Exhibit 10.9
CHANGE IN CONTROL AGREEMENT
This CHANGE IN CONTROL AGREEMENT (the "Agreement") is entered into on
this 4th day of February, 2004, by and between RAINBOW RENTALS, INC. (the
"Company"), and S. Xxxxxx Xxxxxx ("Associate").
WITNESSETH:
WHEREAS, Associate is an officer of the Company and an integral part of
its management; and
WHEREAS, the Company desires to assure itself of continuity of
management in the pending merger with RENT-A-CENTER, INC.(the
"Change-in-Control"),
WHEREAS, the Company desires to assure itself of the continued
performance of services by Associate on an objective and impartial basis and
without distraction by concern for his employment status and security; and
WHEREAS, Associate is willing to continue in the employ of the Company
but desires assurance that his responsibilities and status with the Company will
not be adversely affected by the Change in Control.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the sufficiency of which are hereby acknowledged, the Company
and Associate hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined in this
Agreement shall have the meanings set forth in this paragraph 1.
"Cause" means (i) the conviction by the Associate of a felony
or of a crime of moral turpitude or dishonesty involving the
Company; (ii) the Associate's engagement in (A) willful
misconduct, (B) willful or gross neglect, (C) fraud, (D)
misappropriation or (E) embezzlement in the performance of his
duties as an Associate of the Company; or (iii) the
Associate's breach of any of the terms and provisions of this
Agreement.
2. Operational Date. This Agreement shall be binding on the
parties hereto immediately upon its execution, but, anything in this Agreement
to the contrary notwithstanding, this Agreement shall not be operative and
effective unless and until there has been the consummation of a Change in
Control while Associate is an Associate of the Company. Associate acknowledges
and agrees that unless and until there has been the consummation of a Change in
Control while Associate is an Associate of the Company, Associate's employment
status with the Company is that of an Associate-at-will and that Associate's
employment may be terminated by the Company or Associate at any time with or
without Cause and with or without notice.
3. Employment; Contract Period. Subject to the terms and
conditions of this Agreement, upon the consummation of the Change in Control,
the Company shall continue to employ Associate and Associate shall continue in
the employ of the Company for the period commencing on the date of consummation
of a Change in Control (the "Change in Control Date") and, subject only to the
provisions of paragraphs 4 and 5 below, continuing for a period of three (3)
months after of such Change in Control Date (the "Contract Period").
4. Position, Responsibilities, Duties. At all times during the
Contract Period, Associate shall hold the position and have the duties and
responsibilities held by Associate as of February 4, 2004, or such other
position, responsibilities, and duties as Associate may have had immediately
before the Change in Control occurred, or to which the Company and Associate may
agree in writing. Throughout the Contract Period, Associate shall devote
substantially all of his time and attention during normal business hours to the
business and affairs of the Company, consistent with past practice, except for
reasonable vacations and periods of illness or incapacity.
5. Compensation During Contract Period.
(a) During the Contract Period, the Company shall pay
Associate a salary at a rate not less than
Associate's base salary in effect immediately before
the occurrence of a Change in Control, or such higher
rate as may be determined from time to time by the
Company (the "Base Salary"). Payments
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of direct compensation pursuant to this paragraph
5(a) shall be made periodically on the same schedule
as in effect immediately before the occurrence of a
Change in Control.
(b) During the Contract Period, Associate shall be and
continue to be a full participant in any and all
benefit plans in which Associates of the Company
participate, including, without limitation, the
Associates' group insurance, medical, dental,
hospitalization or life insurance, disability
insurance and other Associate benefit plans,
programs, or arrangements (collectively, "Associate
Benefits").
6. Effect of Death. If Associate dies during the Contract Period
and before his employment hereunder is otherwise terminated, the Company shall
pay Associate's designated beneficiary (or, in the event of the decease of or
failure to designate a beneficiary, Associate's personal representative) the
severance payment provided for in paragraph 8(b) below, but without prejudice to
any payments otherwise due Associate in respect of his death.
7. Releases of Claims and Covenant Not to Xxx.
(a) Subject to the obligation of the Company to make the
payments required under this Agreement, Associate,
for himself and heirs, executors, administrators,
personal representatives, successors and assigns
hereby completely and forever releases, discharges
and acquits the Company, its directors, officers,
employees, successors, and assigns, from any and all
claims, demands, damages, actions, causes of action
or suits at law or in equity, contract or tort, of
whatsoever kind or nature, known or unknown
including, by way of example and not by way of
limitation, all claims which Associate has, had, or
may have arising out of his employment with the
Company through the date of this Agreement, or
through his termination of employment with the
Company through the end of the Retention Period. For
purposes of this Agreement, "all claims@ shall
specifically include, but is not limited to the
following: (i) claims arising out of Associate=
employment and/or termination of employment with the
Company; (ii) claims and causes of action under the
Age Discrimination and Employment Act, the Older
Workers= Benefit Protection Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act,
and claims under any other federal or any state or
local law, statute or regulation, dealing with
employment; (iii) claims for wrongful or unjust
discharge, breach of contract, whether express or
implied, promissory estoppel, negligence or
intentional conduct; negligence or intentional
infliction of emotional distress, defamation, breach
of any implied covenant of good faith or fair
dealing, at common law or otherwise; (iv) claims for
compensation in the nature of wages, salary, bonuses,
commissions, stock options, fringe benefits, vacation
pay, severance pay, back pay, front pay, attorney
fees, costs, business or other expenses or otherwise.
(b) Associate covenants and agrees that he or she will
never institute any claim or charge of employer
discrimination with any governmental agency or xxx
the Company concerning any claims relating to
Associate= employment and/or termination of
employment with the Company.
(c) Subject to the obligation of Associate required under
this Agreement, the Company, for itself and its
successors and assigns, hereby completely and forever
releases, discharges and acquits Associate, his or
her heirs, executors, personal representatives,
successors and assigns from any and all claims,
demands, causes of action or suits at law or in
equity, contract or tort, of whatsoever kind or
nature, which the Company has, had, or may have
against Associate to the date of this Agreement.
8. Termination Following a Change in Control; Severance
Compensation.
(a) Termination for Cause. Following a Change in Control,
Associate's employment may be terminated during the
Contract Period by the Company for Cause. In the
event Associate's termination during the Contract
Period for Cause, the Associate shall have no right
to receive any compensation or benefit hereunder on
and after the effective date of such termination (as
determined by the Company), other than salary,
bonuses, and other benefits earned and accrued, and
reimbursement under this Agreement for expenses
incurred, prior to the effective date of such
termination.
(b) Termination without Cause; Voluntary Termination.
Subject to the Company's obligations herein, the
Company may terminate Associate's Employment at any
time during the Contract Period with
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or without Cause. If the Company terminates
Associate's employment during the Contract Period for
any reason other than for Cause, or Associate elects
to terminate his employment for any reason, then the
Company shall, as severance, pay to Associate and
provide him and his dependents, beneficiaries, and
estate with the following:
i. a severance payment equal to $116,667,
payable in a lump-sum within five (5)
business days of such termination; and
ii. during a 9-month period after the effective
date of Associate's termination pursuant to
this paragraph 8(b), Associate and his
dependents, beneficiaries, and estate shall
continue to be entitled to the medical and
dental insurance coverage referred to in
paragraph 5(b) and continued use of his
corporate vehicle for a period of 9 months.
9. Confidentiality. Associate agrees to keep the existence of any
terms of this Agreement confidential to the extent permitted by law.
10. Mitigation Required. Associate shall not be required to
mitigate the amount of any payment provided for under this Agreement by seeking
employment or in any other manner.
11. Withholding. The Company may withhold from any amounts payable
hereunder, all federal, state, city, or other taxes as may be required pursuant
to any applicable law, government regulation or ruling.
12. Legal Fees. The Company shall pay and be solely responsible
for any and all attorneys' fees and related fees and expenses incurred by
Associate as a result of any claim, action, or proceeding arising out of the
enforcement of, or any challenge to the validity or enforceability of, this
Agreement or any provision hereof; provided, however, that the Company shall not
be obligated to pay any attorneys' fees or related fees and expenses incurred by
Associate in bringing an unsuccessful action to enforce this Agreement.
13. Notices. For purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given (i) when given by personal delivery, (ii) one business day after being
sent by overnight courier service, or (iii) five business days after being
mailed by U.S. registered or certified mail, return receipt request, postage
prepaid, to the addresses set forth below:
If to Company: Rainbow Rentals, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, Chairman and CEO
If to Associate: S. Xxxxxx Xxxxxx
00000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
14. General Provisions.
(a) This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any rights, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege nor any single or partial exercise of any such right, power or
privilege, preclude any other or further exercise thereof or the exercise of any
other such right, power or privilege.
(b) The validity and interpretation of this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Ohio applicable to agreements made and to be fully performed
therein (excluding the conflicts of laws rules). The state and federal courts
situated in Mahoning County, Ohio shall have venue and exclusive jurisdiction
over all disputes relating to this Agreement. Recipient hereby consents to the
exclusive personal jurisdiction of such courts, and waives any defense of
inconvenient forum in any action or proceeding brought in such courts relating
to or arising out of this Agreement.
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(c) In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law. In the event that any provision hereof
shall be determined to be invalid or unenforceable, the parties will negotiate
in good faith to replace such provision with another provision which will be
valid or enforceable which is as close as practicable to the provision held
invalid or unenforceable.
(d) This Agreement shall be binding upon and inure to the
benefit of Associate, his heirs, and legal representative, the Company, and any
successor organization or organizations which shall succeed to substantially all
of the business and property of the Company, whether by means of merger,
consolidation, acquisition of substantially all of the assets of the Company or
otherwise, including by operation of law.
(e) This Agreement shall terminate and be deemed null and
void if a Change of Control has not occurred by December 31, 2004.
IN WITNESS WHEREOF, the Company and Associate have executed this
Agreement on the day and year first above written.
"Company"
RAINBOW RENTALS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx, Chairman & CEO
"Associate"
/s/ S. Xxxxxx Xxxxxx
--------------------------
S. Xxxxxx Xxxxxx
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