Exhibit 10.4
**RENT-WAY, INC.**
**STOCK OPTION AGREEMENT**
     THIS AGREEMENT (“Agreement”) is made and entered into as of this «Day» day of «Month» «Year»,by and between Rent-Way, Inc., a Pennsylvania corporation (the “Company”) and the undersignedemployee (the “Optionee”).
**WITNESSETH:**
     WHEREAS, the Company has determined that an option to purchase shares of common stock of theCompany be granted to Optionee under the **Rent-Way «PlanYear» Stock Option Plan**(the “Plan”); and
     WHEREAS, the Board of Directors of the Company or a committee thereof has approved the grantevidenced hereby.
     NOW, THEREFORE, in consideration of the premises, the mutual promises and representationscontained in this Agreement, and intending to be legally bound, the parties agree as follows:
 1.  Stock Option. The Company hereby grants to Optionee an option (the“Option”) to purchase, upon the terms and conditions set forth herein and in the Plan,that number of shares of common stock of the Company set forth on Exhibit A. Subjectto the terms of the Plan and applicable law, the Option will be treated as an incentivestock option or as a non-qualified stock option (in each case as such terms are definedin the Plan) as set forth on Exhibit A.  2.  Terms of Stock Option. The Option is subject to the following termsand conditions:
 a.  The exercise price is set forth on Exhibit A.  b.  The Option will vest immediately. The shares of stock subjectto the Option will be subject to restrictions on transfer described on ExhibitA. The certificates representing such shares shall bear a legend with respectto those restrictions determined by the Company.  c.  The Option may be exercised in whole or in part at any time orfrom time to time by delivering a written notice (in the form attached hereto)to the Company and paying to the Company the exercise price. Subject toparagraph (e) below, if Optionee ceases to be employed by, or ceases to be inthe service of the Company for any reason other than death or disability,Optionee will have the right to exercise the Option at any time withinthree months after such termination, but only to the extent the Option wasexercisable at the date of such termination. Any portion of the Option notthen exercised will immediately expire following such three-month period.

 

 

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    In no event may the Option be exercised after its expiration date.  d.  The Option may be exercised only by Optionee during his or herlifetime, except in the case of death or disability, in which case it may beexercised, in whole or in part, within one year following such death ordisability to the extent Optionee could have exercised the Option as of thedate of death or disability, by the person or persons who acquire the Option bybequest or inheritance or by the Optionee’s legal representative. In no eventmay the Option be exercised after its expiration date. The determination ofwhether Optionee’s employment with or service to the Company has ceased due todisability will be made by the Compensation Committee of the Company’s Board ofDirectors or such other body administering the Plan in accordance with itsterms.  e.  Notwithstanding the second sentence of paragraph (c) above, theOption will expire automatically and may not be exercised following theinvoluntary termination of Optionee’s employment with or service to theCompany. The determination of whether Optionee’s employment with or service tothe Company has been involuntarily terminated will be made by the CompensationCommittee of the Company’s Board of Directors or such other body administeringthe Plan in accordance with its terms.  f.  The exercise price will be payable to the Company upon theexercise of the Option either (i) in cash or by check, (ii) by delivery ofCompany common stock already owned by Optionee having a fair market value equalto the exercise price or (iii) by a combination of (i) and (ii) above. To theextent not inconsistent with the restrictions on transfer pertaining to thestock subject to the Option as described on Exhibit A, the Option may also beexercised by delivery to the Company of an irrevocable written noticeinstructing the Company to deliver the shares deliverable upon exercise of theOption to a broker selected by the Company, subject to the broker’s writtenguarantee to deliver cash to the Company in the full amount of the exerciseprice due on the Option’s exercise. The fair market value of stock deliveredin payment of the exercise price of the Option will be determined as of anydate in the same manner as the exercise price in accordance with the terms ofthe Plan.  g.  The Option will expire automatically at 11:59 p.m. Erie,Pennsylvania local time on the expiration date as set forth on Exhibit A.
 3.  Rights as Shareholder. Optionee will have no rights as a shareholderwith respect to any shares covered by the Option until the date of the issuance of astock certificate representing the shares acquired on exercise thereof.  4.  Investment Purpose. This Option is granted on the condition that thepurchases of stock covered by the Option will be for investment purposes, and not witha view towards resale or distribution. However, in the event the stock subject to theOption is registered under the Securities Act of 1933, as amended, or a resale of
 

 

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    stockwithout registration with the Securities and Exchange Commission would otherwise bepermissible, such condition will be inoperative if, in the opinion of counsel for theCompany, such condition is not required under the Securities Act of 1933 or any otherapplicable law, regulation, or rule of any governmental agency, national securitiesexchange or national securities association. All certificates for common stock issuedby the Company pursuant to this Agreement may contain the following statement:
       The securities represented by this certificate have not beenregistered under any applicable federal or state securitiesacts in reliance upon exemptions under those acts. Thesesecurities may not be transferred unless the Companyreceives a satisfactory opinion of counsel that suchtransfer has been registered or is exempt from registrationunder applicable securities laws.
 5.  No Right to Continued Employment. Nothing in this agreement, the Planor any agreement or instrument delivered in connection herewith or therewith confersupon Optionee the right to continue in the employ of or continue to provide service tothe Company or to be entitled to any remuneration or benefits not set forth in thisAgreement, the Plan or any other agreement, or to interfere with or limit in any waythe right of the Company to terminate Optionee’s employment or service.  6.  Miscellaneous.
 a.  This Agreement is binding upon the parties and their heirs,legal representatives, successors and assigns.  b.  This Agreement is subject to the terms of the Plan in allrespects. Any term or provision hereof that is inconsistent with the Plan willbe inoperative and the Plan will control.  c.  The Option represented hereby is not transferable by theOptionee except by will or the laws of descent and distribution.  d.  The Agreement is governed by and will be construed inaccordance with the laws of the Commonwealth of Pennsylvania.

 

 

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorizedofficer and Optionee has signed this Agreement.   OPTIONEE: RENT-WAY, INC.   **«OptioneeName»**  **«OptioneeSSNumber»**     Signature of Optionee By: William E. Morgenstern   Print Name of Optionee Title: Chief Executive Officer   Address     Address  
 

 

**EXHIBIT A**
Number of shares subject to Option: **«NumberofShares»
Tax status of Option: **«TaxStatus»**
Exercise price of Option: **$«ExercisePrice»**
Exercisability: The Option will vest and become exercisable immediately on grant.
Expiration Date: The Option may be exercised within a five (5) year period from the date ofgrant.
Restrictions on Transfer: The shares received on exercise of the Option will not betransferable except as follows:
33 1/3% on and after the third anniversary of the grant date of the Option.
33 1/3% on and after the fourth anniversary of the grant date of the Option.
33 1/3% on and after the fifth anniversary of the grant date of the Option.
 

 

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**EXERCISE OF STOCK OPTION AND DECLARATION**
     Pursuant to the provisions of the stock option agreement entered into as of ___,200___between Rent-Way, Inc. (the “Company”) and the undersigned as Optionee, I hereby exercise theOption granted thereunder to the extent of ___shares of common stock of the Company. I herebymake payment in full in accordance with the terms of the stock option agreement.        Date: _____________, 20__    (Optionee Signature)   Print Name:  _________________________Social Security Number:  _______________Address: __________________________  
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