UPBOUND GROUP, INC. — Proxy Solicitation & Information Statement 2010

Apr 5, 2010

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION

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o Preliminary Proxy Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) þ Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to Rule 14a-12

RENT-A-CENTER, INC.

(Name of Registrant as Specified In Its Charter)

NOT APPLICABLE

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NOTICE OF

2010 ANNUAL MEETING OF STOCKHOLDERS

Annual Meeting:	May 13, 2010 9:30 a.m., local time
Location:	Rent-A-Center, Inc. 5501 Headquarters Drive Plano, Texas 75024
Record Date:	The record date is the close of business on March 31, 2010.
Stockholders Entitled to Vote:	If you were a stockholder of record at the close of business on
the record date, you are entitled to notice of and to vote at
the annual meeting and at any and all adjournments or
postponements thereof.
Agenda:	1. To elect the three Class I directors nominated by
the Board;
	2. To ratify the Audit Committee’s appointment of
Grant Thornton LLP as our independent registered public
accounting firm for the year ending December 31, 2010; and
	3. To transact other business that properly comes before
the meeting.
Proxies:	You cannot vote your shares of common stock unless you are
present at the meeting or you have previously given your proxy.
You can vote by proxy in one of the following three convenient
ways:
	• in writing, by completing, signing, dating and
returning the proxy card in the enclosed envelope;
	• on the Internet, by visiting the website shown on
the proxy card and following the instructions; or
	• calling the toll-free telephone number shown on the
proxy card and following the instructions.
	All properly executed proxies, unless revoked as described
below, will be voted at the meeting in accordance with your
directions on the proxy. If a properly executed proxy does not
provide instructions, the shares of common stock represented by
your proxy will be voted:
	• “FOR” each of the Board’s nominees
for Class I director; and
	• “FOR” the ratification of the Audit
Committee’s appointment of Grant Thornton LLP as our
independent registered public accounting firm for 2010.
	The proxy holders will use their discretion on any other matters
that properly come before the meeting.
First Mailing Date:	This proxy statement is dated April 1, 2010. We are first
mailing this proxy statement and the enclosed proxy card on or
about April 9, 2010.

IMPORTANT Whether or not you plan to attend the meeting in person, please vote by signing, dating and promptly returning the proxy card in the enclosed postage prepaid envelope or by using the Internet or the telephone voting procedures described on the proxy card.

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TOC

| QUESTIONS AND ANSWERS ABOUT THE 2010 ANNUAL
MEETING AND VOTING PROCEDURES | ii |
| --- | --- |
| PROPOSAL ONE: ELECTION OF
DIRECTORS | 1 |
| BOARD INFORMATION | 6 |
| DIRECTOR COMPENSATION | 9 |
| CORPORATE GOVERNANCE | 11 |
| PROPOSAL TWO: RATIFICATION OF THE
SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM | 14 |
| AUDIT COMMITTEE REPORT | 15 |
| EXECUTIVE OFFICERS | 16 |
| COMPENSATION DISCUSSION AND ANALYSIS | 17 |
| COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION | 44 |
| COMPENSATION COMMITTEE INTERLOCKS | 44 |
| RELATED PERSON TRANSACTIONS | 45 |
| SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE | 45 |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT | 46 |
| SUBMISSION OF STOCKHOLDER PROPOSALS | 48 |
| OTHER BUSINESS | 48 |

/TOC

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QUESTIONS AND ANSWERS ABOUT THE 2010 ANNUAL MEETING AND VOTING PROCEDURES

Important Notice Regarding the Availability of Proxy Materials for the 2010 Annual Meeting of Stockholders to Be Held on May 13, 2010.

This Proxy Statement and our 2009 Annual Report are available at: http://bnymellon.mobular.net/bnymellon/rcii

| Who may vote? | Stockholders of record as of the close of business on
March 31, 2010, the record date for the annual meeting, may
vote at the meeting. As of March 31, 2010, there were
65,756,997 shares of our common stock outstanding. Each share of
common stock entitles the holder to one vote per share. |
| --- | --- |
| What constitutes a quorum? | The holders of a majority of our outstanding shares of common
stock entitled to vote at the annual meeting, or 32,878,499
shares of our common stock, must be represented at the annual
meeting in person or by proxy to have a quorum. Any stockholder
present at the annual meeting, either in person or by proxy, but
who abstains from voting, will be counted for purposes of
determining whether a quorum exists. If holders of fewer than
32,878,499 shares are present at the annual meeting, we will
adjourn and reschedule the annual meeting until a quorum is
present. |
| 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, 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. |
| | A majority of the votes cast is required to ratify Grant
Thornton as our independent registered public accounting firm
and to approve all other matters submitted to you at the
meeting, except as otherwise provided by law or our Certificate
of Incorporation or Bylaws. Broker non-votes and abstentions
will have no effect on the outcome of the vote to ratify Grant
Thornton or on any other proposal that may properly come before
the meeting. |
| What are broker non-votes? | Broker non-votes occur when nominees, such as banks and brokers,
holding shares on behalf of beneficial owners, or customers, do
not receive voting instructions from the customers. Brokers
holding shares of record for customers generally are not
entitled to vote on certain matters unless they receive voting
instructions from their customers. In the event that a broker
does not receive voting instructions for these matters, a broker
may notify us that it lacks voting authority to vote those
shares. These broker non-votes refer to votes that could have
been cast on the matter in question by brokers with respect to
uninstructed shares if the brokers had received their
customers’ instructions. These broker non-votes will be
included in determining whether a quorum exists. |
| | Prior to this year’s stockholder meeting, brokers were
permitted to vote in the election of directors shares held in
“street name” on the customer’s behalf in their
discretion regardless of whether the customer provided voting
instructions to his or her broker. Recent changes in regulation
were made to eliminate the ability of your bank or broker to
vote your uninstructed shares in the election of directors on a
discretionary basis. Thus, if you hold your shares in street
name and you do not instruct your bank or broker how to vote in
the election of directors, no votes will be cast on your behalf.
To be sure your shares are voted in the manner you desire, you
should instruct your broker how to vote your shares. |

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| How will the proxies be voted? | The enclosed proxies will be voted in accordance with the
instructions you place on the proxy card or, if you vote on the
Internet or by telephone, as indicated using such method. Unless
otherwise stated, all shares represented by your completed,
returned, and signed proxy will be voted as described on the
Notice of 2010 Annual Meeting of Stockholders. If you are voting
on the Internet or by telephone, the proxies will be voted in
accordance with your voting instructions. If you are voting on
the Internet or by telephone, your voting instructions must be
received by 11:59 p.m., Eastern Daylight Savings Time, on
May 12, 2009. |
| --- | --- |
| How may I revoke my proxy? | You may revoke your proxy at any time before or at the annual
meeting by: |
| | • Delivering a signed, written revocation letter,
dated later than the proxy, to Ronald D. DeMoss, Executive Vice
President — General Counsel and Secretary, at 5501
Headquarters Drive, Plano, TX 75024; |
| | • Delivering a signed proxy, dated later than the
first one, to BNY Mellon Shareowner Services, 480 Washington
Boulevard, Jersey City, NJ 07310, Attn: Proxy Department; |
| | • Voting at a later time on the Internet or by
telephone, if you previously voted on the Internet or by
telephone; or |
| | • Attending the meeting and voting in person or by
proxy. Attending the meeting alone will not revoke your proxy. |
| Who is soliciting this proxy? | The Board of Directors is soliciting this proxy. In addition to
the solicitation of proxies by mail, proxies may also be
solicited by telephone, telegram, electronic mail or personal
interview by our officers and employees. We will reimburse
banks, brokers, custodians, nominees and fiduciaries for
reasonable expenses they incur in sending these proxy materials
to you if you are a beneficial holder of our shares. |

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PROPOSAL ONE:

ELECTION OF DIRECTORS

| Board Organizational Structure: | The number of directors currently constituting our entire Board
is eight. The directors are divided into three classes. In
general, directors in each class serve for a term of three years. | |
| --- | --- | --- |
| Number of Directors to be Elected: | Three Class I directors are to be elected by our stockholders. | |
| Board Nominees: | Our Board, upon recommendation of the Nominating and Corporate
Governance Committee, has nominated Mitchell E. Fadel to be
re-elected, and each of Kerney Laday and Paula Stern, Ph.D.
to be elected, as Class I directors by the stockholders. Mr.
Laday and Dr. Stern were previously appointed as Class I
directors by the Board. We urge you to vote “FOR”
each of Mr. Fadel, Mr. Laday, and Dr. Stern. | |
| | Mr. Fadel has agreed to stand for re-election, and each of Mr.
Laday and Dr. Stern have agreed to stand for election.
However, should any of them become unable or unwilling to accept
nomination or election, the shares of common stock voted for
that nominee by proxy will be voted for the election of a
substitute nominee whom the proxy holders believe will carry out
our present policies. Our Board of Directors has no reason to
believe that any of Mr. Fadel, Mr. Laday, or Dr. Stern will
be unable or unwilling to serve if elected, and, to the
knowledge of the Board of Directors, each intends to serve the
entire term for which election is sought. | |
| Term to Expire at the 2013 Annual Meeting: | Mitchell E. Fadel | Mr. Fadel has served as our President since July 2000, as our
Chief Operating Officer since December 2002 and as a director
since December 2000. From November 1992 until July 2000, Mr.
Fadel served as President and Chief Executive Officer of our
subsidiary, ColorTyme, Inc. Mr. Fadel’s term as a
Class I director expires at this year’s annual stockholder
meeting. Mr. Fadel is 52 years old. |
| | | As our President and Chief Operating Officer, Mr. Fadel’s
day-to-day leadership provides him with intimate knowledge of
our operations that are a vital component of our Board
discussions. In addition, Mr. Fadel brings 27 years of
experience in and knowledge of the rent-to-own industry to the
Board. We believe Mr. Fadel’s service as our President and
Chief Operating 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. |
| | Kerney Laday | Mr. Laday has served as one of our directors since May 2008.
Mr. Laday has served as President of The Laday Company, a
management consulting and business development firm, since
1997. From 1971 to 1997, Mr. Laday was employed by Xerox
Corporation, serving in various capacities including Vice
President — Field Operations for the Southern Region
of U.S. Customer Operations; Vice President & Region
General Manager; and Vice President, National Service, United
States Marketing Group. Mr. Laday also serves as a director and
Vice Chairman of Texas Health Resources, and as a director of
TDIndustries, Inc. and The Beck Group. Mr. Laday
previously served on the board of TXU Energy, Inc. Mr.
Laday’s term as a Class I director expires at this
year’s annual stockholder meeting. Mr. Laday is
68 years old. |

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| | We believe Mr. Laday’s operations and consulting background
provide valuable business, leadership and management experience,
including expertise in cost-cutting, strategy implementation and
resource allocation. In addition, Mr. Laday provides leadership
and governance experience through his other directorships,
including service on the governance and compensation committees
of such companies. |
| --- | --- |
| Paula Stern, Ph.D. | The Honorable Paula Stern joined the Board in
December 2008. Dr. Stern is Chairwoman of The Stern
Group, Inc., an international advisory firm in areas of business
and government strategy established in 1988. She was
Commissioner of the U.S. International Trade Commission from
1978 to 1987 and Chairwoman from 1984 to 1986. She is a member
of the Atlantic Council of the United States and serves on the
Board of Trustees of the Committee for Economic Development and
on the Advisory Council of Columbia University School of Social
Work. She is also a member of Council on Foreign Relations,
Inter-American Dialogue, Bretton Woods Committee, and the High
Level Advisory Group for the Global Subsidies Initiative of the
International Institute for Sustainable Development.
Dr. Stern also serves on the boards of Avon Products, Inc.
and Hasbro, Inc. Dr. Stern previously served as a director
of Avaya, Inc. and the Neiman Marcus Group, Inc.
Dr. Stern’s term as a Class I director expires at this
year’s annual stockholder meeting. Dr. Stern is
65 years old. |
| | We believe Dr. Stern’s extensive experience in
international trade issues brings an important perspective to
the Board in light of our growth strategies. In addition,
Dr. Stern provides leadership and governance experience
through her other public company directorships, including
service on the finance and governance committees of such
companies. |
| OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
“FOR” EACH OF THE BOARD NOMINEES | |

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| Terms to Expire at the 2011 Annual Meeting: | Mr. Speese has served as our Chairman of the Board and Chief
Executive Officer since October 2001 and has served as one of
our directors since 1990. Mr. Speese previously served as our
Vice Chairman from September 1999 until 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. Mr. Speese’s term as a
Class II director expires at our 2011 annual stockholder
meeting. Mr. Speese is 52 years old. |
| --- | --- |
| | 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 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. |
| Jeffery M. Jackson | Mr. Jackson has served as one of our directors since March
2007. Mr. Jackson serves as the Executive Vice
President — Corporate Business Development of Sabre
Holdings, Inc. From 1998 to August 2009, Mr. Jackson served as
the Executive Vice President — Chief Financial Officer
of Sabre Holdings. 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’s term as a
Class II director expires at our 2011 annual stockholder
meeting. Mr. Jackson is 54 years old. |
| | 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 Committee. In
addition, Mr. Jackson brings strong accounting and financial
skills important to the oversight of our financial reporting,
enterprise and operational risk management. |
| Leonard H. Roberts | Mr. Roberts has served as one of our directors since September
2006. 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 Executive Officer of Arby’s, Inc. Mr. Roberts is
Chairman Emeritus of Students in Free Enterprise, a director of
the Fort Worth Crime Commission, a director and Chairman of
Texas Health Resources, and a director of J.C. Penney, Inc. Mr.
Roberts previously served on the board of TXU Energy, Inc. Mr.
Roberts’ term as a Class II director expires at our
2011 annual stockholder meeting. Mr. Roberts is 61 years
old. |

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| Michael J. Gade | We believe that Mr. Roberts’ experience as a former Chief
Executive Officer of several multi-unit retail companies brings
directly relatable experience and a unique perspective in retail
marketing to our Board. We also believe that Mr. Roberts’
background as a board chairman brings significant corporate
governance experience to our Nominating and Corporate Governance
Committee, and his experience on the compensation committee of
another publicly traded company brings an understanding of
compensation issues to our Compensation Committee. — Mr. Gade has served as one of our directors since
May 2005. Since 2004, Mr. Gade has been an Executive in
Residence at the University of North Texas as a professor of
marketing and retailing. A founding partner of Challance Group,
LLP, Mr. Gade has 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 for 7-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. Mr. Gade’s
term as a Class III director expires at our 2012 annual
stockholder meeting. Mr. Gade is 58 years old. |
| --- | --- |
| | We believe that Mr. Gade’s significant retail marketing
experience provides our Board with an important resource with
respect to 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. |
| J. V. Lentell | Mr. Lentell has served as one of our directors since February
1995, and as Lead Director since April 2009. Since July 1993,
he has served as a director and Vice Chairman of the Board of
Directors of Intrust Bank, N.A., successor by merger to Kansas
State Bank & Trust Co. Mr. Lentell was employed by Kansas
State Bank & Trust Co., in Wichita, Kansas from 1966 until
July 1993, serving as Chairman of the Board from 1981 until July
1993. Mr. Lentell also serves on the Board of Directors of
Intrust Financial Corporation. Mr. Lentell’s term as a
Class III director expires at our 2012 annual stockholder
meeting. Mr. Lentell is 71 years old. |

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During his 15 year tenure on our Board, including as our Lead Director since April 2009, Mr. Lentell has provided demonstrated leadership to our Board. Mr. Lentell’s service on all Board committees during some period of that time provides him with a deep understanding of our company and its growth history, which we believe contributes a useful frame of reference in the context of Board discussions. In addition, Mr. Lentell has extensive knowledge of the capital markets and finance issues from his 52 years of experience in the banking industry which we believe is important to the Board’s discussions of our capital and liquidity needs. Further, Mr. Lentell’s experience as a board member of various private companies and civic and charitable organizations, including service on the audit, finance, compensation and governance committees of such organizations (in some cases as the chairman), provides our Board and committees with significant insight into compensation, governance and risk management issues.

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BOARD INFORMATION

| Board Meetings: | During 2009, our Board met 7 times, including regularly
scheduled and special meetings. Each director attended all
meetings of the Board during his or her service as a director,
except that Mr. Jackson and Dr. Stern were each unable
to attend one meeting after receiving or waiving proper notice.
All of our directors attended more than 75% of the aggregate of
the total number of meetings of the Board and the total number
of meetings of the Board committees on which they serve. The
Board also took action by unanimous written consent once during
2009. |
| --- | --- |
| 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 February 2010, each of our non-employee
directors completed a questionnaire which inquired as to their
relationship with us (and those of their immediate family
members) 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
related to transactions, relationships and arrangements between
us and our directors or parties related to our directors. In
March 2010, our Board met to discuss the independence of our
directors who are not employed by us. Following such
discussions, our Board determined that the following directors
are “independent” as defined under Nasdaq rules:
Michael J. Gade, Jeffery M. Jackson, Kerney Laday, J.V. Lentell,
Leonard H. Roberts, and Paula Stern, Ph.D. The table below
includes a description of categories or types of transactions,
relationships or arrangements considered by our Board in
reaching its determination that the directors are independent. |

Name		Transactions/Relationships/Arrangements
Michael J. Gade	Yes	None
Jeffery M. Jackson	Yes	None
Kerney Laday	Yes	None
J.V. Lentell	Yes	Banking relationship with Intrust — immaterial
Leonard H. Roberts	Yes	Charitable contributions by us to Students in Free
Enterprise — immaterial
Paula Stern, Ph.D.	Yes	None

| Board Leadership Structure: | Our Board believes the combined role of Chairman and Chief
Executive Officer, together with an independent Lead Director
having the duties described below, is in the best interest of
our stockholders because it provides an appropriate balance
between strategy development and independent oversight of
management. Our independent directors bring experience,
oversight and expertise from outside the company and rent-to-own industry, while the Chief Executive Officer brings company- and
industry-specific experience and expertise. Our Board believes
that our Chief Executive Officer is best situated to serve as
Chairman because, as a founder 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.
Our Board believes that the combined role of Chairman and Chief
Executive Officer promotes strategy development and execution,
and facilitates information flow between management and the
Board. |
| --- | --- |
| Lead Director: | As part of the Company’s corporate governance practices,
our Board has created a Lead Director position. The duties of
the Lead Director as established by the Board include
(i) serving as the chairman of executive sessions of the
Board, (ii) consulting with our Chairman and Chief
Executive Officer on matters to be addressed at Board meetings,
(iii) facilitating information flow and communication among
the directors, and (iv) performing such other duties as may
be specified by the Board. Mr. Lentell serves as our Lead
Director. |
| Executive Sessions: | Our non-employee directors meet regularly outside the presence
of management. Mr. Lentell chairs these sessions in his
role as Lead Director. |
| 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 |

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| | 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. The Board also meets with senior management annually for
a strategic planning session and discussion of the key risks
inherent in our 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 2009 included the
Audit Committee, the Compensation Committee, and the Nominating
and Corporate Governance Committee. Each of the Audit Committee,
the Compensation Committee and the Nominating and Corporate
Governance Committee has the authority to retain independent
advisors and consultants, with all fees and expenses to be paid
by us. |
| | The Audit Committee assists the Board in fulfilling its
oversight responsibilities by reviewing risks relating to
accounting matters, financial reporting, legal and regulatory
compliance, and other enterprise-wide risks. To satisfy these
oversight responsibilities, our Audit Committee reviews, among
other things, (1) the financial reports and other financial
information provided by us to the SEC or the public,
(2) our systems of controls regarding finance, accounting,
legal compliance and ethics that management and the Board have
established, (3) our independent auditor’s
qualifications and independence, (4) the performance of our
internal audit function and our independent auditors, and
(5) the efficacy and efficiency of our auditing, accounting
and financial reporting processes generally. The Audit Committee
has the direct responsibility for the appointment, compensation,
retention and oversight of our independent auditors, and reviews
our internal audit department’s reports, responsibilities,
budget and staffing. The Audit Committee also pre-approves all
audit and non-audit services provided by our independent
auditors and oversees compliance with our codes of ethics. In
addition, the Audit Committee meets regularly with our Chief
Financial Officer, director of internal audit, our independent
auditors, and management (including regularly scheduled
executive sessions with the director of internal audit and our
independent auditors). |
| | The Board has adopted a charter for the Audit Committee, which
can be found in the “Corporate Governance” section of
the “Investor Relations” section of our website at
www.rentacenter.com. The Audit 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 2009, the Audit Committee held 12 regularly scheduled
meetings. All members of the Audit Committee are
“independent” under SEC and Nasdaq rules. In addition,
the Board has determined that Mr. Jackson is an “audit
committee financial expert” as defined by SEC rules and
each of Mr. Gade and Mr. Laday meets the financial
sophistication requirements of Nasdaq. Members:
Mr. Jackson, Chairman, Mr. Gade and Mr. Laday. |
| | The Compensation Committee (1) discharges the
Board’s responsibilities with respect to all forms of
compensation of our Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, Executive Vice
President — General Counsel, Executive Vice
President — Operational Services and Executive Vice
Presidents — Operations, including assessing the risks
associated with our executive compensation policies and
practices and employee benefits, (2) administers our equity
incentive plans, and (3) reviews and discusses with our
management the Compensation Discussion and Analysis to be
included in our annual proxy statement, annual report on Form 10-K or information statement, as applicable, and makes a
recommendation to the Board as to whether the Compensation
Discussion and Analysis should be included in our annual proxy
statement, annual report on Form 10-K or any information statement, as applicable. The Compensation
Committee is also responsible for recommending to the Board the
form and amount of director compensation and conducting a review
of such compensation as appropriate. |
| | The Board has adopted a charter for the Compensation Committee,
which can be found in the “Corporate Governance”
section of the “Investor Relations” section of our
website at www.rentacenter.com. In addition, the Compensation
Committee reviews, updates and |

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| 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. |
| --- |
| The Compensation Committee’s processes for fulfilling its
responsibilities and duties with respect to executive
compensation and the role of our executive officers in the
compensation process are described under “Compensation
Discussion and Analysis — Compensation Process”
beginning on page 17 of this proxy statement. |
| Pursuant to its charter, the Compensation Committee has the
authority, to the extent it deems necessary or appropriate, to
retain compensation consultants, independent legal counsel or
other advisors and has the sole authority to approve the fees
and other retention terms with respect to such advisors. Hewitt
Associates LLC (“Hewitt”) was retained by the
Compensation Committee in September 2008 to advise the
Compensation Committee with respect to compensation to be paid
to our management as well as compensation to be paid to the
non-employee members of our Board commencing with the 2009
fiscal year. |
| The Compensation Committee held six meetings in 2009, including
regularly scheduled and special meetings. All members of the
Compensation Committee are non-employee directors and are
“independent” under Nasdaq rules. Members:
Mr. Roberts, Chairman, Mr. Lentell and
Dr. Stern. |
| The Nominating and Corporate Governance Committee manages risks associated with the independence of our Board,
corporate governance and potential conflicts of interest and
assists the Board in fulfilling its responsibilities by
(1) identifying individuals believed to be qualified to
become members of the Board, consistent with criteria approved
by the Board, (2) recommending to the Board candidates for
election or reelection as directors, including director
candidates submitted by the Company’s stockholders, and
(3) overseeing, reviewing and making periodic
recommendations to the Board concerning our corporate governance
policies. |
| The Board has adopted a written charter for the Nominating and
Corporate Governance Committee, which is available in the
“Corporate Governance” section of the “Investor
Relations” section of our website at www.rentacenter.com.
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 2009, the Nominating and Corporate Governance Committee
met four times, including regularly scheduled and special
meetings. The Board has determined that each member of the
Nominating and Corporate Governance Committee is
“independent” as defined under Nasdaq rules. Members: Mr. Lentell, Chairman, Mr. Gade and
Mr. Roberts. |

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DIRECTOR COMPENSATION

Cash Compensation: Each non-employee director receives an annual retainer of $40,000. Additionally, non-employee directors each receive $2,500 for each Board meeting attended in person and are reimbursed for their expenses in attending such meetings. In addition to such compensation, additional annual retainers are paid as follows:

	Annual
Position	Retainer
Lead Director	$10,000
Chairperson of the Audit Committee	$10,000
Other members of the Audit Committee	$7,500
Chairperson of the Compensation Committee	$6,000
Other members of the Compensation Committee	$5,000
Chairperson of the Nominating and Corporate Governance Committee	$6,000
Other members of the Nominating and Corporate Governance
Committee	$5,000

| | All retainers are payable in cash, in four equal installments on
the first day of each fiscal quarter. |
| --- | --- |
| | Neither Mr. Speese nor Mr. Fadel received any cash
compensation for his service as a director during 2009. |
| Equity Compensation: | Prior to December 31, 2008, our non-employee directors also
received options to purchase 9,000 shares of our common
stock on the first business day of the first full fiscal year of
service as a director and options to purchase 5,000 shares
of our common stock on the first business day of each year
thereafter. Commencing with the 2009 fiscal year, our
non-employee directors receive a deferred stock award pursuant
to the Rent-A-Center, Inc. 2006 Long-Term Incentive Plan (the “2006 Plan”)
on the first business day of each fiscal year rather than
options to purchase shares of our common stock. Each deferred
stock award consists of the right to receive shares of our
common stock and is fully vested upon issuance. The shares
covered by the award will be issued upon the termination of the
director’s service as a member of the Board. |
| | All of our non-employee directors serving on January 2,
2009 were granted deferred stock units valued at $50,000 on that
date. Mr. Laday, who joined our Board in May 2008, received
additional deferred stock units valued at $25,520 in lieu of the
first year stock option grant he would otherwise have received.
Neither Mr. Speese nor Mr. Fadel were granted any
equity compensation for his service as a director during 2009. |
| Director Equity Interest Guideline: | Our Board has adopted a guideline encouraging each non-employee
member of the Board to hold at least $200,000 in our common
stock and/or the deferred stock units issued as compensation for
Board service (based on the price per share on the date or dates
of such acquisition) within 5 years of the later of
(i) December 23, 2008, or (ii) the date of their
original election or appointment to the Board, and to hold such
equity interest for so long as such member continues as a
director. |

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The following table sets forth certain information regarding the compensation of our non-employee directors during 2009:

Director Compensation

| Name | Fees Earned or — Paid in
Cash (1) | Deferred Stock — Awards (2) | Total |
| --- | --- | --- | --- |
| Michael J. Gade | $67,500 | $50,000 | $117,500 |
| Jeffrey M. Jackson | $62,500 | $50,000 | $112,500 |
| Kerney Laday | $60,000 | $75,520 | $135,520 |
| J.V. Lentell | $71,000 | $50,000 | $121,000 |
| Leonard H. Roberts | $63,500 | $50,000 | $113,500 |
| Paula Stern, Ph.D. | $55,000 | $50,000 | $105,000 |

| (1) | Includes annual retainer, committee
fees and meeting attendance fees paid to each non-employee
director. |
| --- | --- |
| (2) | The amounts in this column reflect
the aggregate grant date fair value computed in accordance with
FASB ASC Topic 718. Assumptions used in the calculation of these
amounts are included in footnote L to our consolidated financial
statements for the fiscal year ended December 31, 2009
included in our Annual Report on Form 10-K filed with the SEC on February 26, 2010. On January 2,
2009, each then current director, with the exception of
Mr. Laday, was granted 2,833 deferred stock units. Each
deferred stock unit represents the right to receive one share of
our common stock. The deferred stock units are fully vested and
non-forfeitable. The common stock will be issued to the director
upon the termination of his or her service as a member of our
Board. Mr. Laday, who joined our Board in May 2008,
received additional deferred stock units valued at $25,520 in
lieu of the first year stock option grant he would otherwise
have received under our prior director compensation policy. |

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CORPORATE GOVERNANCE

| General: | Our Board has established corporate governance practices
designed to serve the best interests of our company and our
stockholders. In this regard, our Board has, among other things,
adopted: |
| --- | --- |
| | • a code of business conduct and ethics applicable to
all of our employees, including our Chief Executive Officer,
Chief Financial Officer, our principal accounting officer and
controller; |
| | • a code of business conduct and ethics applicable to
all of our Board members; |
| | • procedures regarding stockholder communications with
our Board and its committees; |
| | • a Lead Director position; |
| | • a majority voting standard in non-contested
elections for directors; |
| | • a policy for the submission of complaints or
concerns relating to accounting, internal accounting controls or
auditing matters; |
| | • provisions in our Bylaws regarding director
candidate nominations and other proposals by stockholders; and |
| | • written charters for its Audit Committee,
Compensation Committee and Nominating and Corporate Governance
Committee. |
| | Our Board intends 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
governing all of our employees, including our Chief Executive
Officer, Chief Financial Officer, our principal accounting
officer and controller. A copy of this Code of Business Conduct
and Ethics is published in the “Corporate Governance”
section of the “Investor Relations” section of our
website at www.rentacenter.com. We intend to make all required
disclosures concerning any amendments to, or waivers from, this
Code of Business Conduct and Ethics on our website. |
| Board Code of Business Conduct and Ethics: | Our Board has adopted a Code of Business Conduct and Ethics
applicable to all of the members of the Board. The Board Code of
Business Conduct and Ethics provides guidance to our directors
to help them recognize and deal with ethical issues and provides
a mechanism to report unethical conduct. The Board Code of
Business Conduct and Ethics is available on the “Corporate
Governance” section of the “Investor Relations”
section of our website at www.rentacenter.com. |
| Stockholder Communications with the Board: | Our Board has established a process by which stockholders may
communicate with our Board. Stockholders may contact the Board
or any committee of the Board by any one of the following
methods: |

By telephone:	By mail:	By e-mail:
972-624-6210	Rent-A-Center, Inc.	RAC.Board@rentacenter.com
	Attn: Compliance Officer
	5501 Headquarters Drive
	Plano, TX 75024

Procedures for Reporting Accounting Concerns: The Audit Committee has established procedures for (1) the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and (2) the submission by our employees, on a confidential and anonymous basis, of concerns regarding questionable accounting or auditing matters. These procedures are posted in the “Corporate Governance” section of the “Investor Relations” section of our website at www.rentacenter.com.

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| Director Nominations: |
| --- |
| Qualifications. The Nominating and Corporate Governance
Committee believes that the minimum requirements for a person to
be qualified to be a member of the Board are that a person must
be committed to equal opportunity employment, and must not be a
director, consultant, employee of or to any competitor of ours
(i.e., a company in the rent-to-own business). The Nominating and Corporate Governance Committee
also believes that members of the Board should possess
character, judgment, skills (such as an understanding of the
retail and rent-to-own industries, business management, finance, accounting, marketing,
operations and strategic planning), diversity, and experiences
with businesses and other organizations of a comparable size and
industry. In addition, the Nominating and Corporate Governance
Committee considers the composition of the current Board and the
Board’s needs when evaluating the experience and
qualification of director candidates. The Nominating and
Corporate Governance Committee evaluates whether certain
individuals possess the foregoing qualities and 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 stockholders, 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 stockholders, Section I,
Article 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 |

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| | 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. The notice to our Secretary must
set forth: |
| --- | --- |
| | • the name & address of the stockholder
and/or beneficial owner making such nomination; |
| | • class & number of shares of capital stock
owned, directly or indirectly, beneficially or of record by such
stockholder and/or beneficial owner; |
| | • any derivative interests held by such stockholder
and/or beneficial owner; |
| | • proxy or voting agreements to which such stockholder
and/or beneficial owner may vote any shares of any of our
securities; |
| | • short interest position of such stockholder and/or
beneficial owner, if any; |
| | • dividend rights to which such stockholder and/or
beneficial owner are entitled, if separable; |
| | • proportionate interests of such stockholder and/or
beneficial owner arising out of partnership arrangements; and |
| | • performance related fees to which such stockholder
and/or beneficial owner is entitled based on the increase or
decrease in the value of such shares or derivative instrument. |
| | The above information must be supplemented (1) no later
than 10 days following the record date for the meeting, and
(2) 10 days prior to the meeting date. 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: |
| | • information relating to such person that is required
to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, pursuant to
Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person’s written consent to
being named in the proxy statement as a nominee and to serve as
a director if elected); |
| | • a description of any compensatory and other material
agreements among the nominating stockholder/beneficial owner,
its affiliates and associates, and the proposed nominee; |
| | • a questionnaire furnished by our Secretary and
completed by the proposed nominee; and |
| | • the representation and agreement of the proposed
nominee regarding no voting agreements, non-disclosed
compensation arrangements, and compliance upon election with our
governance policies and guidelines. |
| 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 2009 Annual
Meeting of Stockholders. |

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PROPOSAL TWO: RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

| Overview: | The Audit Committee of the Board has selected Grant Thornton LLP
as our independent registered public accounting firm for the
fiscal year ending December 31, 2010. Our Board has further
directed that we submit the selection of our independent
registered public accounting firm for ratification by our
stockholders at the annual meeting. |
| --- | --- |
| | The Audit Committee reviews and pre-approves both audit and all
permissible non-audit services provided by our independent
registered public accounting firm, and accordingly, all services
and fees in 2009 provided by Grant Thornton were pre-approved by
the Audit Committee. The Audit Committee has considered whether
Grant Thornton’s provision of services, other than services
rendered in connection with the audit of our annual financial
statements, is compatible with maintaining Grant Thornton’s
independence. The Audit Committee has determined that the
rendering of non-audit services by Grant Thornton during the
fiscal year ended December 31, 2009 was compatible with
maintaining their independence. Representatives of Grant
Thornton will attend the annual meeting, will have an
opportunity to make a statement if they so desire and will be
available to respond to appropriate questions. |
| | Stockholder ratification of the selection of Grant Thornton as
our independent registered public accounting firm is not
required by our Bylaws or otherwise. However, the Board is
submitting the selection of Grant Thornton to the stockholders
for ratification as a matter of good corporate practice. The
Audit Committee believes it to be in the best interests of our
stockholders to retain, and has retained, Grant Thornton as our
independent registered public accounting firm for the fiscal
year ending December 31, 2010. If the stockholders fail to
ratify the selection, the Audit Committee will reconsider
whether or not to continue the retention of Grant Thornton. Even
if the selection is ratified, the Audit Committee in its
discretion may direct the appointment of a different independent
registered public accounting firm at any time during the year if
they determine that such a change would be in our best interests
and those of our stockholders. The Audit Committee annually
reviews the performance of our independent registered public
accounting firm and the fees charged for their services. Based
upon the Audit Committee’s analysis of this information,
the Audit Committee will determine which registered independent
public accounting firm to engage to perform our annual audit
each year. |
| Principal Accountant Fees and Services: | The aggregate fees billed by Grant Thornton for the fiscal years
ended December 31, 2009 and December 31, 2008 for the
professional services described below are as follows: |

| Audit
Fees (1) | $920,029 | $923,487 |
| --- | --- | --- |
| Audit-Related
Fees (2) | $38,558 | $36,453 |
| Tax
Fees (3) | $40,970 | $17,265 |
| All Other
Fees (4) | $9,105 | $0 |

| (1) | Represents the aggregate fees
billed by Grant Thornton for (a) professional services
rendered for the audit of our annual financial statements for
2009 and 2008, (b) the audit of management’s
assessment of the effectiveness of our internal controls over
financial reporting as of December 31, 2009 and 2008,
(c) reviews of the financial statements included in our Forms 10-Q filed with the SEC, and (d) services in connection with
regulatory filings during 2009 and 2008. |
| --- | --- |
| (2) | Represents the aggregate fees
billed by Grant Thornton for 2009 and 2008 for assurance and
related services that are reasonably related to the performance
of the audit or review of our financial statements and are not
reported above under the caption “Audit Fees.” |
| (3) | Represents the aggregate fees
billed by Grant Thornton for professional services rendered for
tax compliance, tax advice and tax planning. This amount
consists of fees related to state tax work in 2009 and 2008. |
| (4) | For 2009, represents the aggregate
fees billed by Grant Thornton for business analytics consulting
services. There were no fees paid to Grant Thornton in 2008 for
products or services not included above under the captions
“Audit Fees,” “Audit Related Fees” and
“Tax Fees.” |

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO RATIFY GRANT THORNTON LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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AUDIT COMMITTEE REPORT

In accordance with its written charter adopted by the Board, the Audit Committee assists the Board in fulfilling its oversight responsibilities by, among other things, reviewing the financial reports and other financial information provided by the Company to any governmental body or the public.

In discharging its oversight responsibilities, the Audit Committee obtained from the independent registered public accounting firm a formal written statement describing all relationships between the firm and the Company that might bear on the auditors’ independence consistent with the applicable requirements of the Public Company Accounting Standards Board, discussed with the independent auditors any relationships that may impact their objectivity and independence, and satisfied itself as to the auditors’ independence. The Audit Committee also discussed with management, the internal auditors and the independent auditors the integrity of the Company’s financial reporting processes, including the Company’s internal accounting systems and controls, and reviewed with management and the independent auditors the Company’s significant accounting principles and financial reporting issues, including judgments made in connection with the preparation of the Company’s financial statements. The Audit Committee also reviewed with the independent auditors their audit plans, audit scope and identification of audit risks.

The Audit Committee discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, and, with and without management present, discussed and reviewed the results of the independent auditors’ examination of the consolidated financial statements of the Company.

The Audit Committee reviewed and discussed the audited consolidated financial statements of the Company as of and for the fiscal year ended December 31, 2009 with management and the independent auditors. Management is responsible for the Company’s financial reporting process, including its system of internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934), 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 Committee’s responsibility is to monitor and review these processes. The members of the Audit Committee are “independent” as defined by SEC and Nasdaq rules, and our Board has determined that Jeffery M. Jackson is an “audit committee financial expert” as defined by SEC rules.

The Audit Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits, including internal control testing under Section 404 of the Sarbanes-Oxley Act. The Audit Committee periodically meets with the Company’s internal and independent auditors, with and without management present, and in private sessions with members of senior management to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. The Audit Committee also periodically meets in executive session.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board (and the Board subsequently approved the recommendation) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE

Jeffery M. Jackson, Chairman

Michael J. Gade

Kerney Laday

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EXECUTIVE OFFICERS

The Board appoints our executive officers at the first Board meeting following our annual stockholders meeting and updates the executive officer positions as needed throughout the year. Each executive officer serves at the behest of the Board and until their successors are appointed, or until the earlier of their death, resignation or removal.

The following table sets forth certain information with respect to our executive officers as of March 31, 2010:

Name		Position
Mark E. Speese	52	Chairman of the Board of Directors and Chief Executive Officer
Mitchell E. Fadel	52	President and Chief Operating Officer
Robert D. Davis	38	Executive Vice President — Finance, Chief Financial
Officer and Treasurer
Theodore V. DeMarino	48	Executive Vice President — Operations
Ronald D. DeMoss	59	Executive Vice President — General Counsel and
Secretary
Christopher A. Korst	50	Executive Vice President — Operations
David E. West	59	Executive Vice President — Operational Services

| Mark E. Speese | Mr. Speese has served as the Chairman of our Board and
Chief Executive Officer since October 2001 and has served as one
of our directors since 1990. Mr. Speese previously served
as our Vice Chairman from September 1999 until 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. |
| --- | --- |
| Mitchell E. Fadel | Mr. Fadel has served as our President since July 2000, as
our Chief Operating Officer since December 2002 and as a
director since December 2000. From November 1992 until July
2000, Mr. Fadel served as President and Chief Executive
Officer of ColorTyme. |
| Robert D. Davis | Mr. Davis has served as our Executive Vice President
— Finance since February 2008, our Senior Vice
President — Finance since September 1999, as our Chief
Financial Officer since March 1999 and as our Treasurer since
January 1997. From September 1998 until September 1999,
Mr. Davis served as our Vice President — Finance
and Treasurer. Mr. Davis began his employment with us in
1993 as an accountant. Mr. Davis is a licensed certified
public accountant in the State of Texas. |
| Theodore V. DeMarino | Mr. DeMarino has served as our Executive Vice
President — Operations since August 2009. From April
2003 to July 2009, Mr. DeMarino served as one of our
division vice presidents, and as one of our regional directors
from January 1995 to March 2003. Mr. DeMarino began his
employment with us in 1984 as a store manager. |
| Ronald D. DeMoss | Mr. DeMoss has served as our Executive Vice President
— General Counsel and Secretary since August 2008, and
as our Senior Vice President — General Counsel and
Secretary of the Company since January 2008. From November 2006
until December 2007, Mr. DeMoss served as our Vice
President — Assistant General Counsel. Mr. DeMoss
previously served as Vice President and General Counsel of
Rent-Way, Inc. from February 1996 to November 2006. We acquired
Rent-Way in November 2006. |
| Christopher A. Korst | Mr. Korst has served as our Executive Vice President
— Operations since January 2008. Mr. Korst
previously served as our Secretary since September 2004 and our
Senior Vice President — General Counsel since May
2001. From January 2000 until May 2001, Mr. Korst owned and
operated AdvantEdge Quality Cars, which he acquired in a
management buyout. |
| David E. West | Mr. West has served as our Executive Vice President
— Operational Services since August 2008, and as our
Senior Vice President — Operational Services since May
2005. From September 2004 until May 2005, Mr. West served
as our Vice President — Operational Services. From
August 1992 until September 2004, Mr. West served as our
Vice President — Product Service. |

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation Program Objectives

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 govern 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:

| • | attract, retain and motivate senior executives with competitive
compensation opportunities; |
| --- | --- |
| • | balance short-term and long-term strategic goals; |
| • | align our executive compensation program with the core values
identified in our mission statement which include respect for
people, integrity, a commitment to excellence, ownership and
stakeholder focus; and |
| • | reward achievement of our financial and non-financial goals. |

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 has traditionally relied heavily on the input and recommendations of our Chief Executive Officer, Mark E. Speese, who reviews and makes recommendations to the Compensation Committee with respect to our executive compensation programs. The Compensation Committee believes Mr. Speese’s unique insight into our business, his role as a founder of our company, his day-to-day interaction with our senior executives, as well as his over 30 years of experience in the rent-to-own industry, provides a valuable resource to the Compensation Committee. Prior to providing his input and recommendations to the Compensation Committee, our Human Resources department prepares, and Mr. Speese reviews, an informal position-level analysis of our compensation programs company-wide, which includes a review of our named executive officers’ compensation for internal consistency relative to our other officers and employees, and attempts to achieve consistency between the relative difference between the compensation of our named executive officers and the compensation of our other officers and employees. Mr. Speese does not, however, participate in the discussions among the members of the Compensation Committee with respect to his own compensation.

The Compensation Committee determines each year, generally in September, whether to retain a compensation consultant to assist it with compensation decisions for the upcoming fiscal year. The Compensation Committee engaged Hewitt in 2005 to conduct a formal evaluation of our compensation arrangements for our senior executives in relation to those arrangements offered by similarly-situated public companies in the retail industry. The Compensation Committee made adjustments to our compensation arrangements beginning in 2006 in response to Hewitt’s evaluation, including the formulation of the 2006 Plan and the determination of the structure of our long-term incentive awards under the 2006 Plan. In the fall of 2008, the Compensation Committee determined it appropriate to again engage Hewitt to conduct a formal evaluation of our compensation arrangements for our directors and our senior executives, including our named executive officers, in relation to those arrangements offered by similarly-situated public companies in the retail industry. See “Changes Implemented in 2009” below for a discussion regarding the executive compensation changes implemented by the Compensation Committee for 2009 and Hewitt’s role in that process. In each of these instances, Hewitt was engaged directly by the Compensation Committee, and has performed no other services to us or any of our executive officers or directors within the previous three years.

In those years in which a compensation consultant is not retained, the Compensation Committee generally relies on market data gathered by our Human Resources department in evaluating the competitiveness of pay arrangements for our named executive officers, including independent compensation surveys by companies (such as Mercer LLC and the Economic Research Institute (ERI)) conducted with respect to companies categorized as retailers with similar sales revenue as our company. The Compensation Committee also relies on input provided by Hewitt in its previous engagements in years in which a compensation consultant is not retained. For the 2010 fiscal year, the Compensation Committee did not retain a compensation consultant and made no significant adjustments to the compensation arrangements for our senior executives, including our named executive officers.

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See the section entitled “ — Determination of 2010 Compensation ” on page 42 of this proxy statement for information regarding the compensation arrangements approved for our named executive officers for the 2010 fiscal year.

Finally, various members of the Compensation Committee have significant professional experience in the retail industry, as well as with respect to the 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 conditions and our progress in achieving our short term and long-term goals.

When the Compensation Committee considers the mix and amount of total compensation for our named executive officers, it reviews a tally sheet which contains information regarding, among other things:

| • | each named executive officer’s compensation for the
previous three years; |
| --- | --- |
| • | the type and amount of long-term incentive awards granted to
each named executive officer in the previous three years; |
| • | our equity securities owned by each named executive officer as
of the end of the most recently completed fiscal year; |
| • | the proceeds realized by each named executive officer from sales
of our equity securities in the previous three years; and |
| • | the severance payments to which each named executive officer
would be entitled to receive upon the occurrence of certain
events, taking into account the proposed compensation to be paid
to such named executive officer for the new fiscal year. |

The Compensation Committee uses these tally sheets to estimate the total annual compensation of the named executive officers, and provide it a perspective on the named executive officers’ wealth accumulation from our compensation programs and potential payouts to them under a range of termination scenarios. 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. In its review of tally sheets for 2009 compensation, the Compensation Committee discovered no unintended consequences of the compensation program, and consequently, no material changes were made or deemed necessary to the executive compensation program or the individual elements of our executive officers’ compensation as a result of this review.

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 38 and 40, 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.

Changes Implemented in 2009

In the fall of 2008, the Compensation Committee determined it appropriate to engage Hewitt to conduct a formal evaluation of our compensation arrangements for our directors and our senior executives, including our named executive officers, in relation to those arrangements offered by similarly-situated public companies in the retail industry. In December 2008, Hewitt presented its findings to the Compensation Committee and recommended that the Compensation Committee consider revisions to our compensation arrangements to more fully align our executive compensation arrangements with the 50 th percentile of similarly situated public companies identified by Hewitt. In connection with that review, the Compensation Committee implemented the following changes beginning with the 2009 fiscal year:

| • | Revised our MBO program structure to both increase the eligible
bonus percentage available to our senior executives, including
our named executive officers, as well as to tie the attainment
of that bonus solely to a company financial performance measure.
Previously, our MBO program was divided into two
parts — a measure based on our company-wide financial
performance, which made up 40% of the potential annual incentive
award, and an individual performance measure specific to each
named executive officer, which made up the remaining 60% of the
potential annual incentive award; and |
| --- | --- |
| • | Revised the structure of the long-term incentive awards granted
to our senior executives, including our named executive
officers, both to increase the size of the award to an amount
commensurate with the
50 th |

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percentile of similarly situated companies, as well as altered the mix of such awards to more heavily weight the achievement of such awards to our financial performance, such that 35% of the value of the award is issued in stock options, 25% of the value of the award is issued in time based restricted stock units and 40% of the value of the award is issued in performance based restricted stock units. Prior to 2009, the annual long-term incentive awards granted to our senior executives, including our named executive officers, were comprised of an approximate 50/50 combination of stock options and restricted stock units (half of which had time-based vesting and the other half had performance-based vesting).

These adjustments were made to more fully align potential compensation to the 50th percentile of similarly situated companies and to emphasize that such compensation should be more aligned with actual financial performance.

In connection with its review of our compensation arrangements, Hewitt determined that the following similarly situated public companies provided an appropriate comparison for the purpose of evaluating our compensation arrangements for our senior executives and directors:

99 Cents Only Stores	Aaron, Inc.	Advance America/Cash Advance
AmeriCredit Corp.	Autozone, Inc.	Bed Bath & Beyond, Inc.
Big Lots, Inc.	Blockbuster, Inc.	Cash America International, Inc.
Dollar Financial Corp.	Dollar Tree, Inc.	Ezcorp, Inc.
Family Dollar Stores	Pier 1 Imports, Inc.	RadioShack Corp.
Williams-Sonoma, Inc.

Hewitt used the following criteria to establish this group:

| • | Companies with a similar business focus as ours, including both
retail (particularly home furnishings and other retail
organizations with which we compete for customers in a similar
demographic) and consumer finance; |
| --- | --- |
| • | Companies with similar revenue and market value as us, and where
we approximated the median and average of the group; and |
| • | U.S.-based public companies, with a preference toward companies based in
the Dallas/Fort-Worth metroplex area. |

The Compensation Committee approved the use of this group.

Forms of Compensation

The following forms of compensation are currently utilized by the Compensation Committee in compensating our named executive officers:

•	base salary, which is paid in cash;
•	annual incentive compensation, which is paid in cash;
•	long-term incentive compensation;
•	severance arrangements; and
•	limited fringe benefits, including perquisites.

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:

| • | the named executive officer’s historical performance in his
position with us, based on the input received from
Mr. Speese, including the financial performance within his
or her area of responsibility and other subjective factors; |
| --- | --- |
| • | Mr. Speese’s recommendations as to the proposed base
salary (other than his own); |
| • | our financial performance; and |
| • | recent comparative peer data, which for 2009 compensation, was
compiled by Hewitt. |

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Annual 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 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.

MBO Program. Our named executive officers, other than Mr. Speese, participate in our management bonus opportunity program, which we refer to as our “MBO program.” Under our MBO program, cash bonuses are 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 allocation as well as the potential ultimate payouts pursuant to our MBO 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 and Mr. Speese 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.

The MBO program is based solely upon the achievement of a company-wide financial performance measure. The Compensation Committee believes that individualized objectives are better addressed through the amount of base salary awarded to the applicable named executive officer, and that the achievement of a bonus should be attributed more heavily to company financial performance. In that regard, the Compensation Committee believes that, since each named executive officer is aligned with the overall performance of the company, 100% of the executive’s bonus should be determined based upon the achievement of an overall company financial performance objective. Consistent with prior years, the Compensation Committee further determined that our consolidated pre-tax net income was the appropriate basis upon which to measure our performance in this context, based in part upon input previously received from Hewitt in 2005 and 2008 regarding the performance measures utilized with respect to similar awards made by similarly-situated public companies in the retail industry. The Compensation Committee also believes that consolidated pre-tax net income generally represents an accurate indicator of our financial performance over a one-year period of time.

In setting the target amount of financial performance, the Compensation Committee reviews with Mr. Speese our financial projections as well as the market’s expectations with respect to our company-wide financial performance for the applicable year. Our MBO program contains provisions such that each participating named executive officer is typically eligible to receive a cash bonus in a range from a minimum amount should we approach, but fail to achieve, our targeted financial performance, a target amount, should we achieve our targeted financial performance, and a maximum amount should we exceed our targeted financial performance. The Compensation Committee believes that such adjustments are appropriate to operate as an additional incentive for our named executive officers in the event that we either exceed or approach, yet fail to achieve, the financial performance target.

The Compensation Committee recognizes that there may be instances where the accounting treatment of a matter may have a disproportionate impact on our financial results in any given year, irrespective of whether or not such accounting impact truly reflects our operating results for that fiscal year, as may be the case with changes in our accruals for insurance and legal liabilities. Accordingly, the Compensation Committee uses its discretion in evaluating our financial performance with respect to the MBO program, and may make adjustments with respect to certain accounting measures and extraordinary items in determining whether we met our financial performance target when doing so is consistent with our compensation objectives.

Mr. Speese Annual Incentive Compensation. Mr. Speese does not participate in our MBO program, but the Compensation Committee has the ability to award a cash bonus to Mr. Speese in its discretion pursuant to the terms of his employment agreement, which is discussed in greater detail below. In determining whether Mr. Speese is awarded a cash bonus and if so, in what amount, the Compensation Committee will review our financial performance for the relevant fiscal year, Mr. Speese’s past performance, total cash compensation necessary to retain top executive talent, and whether we attained the financial performance measure for the MBO program for our other senior executive officers, including our named executive officers.

For a description of the cash bonuses paid to our named executive officers for 2009, please see “ — Determination of 2009 Compensation — MBO Program Compensation for 2009 ” on page 23, the Summary Compensation Table on page 27 and the Grants of Plan-Based Awards Table on page 29 of this proxy statement.

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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. In general, the Compensation Committee considers equity awards to our named executive officers on an annual basis, normally in January of each year.

Generally, long-term incentive awards are made to our named executive officers pursuant to (i) the 2006 Plan and (ii) 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 vesting 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. In addition, under the 2006 Plan, awards may be made in the form of cash awards.

The Compensation Committee has generally granted long-term incentive equity awards to our named executive officers other than Mr. Speese in the form of options to purchase shares of our common stock and restricted stock units. 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 vest either incrementally over a 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 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. We typically grant awards of restricted stock units to our named executive officers as a portion of a long-term incentive award in January of each year. The Compensation Committee typically determines the dollar value for each award of restricted stock with time-based vesting and performance-based vesting to each of our named executive officers.

In place of long-term equity awards, the Compensation Committee has typically granted Mr. Speese a cash award with vesting provisions similar to the vesting provisions of the long-term equity awards granted to our other named executive officers.

For a description of the long-term incentive awards granted to our named executive officers for 2009, please see “ — Determination of 2009 Compensation — Long-Term Incentive Compensation Award Grants in 2009 ” on page 25, the Summary Compensation Table on page 27 and the Grants of Plan-Based Awards Table on page 29 of this proxy statement.

Severance Arrangements. We have an employment agreement with Mr. Speese 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. 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 release provisions in our loyalty agreements, which inure to our benefit in the event that an eligible executive severs employment with us.

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For a more detailed description of the severance arrangements which apply to our named executive officers, please see “ Termination of Employment and Change-in-Control Arrangements ” beginning on page 34 of this proxy statement.

Fringe Benefits and 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 industry. In addition, we will pay for the cost of one annual executive physical examination for each named executive officer. Our named executive officers are also eligible to participate in our 401(k) plan and the Rent-A-Center, Inc. Deferred Compensation Plan. The Deferred Compensation Plan allows our executive officers to defer tax liability on a portion of their compensation that they would not otherwise be able to contribute due to applicable IRS limitations on contributions to 401(k) plans by highly compensated individuals.

In addition, we own and operate a corporate jet for use by management for business purposes which is available for limited non-business use to our named executive officers. Use of the corporate aircraft by these executives for non-business use is subject to availability. Under the policy established by the Board, none of our executives is permitted to charter the corporate aircraft for non-business use more than once per calendar quarter, unless the executive first submits a request to Mr. Speese, who must consult with the Chairman of the Audit Committee in determining whether to approve such additional non-business use. Once a reservation of the corporate aircraft for non-business use is made, the executive must pay us, in advance, 110% of the estimated total cost of the requested use of the corporate aircraft. If the actual cost for the non-business use of the corporate aircraft exceeds the advance deposit made by the requesting executive, the additional 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 fringe benefits and perquisites in order to attract and retain our named executive officers by offering compensation opportunities that are competitive with those offered by similarly-situated public companies in the retail industry. In determining the total compensation payable to our named executive officers for a given fiscal year, the Compensation Committee will examine such fringe benefits and perquisites in the context of the total compensation which our named executive officers are eligible to receive. However, given the fact that such fringe benefits and perquisites which are available to our named executive officers represent a relatively insignificant portion of their total compensation, the availability of such items does not materially influence the decisions made by the Compensation Committee with respect to other elements of the total compensation to which our named executive officers are entitled or awarded.

For a description of the fringe benefits and perquisites received by our named executive officers in 2009, please see “ — All Other Compensation ” on page 28 of this proxy statement.

Section 162(m)

In general, Section 162(m) 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 or the Equity Plan. The Compensation Committee believes that our executive compensation deduction for 2009 will not be materially affected by the Section 162(m) limitations.

Determination of 2009 Compensation

2009 Annual Base Salary Adjustments and 2009 Target Annual Incentive Compensation

At the beginning of 2009, the Compensation Committee considered whether adjustments would be made to the annual base salaries and target annual incentive compensation opportunities for our named executive officers. During the Compensation Committee’s review of base salaries for our named executive officers for 2009, the Compensation Committee primarily considered market data provided by Hewitt, the input of Mr. Speese (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. In determining Mr. Speese’s base salary for 2009, the Compensation Committee considered our financial performance in 2008 and the level of compensation paid to the highest paid executive at similarly situated public companies in the retail industry.

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Based on its review, the Compensation Committee increased the base salaries of the named executive officers for 2009 (other than Mr. DeMarino) as set forth in the table below. The increases were generally consistent with the Compensation Committee’s decision to increase our named executive officers’ base salaries consistent with the 4.0% cost of living increase, on an overall basis, of the base salaries for our home office employees. This increase was also consistent with the Compensation Committee’s decision to move our executive compensation levels toward the 50th percentile of base salaries paid to executive officers with comparable duties and responsibilities at similarly-situated public companies in the retail industry. In doing so, the Compensation Committee reviewed the analysis provided by Hewitt, market data compiled by our Human Resources department, and the ERI and Mercer data as described more fully in “Compensation Discussion and Analysis — Compensation Process” on page 17 of this proxy. Messrs. Speese and Fadel each received a 2% increase in base salary because their base salaries more closely approached the 50th percentile of base salaries paid to executive officers with comparable duties and responsibilities at similarly-situated public companies in the retail industry than the base salaries of our other named executive officers. Mr. Davis received a 4% increase in base salary, and Mr. Korst received a 5% increase in base salary, each in an effort to more closely align their base salaries with that of individuals in comparable positions based on survey data collected by Hewitt. The base salary adjustments for 2009 were effective March 1, 2009. Mr. DeMarino was not serving as an executive officer at the time of these base salary adjustments. In August 2009, Mr. DeMarino’s base salary was increased by approximately 30% to $306,112 due to his promotion at that time to Executive Vice President — Operations.

Annual Base Salaries

Name	2008 Base Salary	2009 Base Salary
Mark E. Speese	$ 800,000	$ 816,000	2.0 %
Robert D. Davis	$ 380,000	$ 395,200	4.0 %
Mitchell E. Fadel	$ 543,000	$ 553,860	2.0 %
Christopher A. Korst	$ 330,000	$ 346,500	5.0 %

Furthermore, the Compensation Committee concluded, based upon the study by Hewitt, that the eligible bonus percentage for each of our named executive officers should be increased to more fully align our executive officers’ bonus potential with similarly situated officers of other comparable companies. Based upon that review, the Compensation Committee increased the bonus potential under the MBO program for Mitchell E. Fadel to 60%; and for each of Messrs. Davis and Korst to 50% of their base salaries, an increase in each case of 10%. In addition, the Compensation Committee increased Mr. Speese’s bonus potential from 60% to 80% of his base salary.

MBO Program Compensation for 2009

In January 2010, the Compensation Committee reviewed the amounts payable pursuant to the named executive officers’ annual incentive awards under the 2009 MBO program for performance in 2009 based on the metrics approved by the Compensation Committee in January 2009. The Compensation Committee further awarded Mr. Speese’s cash bonus for his performance in 2009 at that time. The annual cash incentive awards for 2009 performance were paid in cash in February 2010. The following discussion sets forth the process the Compensation Committee followed in reviewing the amounts payable to each named executive officer under the MBO program for 2009 performance. As previously described, the MBO program for 2009 was comprised solely of a company-wide financial performance measure.

MBO Program — Company-Wide Financial Performance Goal. Our 2009 MBO financial performance goal was set at $247.6 million of consolidated pre-tax net income. When setting the performance target for 2009, the Compensation Committee elected to use a pre-tax financial measurement because, in the Compensation Committee’s view, that measure more appropriately reflects management’s current year impact on operating results by eliminating any potential positive or negative effect on our effective tax rate of non-operating items (such as reserves and refinancing charges).

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The percentage of the incentive target each named executive officer was eligible to receive if we missed, met or exceeded this target during 2009 is set forth in the table below:

2009 MBO Program Financial Performance Target

Percent of Target Financial — Performance Target Achieved	Named Executive Officer
<80%		0 %
80.0%	— 85.0%	50 %
85.0%	— 90.0%	60 %
90.0%	— 92.5%	70 %
92.6%	— 95.0%	80 %
95.1%	— 97.5%	90 %
97.6%	— 102.5%	100 %
102.6%	— 105.0%	110 %
105.1%	— 107.5%	120 %
107.6%	— 109.0%	130 %
109.1%	— 110.5%	140 %
³ 110.6%		150 %

The financial performance target for 2009 was established following a review of our financial projections developed in alignment with our strategic plan and objectives for 2009. Generally, the financial performance target levels are set such that the relative difficulty of achieving the target level is consistent from year to year. For 2009, the corporate performance target was set consistent with the target level set for 2008. The Compensation Committee noted we did not achieve the financial performance target under the 2008 MBO program, and determined that establishing a target consistent with the 2008 target was appropriate for 2009 given the economic environment.

MBO Program Compensation Determinations for 2009

On January 29, 2010, the Compensation Committee reviewed the actual performance of our company relative to the pre-tax consolidated net income target amount that was established for the year. Pre-tax consolidated net income as reported in our financial statements for the year ended December 31, 2009, was $270.4 million. In reviewing our actual 2009 performance relative to the corporate financial goal, the Compensation Committee determined that it would be appropriate, consistent with past practices, to adjust for certain non-operating items for purposes of determining whether we met our financial performance target. Accordingly, the Compensation Committee made adjustments to pre-tax consolidated net income pertaining to certain litigation credits (a decrease of $4.9 million) and the incremental amount accrued for the payment of cash bonuses at greater than 100% (an increase of $1,5 million) and determined that, for purposes of the 2009 MBO program, we achieved pre-tax consolidated net income for the fiscal year ended December 31, 2009, of $267.0 million, which represented 107.8% of the target amount of $247.6 million, resulting in payment of 130% of the target bonus amounts pursuant to our 2009 MBO program.

Mr. Speese 2009 Cash Bonus. Although Mr. Speese does not participate in our MBO program, the Compensation Committee determined a target cash bonus for Mr. Speese in January 2009 of 80% of his base salary. In determining whether Mr. Speese is actually awarded a cash bonus and if so, in what amount, the Compensation Committee reviews the factors described above under “ — Annual Incentive Compensation — Mr. Speese Annual Incentive Compensation ” on page 20 of this proxy statement. In January 2010, the Compensation Committee determined that Mr. Speese should receive a cash bonus for the fiscal 2009 year in the amount of $848,650, which amount is equal to 130% of Mr. Speese’s targeted cash bonus. In making this determination, the Compensation Committee considered Mr. Speese’s individual contributions to our company and also considered the level of achievement of the financial performance target set with respect to our 2009 MBO program.

The amounts awarded to our named executive officers for their annual cash incentive bonus for 2009 performance is included in the Summary Compensation Table under the column “Non-Equity Incentive Plan Compensation” on page 27 of this proxy statement.

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Long-Term Incentive Compensation Award Grants in 2009

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 the annual grant to our executive officers after the Compensation Committee has reviewed the information set forth in the tally sheets. Stock options are granted with an exercise price equal to the fair market value per share of our common stock on the date the option is granted by reference to the closing price for shares on the Nasdaq Global Select Market on the last market trading day prior to the date the option is granted. Grants may also be made in connection with commencement of employment or promotions.

The long-term equity incentive grants to our named executive officers in 2009 reflected (i) an increase in the size of the award to an amount commensurate with the 50th percentile of similarly situated companies, and (ii) a change in the mix of such awards to more heavily weight the achievement of such awards to our financial performance, as compared to the awards made in 2006, 2007 and 2008. The dollar amount, the allocation of the dollar amounts to each vesting requirement and the basis for selecting the dollar amounts allocated to each of the vesting requirements were determined by the Compensation Committee based on data compiled by, and recommendations of, Hewitt. Annual long-term incentive compensation grants to our named executive officers for 2009 were structured in three tranches comprised of (i) 35% of the value of the award issued in stock options, (ii) 25% of the value of the award issued in time based restricted stock units and (iii) 40% of the value of the award issued in performance based restricted stock units. Options are granted at target levels, are not adjusted for company or individual performance, and vest ratably over a four year period commencing on the one-year anniversary of the date of grant. The time-based restricted stock units vest upon the named executive officer completing three years of continuous employment with us from January 30, 2009. The performance-based restricted stock units vest upon our achievement of a three-year EBITDA target of $1.151 billion for the three-year period ending December 31, 2011.

Given Mr. Speese’s significant ownership of our common stock, and consistent with the prior years, the Compensation Committee determined in January 2009 that a long-term incentive award granted to Mr. Speese should be a cash award, containing substantially the same vesting schedule and requirements as those of the long-term incentive equity awards granted to our other named executive officers.

Consistent with the prior years, the Compensation Committee established an EBITDA target as the appropriate basis upon which to measure our performance in this context based in part upon input received from Hewitt regarding the performance measures utilized with respect to similar awards made by similarly-situated public companies in the retail industry. The Compensation Committee also believes EBITDA represents an accurate indicator of our performance over an extended period of time, as an EBITDA measure incorporates certain factors which the Compensation Committee believes are important to an understanding of our performance over such period, such as an increase in revenue as well as the management of our expenses, while not incorporating other factors which the Compensation Committee does not believe are important to an understanding of our performance over such period, such as any repurchases of our outstanding shares which would affect an earnings per share measurement. In setting the target amount of EBITDA over such three-year period, the Compensation Committee reviewed with Mr. Speese our financial projections as well as the market’s expectations with respect to our financial performance over such period. The Compensation Committee selected a three-year period over which to measure EBITDA based upon both input received from Hewitt regarding the time-period utilized with respect to similar 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 operating results over an extended period of time, as opposed to the single year measure which is utilized in our MBO program. The three year EBITDA target for the 2009 performance based awards was set at $1.151 billion.

In addition, the awards of restricted stock with performance-based vesting to our named executive officers (and cash, with respect to Mr. Speese’s award) in January 2009 contained provisions with respect to our achievement of the target EBITDA, such that each eligible named executive officer may receive (1) an additional payout pursuant to such award in the event that we exceed the target EBITDA over such period, and (2) a portion of the target payout pursuant to such award in the event that we approach, yet fail to achieve, the target level of financial performance. The Compensation Committee believed that such adjustments were appropriate to operate as an additional incentive for our named executive officers in the event that we either exceed or approach, yet fail to achieve, the target EBITDA of $1.151 billion. The percentage of the restricted stock unit awards to be received

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by each named executive office if we miss, meet, or exceed the target three-year EBITDA is set forth in the table below:

2009 Long-Term Incentive Compensation — Financial Performance Target for Performance-Based Award

Percent of Target EBITDA Achieved	Award Received
< 87.00%		0 %
87.00%	— 90.00%	20 %
90.10%	— 93.00%	40 %
93.10%	— 96.00%	60 %
96.10%	— 99.00%	80 %
99.10%	— 101.00%	100 %
101.10%	— 104.00%	110 %
104.10%	— 107.00%	120 %
107.10%	— 111.00%	130 %
111.10%	— 115.00%	140 %
115.00% <		150 %

Summary of Compensation

The following table summarizes the compensation earned by our Chairman and Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers or our “named executive officers,” in 2009, as well as the compensation earned by such individuals in each of 2008 and 2007, if serving as an executive officer during that time. The table specifically identifies the dollar value of compensation related to 2009, 2008 and 2007 paid to such named executive officers in the form of:

•	salary, paid in cash;
•	stock awards, comprised of awards of restricted stock relating
to the 2009, 2008 and 2007 fiscal years;
•	option awards, comprised of awards of options during the 2009,
2008 and 2007 fiscal years and identified based upon the
aggregate fair value in dollars of such award;
•	non-equity plan incentive plan compensation, listing the
aggregate dollar value of the awards paid to our named executive
officers; and
•	all other compensation, which includes amounts paid by us to the
named executive officers as matching contributions under our
401(k) plan and insurance premiums.

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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 2009, 2008 and 2007.

Based on the grant date fair value of equity awards granted to our named executive officers in 2009 and the base salary of our named executive officers for 2009, “Salary” accounted for approximately 43% of the total compensation of our named executive officers while cash bonuses paid to our named executive officers under our MBO program for 2009 accounted for approximately 34% of the total compensation of our named executive officers.

Summary Compensation Table

Name and Principal			Stock	Option	Non-Equity — Incentive Plan	All Other
Position	Year	Salary	Awards (1)	Awards (1)	Compensation (2)	Compensation (3)	Total
Mark E. Speese,	2009	$816,000	—	—	$1,163,640	(4)	$3,304	$1,982,944
Chairman of the	2008	$800,000	—	—	$413,000	(4)	$8,732	$1,221,732
Board and Chief	2007	$775,000	—	—	$312,500	(4)	$1,226	$1,088,726
Executive Officer
Robert D. Davis,	2009	$395,200	$142,385	$52,570	$256,880		$7,142	$854,177
Executive Vice	2008	$380,000	$60,059	$36,657	$91,200		$8,326	$576,242
President — Finance,	2007	$355,000	$52,750	$20,610	$77,745		$5,398	$511,503
Chief Financial Officer and Treasurer
Mitchell E. Fadel,	2009	$553,860	$266,059	$98,234	$432,011		$15,060	$1,365,224
President and Chief	2008	$543,000	$128,521	$78,459	$142,130		$10,791	$902,900
Operating Officer	2007	$525,000	$118,492	$46,334	$149,625		$5,726	$845,177
Theodore V. DeMarino,	2009	$318,356	$35,450	$73,166	$147,951		$117,388	$692,311
Executive Vice President —
Operations (5)
Christopher A. Korst,	2009	$346,500	$124,843	$46,092	$225,225		$6,290	$748,950
Executive Vice	2008	$330,000	$52,070	$64,929	$68,112		$9,811	$524,922
President — Operations	2007	$294,000	$36,899	$14,424	$50,274		$4,882	$400,479

| (1) | The amounts reflected in this
column are the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718 for each award of stock
options or restricted stock in 2009, 2008 and 2007 to the
applicable named executive officer. Assumptions used in the
calculation of these amounts are included in footnote L to our
audited financial statements for our fiscal year ended
December 31, 2009 included in our Annual Report on Form 10-K filed with the SEC on February 26, 2010 and our Annual
Reports on Form 10-K for prior years. |
| --- | --- |
| (2) | For each of our named executive
officers other than Mr. Speese, represents the cash bonuses
which were payable under our MBO program with respect to
services for the year indicated. See “ -Compensation
Discussion and Analysis — Determination of 2009
Compensation — MBO Program Compensation Determinations
for 2009 ” on page 24 of this proxy statement. |
| (3) | For 2009, represents the
compensation as described in the “ All Other
Compensation ” table below. |
| (4) | For 2009, represents (1) the
cash bonus amount determined by the Compensation Committee for
Mr. Speese’s services to us in 2009 in the amount of
$848,640, and (2) the earned portion of the incentive cash
awards granted to Mr. Speese in 2008, 2007 and 2006 in the
amount of $315,000. For 2008, represents (1) the cash bonus
amount determined by the Compensation Committee for
Mr. Speese’s services to us in 2008 in the amount of
$288,000, and (2) the earned portion of the incentive cash
awards granted to Mr. Speese in 2007 and 2006 in the amount
of $125,000. For 2007, represents (1) the cash bonus amount
determined by the Compensation Committee for
Mr. Speese’s services to us in 2007 in the amount of
$250,000, and (2) the earned portion of the incentive cash
award granted to Mr. Speese in 2006 in the amount of
$62,500. |
| (5) | Mr. DeMarino became an
executive officer in August 2009. |

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All Other Compensation

The following table provides information regarding each component of compensation for 2009 included in the All Other Compensation column in the Summary Compensation Table above.

Name	Company 401(k) — Contributions (1)	Value of Insurance — Premiums (2)	Other		Total
Mark E. Speese	$ 0	$ 1,249	$ 2,055	(3)	$ 3,304
Robert D. Davis	$ 3,343	$ 330	$ 3,469	(4)	$ 7,142
Mitchell E. Fadel	$ 4,895	$ 1,249	$ 8,916	(5)	$ 15,060
Theodore V. DeMarino	$ 4,923	$ 277	$ 112,188	(6)	$ 117,388
Christopher A. Korst	$ 4,610	$ 733	$ 947	(7)	$ 6,290

| (1) | Represents contributions or other
allocations made by us to our Retirement Savings Plan. |
| --- | --- |
| (2) | Represents life insurance premiums
paid by us or on our behalf. |
| (3) | Represents fees paid by us for
annual executive physical examination. |
| (4) | Represents deemed compensation
related to incentive travel award in the amount of $897, and
contributions or other allocations made by us to our Deferred
Compensation Plan in the amount of $2,572. |
| (5) | Represents deemed compensation
related to incentive travel award in the amount of $897, and
fees paid by us for annual executive physical examination in the
amount of $8,019. |
| (6) | Represents deemed compensation
related to incentive travel award in the amount of $1,128, fees
paid by us for annual executive physical examination in the
amount of $4,034, and $107,026 in relocation expenses paid by us
in connection with Mr. DeMarino’s transfer to our home
office in Plano, Texas as a result of his promotion to Executive
Vice President — Operations in August 2009. |
| (7) | Represents deemed compensation
related to incentive travel award. |

The following is a description of material factors necessary to understand the information disclosed above in the Summary Compensation Table.

Mr. Speese’s Employment Agreement We have an employment agreement with Mr. Speese. Pursuant to the terms of the employment agreement, Mr. Speese’s compensation consists of (1) an annual base salary of not less than $740,000, subject to upward adjustment based upon the results of an annual review by the Compensation Committee, (2) an annual bonus opportunity established by the Compensation Committee, (3) participation in our employee benefit plans for senior executive officers, and (4) a one time grant of an option to purchase 70,000 shares of our common stock. In addition, the employment agreement contains severance provisions which provide for certain payments to be made by us to Mr. Speese upon the occurrence of certain events which result in his employment with us being severed, including upon a change in control of us. For a detailed description of the severance provisions contained in Mr. Speese’s employment agreement, please see “— Termination of Employment and Change-in-Control Arrangements — Employment Agreement ” below.

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Grants of Plan-Based Awards

The table below sets forth information about plan-based awards granted to the named executive officers during 2009 under our non-equity incentive plans and equity incentive plans.

									All Other	All Other
									Stock	Option
									Awards:	Awards:
		Date of	Estimated Possible Payouts			Estimated			Number	Number of	Exercise or	Closing	Grant Date
		Compensation	Under Non-Equity			Future Payouts Under			of Shares	Securities	Base Price	Price on	Fair Value of
	Grant	Committee	Incentive Plan
Awards (1)			Equity Incentive Plan
Awards (2)			of Stock	Underlying	of Option	Grant	Stock and Option
Name:	Date	Action	Threshold	Target	Maximum	Threshold	Target	Maximum	or
Units (3)	Options (4)	Award (5)	Date	Awards
Mark E. Speese
Long-Term
Incentive (6)	1/30/09	1/30/09	489,600	816,000	979,200	—	—	—	—	—	—	—	—
Robert D. Davis
Short-Term Incentive	N/A	1/30/09	0	197,600	296,400	—	—	—	—	—	—	—	—
Restricted Stock Units	1/30/09	1/30/09	—	—	—	0	8,228	12,342	3,857	—	—	$ 14.85	$ 142,385
Stock Options	1/30/09	1/30/09	—	—	—	—	—	—	—	10,949	$ 15.37	$ 14.85	$ 52,570
Mitchell E. Fadel
Short-Term Incentive	N/A	1/30/09	0	332,316	498,474	—	—	—	—	—	—	—	—
Restricted Stock Units	1/30/09	1/30/09	—	—	—	0	15,375	23,063	7,207	—	—	$ 14.85	$ 266,059
Stock Options	1/30/09	1/30/09	—	—	—	—	—	—	—	20,459	$ 15.37	$ 14.85	$ 98,234
Theodore V. DeMarino
Stock
Options (7)	10/01/09	09/25/09	—	—	—	—	—	—	—	10,000	$ 18.88	$ 18.73	$ 60,075
Restricted Stock Units	1/30/09	1/30/09	—	—	—	0	2,049	3,074	960	—	—	$ 14.85	$ 35,450
Stock Options	1/30/09	1/30/09	—	—	—	—	—	—	—	2,727	$ 15.37	$ 14.85	$ 13,091
Christopher A. Korst
Short-Term Incentive	N/A	1/30/09	0	173,250	259,875	—	—	—	—	—	—	—	—
Restricted Stock Units	1/30/09	1/30/09	—	—	—	0	7,214	10,821	3,382	—	—	$ 14.85	$ 124,843
Stock Options	1/30/09	1/30/09	—	—	—	—	—	—	—	9.600	$ 15.37	$ 14.85	$ 46,092

| (1) | These columns show the potential
value of the payout of the annual cash incentive bonuses for
2009 performance for each named executive officer other than
Mr. Speese if the threshold, target and maximum performance
levels are achieved. The potential payout is performance-based
and driven by company performance. The actual amount of the
annual cash incentive bonuses paid for 2009 performance is shown
in the Summary Compensation Table under the “Non-Equity
Incentive Plan Compensation” column. |
| --- | --- |
| (2) | Represents restricted stock units
which vest upon our achievement of a three-year EBITDA of
$1.151 billion for the three year period ending
December 31, 2011 and the named executive officer remains
an employee through December 31, 2011. The issuance of the
stock underlying the performance-based restricted stock units
granted to our named executive officers will range from a
minimum of zero shares if we achieve less than 87.0% of the
target EBITDA, to the maximum number of shares if we achieve at
least 115.1% of the target EBITDA. |
| (3) | Represents restricted stock units
which vest upon completion of three-years of continuous
employment with us from January 30, 2009. |
| (4) | Represents options to purchase
shares of our common stock granted under our 2006 Long-Term
Incentive Plan or 2006 Equity Incentive Plan, which vest ratably
over a four-year period. |
| (5) | Calculated by reference to the
closing price for shares of our common stock on the Nasdaq
Global Select Market on the last trading day before the date of
grant as reported on the Nasdaq Global Select Market, in
accordance with our 2006 Long-Term Incentive Plan or 2006 Equity
Incentive Plan. |

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| (6) | Mr. Speese’s award was
made on January 30, 2009 and consists of (1) $285,600
which will vest ratably over a four year period ($71,400 on each
anniversary date), (2) $204,000 which will vest upon
Mr. Speese’s completion of three years of continuous
service from January 30, 2009, and (3) $326,400 which
will vest upon our achievement of a three-year EBITDA target.
The award of the cash underlying the performance-based portion
of the cash award will range from a minimum of $0 if we achieve
less than 87.0% of the target EBITDA up to a maximum of $489,600
if we achieve at least 115.1% of the target EBITDA. |
| --- | --- |
| (7) | Represents options to purchase
shares of our common stock granted under our 2006 Long-Term
Incentive Plan to Mr. DeMarino with respect to his
promotion to his current position in 2009. |

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| | The following is a description of material factors necessary to
understand the information disclosed above in the Grant of
Plan-Based Awards Table. |
| --- | --- |
| 2009 Long-Term Incentive Awards | As described in the Compensation Discussion and Analysis, in
January 2009, the Compensation Committee granted long-term
incentive awards under our 2006 Plan and our Equity Plan for our
named executive officers. Consistent with prior awards, these
awards were comprised of options to purchase shares of our
common stock and restricted stock units. |
| | With respect to these awards, once the dollar amount of the
awards is established, the Compensation Committee determines the
number of options and restricted stock units to grant comprising
that award as follows. The number of options to purchase shares
of our common stock is determined by dividing the total dollar
value to be allocated to the award of stock options (which is
35% of the award) by 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 number of time-based restricted stock units to be granted
is determined by dividing the total dollar value to be allocated
to the award of time-based restricted stock units (which is 25%
of the award) by the closing price for shares of our common
stock on the Nasdaq Global Select Market as of the date
immediately preceding the grant date for such award. The number
of performance-based restricted stock units to be granted is
determined by dividing the total dollar value to be allocated to
the award of performance-based restricted stock units (which is
40% of the award) by an amount equal to 75% of the closing price
for shares of our common stock on the Nasdaq Global Select
Market as of the date immediately preceding the grant date for
such award. The 25% discount factor represents the Compensation
Committee’s determination of the appropriate reduction to
the value of such awards based upon both the previous input
received from Hewitt regarding the discount factors utilized
with respect to similar awards made by similarly-situated public
companies. |

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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, 2009.

								Stock Awards
										Equity
	Option Awards							Equity		Incentive
				Equity				Incentive		Plan Awards:
				Incentive				Plan Awards:		Market or
				Plan Awards:				Number		Payout Value
	Number of	Number of		Number of				of Unearned		of Unearned
	Securities	Securities		Securities				Shares,		Shares, Units
	Underlying	Underlying		Underlying				Units or		or Other
	Unexercised	Unexercised		Unexercised		Option	Option	Other Rights		Rights
	Options	Options		Unearned		Exercise	Expiration	That Have		That Have Not
Name	Exercisable	Unexercisable		Options		Price	Date	Not Vested		Vested (1)
Mark E. Speese	22,500					$ 13.075	1/2/11
	500,000					$ 10.396	11/9/11
	70,000					$ 29.29	10/2/16
Robert D. Davis	50,000					$ 10.396	11/9/11
	3,990		1,330	(2)		$ 19.52	1/31/16
	1,733		1,732	(3)		$ 28.81	1/31/17	1,015	(6)	$ 17,986
								1,015	(7)	$ 17,986
	2,610		7,830	(4)		$ 15.26	1/30/18	2,180	(8)	$ 38,630
								2,180	(9)	$ 38,630
			10,949	(5)		$ 15.37	1/30/19	8,228	(10)	$ 145,800
								3,857	(11)	$ 68,346
Mitchell E. Fadel	87,500	(12)				$ 8.95	7/24/10
	250,001	(12)				$ 10.396	11/9/11
	8,970	(12)	2,990	(2)		$ 19.52	1/31/16
	3,895		3,895	(3)		$ 28.81	1/31/17	2,280	(6)	$ 40,402
								2,280	(7)	$ 40,402
	5,586		16,759	(4)		$ 15.26	1/30/18	4,665	(8)	$ 82,664
								4,665	(9)	$ 82,664
			20,459	(5)		$ 15.37	1/30/19	15,375	(10)	$ 272,445
								7,207	(11)	$ 127,708
Christopher A. Korst	43,750			75,000	(13)	$ 18.50	7/12/11
	2,393		797	(2)		$ 19.52	1/31/16
	1,213		1,212	(3)		$ 28.81	1/31/17	710	(6)	$ 12,581
								710	(7)	$ 12,581
	2,500		7,500	(14)		$ 14.52	1/02/18
	2,266		6,799	(4)		$ 15.26	1/30/18	1,890	(8)	$ 33,491
								1,890	(9)	$ 33,491
			9,600	(5)		$ 15.37	1/30/19	7,214	(10)	$ 127,832
								3,382	(11)	$ 59,929
Theodore V. DeMarino	12,500					$ 29.77	7/1/2013
	1,200		400	(2)		$ 19.52	1/31/16
	693		692	(3)		$ 28.81	1/31/17	405	(6)	$ 7,177
								405	(7)	$ 7,177
	755		2,265	(4)		$ 15.26	1/30/18	630	(8)	$ 11,164
								630	(9)	$ 11,164
			2,727	(5)		$ 15.37	1/30/19	2,049	(10)	$ 36,308
								960	(11)	$ 17,011
			10,000	(15)		$ 18.88	10/1/19

| (1) | Calculated by reference to the
closing price for shares of our common stock on the Nasdaq
Global Select Market on December 31, 2009 which was $17.72. |
| --- | --- |
| (2) | These options to purchase shares of
our common stock vested on January 31, 2010. |
| (3) | These options to purchase shares of
our common stock vest in equal amounts on each of
January 31, 2010 and January 31, 2011. |

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| (4) | These options to purchase shares of
our common stock vest in equal amounts on each of
January 30, 2010, January 30, 2011, and
January 30, 2012. |
| --- | --- |
| (5) | These options to purchase shares of
our common stock vest in equal amounts on each of
January 30, 2010, January 30, 2011, January 30,
2012, and January 30, 2013. |
| (6) | Represents the number of shares of
our common stock that will vest and become issuable pursuant to
the performance-based restricted stock unit awards upon our
achievement of a three-year EBITDA target of
$1.4069 billion for the three-year period ending
December 31, 2009 and the named executive officer remains
an employee through December 31, 2009. We failed to achieve
the three-year EBITDA target and, accordingly, none of these
shares vested and the right to these shares expired as of
January 29, 2010. |
| (7) | Represents the number of shares of
our common stock that will vest and become issuable pursuant to
the time-based restricted stock unit awards upon the named
executive officer’s completion of three years of continuous
employment with us from January 31, 2007. These shares
vested as of January 31, 2010. |
| (8) | Represents the number of shares of
our common stock that will vest and become issuable pursuant to
the performance-based restricted stock unit awards upon our
achievement of a three-year EBITDA target of $1.335 billion
for the three-year period ending December 31, 2010 and the
named executive officer remains an employee through
December 31, 2010. |
| (9) | Represents the number of shares of
our common stock that will vest and become issuable pursuant to
the time-based restricted stock unit awards upon the named
executive officer’s completion of three years of continuous
employment with us from January 30, 2008. |
| (10) | Represents the number of shares of
our common stock that will vest and become issuable pursuant to
the performance-based restricted stock unit awards upon our
achievement of a three-year EBITDA target of $1.151 billion
for the three-year period ending December 31, 2011 and the
named executive officer remains an employee through
December 31, 2011. |
| (11) | Represents the number of shares of
our common stock that will vest and become issuable pursuant to
the time-based restricted stock unit awards upon the named
executive officer’s completion of three years of continuous
employment with us from January 30, 2009 |
| (12) | In connection with an agreed
divorce settlement effective September 10, 2007,
Mr. Fadel transferred his beneficial interest in 102,147 of
these options to his former spouse. |
| (13) | These options gradually vest upon
the enactment of legislation in certain states in which we
conduct business. |
| (14) | These options to purchase shares of
our common stock vest in equal amounts on each of
January 2, 2010, January 2, 2011, and January 2,
2012. |
| (15) | These options to purchase shares of
our common stock vest in equal amounts on each of
October 1, 2010, October 1, 2011, October 1,
2012, and October 1, 2013. |

Option Exercises and Stock Vested

The following table reflects certain information with respect to options exercised by our named executive officers during the 2009 fiscal year, as well as applicable stock awards that vested, during the 2009 fiscal year:

	Option Awards
	Number of		Number of
	Shares Acquired	Value Realized	Shares Acquired		Value Realized
Name	on Exercise	on Exercise	on Exercise		on Vesting
Mark E. Speese	—	—		—	—
Robert D. Davis	—	—		1,015	$ 20,808
Mitchell E. Fadel	8,750	$ 116,594	(1)	3,340	$ 68,470
Theodore V. DeMarino	—	—		445	$ 9,123
Christopher A. Korst	—	—		890	$ 18,245

(1) This amount reflects the difference between the exercise price of the options, which was $7.925, and the closing price of $21.25 for our common stock on the Nasdaq Global Select Market on August 5, 2009, the date on which the options were exercised by Mr. Fadel.

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Nonqualified Deferred Compensation

The Rent-A-Center, Inc. Deferred Compensation Plan is an unfunded, nonqualified deferred compensation plan for a select group of our key management personnel and highly compensated employees. The Deferred Compensation Plan first became available to eligible employees in July 2007, with deferral elections taking effect as of August 3, 2007.

The Deferred Compensation Plan allows participants to defer up to 50% of their base compensation and up to 100% of any bonus compensation. Participants may invest the amounts deferred in measurement funds that are the same funds offered as the investment options in the Rent-A-Center, Inc. 401(k) Retirement Savings Plan. We may make discretionary contributions to the Deferred Compensation Plan, which are subject to a five-year graded vesting schedule based on the participant’s years of service with us. We are obligated to pay the deferred compensation amounts in the future in accordance with the terms of the Deferred Compensation Plan.

The following table provides information for the named executive officers regarding contributions, earnings and balances for our Deferred Compensation Plan.

	Executive	Registrant		Aggregate	Aggregate	Aggregate
	Contributions	Contributions		Earnings	Withdrawals/	Balance at
Name	in Last FY	in Last FY		in Last FY	Distributions	Last FYE
Mark E.
Speese (1)	—	—		—	—	—
Robert D. Davis	$ 31,920	$ 2,572	(2)	$ 19,825	$ 0	$ 98,439
Mitchell E.
Fadel (1)	—	—		—	—	—
Theodore V
DeMarino (1)	—	—		—	—	—
Christopher A. Korst	$ 700	—		$ 2,248	$ 0	$ 10,521

| (1) | Elected not to participate in our
Deferred Compensation Plan during 2009. |
| --- | --- |
| (2) | Represents matching contributions
or other allocations made by us under our Deferred Compensation
Plan which amount was also reported as compensation in the
“ Summary Compensation Table ” on page 27 of
this proxy. |

Termination of Employment and Change-in-Control Arrangements

| Severance Arrangements |
| --- |
| Termination Not in Conjunction With a Change In
Control . If the named executive officer’s
employment is terminated without “cause,” the named
executive officer will be entitled to receive: |

| • unpaid but earned base salary through the date
of termination; |
| --- |
| • a pro rata bonus calculated based upon the
named executive officer’s bonus amount from the previous
year; |
| • one and one half times the sum of the named
executive officer’s highest annual rate of salary during
the previous 24 months, and the named executive
officer’s average annual bonus for the two preceding
calendar years; and |
| • continued health insurance coverage for the
named executive officer and the named executive officer’s
spouse and covered dependents for up to 18 months. |

If the named executive officer’s employment is terminated due to disability or death, the named executive officer will be entitled to receive:

| • unpaid but earned base salary through the date
of termination; |
| --- |
| • a pro rata bonus calculated based upon the
named executive officer’s bonus amount from the previous
year; and |

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• continued health insurance coverage for the named executive officer and the named executive officer’s spouse and covered dependents for 12 months.

| If the named executive officer’s employment is terminated
for “cause” or if the named executive officer
terminates his employment for any reason other than death, the
named executive officer will be entitled to receive his unpaid
but earned base salary through the date of termination (reduced
by amounts owed by the named executive officer to us or our
affiliates). |
| --- |
| Termination in Conjunction With a Change In
Control . If the named executive officer’s
employment is terminated in conjunction with a change in control
of us without “cause” or by the named executive
officer for “good reason,” the named executive officer
will be entitled to receive the same severance payments and
benefits as described above (not in connection with a change in
control) with respect to a termination without
“cause,” except that the named executive officer will
be entitled to receive two times the sum of the named executive
officer’s highest annual rate of salary during the previous
24 months, and the named executive officer’s average
annual bonus for the two preceding calendar years, rather than
one and one half times such amount, and the named executive
officer will be entitled to continued health insurance coverage
for up to two years, rather than 18 months. If the named
executive officer’s employment is terminated in connection
with a change in control due to disability or death, or for
“cause” or without “good reason,” the named
executive officer will be entitled to receive the same severance
payments and benefits as described above (not in connection with
a change in control) with respect to a termination due to
disability or death or for “cause,” respectively. |
| Under each of the executive transition agreements, the term
“change in control” generally means the occurrence of
any of the following after September 14, 2006: |

| • any person becomes the beneficial owner of 40%
or more of the combined voting power of our then outstanding
voting securities; |
| --- |
| • a consolidation, merger or reorganization of
us, unless (i) our stockholders immediately prior to such
transaction own at least a majority of the voting power of the
outstanding voting securities of the resulting entity,
(ii) the members of our Board immediately prior to the
execution of the agreement providing for such a transaction
constitute a majority of the board of directors of the surviving
corporation or of its majority stockholder, and (iii) no
person beneficially owns more than 40% of the combined voting
power of the then outstanding voting securities of the surviving
corporation (other than a person who is (a) us or a
subsidiary of us, (b) an employee benefit plan maintained
by us, the surviving corporation or any subsidiary, or
(c) the beneficial owner of 40% or more of the combined
voting power of our outstanding voting securities immediately
prior to such transaction; |
| • individuals who, as of September 14,
2006, constitute our entire Board cease to constitute a majority
of our Board, provided that anyone who later becomes a director
and whose appointment or nomination for election was approved by
at least two-thirds of our directors at the time shall be
considered as though such individual were a member of our Board; |
| • approval by our stockholders of a complete
liquidation or dissolution of us, or a sale or other disposition
of all or substantially all of our assets (other than to an
entity described in the second bullet point above); or |
| • any other event or transaction which our
Board, acting in its discretion, designates is a change in
control. |

Employment Agreement Pursuant to Mr. Speese’s employment agreement, if we terminate Mr. Speese’s employment due to his disability or death, Mr. Speese will be entitled to receive:

| • unpaid but earned base salary through the date
of termination; |
| --- |
| • a pro rata bonus calculated based upon
Mr. Speese’s bonus amount from the previous year; and |

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• continued health insurance coverage for Mr. Speese and Mr. Speese’s spouse and covered dependents for 12 months.

If we terminate Mr. Speese’s employment for “cause,” or if Mr. Speese terminates his employment with us for any reason other than death or for “good reason,” Mr. Speese will be entitled to receive his unpaid but earned base salary through the date of termination (reduced by amounts owed by Mr. Speese to us or our affiliates). If Mr. Speese’s employment is terminated by us without “cause” (as defined in the employment agreement) or by Mr. Speese for “good reason,” Mr. Speese will be entitled to receive:

| • unpaid but earned base salary through the date
of termination; |
| --- |
| • a pro rata bonus calculated based upon
Mr. Speese’s bonus amount from the previous year; |
| • two times the sum of Mr. Speese’s
highest annual rate of salary during the previous
24 months, and Mr. Speese’s average annual bonus
for the two preceding calendar years; and |
| • continued health insurance coverage for
Mr. Speese and Mr. Speese’s spouse and covered
dependents for up to 24 months. |

| | If we terminate Mr. Speese’s employment in conjunction
with a change in control of us without “cause” or if
Mr. Speese terminates his employment with us for “good
reason,” Mr. Speese will be entitled to receive in a
lump sum the same aggregate severance payments and benefits as
described above for a termination not in connection with a
change in control, except that in addition to such amounts,
Mr. Speese will be entitled to continued health insurance
coverage for himself and his spouse and covered dependents for
36 months, rather than 24 months. The amount of the
severance payments will be reduced if and to the extent
necessary to avoid the loss of a tax deduction by us under
Section 280G of the Internal Revenue Code and the
imposition of an excise tax on Mr. Speese pursuant to
Section 4999 of the Internal Revenue Code. The Compensation
Committee or the Board may condition the payment of severance or
benefits on the execution and delivery by Mr. Speese of a
general release in favor of us, our affiliates and our officers,
directors, and employees, provided that no such release will be
required for the payment to Mr. Speese of accrued
compensation. |
| --- | --- |
| Long-Term Incentive Plans | Awards Pursuant to the Amended and Restated Long-Term
Incentive Plan . The 2006 Plan replaced our
previously-existing Amended and Restated Long-Term Incentive
Plan, which we refer to as the “Previous Plan.” Awards
made pursuant to the Previous Plan remain outstanding for the
term of such award. Pursuant to stock option agreements under
the Previous Plan, if the individual’s employment with us
is terminated because of death or disability, any options that
are vested and exercisable on the date of termination will
remain exercisable for 12 months thereafter, but not beyond
the term of the agreement. If the individual’s employment
is terminated by us for “cause,” then the options
(whether or not then vested and exercisable) will immediately
terminate and cease to be exercisable. If the individual’s
employment with us is terminated for any other reason, any
options that are vested and exercisable as of the date of
termination will remain exercisable for three months thereafter,
but not beyond the term of the agreement. Lastly, in the event
of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the
Compensation Committee may accelerate the exercisability of, or
lapse of restrictions with respect to, outstanding options and
terminate unexercised options. |
| | Awards Pursuant to the 2006 Plan and the Equity
Plan . Pursuant to stock option agreements under
the 2006 Plan and the Equity Plan, if the individual’s
employment with us is terminated because of death or disability,
any options that are vested and exercisable on the date of
termination will remain exercisable for 12 months
thereafter, but not beyond the term of the agreement. If the
individual’s employment is terminated by us for
“cause,” then the options (whether or not then vested
and exercisable) will immediately terminate and cease to be
exercisable. If the individual’s employment with us is
terminated for any other reason, any options that are vested and
exercisable as of the |

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| date of termination will remain exercisable for three months
thereafter, but not beyond the term of the agreement. |
| --- |
| Pursuant to the 2006 Plan and the Equity Plan, each holder of an
option to purchase shares of our common stock may exercise such
option immediately prior to an “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 in exchange for our common stock, and if our Board
so directs, then all outstanding options shall be converted into
options to purchase shares of such stock, with the amount and
price to be determined by adjusting the amount and price of the
options granted under the 2006 Plan or the Equity Plan, as
applicable, on the same basis as the determination of the number
of shares of exchange stock the holders of our outstanding
common stock are entitled to receive in the exchange
transaction. In addition, unless our Board determines otherwise,
the vesting conditions with respect to the converted options
shall be substantially the same as those set forth in the
original option agreement. The Board may accelerate the vesting
of stock awards and other awards, provide for cash settlement of
and/or make such other adjustments to any outstanding award as
it deems appropriate in the context of an exchange transaction. |
| Under the 2006 Plan and the Equity Plan, the term “exchange
transaction” means 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 or 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 ownership of us, then any unvested restricted stock
units will vest on the date of such termination of employment or
immediately prior to the consummation of the change in ownership
of us, as the case may be. However, any unvested restricted
stock units do not vest by reason of a change in ownership
unless the individual remains continuously employed by us until
such change in ownership is complete or the individual’s
employment is sooner terminated by us in connection with such
change in ownership. In addition, upon the termination of the
individual’s employment or other service with us for any
reason other than disability or death, any unvested restricted
stock units will thereupon terminate and be canceled. |
| Under each of the stock compensation agreements, the term
“change in ownership” is defined as any transaction or
series of transactions as a result of which any one person or
group of persons acquires (i) ownership of our common stock
that, together with the common stock previously held by such
person, constitutes more than 50% of the total fair market value
or total voting power of such stock, or (ii) ownership of
our assets having a total gross fair market value at least equal
to 80% of the total gross fair market value of all of the assets
immediately prior to such transaction or series of transactions. |
| When Mr. Speese was awarded options under the 2006 Plan in
October 2006, he entered into a stock option agreement with us.
This agreement provides that if Mr. Speese’s
employment or other service with us is terminated due to his
death or disability, or if he dies after the termination of his
employment and before the underlying option expires, then such
option shall remain exercisable for 12 months thereafter,
but not beyond the stated term. If Mr. Speese’s
employment or other service with us terminates for any other
reason, then the underlying option shall remain exercisable for
three months thereafter (or until one year from his death if he
dies during such three-month period), but in no event beyond the
stated term. |
| Long-Term Incentive Cash Award Agreements with
Mr. Speese . In connection with
Mr. Speese’s receipt of cash awards in January of
2006, 2007, 2008 and 2009, he entered into long-term incentive
cash award agreements with us. Theses agreements |

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| | contain provisions with respect to the vesting of such cash
awards which are substantially similar to those contained in the
above-described stock compensation agreements. |
| --- | --- |
| Potential Payments and Benefits Upon Termination Without 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, 2009, the last business day of
our fiscal 2009, assuming that: |

| • each named executive officer’s employment
with us was terminated on December 31, 2009, and was not in
connection with an event which constituted a “change in
control” or an “exchange transaction” under any
agreement or plan described above; |
| --- |
| • the base salary earned by each named executive
officer for his services to us through December 31, 2009
has been fully paid to such named executive officer; |
| • to the extent not otherwise terminated in
connection with the named executive officer’s termination,
each of our named executive officers exercised any previously
unexercised, vested options and sold the underlying shares at
the closing price for shares of our common stock on the Nasdaq
Global Select Market on December 31, 2009, which was
$17.72; and |
| • to the extent not otherwise terminated in
connection with the named executive officer’s termination,
each of our named executive officers sold the shares of our
common stock underlying their previously unvested restricted
stock units at the closing price for shares of our common stock
on the Nasdaq Global Select Market on December 31, 2009. |

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		Continuation of	Acceleration and — Continuation of	Total
	Cash Severance	Medical Benefits	Outstanding	Termination
	Payment	(present value)	Awards	Benefits
Mark E. Speese
• Termination by Us Without “Cause” or by
Mr. Speese for “Good Reason”	$ 2,458,000	$ 21,258	$ 3,766,513	$ 6,245,771
• Termination by Us for “Cause”	$ 0	$ 0	$ 0	$ 0
• Termination by Us Due to Mr. Speese’s
Disability or Death	$ 288,000	$ 10,629	$ 5,287,513	$ 5,586,142
• Termination by Mr. Speese for Reason other than
Death or “Good Reason”	$ 0	$ 0	$ 3,766,513	$ 3,766,513
Robert D. Davis
• Termination by Us Without “Cause”	$ 810,709	$ 15,944	$ 372,621	$ 1,199,274
• Termination by Us for “Cause”	$ 0	$ 0	$ 0	$ 0
• Termination by Us Due to Mr. Davis’s
Disability or Death	$ 91,200	$ 10,629	$ 699,998	$ 801,827
• Termination by Mr. Davis for Reason Other Than
Death	$ 0	$ 0	$ 372,621	$ 372,621
Mitchell E. Fadel
• Termination by Us Without “Cause”	$ 1,191,737	$ 15,944	$ 1,832,612	$ 3,040,293
• Termination by Us for “Cause”	$ 0	$ 0	$ 0	$ 0
• Termination by Us Due to Mr. Fadel’s
Disability or Death	$ 142,130	$ 10,629	$ 2,478,896	$ 2,631,655
• Termination by Mr. Fadel for Reason Other Than
Death	$ 0	$ 0	$ 1,832,612	$ 1,832,612
Theodore V. DeMarino
• Termination by Us Without “Cause”	$ 588,208	$ 15,944	$ 1,857	$ 606,009
• Termination by Us for “Cause”	$ 0	$ 0	$ 0	$ 0
• Termination by Us Due to Mr. DeMarino’s
Disability or Death	$ 49,062	$ 10,629	$ 91,857	$ 151,548
• Termination by Mr. DeMarino for Reason Other
Than Death	$ 0	$ 0	$ 1,857	$ 1,857
Christopher A. Korst
• Termination by Us Without “Cause”	$ 676,652	$ 15,944	$ 13,575	$ 706,171
• Termination by Us for “Cause”	$ 0	$ 0	$ 0	$ 0
• Termination by Us Due to Mr. Korst’s
Disability or Death	$ 68,112	$ 10,629	$ 293,480	$ 372,221
• Termination by Mr. Korst for Reason Other Than
Death	$ 0	$ 0	$ 13,575	$ 13,575

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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, 2009, the last business day of our fiscal 2009, assuming that:

| • each named executive officer’s employment
with us was terminated on December 31, 2009, and was in
connection with an event which constituted a “change in
control” or an “exchange transaction” under any
agreement or plan described above; |
| --- |
| • the base salary earned by each named executive
officer for his services to us through December 31, 2009
has been fully paid to such named executive officer; |
| • with respect to options awarded pursuant to
the Previous Plan, the Compensation Committee accelerated the
exercisability of, or lapse of restrictions with respect to,
such options; |
| • with respect to options awarded pursuant to
the 2006 Plan or the Equity Plan, the Board does not direct such
outstanding options to be converted into options to purchase
shares of the exchange stock; |
| • to the extent not otherwise terminated in
connection with the named executive officer’s termination,
each of our named executive officers exercised any previously
unexercised options and sold the underlying shares at the
closing price for shares of our common stock on the Nasdaq
Global Select Market on December 31, 2009; and |
| • to the extent not otherwise terminated in
connection with the named executive officer’s termination,
each of our named executive officers sold the shares of our
common stock underlying their previously unvested restricted
stock units at the closing price for shares of our common stock
on the Nasdaq Global Select Market on December 31, 2009. |

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		Continuation of	Acceleration and — Continuation of	Total
	Cash Severance	Medical Benefits	Outstanding	Termination
	Payment	(present value)	Awards	Benefits
Mark E. Speese
• Termination by Us Without “Cause” or by
Mr. Speese for “Good Reason”	$ 2,458,000	$ 31,887	$ 5,287,513	$ 7,777,400
• Termination by Us Due to Mr. Speese’s
Disability or Death	$ 288,000	$ 10,629	$ 5,287,513	$ 5,586,142
• Termination by Us for “Cause” or by
Mr. Speese Without “Good Reason”	$ 0	$ 0	$ 5,287,513	$ 5,287,513
Robert D. Davis
• Termination by Us Without “Cause” or by
Mr. Davis for “Good Reason”	$ 1,050,545	$ 21,258	$ 744,990	$ 1,816,793
• Termination by Us Due to Mr. Davis’s
Disability or Death	$ 91,200	$ 10,629	$ 744,990	$ 846,819
• Termination by us for “Cause” or by
Mr. Davis Without “Good Reason”	$ 0	$ 0	$ 744,990	$ 744,990
Mitchell E. Fadel
• Termination by Us Without “Cause” or by
Mr. Fadel for “Good Reason”	$ 1,541,606	$ 21,258	$ 2,568,201	$ 4,131,065
• Termination by Us Due to Mr. Fadel’s
Disability or Death	$ 142,130	$ 10,629	$ 2,568,201	$ 2,720,960
• Termination by us for “Cause” or by
Mr. Fadel Without “Good Reason”	$ 0	$ 0	$ 2,568,201	$ 2,568,201
Theodore V. DeMarino
• Termination by Us Without “Cause” or by
Mr. DeMarino for “Good Reason”	$ 767,923	$ 21,258	$ 103,838	$ 893,019
• Termination by Us Due to Mr. DeMarino’s
Disability or Death	$ 49,062	$ 10,629	$ 103,838	$ 163,529
• Termination by us for “Cause” or by
Mr. DeMarino Without “Good Reason”	$ 0	$ 0	$ 103,838	$ 103,838
Christopher A. Korst
• Termination by Us Without “Cause” or by
Mr. Korst for “Good Reason”	$ 879,498	$ 21,258	$ 356,765	$ 1,257,521
• Termination by Us Due to Mr. Korst’s
Disability or Death	$ 68,112	$ 10,629	$ 356,765	$ 435,506
• Termination by us for “Cause” or by
Mr. Korst Without “Good Reason”	$ 0	$ 0	$ 356,765	$ 356,765

Potential Realizable Value of Outstanding Awards Upon a Change in Control Without Termination Under the Previous Plan, the 2006 Plan, and the Equity Plan, 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 the Previous Plan, the 2006 Plan, and the Equity Plan assuming that:

| • an event which constituted a “change in
control” and an “exchange transaction” under each
of the agreements and plans described above was consummated on
December 31, 2009; |
| --- |
| • with respect to options awarded pursuant to
the Previous Plan, the Compensation Committee accelerated the
exercisability of, or lapse of restrictions with respect to,
such options; |
| • with respect to options awarded pursuant to
the 2006 Plan and the Equity Plan, the Board does not direct
such outstanding options to be converted into options to
purchase shares of the exchange stock; |

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| • each named executive officer exercised any
previously unexercised options and sold the underlying shares at
the closing price for shares of our common stock on the Nasdaq
Global Select Market on December 31, 2009; and |
| --- |
| • each named executive officer sold the shares
of our common stock underlying their previously unvested
restricted stock units at the closing price for shares of our
common stock on the Nasdaq Global Select Market on
December 31, 2009. |

Name
Mark E. Speese	$5,287,513
Robert D. Davis	$744,990
Mitchell E. Fadel	$2,568,201
Theodore V. DeMarino	$103,838
Christopher A. Korst	$356,765

(1) Calculated by reference to the closing price for shares of our common stock on The Nasdaq Global Select Market on December 31, 2009, the last business day of fiscal 2009, which was $17.72.

Determination of 2010 Compensation

Consistent with prior years and the philosophy and process as described in the Compensation Discussion & Analysis, above, the Compensation Committee met in January 2010 to consider the compensation arrangements for our senior executives, including our named executive officers, for the 2010 fiscal year. The Compensation Committee did not make significant adjustments to the form or structure of the compensation arrangements for our senior executives, including our named executive officers, for 2010.

Base Salary Adjustments. The Compensation Committee increased the base salaries of the named executive officers for 2010 as set forth in the table below. In making these adjustments, the Compensation Committee generally relied on market data gathered by our Human Resources department in evaluating the competitiveness of pay arrangements for our named executive officers, including independent compensation surveys by companies (such as Mercer LLC and ERI) conducted with respect to companies categorized as retailers with similar sales revenue as our company. In addition, the Compensation Committee considered input provided by Hewitt in the fall of 2008. The base salary adjustments for 2010 were effective March 6, 2010.

Annual Base Salaries

Name	2009 Base Salary	2010 Base Salary
Mark E. Speese	$ 816,000	$ 840,480	3.0 %
Robert D. Davis	$ 395,200	$ 409,032	3.5 %
Mitchell E. Fadel	$ 553,860	$ 570,476	3.0 %
Theodore V. DeMarino	$ 306,112	$ 318,356	4.0 %
Christopher A. Korst	$ 346,500	$ 360,360	4.0 %

MBO Program Determinations. No adjustments were made to the named executive officers’ 2010 target annual incentive compensation as a percentage of their respective base salaries. The financial performance target for the 2010 MBO program was established following a review of our financial projections developed in alignment with our strategic plan and objectives for 2010. Based upon that review, the Compensation Committee established a financial performance target under the 2010 MBO program of $266.3 million of pre-tax consolidated net income, an increase of approximately 8% over the financial performance target under the 2009 MBO program. The Compensation Committee further determined that, consistent with its views as to the financial performance measure for our MBO program, each eligible executive officer may receive (1) an additional bonus amount in the event that we exceed the financial performance target for the fiscal year, and (2) a portion of the bonus in the event that we approach, yet fail to achieve, the target level of financial performance. The percentage of the incentive target each named executive officer is eligible to receive if we miss, meet or exceed this target during 2010 is the same as that established for the 2009 MBO program (see page 24 of this proxy statement).

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Long-Term Incentive Compensation Awards. Consistent with prior years, the Compensation Committee granted on January 29, 2010, long-term incentive awards to our named executive officers, by type of award, as follows:

			Restricted Stock Units
			Time-Based	Performance-Based
Name	Cash	Stock Options	Vesting	Vesting	Total
Mark E. Speese	$ 840,480	—	—	—	$ 840,480
Robert D. Davis	—	$ 85,897	$ 61,355	$ 98,168	$ 245,419
Mitchell E. Fadel	—	$ 159,733	$ 114,095	$ 182,552	$ 456,381
Theodore V. DeMarino	—	$ 66,855	$ 47,753	$ 76,406	$ 191,014
Christopher A. Korst	—	$ 75,676	$ 54,054	$ 86,486	$ 216,216

In addition, consistent with prior long-term incentive awards years, the Compensation Committee established a three-year EBITDA target as the appropriate basis upon which to measure our performance in this context. In setting the target amount of EBITDA over such three-year period, the Compensation Committee reviewed with Mr. Speese our financial projections as well as the market’s expectations with respect to our financial performance over such period. The three-year EBITDA target for the 2010 performance based awards was set at $1.112 billion.

As with past long-term incentive awards, the awards of restricted stock with performance-based vesting to our named executive officers (and cash, with respect to Mr. Speese’s award) in January 2010 contained provisions with respect to our achievement of the target EBITDA, such that each eligible named executive officer may receive (1) an additional payout pursuant to such award in the event that we exceed the target EBITDA over such period, and (2) a portion of the target payout pursuant to such award in the event that we approach, yet fail to achieve, the target level of financial performance. The percentage of the restricted stock unit awards to be received by each named executive office if we miss, meet, or exceed the target three-year EBITDA is the same as that established for the 2009 long-term incentive awards (see page 26 of this proxy statement).

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:

| • | The allocation among the components of direct annual
compensation provides an appropriate balance between annual and
long-term incentives and between fixed and performance-based
compensation. |
| --- | --- |
| • | The performance measures and the multi-year vesting features of
the long-term equity incentive compensation component encourage
participants to seek sustainable growth and value creation. |
| • | Inclusion of share-based compensation through the long-term
equity incentive compensation component encourages appropriate
decision-making that is aligned with the long-term interests of
our stockholders. |
| • | Our MBO program and the awards of restricted stock with
performance-based vesting contain provisions with respect to our
achievement of the applicable financial target such that each
participant may receive (1) an additional payout pursuant
to such award in the event that we exceed the applicable
financial target, and (2) a portion of the target payout
pursuant to such award in the event that we approach, yet fail
to achieve, the target level of financial performance. |
| • | We maintain a values-driven, ethics-based culture supported by a
strong tone at the top. |

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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

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 the proxy statement on Schedule 14A related to the 2010 Annual Meeting of Stockholders, for filing with the Securities and Exchange Commission.

COMPENSATION COMMITTEE Leonard H. Roberts, Chairman J.V. Lentell Paula Stern, Ph.D.

COMPENSATION COMMITTEE INTERLOCKS

No member of the Compensation Committee (1) has ever been employed by us, as an officer or otherwise, or (2) other than with respect to Mr. Lentell, as described under the heading “Related Person Transactions” below, has or had any relationship with us in 2009 requiring disclosure pursuant to SEC rules. In addition, during 2009, none of our executive officers served as a member of the compensation or similar committee or as a member of the board of directors of any other entity of which an executive officer served on the Compensation Committee or Board of Directors of Rent-A-Center.

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RELATED PERSON TRANSACTIONS

Policy on Review and Approval of Transactions with Related Persons

The Board has adopted a statement of policy and procedures for the identification and review of transactions involving us and “related persons” (our directors and executive officers, stockholders owning five percent or greater of our outstanding stock, immediate family members of any of the foregoing, or any entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a five percent or greater beneficial ownership interest).

Our directors and executive officers are required to provide notice to our legal department of the facts and circumstances of any proposed transaction involving amounts greater than $50,000 involving them or their immediate family members 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 $14.0 million participant (total commitment) in our senior credit facility. We also maintain operational checking and other accounts, including a $20.0 million revolving line of credit, with Intrust Bank, N.A., none of which was drawn down as of March 31, 2010. In addition, Intrust Bank, N.A. serves as trustee of our 401(k) plan. During 2009, we paid Intrust a total of $1,321,528 in fees in connection with banking services provided by them, of which $752,698 was for administration fees and trustee fees for our 401(k) plan. The total fees paid to Intrust during 2009 constituted less than 1% of Intrust’s annual revenue for the year ended December 31, 2009.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on a review of reports filed by our directors, executive officers and beneficial holders of more than 10% of our shares of common stock, and upon representations from those persons, we believe that all SEC stock ownership reports required to be filed by those reporting persons during 2009 were timely made.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the common stock ownership for each of our directors, each of our named executive officers, all of our directors and executive officers as a group, and each of our known 5% stockholders. Beneficial ownership is determined in accordance with SEC rules and regulations. Unless otherwise indicated and subject to community property laws where applicable, we believe that each of the stockholders named in the table below has sole voting and investment power with respect to the shares indicated as beneficially owned. Unless otherwise indicated, all stockholders set forth below have the same principal business address as the Company. Information in the table is as of March 31, 2010, unless otherwise indicated.

	Amount and Nature
	of Beneficial
Name of Beneficial Owner	Ownership	Percent
Mark E. Speese	2,299,272	(1)	3.5
Mitchell E. Fadel	287,164	(2)	*
Michael J. Gade	27,055	(3)	*
Jeffrey M. Jackson	16,155	(4)	*
J.V. Lentell	63,155	(5)	*
Kerney Laday	7,101	(6)	*
Leonard H. Roberts	21,155	(7)	*
Paula Stern, Ph.D.	5,655	(8)	*
Robert D. Davis	70,798	(9)	*
Theodore V. DeMarino	18,181	(10)	*
Christopher A. Korst	138,355	(11)	*
BlackRock,
Inc. (12)	7,162,797		10.9
Hotchkis and Wiley Capital Management,
LLC (13)	4,435,685		6.7
All executive officers and directors as a group (11 total)	2,954,046		4.4

*	Less than 1%.
(1)	Represents
(a) 982,467 shares held directly, and
188,523 shares held by the Mark E. Speese 2007 Grantor
Retained Annuity Trust, of which Mr. Speese is trustee,
(b) 592,500 shares issuable pursuant to currently
exercisable options, (c) 163,141 shares held directly
by Mr. Speese’s spouse and 286,859 held by the Carolyn
Speese 2007 Grantor Retained Annuity Trust, of which
Mr. Speese is trustee, (d) 28,594 shares held in
the Jessica Elizabeth Speese 2000 Remainder Trust, Stephen F.
Elken Trustee, (e) 28,594 shares held in the Allison
Rebecca Speese 2000 Remainder Trust, Stephen F. Elken Trustee,
and (f) 28,594 shares held in the Andrew Michael
Speese 2000 Remainder Trust, Stephen F. Elken Trustee.
Mr. Elken, as trustee of the foregoing trusts, has sole
voting and investment power over the shares held in such trusts.
(2)	Represents
(a) 5,620 shares held directly,
(b) 269,445 shares issuable pursuant to currently
exercisable options, (c) 8,274 shares held pursuant to
our 401(k) Plan (as of December 31, 2009), and
(d) 3,825 shares held in a personal IRA account.
(3)	Represents
(a) 2,400 shares held directly,
(b) 19,000 shares issuable pursuant to currently
exercisable options, and (c) 5,655 deferred stock units.
(4)	Represents
(a) 1,500 shares held directly,
(b) 9,000 shares issuable pursuant to currently
exercisable options and (c) 5,655 deferred stock units.
(5)	Represents
(a) 57,500 shares issuable pursuant to currently
exercisable options, and (b) 5,655 deferred stock units.
(6)	Represents 7,101 deferred stock
units.
(7)	Represents
(a) 1,500 shares held directly,
(b) 14,000 shares issuable pursuant to currently
exercisable options, and (c) 5,655 deferred stock units.
(8)	Represents 5,655 deferred stock
units.
(9)	Represents
(a) 2,500 shares held directly,
(b) 65,876 shares issuable pursuant to currently
exercisable options, and (c) 2,422 shares held
pursuant to our 401(k) Plan (as of December 31, 2009).
(10)	Represents (a) 850 shares
held directly, and (b) 17,331 shares issuable pursuant
to currently exercisable options.

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| (11) | Represents
(a) 1,600 shares held directly,
(b) 60,692 shares issuable pursuant to currently
exercisable options, (c) 75,000 shares issuable
pursuant to options which may become exercisable within
60 days, and (d) 1,063 shares held pursuant to
our 401(k) Plan (as of December 31, 2009). |
| --- | --- |
| (12) | The address of BlackRock, Inc. is
40 East
52 nd Street, New York, New York, 10022. BlackRock, Inc. exercises
sole investment and voting control over all
7,162,797 shares. This information is based on a
Schedule 13G filed by BlackRock, Inc. with the Securities
and Exchange Commission on January 8, 2010. |
| (13) | The address of Hotchkis and Wiley
Capital Management, LLC is 725 S. Figueroa Street,
39th Floor, Los Angeles, California 90017. Hotchkis and Wiley
Capital Management, LLC exercises sole investment control over
all 4,435,685 shares and sole voting power over 3,077,985
of these shares. This information is based on a
Schedule 13G/A filed by Hotchkis and Wiley Capital
Management, LLC with the Securities and Exchange Commission on
February 12, 2010. |

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SUBMISSION OF STOCKHOLDER PROPOSALS

From time to time, stockholders may seek to nominate directors or present proposals for inclusion in the proxy statement and form of proxy for consideration at an annual stockholders meeting. To be included in the proxy statement or considered at an annual or any special meeting, you must timely submit nominations of directors or proposals, in addition to meeting other legal requirements. We must receive proposals for possible inclusion in the proxy statement related to the 2011 annual stockholders meeting no later than December 2, 2010. Proposals for possible consideration at the 2011 annual stockholders meeting must be received by us no earlier than January 13, 2011, and no later than February 12, 2011. The 2011 annual stockholders meeting is expected to take place on May 12, 2011. Direct any proposals, as well as related questions, to the undersigned.

OTHER BUSINESS

The Board does not intend to bring any business before the annual stockholders meeting other than the matters referred to in this notice and at this date has not been informed of any matters that may be presented to the annual stockholders meeting by others. If, however, any other matters properly come before the annual stockholders meeting, it is intended that the persons named in the accompanying proxy will vote pursuant to the proxy in accordance with their best judgment on such matters.

By order of the Board of Directors,

Ronald D. DeMoss

Executive Vice President — General Counsel and

Secretary

PLEASE VOTE — YOUR VOTE IS IMPORTANT

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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.

We encourage you to take advantage of Internet or telephone voting. Both are available 24 hours a day, 7 days a week.

Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to the shareholder meeting date.

RENT-A-CENTER, INC.

INTERNET http://www.proxyvoting.com/rcii

Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.

OR

TELEPHONE 1-866-540-5760

Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.

If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.

To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.

Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

71326-bl

6 FOLD AND DETACH HERE 6

Please mark your votes as indicated in this example x

1. — The Board of Directors recommends a vote FOR the listed nominees.		FOR	AGAINST	ABSTAIN
1.1	Mitchel E. Fadel	o	o	o
1.2	Kerney Laday	o	o	o
1.3	Paula Stern, Ph.D.	o	o	o

| 2. | To ratify the Audit Committee’s appointment of Grant
Thornton LLP, registered independent accountants,
as the Company’s independent auditors for the fiscal
year ended December 31, 2010, as set forth in the
accompanying proxy statement. | ABSTAIN — o |
| --- | --- | --- |
| | The Board of Directors recommends a vote “FOR” Proposal 2. | |
| 3. | In their discretion, upon such other business as may properly come before the meeting. | |
| I PLAN TO ATTEND | | o |

| The undersigned(s) acknowledges receipt of the Notice of 2010
Annual Meeting of Stockholders and the proxy statement accompanying the same. | |
| --- | --- |
| Mark Here for Address Change or Comments SEE REVERSE | o |

Signature Signature Date

NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.

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Important notice regarding the Internet availability of proxy materials for the Annual Meeting of shareholders. The Proxy Statement and the 2009 Annual Report to Stockholders are available at: http://bnymellon.mobular.net/bnymellon/rcii

5 FOLD AND DETACH HERE 5

RENT-A-CENTER, INC.

5501 HEADQUARTERS DRIVE PLANO, TEXAS 75024

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF RENT-A-CENTER, INC.

COMMON STOCK

The undersigned, hereby revoking all prior proxies, hereby appoints Robert D. Davis and Ronald D. DeMoss jointly and severally, with full power to act alone, as my true and lawful attorneys-in-fact, agents and proxies, with full and several power of substitution to each, to vote all the shares of Common Stock of Rent-A-Center, Inc. which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders of Rent-A-Center, Inc. to be held on May 13, 2010, and at any adjournments and postponements thereof. The above-named proxies are hereby instructed to vote as shown on the reverse side of this card.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED HEREIN, BUT WHERE NO DIRECTION IS GIVEN IT WILL BE VOTED “FOR” EACH OF THE NOMINEES LISTED IN PROPOSAL 1 AND PROPOSAL 2, AND IN THE DISCRETION OF THE ABOVE-NAMED PERSONS ACTING AS PROXIES ON SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.

Address Change/Comments
(Mark the corresponding box on the reverse side)

BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250

(Continued and to be marked, dated and signed, on the other side)

71326-bl

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