RENT-A-CENTER, INC. FORM OF LONG-TERM INCENTIVE CASH AWARD
Exhibit 10.16
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 Amended and Restated
Rent-A-Center, Inc. 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, the Company hereby grants to the Executive a cash award of
$______, of which $______ will be subject to adjustment pursuant to Exhibit A (the
“Award”) under the Plan.
2. Provisions of the Plan Control. The provisions of the Plan, the terms of which are
incorporated in this Agreement, shall govern if and to the extent that there are inconsistencies
between those provisions and the provisions of this Agreement. The Executive acknowledges receipt
of a copy of the Plan prior to the execution of this Agreement.
3. Vesting.
(a) General. Subject to the further provisions of this Agreement and provided the
Executive remains continuously employed by the Company or a subsidiary of the Company through the
applicable anniversary dates or the end of said performance period, the Executive’s right to
receive payment of the Award shall vest (if at all) with respect to:
(i) one-eighth of the Award ($______) 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 described in Exhibit A annexed to this Agreement, subject to the
Company’s 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 connection with such change in Company
ownership.
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(c) Definitions. The term “disability” means the inability of Executive to perform the
principal duties of the Executive’s employment by reason of a physical or mental illness or injury
that is expected to last indefinitely or result in death, as determined by a duly licensed
physician selected by the Company. The term “change in Company ownership” means a transaction or
series of transactions as a result of which any one person or group of persons acquires (1)
ownership of common stock of the Company that, together with the common stock previously held by
such person or group of persons, constitutes more than 50% of the total fair market value or total
voting power of such stock, or (2) ownership of assets of the Company and its subsidiaries 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, all as determined
pursuant to the regulations issued by the Treasury Department under 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. On the applicable vesting dates described in Section 3 above, the
Company shall pay the vested amount of the Award to the Executive in cash. Any amount payable
pursuant to Section 3(a)(iii) hereof shall be deferred if and to the extent necessary to avoid a
loss of deduction by the Company under Section 162(m) of the Internal Revenue Code of 1986.
7. Tax Withholding. The Company may withhold from any payments under this Agreement
all federal, state, city, or other taxes as may be required pursuant to any law or governmental
regulation or ruling.
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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.
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.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.
| RENT-A-CENTER, INC. | ||||
| By: | ||||
| Executive | ||||
Signature Page
EXHIBIT A
PERFORMANCE VESTING CONDITIONS
PERFORMANCE VESTING CONDITIONS
A-1
