on or about April 12,
2000. Our common stock is traded on the NYSE under the symbol "RWY." On May 30,
2000, the last sale price of the common stock, as reported by the NYSE, was
$26.75 per share.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 6 FOR A DISCUSSION OF THESE RISKS.
THE SELLING SHAREHOLDERS AND ANY BROKER EXECUTING SELLING ORDERS ON BEHALF
OF THE SELLING SHAREHOLDERS MAY BE DEEMED TO BE AN "UNDERWRITER." COMMISSIONS
RECEIVED BY ANY BROKER MAY BE DEEMED TO BE UNDERWRITING COMMISSIONS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE 1, 2000
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TABLE OF CONTENTS
Rent-Way, Inc. ..................................................... 6
Risk Factors ....................................................... 6
Use of Proceeds .................................................... 20
Selling Shareholders ............................................... 20
Plan of Distribution ............................................... 21
Legal Matters ...................................................... 22
Experts ............................................................ 22
About this Prospectus .............................................. 23
Where You Can Find More Information ................................ 23
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RENT-WAY, INC.
Rent-Way, Inc. (the "Company" or "Rent-Way") is the second largest operator
in the rental purchase industry with 1,094 stores in 42 states. We offer home
entertainment equipment, furniture, major appliances, electronics, computers
(with pre-paid internet access) and jewelry to customers under full-service
rental-purchase agreements that generally allow the customer to obtain ownership
of the merchandise at the conclusion of an agreed upon rental period. We believe
that these rental-purchase arrangements appeal to a wide variety of customers by
allowing them to obtain merchandise that they might otherwise be unable or
unwilling to obtain due to insufficient cash resources or lack of access to
credit or because they have a temporary, short-term need for the merchandise or
a desire to rent rather than purchase the merchandise.
Our principal executive offices are located at One RentWay Place, Erie,
Pennsylvania 16505, and our telephone number is (814) 455-5378.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE
TO BUY OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WOULD LIKELY SUFFER. IN
SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE.
CERTAIN STATEMENTS MADE IN THIS PROSPECTUS, AND OTHER WRITTEN OR ORAL
STATEMENTS MADE BY US OR ON OUR BEHALF, MAY CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. WHEN USED IN THIS
PROSPECTUS, THE WORDS "BELIEVES," "EXPECTS," "ESTIMATES," "INTENDS," AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. STATEMENTS
REGARDING FUTURE EVENTS AND DEVELOPMENTS AND OUR FUTURE PERFORMANCE, AS WELL AS
OUR EXPECTATIONS, BELIEFS, PLANS, INTENTIONS, ESTIMATES OR PROJECTIONS RELATING
TO THE FUTURE, ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THESE LAWS.
EXAMPLES OF SUCH STATEMENTS IN THIS PROSPECTUS INCLUDE DESCRIPTIONS OF OUR PLANS
TO OPEN NEW STORES, OUR PLANS FOR ADDING COMPUTERS TO OUR PRODUCT SELECTIONS AND
OUR ADDITION OF THE PRE-PAID LOCAL TELEPHONE EXCHANGE SERVICES BUSINESS. ALL
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. WE BELIEVE
THAT THESE FORWARD-LOOKING STATEMENTS ARE REASONABLE; HOWEVER, YOU SHOULD NOT
PLACE UNDUE RELIANCE ON SUCH STATEMENTS. THESE STATEMENTS ARE BASED ON CURRENT
EXPECTATIONS AND SPEAK ONLY AS OF THE DATE OF SUCH STATEMENTS. WE UNDERTAKE NO
OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER
AS A RESULT OF FUTURE EVENTS, NEW INFORMATION OR OTHERWISE.
WE MAY BE UNABLE TO ACQUIRE NEW STORES SUCCESSFULLY, WHICH WOULD LIMIT OUR
GROWTH AND MATERIALLY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS
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Our continued growth will depend, in part, on our ability to acquire
additional rental-purchase stores on favorable terms, to enhance their
performance and to integrate the acquired stores into our operations. We will
compete for acquisition opportunities with other companies one of which,
Rent-A-Center, has significantly greater financial and other resources. There
can be no assurance that we will be able to locate or acquire suitable
acquisition candidates, that acquisition candidates, once located, can be
acquired by us on terms comparable with terms available to Rent-A-Center, or
that any operations that are acquired can be effectively and profitably
integrated into our existing operations. Furthermore, future acquisitions may
negatively impact our operating results, particularly during the periods
immediately following an acquisition. We may acquire operations that are
unprofitable or have inconsistent profitability. The inability to improve the
profitability of these acquired stores could have a material adverse effect on
our results of operations and financial condition. Our acquisition strategy is
also likely to place significant demands on our management and our financial
resources.
WE MAY BE UNABLE TO OPEN NEW STORES SUCCESSFULLY, WHICH WOULD LIMIT OUR GROWTH
AND MATERIALLY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
We have announced an aggressive plan to open 400 new stores over the next
three to four years. Our inability to open these new stores and have them become
profitable in a timely manner or at all could materially adversely affect our
results of operations.
WE MAY BE UNABLE TO IMPROVE FURTHER THE PROFITABILITY OF THE STORES ACQUIRED
FROM HOME CHOICE HOLDINGS, INC., WHICH COULD NEGATIVELY AFFECT OUR RESULTS OF
OPERATIONS
Our continued profitability growth will depend on our ability to improve
further the revenue performance and profitability of the stores we acquired from
Home Choice Holdings, Inc. in December 1998. Our inability to improve
profitability and performance further could negatively affect on our results of
operations.
OUR GROWTH STRATEGY REQUIRES SIGNIFICANT CONTINUING CASH INVESTMENT
Our cash requirements have been and will continue to be significant. In
connection with a new program recently entered into with Gateway Companies,
Inc., we have agreed to purchase all of the computers that are rented to
customers from Gateway which will require a significant annual cash investment.
As part of our recent acquisition of dPi TeleConnect, LLC, and our entry into
the business of providing local telephone exchange services, we will invest
significant cash to grow this business. Also, as part of our strategy to
continue to grow through opening new store locations, we will be required to
invest significant amounts of cash. In addition to capital needed for
acquisitions, new store openings, additional purchases of computers and the
local telephone exchange services business, we will also need cash to service
our current debt, and for the purchase of new rental merchandise. We cannot
assure that adequate capital will be available to us on acceptable terms.
WE HAVE INCURRED SUBSTANTIAL DEBT IN PURSUING OUR GROWTH STRATEGY
We have incurred substantial indebtedness to finance acquisitions and new
store openings. We had debt of approximately $312 million at March 31, 2000 and
our ratio of debt to total shareholders' equity was approximately 98%. At March
31, 1999 and March 31, 1998, our ratio of debt to total shareholders' equity was
80% and 72%, respectively. We cannot assure you that we will have the ability to
service our debt. Nor can we assure you that we will be able to refinance our
debt at maturity on terms that are acceptable to us.
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A SUBSTANTIAL PORTION OF OUR ASSETS CONSIST OF INTANGIBLE ASSETS, PRIMARILY
GOODWILL
A substantial portion of our assets consist of intangible assets, including
goodwill and covenants not to compete relating to the acquisition of
rental-purchase stores. At March 31, 2000, we had $312 million of intangible
assets of these types, a substantial portion of our $673 million in total assets
at that date. We expect goodwill on our balance sheet to increase in the future
in connection with additional acquisitions. These additions to goodwill will
have an adverse impact on earnings as goodwill will be amortized against
earnings. We cannot assure you that in the event of any sale or liquidation of
Rent-Way, the value of Rent-Way's intangible assets will be realized. In
addition, we evaluate continually whether events and circumstances have occurred
that indicate the remaining balance of intangible assets are recoverable. We may
be required to reduce the carrying value of our intangible assets if and when
factors indicate that these intangible assets should be evaluated for possible
impairment. This type of reduction could materially adversely affect our results
of operations.
THE RENTAL PURCHASE INDUSTRY IS SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION
Forty-seven states have enacted laws regulating or otherwise impacting the
rental-purchase transaction, including all the states in which our stores are
located. These laws generally require specific written disclosures concerning
the nature of the transaction and also provide consumer protection, such as a
grace period for late payments and contract reinstatement rights in the event
the rental-purchase agreement is terminated for non-payment. The rental-purchase
laws of some states, including California, Michigan, New York, Ohio,
Pennsylvania and West Virginia limit the total dollar amount of payments that
may be charged over the life of the rental-purchase agreement. As we acquire or
open new stores in states in which we do not currently operate, we will become
subject to rental-purchase laws of those states. We cannot provide any
assurances against the enactment of new or revised rental purchase laws that
could materially adversely affect us.
No federal legislation has been enacted regulating or otherwise impacting
the rental-purchase transaction. From time-to-time, legislation has been
introduced in Congress that would regulate the rental-purchase transaction,
including legislation that would subject the transaction to interest rate,
finance charge and fee limitations, and to the Federal Truth in Lending Act. Any
federal legislation of this sort, if enacted, could materially adversely affect
us.
THE RENTAL-PURCHASE INDUSTRY IS HIGHLY COMPETITIVE
The rental-purchase industry is highly competitive. We compete with other
rental-purchase businesses and, to a lesser extent, with rental stores that do
not offer their customers a purchase option. Competition is based primarily on
rental prices and terms, product selection and availability, and customer
service. We also compete with department stores, discount stores and other
retail outlets that offer an installment sales program or offer comparable
products and prices. Our largest industry competitor, Rent-A-Center, is national
in scope and has significantly greater financial and operating resources and
greater name recognition than we have. We cannot assure you that we will be able
to successfully compete with Rent-A-Center or with our other competitors.
Furthermore, additional competitors may emerge, especially since the cost of
entering the rental-purchase business is relatively low.
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WE DEPEND ON OUR KEY PERSONNEL
Our operations and future success are largely dependent upon our executive
officers. The loss of services of any of these executive officers could
materially adversely affect us.
WE HAVE ADOPTED CERTAIN ANTI-TAKEOVER PROVISIONS THAT COULD DETER A TAKEOVER
Our Articles of Incorporation and By-laws contain provisions that could
delay, deter or prevent a merger, tender offer or other business combination or
change in control involving the Company that some or a majority of our
shareholders might consider to be in their best interest, including offers or
attempted takeovers that might result in our shareholders receiving a premium
over the then market price of their common stock. Our Articles of Incorporation
contain a provision authorizing the issuance of "blank check" preferred stock.
Our By-laws contain provisions establishing a classified Board of Directors and
advance notice requirements for director nominations and actions to be taken at
annual shareholder meetings. The By-laws also provide that only the directors
may call special meetings of the shareholders and that the Board, or any class
of the Board or any individual director, may be removed from office only for
cause and only by vote of holders of greater than 50% of the outstanding common
stock.
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BUSINESS
General
We were formed in Erie, Pennsylvania in 1981 and have been engaged in the
rental-purchase business since our formation. We currently operate 1,094 stores
that provide brand name merchandise in 42 states. We offer quality, brand name
home entertainment equipment, furniture, major appliances, electronics,
computers (with pre-paid internet access) and jewelry to customers under
full-service rental-purchase agreements that generally allow the customer to
obtain ownership of the merchandise at the conclusion of an agreed upon rental
period. We believe that these rental-purchase arrangements appeal to a wide
variety of customers by allowing them to obtain merchandise that they might
otherwise be unable or unwilling to obtain due to insufficient cash resources or
lack of access to credit or because they have a temporary, short-term need for
the merchandise or a desire to rent rather than purchase the merchandise.
Our principal executive offices are located at One RentWay Place, Erie,
Pennsylvania 16505, and our telephone number is (814) 455-5378.
Recent Developments
On May 1, 2000, we entered into an agreement with Gateway Companies, Inc.
pursuant to which Gateway will be our exclusive supplier of personal computers
as long as we purchase a specified number of computers from Gateway during the
first 18 months of the agreement. As part of this transaction, Gateway purchased
348,910 shares of our common stock for $7.0 million.
On January 4, 2000, we acquired a 49% ownership interest in dPi
TeleConnect, LLC, a company engaged in the business of providing local telephone
exchange services, for a total purchase price of $6.4 million. Once all required
regulatory consents are obtained for the change in majority ownership of dPi
TeleConnect, which we anticipate will occur in early May 2000, we will acquire
an additional 21% interest in dPi TeleConnect for an additional $1.1 million.
dPi TeleConnect offers pre-paid local phone service without reference to
prior credit history or payment history with a local phone company. The service
is paid for in advance and requires no long-term obligation on the part of the
customer. We believe that the acquisition of dPi TeleConnect provides
substantial new growth opportunities for us both through our participation in
its revenues and profits and through its ability to drive new potential
customers to our rental-purchase stores for the purchase of pre-paid local phone
services.
The Rental-Purchase Industry
Begun in the mid-to-late 1960s, the rental-purchase business is a
relatively new segment of the retail industry offering an alternative to
traditional retail installment sales. The rental-purchase industry provides
brand name merchandise to customers generally on a week-to-week or
month-to-month basis under a full service rental agreement, which in most cases
includes a purchase option. The customer may cancel the rental agreement at any
time without further obligation by returning the product to the rental-purchase
operator.
APRO, the industry's trade association, estimated that at the end of 1999
the U.S. rental-purchase industry comprised approximately 8,000 stores providing
7.5 million products to 3.3 million households in the United States. We believe
that our customers generally have annual household incomes ranging from $20,000
to $40,000. Based on APRO estimates, the rental-purchase industry had gross
revenues of $4.7 billion in 1999. The U.S. rental-purchase industry is highly
fragmented, but is experiencing increased consolidation. Based on information
from APRO and management estimates, the five largest industry participants
account for approximately 52% of total industry stores, with the largest
industry participant, Rent-A-Center, accounting for approximately 30.0% of those
stores, and management estimates that the remainder of the industry consists of
operations with fewer than 20 stores.
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We believe that the rental-purchase industry is experiencing increasing
consolidation due to, among other factors, the recognition by smaller operators
of the increased operating efficiencies and better competitive position
achievable by combining with larger operators, greater availability of capital
for larger operators, and the willingness of older operators to sell as a means
of resolving business succession issues. We believe that this trend toward
consolidation of operations in the industry presents an opportunity for
well-capitalized rental-purchase operators to continue to acquire additional
stores on favorable terms.
Strategy
We believe that our continued success depends on successful implementation
of the following business strategies:
Acquiring and Opening New Stores
We currently intend to expand our operations by acquiring existing stores
and opening new stores, both within our present market area and in geographic
regions we do not currently serve. At present, the majority of that expansion is
expected to be accomplished through acquisitions. We believe that acquisitions
can effectively increase our market share while simultaneously expanding our
customer base. In addition, in pursuing our growth strategies, we expect to
benefit from both enhanced purchasing power and the ability to leverage
economies of scale for several operating expenses.
We continually review acquisition opportunities, and we believe that a
number of acquisition opportunities currently exist. At present, we have no
plans, proposals, arrangements or understandings with respect to significant
acquisitions. In identifying targets for acquisition, we intend to focus on
operations that complement our existing markets, while remaining open to the
possibility of making acquisitions in other areas. We have not established
formal criteria for potential acquisitions. Generally, however, we seek to
acquire rental-purchase businesses that operate profitably and are located in
geographic markets that complement our existing stores or that we view as growth
markets for the rental-purchase industry. We seek to acquire these businesses
at purchase prices that will permit us a prompt return on our investment in the
form of increased earnings. We have no formal policy with respect to
acquisitions with related entities. To date, none of these acquisitions have
been considered nor do we anticipate considering any of these acquisitions in
the future. We believe that our senior management's ability and experience
provides us with a competitive advantage in the evaluation and consummation of
acquisition opportunities.
Following consummation of an acquisition, we appoint a dedicated team to
oversee and monitor the integration of the acquired stores, including
determining staffing, store merchandise and facility needs, budgets and
performance goals. All acquired stores are promptly evaluated and, if necessary,
remodeled. We seek to integrate acquired stores and the management information
system of those stores within one to three months following an acquisition.
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In addition, in May 1999, we announced a new store opening plan designed to
complement our acquisition strategy. We plan to open an additional 40-60 stores
in the next twelve months. The new store openings will occur in under-serviced
markets near existing locations to leverage field operating strength and
advertising efficiencies.
Customer-Focused Philosophy
We believe that through the continued adherence to our "Welcome, Wanted and
Important" business philosophy we should be able to increase our new and repeat
customer base, and thus the number of units we have on rent, thereby increasing
revenues and net income. The "Welcome, Wanted and Important" philosophy is a
method by which we seek to create a store atmosphere conducive to customer
loyalty. We attempt to create this atmosphere through the effective use of
advertising and merchandising strategies, by maintaining the clean and
well-stocked appearance of our stores, and by providing a high level of customer
service, including the institution of a 1-800-RENTWAY complaint and comment
line. Our advertising emphasizes brand name merchandise from leading
manufacturers. In addition, merchandise selection within each product category
is periodically updated to incorporate the latest offerings from suppliers.
Services provided by us to our customer include home delivery and installation,
ordinary maintenance and repair services and pick up during the term of the
contract at no additional charge. Store managers also work closely with each
customer in choosing merchandise, setting delivery dates and arranging a
suitable payment schedule. As part of the "Welcome, Wanted and Important"
philosophy, store managers are empowered, encouraged and trained to make
decisions regarding store operations subject only to our company-wide operating
guidelines and general policies.
Expanding Our Product Lines
One of our principal strategies is to provide the rental-purchase customer
with the opportunity to obtain merchandise of higher quality than the
merchandise available from our competitors on competitive terms. To this end, we
attempt to maintain a broad selection of products while emphasizing better
quality, higher priced merchandise. We intend to continue expanding our
offerings of better quality, higher priced products in all product areas. We
believe that previous offerings of these products have succeeded in both
increasing our profitability and attracting new customers to our existing
stores. In addition, we selectively test new merchandise and services. Our
current agreement to purchase Gateway computers and offer them to customers in
part of our strategy of expanding our product line to include higher quality
products. In addition, our acquisition of an interest in dPi TeleConnect, LLC
now enables us to offer prepaid local phone service to our customers in addition
to the traditional rental-purchase items. We believe that opportunities exist to
provide additional or non-traditional merchandise to our customers.
Monitoring Store Performance
Our management information system allows each store manager to track rental
and collection activity on a daily basis. The system generates detailed reports
that track inventory movement within each product category and the number and
frequency of past due accounts and other collection activity. Physical
inventories are regularly conducted at each store to ensure the accuracy of the
management information system data. Senior management monitors this information
to ensure adherence to established operating guidelines. In addition, each store
is provided with a monthly profit and loss statement to track performance. We
believe our management and accounting information systems enhance our ability to
monitor and affect the operating performance of existing stores and to integrate
and improve the performance of newly acquired stores.
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Results-Oriented Compensation
We believe that an important reason for our positive financial performance
and growth has been the structure of our management compensation system. A
significant portion of our regional and store managers' total compensation is
dependent upon store performance. Regional and store managers earn incentives by
increasing both store revenues and operating profits. As further incentive, we
grant managers stock options in Rent-Way. We believe that our emphasis on
incentive-based compensation has been instrumental in our ability to attract,
retain and motivate our regional and store managers.
Manager Training and Empowerment
We employ four full-time trainers who conduct classroom programs in the
areas of sales, store operations and personnel management. These training
programs often continue for several months and culminate in an exam. We also
require our managers to attend, at our expense, leadership and management
programs offered by leading management and organization experts. We empower our
store managers by permitting them to make significant decisions involving store
operations, including personnel, merchandise, and collections decisions. We
believe that well-trained and empowered store managers are important to our
efforts to maximize individual store performance.
Operations Our Stores
We currently operate 1,094 stores in 42 states, as follows:
Location Number of Stores
-------- ----------------
Texas 120
Florida 94
New York 76
Pennsylvania 64
Ohio 61
South Carolina 61
North Carolina 45
Tennessee 44
Indiana 42
Georgia 40
Louisiana 39
Illinois 39
Kentucky 36
Arkansas 34
Virginia 32
Alabama 29
Michigan 28
Oklahoma 16
Arizona 16
Maryland 15
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Location Number of Stores
-------- ----------------
Massachusetts 14
Maine 14
Missouri 14
Mississippi 12
Nebraska 12
Kansas 11
Colorado 10
New Mexico 10
New Hampshire 9
Iowa 8
West Virginia 8
Vermont 7
Nevada 6
Connecticut 5
Delaware 5
Washington 5
California 4
Utah 3
Rhode Island 2
South Dakota 2
Idaho 1
Oregon 1
Our stores average 3,500 square feet in floor space and are generally
located in strip shopping centers in or near low to middle income neighborhoods.
Often, these shopping centers offer convenient free parking to our customers.
Our stores are generally uniform in interior appearance and design and display
of available merchandise. The stores have separate storage areas but generally
do not use warehouse facilities. In selecting store locations, we use a variety
of market information sources to locate areas of a town or city that are readily
accessible to low and middle income consumers. We believe that within these
areas, the best locations are in neighborhood shopping centers that include a
supermarket. We believe this type of location makes frequent rental payments at
our stores more convenient for our customers. Generally, we refurbish our stores
every two to five years.
Product Selection
We offer brand name home entertainment equipment, such as television sets,
video recorders, video cameras and stereos, furniture, major appliances,
electronics and jewelry. Major appliances offered by us include refrigerators,
ranges, washers and dryers. Our product line currently includes the Zenith, RCA,
Pioneer, JVC, Sharp and Panasonic brands in home entertainment equipment, the
Ashley and New England Corsair brand in furniture, and the Crosley, Kenmore and
General Electric brands in major appliances. In addition, we now offer Gateway
personal computers. We closely monitor customer rental requests and adjust our
product mix to offer rental merchandise desired by customers.
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For the year ended September 30, 1999, payments under rental-purchase
contracts for home entertainment products accounted for approximately 40%,
furniture 28.3%, appliances 26.5%, jewelry 3.9%, and all other items 0.6% of our
rental revenues. Customers may rent either new merchandise or previously rented
merchandise. Weekly rentals currently range from $14.99 to $39.99 for home
entertainment equipment, from $9.99 to $39.99 for furniture, from $9.99 to
$29.99 for major appliances and $6.99 to $19.99 for jewelry.
Rental-Purchase Agreements
Merchandise is provided to customers under written rental-purchase
agreements that set forth the terms and conditions of the transaction. We use
standard form rental-purchase agreements which are reviewed by legal counsel and
customized to meet the legal requirements of the various states in which they
are to be used. Generally, the rental-purchase agreement is signed at the store,
but may be signed at the customer's residence if the customer orders the product
by telephone and requests home delivery. Customers rent merchandise on a
week-to-week and, to a lesser extent, on a month-to-month basis with rent
payable in advance. At the end of the initial and each subsequent rental period,
the customer retains the merchandise for an additional week or month by paying
the required rent or may terminate the agreement without further obligation. If
the customer decides to terminate the agreement, the merchandise is returned to
the store and is then available for rent to another customer. We retain title to
the merchandise during the term of the rental-purchase agreement. If a customer
rents merchandise for a sufficient period of time, usually 12 to 24 months,
ownership is transferred to the customer without further payments being
required. Rental payments are typically made in cash or by check or money order.
We do not extend credit.
Product Turnover
Generally, a minimum rental term of between 12 and 24 months is required to
obtain ownership of new merchandise. Based upon merchandise returns for the year
ended September 30, 1999, we believe that the average period of time during
which customers rent merchandise is 16 to 17 weeks. However, turnover varies
significantly based on the type of merchandise being rented, with some consumer
electronic products, such as camcorders and VCRs, generally being rented for
shorter periods, while appliances and furniture are generally rented for longer
periods. Each rental-purchase transaction requires delivery and pickup of the
product, weekly or monthly payment processing and, in some cases, repair and
refurbishment of the product. In order to cover the relatively high operating
expenses generated by greater product turnover, rental-purchase agreements
require larger aggregate payments than are generally charged under installment
purchase or credit plans.
Customer Service
We offer same day delivery, installation and pick-up of our merchandise at
no additional cost to the customer. We also provide any required service or
repair without charge, except for damage in excess of normal wear and tear. If
the product cannot be repaired at the customer's residence, we provide a
temporary replacement while the product is being repaired. The customer is fully
liable for damage, loss or destruction of the merchandise, unless the customer
purchases an optional loss/damage waiver. Most of the products that we offer are
covered by a manufacturer's warranty for varying periods, which, subject to the
terms of the warranty, is transferred to the customer in the event that the
customer obtains ownership. Repair services are provided through in-house
service technicians, independent contractors or under factory warranties. We
offer Rent-Way Plus, a fee-based membership program that provides special loss
and damage protection and an additional one year of service protection on rental
merchandise, preferred treatment in the event of involuntary job loss,
accidental death and dismemberment insurance and discounted emergency roadside
assistance, as well as other discounts on merchandise and services.
15
<PAGE>
Collections
We believe that effective collection procedures are important to our
success. Our collection procedures increase the revenue per product with minimal
associated cost, decrease the likelihood of default and reduce charge-offs.
Senior management, as well as store managers use our computerized management
information system to monitor cash collections on a daily basis. In the event a
customer fails to make a rental payment when due, store management will attempt
to contact the customer to obtain payment and reinstate the contract or will
terminate the account and arrange to regain possession of the merchandise.
However, store managers are given latitude to determine the appropriate
collection action to be pursued based on individual circumstances. Depending on
state regulatory requirements, we charge for the reinstatement of terminated
accounts or collect a delinquent account fee. These fees are standard in the
industry and may be subject to state law limitations. Despite the fact that we
are not subject to the federal Fair Debt Collection Practices Act, it is our
policy to abide by the restrictions of this law in our collection procedures. If
an item on rent is not returned or payment is not received within 90 days of its
due date, our policy is to charge off the item. Charge-offs due to lost or
stolen merchandise were approximately 2.9%, 3.1% and 3.4% of our revenues for
the years ended September 30, 1999, 1998 and 1997, respectively. The charge-off
rate for chains with over 40 stores reporting to APRO in 1998 was 3.3%.
Management
Our stores are organized geographically with several levels of management.
At the individual store level, each store manager is responsible for customer
relations, deliveries and pickups, inventory management, staffing and certain
marketing efforts. One of our stores normally employs one store manager, one
assistant manager, two account managers, one full-time office manager and one
full-time delivery and installation technician. The staffing of a store depends
on the number of rental-purchase contracts serviced by the store.
Each store manager reports to one regional manager, each of whom typically
oversees six to eight stores. Regional managers are primarily responsible for
monitoring individual store performance and inventory levels within their
respective regions. Our regional managers, in turn, report to directors of
operations, who monitor the operations of their respective regions and, through
the regional managers, individual store performance. The directors of operations
report to one of five Divisional Vice Presidents who monitor the overall
operations of their assigned geographic area. The Divisional Vice Presidents
report to the Vice President-Operations who is responsible for overall
Company-wide store operations. Senior management at our headquarters directs and
coordinates purchasing, financial planning and controls, management information
systems, employee training, personnel matters and acquisitions. Headquarters
personnel also evaluate the performance of each store.
Management Information System
We believe that our propriety management information system provides us
with a competitive advantage over many small rental-purchase operations. We use
an integrated computerized management information and control system to track
each unit of merchandise and each rental-purchase agreement. Our system also
includes extensive management software and report generating capabilities.
Reports for all stores are reviewed daily by senior management and any
irregularities are addressed the following business day. Each store has the
ability to track individual components of revenue, idle items, items on rent,
delinquent accounts and other account information. Management electronically
gathers each day's activity report through the computer located at the
headquarters office. Our management has access to operating and financial
information about any store location or region in which we operate and generates
management reports on a daily, weekly, month-to-date and year-to-date basis.
Utilizing the management information system, senior management, regional
managers and store managers can closely monitor the productivity of stores under
their supervision compared to Company-prescribed guidelines. This system has
enabled us to expand our operations while maintaining a high degree of control
over cash receipts, rental merchandise, and merchandise units in repair. While
we believe our management information system is adequate to meet our needs for
the foreseeable future, we continue to upgrade the system over time.
16
<PAGE>
Purchasing and Distribution
Our general product mix is determined by senior management, based on an
analysis of customer rental patterns and introduction of new products on a test
basis. Individual store managers are responsible for determining the particular
product selection for their store from a list of products approved by senior
management. All purchase orders are executed through regional managers and our
purchasing department to ensure that inventory levels and mix throughout the
store regions are appropriate. We purchase our merchandise directly from
manufacturers or distributors. With the exception of our recent agreement with
Gateway for personal computers, we generally do not enter into written contracts
with our suppliers. Although we currently expect to continue our existing
relationships, we believe there are numerous sources of products available to
us, and do not believe that the success of our operations is dependent on any
one or more of our present suppliers.
Marketing and Advertising
We promote our products and services through targeted direct mail, spot and
national television advertising and, to a lesser extent, through radio and
secondary print media advertisement. We also solicit business by telephoning
former and prospective customers. We are dedicating an increasing percentage of
our marketing dollars to television advertising to build brand recognition in
markets where it is economically attractive to do so. Our print advertisements
emphasize product and brand name selection, prompt delivery and repair, and the
absence of any down payment, credit investigation or long-term obligation.
Advertising expense as a percentage of revenue for the years ended September 30,
1999, 1998 and 1997 were 4.7%, 5.4% and 5.6%, respectively. In addition to our
national advertising efforts, a good deal of emphasis has been placed on the
development of a local store marketing plan to allow the stores to leverage
market specific knowledge. As we obtain new stores in our existing markets, the
advertising expenses of each store in the market can be reduced by listing all
stores in the same market-wide advertisement. In addition, we participate in
cooperative advertising programs with many of our major vendors.
Competition
The rental-purchase industry is highly competitive. We compete with other
rental-purchase businesses as well as rental stores that do not offer their
customers a purchase option. Competition is based primarily on rental rates and
terms, product selection and availability, and customer service. With respect to
consumers who are able to purchase a product for cash or on credit, we also
compete with department stores, discount stores and retail outlets that offer an
installment sales program or offer comparable products and prices. We are the
second largest operator in the rental-purchase industry, second only to
Rent-A-Center. Rent-A-Center is national in scope and has significantly greater
financial and operating resources and name recognition than we have.
17
<PAGE>
Properties
We generally lease all of our store facilities under operating leases that
generally have terms of three to five years and require that we pay real estate
taxes, utilities and maintenance. We have optional renewal privileges on most of
our leases for additional periods ranging from three to five years at rental
rates generally adjusted for increases in the cost of living. There is no
assurance that we can renew the leases that do not contain renewal options, or
that if we can renew them, that the terms will be favorable to us. We believe
that suitable store space is generally available for lease and that we would be
able to relocate any of our stores without significant difficulty should we be
unable to renew a particular lease. We also expect that additional space will be
readily available at competitive rates in the event we desire to open new
stores.
Our main corporate offices are in Erie, Pennsylvania and consist of three
buildings of approximately 34,000, 11,000, and 10,000 square feet. During
calendar year 2000, we plan to construct a 30,000 square foot addition to our
main corporate headquarters. We estimate the cost of this addition at
approximately $3.5 million and plan to pay for this project with borrowings on
our senior credit facility. In addition, we lease administrative offices in
Dallas, Texas, Daytona, Florida, Lexington, Kentucky, and Raleigh, North
Carolina. We also own two office buildings in Erie, Pennsylvania that are used
for record storage.
Personnel
As of April 1, 2000, we had approximately 5,500 employees, of whom 250 are
located at the corporate office in Erie, Pennsylvania. None of our employees is
represented by a labor union. We believe our relations with our employees are
good.
Government Regulation
Forty-seven states have adopted legislation regulating or otherwise
impacting the rental-purchase transaction. These laws generally require certain
contractual and advertising disclosures concerning the nature of the transaction
and also provide varying levels of substantive consumer protection, such as
requiring a grace period for late payments and contract reinstatement rights in
the event the agreement is terminated for nonpayment.
Recent court decisions in Minnesota, New Jersey, and Wisconsin have created
a legal environment in those states which is prohibitive to rental-purchase
transactions. We do not operate in those states. The majority of the states in
which we operate impose some type of disclosure requirements, either in
advertising or in the rental-purchase agreement, or both. The regulations in
these states also distinguish rental-purchase transactions from credit sales. We
believe that our operations are in material compliance with applicable state
rental-purchase laws.
No federal legislation has been enacted regulating the rental-purchase
transaction. We instruct our managers in procedures required by applicable law
through training seminars and policy manuals and believe that we have operated
in compliance with the requirements of applicable law in all material respects.
We believe that in the unlikely event federal legislation is enacted
regulating rental-purchase transactions as credit sales, we would be able to
adapt to the new laws and remain profitable by repositioning ourselves as a
rent-to-rent business.
18
<PAGE>
Service Marks
We have registered the "Rent-Way" service mark under the Lanham Act. We
believe that this mark has acquired significant market recognition and goodwill
in the communities in which our stores are located. We have also registered the
service marks "Rent-Way Because There's Really Only One Way" and "RentWay - the
Right Way" and the related designs. We have also prepared applications to
register the following service marks: "RentWay. The Right Way. Right Away.",
"Lifetime Reinstatement", and "We're Changing the Way America Rents". In
connection with the Home Choice merger, we acquired the "Home Choice" service
mark, which is registered under the Lanham Act.
Legal Proceedings
From time to time we are a party to various legal proceedings arising in
the ordinary course of our business. We are not currently a party to any
material litigation.
19
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from sale of the common stock offered by
the selling shareholders.
SELLING SHAREHOLDERS
The following table sets forth the number of shares of common stock offered
by the selling shareholders in this prospectus based upon information furnished
to us:
<TABLE>
<CAPTION>
Number of Shares Number of Shares Number of Shares Percentage of
of Common Stock of Common Stock of Common Stock Outstanding Common
Owned Prior to Offered for Sale Owned After the Stock Owned After
Name the Offering in the Offering Offering the Offering
---- ---------------- ---------------- --------------- ------------------
<S> <C> <C> <C> <C>
Larry Kugler 23,072 23,072 -- --
Thomas H. Lowe 23,185 23,185 -- --
Jeri F. Slatton 23,185 23,185 -- --
Mollie Dockery Tackett 23,185 23,185 -- --
Gregory T. J. Madson 23,185 23,185 -- --
</TABLE>
The shares of common stock being offered in this prospectus underlie
options granted in July 1995 to the former shareholders of McKenzie Leasing
Corporation in connection with our acquisition of McKenzie Leasing Corporation.
The options were subsequently sold to the selling shareholders on or about April
12, 2000. Except as described in this prospectus, none of the selling
shareholders has had any position, office or material relationship with us
within the past three years.
20
<PAGE>
PLAN OF DISTRIBUTION
The common stock offered by this prospectus is being offered by the selling
shareholders. Such common stock may be sold or distributed from time to time by
the selling shareholders, or by donees or transferees of, or other successors in
interests to, the selling shareholders, directly to one or more purchasers or
through brokers, dealers or underwriters who may act solely as agents or may
acquire such common stock as principals, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices, at negotiated
prices, or at fixed prices, which may be changed. The sale of the common stock
offered hereby may be effected in one or more of the following methods:
- ordinary brokers' transactions;
- purchases by brokers, dealers or underwriters as principal who then
resell for their own accounts pursuant to this prospectus;
- "at the market" to or through market makers or into an existing market
for the common stock;
- in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
- in privately negotiated transactions;
- through a pledge to a lending institution; or
- any combination of the foregoing.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and complied
with.
Brokers, dealers, underwriters or agents participating in the distribution
of the shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling shareholders and/or purchasers of the
common stock for whom such broker-dealers may act as agent, or to whom they may
sell as principal, or both (which compensation as to a particular broker-dealer
may be less than or in excess of customary commissions).
THE SELLING SHAREHOLDERS AND ANY BROKER-DEALERS WHO ACT IN CONNECTION WITH
THE SALE OF THE SHARES HEREUNDER MAY BE DEEMED TO BE "UNDERWRITERS" WITHIN THE
MEANING OF THE SECURITIES ACT, AND ANY COMMISSIONS THEY RECEIVE AND PROCEEDS OF
ANY SALE OF THE SHARES MAY BE DEEMED TO BE UNDERWRITING DISCOUNTS AND
COMMISSIONS UNDER THE SECURITIES ACT.
Neither Rent-Way nor the selling shareholders can presently estimate the
amount of such compensation. Rent-Way knows of no existing arrangements between
any selling shareholders, any other shareholder, broker, dealer, underwriter or
agent relating to the sale or distribution of the shares. At a time a particular
offer of shares is made, a prospectus supplement, if required will be
distributed that will set forth the names of any agents, underwriters or dealers
and any compensation from the selling shareholders and any other required
information.
Rent-Way will pay all of the expenses incident to the registration,
offering and sale of shares to the public other than commissions or discounts of
underwriters, broker-dealers or agents. Rent-Way has also agreed to indemnify
the selling shareholders and certain related persons against certain
liabilities, including liabilities under the Securities Act.
21
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Rent-Way,
Rent-Way has been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is therefore,
unenforceable.
Rent-Way has advised the selling shareholders that during such time as they
may be engaged in a distribution of the shares included in this prospectus they
are required to comply with Regulation M promulgated under the Securities
Exchange Act of 1934, as amended. With certain exceptions, Regulation M
precludes the selling shareholders, any affiliated purchasers, and any
broker-dealer or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase any
security which is the subject of the distribution until the entire distribution
is complete. Regulation M also prohibits any bids or purchases made in order to
stabilize the price of a security in connection with the distribution of that
security. All of the foregoing may affect the marketability of the shares
offered hereby.
LEGAL MATTERS
The validity of the common stock offered in this prospectus will be passed
upon for us by Hodgson, Russ, Andrews, Woods & Goodyear LLP, Buffalo, New York.
EXPERTS
Our balance sheets as of September 30, 1999 and 1998 and the related
statements of income, shareholders' equity and cash flows for the years ended
September 30, 1999, 1998 and 1997, all incorporated by reference into this
registration statement and prospectus, have been incorporated into this
registration statement and prospectus in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
22
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus may be used by the selling shareholders identified under
the heading "SELLING SHAREHOLDERS" in connection with their sale of shares of
common stock which they own or acquire from us by the exercise of stock options.
The selling shareholders may also sell their shares of common stock by complying
with Rule 144 or Rule 144A adopted by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, if the requirements of those rules
have been satisfied.
The selling shareholders will receive all of the proceeds from their sales
of the common stock. We will not receive any money from these sales.
This prospectus provides you with a general description of us and of our
common stock. You should carefully read this prospectus and the documents
referred to in this prospectus under the heading "WHERE YOU CAN FIND MORE
INFORMATION." You should rely only on the information provided in this
prospectus or incorporated into this prospectus by reference. We have not
authorized anyone to provide you with different information. You should not
assume that the information in this prospectus is accurate after the date of
this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement with the SEC relating to sales by
the selling shareholders of their shares of common stock. This prospectus is
part of that registration statement, but the registration statement also
contains additional information and exhibits. We also file proxy statements,
annual, quarterly and special reports and other information with the SEC. You
may read and copy (upon the payment of fees charges by the SEC) any document
that we file with the SEC at its public reference rooms in Washington, DC (450
Fifth Street, N.W., Washington, DC 20549), New York, New York (7 World Trade
Center, Suite 300, New York, New York 10048), and Chicago (500 West Madison
Street, Suite 1400, Chicago, Illinois 60661). You may call the SEC at 1-(800)
SEC-0330 for further information about the public reference rooms. Our filings
are also available at the SEC's website at Our Internet address is
The SEC allows us to incorporate documents in this prospectus by reference.
This means that we can disclose important business, financial and other
information in our SEC filings by referring you to the documents containing such
information. All information incorporated by reference is part of this
prospectus until it is updated by future filings with the SEC. Those future
filings are considered to automatically update this prospectus.
We incorporate by reference into this prospectus the documents listed in
the following table:
Our SEC Filings Period
--------------- ------
Annual Report on Form 10-K Year ended September 30, 1999
Quarterly Report on Form 10-Q Quarter ended December 31, 1999
Quarterly Report on Form 10-Q Quarter ended March 31, 2000
Current Reports on Form 8-K Dated: January 19, 2000 (two reports)
February 15, 2000
February 29, 2000
April 11, 2000
April 25, 2000
Registration Statement on Form 8-A Filed September 30, 1998, including any
containing a description of our amendments or reports filed for the
common stock purpose of updating such description
23
<PAGE>
We also incorporate by reference additional documents that we may file
between the date of this prospectus and the termination of the offering made by
use of this prospectus. These documents include periodic reports such as Annual
Reports on Forms 10-K, Quarterly Reports on Forms 10-Q, Current Reports on Form
8-K, and other reports filed with the SEC, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
prospectus from us, other than exhibits to those documents unless the exhibit is
specifically incorporated by reference into this prospectus as an exhibit. You
can obtain documents incorporated by reference in this prospectus by requesting
them in writing or by telephone from us at the following address and telephone
number:
Investor Relations
RENT-WAY, INC.
One RentWay Place
Erie, Pennsylvania 16505
(814) 455-5378
To ensure timely receipt of documents that you request, you should make any
request to us at least five business days prior to the date you need them. We
will mail materials to you by first class mail, or another equally prompt means,
within one business day after we receive your request.
24
<PAGE>
RENT-WAY, INC.
115,812 SHARES
OF
COMMON STOCK
------------
PROSPECTUS
------------
June 1, 2000
25
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses to be incurred in connection with the offering are set forth
below. The selling shareholders will not pay any expenses of the offering. All
amounts are estimates except the SEC registration fee.
SEC registration fee ......................... $ 779.00
Accounting fees and expenses ................. 5,000.00
Legal fees and expenses ...................... 10,000.00
Blue Sky Fees and Expenses ................... 2,000.00
Miscellaneous ................................ 1,000.00
Total .................................... $18,779.00
Item 15. Indemnification of Directors and Officers
The provisions of Sections 1741 through 1750 of the Pennsylvania Business
Corporation Law provide that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any action
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a representative of the corporation,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
the action or proceeding if they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
corporation. To the extent that a representative of the corporation has been
successful on the merits or otherwise in defense of any action or proceeding or
in defense of any claim, issue or matter therein, the corporation is required by
the Pennsylvania Business Corporation Law to indemnify them against expenses
actually and reasonably incurred by them in connection with their defense.
Rent-Way's By-Laws provide that it shall indemnity its officers and
directors against claims arising from actions taken in their official capacity
except where the conduct giving rise to the claim is finally determined by a
court or in arbitration to have constituted willful misconduct or recklessness
or to have involved the receipt from Rent-Way of a personal benefit to which the
officer or director was not entitled, or where the indemnification has been
determined in a final adjudication to be unlawful. Rent-Way may create a fund,
trust or other arrangement to secure the indemnification. In addition, Rent-Way
is required to pay the expenses of defending the claim in advance of final
adjudication upon the receipt of an undertaking by the officer or director to
repay the advanced amounts if it is ultimately determined that the officer or
director is not entitled to be indemnified. These provisions of the By-Laws are
expressly permitted pursuant to the Pennsylvania Business Corporation Law.
II-1
<PAGE>
Item 16. Exhibits
Exhibit No. Description
----------- -----------
5.1(1) Opinion of Hodgson, Russ, Andrews, Woods & Goodyear, LLP
10.1(2) Form of Stock Option Agreements between the Company and each
of the former shareholders of McKenzie Leasing Corporation,
dated July 21, 1995
10.2(1) Form of Stock Option Assignment Agreement
23.1(1) Consent of Hodgson, Russ, Andrews, Woods & Goodyear, LLP
(included in Exhibit 5.1)
23.2(1) Consent of PricewaterhouseCoopers, LLP
------------------------------
(1) Filed herewith.
(2) Previously filed, as of January 5, 1996, as an exhibit to the Company's
Registration Statement on Form SB-2.
II-2
<PAGE>
Item 17. Undertakings
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Rent-Way
pursuant to the foregoing provisions or otherwise, Rent-Way has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against these liabilities, other than the payment by Rent-Way of expenses
incurred or paid by a director, officer or controlling person of Rent-Way in the
successful defense of any action, suit or proceeding, is asserted by a director,
officer or controlling person in connection with the securities being
registered, Rent-Way will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of the issue.
(b) Rent-Way also hereby undertakes that:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement, or the most recent
post-effective amendment of the Registration Statement, which, individually or
in the aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to the information in the Registration Statement;
Provided, however, that paragraphs (b)(1)(i) and (b)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by Rent-Way pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That for the purposes of determining any liability under the
Securities Act, each such post-effective shall be deemed to be a new
registration statement relating to the securities offered in that registration
statement, and the offering of those securities at that time shall be deemed to
be the initial bona fide offer to sell those securities.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(c) Rent-Way hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of Rent-Way's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act, and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of Rent-Way Exchange Act, that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered in that registration statement, and the
offering of those securities at that time shall be deemed to be the initial bona
fide offering of those securities.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Rent-Way certifies that
it has reasonable grounds to believe that it meets all of the requirements of
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned who are duly authorized in the City of Erie,
State of Pennsylvania, on June 1, 2000.
RENT-WAY, INC.
By: /s/ William E. Morgenstern
-----------------------------------
William E. Morgenstern, Chairman of the Board,
Chief Executive Officer
In accordance with the requirements of the Securities Act, this
Registration Statement was signed by the following persons in the capacities and
on the date stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William E. Morgenstern Chairman of the Board and Chief June 1, 2000
---------------------------------- Executive Officer and Director
William E. Morgenstern (Principal Executive Officer)
/s/ William A. McDonnell Vice President, Chief Financial Officer June 1, 2000
---------------------------------- (Principal Financial Officer)
William A. McDonnell
/s/ Jeffrey A. Conway President, Chief Operating Officer and June 1, 2000
-------------------------------------- Director
Jeffrey A. Conway
/s/ Gerald A. Ryan Chairman Emeritus, Director June 1, 2000
-----------------------------------------
Gerald A. Ryan
/s/ Vincent A. Carrino Director June 1, 2000
-----------------------------------------
Vincent A. Carrino
/s/ Robert B. Fagenson Director June 1, 2000
-----------------------------------------
Robert B. Fagenson
/s/ Marc W. Joseffer Director June 1, 2000
-----------------------------------------
Marc W. Joseffer
/s/ William Lerner Director June 1, 2000
-----------------------------------------
William Lerner
/s/ Jacqueline Woods Director June 1, 2000
-----------------------------------------
Jacqueline Woods
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
5.1(1) Opinion of Hodgson, Russ, Andrews, Woods & Goodyear, LLP
10.1(2) Form of Stock Option Agreements between the Company and each
of the former shareholders of McKenzie Leasing Corporation,
dated July 21, 1995
10.2(1) Form of Stock Option Assignment Agreement
23.1(1) Consent of Hodgson, Russ, Andrews, Woods & Goodyear, LLP
(included in Exhibit 5.1)
23.2(1) Consent of PricewaterhouseCoopers, LLP
------------------------------
(1) Filed herewith.
(2) Previously filed, as of January 5, 1996, as an exhibit to the Company's
Registration Statement on Form SB-2.
