Exhibit 10.1

COOPERATION AGREEMENT

This Cooperation Agreement (this “Agreement”) is made and entered into as of
February 5, 2018, by and among Rent-A-Center, Inc. (the “Company”), Engaged
Capital Flagship Master Fund, LP (“Engaged Master Fund”), Engaged Capital
Co-Invest V, LP (“Engaged Co-Invest V”), Engaged Capital Co-Invest V-A, LP
(“Engaged Co-Invest V-A”), Engaged Capital Flagship Fund, LP (“Engaged Flagship
LP”), Engaged Capital Flagship Fund, Ltd. (“Engaged Flagship Ltd.”), Engaged
Capital, LLC (“Engaged Capital”), Engaged Capital Holdings, LLC (“Engaged
Holdings”) and Glenn W. Welling (“Welling,” and together with Engaged Master
Fund, Engaged Co-Invest V, Engaged Co-Invest V-A, Engaged Flagship LP, Engaged
Flagship Ltd., Engaged Capital and Engaged Holdings, the “Engaged Group”) (each
of the Company and the members of the Engaged Group, a “Party” to this
Agreement, and collectively, the “Parties”).

RECITALS

WHEREAS, the Engaged Group is deemed to beneficially own approximately 16.9% of
the issued and outstanding common stock of the Company;

WHEREAS, the Company has announced that the Board of Directors of the Company
(the “Board”) will submit a binding proposal to the Company’s stockholders at
the 2018 annual meeting of stockholders of the Company (the “2018 Annual
Meeting”) to amend the Company’s Certificate of Incorporation, as amended (the
“Charter”), to declassify the structure of the Board such that all directors
will stand for election on an annual basis (the “Declassification Proposal”);

WHEREAS, the Company has further announced that each current director of the
Board has committed to tender his resignation (a “Director Resignation Letter”)
following the 2018 Annual Meeting if he is a member of the Board at that time
and that each such director will subsequently be reappointed to the Board by the
remaining members of the Board, meaning the ultimate effect of the
Declassification Proposal, if approved, is that all directors will stand for
election annually beginning at the Company’s 2019 annual meeting of stockholders
(the “2019 Annual Meeting”);

WHEREAS, Rishi Garg, a member of the Board whose term on the Board will expire
at the 2018 Annual Meeting, has determined not to stand for re-election to the
Board at the 2018 Annual Meeting and, accordingly, shall cease to be a director
of the Company upon the conclusion of the 2018 Annual Meeting;

WHEREAS, J.V. Lentell and Michael J. Gade (each, a “Designated Director” and,
collectively, the “Designated Directors”), each a member of the Board whose term
on the Board will expire at the 2018 Annual Meeting, have recently informed the
Company that they currently intend to stand for re-election to the Board at the
2018 Annual Meeting; and

WHEREAS, as of the date hereof, the Company and the Engaged Group have
determined to come to an agreement with respect to certain matters relating to
the 2018 Annual Meeting and certain other matters as provided in this Agreement,
including, without limitation, consensus on proposed director nominees for
stockholder consideration at the 2018 Annual Meeting such as to avoid the
substantial cost and distraction to the Company and the Board associated with a
contested election between the Company and the Engaged Group at the 2018 Annual
Meeting.

 

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NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, intending to be legally bound hereby, agree as follows:

1.     2018 Annual Meeting; Governance Matters.

(a)    The Company currently intends to hold the 2018 Annual Meeting no later
than June 29, 2018 and agrees to hold the 2018 Annual Meeting no later than such
date, unless otherwise agreed to in writing by the Parties.

(b)    The Board shall recommend in favor of, and use its reasonable best
efforts to solicit stockholder support for, the approval of the Declassification
Proposal at the 2018 Annual Meeting, and all directors and executive officers of
the Company and all members of the Engaged Group agree to vote all shares
beneficially owned by them or over which they have voting control in favor of
the Declassification Proposal.

(c)    The Board and the appropriate committee(s) of the Board agree to
terminate that certain Rights Agreement entered into by and between the Company
and American Stock Transfer & Trust Company, LLC, dated as of March 28, 2017, no
later than February 28, 2018, and shall take all other actions consistent with
and necessary to facilitate such termination.

(d)    Effective as of the date hereof, each member of the Engaged Group, on
behalf of itself and its respective Affiliates and Associates (each as defined
below), hereby agrees that it will not, and that it will not permit any of its
Affiliates or Associates to, (i) nominate or recommend for nomination any person
for election to the Board at the 2018 Annual Meeting, directly or indirectly
(except as expressly permitted by Section 2 of this Agreement), (ii) submit any
proposal (including any proposal pursuant to Rule 14a-8 of the Exchange Act (as
defined below)) for consideration at, or bring any other business before, the
2018 Annual Meeting, directly or indirectly (except as expressly permitted in
Sections 1 and 2 of this Agreement), or (iii) initiate, encourage or participate
in any “withhold” or similar campaign with respect to the 2018 Annual Meeting,
directly or indirectly. Effective as of the date hereof, each member of the
Engaged Group on behalf of itself and its respective Affiliates and Associates
hereby agrees that it shall not publicly or privately encourage or support any
other stockholder of the Company to take any of the actions described in this
Section 1(d).

(e)    Each member of the Board previously nominated by the Engaged Group that
was subsequently elected to the Board at the 2017 annual meeting of stockholders
of the Company (collectively, the “2017 Directors”) agrees to approve the
nomination of the Designated Directors (or, if applicable, a Designated
Replacement Director (as defined below)) and to support the election of the same
to the Board at the 2018 Annual Meeting as the Company’s nominees to the Board.

 

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(f)    The 2017 Directors each agree that if any Designated Director (or any
Designated Replacement Director, if applicable) is unable to serve as a
director, resigns as a director or elects not to stand for re-election at the
2018 Annual Meeting, then the remaining Designated Director and/or Designated
Replacement Director(s) shall have the right to select a substitute person(s) to
fill the resulting vacancy or, if no vacancy is created due to the choice by a
Designated Director or a Designated Replacement Director not to stand for
re-election, select a substitute person to be nominated for election to the
Board at the 2018 Annual Meeting; provided that any substitute person
recommended must be approved by the Nominating and Corporate Governance
Committee (the “Nominating Committee”) of the Board. Upon the approval of a
substitute person by the Nominating Committee, which approval not to be
unreasonably withheld, delayed or conditioned (any such replacement nominee
shall be referred to as a “Designated Replacement Director”), the Board will
take such actions as reasonably necessary to appoint such Designated Replacement
Director to the Board effective no later than ten (10) business days after the
Nominating Committee recommendation of such Designated Replacement Director. The
remaining Designated Director and/or Designated Replacement Director(s) shall
have the right to submit Designated Replacement Director candidates for
consideration by the Nominating Committee until a Designated Replacement
Director is approved by the Nominating Committee.

(g)    At the 2018 Annual Meeting and any special meeting that may be held prior
to the Termination Date (as defined below), as applicable, each member of the
Engaged Group agrees to appear in person or by proxy and to vote all of the
voting securities it beneficially owns (i) in favor of the election of the
Company’s nominees to the Board, (ii) against any nominees for director not
recommended by the Board, (iii) against any proposals to remove any director and
(iv) in accordance with the Board’s recommendation with respect to any
stockholder proposals or other business presented at such meeting; provided,
however, that the Engaged Group shall be permitted to vote in its sole
discretion on a proposal (except with respect to the election or removal of
directors or any other matter that would be inconsistent with the Engaged
Group’s specific obligations under this Agreement, including, without
limitation, the obligations set forth in Sections 1(b), 1(d) and 1(g) hereof) if
director Christopher B. Hetrick (“Hetrick”) has not voted in favor of the
Board’s recommendation with respect to such proposal.

2.    Settlement Director and Other Board Matters.

(a)    As promptly as practicable following the execution of this Agreement, but
in any event no later than thirty (30) days from the date of this Agreement, the
Engaged Group shall submit to the Nominating Committee, in writing, two
candidates (the “Potential Directors”), one of which to be named as a director
candidate in the Company’s proxy materials for election (subject to the
satisfaction of the selection and qualification requirements set forth in this
Section 2) to the Board at the 2018 Annual Meeting (such writing, the “Potential
Directors List”). The Engaged Group acknowledges that ethnic and gender
diversity are important factors to the Board when identifying and evaluating
individuals to serve on the Board, and such factors are similarly important to
the Engaged Group. In support of the Board’s diversity objectives, the Engaged
Group will endeavor to submit Potential Directors that are diverse from an
ethnic and/or gender perspective.

 

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(b)    The Engaged Group will ensure that (i) each Potential Director is not an
Affiliate of any member of the Engaged Group, (ii) each Potential Director is a
qualified candidate to serve as a director of Company under the Charter and the
Company’s Amended and Restated Bylaws (the “Bylaws”), and (iii) a fully
completed copy of the Company’s standard director and officer questionnaire, a
Director Resignation Letter and other reasonable and customary director
onboarding documentation required by the Company of all current directors in
connection with the appointment or election of new Board members is provided to
the Secretary of the Company contemporaneously with the Potential Directors List
(which onboarding materials shall be provided to the Engaged Group no later than
five (5) business days from the date of this Agreement).

(c)    Following the Nominating Committee’s receipt of the Potential Directors
List in accordance with the requirements of Section 2 hereof, the Nominating
Committee shall, within ten (10) business days following the opportunity to
interview the Potential Directors (in person or by teleconference), convene,
review the Potential Directors and associated information with respect thereto
and recommend that one of the Potential Directors be named as a director
candidate in the Company’s proxy materials for election to the Board at the 2018
Annual Meeting; provided, however, that in the event the Nominating Committee
has a reasonable objection to both Potential Directors and does not approve of
the Potential Directors, then the Engaged Group shall submit an additional
candidate for consideration (such candidate, if any, a “Replacement Potential
Director,” and shall be regarded as a Potential Director for Purposes of
Section 2(a) hereof). The Engaged Group shall have the right to submit Potential
Replacement Directors for consideration by the Nominating Committee until a
Replacement Potential Director is approved by the Nominating Committee. Upon
receipt of the Nominating Committee’s recommendation with respect to the
Potential Director (or a Replacement Potential Director), the Board agrees to
take all actions reasonably necessary to approve the inclusion of the Potential
Director (or Replacement Potential Director, if applicable) to be named as a
director candidate in the Company’s proxy materials for election to the Board at
the 2018 Annual Meeting (such Potential Director or, if applicable, Replacement
Potential Director, following his or her election to the Board, is referred to
herein as the “Settlement Director”).

(d)    The Company agrees that if the Settlement Director (or any Settlement
Replacement Director (as defined below), if applicable) elects not to stand for
election at the 2018 Annual Meeting or is unable to serve as a director, resigns
as a director or is removed as a director without cause prior to the Termination
Date, then the Engaged Group shall have the right to select a substitute
person(s) to fill the resulting vacancy or, if no vacancy is created due to the
choice by a Settlement Director or Settlement Replacement Director not to stand
for election, select a substitute person to be nominated for election to the
Board at the 2018 Annual Meeting; provided that any substitute person
recommended by the Engaged Group must satisfy the requirements of Sections 2(a),
2(b) and 2(e) hereof and be approved by the Nominating Committee (such approval
not to be unreasonably withheld, delayed or conditioned). In the event the
Nominating Committee does not approve a substitute person selected by the
Engaged Group, the Engaged Group shall have the right to select additional
substitute person(s) for consideration by the Nominating Committee until a
Settlement Replacement Director (as defined below) is approved by the Nominating
Committee. Upon the approval of a substitute person by the Nominating Committee
(any such replacement nominee shall be referred to as a “Settlement Replacement
Director”), the Board will take such actions as reasonably necessary to appoint
such Settlement Replacement Director to the Board effective no later than ten
(10) business days after the Nominating Committee recommendation of such
Settlement Replacement Director.

 

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(e)    The Settlement Director (or any Settlement Replacement Director, if
applicable) must (i) qualify as “independent” pursuant to the U.S. Securities
and Exchange Commission (“SEC”) rules and regulations and NASDAQ listing
standards (or other securities exchange on which the Company’s securities may
then be traded) and (ii) qualify to serve as a director under the Delaware
General Corporation Law.

(f)    While the Settlement Director (or any Settlement Replacement Director, if
applicable) is serving as a director on the Board, the Settlement Director (or
any Settlement Replacement Director, if applicable) and all of the other members
of the Board agree to cooperate and work constructively with one another to
develop and implement initiatives designed to create durable, sustainable
stockholder value during the continuation of the broad-based financial and
strategic review process previously approved, announced and initiated by the
Board; provided, however, that each director will be always free to reach his or
her own good faith decisions regarding what is in the best interest of
stockholders.

(g)    Prior to the 2018 Annual Meeting, the Board size shall be fixed at no
more than six (6) directors, and immediately following the 2018 Annual Meeting
and during the remaining term of this Agreement, the Board size may be increased
to no more than seven (7) directors. In the event that the Board size is
increased to seven (7) directors during the term of this Agreement, the process
of selecting the seventh director shall follow substantially the same process
set forth in Sections 2(a) – 2(d) hereof used for the selection of the
Settlement Director.

(h)    In the event that the Declassification Proposal is not approved at the
2018 Annual Meeting, immediately following the conclusion of the 2018 Annual
Meeting, the Board and the appropriate committee(s) of the Board shall take all
steps reasonably necessary to reconfigure the classes on which the directors
serve such that each class of directors is as nearly as equal in number of
directors as possible.

3.     Non-Disparagement. During the term of this Agreement, the Company, on the
one hand, and each member of the Engaged Group, on the other hand, will refrain
from making, and will cause their respective Affiliates and Associates and its
and their respective Representatives (as defined below) not to make, any
statement or announcement that constitutes an ad hominem attack on, or that
otherwise disparages, impugns or is reasonably likely to damage the reputation
of, (a) in the case of statements or announcements by or on behalf of a member
of the Engaged Group, the Company or any of its Affiliates or Associates or any
of its or their respective officers, directors (or any Affiliates or Associates
of such directors) or employees or any person who has served as an officer,
director or employee of the Company or any of its Affiliates or Associates; and
(b) in the case of statements or announcements by or on behalf of the Company,
each member of the Engaged Group and its respective Affiliates and Associates
and its and their respective principals, directors, officers, employees, members
or general partners or any person who has served as such. The foregoing will not
prevent the making of any factual statement in any compelled testimony or the
production of information, whether by legal process, subpoena or as part of a
response to a request for information from any governmental authority with
jurisdiction over the Party from whom information is sought. For purposes of
this Agreement, “Representatives,” with respect to each Party, shall mean such
Party’s principals, directors, officers, employees, general partners, members,
agents, representatives, attorneys and advisors acting at the direction or on
behalf of such Party.

 

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4.     Representations and Warranties of the Company. The Company represents and
warrants to the Engaged Group that (a) the Company has the corporate power and
authority to execute this Agreement and to bind it thereto, (b) this Agreement
has been duly and validly authorized, executed and delivered by the Company,
constitutes a valid and binding obligation and agreement of the Company, and is
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles and
(c) the execution, delivery and performance of this Agreement by the Company
does not and will not violate or conflict with (i) any law, rule, regulation,
order, judgment or decree applicable to the Company, or (ii) result in any
breach or violation of or constitute a default (or an event which with notice or
lapse of time or both could constitute such a breach, violation or default)
under or pursuant to, or result in the loss of a material benefit under, or give
any right of termination, amendment, acceleration or cancellation of, any
organizational document, agreement, contract, commitment, understanding or
arrangement to which the Company is a party or by which it is bound.

5.    Representations and Warranties of the Engaged Group. Each member of the
Engaged Group represents and warrants to the Company that (a) the authorized
signatory of such Engaged Group member set forth on the signature page hereto
has the power and authority to execute this Agreement and any other documents or
agreements to be entered into in connection with this Agreement and to bind it
thereto, (b) this Agreement has been duly authorized, executed and delivered by
such Engaged Group member, and is a valid and binding obligation of such Engaged
Group member, enforceable against each in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles,
(c) the execution of this Agreement, the consummation of any of the transactions
contemplated hereby, and the fulfillment of the terms hereof, in each case in
accordance with the terms hereof, will not conflict with, or result in a breach
or violation of the organizational documents of such Engaged Group member as
currently in effect and (d) the execution, delivery and performance of this
Agreement by such Engaged Group member does not and will not violate or conflict
with (i) any law, rule, regulation, order, judgment or decree applicable to such
Engaged Group member, or (ii) result in any breach or violation of or constitute
a default (or an event which with notice or lapse of time or both could
constitute such a breach, violation or default) under or pursuant to, or result
in the loss of a material benefit under, or give any right of termination,
amendment, acceleration or cancellation of, any organizational document,
agreement, contract, commitment, understanding or arrangement to which such
member is a party or by which it is bound.

6.     Termination. This Agreement shall terminate on the date that is thirty
(30) days prior to the expiration of the Company’s advance notice period for the
nomination of directors by stockholders at the 2019 Annual Meeting (the
“Termination Date”), which date shall only be deemed to refer to the notice
periods as established by the Bylaws and shall not, in any event, be deemed to
refer to the date for submission of stockholder proposals as established by Rule
14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Notwithstanding the foregoing, this Section 6 and Sections 8-16 shall survive
the termination or expiration of this Agreement.

 

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7.     Filings and Public Statements. Within one (1) business day following the
date of this Agreement, the Company and the members of the Engaged Group shall
jointly issue a mutually agreeable press release, substantially in the form
attached hereto as Exhibit A (the “Press Release”), announcing this Agreement.
Prior to the issuance of the Press Release, neither the Company nor the Engaged
Group shall issue any press release or public announcement regarding this
Agreement or take any action that would require public disclosure thereof
without the prior written consent of the other Party. No Party or any of its
Affiliates or Associates shall make any public statement (including, without
limitation, in any filing required under the Exchange Act) concerning the
subject matter of this Agreement inconsistent with the Press Release. From the
date hereof until the Termination Date, no Party shall make any public
announcement or statement that is inconsistent with or contrary to the
statements made in the Press Release, except as required by law or the rules and
regulations of any stock exchange or governmental entity or with the prior
written consent of the Engaged Group and the Company, as applicable, and
otherwise in accordance with this Agreement. The Company, with respect to its
Current Report on Form 8-K, and the Engaged Group, with respect to its amendment
to its Schedule 13D, in each case in connection with the entrance by the Parties
to this Agreement, will provide the other Party, prior to each such filing, a
reasonable opportunity to review and comment on such documents, and each such
Party will consider any comments from the other Party in good faith.

8.     Specific Performance. Each of the members of the Engaged Group, on the
one hand, and the Company, on the other hand, acknowledges and agrees that
irreparable injury to the other Party hereto would occur in the event any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such injury would not be
adequately compensable by the remedies available at law (including the payment
of money damages). It is accordingly agreed that each member of the Engaged
Group, on the one hand, and the Company, on the other hand (the “Moving Party”),
shall each be entitled to specific enforcement of, and injunctive relief to
prevent any violation of, the terms hereof, and the other Party hereto will not
take action, directly or indirectly, in opposition to the Moving Party seeking
such relief on the grounds that any other remedy or relief is available at law
or in equity. This Section 8 is not the exclusive remedy for any violation of
this Agreement.

9.     Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the Parties that the Parties would have executed
the remaining terms, provisions, covenants and restrictions without including
any of such which may be hereafter declared invalid, void or unenforceable. In
addition, the Parties agree to use their best efforts to agree upon and
substitute a valid and enforceable term, provision, covenant or restriction for
any of such that is held invalid, void or enforceable by a court of competent
jurisdiction.

 

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10.     Notices. Any notices, consents, determinations, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (a) upon
receipt, when delivered personally; (b) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending Party); (c) upon confirmation of
receipt, when sent by email (provided, however, that such confirmation is not
automatically generated); or (d) one business day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the Party to receive the same. The addresses for such
communications shall be:

 

If to the Company:    Rent-A-Center, Inc.    5501 Headquarters Drive    Plano,
TX 75024    Attention: Dawn M. Wolverton    Telephone: (972) 801-1160    Email:
Dawn.Wolverton@Rentacenter.com    Facsimile: (866) 260-1424
With copies (which shall not constitute notice) to:    Winston & Strawn LLP   
2501 N. Harwood St., Suite 1700    Dallas, TX 75201    Attention: Thomas W.
Hughes                     Todd J. Thorson    Telephone: (214) 453-6500   
Email: TWHughes@winston.com               TThorson@winston.com    Facsimile:
(214) 453-6400 If to the Engaged Group:    Engaged Capital, LLC    610 Newport
Center Drive, Suite 250    New Port Beach, CA 92660    Attention: Glenn W.
Welling    Telephone: (949) 734-7900    Email: glenn@engagedcapital.com   
Facsimile: (949) 734-7901 With a copy (which shall not constitute notice) to:   
Olshan Frome Wolosky LLP    1325 Avenue of the Americas    New York, NY 10019   
Attention: Steve Wolosky                     Ryan P. Nebel    Telephone: (212)
451-2300    Email: SWolosky@olshanlaw.com               RNebel@olshanlaw.com   
Facsimile: (212) 451-2222

 

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11.     Governing Law; Exclusive Jurisdiction; Waiver of Jury Trial.

This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware without reference to the conflict of laws
principles thereof.

The Parties irrevocably agree that any legal action or proceeding with respect
to this Agreement and the rights and obligations arising hereunder, or for
recognition and enforcement of any judgment in respect of this Agreement and the
rights and obligations arising hereunder brought by the other Party hereto or
its successors or assigns, shall be brought and determined exclusively in the
Court of Chancery of the State of Delaware (or, if any such court declines to
accept jurisdiction over a particular matter, any state or federal court within
the State of Delaware) and any appellate court therefrom. Each of the Parties
hereto hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect of its property, generally and unconditionally, to the
personal jurisdiction of the aforesaid courts and agrees that it will not bring
any action relating to this Agreement in any court other than the aforesaid
courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to
assert in any action or proceeding with respect to this Agreement, (i) any claim
that it is not personally subject to the jurisdiction of the above-named courts
for any reason, (ii) any claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (iii) to the fullest extent permitted by applicable legal requirements, any
claim that (A) the suit, action or proceeding in such court is brought in an
inconvenient forum, (B) the venue of such suit, action or proceeding is improper
or (C) this Agreement, or the subject matter hereof, may not be enforced in or
by such courts.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY.

12.     Affiliates and Associates. The obligations of each member of the Engaged
Group herein shall be understood to apply to each of its respective Affiliates
and Associates, and each member of the Engaged Group agrees that it will cause
its respective Affiliates and Associates to comply with the terms of this
Agreement. As used in this Agreement, the terms “Affiliate” and “Associate”
shall have the respective meanings set forth in Rule 12b-2 promulgated by the
SEC under the Exchange Act and shall include all persons or entities that at any
time during the term of this Agreement become Affiliates or Associates of any
person or entity referred to in this Agreement, it being understood, that such
terms shall not include non-employee investors in any member of the Engaged
Group, or any portfolio company of any member of the Engaged Group, in each case
that are not controlled by any member of the Engaged Group or Welling, alone or
in combination. Any Affiliate or Associate controlled by Welling shall be
considered an Affiliate or Associate, respectively, of each member of the
Engaged Group.

13.     Confidentiality. The Company understands and agrees that, subject to the
terms of, and in accordance with, this Agreement, Hetrick may, if and to the
extent he desires to do so (and subject to his fiduciary duties), confidentially
disclose information he obtains while serving as a member of the Board or of any
committee of the Board to the Engaged Group. Each

 

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member of the Engaged Group acknowledges and agrees that this information is
confidential and proprietary to the Company and may include trade secrets or
other business information the disclosure of which could harm the Company. In
consideration for, and as a condition of, the information being furnished to the
Engaged Group and, subject to the restrictions set forth in this Section 13,
each member of the Engaged Group agrees to treat any and all information
concerning or relating to the Company or any of its Affiliates or Associates
that is furnished to it (regardless of the manner in which it is furnished,
including in written or electronic format or orally, gathered by visual
inspection or otherwise) by Hetrick, or by or on behalf of the Company or any of
its Representatives, together with any notes, analyses, reports, models,
compilations, studies, interpretations, documents, records or extracts thereof
containing, referring, relating to, based upon or derived from such information,
in whole or in part (collectively, “Company Confidential Information”), as
confidential in accordance with the provisions of this Section 13. Each member
of the Engaged Group will, and will cause its Representatives to, (a) keep the
Company Confidential Information strictly confidential and (b) not disclose any
of the Company Confidential Information in any manner whatsoever without the
prior written consent of the Company; provided, however, that members of the
Engaged Group may privately disclose any of such information to their respective
Representatives (i) who need to know such information for the sole purpose of
advising such member of the Engaged Group on its investment in the Company and
(ii) who are informed by such member of the Engaged Group of the confidential
nature of such information and agree to abide for the benefit of the Company to
the terms hereof; provided, further, that such member of the Engaged Group will
be responsible for any violation of this Agreement by its Representatives as if
they were parties hereto. It is understood and agreed that Hetrick shall not
disclose to the Engaged Group or its Representatives any Legal Advice (as
defined below) that may be included in the Company Confidential Information with
respect to which such disclosure may constitute waiver of the Company’s
attorney-client privilege or attorney work-product privilege. “Legal Advice” as
used herein shall include any advice or guidance provided by legal counsel that
a person would reasonably believe to be protected by the attorney-client and/or
attorney work-product privilege. The obligations set forth in this Section 13
shall expire six (6) months after the date on which Hetrick no longer serves as
a director of the Company; provided, that each member of the Engaged Group shall
maintain in accordance with the confidentiality obligations set forth herein any
Company Confidential Information constituting trade secrets for such longer time
as such information constitutes a trade secret of the Company.    The Engaged
Group acknowledges that the Company Confidential Information may constitute
material, non-public information. The Engaged Group is also aware that the
securities laws of the United States and other relevant jurisdictions prohibit
any person who has material, non-public information concerning the issuer of
publicly traded securities from purchasing or selling such securities or from
communicating such information to any other person when it is reasonably
foreseeable that such person is likely to purchase or sell such securities.

14.     Expenses. Each Party shall be responsible for its own fees and expenses
incurred in connection with the negotiation, execution and effectuation of this
Agreement and the transactions contemplated hereby; provided, however, that to
avoid the substantial cost and distraction to the Company and the Board
associated with a contested election between the Company and the Engaged Group
at the 2018 Annual Meeting, the Company agrees to reimburse the Engaged Group
for reasonable and documented expenses incurred by the Engaged Group prior to
the date hereof directly in connection with its investment in the Company in an
amount not to exceed $925,000. The reimbursement provided in this Section 14
shall be paid by the Company to the Engaged Group on or before June 29, 2018 as
approved by the Board provided that documentation supporting such reimbursable
expenses is provided to the Company no later than ten (10) business days
following the date of this Agreement.

 

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15.     Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the Parties
and delivered to the other Party (including by means of electronic delivery or
facsimile).

16.     Entire Agreement; Amendment and Waiver; Successors and Assigns; Third
Party Beneficiaries. This Agreement contains the entire understanding of the
Parties hereto with respect to its subject matter. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
between the Parties other than those expressly set forth herein. No
modifications of this Agreement can be made except in writing signed by an
authorized representative of each of the Company and the Engaged Group. No
failure on the part of any Party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such Party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law. The terms and conditions of
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the Parties hereto and their respective successors, heirs,
executors, legal representatives, and permitted assigns. No Party shall assign
this Agreement or any rights or obligations hereunder without, with respect to
any member of the Engaged Group, the prior written consent of the Company, and
with respect to the Company, the prior written consent of an authorized
representative of the Engaged Group. This Agreement is solely for the benefit of
the Parties hereto and is not enforceable by any other persons.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized signatories of the Parties as of the date hereof.

 

Rent-A-Center, Inc. By:   /s/ Dawn M. Wolverton Name:   Dawn M. Wolverton Title:
  Vice President – Assistant General Counsel & Secretary Engaged Capital
Flagship Master Fund, LP By:   Engaged Capital, LLC   General Partner By:   /s/
Glenn W. Welling Name:   Glenn W. Welling Title:   Founder and Chief Investment
Officer Engaged Capital Co-Invest V, LP By:   Engaged Capital, LLC   General
Partner By:   /s/ Glenn W. Welling Name:   Glenn W. Welling Title:   Founder and
Chief Investment Officer Engaged Capital Co-Invest V-A, LP By:   Engaged
Capital, LLC   General Partner By:   /s/ Glenn W. Welling Name:   Glenn W.
Welling Title:   Founder and Chief Investment Officer

 

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Engaged Capital Flagship Fund, LP By:   Engaged Capital, LLC   General Partner
By:   /s/ Glenn W. Welling Name:   Glenn W. Welling Title:   Founder and Chief
Investment Officer Engaged Capital Flagship Fund, Ltd. By:   /s/ Glenn W.
Welling Name:   Glenn W. Welling Title:   Director Engaged Capital, LLC By:  
/s/ Glenn W. Welling Name:   Glenn W. Welling Title:   Founder and Chief
Investment Officer

Engaged Capital Holdings, LLC

By:   /s/ Glenn W. Welling Name:   Glenn W. Welling Title:   Sole Member /s/
Glenn W. Welling Glenn W. Welling

 

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EXHIBIT A

Press Release

(See attached)

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NOT FOR IMMEDIATE RELEASE

RENT-A-CENTER ANNOUNCES COOPERATION AGREEMENT WITH ENGAGED CAPITAL, LLC

PLANO, Texas – February [5], 2018 – Rent-A-Center, Inc. (NASDAQ/NGS:RCII)
(“Rent-A-Center” or the “Company”), a leader in the rent-to-own industry, today
announced that it has entered into a cooperation agreement with Engaged Capital,
LLC (“Engaged Capital”). Engaged Capital beneficially owns approximately
16.9 percent of Rent-A-Center’s outstanding common stock.

Under the terms of the cooperation agreement, Rent-A-Center will nominate for
election at the 2018 Annual Meeting of Stockholders (the “2018 Annual Meeting”)
one new independent director to be proposed by Engaged Capital. That individual
will replace the nomination of Rishi Garg, a current member of the Rent-A-Center
Board, who has informed the Company that he does not intend to stand for
re-election at the 2018 Annual Meeting. Engaged Capital fully supports the
Board’s diversity objectives and intends to propose a director nominee candidate
for election at the 2018 Annual Meeting that is diverse from an ethnic and/or
gender perspective.

J.V. Lentell and Michael J. Gade, members of the Rent-A-Center Board whose terms
will expire at the 2018 Annual Meeting, have recently informed the Company of
their intent to stand for re-election. Engaged Capital has agreed to vote in
favor of Messrs. Lentell and Gade, in addition to the new nominee. Prior to the
2018 Annual Meeting, the Board will be composed of six directors, but may,
following the 2018 Annual Meeting, be expanded to seven directors during the
remaining term of the cooperation agreement (in which case nominees for the
seventh director seat would be proposed by Engaged Capital). Rent-A-Center has
also agreed to terminate its stockholder rights plan in advance of the 2018
Annual Meeting. In addition, if elected at the 2018 Annual Meeting, Messrs.
Lentell and Gade and the new independent director proposed by Engaged Capital
will serve on the Board together with Jeffrey J. Brown, Mitchell E. Fadel and
Christopher B. Hetrick, who were all Engaged Capital nominees and elected at the
Company’s 2017 Annual Meeting of Stockholders.

“We believe this consensus on Board composition for our stockholders’
consideration is an important step forward as the Board conducts its review of
strategic and financial alternatives for the Company,” said Mitchell E. Fadel,
Chief Executive Officer of Rent-A-Center. “These activities are ongoing and
robust, and we look forward to reporting to our stockholders in due course.”

“The actions announced today will allow the Company and Engaged Capital to
continue our constructive working relationship while avoiding the expense and
disruption of another proxy contest as we continue exploring options to maximize
value for all of our stockholders,” said J.V. Lentell, Chairman of the
Rent-A-Center Board of Directors. “Under the terms of the cooperation agreement,
the Board will achieve improved diversity while also implementing other
important corporate governance goals.”

Glenn W. Welling, Founder and Chief Investment Officer at Engaged Capital,
stated “We are pleased to reach a cooperation agreement with Rent-A-Center. With
the nominating window for the 2018 Annual Meeting upon us, this agreement helps
ensure that the Board’s review of strategic and financial alternatives will
continue unabated and without distraction – enabling Rent-A-Center’s directors
to continue working constructively to maximize value for all stockholders.”

Pursuant to the cooperation agreement, Engaged Capital has agreed to certain
standstill provisions. Engaged Capital has also agreed to vote all of its shares
in favor of Rent-A-Center’s previously announced proposal to declassify the
Board which, if approved, will result in all directors standing for election on
an annual basis.

Rent-A-Center’s Board nominees, its Board declassification plan and other
matters to be considered by the Company’s stockholders will be detailed in the
Company’s 2018 definitive proxy materials, which will be filed in advance of the
2018 Annual Meeting. This press release is being provided for informational
purposes only and does not constitute the solicitation of any vote for approval
of any transaction or proposal.

The full cooperation agreement between Rent-A-Center and Engaged Capital will be
filed on a Form 8-K with the Securities and Exchange Commission.

 

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J.P. Morgan is serving as financial advisor and Winston & Strawn LLP is serving
as legal advisor to Rent-A-Center.

About Rent-A-Center

A rent-to-own industry leader, Plano, Texas-based, Rent-A-Center, Inc., is
focused on improving the quality of life for its customers by providing them the
opportunity to obtain ownership of high-quality, durable products such as
consumer electronics, appliances, computers, furniture and accessories, under
flexible rental purchase agreements with no long-term obligation. The Company
owns and operates stores in the United States, Mexico, Canada and Puerto Rico,
and Acceptance NOW kiosk locations in the United States and Puerto Rico.
Rent-A-Center Franchising International, Inc., a wholly owned subsidiary of the
Company, is a national franchiser of rent-to-own stores operating under the
trade names of “Rent-A-Center,” “ColorTyme,” and “RimTyme.” For additional
information about the Company, please visit our website at www.rentacenter.com.

About Engaged Capital

Engaged Capital, LLC (“Engaged Capital”) was established in 2012 by a group of
professionals with significant experience in activist investing in North America
and was seeded by Grosvenor Capital Management, L.P., one of the oldest and
largest global alternative investment managers. Engaged Capital is a limited
liability company owned by its principals and formed to create long-term
shareholder value by bringing an owner’s perspective to the managements and
boards of undervalued public companies. Engaged Capital’s efforts and resources
are dedicated to a single investment style, “Constructive Activism” with a focus
on delivering superior, long-term, risk-adjusted returns for investors. Engaged
Capital is based in Newport Beach, California.

Investors:

Maureen Short, 972-801-1899

Interim Chief Financial Officer

maureen.short@rentacenter.com

or

Media:

Joele Frank, Wilkinson Brimmer Katcher

James Golden / Matthew Gross / Aura Reinhard

212-355-4449

 

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