RENT-A-CENTER, INC. FORM OF LONG-TERM INCENTIVE CASH AWARD
EXHIBIT 10.20
RENT-A-CENTER, INC.
FORM OF LONG-TERM INCENTIVE CASH AWARD
FORM OF LONG-TERM INCENTIVE CASH AWARD
THIS AGREEMENT, made as of the ___day of ___, ___, by and between Rent-A-Center, Inc. (the
“Company”) and ___(the “Executive”), pursuant to the Rent-A-Center, Inc. 2006 Long-Term
Incentive Plan (the “Plan”).
1. Long-Term Incentive Cash Award. Subject to the vesting and other terms and
conditions set forth in this Agreement and Exhibit A annexed hereto and made a part hereof, the
Company hereby grants to the Executive a cash award of $___, of which $___will be subject to
adjustment pursuant to Exhibit A (the “Award”).
2. Provisions of the Plan Control. The provisions of the Plan, the terms of which are
incorporated in this Agreement, shall govern if and to the extent that there are inconsistencies
between those provisions and the provisions of this Agreement. The Executive acknowledges receipt
of a copy of the Plan prior to the execution of this Agreement.
3. Vesting.
(a) General. Subject to the further provisions of this Agreement and provided the
Executive remains continuously employed by the Company or a subsidiary of the Company through the
applicable anniversary dates or the end of the applicable performance period described in Exhibit A
(the “Performance Period”), the Executive’s right to receive payment of the Award shall vest (if at
all) with respect to:
(i) one-eighth of the Award ($___) on each of the first four anniversaries of the date of
this Agreement;
(ii) one-quarter of the Award ($___) on the third anniversary of the date of this
Agreement; and
(iii) the balance of the Award ($___, subject to adjustment pursuant to Exhibit A) at the
end of the Performance Period, subject to the attainment of the performance objectives specified in
said Exhibit A.
(b) Accelerated Vesting. If, before the applicable vesting date described in (a)
above, the Executive’s employment with the Company and its subsidiaries is terminated due to the
Executive’s death or “disability” (as defined below), or there occurs a “change in Company
ownership” (as defined below), then the Executive’s right to receive payment of the Award (to the
extent not previously vested) will become vested on the date of such termination of employment or
immediately prior to the consummation of the change in Company ownership, as the case may be.
Notwithstanding the preceding sentence, vesting will not accelerate by reason of a change in
Company ownership unless the Executive remains in the continuous employ of the Company or a
subsidiary until the consummation of the change in Company ownership or the Executive’s employment
is terminated sooner by the Company or a subsidiary in contemplation of or in connection with such
change in Company ownership.
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(c) Definitions. The term “disability” means the inability of Executive to
substantially perform the customary duties and responsibilities of the Executive’s employment with
the Company or an affiliate for a period of at least 120 consecutive days or 120 days in any
12-month period by reason of a physical or mental incapacity that is expected to result in death or
last indefinitely, as determined by a duly licensed physician appointed by the Company. The term
“change in Company ownership” means a transaction or series of transactions as a result of which
there is a change in the ownership or effective control of the Company or a change in the ownership
of a substantial portion of the assets of the Company, in each case within the meaning and for the
purposes of Section 409A of the Internal Revenue Code of 1986 (it being intended that a “change in
Company ownership” under this Agreement will be a permissible distribution event under said section
409A).
4. Termination of Employment or Service. Upon the termination of the Executive’s
employment or other service with the Company and its subsidiaries for any reason other than death
or disability, the Executive’s right to receive payment of the Award, to the extent not previously
vested or terminated, will thereupon terminate and be canceled.
5. Restoration. The Executive has been provided and is privy to intellectual property,
trade secrets, and other confidential information of the Company. For two years following the
Executive’s termination of employment, the Executive has agreed not to engage in any activity or
provide any services which are similar to or competitive with the Company’s business. For the same
two year period, the Executive also agreed not to solicit or induce, or cause or permit others to
solicit or induce, any employee to terminate their employment with the Company. These covenants are
set forth and agreed to in the Loyalty and Confidentiality Agreement between the Executive and the
Company (the “Loyalty Agreement”). The parties hereto understand and agree that the promises in
this Agreement and those in the Loyalty Agreement, and not any employment of or services performed
by the Executive in the course and scope of that employment, are the sole consideration for the
Award. Further, it is agreed that should the Executive violate or be in breach of any restrictions
set forth herein or in the Loyalty Agreement (which determination shall be made in the discretion
of the Compensation Committee of the Company’s Board of Directors), (a) the Executive shall
immediately repay to the Company, in a single cash lump sum, the amount of any Award received by
the Executive hereunder and (b) the Executive shall have no right to receive, and shall not
receive, any further Award hereunder, whether or not such Award has otherwise vested hereunder.
6. Cash Settlement. The Award will be settled in cash if, as and when it becomes
vested in accordance with the provisions hereof; provided, however, that any amount payable
pursuant to Section 3(a)(iii) hereof shall be deferred if and to the extent necessary to (a) avoid
a loss of deduction by the Company under Section 162(m) of the Internal Revenue Code of 1986,
and/or (b) avoid the imposition of additional tax under Section 409A(a) of the Code.
8. No Service Rights. Nothing contained in the Plan or this Agreement shall confer
upon the Executive any right with respect to the continuation of the Executive’s employment or
other service with the Company or any subsidiary of the Company or interfere in any way with the
right of the Company or any subsidiary of the Company at any time to terminate such relationship.
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9. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas, without regard to its principles of conflict of laws.
10. Miscellaneous. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and may not be modified other than by
written instrument executed by the parties.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.
| RENT-A-CENTER, INC. | ||
By: |
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Executive
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Signature Page
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EXHIBIT A
PERFORMANCE VESTING CONDITIONS
A-1
PERFORMANCE VESTING CONDITIONS
A-1
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