<PAGE> 1
As filed with the Securities and Exchange Commission on May 22, 1998
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RENTERS CHOICE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 48-1024367
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
13800 MONTFORT DRIVE, SUITE 300
DALLAS, TEXAS 75240
(Address of principal executive offices) (zip code)
AMENDED AND RESTATED
1994 RENTERS CHOICE, INC.
LONG-TERM INCENTIVE PLAN
(Full title of the plan)
DANNY Z. WILBANKS
13800 MONTFORT DRIVE, SUITE 300
DALLAS, TEXAS 75240
(Name and address of agent for service)
(972) 419-2652
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share Offering Price Fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $0.01
per share 1,500,000 $27.72* $41,580,000* $12,266.10
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(h). Pursuant to Rule 457(h), this
estimate is based upon the average of the high and low prices of the
Registrant's common stock, par value $0.01 per share, on May 18, 1998
(as reported on The Nasdaq Stock Market, Inc.).
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement on Form S-8 is filed in order to register
an additional 1,500,000 shares of common stock, par value $.01 per share, of
Renters Choice, Inc. for issuance pursuant to the 1994 Renters Choice, Inc.
Long-Term Incentive Plan (as amended, the "Plan"). The contents of that
earlier Registration Statement (Registration No. 33-98800), which registered
1,500,000 shares (on a post-split basis) for issuance under the Plan was filed
on October 31, 1995, are hereby incorporated by reference.
ITEM 8. EXHIBITS
5.1 Opinion of Winstead Sechrest & Minick P.C. regarding the validity of
the securities being registered.*
23.1 Consent of Grant Thornton LLP.*
23.2 Consent of Winstead Sechrest & Minick P.C. (included as part of
Exhibit 5.1).*
24 Power of Attorney (See Page II-1 of this Registration Statement).*
99.1 Amended and Restated 1994 Renters Choice, Inc. Long-Term Incentive
Plan.*
- ---------------------
* Filed herewith.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on May 22, 1998.
RENTERS CHOICE, INC.
By: /s/ J. ERNEST TALLEY
----------------------------------
J. Ernest Talley
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints J. Ernest Talley and Danny Z.
Wilbanks, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and on his behalf
and in his name, place and stead, in any and all capacities, to sign any and
all documents relating to this Registration Statement, including any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits and supplements thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
II-1
<PAGE> 4
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature and Title Date
------------------- ----
<S> <C>
/s/ J. ERNEST TALLEY May 22, 1998
- -------------------------------------------
J. Ernest Talley
Chairman of the Board and
Chief Executive Officer (Principal
Executive Officer)
/s/ MARK E. SPEESE May 22, 1998
- -------------------------------------------
Mark E. Speese
President, Chief Operating
Officer and Director
/s/ DANNY Z. WILBANKS May 22, 1998
- -------------------------------------------
Danny Z. Wilbanks
Senior Vice President of Finance
and Chief Financial Officer
(Principal Financial
and Accounting Officer)
/s/ J. V. LENTELL May 22, 1998
- -------------------------------------------
J. V. Lentell
Director
/s/ JOSEPH V. MARINER, JR. May 22, 1998
- -------------------------------------------
Joseph V. Mariner, Jr.
Director
/s/ REX W. THOMPSON May 22, 1998
- -------------------------------------------
Rex W. Thompson
Director
</TABLE>
II-2
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
5.1 Opinion of Winstead Sechrest & Minick P.C. regarding the validity of
the securities being registered.*
23.1 Consent of Grant Thornton LLP.*
23.2 Consent of Winstead Sechrest & Minick P.C. (included as part of
Exhibit 5.1).*
24 Power of Attorney (See Page II-1 of this Registration Statement).*
99.1 Amended and Restated 1994 Renters Choice, Inc. Long-Term Incentive
Plan.*
- ---------------------
* Filed herewith.
</TABLE>
<PAGE> 1
Direct Dial (214) 745-5201
[email protected]
EXHIBIT 5.1
OPINION REGARDING LEGALITY
May 22, 1998
Renters Choice, Inc.
13800 Montfort Drive, Suite 300
Dallas, Texas 75240
Gentlemen:
Renters Choice, Inc., a Delaware corporation (the "Company"), is today
filing with the Securities and Exchange Commission (the "Commission") a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended, with respect to the registration of
1,500,000 shares (the "Shares") of common stock ("Common Stock"), $.01 par
value per share, of the Company which may hereafter be issued pursuant to The
1994 Renters Choice, Inc. Long-Term Incentive Plan (the "Plan").
In rendering the opinions expressed herein, we have examined (i) the
Company's Amended and Restated Certificate of Incorporation and all amendments
thereto, (ii) the Company's Amended and Restated Bylaws, as amended, (iii)
minutes of meetings or consents in lieu of meetings of the Company's board of
directors (the "Board") and stockholders, and (iv) such other corporate records
and documents, certificates of corporate and public officials and statutes as
we have deemed necessary for the purposes of this opinion. In such
examination, we have assumed the genuineness of all signatures, the
authenticity of all corporate records, documents and instruments submitted to
us as originals, the conformity to original documents of all documents
submitted to us as conformed, certified or photostatic copies thereof, the
authenticity of the originals of such photostatic, certified or conformed
copies, and compliance both in the past and in the future with the terms of the
Plan by the Company and its employees, officers, the Board and any committees
appointed to administer the Plan.
Based upon such examination and in reliance thereon, we are of the
opinion that upon the issuance of Shares in accordance with the terms and
conditions of the Plan, including receipt prior to issuance by the Company of
the full consideration for the Shares (which consideration shall be at least
equal to the par value thereof), the Shares will be validly issued, fully paid
and nonassessable shares of Common Stock.
<PAGE> 2
Renters Choice, Inc.
May 22, 1998
Page 2
This firm consents to the filing of this opinion with the Commission
as Exhibit 5.1 to the Registration Statement.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ Thomas W. Hughes
---------------------------------
Thomas W. Hughes
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Certified Public Accountants
We have issued our report dated February 12, 1998, accompanying the consolidated
financial statements of Renters Choice, Inc. and Subsidiaries included in the
Annual Report on Form 10-K for the year ended December 31, 1997 which is
incorporated by reference in this Registration Statement. We consent to the
incorporation by reference of said report in this Registration Statement of
Renters Choice, Inc.
Grant Thornton LLP
Dallas, Texas
May 22, 1998
<PAGE> 1
EXHIBIT 99.1
AMENDED AND RESTATED
1994 RENTERS CHOICE, INC.
LONG-TERM INCENTIVE PLAN
1. Objectives. The 1994 Renters Choice, Inc. Long-Term
Incentive Plan (the "Plan") is designed to retain selected employees and
non-employee directors of Renters Choice, Inc. (the "Company") and reward them
for making significant contributions to the success of the Company and its
Subsidiaries (as hereinafter defined). These objectives are to be accomplished
by making awards under the Plan and thereby providing Participants (as
hereinafter defined) with a proprietary interest in the growth and performance
of the Company and its Subsidiaries.
2. Definitions. As used herein, the terms set forth
below shall have the following respective meanings:
"Agreement" means a written agreement between the Company and
a Participant that sets forth the terms, conditions and limitations applicable
to an Employee Award or a Director Option.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means such committee of the Board as is designated
by the Board to administer the Plan. The Committee shall be constituted to
permit the Plan to comply with Rule 16b-3.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company.
"Director" means an individual serving as a member of the
Board who is not an employee of the Company or any Subsidiary of the Company.
"Director Option" means a nonqualified stock option granted to
a Director under the terms of this Plan.
"Employee Award" means the grant of any form of Employee Stock
Option, stock appreciation right, stock award or cash award, whether granted
singly, in combination or in tandem, to an employee of the Company or any
Subsidiary pursuant to any applicable terms, conditions and limitations as the
Committee may establish in order to fulfill the objectives of the Plan.
<PAGE> 2
"Employee Stock Option" means an incentive stock option or a
nonqualified stock option granted to an employee of the Company or any of its
Subsidiaries under this Plan by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fair Market Value" means, as of a particular date, (a) if the
shares of Common Stock are listed on a national securities exchange, the mean
between the highest and lowest sales price per share of Common Stock on the
consolidated transaction reporting system for the principal such national
securities exchange on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (b) if the shares of Common Stock are not so listed but are quoted on
the Nasdaq National Market, the mean between the highest and lowest sales price
per share of Common Stock on the Nasdaq National Market on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported or (c) if the Common Stock
is not so listed or quoted, the mean between the closing bid and asked price on
that date, or, if there are no quotations available for such date, on the last
preceding date on which such quotations shall be available, as reported by the
Nasdaq Stock Market, Inc., or, if not reported by the Nasdaq Stock Market,
Inc., by the National Quotation Bureau, Inc.
"Participant" means an employee of the Company or any of its
Subsidiaries to whom an Employee Award has been made under this Plan or a
Director who has received a Director Option.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, or any successor rule.
"Subsidiary" means any corporation of which the Company
directly or indirectly owns shares representing more than 50% of the voting
power of all classes or series of capital stock of such corporation which have
the right to vote generally on matters submitted to a vote of the stockholders
of such corporation.
3. Eligibility.
(a) Employee Awards. All employees of the Company and
its Subsidiaries are eligible for Employee Awards under this Plan. The
Committee shall select the employees who shall become Participants in the Plan
from time to time by the grant of Employee Awards under the Plan.
(b) Director Options. Recipients of Director Options
shall include all persons who, as of the time Director Options are awarded, are
serving as Directors of the Company.
-2-
<PAGE> 3
4. Common Stock Available Under the Plan. There shall
be available for Employee Awards granted wholly or partly in Common Stock
(including rights or options which may be exercised for or settled in Common
Stock) and Director Options during the term of this Plan an aggregate of
3,000,000 shares of Common Stock, subject to adjustment as provided in
Paragraph 14, 240,000 of which shall be set aside for issuance pursuant to
Director Options and 150,000 of which shall be set aside for stock awards, as
described in subparagraph 6(iii) hereof. The Board and the appropriate
officers of the Company shall from time to time take whatever actions are
necessary to file required documents with governmental authorities and stock
exchanges and transaction reporting systems to make shares of Common Stock
available for issuance pursuant to Employee Awards and Director Options.
Common Stock related to Employee Awards and Director Options that are forfeited
or terminated, expire unexercised, are settled in cash in lieu of Common Stock
or in a manner such that all or some of the shares covered by an Employee Award
or Director Option are not issued to a Participant, or are exchanged for
Employee Awards that do not involve Common Stock, shall immediately become
available for Employee Awards and Director Options hereunder. The Committee
may from time to time adopt and observe such procedures concerning the counting
of shares against the Plan maximum as it may deem appropriate under Rule 16b-3.
5. Administration. This Plan shall be administered by
the Committee, which shall have full and exclusive power to interpret this Plan
and to adopt such rules, regulations and guidelines for carrying out this Plan
as it may deem necessary or proper, all of which powers shall be exercised in
the best interests of the Company and in keeping with the objectives of this
Plan. The Committee may, in its discretion, provide for the extension of the
exercisability of an Employee Award, accelerate the vesting or exercisability
of an Employee Award, eliminate or make less restrictive any restrictions
contained in an Employee Award, waive any restriction or other provision of an
Employee Award or otherwise amend or modify an Employee Award in any manner
that is either (a) not adverse to the Participant holding such Employee Award
or (b) consented to by such Participant. The Committee may correct any defect
or supply any omission or reconcile any inconsistency in this Plan or in any
Employee Award in the manner and to the extent the Committee deems necessary or
desirable to carry it into effect. Any decision of the Committee in the
interpretation and administration of this Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned. No member of the Committee or officer of the Company to whom it has
delegated authority in accordance with the provisions of this Plan shall be
liable for anything done or omitted to be done by him or her, by any member of
the Committee or by any officer of the Company in connection with the
performance of any duties under this Plan, except for his or her own willful
misconduct or as expressly provided by statute. The Committee may delegate to
the Chief Executive Officer of the Company and to other senior officers of the
Company its duties under this Plan pursuant to such conditions or limitations
as the Committee may establish, except that the Committee may not delegate to
any person the authority to grant Employee Awards to, or take other action with
respect to, Participants who are subject to Section 16 of the Exchange Act.
6. Employee Awards. The Committee shall determine the
type or types of Awards to be made to each Participant under this Plan. Each
Employee Award made hereunder shall
-3-
<PAGE> 4
be embodied in an Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the Committee in its sole discretion and
shall be signed by the Participant and by the Chief Executive Officer, the
Chief Operating Officer or any Vice President of the Company for and on behalf
of the Company. Employee Awards may consist of those listed in this Paragraph
6 and may be granted singly, in combination or in tandem. Employee Awards may
also be made in combination or in tandem with, in replacement of, or as
alternatives to grants or rights (a) under this Plan or any other employee plan
of the Company or any of its Subsidiaries, including the plan of any acquired
entity, or (b) made to any Company or Subsidiary employee by the Company or any
Subsidiary. An Employee Award may provide for the granting or issuance of
additional, replacement or alternative Employee Awards upon the occurrence of
specified events, including the exercise of the original Employee Award.
Notwithstanding anything herein to the contrary, no Participant may be granted
Employee Awards consisting of stock options or stock appreciation rights
exercisable for more than 20% of the shares of Common Stock originally
authorized for Employee Awards under this Plan, subject to adjustment as
provided in Paragraph 14. In the event of an increase in the number of shares
authorized under the Plan, the 20% limitation will apply to the number of
shares authorized.
(i) Employee Stock Option. An Employee Award may consist
of a right to purchase a specified number of shares of Common Stock at a price
specified by the Committee in the Agreement or otherwise. A stock option may
be in the form of an incentive stock option ("ISO") which, in addition to being
subject to applicable terms, conditions and limitations established by the
Committee, complies with Section 422 of the Code. Notwithstanding the
foregoing, no ISO can be granted under the Plan more than ten years following
the Effective Date of the Plan.
(ii) Stock Appreciation Right. An Employee Award may
consist of a right to receive a payment, in cash or Common Stock, equal to the
excess of the Fair Market Value or other specified valuation of a specified
number of shares of Common Stock on the date the stock appreciation right
("SAR") is exercised over a specified strike price as set forth in the
applicable Agreement.
(iii) Stock Award. An Employee Award may consist of Common
Stock or may be denominated in units of Common Stock. All or part of any stock
Employee Award may be subject to conditions established by the Committee and
set forth in the Agreement, which conditions may include, but are not limited
to, continuous service with the Company and its Subsidiaries, achievement of
specific business objectives, increases in specified indices, attaining
specified growth rates and other comparable measurements of performance. Such
Employee Awards may be based on Fair Market Value or other specified
valuations. The certificates evidencing shares of Common Stock issued in
connection with a stock Employee Award shall contain appropriate legends and
restrictions describing the terms and conditions of the restrictions applicable
thereto.
(iv) Cash Award. An Employee Award may be denominated in
cash with the amount of the eventual payment subject to future service and such
other restrictions and conditions as may be established by the Committee and
set forth in the Agreement, including, but not limited
-4-
<PAGE> 5
to, continuous service with the Company and its Subsidiaries, achievement of
specific business objectives, increases in specified indices, attaining
specified growth rates and other comparable measurements of performance.
7. Director Stock Options. Director Options shall be
granted to each eligible Director as of the date of consummation of the initial
public offering of the Common Stock providing for the purchase of 9,000 shares
of Common Stock. Commencing on January 1, 1996, automatic annual awards of
Director Options shall be made to each eligible Director on the first business
day of the Company's fiscal year, providing for the purchase of 3,000 shares of
Common Stock; provided that such Director Options shall provide for the
purchase of 9,000 shares of Common Stock if the recipient of such Director
Option had not previously received a grant of a Director Option pursuant to
this Plan. The purchase price of each share of Common Stock placed under a
Director Option shall be equal to the Fair Market Value of such shares on the
date the Director Option is granted; provided, that the purchase price of each
share of Common Stock placed under a Director Option on the date of
consummation of the initial public offering of the Common Stock shall be equal
to the initial public offering price of the Common Stock. Director Options
shall terminate and be of no force or effect with respect to any shares not
previously purchased by the Director Optionee upon the expiration of ten years
from the date of granting of each Director Option, notwithstanding any earlier
termination of the Director Optionee's status as a Director of the Company.
All Director Options shall be exercisable immediately on the date of grant.
Notwithstanding the foregoing, no grant of Director Options shall be made
unless the number of shares available under the Plan is sufficient to make all
automatic grants of Director Options on the grant date. All Director Options
shall be evidenced by a written Agreement conforming with the terms of this
Plan.
8. Payment of Employee Awards.
(a) General. Payment of Employee Awards may be made in
the form of cash or Common Stock or combinations thereof and may include such
restrictions as the Committee shall determine including, in the case of Common
Stock, restrictions on transfer and forfeiture provisions. As used herein,
"Restricted Stock" means Common Stock that is restricted or subject to
forfeiture provisions.
(b) Deferral. The Committee may, in its discretion, (i)
permit selected Participants to elect to defer payments of some or all types of
Employee Awards in accordance with procedures established by the Committee or
(ii) provide for the deferral of an Employee Award in an Agreement or
otherwise. Any such deferral may be in the form of installment payments or a
future lump sum payment. Any deferred payment, whether elected by the
Participant or specified by the Agreement or by the Committee, may be forfeited
if and to the extent that the Agreement so provides.
(c) Dividends and Interest. Dividends or dividend
equivalent rights may be extended to and made part of any Employee Award
denominated in Common Stock or units of
-5-
<PAGE> 6
Common Stock, subject to such terms, conditions and restrictions as the
Committee may establish. The Committee may also establish rules and procedures
for the crediting of interest on deferred cash payments and dividend
equivalents for deferred payment denominated in Common Stock or units of Common
Stock.
(d) Substitution of Employee Awards. At the discretion
of the Committee, a Participant may be offered an election to substitute an
Employee Award for another Employee Award of the same or different type.
9. Stock Option Exercise. The price at which shares of
Common Stock may be purchased under a stock option shall be paid in full at the
time of exercise in cash or, if permitted by the Committee, by means of
tendering Common Stock or surrendering all or part of that or any other
Employee Award, including Restricted Stock, valued at Fair Market Value on the
date of exercise, or any combination thereof. The Committee shall determine
acceptable methods for tendering Common Stock or Employee Awards to exercise a
stock option as it deems appropriate. If permitted by the Committee, payment
may be made by successive exercises by the Participant. The Committee may
provide for procedures to permit the exercise or purchase of Employee Awards by
(a) loans from the Company or (b) use of the proceeds to be received from the
sale of Common Stock issuable pursuant to an Employee Award. Unless otherwise
provided in the applicable Agreement, in the event shares of Restricted Stock
are tendered as consideration for the exercise of a stock option, a number of
the shares issued upon the exercise of the stock option, equal to the number of
shares of Restricted Stock used as consideration therefor, shall be subject to
the same restrictions as the Restricted Stock so submitted as well as any
additional restrictions that may be imposed by the Committee.
10. Tax Withholding. The Company shall have the right to
deduct applicable taxes from any Employee Award payment and withhold, at the
time of delivery or vesting of cash or shares of Common Stock under this Plan,
an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes required by law or to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligations for withholding of such taxes. The Committee may also permit
withholding to be satisfied by the transfer to the Company of shares of Common
Stock theretofore owned by the holder of the Employee Award with respect to
which withholding is required. If shares of Common Stock are used to satisfy
tax withholding, such shares shall be valued based on the Fair Market Value
when the tax withholding is required to be made.
11. Amendment, Modification, Suspension or Termination.
The Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other
purpose permitted by law except that (a) no amendment or alteration that would
impair the rights of any Participant under any Employee Award previously
granted to such Participant shall be made without such Participant's consent,
(b) no amendment or alteration shall be effective prior to approval by the
Company's stockholders to the extent such approval is then required pursuant to
Rule 16b-3 in order to preserve the applicability of any
-6-
<PAGE> 7
exemption provided by such rule to any Employee Award then outstanding (unless
the holder of such Employee Award consents) or to the extent stockholder
approval is otherwise required by applicable legal requirements, and (c) the
Plan shall not be amended more than once every six months to the extent such
limitation is required by Rule l6b-3(c)(2)(ii) (or any successor provision)
under the Exchange Act as then in effect.
12. Termination of Employment. Upon the termination of
employment by a Participant, any unexercised, deferred or unpaid Employee
Awards shall be treated as provided in the specific Agreement evidencing the
Employee Award. In the event of such a termination, the Committee may, in its
discretion, provide for the extension of the exercisability of an Employee
Award, accelerate the vesting or exercisability of an Employee Award, eliminate
or make less restrictive any restrictions contained in an Employee Award, waive
any restriction or other provision of this Plan or an Employee Award or
otherwise amend or modify the Employee Award in any manner that is either (a)
not adverse to such Participant or (b) consented to by such Participant.
13. Assignability. Unless otherwise determined by the
Committee and provided in the Agreement, no Employee Award, Director Option or
any other benefit under this Plan constituting a derivative security within the
meaning of Rule 16a-l(c) under the Exchange Act shall be assignable or
otherwise transferable except by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder. The Committee may prescribe and include in applicable Agreements
other restrictions on transfer. Any attempted assignment of an Employee Award,
Director Option or any other benefit under this Plan in violation of this
Paragraph 13 shall be null and void.
14. Adjustments.
(a) The existence of outstanding Employee Awards shall
not affect in any manner the right or power of the Company or its stockholders
to make or authorize any or all adjustments, recapitalizations, reorganizations
or other changes in the capital stock of the Company or its business or any
merger or consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock (whether or not such issue is prior to, on
a parity with or junior to the Common Stock) or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding of any kind, whether or not
of a character similar to that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock or declaration of a dividend payable in
shares of Common Stock or capital reorganization or reclassification or other
transaction involving an increase or reduction in the number of outstanding
shares of Common Stock, the Committee may adjust proportionally (i) the number
of shares of Common Stock reserved under this Plan and covered by outstanding
Employee Awards and Director Options denominated in Common Stock or units of
Common Stock; (ii) the exercise or other price in respect of such Employee
Awards and Director Options; and (iii) the
-7-
<PAGE> 8
appropriate Fair Market Value and other price determinations for such Employee
Awards and Director Options. In the event of any consolidation or merger of
the Company with another corporation or entity or the adoption by the Company
of a plan of exchange affecting the Common Stock or any distribution to holders
of Common Stock of securities or property (other than normal cash dividends or
dividends payable in Common Stock), the Committee shall make such adjustments
or other provisions as it may deem equitable, including adjustments to avoid
fractional shares, to give proper effect to such event. In the event of a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Committee shall be authorized to issue or
assume stock options, regardless of whether in a transaction to which Section
424(a) of the Code applies, by means of substitution of new options for
previously issued options or an assumption of previously issued options, or to
make provision for the acceleration of the exercisability of, or lapse of
restrictions with respect to, Employee Awards and the termination of
unexercised options in connection with such transaction.
15. Restrictions. No Common Stock or other form of
payment shall be issued with respect to any Employee Award unless the Company
shall be satisfied based on the advice of its counsel that such issuance will
be in compliance with applicable federal and state securities laws. It is the
intent of the Company that this Plan comply with Rule 16b-3 with respect to
persons subject to Section 16 of the Exchange Act unless otherwise provided
herein or in an Agreement, that any ambiguities or inconsistencies in the
construction of this Plan be interpreted to give effect to such intention and
that, if any provision of this Plan is found not to be in compliance with Rule
16b-3, such provision shall be null and void to the extent required to permit
this Plan to comply with Rule 16b-3. Certificates evidencing shares of Common
Stock delivered under this Plan may be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any securities exchange or transaction reporting system upon which the Common
Stock is then listed and any applicable federal and state securities law. The
Committee may cause a legend or legends to be placed upon any such certificates
to make appropriate reference to such restrictions.
16. Unfunded Plan. Insofar as it provides for Employee
Awards of cash, and Employee Awards and Director Options covering Common Stock
or rights thereto, this Plan shall be unfunded. Although bookkeeping accounts
may be established with respect to Participants who are entitled to cash,
Common Stock or rights thereto under this Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock
or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall the Company, the Board or the Committee be deemed to be
a trustee of any cash, Common Stock or rights thereto to be granted under this
Plan. Any liability or obligation of the Company to any Participant with
respect to a grant of cash, Common Stock or rights thereto under this Plan
shall be based solely upon any contractual obligations that may be created by
this Plan and any Agreement, and no such liability or obligation of the Company
shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. None of the Company, the Board or the Committee shall
be required to give any security or bond for the performance of any obligation
that may be created by this Plan.
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17. Governing Law. This Plan and all determinations made
and actions taken pursuant hereto, to the extent not otherwise governed by
mandatory provisions of the Code or the securities laws of the United States,
shall be governed by and construed in accordance with the laws of the State of
Texas.
18. Effective Date of Plan.
(a) This Plan was approved by the Board of Directors of
the Company as of December 5, 1994, and by the unanimous written consent dated
as of December 21, 1994, of the holders of all of the shares of Common Stock
outstanding and entitled to vote thereon.
(b) The Plan was amended effective May 20, 1996 for the
purpose of increasing the number of shares reserved for issuance under the Plan
from 1,500,000 to 2,000,000. The amendments to the Plan were approved by the
Board of Directors of the Company as of March 18, 1996, and by the holders of a
majority of the issued and outstanding shares of Common Stock of the Company as
of May 20, 1996.
(c) The Plan was again amended effective May 21, 1998 for
the purpose of increasing the number of shares reserved for issuance under the
Plan from 2,000,000 to 3,000,000. The amendment to the Plan was approved by
the Board of Directors of the Company on March 16, 1998, and by the holders of
a majority of the issued and outstanding shares of Common Stock of the Company
on May 18, 1998. For purposes of ease of administration and clarity of
reference, the Plan was amended and restated to incorporate the 1996 and the
1998 amendments.
RENTERS CHOICE, INC.
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