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Notice of 2016
Thursday, (the “2024 Annual Meeting”) of Upbound Group, Inc. The 2024 Annual Meeting will be held on Tuesday, June 2, 2016
4, 2024, at 8:00 a.m. local time,
, Central Time, at the Upbound Group, Inc. Field Support Center, which is located, along with our principal executive offices, at 5501 Headquarters Drive, Plano, Texas 75024
The 201675024.
| /s/ Jeffrey Brown Jeffrey Brown Chairman of the Board | | | /s/ Mitchell Fadel Mitchell Fadel Chief Executive Officer and Director | |
| Notice of 2024 Annual Meeting of Stockholders | |
Only stockholders
Under rules approved by
materials.
Upbound Group, Inc.
Dawn M. Wolverton
April 18, 2016
Upbound Group, Inc.
5501 Headquarters Drive, Plano, Texas
75024
April 23, 2024
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | | | | 62 | | | |||
OTHER INFORMATION | | | | | 64 | | | ||
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For the Annual Meeting of Stockholders
To Be Held on June 4, 2024
Proxy Summary
23, 2024 to stockholders of record as of April 9, 2024.
statement to the 2024 Annual Meeting Information
Date & Time: 8:00 a.m. Centralalso refer to any adjournments, postponements or changes in time on Thursday, June 2, 2016
or location of the meeting, to the extent applicable.
75024.
Voting matters
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Proposal | | | Board Vote Recommendation | |||
| One: Election of Directors | | | FOR each Director Nominee | ||
| Two: Ratification of Auditors | | | FOR | ||
| Three: Advisory Vote on Executive Compensation | | | FOR | ||
| Four: Adoption of the Exculpation Amendment to the Certificate of Incorporation | | | FOR | | |
| | | FOR | |
Name | Age | Director Since | Experience/Qualification | Independent | Committee Memberships | Other Public Company Boards | ||||||
Robert D. Davis | 44 | 2013 | • Chief Executive Officer and former Chief Financial Officer • over 20 years Company | N/A | N/A | |||||||
Steven L. Pepper | 53 | 2013 | • International • Multi-unit management • Franchise operations | X | Audit & Risk; Finance (Chair) | N/A |
Executive Compensation
Principles (page 18)
We generally target total direct compensation (base salary, annual incentive and long-term incentive compensation)the Board will end at the 50th-75th percentile2024 Annual Meeting, and, accordingly, Ms. You is not one of that paid at similarly-situated public companiesthe director nominees. Ms. You’s decision to not seek re-election was not due to any disagreement with the Company on any matters relating to the Company’s operations, practices or policies. Additional information about each nominee, including the Board’s diversity and skills matrix, can be found under “Proposal One: Election of Directors” below.
| Name(1) | | | Age | | | Director Since | | | Independent | | | Committee Memberships | | | Other Public Company Boards | |
| Jeffrey Brown (Chairman) | | | 63 | | | 2017 | | | Yes | | | Audit & Risk (chair) | | | Medifast, Inc. | |
| Mitchell Fadel | | | 66 | | | 2017 | | | — | | | — | | | — | |
| Molly Langenstein | | | 60 | | | 2024 | | | Yes | | | Compensation Nominating and Corporate Governance | | | — | |
| Harold Lewis | | | 63 | | | 2019 | | | Yes | | | Audit & Risk Compensation | | | — | |
| Glenn Marino | | | 67 | | | 2020 | | | Yes | | | Compensation (chair) Nominating and Corporate Governance | | | PRA Group, Inc. | |
| Carol McFate | | | 71 | | | 2019 | | | Yes | | | Audit & Risk Nominating and Corporate Governance (chair) | | | — | |
Pay for Performance; Relative Total Shareholder Return (page 25)
Stockthat were granted.
the brokerage firm.
Our
Pay for Performance (page 18)
Our executive compensation program directly links a substantial portion of executive compensation to our financial performance through annual and long-term incentives. For the 2015 annual cash incentive program, the EBITDA goal was achieved at 85.5% of target, which resulted in a 25% payout of the 75% of the target bonus amounts attributable to the EBITDA target (see the payout schedule below), and the revenue goal was achieved at 98.9% of target, which resulted in a 75% payout of the 25% of the target bonus amounts attributable to the revenue target (see the payout schedule below).
We failed to achieve more than 80% of the three-year EBITDA target established in connection with the grant in 2013 of performance-based restricted stock units pursuant to our long-term incentive compensation program. Accordingly, none of the performance-based restricted stock units granted as part of the 2013 long-term incentive compensation awards was earned and no shares were issued to our named executive officers pursuant to such awards.
In 2015, our Compensation Committee adopted relative total shareholder return as the performance metric with respect to performance-based restricted stock units granted pursuant to our long-term incentive compensation program, rather than the EBITDA metric historically used. In connection with this change, our Compensation Committee granted to our named executive officers performance-based restricted stock units based on our relative total stockholder return as compared to the S&P 1500 Specialty Retail Index over a one-year measurement period. Our relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the one-year period ending December 31, 2015, ranked below the 25th percentile, which resulted in no shares vesting.
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
In accordance with rules adopted by the Securities and Exchange Commission (“SEC”), we are making this proxy statement and our Annual Report on Form 10-K available on the Internet, in addition to mailing a printed copy of these materials to our registered stockholders. If you received the Notice by mail and would prefer to receive a printed copy of our proxy materials, please follow the
instructions for requesting printed copies included in the Notice. The Notice also contains instructions on how to access and review all of the important information contained in the proxy materials provided on the Internet, including how you may submit your proxy by telephone or over the Internet.
Who may vote?
outstanding, which were held by 36 holders of record. Most of our stockholders hold their shares as a beneficial owner through a broker or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
If a quorum is not present, the meeting may be adjourned or postponed from time to time until a quorum is obtained.
| | Voting Method | | | | Description of Process | | |
| | By Internet | | | | You may submit a proxy electronically on the Internet, by visiting the website shown on the Notice or proxy card and following the instructions. | | |
| | By Telephone | | | | If you request paper copies of the proxy materials by mail, you may submit a proxy by telephone, by calling the toll-free telephone number shown on the Notice or proxy card and following the instructions. | | |
| | By Mail | | | | If you request paper copies of the proxy materials by mail, you may submit a proxy by signing, dating and returning a paper proxy card in accordance with its instructions. The Notice provides instructions on how to request a paper proxy card and other proxy materials. | | |
| | In Person | | | | By properly and timely completing and delivering a company ballot to the inspector of election at the 2024 Annual Meeting, prior to the closing of the polls. | | |
| | Proposal | | | | Board Recommendation | | |
| | One: Election of Directors | | | | “FOR” each of the Board’s nominees for director | | |
| | Two: Ratification of the Audit & Risk Committee’s Selection of Ernst & Young LLP | | | | “FOR” the ratification of the Audit & Risk Committee’s selection of Ernst & Young LLP as our independent registered public accounting firm for 2024 | | |
| | Three: Advisory Vote on Executive Compensation | | | | “FOR” the resolution approving, on an advisory basis, the compensation of the named executive officers for the year ended December 31, 2023, as set forth in this proxy statement | | |
| | Four: Adoption of the Exculpation Amendment to the Certificate of Incorporation | | | | “FOR” the approval of the Exculpation Amendment | | |
| | Five: Adoption of the Miscellaneous Amendments to the Certificate of Incorporation | | | | “FOR” the approval of the Miscellaneous Amendments | | |
Themanagement proxy holders will use their discretion on any other matters that properly come beforeto vote the meeting.proxies in accordance with their best judgment in the interests of the Company. Unless otherwise stated, all shares represented by your completed, returned, and signed proxy will be voted as described above.
QUESTIONS AND ANSWERS ABOUT THE 2016 ANNUAL MEETING AND VOTING PROCEDURES
How may I revoke my proxy?
You may revoke your proxy at any time before or atby timely following one of the annual meeting (in each case, before the vote at the annual meeting) by:
| | | | Description of Process | | | ||
| | New Proxy Card | | | | Deliver a signed proxy, dated later than the first one, which proxy must be received by the Company prior to | | |
| | New Internet/Telephone Proxy | | | | Submit a proxy at a later time on the Internet or by telephone, if you previously voted on the Internet or by telephone, which vote must be submitted prior to the deadline set forth above | | |
| | New Vote at 2024 Annual Meeting | | | | Attend the meeting and vote in person or by proxy (attending the meeting alone will not revoke your proxy) | | |
| | Written Notice to the Company | | | | Deliver a signed, written revocation letter, dated later than the previously submitted proxy, to Bryan Pechersky, Executive Vice President — General Counsel & Corporate Secretary, at 5501 Headquarters Drive, | | |
How many votes must each proposal receive to be adopted?
Under our Bylaws, directors are elected by a majority of the votes cast in uncontested elections. Accordingly, the numbers of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee. In contested elections,
proposals below.
| | Proposal | | | | Required Vote for Approval | | | | Impact of Broker Non-Votes and Abstentions | | |
| | One: Election of Directors | | | | Under our bylaws, directors are elected by a majority of the votes cast in uncontested elections. Accordingly, the numbers of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee. In contested elections, the vote standard would be a plurality of votes cast. Each share may be voted for each of the nominees, but no share may be voted more than once for any particular nominee. | | | | Broker non-votes and abstentions will not affect the outcome of the vote. | | |
| | Two: Ratification of the Audit & Risk Committee’s Selection of Ernst & Young LLP | | | | A majority of the votes cast is required to ratify Ernst & Young LLP as our independent registered public accounting firm. | | | | Certain brokers have discretionary authority in the absence of timely instructions from their customers to vote on this proposal. Abstentions will not affect the outcome of the vote. | | |
| | Three: Advisory Vote on Executive Compensation | | | | The affirmative vote of the holders of a majority in voting power of the shares of common stock present or represented by proxy and entitled to vote thereon is required to approve the advisory resolution on executive compensation. | | | | Broker non-votes will not affect the outcome of the vote. Because abstentions are counted as shares present and entitled to vote on the proposal, each abstention will have the same effect as a vote “against” this proposal. | | |
| | Four: Adoption of the Exculpation Amendment to the Certificate of Incorporation | | | | The affirmative vote of the holders of a majority of the outstanding shares of common stock that are entitled to vote thereon is required to approve the Exculpation Amendment. | | | | Broker non-votes and abstentions will have the same effect as a vote “against” this proposal. | | |
| | Five: Adoption of the Miscellaneous Amendments to the Certificate of Incorporation | | | | The affirmative vote of the holders of a majority of the outstanding shares of common stock that are entitled to vote thereon is required to approve the Miscellaneous Amendments. | | | | Broker non-votes and abstentions will have the same effect as a vote “against” this proposal. | | |
The affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the meeting is required to approve the advisory resolution on executive compensation and the Rent-A-Center, Inc. 2016 Long-Term Incentive Plan. Broker non-votes will not affect the outcome of the vote. Because abstentions are counted as shares present and entitled to vote on the proposal, each abstention will have the same effect as a vote “against” the advisory resolution on executive compensation and the approval of the Rent-A-Center, Inc. 2016 Long-Term Incentive Plan.
What are broker non-votes?
Your bank or broker is not permitted to vote your uninstructed shares in respect of “non-routine” matters, including Proposal One (election of directors), Proposal Three (advisory vote on executive compensation), Proposal Four (approval of the electionExculpation Amendment to the Certificate of directors onIncorporation) or Proposal Five (approval of the Miscellaneous Amendments to the Certificate of Incorporation). As a discretionary basis. Thus,result, if you hold your shares in street name and you do not instruct your bank or broker how to vote, no votes will be cast on your behalf in the election of directors, or with respect to Proposal 3 (advisory vote on executive compensation) and Proposal 4 (approval of the Rent-A-Center, Inc. 2016 Long-Term Incentive Plan). foregoing matters. However, if you hold your shares in street name and you do not instruct your broker how to vote in respect of certain “routine” matters, including Proposal Two (ratification of auditors), your broker might be entitled to vote your shares.
Alliance Advisors Saratoga Proxy Consulting LLC, a proxy solicitation firm, to assist in the solicitation of proxies. Weproxies for which we will pay that firm $8,000a fee in the amount of $10,000 and will also reimburse Saratoga Proxy Consulting LLC for its proxy solicitation servicesreasonable and reimburse itscustomary out-of-pocket expenses incurred in performing such services.
The number of directors currently constituting our entire Board is nine. The directors are divided into three classes. In general, directors inseven, each class serve for a term of three years.
How many directors are to be elected?
Two Class I directors are to bewhom is elected by our stockholders. Paula Stern, Ph.D., currently serving as a Class I director, is not standing for re-election and her term will end at the 2016 Annual Meetingannual meeting of Stockholders.
Who arestockholders to serve one-year terms expiring at the board nominees?
Our Board, upon recommendation of the Nominating and Corporate Governance Committee, has nominated each of Robert D. Davis and Steven L. Peppersix sitting directors to be electedre-elected as Class I directors by our stockholders. The nominees include Molly Langenstein who was first appointed by the stockholders. Board as a director and member of the Company’s Compensation Committee and Nominating and Corporate Governance Committee effective April 1, 2024.
We urgeCompany.
| | | Jeffrey Brown | | |
Chairman of the Board; Independent Director Age: 63 Director Since: 2017 Committees Served: Audit & Risk (chair) Gender: Male Ethnicity: Caucasian |
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| | | Mitchell Fadel | | |
| Director; Chief Executive Officer
66 2017 Gender: Male Ethnicity: Caucasian; Middle Eastern | |
With over 20 years of experience with the Company, including 15 as Chief Financial Officer, Mr. Davis has an intimate knowledge of our operations and financial position that isare a vital component of our Board discussions. In addition, Mr. Fadel brings 40 years of experience in and knowledge of the rent-to-own industry, including his previous tenure as our President and Chief Operating Officer, to the Board. We believe Mr. Davis’Fadel’s service as our Chief Executive Officer creates a critical link between management and our Board, enabling our Board to perform its oversight function with the benefit of management’s perspectives on our business.
| | | Molly Langenstein | | |
| Independent Director Age: 60 Director Since: 2024 Committees Served: Compensation; Nominating and Corporate Governance Gender: Female Ethnicity: Caucasian | |
| | | Harold Lewis | | |
Independent Director
63 2019 Gender: Male Ethnicity: African American | |
In 2011,
Mr. Pepper’s experience in oversight responsibility for international operationsfinancial services and expansion, particularly in Mexico, is critical to the Board’s consideration of our international operations. In addition,mortgage lending. Mr. Pepper possesses particular knowledge and experience in a variety of areas, including accounting and financial matters, franchise operations, marketing, international markets, and global market entry that strengthens the Board’s collective knowledge, capabilities and experience.
Our Board of Directors recommends that you vote “FOR” each of the Board nominees.
PROPOSAL ONE: ELECTION OF DIRECTORS
Who are the continuing members of the Board?
The terms of the following six members of our Board will continue past this year’s stockholder meeting.
Term to Expire at the 2017 Annual Meeting:
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Mr. Speese has served as our Chairman of the Board since October 2001, as our Chief Executive Officer from October 2001 until January 2014, and as one of our directors since 1990. Mr. Speese previously served as our Vice Chairman from September 1999 until March 2001. From 1990 until April 1999, Mr. Speese served as our President. Mr. Speese also served as our Chief Operating Officer from November 1994 until March 1999.
As a founder of our company, Mr. Speese brings leadership, tremendous knowledge of our business as well as the rent-to-own industry, extensive operations experience, and his strategic vision for our company to the Board. We believe Mr. Speese’s service as our Chairman and his previous tenure as our Chief Executive Officer creates a critical link between management and our Board, enabling our Board to perform its oversight function with the benefit of management’s perspectives on our business.
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Mr. Jackson is Managing Director of Thayer Ventures, a venture capital company investing in technology companies that serve the travel and hospitality industries. Mr. Jackson served as the Executive Vice President – Corporate Business Development of Sabre Holdings, Inc., a travel technology company, from August 2009 to March 2012, and previously served as its Executive Vice President – Chief Financial Officer from 1998 to August 2009. Mr. Jackson served as a board member of Travelocity.com until March 2002, when it became a Sabre Holdings subsidiary. Prior to joining Sabre Holdings in 1998, Mr. Jackson served as both Vice President of Corporate Development and Treasurer, and Vice President and Controller of American Airlines, Inc. Mr. Jackson alsoLewis currently serves as a director of tripBAM, Inc., ID90T, Inc., Booking Pal, Inc., Options Away, Inc. and Traxo, Inc.
Mr. Jackson brings financial expertise to our Board, including through his prior experience as Chief Financial Officer of Sabre as well as his service as chairman of our Audit & Risk Committee. In addition, Mr. Jackson brings strong accounting and financial skills important to the oversight of our financial reporting, significant transactions, and enterprise and operational risk management.
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Mr. Roberts served as the Executive Chairman of the Board of Directors of RadioShack Corporation from May 2005 until May 2006, and had previously served as a director since 1997, Chairman of the Board and Chief Executive Officer from 1999 to 2005, and President from 1993 to 1999. From 1990 to 1993, Mr. Roberts was Chairman and Chief Executive Officer of Shoney’s, Inc., and from 1985 to 1990 was the President and Chief ExecutiveOperating Officer of Arby’s,BSI Financial Services, a financial services company in the mortgage industry. From August 2018 until June 2019, he served as the CEO of Renovate America, Inc., a national home improvement fintech company focused on energy efficient home improvement lending. From 2016 to 2018, Mr. Roberts is currentlyLewis was a directorsenior advisor for McKinsey & Company, a worldwide management consulting firm. From 2012 to 2015, he served as President and COO of J.C. Penney, Inc.Nationstar Mortgage, one of the largest mortgage servicers in the country. In that position, he grew Nationstar’s servicing platform from $30 billion to $400 billion and Texas Health Resources.
mortgage origination portfolio from $1.8 billion to $25 billion while also building and managing Nationstar’s relationship with the newly created industry regulator, the Consumer Financial Protection Bureau. Prior to Nationstar Mortgage, he held C-Suite and senior executive positions at Citi Mortgage, Fannie Mae, Resource Bancshares Mortgage Group and Nations Credit, among others.
PROPOSAL ONE: ELECTION OF DIRECTORS
Term to Expire at the 2018 Annual Meeting:
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Since 2004, Mr. Gade has been an Executive in Residence at the University of North Texas as a professor of marketing and retailing. Mr. Gade also serves as a strategic advisor to The Boston Consulting Group. A founding partner of Challance Group, LLP, Mr. Gade has over 30 years of marketing and management experience, most recently serving as senior executive for the southwest region of Home Depot, Inc. from 2003 to 2004. From 2000 to 2003, Mr. Gade served as Senior Vice President, Merchandising, Marketing and Business Development for7-Eleven, Inc. From 1995 to 2000, Mr. Gade was employed by Associates First Capital Corporation as Executive Vice President, Strategic Marketing and Development. Mr. Gade also serves on the Board of Directors of MFRI, Inc. and The Crane Group.
We believe that Mr. Gade’s significant retail marketingconsumer finance regulatory experience provides our Board with an important resource with respect toacross our marketing and advertising efforts. In addition, Mr. Gade provides leadership and governance experience through his other directorships, including service on the audit and compensation committees of such companies.
| | | Glenn Marino | | |
Independent Director
67 2020 Gender: Male Ethnicity: Caucasian | |
We believe From 1999 to 2001, Mr. Garg’s strong background and experience in technology-enabled services, emerging financial technology, and digital media will provide an important perspective to our board as we continue to expand our own technology and e-commerce initiatives.
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Mr. LentellMarino served as our Lead Director from April 2009 until January 2014. Since July 1993, heCEO of Monogram Credit Services, a joint venture between GE and BankOne (now JPMorgan Chase & Co.). Prior to that, Mr. Marino held various roles of increasing responsibility in finance, business development, credit risk, and marketing with General Electric and Citibank. Mr. Marino has served as a director of PRA Group, Inc. since March 2024.
| | | Carol McFate | | |
| Independent Director Age: 71 Director Since: 2019 Committees Served: Audit & Risk; Nominating and Corporate Governance (chair) Gender: Female Ethnicity: Caucasian | |
During his 20 year tenure onwhich we believe supports us in our strategic initiatives and enhances our long-term vision, sustainable growth and shareholder value.
Independent Directors
As part of the Company’s corporate governance practices, and in accordance with Nasdaq rules, the Board has established a policy requiring a majority of the members of the Board to be independent. In January 2016, each of our non-employee directors completed a questionnaire which inquired as to their (and those of their immediate family members) relationship with us and other potential conflicts of interest. Our legal department reviewed the responses of our directors to such questionnaire, as well as material provided by management relatedall of our employees, including our Chief Executive Officer, Chief Financial Officer, principal accounting officer and controller. The Code of Business Conduct and Ethics forms the foundation of a compliance program we have established as part of our commitment to transactions, relationshipsresponsible business practices that includes policies, training, monitoring and arrangements between us and our directors or
parties relatedother components covering a wide variety of specific areas applicable to our directors. In March 2016,business activities and employee conduct. A copy of the Code of Business Conduct and Ethics is published on our Board metwebsite at https://investor.upbound.com/corporate-governance/governance-documents. We intend to discussmake all required disclosures concerning any amendments to, or waivers from, this Code of Business Conduct and Ethics on our website.
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Board Leadership Structure
Independent Chairman
believes that Mr. SpeeseBrown is bestwell situated to serve as Chairman because of his experience serving on the boards of directors of other public companies, including as a founderlead director of our company, he is the director most familiar with our business and the rent-to-own industry, and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy.Medifast, Inc. Mr. SpeeseBrown works closely with Mr. DavisFadel to set the agenda for Board meetings and to facilitatecoordinate information flow between the Board and management.
During 2015,has established a policy requiring a majority of the members of the Board to be independent. In the first quarter of 2024, each of our non-employee directors completed a questionnaire which inquired as to their relationship (and the relationships of their immediate family members) with us and other potential conflicts of interest. Taking into account our review of the responses to this questionnaire process and such other due consideration and diligence as it deemed appropriate our Board met 11 times, including regularly scheduledto discuss the independence of those non-employee directors. Following such discussions and special meetings. All of our directors attended more than 75%based on the recommendations of the aggregateNominating and Corporate Governance Committee, our Board determined that the following directors are “independent” as defined under Nasdaq rules: Jeffrey Brown, Molly Langenstein, Harold Lewis, Glenn Marino and Carol McFate.
Our independent directors meet in executive session at each in-person meeting of the Board. Mr. Gade presides over such executive sessions.
| Name(1) | | | Independent | | | Transactions/Relationships/Arrangements | |
| | | | | None | | ||
| Molly Langenstein | | | Yes | | | None | |
| Harold Lewis | | | Yes | | | None | |
| Glenn Marino | | | Yes | | | None | |
| Carol McFate | | | Yes | | | None | |
Role of the Board in Risk Oversight
Our Board takes an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board and the relevant committees receive regular reports from members of senior management on areas of material risk to the Company, including operational, financial, strategic, competitive, reputational, legal and regulatory risks.
short- and long-term strategies at the development stage, and also receives periodic updates on our strategic initiatives throughout the year. In addition, our Board has delegated the responsibility for oversight of certain risks to its standing committees, as discussed below. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire Board is regularly informed through committee reports concerning such risks.
Board Committees
The standing committees of the Board during 20152023 included the (1) Audit & Risk Committee, the(2) Compensation Committee, theand (3) Nominating and Corporate Governance Committee, and the Finance Committee. Each of the standing committees has the authority to retain independent advisors and consultants, with all fees and expenses to be paid by us.
the Company. From time to time, the Board may also appoint special committees for specific matters.
| Name(1) | | | Independent(2) | | | Audit & Risk Committee(3) | | | Compensation Committee | | | Nominating and Corporate Governance Committee | |
| Jeffrey Brown | | | Yes | | | Chair | | | — | | | — | |
| Mitchell Fadel | | | No | | | — | | | — | | | — | |
| Christopher Hetrick(4) | | | Yes | | | — | | | Former Chair | | | Former Member | |
| Harold Lewis | | | Yes | | | Member | | | Member | | | — | |
| Glenn Marino(5) | | | Yes | | | Former Member | | | Chair | | | Member | |
| Carol McFate | | | Yes | | | Member | | | — | | | Chair | |
| Jen You(6) | | | Yes | | | — | | | Member | | | — | |
| Number of Committee Meetings in 2023 | | | — | | | 8 | | | 5 | | | 5 | |
The Audit & Risk Committee also oversees compliance with our Code of Business Conduct and Ethics.
During 2015, the Audit & Risk Committee held 12 meetings. All members of the Audit & Risk Committee are “independent” under SEC and Nasdaq rules. In addition, the Board has determined that each of Mr. Jackson and Mr. Pepper is an “audit
committee financial expert” as defined by SEC rules and Mr. Lentell meets the financial sophistication requirements of Nasdaq. Members: Mr. Jackson, Chairman, Mr. Lentell and Mr. Pepper.
TheCompensation Committee (1)
DIRECTOR COMPENSATION
Discussion and Analysis –— Compensation Process” beginning on page 19 of
The Compensation Committee held four meetings in 2015, and acted by unanimous written consent once. All members of the Compensation Committee are non-employee directors and are “independent” under Nasdaq rules. Members: Mr. Roberts, Chairman, Mr. Lentell and Mr. Gade.
The
officers; and
“Corporate Governance” section of the “Investor Relations” section ofon our website at www.rentacenter.com.https://investor.upbound.com/corporate-governance/governance-documents. In addition, the Nominating and Corporate Governance Committee reviews, updates and assesses the adequacy of its charter on an annual basis, and may recommend any proposed modifications to its charter to the Board for its approval, if and when appropriate.
During 2015,
TheFinance Committeeassists the Board in fulfilling its responsibilities by reviewingoverseeing the Company’s sustainability initiatives and advisingreporting. In the Board with respectsecond quarter of 2024, we published our third annual sustainability report, to communicate the financial policies, capital structureCompany’s sustainability accomplishments, programs and operating plans that support our mission, values and critical growth initiatives.
objectives.
During 2015, the Finance Committee held nine meetings. A majority of the members of the Finance Committee must be independent. Members: Mr. Pepper, Chairman, Mr. Jackson, Mr. Roberts and Mr. Speese.
| Position | | | 2023 Annual Retainer | | |||
| All Non-Employee Directors (including the Chairman) | | | | $ | 77,500 | | |
| Chairman of the Board | | | | $ | 175,000 | | |
| Chair of the Audit & Risk Committee | | | | $ | 27,500 | | |
| Other members of the Audit & Risk Committee | | | | $ | 15,000 | | |
| Chair of the Compensation Committee | | | | $ | 25,000 | | |
| Other members of the Compensation Committee | | | | $ | 10,500 | | |
| Chair of the Nominating and Corporate Governance Committee | | | | $ | 20,000 | | |
| Other members of the Nominating and Corporate Governance Committee | | | | $ | 10,000 | | |
Cash Compensation
During 2015, each non-employee director received an annual retainer of $50,000. Additionally, each non-employee director receives $2,500 for each Board meeting attended in person and isDirectors are reimbursed for his or hertheir expenses in attending suchBoard and committee meetings. In addition
Position | Annual Retainer | |||
Chairman of the Board | $ | 125,000 | ||
Chairperson of the Audit & Risk Committee | $ | 16,000 | ||
Other members of the Audit & Risk Committee | $ | 9,000 | ||
Chairperson of the Compensation Committee | $ | 12,000 | ||
Other members of the Compensation Committee | $ | 6,000 | ||
Chairperson of the Nominating and Corporate Governance Committee | $ | 8,000 | ||
Other members of the Nominating and Corporate Governance Committee | $ | 6,000 | ||
Chairperson of the Finance Committee | $ | 8,000 | ||
Other members of the Finance Committee | $ | 6,000 |
All retainers are payable in cash, in four equal installments on the first day of each quarter. Mr. Davis did not receive any cash compensation for his service as a director during 2015.
DIRECTOR COMPENSATION
Equity Compensation
DSU Deferral Awards
director’s service as a member of the Board. AllBoard and, therefore, cannot be sold until such time. The DSUs do not have voting rights. The holder of a DSU is entitled to receive cash dividend equivalent payments with respect to the shares underlying such DSU if, as and when any cash dividend is declared by the Board with respect to our non-employee directors serving on January 2, 2015 were granted deferred stock units valued at $100,000 on that date. Mr. Davis was not granted any equity compensation for his service as a director during 2015.
Director Equity InterestStock Ownership Guideline
the form of DSUs, they are required to retain 100% of their equity compensation until they cease to be a member of the Board and are issued shares of common stock in respect of their DSUs.
2023
Name | Fees Earned or Paid in Cash(1) | Deferred Stock Award(2) | Total | |||||||||
Michael J. Gade | $ | 75,500 | $ | 100,000 | $ | 175,500 | ||||||
Jeffrey M. Jackson | $ | 84,500 | $ | 100,000 | $ | 184,500 | ||||||
J.V. Lentell | $ | 75,500 | $ | 100,000 | $ | 175,500 | ||||||
Steven L. Pepper | $ | 79,500 | $ | 100,000 | $ | 179,500 | ||||||
Leonard H. Roberts | $ | 80,500 | $ | 100,000 | $ | 180,500 | ||||||
Mark E. Speese | $ | 187,550 | $ | 100,000 | $ | 287,550 | ||||||
Paula Stern, Ph.D. | $ | 77,500 | $ | 100,000 | $ | 177,500 |
(1) Includes annual retainers paid in cash to each non-employee director with respect to services rendered in 2023. For directors who elected to defer cash fees into DSUs, those deferred amounts are included in the DSUs column to the extent such DSUs were awarded in 2023. (2) Reflects the grant date fair value calculated pursuant to Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 of DSUs granted to each director in fiscal 2023, as follows: • Each director was granted 5,876 DSUs in January 2023, representing the $132,500 annual grant for service in fiscal 2023. • During fiscal 2023, Messrs. Brown, Hetrick and Marino and Mses. McFate and You were granted 15,056, 6,334, 4,746, 3,073, and 1,742 DSUs, respectively, in lieu of quarterly cash retainers and dividends payable in respect of the fourth quarter of 2022 through and including the third quarter of 2023. Such amounts (and the table above) exclude DSUs that were awarded to such persons in January 2024 in lieu of quarterly cash retainers payable in respect of the fourth quarter of 2023 and exclude DSUs that were awarded to such persons in January 2024 in lieu of dividend equivalents on their December 19, 2023 record date DSUs. (3) Represents dividend equivalents paid in cash in respect of vested DSUs and other reimbursable expenses. (4) Ms. You’s service as a director will end at the 2024 Annual Meeting. (5) Mr. Hetrick’s service as a director ended upon his resignation on February 29, 2024, which was not due to any disagreement with the Company on any matters relating to the Company’s operations, practices or policies. (6) Mr. Silver’s service as a director ended upon his resignation on January 28, 2023, which was not due to any disagreement with the Company on any matters relating to the Company’s operations, practices or policies. Director Compensation for 2024 At its December 2023 meeting, the Compensation Committee conducted its annual review of the non-employee director compensation program, which has not been changed since 2022. The Compensation Committee engaged an independent consulting firm, Korn Ferry, Inc. (“Korn Ferry”), to assist with its review and recommendation to the Board of any changes to the program for 2024. Korn Ferry provided the Compensation Committee with market data regarding director compensation programs from our Peer Group and a comparison of our director compensation program to the market data, which was taken into account by the Compensation Committee. As a result of its review, the Compensation Committee recommended, and the Board approved, retaining the same compensation program elements and amounts for 2024 as in 2023, with three modifications: (1) increasing the annual cash retainer for Board service by $7,500 to $85,000; (2) increasing the annual cash retainer for the Chairman of the Board by $25,000 to $200,000; and (3) increasing the value of the annual DSU award by $12,500 to a grant date value of $145,000. Director Nominations Director Nominees Under our bylaws, only persons who are nominated in accordance with the procedures set forth in our bylaws are eligible for election as, and |
General
Our Board has established corporate governance practices designed to serve the best interestsas, members of our company andBoard. Under our stockholders. In this regard,bylaws, nominations of persons for election to our Board has, among other things, adopted:
Our Board intendsselects individuals it believes are qualified to monitor developing standards in the corporate governance area and, if appropriate, modify our policies and procedures with respect to such standards. In addition, our Board will continue to review and modify our policies and procedures as appropriate to comply with any new requirements of the Securities and Exchange Commission or Nasdaq.
Code of Business Conduct and Ethics
Our Board has adopted a Code of Business Conduct and Ethics applicable to all of thebe members of the Board, and recommends those individuals to the Board for nomination for election or re-election as welldirectors. In identifying prospective director candidates, the Nominating and Corporate Governance Committee may seek referrals from other members of the Board, management, stockholders and other sources. From time to time, pursuant to its committee charter, the Nominating and Corporate Governance Committee may also engage a consultant to conduct a search to identify qualified candidates. The Nominating and Corporate Governance Committee then undertakes the evaluation process described below for any candidates so identified.
“ characteristics, experience, independence and skills of potential candidates for election to the Board and recommends nominees for director to the Board for election. In considering candidates for the Board, the Nominating and Corporate Governance” sectionGovernance Committee also assesses the size, composition and combined expertise of the “Investor Relations” sectionBoard. As the application of these factors involves the exercise of judgment, the Nominating and Corporate Governance Committee does not have a standard set of fixed qualifications that is applicable to all director candidates, although the Nominating and Corporate Governance Committee does at a minimum assess each candidate’s character, integrity, ethics, judgment, skills, diversity of viewpoints, background, experience, his or her ability to satisfy any applicable legal requirements or listing standards and such other criteria as the Nominating and Corporate Governance Committee or Board deems relevant in evaluating the potential effectiveness of candidates as members of the Board in light of the particular needs of the Board at such time. When considering director candidates, the Nominating and Corporate Governance Committee seeks individuals with backgrounds and qualities that, when combined with those of our website at www.rentacenter.com.incumbent directors, provide a blend of skills and experience to further enhance the Board’s effectiveness.
Stockholder CommunicationsBoard should we experience any vacancies, and we have discussed our Board’s diversity with the Board
Ourinstitutional investors we have engaged with through our investor outreach program as described below, none of which expressed concerns to us about our Board’s diversity. Currently, 50% of our Board has establishednominees are diverse from a processgender, race or ethnic perspective, including two female directors.
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Board committees on which they served.
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| 972-624-6210 | | | Upbound Group, Inc. Attn: Corporate Secretary 5501 Headquarters Drive Plano, TX 75024 | | | By e-mail: Upbound.Board@upbound.com | |
CORPORATE GOVERNANCE
Director Nominations
Director Nominees
Under our Bylaws, only persons who are nominated in accordanceRelated Person Transactions
Committee must be notified for consideration at the next regularly scheduled meeting of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee selects individuals it believeshas reviewed and determined that each of the following related person transactions are qualified to be members of the Board, and recommends those individuals to the Board for nomination for election or re-election as directors. From time to time,deemed pre-approved by the Nominating and Corporate Governance Committee: (1) employment and separation agreements related to executive officers if (a) the related compensation is reported in our proxy statement or (b) the executive officer is not an immediate family member of another “related person” and the Compensation Committee may engageapproved, or recommended to the Board for approval, such compensation, (2) any compensation paid to a consultant to conductdirector if the compensation is reported in our proxy statement, (3) transactions where all of our stockholders receive proportional benefits and (4) any transaction with a search to identify qualified candidates.“related person” involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority. The Nominating and Corporate Governance Committee then undertakeswill approve or ratify, as applicable, only those related person transactions that are in, or are not inconsistent with, our best interests and those of our stockholders in its business judgment.
Qualifications
The Nominating
recommends to the Board candidates for nomination to serve as our directors. This process is the same regardless of whether the nominee is recommended by one of our stockholders.
As noted above, our Nominating and Corporate Governance Committee believes that diversity is one of many attributes to be considered when selecting candidates for nomination to serve as one of our directors. In general, our Nominating and Corporate Governance Committee’s goal in selecting directors for nomination to our Board is to create a well-balanced team that (1) combines diverse business and industry experience, skill sets and other leadership qualities, (2) represents diverse viewpoints and (3) enables us to pursue our strategic objectives. While the Committee carefully considers diversity when evaluating nominees for director, the Committee has not established a formal policy regarding diversity in identifying director nominees.
Advance Resignation Policy
As a condition to nomination by the Nominating and Corporate Governance Committee of an incumbent director, a nominee shall submit an irrevocable offer of resignation to the Board, which resignation shall become effective in the event that (a) such nominee is proposed for reelection and is not reelected at a
meeting of the stockholders in which majority voting applies and (b) the resignation is accepted by the Board by the vote of a majority of the directors, not including any director who has not been reelected.
Stockholder Nominations
In addition to nominees by or at the direction of our Board, the Nominating and Corporate Governance Committee will consider candidates for nomination proposed by a stockholder, so long as the stockholder provides notice and information on the proposed nominee to the Nominating and Corporate Governance Committee through the Secretary in accordance with the provisions of Article I, Sections 3 and 4 of our Bylaws relating to direct stockholder nominations.
For the Nominating and Corporate Governance Committee to consider candidates recommended by a stockholder, Article I,
Section 3 of our Bylaws requires that the stockholder provide notice to our Secretary (1) not less than 90 nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders, or (2) with respect to an election to be held at a special meeting of stockholders for the election of directors, no earlier than 120 days prior to the date of such special meeting, nor later than the close of business on the later to occur of the 90th day prior to the date of such special meeting or the 10th day following the day on which public disclosure of the date of the special meeting was made (if the first
CORPORATE GOVERNANCE
public announcement of the date of the special meeting is less than 100 days prior to the date of the special meeting). The notice to our Secretary must set forth, among other things:
In addition, to be timely, a stockholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be correct as of the record date for the meeting and as of the date that is 10 business days prior to the meeting, and such update and supplement must be delivered to our Secretary not later than 5 business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than 8 business days prior to the date for the meeting in the case of the update and supplement required to be made as of 10 business days prior to the meeting. In addition, as to each person whom the stockholder proposes to nominate for election or re-election as a director, the following information must be provided to our Secretary in accordance with the time period prescribed for the notice to our Secretary described above:
The above description of the requirements that stockholders must comply with when recommending candidates for our Board is a summary only, and stockholders interested in nominating candidates to our Board are encouraged to closely review our Bylaws.
Director Attendance at Annual Meeting of Stockholders
Our Board has adopted a policy stating that each member of the Board should attend our annual meeting of stockholders. All of our directors then serving as directors attended the 2015 Annual Meeting of Stockholders.
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in 2023, 2022, 2021 and 2020.
retained, KPMG as our independent registered public accounting firm for the year ending December 31, 2016. If the stockholders fail to ratify the selection, the Audit & Risk Committee will reconsider whether or not to continue the retention of KPMG.E&Y. Even if the selection is ratified, the Audit & Risk Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determineit determines that such a change would be in our best interests and those of our stockholders. The Audit & Risk Committee annually reviews the performance of our independent registered public accounting firm and the fees charged for their services. Based upon the Audit & Risk Committee’s analysis of this information, the Audit & Risk Committee will determine which registered independent public accounting firm to engage to perform our annual audit each year.
Principal Accountant Fees and Services
2015 | 2014 | |||||||
Audit Fees1 | $ | 1,665,000 | $ | 1,533,000 | ||||
Audit-Related Fees2 | $ | 268,400 | $ | 265,500 | ||||
Tax Fees3 | $ | 90,000 | $ | 130,300 | ||||
All Other Fees | $ | -0- | $ | -0- |
| | | | 2023 | | | 2022 | | ||||||
| Audit Fees(1) | | | | $ | 2,259,944 | | | | | $ | 1,920,775 | | |
| Audit-Related Fees(2) | | | | $ | — | | | | | $ | — | | |
| Tax Fees(3) | | | | $ | 14,000 | | | | | $ | 60,034 | | |
| All Other Fees | | | | $ | — | | | | | $ | — | | |
The material in this Report is not “soliciting material”, is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing under the Securities Act of 1933 (the “Securities Act”) or the Securities Exchange Act of 1934 (the “Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation by reference language in such filing.
Company’s financial reporting process, including its system of internal control over financial reporting (as defined inRule 13a-15(f) promulgated under the Securities Exchange Act of 1934)Act), and for the preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles. The independent auditor is responsible for auditing those financial statements, and expressing an opinion on the effectiveness of internal control over financial reporting. The Audit & Risk Committee’s responsibility is to monitor and review these processes. The members of the Audit & Risk Committee are “independent” as defined by SEC and Nasdaq rules, and our Board has determined that each of Jeffery M. Jackson and Steven L. PepperMr. Jeffrey Brown is an “audit committee financial expert” as defined by SEC rules.
SEC.
Jeffery M. Jackson,
J.V. Lentell
Steven L. Pepper
| | | Anthony Blasquez | | ||
Executive Vice President — Rent-A-Center Age: 48 Gender: Male Ethnicity: Hispanic/Latino |
| | Ann Davids | | ||
| Executive Vice President — Chief Customer and Marketing Officer Age: 55 Gender: Female Ethnicity: Caucasian | |
| | | Sudeep Gautam | | |
| Executive Vice President — Chief Technology and Digital Officer Age: 53 Gender: Male Ethnicity: Asian | |
| | | Fahmi Karam | | |
| Executive Vice President — Chief Financial Officer Age: 45 Gender: Male Ethnicity: Asian | |
| | | Tyler Montrone | | |
| Executive Vice President — Acima Age: 43 Gender: Male Ethnicity: Caucasian | |
| | | Bryan Pechersky | | |
| Executive Vice President — General Counsel & Corporate Secretary Age: 53 Gender: Male Ethnicity: Caucasian | |
| | | Transient Taylor | | |
| Executive Vice President — Chief Human Resources Officer and Chief Diversity Officer Age: 58 Gender: Male Ethnicity: African American | |
| Named Executive Officer | | | Title | | ||
| Mitchell Fadel | | | Chief Executive Officer | |||
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| Fahmi Karam | | |||||
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| | Executive Vice President — Chief | | ||||
| Anthony Blasquez | | | Executive Vice President — | | ||
| Tyler Montrone(1) | | | Executive Vice President — Acima | | ||
| Sudeep Gautam(2) | | | Executive Vice President — Chief Technology and Digital Officer | |
Robert D. Davis.
Guy J. Constant. Mr. Constant has served as Executive Vice President – Finance, Chief Financial Officer and Treasurer since June 2014. Mr. Constant was previously employed by Brinker International, Inc., serving as Executive Vice President, Chief Financial Officer and President of Global Business Development from January 2013 until March 2014; as Executive Vice President and Chief Financial Officer from September 2010 to January 2013; Senior Vice President of Finance from May 2008 to September 2010; Vice President of Strategic Planning, Analysis and Investor Relations from September 2005 to May 2008; and Senior Director of Compensation from November 2004 to September 2005.
Mark E. Denman. Mr. Denman was named Executive Vice President – Acceptance Now in March 2015. Mr. Denman previously served as our Senior Vice President – Acceptance Now from January 2014 to February 2015, one of our division vice presidents (RTO) from September 2013 to December 2013, and one of our division vice presidents (Acceptance Now) from August 2011 to September 2013. Mr. DenmanGautam joined the companyCompany in December 2010January 2023.
Fred E. Herman. Mr. Herman was named Executive Vice President – Accounting and Global Controller in July 2014, after serving as Executive Vice President – Shared Services since January 1, 2014. Mr. Herman served as the Chief Risk and Compliance Officer from May 2011 until December 2013, as the Vice President of Internal Audit from January 2005 until May 2011 and as the Director of Internal Audit from April 2003 until January 2005. From 1980 to 2003, Mr. Herman worked in public accounting and in internal audit with several public companies.
Christopher A. Korst. Mr. Korst was named Executive Vice President – Chief Administrative Officer and General Counsel in July 2014, after previously serving as Executive Vice President – Chief Administrative Officer since January 1, 2014. Previously, Mr. Korst served as Executive Vice President – Domestic Operations from May 2012 to December 2013, as our Executive Vice President – Operations from January 2008 until April 2012, and as our Senior Vice President – General Counsel from May 2001 to January 2008. Mr. Korst also served as our Secretary from September 2004 until January 2008. From January 2000 until May 2001, Mr. Korst owned and operated AdvantEdge Quality Cars, which he acquired in a management buyout.
Charles J. White. Mr. White was named Executive Vice President – RTO Domestic effective as of January 1, 2014. Previously, Mr. White served as Senior Vice President – RAC Acceptance from August 2011 to December 2013. From September 2002 to July 2011, Mr. White served as one of our division vice presidents, and as one of our regional directors from January 2000 to September 2002. Prior to joining us in 1995, Mr. White served for six years in the U.S. Navy and six years in the Army National Guard.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management and, based upon such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in thethis proxy statement on Schedule 14A related tofor further details regarding the 2016 Annual Meeting of Stockholders, for filing with the Securities and Exchange Commission.
COMPENSATION COMMITTEE
Leonard H. Roberts, Chairman
Michael J. Gade
J.V. Lentell
COMPENSATION DISCUSSION AND ANALYSIS
matters summarized below.
Decisions with respect to compensation of our executive officers, including our Chief Executive Officer and other named executive officers, are made by our Compensation Committee, which is comprised solely of independent directors. Our Compensation Committee has identified four primary objectives for our executive compensation program, which guide the decisions it makes with respect to the amount and type of compensation paid to our named executive officers. The objectives of our executive compensation program are to:
Component | | | Overview | |
Base Salary | | | Competitive base salaries are determined in large part through in-depth comparative analyses of comparable positions at companies in our Peer Group and other similarly situated public companies in the retail and consumer finance sectors, taking into account the individual’s experience, responsibilities, competencies and individual performance, in addition to the market data. | |
Annual Incentive Opportunity | | | Opportunity for an annual cash incentive award to align our executives with annual corporate and individual performance achievements. For 2023, the ultimate payout amount was based on (1) Consolidated Adjusted EBITDA (50% weighting), (2) Rent-A-Center segment revenue (25% weighting), and (3) Acima segment revenue (25% weighting). The targeted achievement levels take into account the rigorous goals included in our annual operating budget, which is approved by the Board. Each executive officer’s target annual incentive opportunity takes into account market data from the Peer Group and other similarly situated public companies in the retail and consumer finance sectors. | |
Long-Term Incentive Compensation Opportunity | | | Long-term incentive plan and equity ownership guidelines to align our executives with longer term performance achievement and stockholder returns over time. The long-term incentive awards granted in February 2023 consisted of (1) time-based restricted stock units (weighted 30%) that vest pro rata over a three-year period and (2) performance-based stock units (weighted 70%) that vest solely based on the satisfaction of our performance based on our three-year TSR compared to the S&P 1500 Specialty Retail Index. | |
| What We Do | | |||
| • Transparent Compensation Program: Maintain a transparent executive compensation program that is understandable both to our stockholders and employees and is not overly complex or subject to constantly changing features • Compensation Aligned with Performance: A substantial percentage of both cash and equity compensation is at-risk and variable based on company performance • Multi-Year Equity Vesting: Three-year full vesting for all executive equity awards (restricted stock units vest pro rata annually over three years; performance stock units cliff vest after three years based on relative TSR performance) • Annual SOP Vote: Annual say-on-pay stockholder vote regarding our executive compensation program to receive regular feedback from our investors • Annual Program Risk Assessment: Our Compensation Committee performs an annual risk assessment of our compensation program • Investor Outreach: Outreach program to our large institutional investors regarding executive compensation and governance-related topics | | | • Independent Compensation Consultant: Engagement by the Compensation Committee of an independent compensation consultant to conduct a formal evaluation of, and advise the Compensation Committee with respect to, the compensation arrangements for our Chief Executive Officer, as well as provide guidance with respect to the compensation of our senior executives • Rigorous Target Setting: Rigorous performance targets for our annual cash incentive and long-term incentive compensation programs • Total Reward Statement Review: Regular review by the Compensation Committee of total reward statements for the Chief Executive Officer and other executives to evaluate multi-year cash and equity compensation awards • Ownership Guidelines: Equity ownership guidelines for our directors, Chief Executive Officer, executive vice presidents, senior vice presidents and vice presidents • Clawback Policy: Incentive compensation is subject to clawback, as described further in this proxy statement | |
| What We Do Not Do | | |||
| • No Hedging or Pledging Stock: Insider Trading Policy that prohibits derivative transactions involving our common stock and pledging stock • No Gross-ups: Employee benefits are provided without tax gross-ups (other than certain relocation-related expenses) • No Excessive Perquisites: We provide only limited perquisites, as described in this CD&A | | | • No Repricing Options: We do not reprice stock options without stockholder approval (and as of 2021, we no longer grant stock options) • No Dividends Paid on Unvested Equity: No prospective payment of dividends on unvested equity awards | |
Executive Summary
We are committed to a pay-for-performance culture. The compensation program is reviewed annually in order to assure that its objectives and components are aligned with
Pay for Performance
Our executive compensation program directly links a substantial portion of executive compensation to our financial performance through annual and long-term incentives. For the 20152023 annual cash incentive program,plan targets for each metric, the Compensation Committee considered sensitivities to the key business drivers of Adjusted EBITDA, goal was achieved at 85.5%Rent-A-Center segment revenue, and Acima segment revenue to establish rigorous threshold, target and maximum performance levels.
98.9% of target, which resulted in a 75% payout of the 25% of the target bonus amounts attributable to the revenue target (see the payout schedule below).
We failed to achieve more than 80% of the three-year EBITDA target established in connection with the grant in 2013 of performance-based restricted stock units pursuant(70%), thereby including substantial weighting to our long-
COMPENSATION DISCUSSION AND ANALYSIS
term incentive compensation program. Accordingly, none of the performance-based restricted stock units granted as part ofCompany’s relative TSR performance under the 2013 long-term incentive compensation awards were earned and no shares were issued to our named executive officers pursuant to such awards.
In 2015, our Compensation Committee adopted relative total shareholder return as the performance metric with respect to performance-based restricted stock units granted pursuant to our long-term incentive compensation program, rather than the
EBITDA metric historically used. In connection with this change, our Compensation Committee granted to our named executive officers performance-based restricted stock units based on our relative total stockholder return as compared to the S&P 1500 Specialty Retail Index over a one-year measurement period.
Say-on-Pay Approval: In June 2015,2023, we held a stockholder advisory vote on the compensation of our named executive officers, referred to as a say-on-pay vote. Our stockholders approved the compensation of our named executive officers, with 98.6%approximately 99% of the shares of common stock present and entitled to vote at the meetingthereon cast in favor of our proposal. Compensation decisions and changes implemented in fiscal 2015 were made keeping in mind the
support stockholders expressed for our compensation philosophy and pay-for-performance culture. As a result,proposal, which our Compensation Committee kept most facetsbelieved conveyed a general endorsement of our executive compensation program and related compensation actions.
Compensation Process
The Compensation Committee typically begins the process of determining the amount and mix of total compensation to be paid to our senior executives, including our named executive officers, in December of each year and finalizes the amounts the following January. This enables the Compensation Committee to examine and consider our performance during the previous year in establishing the current year’s compensation.
The Compensation Committee determines each year whether to retain a compensation consultant to assist it with compensation decisions for the upcoming fiscal year. In May 2014, the Compensation Committee approved the engagement of Hay Group, Inc. (“Hay Group”) to conduct a formal evaluation of, and advise it with respect to, the compensation arrangements for our Chief Executive Officer, as well as provide guidance with respect to the compensation of our senior executives, including our other
named executive officers, for the 2015 fiscal year. In determining whether to engage Hay Group to provide such services, the Compensation Committee considered whether such engagement would create any conflicts of interest and determined that the engagement of Hay Group by the Company to advise it with respect to compensation to be paid to our senior executive management for 2015 did not create any such conflicts. Hay Group was engaged directly by the Compensation Committee and has performed no other services to us or any of our executive officers or directors.
Based on the work performed by Hay Group, the Compensation Committee determined that the following similarly-situated public companies (the “Peer Group”) provided an appropriate comparison for the purpose of evaluating our compensation arrangements for our senior executives:
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The following criteria were used to establish this Peer Group:
Five companies which were previously included in the Peer Group (Dollar Tree, Advance Auto Parts, RadioShack, DFC Global and
EZCorp) were removed and replaced with Pep Boys, Sears Hometown and Outlet, Tractor Supply, United Rental and Western Union because such companies more closely matched the criteria set forth above. In the fall of 2014, the Compensation Committee approved the use of this Peer Group for use in connection with compensation decisions to be made for the 2015 fiscal year.
Finally, various members of the Compensation Committee have significant professional experience in the retail industry, as well as with respect to theCompany’s executive compensation practices of large publicly-traded companies. This experience provides a frame of reference within which to evaluate our executive compensation program relative to general economic conditionsphilosophy and our progress in achieving our short-term and long-term goals.
COMPENSATION DISCUSSION AND ANALYSIS
When the Compensation Committee considers the mix and amount of total compensation for our named executive officers, it reviews tally sheets which contains information regarding, among other things:
The Compensation Committee uses these tally sheets to estimate the total annual compensation of the named executive officers, and to provide a perspective on the named executive officers’ wealth accumulation from our compensation programs. Before
finalizing the compensation of the named executive officers for any given year, the tally sheets allow the Compensation Committee to fully understand the impact that its decisions will have on each named executive officer’s total existing and potential compensation.
See the sections entitled“– Potential Payments and Benefits Upon Termination Without a Change in Control” and “– Potential Payments and Benefits Upon Termination With a Change in Control” beginning on pages 36 and 37, respectively, of this proxy statement for the total amount of compensation and benefits each named executive officer could receive as a result of the various termination events and a description of our severance arrangements beginning on page 34 of this proxy statement.
Forms of Compensation
The following forms of compensation are currently utilized by the Compensation Committee in compensating our named executive officers:
Base Salary
The base salary for each of our named executive officers represents the guaranteed portion of their total compensation and is determined annually by the Compensation Committee. Base salary is intended to reward the performance of each named executive officer during the fiscal year relative to his position with us. In establishing the base salary for each of our named executive officers, the Compensation Committee reviews:
At the beginning of each year, the Compensation Committee considers whether adjustments would be made to the annual base salaries for our named executive officers. During the Compensation Committee’s review of the current base salaries, the Compensation Committee primarily considers market data, input provided by our Human Resources department, the input of Mr. Davis (other than with respect to his own base salary), individual performance, our financial performance, the experience of the executive officer, and each named executive officer’s compensation in relation to our other executive officers.
The Compensation Committee increased the base salary for 2015 for each of our named executive officers at a modest rate consistent with the salary increases for our other senior executive management (an average of 3%). The Compensation Committee approved the following base salaries of the named executive officers for 2014 and 2015 as set forth in the table below. The base salary adjustments for 2014 and 2015 were effective March 1, 2014, and February 28, 2015, respectively, except with respect to Mr. Davis’ increase for 2014, which was effective on February 1, 2014.
COMPENSATION DISCUSSION AND ANALYSIS
ANNUAL BASE SALARIES
Name | 2013 Base Salary | 2014 Base Salary | 2015 Base Salary | |||||||||
Robert D. Davis(1) | $ | 469,035 | $ | 750,000 | $ | 772,500 | ||||||
Guy J. Constant(2) | – | 475,000 | $ | 491,720 | ||||||||
Mitchell E. Fadel(3) | $ | 623,356 | $ | 642,057 | $ | 661,319 | ||||||
Christopher A. Korst | $ | 393,806 | $ | 405,620 | $ | 417,789 | ||||||
Joel M. Mussat(4) | $ | 324,724 | $ | 360,000 | $ | 370,800 | ||||||
Charles J. White | $ | 297,628 | $ | 330,000 | $ | 336,600 |
Annual Cash Incentive Compensation
The Compensation Committee maintains an annual incentive compensation program for our executive officers that provides for awards in the form of a cash bonus. The Compensation Committee believes that cash bonuses are appropriate to promote our interests as well as those of our stockholders by providing our named executive officers with short-term financial rewards based upon achievement of specified short-term objectives, which the Compensation Committee believes will ultimately increase the value of our stock, as well as help us attract and retain our named executive officers by providing attractive compensation opportunities.
Our named executive officers participate in our annual cash incentive program. Under our annual cash incentive program, cash bonus eligibility is established at a pre-determined percentage of the named executive officer’s base salary, with such percentage amount set in accordance with the eligible named executive officer’s position and responsibilities with us. The percentage allocated as well as the potential ultimate payouts pursuant to our annual cash incentive program for each year are typically approved by the Compensation Committee in January at the same time that all compensation for our named executive officers is reviewed and, if applicable, approved. This enables the Compensation Committee to examine the named executive officer’s performance during the previous year, as well as determine financial performance targets for the new fiscal year based in part upon the previous year’s performance. No changes
to the eligible bonus percentages for our named executive officers were made for the 2015 annual cash incentive program.
The annual cash incentive program for 2015 included two financial performance metrics: EBITDA and corporate revenue. The Compensation Committee included an EBITDA target in the annual cash incentive program because it believes EBITDA generally represents an accurate indicator of our financial performance over a one-year period of time, while excluding the impact of interest and depreciation which can vary significantly. The inclusion of the corporate revenue target in the annual cash incentive program reflects the Compensation Committee’s determination that although a substantial portion of the cash bonus opportunity should be dependent on our profitability, a portion of such cash bonus opportunity should be based on our revenue growth. Accordingly, the potential annual incentive award for each of our named executive officers other than Mr. White for the 2015 annual cash incentive program was divided as follows: 75% EBITDA; and 25% revenue. As the senior executive officer over our Core U.S. segment, Mr. White’s annual cash incentive program includes a divisional revenue target in addition to the corporate revenue and EBITDA metrics. Accordingly, the potential annual incentive award for Mr. White for the 2015 annual cash incentive program was divided as follows: 50% EBITDA; 10% corporate revenue; and 40% divisional revenue.
COMPENSATION DISCUSSION AND ANALYSIS
The financial performance targets for the 2015 annual cash incentive program were established in January 2015 following a review of our financial projections developed pursuant to our strategic plan and objectives for 2015. Based upon that review, the Compensation Committee established a corporate revenue target under the 2015 annual cash incentive program in the amount of $3.314 billion and an EBITDA target under the 2015 annual cash incentive program in the amount of $336.1 million. In setting the EBITDA target under the 2015 annual cash incentive program, the Compensation Committee considered (i) the level of
achievement of the EBITDA target for the 2014 annual cash incentive program and (ii) the level of the Company’s anticipated investment in its growth strategies for 2015. The Compensation Committee further determined that, consistent with its views as to the financial performance measures for our annual cash incentive program, each eligible executive officer may receive (1) an additional bonus amount in the event that we exceed the financial performance targets for the fiscal year, and (2) a portion of the bonus in the event that we approach, yet fail to achieve, the target levels of financial performance, as set forth below:
EBITDA PERFORMANCE RANGE
Target = $336.1M
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COMPENSATION DISCUSSION AND ANALYSIS
REVENUE PERFORMANCE RANGE
Target = $3,313.7M
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In January 2016, the Compensation Committee determined the level of achievement of the revenue and EBITDA targets as previously set by it with respect to the 2015 annual cash incentive program. EBITDA as reported in accordance with GAAP for the year ended December 31, 2015, was ($927.2) million. In reviewing our actual 2015 performance relative to the EBITDA goal, the Compensation Committee determined that it would be appropriate, consistent with past practices, to adjust for certain special items for purposes of determining whether the financial target had been met for the year. The Compensation Committee concluded that the failure to adjust for such items would inappropriately penalize management for certain operational decisions which the Compensation Committee believed were in the best interests of the Company’s stockholders. Accordingly, the Compensation Committee made adjustments to EBITDA pertaining to (i) a non-cash charge to account for goodwill impairment (a $1,170.0 million increase);
(ii) a portion of the write-down of smartphone inventory (a $17.4 million increase); (iii) losses on the sale of stores, including 40 Core U.S. stores to a new franchisee (an $8.6 million increase); (iv) expenses associated with the closure of Core U.S. and Mexico stores (a $7.2 million increase); (iv) the amount accrued for incentive compensation (a $6.3 million increase); (v) pre-tax charges for start-up and warehouse closure expenses related to the Company’s sourcing and distribution initiative (a $2.8 million increase); and (vi) pre-tax corporate restructuring charges (a $2.0 million increase). The Compensation Committee reviewed the combined proposed adjustments and their impact on the calculation of the Company’s EBITDA for the fiscal year ended December 31, 2015, and determined that the Company’s EBITDA for purposes of the 2015 annual cash incentive program was equal to $287.1 million. The Compensation Committee further determined that the total revenue earned by the Company for the fiscal year ended December 31, 2015, was
COMPENSATION DISCUSSION AND ANALYSIS
$3.278 billion, as reported in the Company’s financial statements for the year ended December 31, 2015.
The Compensation Committee concluded that it was appropriate to exclude the impact of the goodwill write-down in its determination of the Company’s EBITDA for the fiscal year ended December 31, 2015, because the charge was non-cash and did not impact the Company’s liquidity position or cash flow. The Compensation Committee additionally concluded that the failure to make any adjustment to EBITDA with respect to the smartphone write-down would inappropriately penalize management for its decisions to enter a new product category and to take swift action to correct smartphone inventories, and believed such decisions were in the best long-term interest of the Company’s stockholders. Accordingly, the Compensation Committee determined to adjust EBITDA by $17.4 million (an amount equal to one-half of the amount written down to account for smartphone inventory) and to apply such adjustment to all of our named executive officers.
As a result, the Compensation Committee determined that the Company achieved (i) 85.5% of the EBITDA objective for 2015 resulting in payment of 25% of the 75% of the target bonus amounts attributable to the EBITDA condition (see payout schedule above) pursuant to the 2015 annual cash incentive program, and (ii) 98.9% of the revenue objective for 2015 resulting in payment of 75% of the 25% of the target bonus amounts attributable to the revenue condition (see payout schedule above) pursuant to the 2015 annual cash incentive program.
The target and actual amounts awarded to our named executive officers for their annual cash incentive bonus for 2015 performance are set forth below and included in the Summary Compensation Table under the column “Non-Equity Incentive Plan Compensation” on page 28 of this proxy statement. Mr. Fadel resigned from the Company effective as of August 28, 2015; accordingly, he did not receive any payment pursuant to the 2015 annual cash incentive plan.
2015 ANNUAL CASH INCENTIVE AWARD
Name | 2015 Incentive Target (%) | 2015 Incentive Target ($) | 2015 Actual Annual Cash Incentive Award | 2015 Actual Annual Cash a % of Target | ||||||||||||
Robert D. Davis | 100 | % | $ | 772,500 | $ | 289,688 | 37.5 | % | ||||||||
Mitchell E. Fadel | 75 | % | $ | 495,989 | N/A | – | ||||||||||
Guy J. Constant | 55 | % | $ | 270,446 | $ | 101,417 | 37.5 | % | ||||||||
Christopher A. Korst | 50 | % | $ | 208,895 | $ | 78,336 | 37.5 | % | ||||||||
Joel M. Mussat | 50 | % | $ | 185,400 | $ | 69,525 | 37.5 | % | ||||||||
Charles J. White | 50 | % | $ | 168,300 | $ | 90,882 | (1) | 54.0 | % |
Long-Term Incentive Compensation
Our equity incentive plans are administered by the Compensation Committee and are designed to enable the Compensation Committee to provide incentive compensation to our employees in the form of stock options, stock awards, other equity awards, and performance-based equity awards. The Compensation Committee believes that awarding our named executive officers non-cash, long-term equity incentive compensation, primarily in the form of long-term incentive awards which may increase in value in conjunction with the satisfaction by us of pre-determined performance measures and/or an increase in the value of our common stock, more effectively aligns their interests with ours. The Compensation Committee also believes that such awards will provide our named executive officers with an incentive to remain in their positions with us, since the determination as to whether a particular measure for our performance and/or an increase in the value of our common stock has been satisfied is typically made over an extended period of time.objectives. In general, the Compensation Committee considers equity awardsdetermined it was appropriate, with certain modifications, to our named executive officers on an annual basis, normallyretain the same overall structure in January of each year.
Generally, long-term incentive awards are made2024 as in 2023 taking into account feedback from the Compensation Committee’s independent compensation consultant, comparisons to our named executive officers pursuant to (i)peer group compensation programs, the 2006 Plan and (ii)strong say-on-pay approval from stockholders, feedback from the Rent-A-Center, Inc. 2006 Equity Incentive Plan, which we refer to as the “Equity Plan.” Under the terms of each of the 2006 Plan and the
Equity Plan, awards may be granted at times and upon vestingCompany’s investor outreach and other conditions as determined by the Compensation Committee, and may be made in the form of stock options, stock awards, other equity awards, and performance-based equity awards. Stock option awards under our equity incentive plans are granted at the fair market value per share of our common stock on the date the option is granted as determined by reference to the closing price for shares of our common stock on the Nasdaq Global Select Market on the last market trading day prior to the date the option is granted. The options granted to our named executive officers typically vest ratably over a four-year period, commencing one year from the date of grant, and expire after 10 years.
The restricted stock units granted by our Compensation Committee cliff vest either after a set period of time or upon the achievement of specified goals for our performance over a period of time. Awards of restricted stock with time-based vesting provide our named executive officers with a minimum level of value while also providing an additional incentive for such individuals to remain in their positions with us. Awards of restricted stock with performance-based vesting provide an additional incentive for our named executive officers to remain in their positions with us in order to realize the benefit of such award
COMPENSATION DISCUSSION AND ANALYSIS
and also focus them on a performance parameter which the Compensation Committee considers beneficial to increasing the value of our stock, and consequently, stockholder value.
The Compensation Committee determines the timing of the annual grants of stock options and restricted stock units to our named executive officers as well as the terms and restrictions
applicable to such grants. The Compensation Committee approves generally in January of each year the annual grant to our executive officers after the Compensation Committee has reviewed the information set forth in the tally sheets. Grants may also be made in connection with commencement of employment, promotions, or tenure.
2015 Long-term Incentive Compensation Awards. The Compensation Committee adjusted the aggregate amount of the long-term incentive compensation award as a percentage of base salary for 2015 for each named executive officer as follows:
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The increase in the aggregate amount of the long-term incentive compensation award for 2015 for each named executive officer was made to target the market median values for long-term compensation awards at similarly situated public companies. Consistent with prior years, the long-term incentive compensation awards for 2015 were comprised of three vehicles, with greater emphasis on the portion of the long-term incentive award which is contingent on financial performance. Accordingly the award tranches are weighted as follows: (i) 20% of the value of the award issued in stock options, (ii) 20% of the value of the award issued in time-based restricted stock units and (iii) 60% of the value of the award issued in performance-based restricted stock units.
Adoption of Relative Total Shareholder Return as Performance Measure. In prior years, long-term incentive awards of restricted stock with performance-based vesting were contingent upon our achievement of a three-year EBITDA target. Beginning in 2015, the Compensation Committee adopted a relative total shareholder return metric over a three-year measurement period as the vesting condition for grants of performance stock units under our long-term incentive compensation program. The
Compensation Committee made this decision in order to tie the external performance of our common stock to executive compensation and because the Compensation Committee believes that a relative measure is a more appropriate basis for measuring long-term performance than an absolute measure. The Compensation Committee also took into consideration the fact that our annual cash incentive program includes an EBITDA metric. The Compensation Committee selected a three-year period over which to measure relative total shareholder return based upon the time-period utilized with respect to awards made by similarly-situated public companies in the retail industry, as well as upon its belief that a three-year measurement period was appropriate to place an emphasis on our relative total shareholder return over an extended period of time, as opposed to the single year measure which is utilized in our annual cash incentive program. In order to immediately emphasize the relative total shareholder return metric to our senior executive officers, the Compensation Committee also determined to grant performance stock unit awards with one- and two-year measurement periods to our senior executive officers, including our named executive officers, in January 2015.
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Committee selected the S&P 1500 Specialty Retail Index as the comparator group for measuring our relative shareholder return over the applicable measurement period. In making this selection, the Compensation Committee considered the median annual revenue of the companies in the index in the amount of $3.8 billion, the inclusion in the index of four
companies included in our Peer Group, and the representation of the overall retail environment by the index to determine that this index is comprised of the companies most similar to the Company and is an appropriate comparator group. The Compensation Committee adopted the following payout ranges applicable to the awards of performance-based restricted stock units:
Payout Chart | Payout% | |||||||||||||||
RCII’s TSR Percentile Rank in the S&P 1500 Speciality | RCII’s TSR Actual Rank in the S&P 1500 Speciality Retail | |||||||||||||||
> | <= | Low | High | |||||||||||||
90% | 100 | % | 1 | 7 | 200 | % | ||||||||||
80% | 89 | % | 8 | 13 | 175 | % | ||||||||||
70% | 79 | % | 14 | 19 | 150 | % | ||||||||||
60% | 69 | % | 20 | 25 | 125 | % | ||||||||||
50% | 59 | % | 26 | 31 | 100 | % | ||||||||||
40% | 49 | % | 32 | 38 | 75 | % | ||||||||||
30% | 39 | % | 39 | 44 | 50 | % | ||||||||||
25% | 29 | % | 45 | 47 | 25 | % | ||||||||||
0% | 24 | % | 48 | 63 | 0 | % |
See the Grants of Plan-Based Awards table under the column “Estimated Future Payouts Under Equity Incentive Plan Awards” on page 30 of this proxy statement for threshold, target, and maximum amounts payable to our named executive officers under the 2015 long-term incentive performance-based awards.
Determination of Long-term Incentive Compensation Awards. In January 2016, the Compensation Committee determined the level of achievement of the three-year EBITDA target previously set by the Compensation Committee with respect to the long-term incentive performance-based awards made in January 2013. The Compensation Committee reviewed the Company’s EBITDA for each of the three years in the period January 1, 2013 through December 31, 2015, and determined that the Company’s aggregate EBITDA for such three-year period for purposes of the 2013 long-term incentive performance-based awards was less than 80% of the EBITDA target previously set by the Compensation Committee in the amount of $1.593 billion. Accordingly, the Compensation Committee determined, in accordance with the terms of the 2013 long-term incentive
performance-based awards, that none of the performance-based restricted stock units granted as part of the 2013 long-term incentive compensation awards was earned and no shares were issued to our name executive officers pursuant to such awards.
In January 2016, the Compensation Committee determined the level of achievement of the minimum TSR condition with respect to the long-term incentive performance-based awards made in January 2015, with a one-year measurement period. The Compensation Committee reviewed the Company’s relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the period January 1, 2015 through December 31, 2015, and determined that the Company’s relative TSR ranking was below the 25th percentile for such one-year measurement period. Accordingly, the Compensation Committee determined, in accordance with the terms of such awards, that none of the performance-based restricted stock units granted as part of the one-year long-term incentive compensation awards was earned and no shares were issued to our name executive officers pursuant to such awards.
Severance Arrangements
We have an employment agreement with Mr. Fadel and executive transition agreements with our other named executive officers to provide certain payments and benefits upon an involuntary termination of the named executive officer’s employment or the occurrence of certain other circumstances that may affect the named executive officer.officer (and, in the case of Mr. Fadel, the employment agreement also provides for, among other items, annual compensation and certain employee benefits, as well as his entitlements upon an involuntary termination as described in the section “Arrangements with Mr. Fadel” below). The Compensation Committee believes that such severance arrangements assist us in recruiting and retaining top-level talent. In addition, formalizing our severance practices benefits us (1) by providing us with certainty in terms of our obligations to an eligible executive in the
event that our relationship with him or her is severed and (2) by virtue of the non-competition non-solicitation and releasenon-solicitation provisions in our loyalty agreements, which inure to our benefit in the event that an eligible executive severs employment with us.
COMPENSATION DISCUSSION AND ANALYSIS
FringeEmployee Benefits and Limited Perquisites
Our named executive officers are eligible to participate in the benefit plans generally available to all of our employees, which include health, dental, life insurance, vision and disability plans, all of which the Compensation Committee believes are commensurate with plans of other similarly situated public companies in the retail and consumer finance industry. In addition, we will pay for the cost of an executive physical examination for each named executive officer each year.year and we do not gross up our executives for any taxes related to the cost of perquisites (other than for certain relocation-related expenses). Our named executive officers were not eligible in 20152023 to participate in our 401(k) Retirement Savings Plan. Instead,Plan and our named executive officers are eligible to participate in the Rent-A-Center, Inc. Deferred Compensation Plan. The Deferred Compensation Plan allows our executive officers to defer tax liabilitycertain compensation to help save for their longer term financial objectives on a portion of their compensation. Beginning in 2016, our named executive officers will be eligible to participate on a limited basis in our 401(k) Retirement Savings Plan and in the Deferred Compensation Plan.
In addition, we own and operate a corporate jet for use by management for business purposes which is available to our named executive officers for limited non-business use. Use of the corporate aircraft by these executives for non-business use is subject to availability. The executive must pay us all direct operating costs and any additional charges incurred by the executive for any non-business use of the corporate aircraft (no later than at the completion of such non-business use). If the
actual cost for the non-business use of the corporate aircraft is not paid in full at the completion of the non-business use, such amount is deemed compensation for the requesting executive and reflected on his or her W-2 earnings statement for the year.
The Compensation Committee has determined it is beneficial to offer the above-described fringeemployee benefits and limited perquisites in order to attract and retain our named executive officers by offering compensation opportunities that are
Clawback Policy
Our BoardHistorically, the Compensation Committee has adoptedretained annually a compensation recovery (“clawback”) policy which provides that, in the eventconsultant to conduct a formal evaluation of, a restatement of our financial results due to our material noncomplianceand advise it with any financial reporting requirement under the U.S. federal securities laws, we may seek reimbursement of any portion of incentive compensation paid, vested, or awarded during the three-year period preceding the date on which we are required to prepare such a re-statement, which is in excess of the amount that would have been paid or awarded if calculated based on the restated financial results. Restatements of financial results that are the
direct result of changes in accounting standards will not result in recovery of performance-based or incentive compensation under this policy. This policy is intended to be administered in a manner consistent with any applicable rules, regulations or listing standards adopted by the SEC or The Nasdaq Global Select Market, Inc., as contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. We intend to revise our clawback policyrespect to, the extent we deem necessary to comply with such rules, regulations or listing standards.
Executive Stock Ownership Guidelines
We believe thatcompensation arrangements for our Chief Executive Officer, should have a meaningful financial stakeas well as provide guidance with respect to the compensation of our senior executives, including our other named executive officers. For the 2023 fiscal year, the Compensation Committee reviewed the executive compensation analysis conducted by Korn Ferry, which utilized the approved Peer Group (as defined below), pursuant to its engagement by the Compensation Committee to assist the committee with compensation decisions for the 2023 fiscal year.
| 2023 Peer Group | | |||||||||
| Aaron’s, Inc. | | | Big Lots Inc. | | | Brinker International Inc. | | | Conn’s | |
| FirstCash, Inc. | | | H&R Block, Inc. | | | La-Z-Boy Incorporated | | | OneMain Holdings | |
| Sally Beauty, Inc. | | | Bread Financial Holdings, Inc. | | | The Western Union Company | | | PROG Holdings | |
| Name | | | 2023 Base Salary | | |||
| Fadel | | | | $ | 1,100,000 | | |
| Karam | | | | $ | 1,000,000 | | |
| Blasquez | | | | $ | 450,000 | | |
| Montrone | | | | $ | 450,000 | | |
| Gautam | | | | $ | 450,000 | | |
| | Metric | | | | Performance Levels | | |
| | Adjusted EBITDA(1) | | | | Threshold — Less than $354 million Target — $417 million Maximum — Greater than or equal to $479 million | | |
| | Rent-A-Center Segment Revenue | | | | Threshold — Less than $1,813 million Target — $1,888 million Maximum — Greater than or equal to $1,964 million | | |
| | Acima Segment Revenue | | | | Threshold — Less than $1,787 million Target — $1,901 million Maximum — Greater than or equal to $2,015 million | | |
| Officer | | | 2023 Target Cash Incentives as a Percentage of Base Salary | | |||
| Fadel | | | | | 135% | | |
| Karam | | | | | 60% | | |
| Blasquez | | | | | 60% | | |
| Montrone | | | | | 60% | | |
| Gautam | | | | | 90% | | |
| | Metric | | | | Weighting (% of total bonus opportunity) | | | | 2023 Performance | | | | Percent of 2023 Target Achieved | | | | Payout for 2023 (% of Target) | | |
| | Adjusted EBITDA(1) | | | | 50% | | | | $474 million | | | | 113.7% | | | | 191% | | |
| | Rent-A-Center Segment Revenue | | | | 25% | | | | $1,864 million | | | | 98.7% | | | | 68% | | |
| | Acima Segment Revenue | | | | 25% | | | | $1,931 million | | | | 101.6% | | | | 127% | | |
ownershipupon vesting and other conditions as determined by the Compensation Committee, and may be made in the form of sharesrestricted stock and share equivalents held in our benefit plans. Restricted stock unit awards, whichother equity awards, and performance-based equity awards. Stock options have not yet vested are counted toward the ownership requirement. Unexercised stock options are not counted. Currently, Mr. Davis owns shares (including 29,000 shares purchasedbeen granted in open market transactions since he became Chief Executive Officer) and unvestedrecent years.
| Officer | | | 2023 Target Equity Award Values as a Percentage of Base Salary(1) | | |||
| Fadel | | | | | 415% | | |
| Karam | | | | | 100% | | |
| Blasquez | | | | | 140% | | |
| Montrone | | | | | 140% | | |
| Gautam | | | | | 90% | | |
| | Award Type | | | | Weighting | | |
| | Performance Stock Units | | | | 70% | | |
| | Restricted Stock Units | | | | 30% | | |
| Performance Stock Unit Payout Chart | | ||||||||||||
| UPBD’s TSR Percentile Rank in the S&P 1500 Specialty Retail Index | | | Payout | | |||||||||
| >= | | | < | | | | | | | | |||
| 90% | | | | | 100% | | | | | | 200% | | |
| 80% | | | | | 90% | | | | | | 175% | | |
| 70% | | | | | 80% | | | | | | 150% | | |
| 60% | | | | | 70% | | | | | | 125% | | |
| 50% | | | | | 60% | | | | | | 100% | | |
| 40% | | | | | 50% | | | | | | 75% | | |
| 30% | | | | | 40% | | | | | | 50% | | |
| 25% | | | | | 30% | | | | | | 25% | | |
| 0% | | | | | 25% | | | | | | 0% | | |
In general, Section 162(m)4999 of the Internal Revenue Code imposes a $1,000,000 limit on the amount of compensation we can deduct in any year with respect to our Chief Executive Officer, Chief Financial Officer, and each of our three other most highly compensated executive officers. The limit does not apply to so-called “performance-based compensation,” which includes compensation attributable to stock options and performance-based restricted stock awards granted pursuant to the 2006 Plan(the “Code”), or the Equity Plan. The Compensation Committee believes that our executive compensationCompany would be denied a deduction for 2015under Section 280G of the Code, then the amounts otherwise payable to Mr. Fadel will be reduced by the minimum amount necessary to ensure Mr. Fadel will not be materially affected by the Section 162(m) limitations.
Summary of Compensation
The following table summarizes the compensation earned by our “named executive officers” in 2015, as well as the compensation earned by such individuals in each of 2014 and 2013, if serving as an executive officer during that time. For 2015, our “named executive officers” consisted of our Chief Executive Officer, our Chief Financial Officer, our three other most highly compensated executive officers, and one additional individual for whom disclosure would have been required but for the fact that such individual was not serving as an executive officer at December 31, 2015. The table specifically identifies the dollar value of compensation related to 2015, 2014 and 2013 paidsubject to such named executive officers inexcise tax and the form of:
Our named executive officers were not entitled to receive payments which would be characterized as “Bonus” payments for purposes of the Summary Compensation Table for 2015, 2014 and 2013.
Summary Compensation Table
Name and Principal Position | Year | Salary | Stock Awards(1) | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | |||||||||||||||||||||
Robert D. Davis Chief Executive Officer | 2015 | $ | 772,500 | $ | 2,640,816 | $ | 386,253 | $ | 289,688 | $ | 36,790 | $ | 4,126,047 | |||||||||||||||
2014 | $ | 750,000 | $ | 1,232,214 | $ | 543,156 | $ | 262,038 | $ | 27,643 | $ | 2,815,051 | ||||||||||||||||
2013 | $ | 469,035 | $ | 341,810 | $ | 133,908 | $ | 25,797 | $ | 25,182 | $ | 995,732 | ||||||||||||||||
Mitchell E. Fadel(4) President and Chief Operating Officer | 2015 | $ | 433,028 | $ | 1,492,098 | $ | 218,242 | $ | N/A | $ | 22,932 | $ | 2,166,300 | |||||||||||||||
2014 | $ | 642,057 | $ | 791,151 | $ | 348,736 | $ | 178,171 | $ | 30,068 | $ | 1,990,183 | ||||||||||||||||
2013 | $ | 623,356 | $ | 681,453 | $ | 266,854 | $ | 46,752 | $ | 40,527 | $ | 1,658,942 | ||||||||||||||||
Guy J. Constant | 2015 | $ | 491,720 | $ | 872,881 | $ | 129,683 | $ | 101,417 | $ | 14,483 | $ | 1,610,184 | |||||||||||||||
Executive Vice President – Chief Financial Officer | 2014 | $ | 475,000 | $ | 395,669 | $ | 63,300 | $ | 52,701 | $ | 9,877 | $ | 996,547 | |||||||||||||||
Christopher A. Korst Executive Vice President – CAO & General Counsel | 2015 | $ | 417,789 | $ | 485,665 | $ | 71,033 | $ | 78,336 | $ | 28,290 | $ | 1,081,113 | |||||||||||||||
2014 | $ | 405,620 | $ | 249,915 | $ | 76,630 | $ | 75,040 | $ | 24,813 | $ | 832,018 | ||||||||||||||||
2013 | $ | 393,806 | $ | 215,257 | $ | 84,327 | $ | 19,690 | $ | 28,214 | $ | 741,294 | ||||||||||||||||
Joel M. Mussat(5) | 2015 | $ | 370,800 | $ | 431,002 | $ | 63,038 | $ | 69,525 | $ | 24,695 | $ | 959,060 | |||||||||||||||
Executive Vice President – Chief Omnichannel Officer | 2014 | $ | 360,000 | $ | 221,810 | $ | 68,011 | $ | 66,600 | $ | 19,604 | $ | 736,025 | |||||||||||||||
Charles J. White Executive Vice President – Domestic RTO | 2015 | $ | 336,600 | $ | 390,885 | $ | 57,785 | $ | 90,882 | $ | 14,900 | $ | 891,052 | |||||||||||||||
All Other Compensation
The following table provides information regarding each component of compensation for 2015 included in the All Other Compensation column in the Summary Compensation Table above.
Name | Company Matching Contributions(1) | Value of Insurance Premiums(2) | Other(3) | Total | ||||||||||||
Robert D. Davis | $ | 20,613 | $ | 10,988 | $ | 5,189 | $ | 36,790 | ||||||||
Mitchell E. Fadel | $ | 12,399 | $ | 4,779 | $ | 5,754 | $ | 22,932 | ||||||||
Guy J. Constant | $ | 0 | $ | 9,525 | $ | 4,958 | $ | 14,483 | ||||||||
Christopher A. Korst | $ | 9,815 | $ | 9,448 | $ | 9,027 | $ | 28,290 | ||||||||
Joel M. Mussat | $ | 8,711 | $ | 9,396 | $ | 6,588 | $ | 24,695 | ||||||||
Charles J. White | $ | 8,128 | $ | 1,621 | $ | 5,151 | $ | 14,900 |
COMPENSATION DISCUSSION AND ANALYSIS
Grants of Plan-Based Awards
The table below sets forth information about plan-based awards granted to the named executive officers during 2015 under the 2015 annual cash incentive program and the 2006 Plan or the Equity Plan, as applicable.
Grant Date | Date of Compen- sation Committee | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) | All Other Option Awards: Number of Securities Underlying Options(4) | Exercise or Base Price of Option Award(5) | Closing Price on Grant Date | Grant Date Fair Value of Stock and Option Award | ||||||||||||||||||||||||||||||||||||||||||||
Name | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||||||||||||||||||||||||||||
Robert D. Davis | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive | N/A | 1/30/15 | $ | 154,500 | $ | 772,500 | $ | 1,545,000 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/06/15 | 1/30/15 | – | – | – | – | – | – | 13,179 | – | – | $ | 29.54 | $ | 386,276 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 43,904 | 87,808 | – | – | – | $ | 29.54 | $ | 1,276,289 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 26,357 | 52,714 | – | – | – | $ | 29.54 | $ | 695,561 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 13,179 | 26,358 | – | – | – | $ | 29.54 | $ | 282,690 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/06/15 | 1/30/15 | – | – | – | – | – | – | – | 41,984 | $ | 29.31 | $ | 29.54 | $ | 386,253 | ||||||||||||||||||||||||||||||||||||
Mitchell E. Fadel | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive | N/A | 1/30/15 | $ | 99,198 | $ | 495,989 | $ | 991,978 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/06/15 | 1/30/15 | – | – | – | – | – | – | 7,446 | – | – | $ | 29.54 | $ | 218,242 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 24,807 | 49,614 | – | – | – | $ | 29.54 | $ | 721,139 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 14,892 | 29,784 | – | – | – | $ | 29.54 | $ | 393,000 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 7,446 | 14,892 | – | – | – | $ | 29.54 | $ | 159,717 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/06/15 | 1/30/15 | – | – | – | – | – | – | – | 23,722 | $ | 29.31 | $ | 29.54 | $ | 218,242 | ||||||||||||||||||||||||||||||||||||
Guy J. Constant | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive | N/A | 1/30/15 | $ | 54,089 | $ | 270,446 | $ | 540,892 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/06/15 | 1/30/15 | – | – | – | – | – | – | 4,425 | – | – | $ | 29.54 | $ | 129,697 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 14,427 | 28,854 | – | – | – | $ | 29.54 | $ | 419,393 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 8,724 | 17,448 | – | – | – | $ | 29.54 | $ | 230,226 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 4,362 | 8,724 | – | – | – | $ | 29.54 | $ | 93,565 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/06/15 | 1/30/15 | – | – | – | – | – | – | – | 14,096 | $ | 29.31 | $ | 29.54 | $ | 129,683 | ||||||||||||||||||||||||||||||||||||
Christopher A. Korst | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive | N/A | 1/30/15 | $ | 41,779 | $ | 208,895 | $ | 417,790 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/06/15 | 1/30/15 | – | – | – | – | – | – | 2,424 | – | – | $ | 29.54 | $ | 71,047 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 8,074 | 16,148 | – | – | – | $ | 29.54 | $ | 234,711 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 4,847 | 9,694 | – | – | – | $ | 29.54 | $ | 127,912 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 2,424 | 4,848 | – | – | – | $ | 29.54 | $ | 51,995 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/06/15 | 1/30/15 | – | – | – | – | – | – | – | 7,721 | $ | 29.31 | $ | 29.54 | $ | 71,033 | ||||||||||||||||||||||||||||||||||||
Joel M. Mussat | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive | N/A | 1/30/15 | $ | 37,080 | $ | 185,400 | $ | 370,800 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/06/15 | 1/30/15 | – | – | – | – | – | – | 2,151 | – | – | $ | 29.54 | $ | 63,046 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 7,165 | 14,330 | – | – | – | $ | 29.54 | $ | 208,287 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 4,302 | 8,604 | – | – | – | $ | 29.54 | $ | 113,530 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 2,151 | 4,302 | – | – | – | $ | 29.54 | $ | 46,139 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/06/15 | 1/30/15 | – | – | – | – | – | – | – | 6,852 | $ | 29.31 | $ | 29.54 | $ | 63,038 |
COMPENSATION DISCUSSION AND ANALYSIS
Grants of Plan-Based Awards, cont.
Grant Date | Date of Compen- sation Committee | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) | All Other Option Awards: Number of Securities Underlying Options(4) | Exercise or Base Price of Option Award(5) | Closing Price on Grant Date | Grant Date Fair Value of Stock and Option Award | ||||||||||||||||||||||||||||||||||||||||||||
Name | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||||||||||||||||||||||||||||
Charles J. White | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive | N/A | 1/30/15 | $ | 33,660 | $ | 168,300 | $ | 336,600 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Restricted Stock Units | 2/06/15 | 1/30/15 | – | – | – | – | – | – | 1,972 | – | – | $ | 29.54 | $ | 57,799 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 6,472 | 12,944 | – | – | – | $ | 29.54 | $ | 188,141 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 3,905 | 7,810 | – | – | – | $ | 29.54 | $ | 103,053 | |||||||||||||||||||||||||||||||||||||
Performance Stock Units | 2/06/15 | 1/30/15 | – | – | – | 0 | 1,953 | 3,906 | – | – | – | $ | 29.54 | $ | 41,892 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/06/15 | 1/30/15 | – | – | – | – | – | – | – | 6,281 | $ | 29.31 | $ | 29.54 | $ | 57,785 |
Outstanding Equity Awards at Fiscal Year End
The following table provides information regarding stock options and restricted stock units held by the named executive officers that were outstanding at December 31, 2015.
Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities Underlying Unexercised Options - Exercisable | Number of Securities Underlying Unexercised Options - Unexercisable | Option Exercise Price | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) | |||||||||||||||||||
Robert D. Davis | 3,465 | $ | 28.81 | 1/31/2017 | 3,372 | (8) | $ | 50,479 | ||||||||||||||||
10,440 | $ | 15.26 | 1/30/2018 | 14,983 | (9) | $ | 224,296 | |||||||||||||||||
10,949 | $ | 15.37 | 1/30/2019 | 13,179 | (10) | $ | 197,290 | |||||||||||||||||
7,555 | $ | 19.70 | 1/29/2020 | 7,194 | (11) | $ | 107,694 | |||||||||||||||||
8,311 | $ | 29.91 | 1/31/2021 | 39,953 | (12) | $ | 598,096 | |||||||||||||||||
8,641 | 2,880 | (2) | $ | 37.19 | 1/31/2022 | 43,904 | (13) | $ | 657,243 | |||||||||||||||
7,388 | 7,388 | (3) | $ | 34.77 | 1/31/2023 | 26,357 | (14) | $ | 394,564 | |||||||||||||||
17,589 | 52,768 | (4) | $ | 25.03 | 1/31/2024 | 13,179 | (15) | $ | 197,290 | |||||||||||||||
41,984 | (5) | $ | 29.31 | 2/6/2025 | ||||||||||||||||||||
Mitchell E. Fadel | 10,000 | $ | 32.28 | 1/3/2021 | 6,723 | (8) | $ | 100,643 | ||||||||||||||||
14,231 | $ | 29.91 | 1/31/2021 | 9,620 | (9) | $ | 144,011 | |||||||||||||||||
14,634 | 4,878 | (2) | $ | 37.19 | 1/31/2022 | 7,446 | (10) | $ | 111,467 | |||||||||||||||
14,729 | 14,728 | (3) | $ | 34.77 | 1/31/2023 | 14,342 | (11) | $ | 214,700 | |||||||||||||||
11,293 | 33,880 | (4) | $ | 25.03 | 1/31/2024 | 25,652 | (12) | $ | 384,010 | |||||||||||||||
23,722 | (5) | $ | 29.31 | 2/6/2025 | 24,807 | (13) | $ | 371,361 | ||||||||||||||||
14,892 | (14) | $ | 222,933 | |||||||||||||||||||||
7,446 | (15) | $ | 111,467 |
COMPENSATION DISCUSSION AND ANALYSIS
Outstanding Equity Awards at Fiscal Year End, cont.
Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities Underlying Unexercised Options - Exercisable | Number of Securities Underlying Unexercised Options - Unexercisable | Option Exercise Price | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) | |||||||||||||||||||
Guy J. Constant | 2,500 | 7,500 | (6) | $ | 28.68 | 7/1/2024 | 4,141 | (16) | $ | 61,991 | ||||||||||||||
14,096 | (5) | $ | 29.31 | 2/6/2025 | 4,425 | (10) | $ | 66,242 | ||||||||||||||||
11,042 | (12) | $ | 165,299 | |||||||||||||||||||||
14,427 | (13) | $ | 215,972 | |||||||||||||||||||||
8,724 | (14) | $ | 130,598 | |||||||||||||||||||||
4,362 | (15) | $ | 65,299 | |||||||||||||||||||||
Christopher A. Korst | 2,425 | $ | 28.81 | 1/31/2017 | 2,124 | (8) | $ | 31,796 | ||||||||||||||||
2,500 | $ | 14.52 | 1/2/2018 | 3,039 | (9) | $ | 45,494 | |||||||||||||||||
2,267 | $ | 15.26 | 1/30/2018 | 2,424 | (10) | $ | 36,287 | |||||||||||||||||
9,600 | $ | 15.37 | 1/30/2019 | 4,530 | (11) | $ | 67,814 | |||||||||||||||||
6,656 | $ | 19.70 | 1/29/2020 | 8,103 | (12) | $ | 121,302 | |||||||||||||||||
6,734 | $ | 29.91 | 1/31/2021 | 8,074 | (13) | $ | 120,868 | |||||||||||||||||
5,558 | 1,853 | (2) | $ | 37.19 | 1/31/2022 | 4,847 | (14) | $ | 72,560 | |||||||||||||||
4,653 | 4,652 | (3) | $ | 34.77 | 1/31/2023 | 2,424 | (15) | $ | 36,287 | |||||||||||||||
3,568 | 10,702 | (4) | $ | 25.03 | 1/31/2024 | |||||||||||||||||||
7,721 | (5) | $ | 29.31 | 2/6/2025 | ||||||||||||||||||||
Joel M. Mussat | 520 | $ | 28.81 | 1/31/2017 | 1,734 | (8) | $ | 25,958 | ||||||||||||||||
2,855 | $ | 29.91 | 1/31/2021 | 2,697 | (9) | $ | 40,374 | |||||||||||||||||
7,500 | $ | 27.45 | 10/3/2021 | 2,151 | (10) | $ | 32,200 | |||||||||||||||||
4,530 | 1,510 | (2) | $ | 37.19 | 1/31/2022 | 3,826 | (11) | $ | 57,275 | |||||||||||||||
3,800 | 3,799 | (3) | $ | 34.77 | 1/31/2023 | 7,192 | (12) | $ | 107,664 | |||||||||||||||
3,166 | 9,499 | (4) | $ | 25.03 | 1/31/2024 | 7,165 | (13) | $ | 107,260 | |||||||||||||||
6,852 | (5) | $ | 29.31 | 2/6/2025 | 4,302 | (14) | $ | 64,401 | ||||||||||||||||
2,151 | (15) | $ | 32,200 | |||||||||||||||||||||
Charles J. White | 389 | $ | 15.26 | 1/30/2018 | 1,284 | (8) | $ | 19,221 | ||||||||||||||||
1,395 | $ | 15.37 | 1/30/2019 | 2,473 | (9) | $ | 37,021 | |||||||||||||||||
1,915 | $ | 19.70 | 1/29/2020 | 1,972 | (10) | $ | 29,521 | |||||||||||||||||
2,492 | $ | 29.91 | 1/31/2021 | 2,739 | (11) | $ | 41,003 | |||||||||||||||||
3,322 | 1,107 | (2) | $ | 37.19 | 1/31/2022 | 6,593 | (12) | $ | 98,697 | |||||||||||||||
2,813 | 2,813 | (3) | $ | 34.77 | 1/31/2023 | 6,472 | (13) | $ | 96,886 | |||||||||||||||
2,500 | 7,500 | (7) | $ | 33.34 | 1/2/2024 | 3,905 | (14) | $ | 58,458 | |||||||||||||||
2,902 | 8,707 | (4) | $ | 25.03 | 1/31/2024 | 1,953 | (15) | $ | 29,236 | |||||||||||||||
6,281 | (5) | $ | 29.31 | 2/6/2025 |
COMPENSATION DISCUSSION AND ANALYSIS
Option Exercises and Stock Vested
The following table reflects certain information with respect to options exercised by our named executive officers during the 2015 fiscal year, as well as applicable stock awards that vested, during the 2015 fiscal year:
Option Awards | Stock Awards | |||||||||||||||
Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | |||||||||||||
Robert D. Davis | – | – | 3,003 | $ | 102,943 | |||||||||||
Mitchell E. Fadel | – | – | 5,085 | $ | 174,314 | |||||||||||
Guy J. Constant | – | – | – | – | ||||||||||||
Christopher A. Korst | – | – | 1,931 | $ | 66,195 | |||||||||||
Joel M. Mussat | – | – | 1,574 | $ | 53,957 | |||||||||||
Charles J. White | – | – | 1,154 | $ | 39,559 |
Nonqualified Deferred Compensation
The Rent-A-Center, Inc. Deferred Compensation Plan
contributions to the Deferred Compensation Plan, which arealso subject to a three-year graded vesting schedule based onLoyalty and Confidentiality Agreement which provides non-competition and non-solicitation provisions for the participant’sbenefit of the Company that remain in effect during the period of employment and an additional period of two years thereafter.
COMPENSATION DISCUSSION AND ANALYSIS
The following table provides information for the named executive officers regarding contributions, earnings and balances for our Deferred Compensation Plan.
Name | Executive in Last FY | Registrant in Last FY(2) | Aggregate in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(3) | |||||||||||||||
Robert D. Davis | $ | 141,495 | $ | 20,613 | $ | (1,103 | ) | $ | 0 | $ | 829,509 | |||||||||
Mitchell E. Fadel | $ | 24,798 | $ | 12,399 | $ | (11 | ) | $ | 0 | $ | 197,957 | |||||||||
Guy J. Constant(1) | – | – | – | – | – | |||||||||||||||
Christopher A. Korst | $ | 49,072 | $ | 9,815 | $ | (580 | ) | $ | 0 | $ | 331,834 | |||||||||
Joel M. Mussat | $ | 73,786 | $ | 8,711 | $ | (9,237 | ) | $ | 0 | $ | 530,037 | |||||||||
Charles J. White | $ | 50,705 | $ | 8,128 | $ | (5,004 | ) | $ | 0 | $ | 315,683 |
Termination of Employment and Change-in-Control Arrangements
Severance Arrangements
We have entered intoin place executive transition agreements with each of our named executive officers.officers who are current executive officers other than Mr. Fadel, whose agreement is described above. Each executive transition agreement has substantially identicalsimilar terms and is intended to provide certain payments and benefits upon an involuntary termination of the named executive officer’s employment or the occurrence of certain other circumstances that may affect the named executive officer.
If payments would subject the named executive officer to excise tax under Section 4999 of the Code, or the Company would be denied a deduction under Section 280G of the Code, then the amounts otherwise payable to the named executive officer will be reduced by the minimum amount necessary to ensure the named executive officer will not be subject to such excise tax and the Company will not be denied any such deduction.
COMPENSATION DISCUSSION AND ANALYSIS
|
Awards RSUs
Pursuant to the 2006
Under the 2006 Plan and the Equity Plan, the term “exchange transaction” meansupon a merger (other than in which the holders of our common stock immediately prior thereto have the same proportionate ownership of common stock in the surviving corporation immediately thereafter), consolidation, acquisition or disposition of property or stock, separation, reorganization (other than a reincorporation or the creation of a holding company), liquidation of us or any other similar transaction or event so designated by our Board, as a result of which our stockholders receive cash, stock or other property in exchange for orqualifying termination in connection with their shares of our common stock.
Pursuant to stock compensation agreements under the 2006 Plan and the Equity Plan, if the individual’s employment with us is terminated because of death or disability, or there is a change in ownershipcontrol. If an award holder’s employment or other service is terminated by the Company or any successor entity thereto without “cause” or by the award holder for “good reason” (as each such term is defined in the applicable award agreement or an award holder’s executive transition agreement or employment agreement, if applicable) upon or within two (2) years after a “change in control” (as defined in the 2021 Plan), (1) each award granted to such award holder prior to such change in control will become fully vested (including the lapsing of us, then any unvested restricted stock units will vest onall restrictions and conditions) and, as applicable, exercisable as of the date of such termination of employment or immediately priorother service, and (2) any shares deliverable pursuant to the consummationstock units will be delivered promptly (but no later than fifteen (15) days) following such termination.
Under eachto constitute at least a majority of the stock compensation agreements,Board, provided that any person becoming a director subsequent to the term “changebeginning of such period, whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the Company’s proxy statement in ownership”which such person is definednamed as any transactiona nominee for director, without written objection to such nomination) will be an Incumbent Director; provided, however, that no individual initially elected or seriesnominated as a director of transactionsthe Company as a result of whichan actual or publicly threatened election contest with respect to directors or as a result of any oneother actual or publicly threatened solicitation of proxies by or on behalf of any person other than the Board will be deemed to be an Incumbent Director;
COMPENSATION DISCUSSION AND ANALYSIS
Potential Payments and Benefits Upon Termination
Without a Change in Control
The following table provides quantitative disclosure of the estimated payments that wouldthis clause (iv) will be made to our named executive officers under their employment agreement or severance agreements, as well as the amounts our named executive officers would receive upon the exercise of the equity and cash awards held by them on December 31, 2015, the last business day of our fiscal 2015, assuming that:
Name | Cash Severance Payout | Continuation of Medical Benefits | Acceleration and Continuation of Outstanding Awards | Total Termination Benefits | ||||||||||||
Robert D. Davis | ||||||||||||||||
Termination by Us without “Cause” | $ | 1,862,233 | $ | 20,525 | $ | 0 | $ | 1,882,758 | ||||||||
Termination by Us for “Cause” | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Termination by Us due to Mr. Davis’s Disability or death | $ | 289,688 | $ | 13,683 | $ | 2,426,951 | $ | 2,730,322 | ||||||||
Termination by Mr. Davis for Reason other than death or disability | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Mitchell E. Fadel | ||||||||||||||||
Termination by Us without “Cause” | $ | 1,451,100 | $ | 14,903 | $ | 0 | $ | 1,466,003 | ||||||||
Termination by Us for “Cause” | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Termination by Us due to Mr. Fadel’s Disability or death | $ | 185,996 | $ | 9,935 | $ | 1,660,592 | $ | 1,856,523 | ||||||||
Termination by Mr. Fadel for Reason other than death or disability | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Guy J. Constant | ||||||||||||||||
Termination by Us without “Cause” | $ | 954,586 | $ | 20,525 | $ | 0 | $ | 975,111 | ||||||||
Termination by Us for “Cause” | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Termination by Us due to Mr. Constant’s Disability or death | $ | 101,417 | $ | 13,683 | $ | 705,401 | $ | 820,501 | ||||||||
Termination by Mr. Constant for Reason other than death or disability | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Christopher A. Korst | ||||||||||||||||
Termination by Us without “Cause” | $ | 820,052 | $ | 20,525 | $ | 1,125 | $ | 841,702 | ||||||||
Termination by Us for “Cause” | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Termination by Us due to Mr. Korst’s Disability or death | $ | 78,336 | $ | 13,683 | $ | 533,533 | $ | 625,552 | ||||||||
Termination by Mr. Korst for Reason other than death or disability | $ | 0 | $ | 0 | $ | 1,125 | $ | 1,125 | ||||||||
Joel M. Mussat | ||||||||||||||||
Termination by Us without “Cause” | $ | 727,819 | $ | 20,525 | $ | 0 | $ | 748,344 | ||||||||
Termination by Us for “Cause” | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Termination by Us due to Mr. Mussat’s Disability or death | $ | 69,525 | $ | 13,683 | $ | 467,333 | $ | 550,541 | ||||||||
Termination by Mr. Mussat for Reason other than death or disability | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Charles J. White | ||||||||||||||||
Termination by Us without “Cause” | $ | 717,156 | $ | 0 | $ | 0 | $ | 717,156 | ||||||||
Termination by Us for “Cause” | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Termination by Us due to Mr. White’s Disability or death | $ | 90,882 | $ | 0 | $ | 410,043 | $ | 500,925 | ||||||||
Termination by Mr. White for Reason other than death or disability | $ | 0 | $ | 0 | $ | 0 | $ |
COMPENSATION DISCUSSION AND ANALYSIS
Potential Payments and Benefits Upon Termination
With a Change in Control
The following table provides quantitative disclosure of the estimated payments that would be made to our named executive officers under their employment agreement or severance agreements, as well as the amounts our named executive officers would receive upon the exercise of the equity and cash awards held by them on December 31, 2015, the last business day of our fiscal 2015, assuming that:
Name | Cash Severance Payout | Continuation of Medical Benefits | Acceleration and Continuation of Outstanding Awards | Total Termination Benefits | ||||||||||||
Robert D. Davis | ||||||||||||||||
Termination by Us without “Cause” or by Mr. Davis for “Good Reason” | $ | 2,386,414 | $ | 27,366 | $ | 2,426,951 | $ | 4,840,731 | ||||||||
Termination by Us due to Mr. Davis’s Disability or death | $ | 289,688 | $ | 13,683 | $ | 2,426,951 | $ | 2,730,322 | ||||||||
Termination by Us for “Cause” or by Mr. Davis without “Good Reason” | $ | 0 | $ | 0 | $ | 2,426,951 | $ | 2,426,951 | ||||||||
Mitchell E. Fadel | ||||||||||||||||
Termination by Us without “Cause” or by Mr. Fadel for “Good Reason” | $ | 1,872,801 | $ | 19,870 | $ | 1,660,592 | $ | 3,553,263 | ||||||||
Termination by Us due to Mr. Fadel’s Disability or death | $ | 185,996 | $ | 9,935 | $ | 1,660,592 | $ | 1,856,523 | ||||||||
Termination by Us for “Cause” or by Mr. Fadel without “Good Reason” | $ | 0 | $ | 0 | $ | 1,660,592 | $ | 1,660,592 | ||||||||
Guy J. Constant | ||||||||||||||||
Termination by Us without “Cause” or by Mr. Constant for “Good Reason” | $ | 1,238,975 | $ | 27,366 | $ | 705,401 | $ | 1,971,742 | ||||||||
Termination by Us due to Constant’s Disability or death | $ | 101,417 | $ | 13,683 | $ | 705,401 | $ | 820,501 | ||||||||
Termination by Us for “Cause” or by Mr. Constant without “Good Reason” | $ | 0 | $ | 0 | $ | 705,401 | $ | 705,401 | ||||||||
Christopher A. Korst | ||||||||||||||||
Termination by Us without “Cause” or by Mr. Korst for “Good Reason” | $ | 1,067,290 | $ | 27,366 | $ | 533,533 | $ | 1,628,189 | ||||||||
Termination by Us due to Mr. Korst’s Disability or death | $ | 78,336 | $ | 13,683 | $ | 533,533 | $ | 625,552 | ||||||||
Termination by Us for “Cause” or by Mr. Korst without “Good Reason” | $ | 0 | $ | 0 | $ | 533,533 | $ | 533,533 | ||||||||
Joel M. Mussat | ||||||||||||||||
Termination by Us without “Cause” or by Mr. Mussat for “Good Reason” | $ | 947,250 | $ | 27,366 | $ | 467,333 | $ | 1,441,949 | ||||||||
Termination by Us due to Mr. Mussat’s Disability or death | $ | 69,525 | $ | 13,683 | $ | 467,333 | $ | 550,541 | ||||||||
Termination by Us for “Cause” or by Mr. Mussat without “Good Reason” | $ | 0 | $ | 0 | $ | 467,333 | $ | 467,333 | ||||||||
Charles J. White | ||||||||||||||||
Termination by Us without “Cause” or by Mr. White for “Good Reason” | $ | 925,914 | $ | 0 | $ | 410,043 | $ | 1,335,957 | ||||||||
Termination by Us due to Mr. White’s Disability or death | $ | 90,882 | $ | 0 | $ | 410,043 | $ | 500,925 | ||||||||
Termination by Us for “Cause” or by Mr. White without “Good Reason” | $ | 0 | $ | 0 | $ | 410,043 | $ | 410,043 |
COMPENSATION DISCUSSION AND ANALYSIS
Potential Realizable Value of Outstanding Awards Upon a Change in Control Without Termination
Under our long-term incentive plans, in the event of a “change in control” of us or an “exchange transaction” involving us, the vesting of outstanding awards may be accelerated regardless of whether the employment of the holder is terminated in connection therewith. The following table provides quantitative disclosure of the potential realizable value of outstanding awards granted to our named executive officers pursuant to our long-term incentive plans assuming that:
Name | Potential Realizable Value(1) | |||
Robert D. Davis | $ | 2,426,951 | ||
Mitchell E. Fadel | $ | 1,660,592 | ||
Guy J. Constant | $ | 705,401 | ||
Christopher A. Korst | $ | 533,533 | ||
Joel M. Mussat | $ | 467,333 | ||
Charles J. White | $ | 410,043 |
Compensation Related Risk
The Compensation Committee believes that the design of our compensation programs, including our executive compensation program, does not encourage our executives or employees to take unnecessary and excessive risks and that the risks arising from these programs are not reasonably likely to have a material adverse effect on us. The Compensation Committee considered the following factors in making that determination:
| | Executive Positions | | | | Ownership Requirement | | |
| | Chief Executive Officer | | | | 5 times annual base salary | | |
| | Executive Vice President | | | | 3 times annual base salary | | |
Name and Principal Position | | | Year | | | Salary | | | Bonus | | | Stock Awards(1) | | | Option Awards(1) | | | Non-Equity Incentive Plan Compensation(2) | | | All Other Compensation(3) | | | Total | | ||||||||||||||||||||||||
Mitchell Fadel Chief Executive Officer | | | | | 2023 | | | | | $ | 1,100,000 | | | | | $ | — | | | | | $ | 6,502,656 | | | | | $ | — | | | | | $ | 2,138,400 | | | | | $ | 49,995 | | | | | $ | 9,791,051 | | |
| | | 2022 | | | | | $ | 1,100,000 | | | | | $ | — | | | | | $ | 5,116,846 | | | | | $ | — | | | | | $ | — | | | | | $ | 63,204 | | | | | $ | 6,280,050 | | | ||
| | | 2021 | | | | | $ | 1,078,846 | | | | | $ | — | | | | | $ | 9,296,543(8) | | | | | $ | — | | | | | $ | 1,900,800 | | | | | $ | 65,496 | | | | | $ | 12,341,685 | | | ||
Fahmi Karam(4)(5) Executive Vice President - Chief Financial Officer | | | | | 2023 | | | | | $ | 1,000,000 | | | | | $ | 500,000 | | | | | $ | 3,561,176 | | | | | $ | — | | | | | $ | 864,008 | | | | | $ | 41,947 | | | | | $ | 5,967,131 | | |
| | | 2022 | | | | | $ | 153,846 | | | | | $ | 500,000 | | | | | $ | 1,999,992 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,653,838 | | | ||
Anthony Blasquez Executive Vice President - Rent-A-Center | | | | | 2023 | | | | | $ | 444,554 | | | | | $ | — | | | | | $ | 897,446 | | | | | $ | — | | | | | $ | 388,800 | | | | | $ | 33,236 | | | | | $ | 1,764,036 | | |
| | | 2022 | | | | | $ | 422,931 | | | | | $ | — | | | | | $ | 477,942 | | | | | $ | — | | | | | $ | — | | | | | $ | 27,295 | | | | | $ | 928,168 | | | ||
| | | 2021 | | | | | $ | 397,308 | | | | | $ | — | | | | | $ | 751,418(8) | | | | | $ | — | | | | | $ | 288,640 | | | | | $ | 12,189 | | | | | $ | 1,449,555 | | | ||
Tyler Montrone(4)(6) Executive Vice President - Acima | | | | | 2023 | | | | | $ | 440,385 | | | | | $ | — | | | | | $ | 897,446 | | | | | $ | — | | | | | $ | 388,800 | | | | | $ | 35,504 | | | | | $ | 1,762,135 | | |
Sudeep Gautam(4)(6)(7) Executive Vice President - Chief Technology and Digital Officer | | | | | 2023 | | | | | $ | 424,039 | | | | | $ | 200,000 | | | | | $ | 576,933 | | | | | $ | — | | | | | $ | 583,200 | | | | | $ | 24,514 | | | | | $ | 1,808,686 | | |
| Name | | | Company Matching Contributions(1) | | | Value of Insurance Premiums(2) | | | Other(3) | | | Total | | ||||||||||||
| Mitchell Fadel | | | | $ | 9,335 | | | | | $ | 35,954 | | | | | $ | 4,706 | | | | | $ | 49,995 | | |
| Fahmi Karam | | | | $ | 11,827 | | | | | $ | 19,039 | | | | | $ | 11,081 | | | | | $ | 41,947 | | |
| Anthony Blasquez | | | | $ | 7,844 | | | | | $ | 21,848 | | | | | $ | 3,544 | | | | | $ | 33,236 | | |
| Tyler Montrone | | | | $ | 8,473 | | | | | $ | 22,008 | | | | | $ | 5,023 | | | | | $ | 35,504 | | |
| Sudeep Gautam | | | | $ | — | | | | | $ | 15,382 | | | | | $ | 9,132 | | | | | $ | 24,514 | | |
| Name | | | Grant Date | | | Committee Approval Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) | | | All Other Option Awards: Number of Securities Underlying Options | | | Exercise or Base Price of Option Awards | | | Closing Price on Grant Date | | | Grant Date Fair Value of Stock and Option Awards(4) | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mitchell Fadel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Incentive | | | | | — | | | | | | 2/9/2023 | | | | | $ | 148,500 | | | | | $ | 1,485,000 | | | | | $ | 2,970,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Restricted Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 51,082 | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 1,369,508 | | |
| Performance Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 0 | | | | | | 158,921 | | | | | | 317,842 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 5,133,148 | | |
| Fahmi Karam | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Incentive | | | | | — | | | | | | 2/9/2023 | | | | | $ | 60,000 | | | | | $ | 600,000 | | | | | $ | 1,200,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Restricted Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 27,975 | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 750,010 | | |
| Performance Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 0 | | | | | | 87,033 | | | | | | 174,066 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 2,811,166 | | |
| Anthony Blasquez | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Incentive | | | | | — | | | | | | 2/9/2023 | | | | | $ | 27,000 | | | | | $ | 270,000 | | | | | $ | 540,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Restricted Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,050 | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 189,011 | | |
| Performance Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 0 | | | | | | 21,933 | | | | | | 43,866 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 708,436 | | |
| Tyler Montrone | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Incentive | | | | | — | | | | | | 2/9/2023 | | | | | $ | 27,000 | | | | | $ | 270,000 | | | | | $ | 540,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Restricted Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,050 | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 189,011 | | |
| Performance Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 0 | | | | | | 21,933 | | | | | | 43,866 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 708,436 | | |
| Sudeep Gautam | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Incentive | | | | | — | | | | | | 2/9/2023 | | | | | $ | 40,500 | | | | | $ | 405,000 | | | | | $ | 810,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Restricted Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,532 | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 121,503 | | |
| Performance Stock Units | | | | | 2/24/2023 | | | | | | 2/9/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 0 | | | | | | 14,100 | | | | | | 28,200 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 26.78 | | | | | $ | 455,430 | | |
Name | | | OPTION AWARDS | | | STOCK AWARDS | | ||||||||||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options - Exercisable | | | Number of Securities Underlying Unexercised Options - Unexercisable | | | Option Exercise Price | | | Option Expiration Date | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) | | ||||||||||||||||||||
Mitchell Fadel | | | | | 80,197 | | | | | | — | | | | | $ | 8.22 | | | | | | 2/23/2028 | | | | | | 8,498(3) | | | | | $ | 288,677 | | |
| | | 75,027 | | | | | | — | | | | | $ | 20.87 | | | | | | 4/1/2029 | | | | | | 31,586(4) | | | | | $ | 1,072,976 | | | ||
| | | 90,743 | | | | | | 30,248(2) | | | | | $ | 24.77 | | | | | | 2/26/2030 | | | | | | 51,082(5) | | | | | $ | 1,735,256 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 77,768(6) | | | | | $ | 2,641,779 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 146,667(7) | | | | | $ | 4,982,278 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 158,921(8) | | | | | $ | 5,398,546 | | | ||
Fahmi Karam | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 62,716(9) | | | | | $ | 2,130,463 | | |
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 27,975(5) | | | | | $ | 950,311 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 87,033(8) | | | | | $ | 2,956,511 | | | ||
Anthony Blasquez | | | | | 3,739 | | | | | | 1,246(2) | | | | | $ | 24.77 | | | | | | 2/26/2030 | | | | | | 687(3) | | | | | $ | 23,337 | | |
| | | 7,500 | | | | | | 2,500(10) | | | | | $ | 26.62 | | | | | | 7/1/2030 | | | | | | 2,951(4) | | | | | $ | 100,245 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,050(5) | | | | | $ | 239,489 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,286(6) | | | | | $ | 213,535 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,700(7) | | | | | $ | 465,389 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,933(8) | | | | | $ | 745,064 | | | ||
Tyler Montrone | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 912(3) | | | | | $ | 30,981 | | |
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,391(4) | | | | | $ | 115,192 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,050(5) | | | | | $ | 239,489 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,348(6) | | | | | $ | 283,582 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,743(7) | | | | | $ | 534,790 | | | ||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,933(8) | | | | | $ | 745,064 | | | ||
Sudeep Gautam | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,532(5) | | | | | $ | 153,952 | | |
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,100(8) | | | | | $ | 478,977 | | |
| | | | Option Awards | | | Stock Awards | | ||||||||||||||||||
| | | | Number of Shares Acquired on Exercise | | | Value Realized on Exercise | | | Number of Shares Acquired on Vesting | | | Value Realized on Vesting | | ||||||||||||
| Mitchell Fadel | | | | | — | | | | | $ | — | | | | | | 124,321 | | | | | $ | 3,337,933 | | |
| Fahmi Karam | | | | | — | | | | | $ | — | | | | | | 31,357 | | | | | $ | 893,518 | | |
| Anthony Blasquez | | | | | 8,881 | | | | | $ | 180,255 | | | | | | 6,260 | | | | | $ | 167,294 | | |
| Tyler Montrone | | | | | — | | | | | $ | — | | | | | | 2,555 | | | | | $ | 66,975 | | |
| Sudeep Gautam | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | |
| Name | | | Executive Contributions in FY 2023(1) | | | Registrant Contributions in FY 2023(1)(2) | | | Aggregate Earnings in FY 2023 | | | Aggregate Withdrawals/ Distributions | | | Aggregate Balance at FYE 2023(3) | | |||||||||||||||
| Mitchell Fadel | | | | $ | 66,000 | | | | | $ | 635(4) | | | | | $ | 90,400 | | | | | $ | — | | | | | $ | 676,434 | | |
| Fahmi Karam | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| Anthony Blasquez | | | | $ | — | | | | | $ | — | | | | | $ | 1,844 | | | | | $ | — | | | | | $ | 7,137 | | |
| Tyler Montrone | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| Sudeep Gautam | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| Name | | | Cash Severance Payout | | | Continuation of Medical Benefits(1) | | | Acceleration of Outstanding Awards | | | Total Termination Benefits | | ||||||||||||
| Mitchell Fadel | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Fadel for “Good Reason” | | | | $ | 5,170,000 | | | | | $ | 30,418 | | | | | | — | | | | | $ | 5,200,418 | | |
| Termination by Us for “Cause” or by Mr. Fadel without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Fadel’s disability or death(2) | | | | | — | | | | | $ | 30,418 | | | | | $ | 10,881,178 | | | | | $ | 10,911,596 | | |
| Termination by Mr. Fadel for Reason other than disability, death or for “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Fahmi Karam | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Karam for “Good Reason” | | | | $ | 2,364,008 | | | | | $ | 35,048 | | | | | | — | | | | | $ | 2,399,056 | | |
| Termination by Us for “Cause” or by Mr. Karam without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Karam’s disability or death | | | | $ | 864,008 | | | | | $ | 23,365 | | | | | $ | 4,065,291 | | | | | $ | 4,952,664 | | |
| Termination by Mr. Karam for Reason other than disability or death or for “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Name | | | Cash Severance Payout | | | Continuation of Medical Benefits(1) | | | Acceleration of Outstanding Awards | | | Total Termination Benefits | | ||||||||||||
| Anthony Blasquez | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Blasquez for “Good Reason” | | | | $ | 1,280,280 | | | | | $ | 35,048 | | | | | | — | | | | | $ | 1,315,328 | | |
| Termination by Us for “Cause” or by Mr. Blasquez without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Blasquez’s disability or death | | | | $ | 388,800 | | | | | $ | 23,365 | | | | | $ | 1,135,128 | | | | | $ | 1,547,293 | | |
| Termination by Mr. Blasquez for Reason other than disability or death or for “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Tyler Montrone | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Montrone for “Good Reason” | | | | $ | 1,063,800 | | | | | $ | 35,048 | | | | | | — | | | | | $ | 1,098,848 | | |
| Termination by Us for “Cause” or by Mr. Montrone without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Montrone’s disability or death | | | | $ | 388,800 | | | | | $ | 23,365 | | | | | $ | 1,034,566 | | | | | $ | 1,446,731 | | |
| Termination by Mr. Montrone for Reason other than disability or death or for “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Sudeep Gautam | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Gautam for “Good Reason” | | | | $ | 1,258,200 | | | | | $ | 35,048 | | | | | | — | | | | | $ | 1,293,248 | | |
| Termination by Us for “Cause” or by Mr. Gautam without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Gautam’s disability or death | | | | $ | 583,200 | | | | | $ | 23,365 | | | | | $ | 313,451 | | | | | $ | 920,016 | | |
| Termination by Mr. Gautam for Reason other than disability or death or for “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Name | | | Cash Severance Payout | | | Continuation of Medical Benefits(1) | | | Acceleration of Outstanding Awards | | | Total Termination Benefits | | ||||||||||||
| Mitchell Fadel | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Fadel for “Good Reason” | | | | $ | 5,170,000 | | | | | $ | 30,418 | | | | | $ | 16,397,794 | | | | | $ | 21,598,212 | | |
| Termination by Us for “Cause” or by Mr. Fadel without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Fadel’s disability or death(2) | | | | | — | | | | | $ | 30,418 | | | | | $ | 16,397,794 | | | | | $ | 16,428,212 | | |
| Fahmi Karam | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Karam for “Good Reason” | | | | $ | 2,864,008 | | | | | $ | 46,731 | | | | | $ | 6,037,284 | | | | | $ | 8,948,023 | | |
| Termination by Us for “Cause” or by Mr. Karam without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Karam’s disability or death | | | | $ | 864,008 | | | | | $ | 46,731 | | | | | $ | 6,037,284 | | | | | $ | 6,948,023 | | |
| Anthony Blasquez | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Blasquez for “Good Reason” | | | | $ | 1,577,440 | | | | | $ | 46,731 | | | | | $ | 1,816,898 | | | | | $ | 3,441,069 | | |
| Termination by Us for “Cause” or by Mr. Blasquez without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Blasquez’s disability or death | | | | $ | 388,800 | | | | | $ | 46,731 | | | | | $ | 1,816,898 | | | | | $ | 2,252,429 | | |
| Tyler Montrone | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Montrone for “Good Reason” | | | | $ | 1,288,800 | | | | | $ | 46,731 | | | | | $ | 1,949,097 | | | | | $ | 3,284,628 | | |
| Termination by Us for “Cause” or by Mr. Montrone without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Montrone’s disability or death | | | | $ | 388,800 | | | | | $ | 46,731 | | | | | $ | 1,949,097 | | | | | $ | 2,384,628 | | |
| Sudeep Gautam | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Us without “Cause” or by Mr. Gautam for “Good Reason” | | | | $ | 1,483,200 | | | | | $ | 46,731 | | | | | $ | 632,929 | | | | | $ | 2,162,860 | | |
| Termination by Us for “Cause” or by Mr. Gautam without “Good Reason” | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Termination due to Mr. Gautam’s disability or death | | | | $ | 583,200 | | | | | $ | 46,731 | | | | | $ | 632,929 | | | | | $ | 1,262,860 | | |
Plan Category | Number of Securities to be issued upon exercise of outstanding options, warrants and rights(1) | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plan(2) | |||||||||
Equity compensation plans approved by security holders | 3,742,121 | $ | 30.33 | 3,072,949 | ||||||||
Equity compensation plans not approved by security holders | –0– | –0– | –0– | |||||||||
Total | 3,742,121 | $ | 30.33 | 3,072,949 |
| Plan Category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted-average exercise price of outstanding options, warrants and rights(1) | | | Number of securities remaining available for future issuance under equity compensation plan(2) | | |||||||||
| Equity compensation plans approved by security holders | | | | | 655,643 | | | | | $ | 22.36 | | | | | | 6,832,305 | | |
| Equity compensation plans not approved by security holders | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | | 655,643 | | | | | $ | 22.36 | | | | | | 6,832,305 | | |
| Year | | | CEO | | | Non-CEO NEOs | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income ($M) | | | Adjusted EBITDA(5) ($M) | | |||||||||||||||||||||||||||||||||
| Summary Compensation Table Total for CEO | | | Compensation Actually Paid to CEO(1) | | | Average Summary Compensation Table Total for non-CEO named executive officers(2) | | | Average Compensation Actually Paid to non-CEO named executive officers(3) | | | TSR | | | Proxy Peer Group TSR(4) | | |||||||||||||||||||||||||||||||||
| 2023 | | | | $ | 9,791,051 | | | | | $ | 15,601,868 | | | | | $ | 2,825,497 | | | | | $ | 3,893,968 | | | | | $ | 142 | | | | | $ | 163 | | | | | $ | (5) | | | | | $ | 474 | | |
| 2022(6) | | | | $ | 6,280,050 | | | | | $ | (3,792,985) | | | | | $ | 1,742,035 | | | | | $ | 128,413 | | | | | $ | 90 | | | | | $ | 145 | | | | | $ | 12 | | | | | $ | 459 | | |
| 2021 | | | | $ | 12,341,685 | | | | | $ | 25,616,911 | | | | | $ | 2,408,210 | | | | | $ | 2,962,970 | | | | | $ | 179 | | | | | $ | 177 | | | | | $ | 135 | | | | | $ | 643 | | |
| 2020 | | | | $ | 9,217,950 | | | | | $ | 14,829,388 | | | | | $ | 2,263,831 | | | | | $ | 3,512,231 | | | | | $ | 140 | | | | | $ | 119 | | | | | $ | 208 | | | | | $ | 344 | | |
| CEO: Mitch Fadel | | | 2023 | | | 2022 | | | 2021 | | | 2020 | | ||||||||||||
| Summary Compensation Table Total | | | | $ | 9,791,051 | | | | | $ | 6,280,050 | | | | | $ | 12,341,685 | | | | | $ | 9,217,950 | | |
| Less: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value of Stock Awards Granted in the Covered Year (measured at grant date) | | | | $ | 6,502,656 | | | | | $ | 5,116,846 | | | | | $ | 9,296,543 | | | | | $ | 5,712,605 | | |
| Fair Value of Awards Granted in Prior Year that were Forfeited during the Covered Year (measured at prior year-end) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Change in Pension Value | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Plus: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value of Unvested Awards Granted in the Covered Year (measured at year-end) | | | | $ | 9,387,302 | | | | | $ | 3,474,280 | | | | | $ | 5,474,111 | | | | | $ | 10,034,035 | | |
| Fair Value of Vested Awards Granted in the Covered Year (measured at Vesting Date) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Change in Fair Value of Unvested Awards Granted in Prior Years (measured at year-end) | | | | $ | 3,834,188 | | | | | $ | (11,440,516) | | | | | $ | 1,511,487 | | | | | $ | 1,914,269 | | |
| Change in Fair Value of Vested Awards Granted in Prior Years (measured at vesting date) | | | | $ | (908,017) | | | | | $ | 3,010,047 | | | | | $ | 15,586,171 | | | | | $ | (624,261) | | |
| Dividends Accrued on Unvested RSUs and PSUs in the Covered Year | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Pension Service Costs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Total Compensation Actually Paid | | | | $ | 15,601,868 | | | | | $ | (3,792,985) | | | | | $ | 25,616,911 | | | | | $ | 14,829,388 | | |
| Non-CEO NEOs (Average) | | | 2023 | | | 2022 | | | 2021 | | | 2020 | | ||||||||||||
| Summary Compensation Table Total | | | | $ | 2,825,497 | | | | | $ | 1,742,035 | | | | | $ | 2,408,210 | | | | | $ | 2,263,831 | | |
| Less: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value of Stock Awards Granted in the Covered Year (measured at grant date) | | | | $ | 1,483,250 | | | | | $ | 1,135,260 | | | | | $ | 1,481,514 | | | | | $ | 1,258,694 | | |
| Fair Value of Awards Granted in Prior Year that were Forfeited during the Covered Year (measured at prior year-end) | | | | $ | 0 | | | | | $ | 1,344,060 | | | | | $ | 0 | | | | | $ | 0 | | |
| Change in Pension Value | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Plus: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value of Unvested Awards Granted in the Covered Year (measured at year-end) | | | | $ | 2,141,235 | | | | | $ | 845,162 | | | | | $ | 872,364 | | | | | $ | 2,425,918 | | |
| Fair Value of Vested Awards Granted in the Covered Year (measured at Vesting Date) | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Change in Fair Value of Unvested Awards Granted in Prior Years (measured at year-end) | | | | $ | 365,842 | | | | | $ | (272,162) | | | | | $ | 318,723 | | | | | $ | 162,066 | | |
| Change in Fair Value of Vested Awards Granted in Prior Years (measured at vesting date) | | | | $ | 44,644 | | | | | $ | 292,698 | | | | | $ | 845,187 | | | | | $ | (80,890) | | |
| Dividends Accrued on Unvested RSUs and PSUs in the Covered Year | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Pension Service Costs | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
| Total Compensation Actually Paid | | | | $ | 3,893,968 | | | | | $ | 128,413 | | | | | $ | 2,962,970 | | | | | $ | 3,512,231 | | |
In accordance with Section 14A of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the 20162024 Annual Meeting of Stockholders:
Meeting:
The affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to be voted on the proposal at the meeting is required for approval of this advisory resolution.
We are asking stockholders
company in certain limited circumstances (the “Exculpation Amendment”). The purposeExculpation Amendment also simplifies the existing exculpation provision related to directors of the 2016 Plan is to foster our ability to attract, motivate and retain key personnel and enhance stockholder value through the use of certain equity and cash incentive compensation opportunities.
Any of our present or future directors, officers, employees, consultants and other personnel are eligible to participateCompany set forth in the 2016 Plan. Actual selection of any eligible individual to participate
in the 2016 Plan is within the sole discretionArticle SEVENTH of the Compensation Committee. If awards are madeCertificate of Incorporation by referring to the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (the “DGCL”) instead of specifying each instance where exculpation for directors is currently not available under the 2016 PlanDGCL. As such, the current exculpation protections available to the directors remain unchanged as they were under the 2006 Plan, the eligible individuals would consist of nine membersa result of the Board, 41 seniorExculpation Amendment. In addition, the Exculpation Amendment provides that if the DGCL is further amended to eliminate or limit the liability of officers and approximately 800 employees that are not senior officers.
Since our named executiveor directors, the liability of such officers and directors are eligible to receive awards under the 2016 Plan, they therefore have an interest in this proposal. On April 1, 2016, following the adoption of the 2016 Plan by the Board, the Compensation Committee granted employees, none of which are executive officers, an aggregate of 66,500 stock options out of the 6,500,000 shares requested, subjectwill be limited or eliminated to the approval of the 2016 Planfullest extent permitted by our stockholders. In the event that the 2016 Plan is not approved by
PROPOSAL FOUR: APPROVAL OF THE RENT-A-CENTER, INC. 2016 LONG-TERM INCENTIVE PLAN
our stockholders, these 66,500 stock options granted to such employees under the 2016 Plan will be immediately forfeited, rescinded and cancelled.
Upon approval by the stockholders, the 2016 Plan will become effective. Assuming the 2016 Plan is approved at the annual
stockholder meeting, unless terminated sooner by the Board, the 2016 Plan will terminate on March 9, 2026. The rights of any person with respect to an award made under the 2016 Plan that is outstanding at the time of its termination will not be affected solely by reason of the termination of the 2016 Plan.
Summary of the 2016 Plan
law, as so amended. The following description of the 2016 Plan is only a summary of certain provisions of the 2016 Planonly and does not contain all of the terms and conditions of the 2016 Plan. This summary is qualified in its entirety by reference to the full text of the 2016 Plan,Exculpation Amendment as shown in the resolution below and is set forth in Annex A hereto.
The 2016 Planamend our Certificate of Incorporation so that directors and certain senior officers will be administered by the Compensation Committee. The Compensation Committee will have the full power and authority to:
If approved, the 2016 Plan would authorize us to issue a total of 6,500,000 shares of Common Stock. All shares remaining available for grant under the 2006 Plan will be cancelled and no additional shares of Common Stock will be issued pursuant to the 2006 Plan. Any shares of Common Stock granted in connection with an award of stock options or stock appreciation rights will be counted against this limit as one share and any shares of Common Stock granted in connection with awards of restricted stock, restricted stock units, deferred stock or similar forms of stock awards other than stock options and stock appreciation rights will be counted against this limit as two shares of Common Stock for every one share of Common Stock granted in connection with such awards. No shares of Common Stock will be deemed to have been issued if (1) such shares covered by the unexercised portion of an option that terminates, expires, or is cancelled or settled in cash or (2) such shares are forfeited or subject to awards that are forfeited, canceled, terminated or settled in cash. In any calendar year, (1) no employee will be granted options and/or stock appreciation rights for more than 800,000 shares of Common Stock; (2) no employee will be granted performance-based equity awards under the 2016 Plan (other than options and stock appreciation rights), covering more than 800,000 shares of Common Stock; and (3) no employee will be granted performance-based cash awards for more than $5,000,000.
The 2016 Plan permits the granting of stock options at such times and upon such vesting and other conditions as determined by the Compensation Committee. The purchase price per share of
Common Stock covered by an option granted under the 2016 Plan may not be less than the fair market value per share on the grant date. The exercise price under an option which is intended to qualify as an “incentive stock option” (within the meaning of Section 422 of the Internal Revenue Code of 1986 (the “Code”)) granted to an employee who is a 10% stockholder within the meaning of Section 422(b)(6) of the Code, may not be less than 110% of the fair market value per share on the date the option is granted.
Subject to earlier termination according to its terms, an option granted under the 2016 Plan will expire on the tenth anniversary of its grant (or the fifth anniversary of its grant in the case of an option which is intended to qualify as an “incentive stock option” granted to an employee who is a 10% stockholder).
No option granted under the 2016 Plan shall be assignable or transferable except upon the optionee’s death to a beneficiary designated in a manner so prescribed or approved by the Compensation Committee or, if no designated beneficiary shall survive the optionee, pursuant to the optionee’s will or by the laws of descent and distribution. During an optionee’s lifetime, options may be exercised only by the optionee or the optionee’s guardian or legal representative. Notwithstanding the foregoing, the Compensation Committee may permit the inter vivos transfer of an optionee’s options (other than options designated as “incentive stock options”) by gift to any “family member,” on such terms and conditions as the Compensation Committee may deem appropriate.
An option granted under the 2016 Plan may be exercised by transmitting to the Secretary (or such other person designated by the Compensation Committee) a written notice identifying the option being exercised and specifying the number of shares being purchased, together with payment of the exercise price and the amount of the applicable tax withholding obligations (unless other arrangements are made for the payment of such exercise and/or the satisfaction of such withholding obligations). The Compensation Committee may permit the exercise and withholding obligation to be paid in whole or in part in cash or by check, by means of a cashless exercise procedurecare solely to the extent permitted by law,the updated Section 102(b)(7).
its ongoing evaluation of our corporate governance practices, the Board has determined that amending the current exculpation provision to align with the updated Section 102(b)(7) strikes the appropriate balance between stockholders’ interest in officer accountability and the need for directors and officers to have appropriate protections from personal liability. The 2016 Plan permits the granting of restricted stock, deferred stock, stock units, stock bonus and other stock awards at such times and upon such vesting and other conditions and restrictions as determined by the Compensation Committee.
PROPOSAL FOUR: APPROVAL OF THE RENT-A-CENTER, INC. 2016 LONG-TERM INCENTIVE PLAN
Unless otherwise determined by the Compensation Committee, (1) the holder of a stock award will not be entitledBoard believes it is important to receive dividend payments (or in the case of an award of stock units, dividend equivalent payments) with respectprovide protection to officers to the shares covered by the award, and (2) the holder of shares of restricted stock may exercise voting rights pertaining to such shares. Under the 2016 Plan, the Compensation Committee may impose vesting and deferral conditions on the payment of dividends, corresponding to the vesting and deferral conditions applicable to the corresponding stock award.
Except asextent permitted by the Compensation Committee in connectionDGCL to attract and retain key executive talent. This protection has long been afforded to directors, and Delaware law now allows certain protections to be extended to certain senior officers. Adopting the Exculpation Amendment that aligns with transfers at death or pursuantamended Section 102(b)(7) of the DGCL could prevent protracted litigation that distracts from our primary objective of creating stockholder value over the long term. In addition, as other companies have updated their certificates of incorporation to inter vivos gifts, no outstanding stock awardalign with amended Section 102(b)(7), and no shares of stock covered by an outstanding stock awardwe expect other companies will continue to do so, our ability to attract and retain highly qualified officer candidates may be sold, assigned, transferred, disposedadversely impacted if we do not similarly do so. For these reasons, the Board believes that the proposal to amend the Certificate of pledged or otherwise hypothecated other than to us in accordance with the terms of the award or the 2016 Plan.
Under the 2016 Plan, the Compensation Committee may grant stock appreciation rights, dividend equivalent payment rights, phantom shares, phantom stock units, bonus shares and other forms of equity-based awards to eligible persons, subject to such terms and conditionsIncorporation as it may establish; provided, however, that no dividend or dividend equivalent payment rights shall be attributable to awards of stock appreciation rights or stock options. The base price for a stock appreciation right granted under the 2016 Plan may not be less than the fair market value per share of the stock covered by the award at the time itdescribed herein is granted. Unless terminated earlier in accordance with its terms, a stock appreciation right will automatically expire on the tenth anniversary of the date it is granted. Such awards may entail the transfer of shares of Common Stock to a participant or the payment in cash or other property determined with reference to shares of Common Stock.
Under the 2016 Plan, the Compensation Committee may grant awards in cash with the amount of eventual payment subject to future service and such other restrictions and conditions as may be established by the Compensation Committee and set forth in the underlying agreement, including, but not limited to, continuous service withbest interests of the Company and its subsidiaries, achievementstockholders, and has unanimously adopted a resolution to amend the Certificate of specific business objectives, increasesIncorporation.
The Compensation Committee may condition the grant, exercise, vestingCorporation shall not be liable to the Corporation or settlementits stockholders for monetary damages for breach of equity-based awardsfiduciary duty as wella director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the grant, vestingsame exists or payment of annualmay hereafter be amended. Any amendment, modification or long-term cash incentive awards made under the 2016 Plan on the achievement of specified performance goals over any period specified by the Compensation Committee, but any dividend equivalents payable with respect to a performance-based equity award will either be deferred and held in escrow until the achievement of the applicable performance goal or automatically deemed to be reinvested in additional performance-based equity awards subject to the achievement of the applicable performance goal. Any such performance goal must be (1) objective, (2) prescribed in writing by the Compensation Committee before the applicable performance period or at such later date when fulfillment is substantially uncertain not later than 90 days after the commencement of the performance period and in any event
before completion of 25% of the performance period, and (3) based on any one or more of the following business criteria:
At the expiration of the applicable performance period, the Compensation Committeesentence shall determine the extent to which the relevant performance goals are achieved and the extent to which each performance-based award has been earned. The Compensation Committee may not exercise its discretion to increase the amount or value of such an award that would otherwise be payable in accordance with its terms.
Awards of stock options, stock appreciation rights, restricted stock units, restricted stock and dividend equivalent rights will not vest or be exercisable (in the case of stock options and stock appreciation rights) earlier than the date that is one year following the date the award is made. The Compensation Committee, however, may provide that such restrictions may lapse or be waived upon the recipient’s death, disability or termination of service, or in connection with an “exchange transaction” (defined below). Also, awards of stock options, stock appreciation rights, restricted stock units and restricted stock that result in the issuance of an aggregate of up to 5% of the shares of Common Stock authorized under the 2016 Plan, as adjusted as described above and below, may be granted without respect to such minimum vesting restriction. Finally, awards of stock options, stock appreciation rights, restricted stock units and restricted stock may be granted to non-employee directors without respect to such minimum vesting provision.
The Compensation Committee may not, without the approval of our stockholders, reprice any previously granted “underwater” stock option or stock appreciation right by (1) amending or modifying the terms of the stock option or stock appreciation
PROPOSAL FOUR: APPROVAL OF THE RENT-A-CENTER, INC. 2016 LONG-TERM INCENTIVE PLAN
right to lower the exercise price or by (2) canceling the underwater stock option or stock appreciation right and granting either replacement stock options or stock appreciation rights having a lower exercise price, granting restricted stock, restricted stock units, or other stock-based award in exchange for such underwater stock options or stock appreciation rights, or cancelling or repurchasing the underwater stock options or stock appreciation rights for cash or other securities. A stock option or stock appreciation right will be deemed to be “underwater” at any time when the fair market value of the shares of Common Stock covered by such award is less than the exercise price of the award.
In the event of a split-up or consolidation of shares or any like capital adjustment, the payment of any stock dividend, and/or to reflect a change in the character or class of shares covered by the 2016 Plan arising from a readjustment or recapitalization of our capital stock, the share authorization limits under the 2016 Plan will be automatically adjusted proportionately, and the shares then subject to each award will automatically be adjusted to reflect any such resulting increase or decrease in the number of issued shares of Common Stock without any change in the aggregate purchase price for such award.
Under the 2016 Plan, in the event of a:
• consolidation,
• acquisition or disposition of property or stock,
• separation,
all optionees will be permitted to exercise their outstanding options immediately prior to such exchange transaction, and any outstanding options not exercised before the exchange transaction shall terminate. However, if, as part of an exchange transaction, our stockholders receive capital stock of another corporation (“exchange stock”) in exchange for their shares of Common Stock, and if the Board so directs, then all outstanding options shall be converted in whole or in part into options to purchase shares of exchange stock. The Board may accelerate vesting of non-vested stock awards and other awards, provide for cash settlement of options and/or make such other adjustments to the terms of any outstanding award as it deems appropriate in the context of an exchange transaction, taking into account, as applicable, the manner in which outstanding options are being treated (subject to the prohibition on repricing without stockholder approval described above).
The Board may at any time amend the 2016 Plan, or the terms of any agreement or award made under the 2016 Plan, or terminate the 2016 Plan, but such amendment or termination may not adversely affect any outstanding award without the consentright or protection of a director or officer of the affected participant. In addition, the Board may not, without theCorporation hereunder in respect of any act or omission occurring prior approval of the stockholders, make any amendment which would (1) increase the aggregate number of shares of Common Stock issuable under the 2016 Plan, (2) increase the maximum number of shares with respect to which options, stock appreciation rights or other equity awards may be granted to any employee in any calendar year, or (3) modify the class of persons eligible to receive awards.
Federal Income Tax Consequences of Awards under the 2016 Plan
The grant of an option or stock appreciation right, or SAR, is not a taxable event for the participant or us. In general, at the time an option is exercised, a participant will recognize ordinary income equal to the difference between the exercise price and the fair market value of the shares. At the time an SAR is exercised, a participant will recognize ordinary income equal to the fair market value of the shares received. We will be entitled to claim a deduction equal to the amount of ordinary income recognized by a participant upon the exercise of an optionsuch amendment, modification or SAR. Upon a later sale of the shares, a participant will realize capital gain or loss equal to the difference between the selling price and the fair market value of the shares on the date the option or SAR is exercised.
We may grant options under the 2016 Plan that qualify for special tax treatment which is different than what is described above. The IRS calls these options “incentive stock options,repeal.” or ISOs. No taxable income is recognized when a participant exercises an ISO,
although alternative minimum tax may apply. If shares acquired upon the exercise of an ISO are held by a participant for at least one year from the date the ISO is exercised and two years from the date the ISO is granted, any gain or loss realized on a sale of the shares will be treated as long-term capital gain or loss. However, if a participant sells the shares before the minimum holding periods are met, the gain realized on the sale will be taxable as ordinary income to the extent of the difference between the exercise price paid for the shares and the fair market value of the shares on the date the ISO was exercised. The balance of the gain, if any, will be treated as capital gain. We will be entitled to claim a deduction equal to any ordinary income recognized by a participant upon the sale of shares acquired by the exercise of an ISO.
In general, participants will recognize ordinary income with respect to other types of awards under the 2016 Plan at the time those awards are settled with vested shares or cash, equal to the
PROPOSAL FOUR: APPROVAL OF THE RENT-A-CENTER, INC. 2016 LONG-TERM INCENTIVE PLAN
amount of cash or the then fair market value of the shares. Thus, for example, if we grant a restricted stock award to a participant under the 2016 Plan, then, unless the participant makes a special tax election to recognize income as of the date of the award, the participant will recognize ordinary income equal to the value of the shares as and when they become vested under the terms of the award. Similarly, if we make a deferred stock award, a participant will recognize ordinary income equal to the fair market value of the shares as and when the shares are delivered to the participant in accordance with the terms of the award. We will be entitled to claim a tax deduction equal to the ordinary income recognized by a participant.
Compensation that qualifies as “performance-based” compensation is excluded from the $1 million deductibility cap of Code Section 162(m), and therefore remains fully deductible by the employer. We believe that compensation attributable to options and SARs granted under the 2016 Plan, as well as compensation under certain other awards which is conditioned upon achievement of performance goals set forth in the 2016 Plan, will be able to qualify as “performance-based” compensation and, as such, would not be subject to the deduction limitations of Section 162(m). A number of requirements must be met in order for particular compensation to so qualify, however, so there can be no assurance that such compensation under the 2016 Plan will be fully deductible under all circumstances. In addition, compensation earned under certain types of awards permitted by the 2016 Plan, including, for example, restricted stock awards and deferred stock awards that
are not subject to performance-based vesting conditions, generally will not qualify for the 162(m) “performance based” compensation exemption and will be taken into account in applying the annual deduction limitation.
The 2016 Plan is intended to comply with Section 409A of the Code to the maximum extent permitted under the Code. Any payments described in the 2016 Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code will not be treated as deferred compensation unless required otherwise under applicable law. To the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the 2016 Plan during the six month period immediately following the award recipient’s “separation from service” as defined in Section 409A of the Code will instead be paid on the first payroll date after the six month anniversary of the recipient’s separation from service (or the recipient’s death, if earlier).
This summary provides only a general description of the application of Federal income tax laws to certain awards under the 2016 Plan. This discussion is intended for the information of stockholders considering how to vote at the annual meeting and not as tax guidance to participants in the 2016 Plan. The summary does not address the effects of gift, estate, excise and other federal taxes or taxes imposed under state, local, or foreign tax laws.
New Plan Benefits
On April 1, 2016, the Compensation Committee granted stock options to employees, none of which are executive officers, under the 2016 Plan, as shown in the table below, subject to
stockholder approval of the 2016 Plan. If our stockholders do not approve the 2016 Plan, these awards will be immediately forfeited, rescinded and cancelled.
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As noted above, participants in the 2016 Plan will generally be selected in the discretion of the Compensation Committee from among our employees, directors and consultants. Thus, except as set forth in the table above, the benefits or amounts that will be received by or allocated to any individual or group generally are
not determinable at this time. Please see the 2015 Grants of Plan-Based Awards table above for information about awards made to our named executive officers in the last year, including awards made under the 2006 Plan.
Required Vote
The affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to be voted on the proposal at the meeting is required for approval of the 2016 Plan.
Our Board of Directors recommends that you vote “FOR” approval of the 2016 Plan.
Mr. Roberts, Mr. Gade,
has or had any relationship with us in 2015 requiring disclosure pursuant to SEC rules. In addition, during 2015, nonethe Miscellaneous Amendments will also correct a typo in Article FOURTH, Section (1), paragraph (7) the Certificate of Incorporation.
Policy on Review and Approval of Transactions
with Related Persons
The Board has adopted a written statement of policy and procedures for the identification and review of transactions involving us and “related persons” (ourour directors and executive officers stockholders owning five percent or greateras a group, and each of our known holders of 5% of our common stock. Unless otherwise indicated and subject to community property laws where applicable, we believe that each of the stockholders named in the table below beneficially own the shares indicated as beneficially owned. Information in the table is as of April 9, 2024, unless otherwise indicated. Under applicable SEC rules, the definition of beneficial ownership for purposes of this table includes shares over which a person has sole or shared voting power, or sole or shared power to invest or dispose of the shares, whether or not a person has any economic interest in the shares, and also includes shares for which the person has the right to acquire beneficial ownership within 60 days of April 9, 2024.
| Name of Beneficial Owner | | | Amount and Nature of Beneficial Ownership | | | Percent of Common Stock | | ||||||
| Jeffrey Brown | | | | | 188,794(1) | | | | | | * | | |
| Mitchell Fadel | | | | | 910,015(2) | | | | | | 1.7% | | |
| Anthony Blasquez | | | | | 62,176 | | | | | | * | | |
| Fahmi Karam | | | | | 30,757 | | | | | | * | | |
| Molly Langenstein | | | | | 4,335(3) | | | | | | * | | |
| Harold Lewis | | | | | 22,591(3) | | | | | | * | | |
| Glenn Marino | | | | | 33,984(3) | | | | | | * | | |
| Carol McFate | | | | | 33,365(3) | | | | | | * | | |
| Tyler Montrone | | | | | 43,488 | | | | | | * | | |
| Sudeep Gautam | | | | | 1,148 | | | | | | * | | |
| Jen You | | | | | 19,806(3) | | | | | | * | | |
| All executive officers and directors as a group (14 total) | | | | | 1,456,385 | | | | | | 2.7% | | |
| BlackRock, Inc. | | | | | 7,994,748(4) | | | | | | 14.6%(4) | | |
| FMR LLC | | | | | 6,849,791(5) | | | | | | 12.6%(5) | | |
| The Vanguard Group | | | | | 5,796,072(6) | | | | | | 10.6%(6) | | |
| Aaron Allred | | | | | 5,102,682(7) | | | | | | 9.4%(7) | | |
| Name | | | Common Stock Underlying Restricted Stock Units | | | Common Stock Underlying Performance Stock Units | | | Shares Issuable upon Exercise of Options | | |||||||||
| Mitchell Fadel | | | | | — | | | | | | — | | | | | | 276,215 | | |
| Fahmi Karam | | | | | — | | | | | | — | | | | | | — | | |
| Anthony Blasquez | | | | | — | | | | | | — | | | | | | — | | |
| Tyler Montrone | | | | | — | | | | | | — | | | | | | — | | |
| Sudeep Gautam | | | | | — | | | | | | — | | | | | | — | | |
OurSEC require our directors and executiveSection 16 officers, and persons who own more than 10% of a registered class of our equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. These persons are required by SEC regulations to provide notice to our legal departmentfurnish us with copies of the facts and circumstances of any proposed transaction involving amounts greater than $50,000 involving them or their immediate family membersall Section 16(a) reports that may be deemed to be a related person transaction. Our legal department will then assess whether the proposed related person transaction requires approval pursuant to the policy and procedures. If our
legal department determines that any proposed, ongoing or completed transaction involves an amount in excess of $100,000 and is a related person transaction, our Chief Executive Officer and the Chairman of the Nominating and Corporate Governance Committee must be notified (unless it involves our Chief Executive Officer, in which case the Chairman of the Nominating and Corporate Governance Committee must be notified), for consideration at the next regularly scheduled meeting of the Nominating and Corporate Governance Committee. In certain instances, the Chairman of the Nominating and Corporate Governance Committee may pre-approve or ratify, as applicable, any related person transaction in which the aggregate amount involved is, or is expected to be, less than $500,000. The Nominating and Corporate Governance Committee or its Chairman, as applicable, will approve or ratify, as applicable, only those related person transactions that are in, or are not inconsistent with, our best interests and those of our stockholders.
Intrust Bank Relationship
J.V. Lentell, one of our directors, serves as Vice Chairman of the Board of Directors of Intrust Bank, N.A., one of our lenders. Intrust Bank, N.A. is a $15 million participant (total commitment) in our senior credit facility. We also maintain operational checking and other accounts, including a $20 million revolving line of credit, with Intrust Bank, N.A. In addition, Intrust Bank, N.A. serves as trustee of our 401(k) and deferred compensation plans. During
2015, we paid Intrust a total of $1.3 million in fees in connection with banking services provided by them, of which $0.9 million was for administration fees and trustee fees for our 401(k) and deferred compensation plans. The total fees paid to Intrust during 2015 constituted less than 1% of Intrust’s annual revenue for the year ended December 31, 2015.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
they file. Based on a review of reports filed by our directors, executive officers and beneficial owners of more than 10% of our shares of common stock,those persons, and upon representations from those persons, we believe that all SEC stock ownership reports required to be filed by those reporting persons during and with respect to 20152023 were timely made.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent | ||||||
Mark E. Speese | 1,279,493 | (1) | 2.4 | |||||
Robert D. Davis | 168,146 | (2) | * | |||||
Michael J. Gade | 36,811 | (3) | * | |||||
Rishi Garg | – | |||||||
Jeffery M. Jackson | 37,111 | (4) | * | |||||
J.V. Lentell | 49,411 | (5) | * | |||||
Steven L. Pepper | 14,085 | (6) | * | |||||
Leonard H. Roberts | 39,911 | (7) | * | |||||
Paula Stern, Ph.D. | 24,411 | (8) | * | |||||
Guy J. Constant | 16,024 | (9) | ||||||
Mark E. Denman | 17,593 | (10) | * | |||||
Fred E. Herman | 29,216 | (11) | * | |||||
Christopher A. Korst | 65,877 | (12) | * | |||||
Charles J. White | 35,606 | (13) | * | |||||
BlackRock, Inc. | 4,608,490 | (14) | 8.7 | |||||
Classic Fund Management Aktiengesellschaft | 2,655,085 | (15) | 5.0 | |||||
Dimensional Fund Advisors LP | 4,474,707 | (16) | 8.4 | |||||
FMR LLC | 3,900,000 | (17) | 7.3 | |||||
The Vanguard Group | 3,512,270 | (18) | 6.6 | |||||
All named executive officers and directors as a group (12 total) | 1,813,695 | 3.4 |
Submission of Stockholder Proposals
later than December 19, 2016. Proposals24, 2024, and such proposals must otherwise comply with Rule 14a-8 under the Exchange Act.
INFORMATION
1.Purpose. The purpose of the plan is
2.Administration.
(a)Committee. The plan will be administered by the compensation committee of the Company’s board of directors (the “Committee”).
(b)Responsibility and Authority of Committee. Subject to the provisions of the plan, the Committee, acting in its discretion, will have responsibility and full power and authority to (1) select the persons to whom awards will be made, (2) prescribe the terms and conditions of each award and make amendments thereto, (3) construe, interpret and apply the provisions of the plan and of any agreement or other document governing the terms of an award made under the plan, and (4) make any and all determinations and take any and all other actions as it deems necessary or desirable in order to carry out the terms of the plan. Notwithstanding the foregoing, the Company’s board of directors will have sole responsibility and authority for matters relating to the grant and administration of awards to non-employee directors, and reference herein to the Committee with respect to any such matters will be deemed to refer to the board of directors. In exercising its responsibilities under the plan, the Committee may obtain at the Company’s expense such advice, guidance and other assistance from outside compensation consultants and other professional advisers as it deems appropriate.
(c)Delegation of Authority. Subject to the requirements of applicable law, the Committee may delegate to any person or group or subcommittee of persons (who may, but need not be, members of the Committee) such plan-related functions within the scope of its responsibility, power and authority on such terms and conditions as it deems appropriate;provided, however, that the Committee may not delegate authority to grant or administer awards granted to the Company’s senior executive officers.
(d)Committee Actions. A majority of the members of the Committee shall constitute a quorum. The Committee may act by the vote of a majority of its members present at a meeting at which there is a quorum or by unanimous written consent. The decision of the Committee as to any disputed question, including questions of construction, interpretation and administration, shall be final and conclusive on all persons. The Committee shall keep a record of its proceedings and acts and shall keep or cause to be kept such books and records as may be necessary in connection with the proper administration of the plan.
(e)Indemnification. The Company shall indemnify and hold harmless each member of the Committee or subcommittee appointed by the Committee and any employee or director of the Company or of a subsidiary to whom any duty or power relating to the administration or interpretation of the plan is delegated from and against any loss, cost, liability (including any sum paid in settlement of a claim with the approval of the board of directors), damage and expense, including legal and other expenses incident thereto, arising out of or incurred in connection with the such person’s services under the plan, unless and except to the extent attributable to such person’s fraud or willful misconduct.
3.Eligibility. Plan awards may be made to any present or future directors, officers, employees, consultants and other personnel of the Company or a subsidiary.
4.Limitations on Plan Awards.
(a)Aggregate Share Limitations. The aggregate number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), that may be issued pursuant to awards granted under the plan shall not exceed 6,500,000 shares of Common Stock, and such total may be issued under the plan covering a stock option granted as an “incentive stock option” (within the meaning of Section 422 of the Internal Revenue Code of 1986). In applying this limitation:
(i) Any shares of Common Stock granted in connection with an award of stock options or stock appreciation rights shall be counted against this limit as one (1) share;
(ii) Any shares of Common Stock granted in connection with awards of restricted stock, restricted stock units, deferred stock or similar forms of stock award other than stock options or stock appreciation rights shall be counted against this limit as two (2) shares of Common Stock for every one (1) share of Common Stock granted in connection with such awards; and
(iii) No shares of Common Stock will be deemed to have been issued if (A) such shares are covered by the unexercised portion of an option that terminates, expires, or is canceled or settled in cash, or (B) such shares are forfeited or subject to awards that are forfeited, canceled, terminated or settled in cash.
(b)Individual Employee Limitations. In any calendar year, (1) no employee will be granted options and/or stock appreciation rights under the plan covering more than 800,000 shares of Common Stock; (2) no employee will be granted performance-based equity incentive awards (other than options and stock appreciation rights), as described in Section 9, covering more than 800,000 shares of Common Stock; and (3) no employee will be granted performance-based cash awards, as described in Section 9, for more than $5,000,000.
5.Stock Option Awards. Subject to the plan, the Committee may grant stock options to such persons, at such times and upon such vesting and other conditions as the Committee, acting in its discretion, may determine.
(a)Minimum Exercise Price. The purchase price per share of Common Stock covered by an option granted under the plan may not be less than the fair market value per share on the date the option is granted. If the Common Stock is listed on an established stock exchange or traded on the Nasdaq Stock Market, the fair market value per share shall be the closing sales price (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported inThe Wall Street Journal or such other source as the Committee deems reliable. The exercise price under an option which is intended to qualify as an “incentive stock option” (within the meaning of Section 422 of the Internal Revenue Code of 1986) granted to an employee who is a 10% stockholder within the meaning of Section 422(b)(6) of the Code, may not be less than 110% of the fair market value per share on the date the option is granted.
(b)Maximum Duration. Unless sooner terminated in accordance with its terms, an option will automatically expire on the tenth anniversary of the date it is granted (the fifth anniversary of the date it is granted in the case of an option which is intended to qualify as an “incentive stock option” granted to an employee who is a 10% stockholder).
(c)Nontransferability. No option shall be assignable or transferable except upon the optionee’s death to a beneficiary designated by the optionee in a manner prescribed or approved for this purpose by the Committee or, if no designated beneficiary shall survive the optionee, pursuant to the optionee’s will or by the laws of descent and distribution. During an optionee’s lifetime, options may be exercised only by the optionee or the optionee’s guardian or legal representative. Notwithstanding the foregoing, the Committee may permit the inter vivos transfer of an optionee’s options (other than options designated as “incentive stock options”) by gift to any “family member” (within the meaning of Item A.1.(a)(5)242 of the General Instructions to Form S-8 or any successor provision), on such terms and conditions as the Committee deems appropriate.
(d)Manner of Exercise. An option may be exercised by transmitting to the SecretaryCorporation Law of the Company (or such other person designatedState of Delaware)
(e)Rights as a Stockholder. No shares of stock will be issued in respect of the exercise of an option until payment of the exercise price and the applicable tax withholding obligations are been made or arranged to the satisfaction of the Company. The holder of an option shall have no rights as a stockholder with respect to any shares covered by the option until the shares are issued pursuant to the exercise of the option.
6.Stock Awards. Subject to the plan, the Committee may grant restricted stock, deferred stock, stock units, stock bonus and other stock awards to such persons, at such times and upon such vesting and other conditions and restrictions as the Committee, acting in its discretion, may determine.
(a)Minimum Purchase Price. The consideration payable for shares transferred pursuant to a stock award must be no less than the minimum consideration (if any) required by applicable law.
(b)Stock Certificates for Restricted Stock. Shares of restricted stock issued pursuant to a stock award may be evidenced by book entry on the Company’s stock transfer records or by a stock certificate issued in the recipient’s name and bearing an appropriate legend regarding the conditions and restrictions applicable to the shares. The Company may require that stock
certificates for restricted shares be held in custody by the Company or a designee pending the lapse of applicable forfeiture conditions and transfer restrictions. The Committee may condition the issuance of shares of restricted stock on the recipient’s delivery to the Company of a stock power, endorsed in blank, for such shares.
(c)Stock Certificates for Vested Stock. The recipient of a stock award which is vested at the time of grant or which thereafter becomes vested will be entitled to receive a certificate, free and clear of conditions and restrictions (except as may be imposed in order to comply with applicable law) for the shares covered by such vested award, subject to the payment or satisfaction of applicable tax withholding obligations and, in the case of shares covered by a vested stock unit award, subject to applicable deferral conditions permitted by Section 409A of the Code.
(d)Rights as a Stockholder. Unless otherwise determined by the Committee, (1) the holder of a stock award will not be entitled to receive dividend payments (or, in the case of an award of stock units, dividend equivalent payments) with respect to the shares covered by the award and (2) the holder of shares of restricted stock may exercise voting rights pertaining to such shares. The Committee may impose vesting and deferral conditions on the payment of dividends, corresponding to the vesting and deferral conditions applicable to the corresponding stock award.
(e)Nontransferability. Except as may be specifically permitted by the Committee in connection with transfers at death or pursuant to inter vivos gifts, no outstanding stock award and no shares of stock covered by an outstanding stock award may be sold, assigned, transferred, disposed of, pledged or otherwise hypothecated other than to the Company in accordance with the terms of the award or the plan. Any attempt to do any of the foregoing shall be null and void and, unless the Committee determines otherwise, shall result in the immediate forfeiture of the award and/or the shares.
7.Other Equity-Based Awards. The Committee may grant stock appreciation rights, dividend equivalent payment rights, phantom shares, phantom stock units, bonus shares and other forms of equity-based awards to eligible persons, subject to such terms and conditions as it may establish;provided, however that no dividend or dividend equivalent payment rights shall be attributable to awards of stock appreciation rights or stock options. The base price for a stock appreciation right granted under the plan may not be less than the fair market value per share of stock covered by the award at the time it is granted. Unless sooner termination in accordance with its terms, a stock appreciation right will automatically expire on the tenth anniversary of the date it is granted. Awards made pursuant to this section may entail the transfer of shares of Common Stock to a participant or the payment in cash or other property determined with reference to shares of Common Stock.
8.Cash Awards. The Committee may grant awards 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 underlying agreement, including, but 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 measurements of performance.
9.Performance-Based Equity and Cash Awards.
(a)General. The Committee may condition the grant, exercise, vesting or settlement of equity-based awards on the achievement of specified performance goals in accordance with this section. The Committee may also condition the grant, vesting or payment of annual and long-term cash incentive awards on the achievement of specified performance goals in accordance with this section. The applicable performance period for measuring achievement of specified performance goals may be any period designated by the Committee. Notwithstanding any other provision of the plan to the contrary, any dividend equivalents payable with respect to a performance-based equity award shall either be deferred and held in escrow until the achievement of the applicable performance goal(s) or automatically deemed reinvested in additional performance-based equity awards subject to achievement of the applicable performance goal(s).
(b)Objective Performance Goals. A performance goal established in connection with an award covered by this section must be (1) objective, so that a third party having knowledge of the relevant facts could determine whether the goal is met, (2) prescribed in writing by the Committee before the beginning of the applicable performance period or at such later date when fulfillment is substantially uncertain not later than 90 days after the commencement of the performance period and in any event before completion of 25% of the performance period, and (3) based on any one or more of the following business criteria:
(i) total revenue or any key component thereof;
(ii) operating income, pre-tax or after-tax income from continuing operations; earnings before interest, taxes and amortization (i.e. EBITA); earnings before interest, taxes, depreciation and amortization (i.e. EBITDA); or net income;
(iii) cash flow (including, without limitation, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations or cash flow in excess of cost of capital);
(iv) earnings per share or earnings per share from continuing operations (basic or diluted);
(v) return on capital employed, return on invested capital, return on assets or net assets;
(vi) after-tax return on stockholders’ equity;
(vii) economic value created;
(viii) operating margins or operating expenses;
(ix) valuedirectors of the Common StockCorporation, which, to the extent provided in said resolution or total return to stockholders;
(x) value of an investmentresolutions or in the Common Stock assumingBylaws of the reinvestmentCorporation shall have and may exercise the power of dividends;
(xi) strategic business criteria, consistingthe Board of one or more objectives based on meeting specified market penetration goals, geographic business expansion goals, cost targets,Directors in the management of employment practicesthe business and employee benefits,affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers on which the Corporation desires to place a seal. Such committee or supervisioncommittees shall have such name or names as may be stated in the Bylaws of litigationthe Corporation or information technology goals,as may be determined from time to time by resolutions adopted by the Board of Directors.”
(xii) a combination of anyofficer, except to the extent such exemption from liability or alllimitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing criteria.
A performance goal applicable to an Award may provide forsentence shall not adversely affect any right or protection of a targeted leveldirector or levelsofficer of achievement measured on a GAAPthe Corporation hereunder in respect of any act or non-GAAP basis, as determined by the Committee. A performance goal also may (but is not required to) be based solely by referenceomission occurring prior to the performancetime of such amendment, modification or repeal.”
(c)Calculation of Performance-Based Award. At the expiration of the applicable performance period, the Committee shall determine the extent to which the performance goals established pursuant to this Section are achieved and the extent to which each performance-based award has been earned. The Committee may not exercise its discretion to increase the amount or value of an award that would otherwise be payableCorporation were duly adopted in accordance with the termsprovisions of a performance-based award madeSection 242 of the General Corporation Law of the State of Delaware.
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10.Minimum Vesting Period. Notwithstanding any other provision of the plan to the contrary, awards of stock options, stock appreciation rights, restricted stock units, restricted stock and dividend equivalent rights, shall not vest or be exercisable (in the case of stock options and stock appreciation rights)U.S. Generally Accepted Accounting Principles (GAAP), earlier than the date that is one year following the date the award is made; provided, however, that, notwithstanding the foregoing, (a) the Committee may provide that such restrictions may lapse or be waived upon the recipient’s death, disability or termination of service, or in connection with an “exchange transaction” (as defined in Section 12(c), below), (b) awards of stock options, stock appreciation rights, restricted stock units and restricted stock that result in the issuance of an aggregate of up to five percent (5%) of the shares of Common Stock that may be authorized for grant under Section 4 (as such authorized number of shares of Common Stock may be adjusted as provided under the terms of the plan) may be granted without respect to such minimum vesting provision, and (c) awards of stock options, stock appreciation rights, restricted stock units and restricted stock may be granted to non-employee directors without respect to such minimum vesting provision.
11.Prohibition on Stock Option and Stock Appreciation Right Repricing. Except as provided in Section 12, the Committee may not, without prior approval of the Company’s stockholders, effect any repricing of any previously granted “underwater” stock
option or stock appreciation right by: (a) amending or modifying the terms of the stock option or stock appreciation right to lower the exercise price; (b) cancelling the underwater stock option or stock appreciation right and granting eitherincluding (1) replacement stock options or stock appreciation rights having a lower exercise price, or (2) restricted stock, restricted stock units, or other stock-based award in exchange, or (3) cancelling or repurchasing the underwater stock options or stock appreciation rights for cash or other securities. A stock option or stock appreciation right will be deemed to be “underwater” at any time when the fair market value of the shares of Common Stock covered by such award is less than the exercise price of the award.
12.Capital Changes, Reorganization, Sale.
(a)Adjustments Upon Changes in Capitalization. The aggregate number and class of shares issuable under the plan, the maximum number of shares with respect to which options, stock appreciation rights and other equity awards may be granted to or earned by any employee in any calendar year, the number and class of shares and the exercise price or base priceNon-GAAP diluted earnings per share covered by each outstanding option and stock appreciation right, and the number and class of shares covered by each outstanding deferred stock unit(net earnings or other-equity-based award, and any per-share base or purchase price or target market price included in the terms of any such award, and related terms shall beloss, as adjusted to reflect any increase or decrease in the number of issued shares of Common Stock resulting from a split-up or consolidation of shares or any like capital adjustment, or the payment of any stock dividend, and/or to reflect a change in the character or class of shares covered by the plan arising from a readjustment or recapitalization of the Company’s capital stock.
(b)Cash, Stock or Other Property for Stock. Except as otherwise provided in this section, in the event of an “exchange transaction”special items (as defined below), all optionees shall be permitted to exercise their outstanding options in whole or in part (whether or not otherwise exercisable) immediately prior to such exchange transaction, and any outstanding options which are not exercised before the exchange transaction shall thereupon terminate. Notwithstanding the preceding sentence, if, as partnet of an exchange transaction, the stockholders of the Company receive capital stock of another corporation (“exchange stock”) in exchange for their shares of Common Stock (whether or not such exchange stock is the sole consideration), and if the Company’s board of directors, acting in its discretion, so directs, then all outstanding options shall be converted in whole or in part into options to purchase shares of exchange stock. The amount and price of such converted options shall be determinedtaxes, divided by adjusting the amount and price of the options granted hereunder on the same basis as the determination of the number of shares of exchangeour common stock on a fully diluted basis), (2) Adjusted EBITDA (net earnings before interest, taxes, stock-based compensation, depreciation and amortization, as adjusted for special items and the holders of outstanding Common Stockannual cash incentive) on a consolidated and segment basis, (3) Adjusted EBITDA Margin and (4) Free Cash Flow. “Special items” refers to certain gains and charges we view as extraordinary, unusual or non-recurring in nature or which we believe do not reflect our core business activities. For the periods presented herein, these special items are entitled to receivedescribed in the exchange transactionquantitative reconciliation tables included below in this Annex B. Because of the inherent uncertainty related to these special items, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort. These non-GAAP measures are additional tools intended to assist our management in comparing our performance on a more consistent basis for purposes of business decision making by removing the impact of certain items management believes do not directly reflect our core operations. These measures are intended to assist management in evaluating operating performance and unless the Company’s boardliquidity, comparing performance and liquidity across periods, planning and forecasting future business operations, helping determine levels of directors determines otherwise, the vesting conditionsoperating and capital investments and identifying and assessing additional trends potentially impacting our Company that may not be shown solely by comparisons of GAAP measures. As discussed in this proxy statement, Adjusted EBITDA is also used as part of our incentive compensation program for our executive officers and others. We believe these non-GAAP financial measures also provide supplemental information that is useful to investors, analysts and other external users of our consolidated financial statements in understanding our financial results and evaluating our performance and liquidity from period to period. However, non-GAAP financial measures have inherent limitations and are not substitutes for, or superior to, GAAP financial measures and they should be read together with, respectour consolidated financial statements prepared in accordance with GAAP. Further, because non-GAAP financial measures are not standardized, it may not be possible to compare such measures to the converted options shall be substantially the same as the vesting conditions set forth in the original option agreement. The board of directors, acting in its discretion, may accelerate vesting of non-vested stock awards andnon-GAAP financial measures presented by other awards, provide for cash settlement of and/or make such other adjustments to the terms of any outstanding award (including, without limitation, outstanding options) as it deems appropriate in the context of an exchange transaction, taking into account, as applicable, the manner in which outstanding options are being treated.
(c)Definition of Exchange Transaction. For purposes hereof, the term “exchange transaction” means a merger (other than a merger of the Company in which the holders of the Common Stock immediately prior to the mergercompanies, even if they have the same proportionate ownershipor similar names.
| | | | Year Ended December 31, 2023 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Gross Profit | | | Operating Profit | | | Earnings Before Income Tax | | | Tax Expense | | | Net (Loss) Earnings | | | Diluted (Loss) Earnings per Share | | ||||||||||||||||||
| GAAP Results | | | | $ | 2,022,258 | | | | | $ | 162,865 | | | | | $ | 52,867 | | | | | $ | 58,046 | | | | | $ | (5,179) | | | | | $ | (0.09) | | |
| Plus: Special Items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Acima equity consideration vesting | | | | | — | | | | | | 137,507 | | | | | | 137,507 | | | | | | (28,876) | | | | | | 166,383 | | | | | | 2.95 | | |
| Acima acquired assets depreciation and amortization(1) | | | | | — | | | | | | 72,934 | | | | | | 72,934 | | | | | | 45,826 | | | | | | 27,108 | | | | | | 0.48 | | |
| Accelerated software depreciation | | | | | — | | | | | | 9,218 | | | | | | 9,218 | | | | | | 5,792 | | | | | | 3,426 | | | | | | 0.06 | | |
| Legal settlements | | | | | — | | | | | | 319 | | | | | | 319 | | | | | | 200 | | | | | | 119 | | | | | | — | | |
| Other(2) | | | | | — | | | | | | (3,069) | | | | | | (3,069) | | | | | | (1,928) | | | | | | (1,141) | | | | | | (0.02) | | |
| Discrete income tax items | | | | | — | | | | | | — | | | | | | — | | | | | | (9,546) | | | | | | 9,546 | | | | | | 0.17 | | |
| Non-GAAP Adjusted Results | | | | $ | 2,022,258 | | | | | $ | 379,774 | | | | | $ | 269,776 | | | | | $ | 69,514 | | | | | $ | 200,262 | | | | | $ | 3.55 | | |
| | | | Year Ended December 31, 2022 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Gross Profit | | | Operating Profit | | | Earnings Before Income Tax | | | Tax Expense | | | Net Earnings | | | Diluted Earnings per Share | | ||||||||||||||||||
| GAAP Results | | | | $ | 2,079,532 | | | | | $ | 148,538 | | | | | $ | 61,471 | | | | | $ | 49,114 | | | | | $ | 12,357 | | | | | $ | 0.21 | | |
| Plus: Special Items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Acima equity consideration vesting | | | | | — | | | | | | 143,210 | | | | | | 143,210 | | | | | | 15,431 | | | | | | 127,779 | | | | | | 2.16 | | |
| Acima acquired assets depreciation and amortization(1) | | | | | (2,853) | | | | | | 77,939 | | | | | | 77,939 | | | | | | 8,397 | | | | | | 69,542 | | | | | | 1.18 | | |
| IT asset disposals | | | | | — | | | | | | 5,808 | | | | | | 5,808 | | | | | | 626 | | | | | | 5,182 | | | | | | 0.09 | | |
| Cost savings initiatives | | | | | — | | | | | | 1,726 | | | | | | 1,726 | | | | | | 186 | | | | | | 1,540 | | | | | | 0.03 | | |
| Store closure costs | | | | | — | | | | | | 1,368 | | | | | | 1,368 | | | | | | 147 | | | | | | 1,221 | | | | | | 0.02 | | |
| Retail partner conversion losses | | | | | — | | | | | | 1,169 | | | | | | 1,169 | | | | | | 126 | | | | | | 1,043 | | | | | | 0.02 | | |
| State tax audit assessment reserves | | | | | — | | | | | | 1,165 | | | | | | 1,165 | | | | | | 126 | | | | | | 1,039 | | | | | | 0.02 | | |
| Hurricane impacts | | | | | — | | | | | | 249 | | | | | | 249 | | | | | | 27 | | | | | | 222 | | | | | | — | | |
| Acima transaction costs | | | | | — | | | | | | 187 | | | | | | 187 | | | | | | 20 | | | | | | 167 | | | | | | — | | |
| Legal settlements | | | | | — | | | | | | (181) | | | | | | (181) | | | | | | (20) | | | | | | (161) | | | | | | — | | |
| Other | | | | | — | | | | | | (210) | | | | | | (210) | | | | | | (23) | | | | | | (187) | | | | | | — | | |
| Discrete income tax items | | | | | — | | | | | | — | | | | | | — | | | | | | 1,532 | | | | | | (1,532) | | | | | | (0.03) | | |
| Non-GAAP Adjusted Results | | | | $ | 2,076,679 | | | | | $ | 380,968 | | | | | $ | 293,901 | | | | | $ | 75,689 | | | | | $ | 218,212 | | | | | $ | 3.70 | | |
| | | | Year Ended December 31, 2023 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Rent-A- Center | | | Acima | | | Mexico | | | Franchising | | | Corporate | | | Consolidated | | ||||||||||||||||||
| Net earnings (loss) | | | | $ | 273,518 | | | | | $ | 235,480 | | | | | $ | 4,846 | | | | | $ | 17,087 | | | | | $ | (536,110) | | | | | $ | (5,179) | | |
| Plus: Interest, net | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 109,998 | | | | | | 109,998 | | |
| Plus: Income tax expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 58,046 | | | | | | 58,046 | | |
| Operating profit (loss) | | | | | 273,518 | | | | | | 235,480 | | | | | | 4,846 | | | | | | 17,087 | | | | | | (368,066) | | | | | | 162,865 | | |
| Plus: Amortization, Depreciation | | | | | 18,816 | | | | | | 1,661 | | | | | | 1,206 | | | | | | 146 | | | | | | 29,492 | | | | | | 51,321 | | |
| Plus: Stock-based compensation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 24,609 | | | | | | 24,609 | | |
| Plus: Special Items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Acima equity consideration vesting | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 137,507 | | | | | | 137,507 | | |
| Acima acquired assets depreciation and amortization(1) | | | | | — | | | | | | 57,048 | | | | | | — | | | | | | — | | | | | | 15,886 | | | | | | 72,934 | | |
| Accelerated software depreciation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,218 | | | | | | 9,218 | | |
| Legal settlements | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 319 | | | | | | 319 | | |
| Other(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,069) | | | | | | (3,069) | | |
| Adjusted EBITDA(3) | | | | $ | 292,334 | | | | | $ | 294,189 | | | | | $ | 6,052 | | | | | $ | 17,233 | | | | | $ | (154,104) | | | | | $ | 455,704 | | |
| Plus: Annual cash incentive | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,900 | | | | | | 17,900 | | |
| Adjusted EBITDA(4) | | | | $ | 292,334 | | | | | $ | 294,189 | | | | | $ | 6,052 | | | | | $ | 17,233 | | | | | $ | (136,204) | | | | | $ | 473,604 | | |
| | | | Year Ended December 31, 2022 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Rent-A- Center | | | Acima | | | Mexico | | | Franchising | | | Corporate | | | Consolidated | | ||||||||||||||||||
| Net earnings (loss) | | | | $ | 334,525 | | | | | $ | 151,301 | | | | | $ | 6,267 | | | | | $ | 19,124 | | | | | $ | (498,860) | | | | | $ | 12,357 | | |
| Plus: Interest, net | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 87,067 | | | | | | 87,067 | | |
| Plus: Income tax expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 49,114 | | | | | | 49,114 | | |
| Operating profit (loss) | | | | | 334,525 | | | | | | 151,301 | | | | | | 6,267 | | | | | | 19,124 | | | | | | (362,679) | | | | | | 148,538 | | |
| Plus: Amortization, Depreciation | | | | | 20,526 | | | | | | 1,928 | | | | | | 711 | | | | | | 146 | | | | | | 29,768 | | | | | | 53,079 | | |
| Plus: Stock-based compensation | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,399 | | | | | | 19,399 | | |
| Plus: Special Items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Acima equity consideration vesting | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 143,210 | | | | | | 143,210 | | |
| Acima acquired assets depreciation and amortization(1) | | | | | — | | | | | | 62,052 | | | | | | — | | | | | | — | | | | | | 15,887 | | | | | | 77,939 | | |
| IT Asset disposals | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,808 | | | | | | 5,808 | | |
| Cost savings initiatives | | | | | 118 | | | | | | (384) | | | | | | — | | | | | | — | | | | | | 1,992 | | | | | | 1,726 | | |
| Store closure costs | | | | | 1,368 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,368 | | |
| Retail partner conversion losses | | | | | — | | | | | | 1,169 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,169 | | |
| State tax audit assessment reserves | | | | | — | | | | | | 1,165 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,165 | | |
| Hurricane impacts | | | | | 249 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 249 | | |
| Acima transaction costs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 187 | | | | | | 187 | | |
| Legal settlements | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (181) | | | | | | (181) | | |
| Other | | | | | — | | | | | | 77 | | | | | | — | | | | | | — | | | | | | (287) | | | | | | (210) | | |
| Adjusted EBITDA(2) | | | | $ | 356,786 | | | | | $ | 217,308 | | | | | $ | 6,978 | | | | | $ | 19,270 | | | | | $ | (146,896) | | | | | $ | 453,446 | | |
| Plus: Annual cash incentive | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,081 | | | | | | 5,081 | | |
| Adjusted EBITDA(3) | | | | $ | 356,786 | | | | | $ | 217,308 | | | | | $ | 6,978 | | | | | $ | 19,270 | | | | | $ | (141,815) | | | | | $ | 458,527 | | |
| | | | Year Ended December 31, 2021 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Rent-A- Center | | | Acima | | | Mexico | | | Franchising | | | Corporate | | | Consolidated | | ||||||||||||||||||
| Net earnings (loss) | | | | $ | 448,905 | | | | | $ | 176,496 | | | | | $ | 7,858 | | | | | $ | 20,321 | | | | | $ | (503,058) | | | | | $ | 134,940 | | |
| Plus: Debt refinancing charges | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,582 | | | | | | 15,582 | | |
| Plus: Interest, net | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 70,653 | | | | | | 70,653 | | |
| Plus: Income tax expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 59,364 | | | | | | 59,364 | | |
| Operating profit (loss) | | | | | 448,905 | | | | | | 176,496 | | | | | | 7,858 | | | | | | 20,321 | | | | | | (373,041) | | | | | | 280,539 | | |
| Plus: Amortization, Depreciation | | | | | 18,588 | | | | | | 2,122 | | | | | | 511 | | | | | | 93 | | | | | | 33,516 | | | | | | 54,830 | | |
| Plus: Special Items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Acima equity consideration vesting | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 127,060 | | | | | | 127,060 | | |
| Acima acquired assets depreciation and amortization(1) | | | | | — | | | | | | 87,455 | | | | | | — | | | | | | — | | | | | | 13,239 | | | | | | 100,694 | | |
| Acima transaction costs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,680 | | | | | | 17,680 | | |
| Legal settlement reserves | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,500 | | | | | | 17,500 | | |
| Acima integration costs | | | | | 14 | | | | | | 6,849 | | | | | | — | | | | | | — | | | | | | 3,442 | | | | | | 10,305 | | |
| Hurricane impacts | | | | | 1,276 | | | | | | 148 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,424 | | |
| Store closure costs | | | | | 528 | | | | | | — | | | | | | 3 | | | | | | — | | | | | | — | | | | | | 531 | | |
| COVID-19 testing | | | | | 293 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 293 | | |
| | | | Year Ended December 31, 2021 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Rent-A- Center | | | Acima | | | Mexico | | | Franchising | | | Corporate | | | Consolidated | | ||||||||||||||||||
| State tax audit assessment reserve | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 161 | | | | | | 161 | | |
| Adjusted EBITDA(2) | | | | $ | 469,604 | | | | | $ | 273,070 | | | | | $ | 8,372 | | | | | $ | 20,414 | | | | | $ | (160,443) | | | | | $ | 611,017 | | |
| Plus: Annual cash incentive | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,412 | | | | | | 11,412 | | |
| Plus: Stock-based compensation(3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,497 | | | | | | 20,497 | | |
| Adjusted EBITDA(4) | | | | $ | 469,604 | | | | | $ | 273,070 | | | | | $ | 8,372 | | | | | $ | 20,414 | | | | | $ | (128,534) | | | | | $ | 642,926 | | |
| | | | Year Ended December 31, 2020 | | |||||||||||||||||||||||||||||||||
| (In thousands) | | | Rent-A- Center | | | Acima | | | Mexico | | | Franchising | | | Corporate | | | Consolidated | | ||||||||||||||||||
| Net earnings (loss) | | | | $ | 333,379 | | | | | $ | 57,847 | | | | | $ | 5,798 | | | | | $ | 12,570 | | | | | $ | (201,479) | | | | | $ | 208,115 | | |
| Plus: Interest, net | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,557 | | | | | | 14,557 | | |
| Plus: Income tax expense | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,664 | | | | | | 14,664 | | |
| Operating profit (loss) | | | | | 333,379 | | | | | | 57,847 | | | | | | 5,798 | | | | | | 12,570 | | | | | | (172,258) | | | | | | 237,336 | | |
| Plus: Amortization, Depreciation | | | | | 19,912 | | | | | | 2,066 | | | | | | 413 | | | | | | 40 | | | | | | 34,227 | | | | | | 56,658 | | |
| Plus: Special Items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| California refranchise store sale | | | | | 16,600 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,600 | | |
| Legal settlement reserves | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,900 | | | | | | 7,900 | | |
| Acima transaction costs | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,400 | | | | | | 6,400 | | |
| Legal settlement | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,800) | | | | | | (2,800) | | |
| Store closure costs | | | | | 2,052 | | | | | | — | | | | | | 37 | | | | | | — | | | | | | — | | | | | | 2,089 | | |
| Asset disposals | | | | | 531 | | | | | | 4 | | | | | | — | | | | | | — | | | | | | 1,269 | | | | | | 1,804 | | |
| Cost savings initiatives | | | | | 577 | | | | | | 193 | | | | | | — | | | | | | — | | | | | | 813 | | | | | | 1,583 | | |
| State tax audit assessment reserves | | | | | 261 | | | | | | 400 | | | | | | — | | | | | | — | | | | | | 564 | | | | | | 1,225 | | |
| COVID-19 impacts | | | | | 883 | | | | | | 115 | | | | | | — | | | | | | — | | | | | | 155 | | | | | | 1,153 | | |
| Nationwide protest impacts | | | | | 942 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 942 | | |
| Insurance proceeds | | | | | (341) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (341) | | |
| Adjusted EBITDA(1) | | | | $ | 374,796 | | | | | $ | 60,625 | | | | | $ | 6,248 | | | | | $ | 12,610 | | | | | $ | (123,730) | | | | | $ | 330,549 | | |
| Plus: Annual cash incentive | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,427 | | | | | | 13,427 | | |
| Plus: Stock-based compensation(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Adjusted EBITDA(3) | | | | $ | 374,796 | | | | | $ | 60,625 | | | | | $ | 6,248 | | | | | $ | 12,610 | | | | | $ | (110,303) | | | | | $ | 343,976 | | |
| | | | Year Ended December 31, | | |||||||||
| (In thousands) | | | 2023 | | | 2022 | | ||||||
| Net cash provided by operating activities | | | | $ | 200,290 | | | | | $ | 468,460 | | |
| Purchase of property assets | | | | | (53,402) | | | | | | (61,387) | | |
| Free cash flow | | | | $ | 146,888 | | | | | $ | 407,073 | | |
(d)Fractional Shares. Inquorum, to remove the event of any adjustment in the number of shares covered by any award pursuantindemnification provisions, to remove references to the provisions hereof, any fractional shares resulting from such adjustment shall be disregarded,Series A Preferred Stock, and each such award shall cover only the number of full shares resulting from the adjustment.
(e)Determination of Board to be Final. All adjustments under this Section shall be made by the Company’s board of directors, and its determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive.
13.Tax Withholding. Ascorrect a condition to the exercise or settlement of any award, or in connection with anytypo NOTE: Such other event that gives rise to a tax withholding obligation on the part of the Company or a subsidiary relating to an award, the Company and/or the subsidiary may (a) deduct or withhold (or cause to be deducted or withheld) from any payment or distribution to the recipient of an award, whether or not made pursuant to the plan or (b) require the recipient to remit cash (through payroll deduction or otherwise), in each case in an amount sufficient in the opinion of the Company to satisfy such withholding obligation. If the event giving rise to the withholding obligation involves a transfer of shares of stock, then, at the sole discretion of the Committee, the recipient may satisfy the applicable tax withholding obligation by electing to have the Company withhold shares of stock or by tendering previously-owned shares, in each case having a fair market value equal to the amount of tax to be withheld (or by any other mechanismbusiness as may be required or appropriate to conform with local tax and other rules).
14.Amendment and Termination. The Company’s board of directors may amend or terminateproperly come before the plan;provided, however, that no such action may adversely affect a holder’s rights under an outstanding award without his or her written consent. Any amendment that would increase the aggregate number of shares of Common Stock issuable under the plan, the maximum number of shares with respect to which options, stock appreciation rights or other equity swards may be granted to any employee in any calendar year, or that would modify the class of persons eligible to receive awards shall be subject to the approval of the Company’s stockholders. The Committee may amend the terms of any agreement or award made hereunder at any time and from time to time, provided, however, that any amendment which would adversely affect a holder’s rights under an outstanding award may not be made without his consent.
15.General Provisions.
(a)Shares Issued Under Plan. Shares of Common Stock available for issuance under the plan may be authorized and unissued, held by the Company in its treasury or otherwise acquired for purposes of the plan. No fractional shares will be issued under the plan.
(b)Compliance with Law. The Company will not be obligated to issue or deliver shares of stock pursuant to the plan unless the issuance and delivery of such shares complies with applicable law, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the requirements of any stock exchange or market upon which the Company’s stock may then be listed. The Company may prevent or delay the exercise of an option or stock appreciation right, or the settlement of an award and/or the termination of restrictions applicable to an award if and to the extent the Company deems necessary or advisable in order to avoid a violation of applicable laws or its own policies regarding the purchase and sale of its stock. If, during the period of any such ban or delay, the term of an affected stock option, stock appreciation right or other award would expire, then the term of such option, stock appreciation right or other award will be extended for thirty days after the Company’s removes the restriction against exercise.
(c)Transfer Orders; Placement of Legends. All certificates for shares of Common Stock delivered under the plan shall be subject to such stock-transfer orders and other restrictions as the Company may deem advisable, including pursuant to the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange or market upon which the Company’s stock may then be listed,meeting and any applicable federaladjournment or state securities law. The Company may cause a legendpostponement thereof. NOTE:Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or legends to be placed on any such certificates to make appropriate reference to such restrictions.
(d)No Employment or other Rights. Nothing contained in the plan or in any award agreement shall confer upon any recipient of an award any right with respect to the continuation of his or her employment or other service with the Company or a subsidiary or interfere in any way with the right of the Company and its subsidiaries at any time to terminate such employment or other service or to increase or decrease, or otherwise adjust, the other terms and conditions of the recipient’s employment or other service.
(e)Decisions and Determinations Final. All decisions and determinations made by the Company’s board of directors pursuant to the provisions hereof and, except to the extent rights or powers under the Plan are reserved specifically to the discretion of the board of directors, all decisions and determinations of the Committee, shall be final, binding and conclusive on all persons.
(f)Section 409A. The plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the plan shall be interpreted and administered to be in compliance therewith. Any payments described in the plan that are due within the “short-term deferral period”guardian, please give full title as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable laws require otherwise. Notwithstanding anything to the contrary in the plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the plan during the six month period immediately following the award recipient’s “separation from service” as defined in Section 409A of the Code shall instead be paid on the first payroll date after the six-month anniversary of the recipient’s separation from service (or the recipient’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on any individual under Section 409A of the Code and neither the Company nor the Committee will have any liability to any individual for such tax or penalty.
16.Governing Law. All rights and obligations under the plan and each award agreement or instrument shall be governed by and construed in accordance with the laws of the State of Texas, without regard to its principles of conflict of laws.
17.Term of the Plan. The plan shall become effective on the date of adoption by the board of directors, subject to approval by the Company’s stockholders within twelve months thereafter. Unless terminated sooner by the board of directors, the plan shall terminate on the tenth anniversary of the date of adoption by the board of directors. The rights of any person with respect to an award made under the plan that is outstanding at the time of the termination of the plan shall not be affected solely by reason of the termination of the plan and shall continue in accordance with the terms of the award and of the plan, as each is then in effect or is thereafter amended.
RENT-A-CENTER, lNC.
5501 HEADQUARTERS DRIVE
PLANO, TEXAS 75024
THIS PROXY SOLICITED ON BEHALFsuch.
THE BOARD OF DIRECTORS OF RENT-A-CENTER, INC.
COMMON STOCK
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p PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.p
CONTENTS
of StockholdersTHIS PROXY IS SOLICITED ON BEHALF OFTHE BOARD OF DIRECTORS OF UPBOUND GROUP, INC. The undersigned hereby appoints Fahmi Karam and Bryan Pechersky, and each of them, with power to act without the other and with power of substitution, as proxies to cast all votes that the undersigned is entitled to cast at Upbound Group, Inc.'s2024 Annual Meeting of Stockholders to be held June 4, 2024 at the Upbound Group, Inc. Field Support Center, which is located, along with our principal executive offices, at 5501 Headquarters Drive, Plano, Texas 75024, or any postponement or adjournment thereof, with authority to vote on the proposals as indicated on the reverse side of this Proxy and in their discretion upon such other matters as may be properly presented at the meeting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN AS TO ANY OR ALL PROPOSALS BUT THIS PROXY IS SIGNED AND DATED, THIS PROXY WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS WITH RESPECT TO SUCH PROPOSALS.(Continued and to be marked, signed and dated on the other side)
Report on Form 10-K ofUpbound Group, Inc. are available at:http://www.allianceproxy.com/rentacenter/2016
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p PLEASE DETACH ALONG PERFORATED LINE AND MAILat investor.upbound.com and www.proxyvote.com. V43563-P096562024 Annual Meeting of StockholdersTHIS PROXY IS SOLICITED ON BEHALF OFTHE BOARD OF DIRECTORS OF UPBOUND GROUP, INC. The undersigned participant in the Upbound Group, Inc. 401(k) Retirement Savings Plan (the "401(k) Plan") hereby directs Empower Trust Company, INTRUST Bank, NA, or other duly named trustee of the 401(k) Plan, to vote his or her shares held through the 401(k) Plan as indicated on the reverse side of this Proxy, or if not so indicated, in accordance with the policy adopted by Upbound Group, Inc. in accordance with the 401(k) Plan document (voting for each proposal as recommended by the board of directors of Upbound Group, Inc.). THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE ENVELOPE PROVIDED.p
MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN AS TO ANY OR ALL PROPOSALS BUT THIS PROXY VOTING INSTRUCTIONS
Please have your 11 digit control number ready when voting by Internet or Telephone
InternetIS SIGNED AND DATED, THIS PROXY WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS WITH RESPECT TO SUCH PROPOSALS.(Continued and telephone voting is available through 11:59 PM Eastern Time
to be marked, signed and dated on the day prior to the shareholder meeting date.
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