RENT-A-CENTER, INC. FORM OF STOCK COMPENSATION AGREEMENT
EXHIBIT 10.23
RENT-A-CENTER, INC.
FORM OF STOCK COMPENSATION AGREEMENT
FORM OF STOCK COMPENSATION AGREEMENT
THIS AGREEMENT, made as of the ___day of ___, ___, 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. Company Stock Award. Subject to the vesting and other terms and conditions set
forth in this Agreement, the Company hereby grants to the Executive the right to receive ___shares
(the “Shares”) of common stock of the Company, par value $0.01 per share, one-half of which shall
be subject to adjustment pursuant to Exhibit A annexed hereto and made a part hereof.
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 of Right to Receive Shares.
(a) General. Subject to the further provisions of this Agreement, the Executive’s
right to receive half the number of Shares covered by this Agreement shall become vested (if at
all) upon the third anniversary of the date of this Agreement, provided the Executive remains
continuously employed by the Company or a subsidiary of the Company through such third anniversary.
The Executive’s right to receive the balance of the Shares covered by this Agreement (subject to
adjustment pursuant to Exhibit A) shall become vested (if at all) at the end of the performance
period described in Exhibit A, subject to (1) attainment of the performance objectives specified in
Exhibit A, and (2) the Executive’s continuous employment with the Company or a subsidiary of the
Company through the end of said performance period.
(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 the Shares (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.
(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
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EXHIBIT 10.23
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 Shares covered by this Agreement, 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
Company (“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 Shares
covered by this Agreement. 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 (the
“Compensation Committee”)), (a) the Executive shall immediately return to the Company any Shares,
whether or not vested, which were received hereunder, (b) the Executive shall immediately send to
the Company at the address below in the form of a check, (i) the proceeds from any Shares received
hereunder that were sold to a third party or (ii) the fair market value of any Shares received
hereunder which were transferred for no consideration to a third party (e.g., a gift or transfer to
a trust), provided that the determination of the fair market value of such Shares shall be made by
the Compensation Committee as of the date of such violation or breach, and (c) all of the
Executive’s rights to the Shares shall be revoked and the Executive will have no further rights
with respect to the Shares.
6. Restrictions on Transfer. The Executive’s right to receive Shares under this
Agreement may not be sold, assigned, transferred, alienated, commuted, anticipated, or otherwise
disposed of (except by will or the laws of descent and distribution), or pledged or hypothecated as
collateral for a loan or as security for the performance of any obligation, or be otherwise
encumbered, and may not become subject to attachment, garnishment, execution or other legal or
equitable process, and any attempt to do so shall be null and void. If the Executive attempts to
dispose of or encumber the Executive’s right to receive Shares under this Agreement before such
right becomes vested, then such right shall terminate and be canceled as of the date of such
attempted transfer.
7. Delivery of Shares.
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EXHIBIT 10.23
(a) General. If and as soon as practicable after the Executive’s right to receive
Shares becomes vested in accordance with numbered paragraph 3 above, the Company will cause such
Shares to be issued and delivered to the Executive (or the Executive’s representative or
beneficiary, as the case may be). For the avoidance of doubt, if the Executive’s right to receive
the Shares becomes vested as a result of a change in control, the Executive will be entitled to
participate in the change in control transaction with respect to such Shares (less any Shares
withheld to satisfy applicable tax withholding) on the same basis and in the same manner as other
stockholders of the Company. Notwithstanding the foregoing, the issuance and delivery of Shares
that become vested pursuant to this Agreement shall be deferred if and to the extent necessary to
(1) avoid a loss of deduction by the Company under Section 162(m) of the Internal Revenue Code of
1986, and/or (2) avoid the imposition of additional tax under Section 409A(a) of the Code.
(b) Tax Withholding. The Company may require as a condition of the delivery of stock
certificates pursuant to subsection (a) above that the Executive remit to the Company or a
subsidiary an amount sufficient in the opinion of the Company to satisfy any federal, state and
other governmental tax withholding requirements attributable to the vesting or delivery of the
shares represented by such certificate. In addition, or in the alternative, the Company may satisfy
such tax withholding obligation in whole or in part by withholding Shares that would otherwise be
delivered to the Executive (or the Executive’s representative or beneficiary) based upon the fair
market value of the Shares on the applicable settlement date.
8. Capital Changes. In the event of a stock dividend, stock split, spin off or other
recapitalization with respect to the outstanding shares of the Company’s common stock, the Company
will make such adjustments to the Shares covered by this Agreement in order to avoid dilution or
enhancement of the Executive’s rights under this Agreement.
9. 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.
10. 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.
11. 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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EXHIBIT 10.23
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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EXHIBIT 10.23
EXHIBIT A
PERFORMANCE VESTING CONDITIONS
PERFORMANCE VESTING CONDITIONS
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