Exhibit 10.22
RENT-WAY, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     THIS AGREEMENT is made effective as of October 1, 2005, between Rent-Way,
Inc., a Pennsylvania corporation with its principal offices at One RentWay
Place, Erie, Pennsylvania 16505 (the “Employer” or “Corporation”), and William
Short, an individual residing at 5022 Robinhood Lane, Erie, Pennsylvania 16509
(the “Employee”).
     WHEREAS, the Employee is currently employed by the Corporation pursuant to
an employment agreement dated July 1, 2002 (the “Existing Employment
Agreement”);
     WHEREAS, the Corporation and the Employee desire to continue such
employment with the Employee serving as the Corporation’s President, and
otherwise subject to the terms and conditions contained in this Agreement;
     NOW, THEREFORE, in consideration of the promises and of the covenants
contained in this Agreement, the Corporation and the Employee agree that the
Existing Employment Agreement is amended and restated in its entirety as
follows:
     1. Definitions. The following definitions apply for purposes of this
Agreement:
          a) “Board of Directors” or “Board” means the Board of Directors of the
Corporation.
          b) “Cause” means (i) a material breach of his obligations under this
Agreement (any breach of Sections 11, 12 or 13 hereof being an example of such a
material breach), (ii) gross negligence or willful misconduct in the performance
of his duties to the Corporation, (iii) dishonesty to the Corporation,
(iv) conviction of any crime which could have the effect of causing the
termination or suspension of any license or permit which the Corporation holds,
(v) conviction of any felony, (vi) conviction of a misdemeanor which
substantially impairs the Employee’s ability to perform his duties to the
Corporation, or (vii) excessive absenteeism not related to disability. The
Employee will not be deemed to have been terminated for Cause under subsection
(i) or (ii) of this definition unless and until he is provided written notice of
the alleged grounds for such termination and such grounds are not substantially
cured within 15 days following the Employee’s receipt of such notice.
          c) “Change in Control” means and will be deemed to have occurred if:
(i) any “person” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the
Corporation, any trustee or other fiduciary holding securities under any
employee benefit plan of the Corporation, or any entity owned, directly or
indirectly, by the shareholders of the Corporation in substantially the same
proportions as their ownership of the voting securities of the Corporation), is
or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act, or any successor rule or regulation thereto as in effect from time to
time), directly or indirectly, of securities representing 25% or more of the
combined voting power of the Corporation’s then outstanding securities; (ii)

 

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during any period of two consecutive years (not including any period prior to
the date of this Agreement), individuals who at the beginning of such period
constitute the Board of Directors, and any new director (other than a director
designated by a person who has entered into an agreement with the Corporation to
effect a transaction described in clause (i), (iii), or (iv) of this paragraph)
whose election by the Board of Directors or nomination for election by the
Corporation’s shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously
approved, cease for any reason to constitute at least a majority of the Board of
Directors; (iii) the Corporation’s shareholders approve a merger or
consolidation of the Corporation with any other corporation, other than a merger
or consolidation that would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of the Corporation (or
similar transaction) in which no person acquires more than 25% of the combined
voting power of the Corporation’s then outstanding securities will not
constitute a Change in Control; or (iv) the Corporation’s shareholders approve a
plan of complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation’s
assets. If any of the events enumerated in clause (i) through (iv) occur, the
Corporation’s Board of Directors will determine in good faith the effective date
of the Change in Control resulting therefrom for purposes of this Agreement.
          d) “Code” means the Internal Revenue Code of 1986, as amended.
          e) “Corporation” means Rent-Way, Inc.
          f) “Disability” means a disability that has existed for a period of 6
consecutive months and because of which the Employee is physically or mentally
unable to substantially perform his regular duties as required under this
Agreement.
          g) “Good Reason” means any of the following to which the Employee will
not consent in writing:
               (i) Other than a determination by the Board of Directors that the
Employee will not have the duties and responsibilities of the Chief Executive
Officer of the Corporation, a material diminution in the Employee’s
responsibilities, duties, titles, reporting responsibilities within the business
organization, status, role or authority which is not substantially cured within
15 days after written notice of such diminution is provided to the Corporation;
               (ii) A relocation of the Corporation’s executive offices to a
location more than 50 miles from Erie, Pennsylvania; or
               (iii) A breach by the Corporation of any of the material terms of
this Agreement if such breach is not substantially cured within 15 days after
written notice of such breach is provided to the Corporation.

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          h) “Termination In Connection With A Change In Control” means any of
the following events occurring within 24 months following, or, directly or
indirectly, in connection with, or in anticipation of a Change in Control:
               (i) A termination of Employee’s employment by the Corporation for
any reason other than Cause or by the Employee for Good Reason.
               (ii) A termination of Employee’s employment by Employee because
any successor to the Corporation’s operations or assets (whether acquired by
merger, sale, consolidation or otherwise) (“Successor”) fails to:
                    (A) acknowledge and assume, in writing, this Agreement at
the time of the Change in Control; or
                    (B) acknowledge and assume, in writing, any indemnification
agreement with the Employee or by-law provisions regarding indemnification which
are in effect at the time of the Change in Control.
     2. Employment; Duties.
          (a) Duties. Subject to the terms and conditions set forth in this
Agreement, the Corporation hereby agrees to employ the Employee and the Employee
hereby accepts employment as President of the Corporation having such duties as
are set forth in the by-laws of the Corporation or as are assigned from time to
time by the Board of Directors. The Employee will report to the Board of
Directors and will perform those duties and discharge those responsibilities as
are commensurate with his position, and as the Board of Directors from time to
time may reasonably direct, provided that such duties and responsibilities are
commensurate with his position. The Employee acknowledges and agrees that any
determination by the Board of Directors during the term of the Employee’s
employment under this Agreement that the Employee will not have the duties and
responsibilities of the Chief Executive Officer of the Corporation will not
constitute a breach of this Agreement. The Employee agrees to perform his duties
and discharge his responsibilities in a faithful manner and to the best of his
ability and to use all reasonable efforts to promote the interests of the
Corporation. The Employee may not accept other gainful employment except with
the prior consent of the Board of Directors. The Employee may be involved in
charitable, civic and religious organizations so long as they do not materially
interfere with the performance of the Employee’s duties hereunder. The Employee
will be entitled to make and manage personal investments, provided such
investments and any activities undertaken in connection therewith do not violate
any restrictive covenants in Sections 10 or 11 of this Agreement.
          (b) Resignation. If the Employee’s employment with the Corporation
terminates for any reason, if the Employee ceases for any reason to serve as
President of the Corporation, or if as President the Employee ceases for any
reason to have the duties and responsibilities of the Chief Executive Officer of
the Corporation, then the Employee will, if requested by the Board of Directors,
immediately resign as a director of the Corporation. If the

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Employee fails to resign immediately upon such request, the Employee shall be
deemed to have resigned as of the date of such request.
     3. Compensation.
          (a) Base Salary. During the first year of the term of the Employee’s
employment under this Agreement, the Employee will receive a base salary of
Three Hundred Twenty-Five Thousand Dollars ($325,000) per year, and thereafter
during the term of the Employee’s employment hereunder, the Employee will
receive a base salary of Three Hundred Fifty Thousand Dollars ($350,000),
payable in accordance with the Corporation’s normal payroll practices. On an
annual basis, the Board of Directors will, in good faith, review the base salary
of the Employee to consider appropriate increases (but not decreases) therein.
If the Employee dies during the period of his employment under this Agreement,
employment for any part of the month of his death will be considered employment
for the entire month.
          (b) Annual Cash Bonuses. During the term of the Employee’s employment
under this Agreement, the Employee will be entitled to receive an annual cash
bonus calculated pursuant to performance standards developed by the
Corporation’s compensation committee, as such standards are in effect from time
to time. The target amount of the bonus will be 100% of the Employee’s base
salary as of the end of the fiscal period of the Corporation for which the bonus
is calculated.
          (c) Equity Compensation. The Employee acknowledges that on
September 30, 2005, the Corporation awarded the Employee a grant of 75,000
options to acquire shares of the Corporation’s common stock under the
Corporation’s stock option plans at an exercise price equal to the closing price
of the Corporation’s common stock as reported by the New York Stock Exchange on
the day prior to the date of grant. The agreement evidencing these options will
provide for the vesting of the options immediately on grant, subject to certain
restrictions on transfer described in such agreement. In addition to this award
and any other equity awards outstanding as of the date of this Agreement, the
Employee will be eligible to receive awards of the Corporation’s stock or stock
equivalents during the term of the Employee’s employment under this Agreement in
accordance with the terms of the Corporation’s equity incentive plans and
subject to the approval of the Corporation’s Board of Directors.
          (d) Withholding. The Corporation will deduct or withhold from all
salary and bonus payments, and from all other payments made to the Employee
pursuant to this Agreement, all amounts that are legally required to be deducted
or withheld.
     4. Other Benefits And Terms. During the term of the Employee’s employment
under this Agreement, the Employee will be entitled to the following other
benefits and terms:
          (a) The Employee will be entitled to participate in the Corporation’s
health and medical benefit plans; any pension, profit sharing and retirement
plans; and any insurance policies or programs from time to time generally
offered to all or substantially all executive officers who are employed by the
Corporation. These plans, policies and programs are subject to change at the
sole discretion of the Corporation.

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          (b) The Employee will be entitled to any other fringe benefit from
time to time generally offered to all or substantially all senior executives
employed by the Corporation.
     5. Vacations. The Employee will be entitled to four weeks of paid vacation
each calendar year. Unused vacation in any year may not be carried over to
subsequent years.
     6. Reimbursement For Expenses. The Corporation will reimburse the Employee
for expenses, which the Employee may from time to time reasonably incur on
behalf of the Corporation in the performance of his responsibilities and duties
including, but not limited to, membership dues in trade and business
organizations and attendance at trade and business conferences.
     7. Period of Employment. Subject to the provisions of this Section, the
period of employment of the Employee under this agreement will be deemed to
begin on October 1, 2005 and continue until September 30, 2007 (the “Initial
Term”). Upon the expiration of the Initial Term, the period of employment will
be automatically extended for additional one year periods thereafter, unless
either party provides written notice to the other at least 120 days prior to the
date the period of employment would otherwise automatically extend that it does
not wish to extend the Employee’s employment beyond its then present term.
     Notwithstanding the foregoing:
          (a) The Employee’s employment will automatically terminate upon the
death or Disability of the Employee. The foregoing is subject to the duty of the
Corporation to provide reasonable accommodation under the Americans with
Disabilities Act.
          (b) The Corporation may, at its sole option, terminate the Employee’s
employment at any time and for any reason by delivering written notice to the
Employee.
          (c) The Employee, at his sole option, may terminate his employment by
providing written notice to the Corporation at least 30 days prior to the
effective date of the termination of employment specified in the notice.
          (d) The Employee, at his sole option, may terminate his employment
absent Good Reason by providing written notice to the Corporation at least
90 days prior to the effective date of the termination of employment specified
in the notice. If the Employee terminates his employment under this
Section 7(d), he will only be entitled to receive the compensation and other
benefits provided under this Agreement through the effective date of such
termination.
Any notice of termination of employment given by a party must specify the
particular termination provision of this Agreement relied upon by the party and
must set forth in reasonable detail the facts and circumstances that provide a
basis for the termination.
     8. Benefits Upon Termination. The Corporation will provide the following
benefits upon the termination of the Employee’s employment with the Corporation.
Unless otherwise specifically set forth in this Section 8 or elsewhere in this
Agreement, all payments to the Employee provided for in this Section 8 shall be
paid by the Corporation within 30 days following the date of termination of the
Employee’s employment with the Corporation.

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          (a) Upon Termination By The Corporation Other Than For Cause, By The
Employee With Good Reason or Termination In Connection With A Change In Control.
Upon the Corporation’s termination of the Employee’s employment for other than
Cause, the Employee’s termination of his employment for Good Reason or a
Termination In Connection With A Change In Control, the Corporation will provide
the following:
               (i) Salary And Fringe Benefits. The Employee will receive his
salary and Fringe Benefits (as defined below) through the effective date of
termination of employment. The Employee will also receive (A) his annual base
salary and (B) his full fringe benefits, including medical and health insurance
(“Fringe Benefits”), in effect on the date of notice of termination for a period
of 24 months beginning with the month next following the month during which his
employment terminates or the balance of the Initial Term, whichever is the
longer period. If the Employee dies during this period, dependent health or
medical Fringe Benefits will be provided for the balance of the period.
               (ii) Bonus. The Employee will receive a bonus payment equal to
the sum of (A) (1) in the event of a Termination by the Corporation other than
for Cause or Termination by the Employee for Good Reason, an amount equal to the
bonus earned by the Employee for the fiscal year prior to the year in which his
employment terminates (but in no event in an amount less than one-half of the
Employee’s target bonus for the fiscal year in which his employment terminates),
or (2) in the event of a Termination in Connection With a Change in Control, an
amount equal to 200% of the Employee’s target bonus for the fiscal year in which
his employment terminates and (B) an amount equal to the unpaid portion of any
bonus earned for any fiscal year prior to the year in which his employment
terminates.
               (iii) Accrued Vacation. The Employee will receive payment for
accrued but unused vacation, which payment will be equitably prorated based on
the period of active employment for that portion of the calendar year in which
the Employee’s termination of employment becomes effective.
               (iv) Stock Options. Notwithstanding any contrary provisions
contained in any stock option agreement evidencing stock options granted to the
Employee, as of the effective date of the Employee’s termination of employment,
(x) the Corporation will vest the Employee in any outstanding unvested stock
options of the Corporation granted the Employee prior to his termination of
employment, (y) the period during which the Employee shall have the right to
exercise all outstanding vested options will be extended by the Corporation to
the one year anniversary of the effective date of the Employee’s termination of
employment, and (z) subject to applicable securities laws, the Corporation will
release any contractual restrictions on transfer applying to shares of common
stock acquired or to be acquired by the Employee pursuant to the exercise of
stock options of the Corporation.
At the Corporation’s discretion, the cash payments provided for in this
subsection (a) may be made in one lump sum within 30 business days following the
effective date of the Employee’s termination of employment; provided, however,
that in the case of a Termination in Connection With a Change in Control, the
cash payments provided for in this subsection (a) will be made in one lump sum
within such 30 business day period.

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          (b) Termination of Employment for Cause. The Corporation will have the
right to terminate the Employee’s employment immediately in the event the
Employee will do or cause to be done any act, which constitutes “cause” (as
defined in Section 1.b. of this Agreement) for termination. Should the
Employee’s employment be terminated by the Corporation for cause, the
Corporation’s only obligation will be to pay the Employee his base salary
through the date of termination. Nothing contained in this Article 8 will in any
way waive, restrict or prejudice the Corporation’s rights against the Employee
with respect to the matter for which the Employee’s employment under this
Agreement is terminated for cause.
          (c) Upon Termination For Disability. Upon termination of the
Employee’s employment because of Disability, the Corporation will provide the
following:
               (i) Salary And Fringe Benefits. The Employee will receive his
salary and Fringe Benefits through the effective date of termination of
employment. The Employee will also receive his annual base salary and Fringe
Benefits, as in effect on the date immediately before the Disability, for a
period of 18 months commencing with the month following the month during which
his employment terminates. If the Employee dies during the 18-month period, his
salary payments under this subsection will continue to be paid to his estate for
the balance of the 18-month period and any dependent health or medical Fringe
Benefits will be provided in each case for the balance of the 18-month period.
               (ii) Bonus. The Employee will receive a bonus payment equal to an
amount determined by multiplying 100% of his base salary in effect in the year
of termination by a fraction the numerator of which is the number of full and
partial calendar months in the calendar year that precede the date of
termination of his employment and the denominator of which is 12, plus an amount
equal to the unpaid portion of any bonus earned for any fiscal year prior to the
year in which his employment terminates.
               (iii) Accrued Vacation. The Employee will receive payment for
accrued but unused vacation, which payment will be equitably prorated based on
the period of active employment for that portion of the calendar year in which
the Employee’s termination becomes effective.
               (iv) Stock Options. Notwithstanding any contrary provisions
contained in any stock option agreement evidencing stock options granted to the
Employee, as of the effective date of the Employee’s termination of employment
because of Disability the Corporation will (x) allow the Employee 12 months from
the date of termination to exercise any stock option vested in the Employee at
the date of termination and (y) subject to applicable securities laws, release
any contractual restrictions on transfer applying to shares of common stock
acquired or to be acquired by the Employee pursuant to the exercise of stock
options of the Corporation.
At the Corporation’s discretion, the bonus and vacation payments provided for in
this subsection (c) may be made in one lump sum within 30 business days
following the effective date of the Employee’s termination of employment because
of Disability.

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          (d) Upon Termination For Death. Upon termination of the Employee’s
employment because of his death, the Corporation will provide the following:
               (i) Salary And Fringe Benefits. The Employee’s salary and Fringe
Benefits through the effective date of termination of employment. The Employee’s
estate will also receive his annual base salary as in effect on the date
immediately prior to his date of death, for a period of 18 months. Any dependent
health or medical Fringe Benefits will be provided for the 18-month period
following the month in which the Employee dies.
               (ii) Bonus. The Employee’s successor as provided in Section 13
will receive a bonus payment equal to an amount determined by multiplying 100%
of his base salary in effect in the year of termination by a fraction the
numerator of which is the number of full and partial calendar months in the
calendar year that precede the date of termination of his employment and the
denominator of which is 12, plus an amount equal to the unpaid portion of any
bonus earned for any fiscal year prior to the year in which his employment
terminates
               (iii) Accrued Vacation. The Employee’s successor as provided in
Section 13 will receive payment for accrued but unused vacation, which payment
will be equitably prorated based on the period of active employment for that
portion of the calendar year in which the Employee died.
               (iv) Stock Options. Notwithstanding any contrary provisions
contained in any stock option agreement evidencing stock options granted to the
Employee, as of the effective date of the Employee’s termination of employment
because of Death, the Corporation will (x) will allow the successor 12 months
from the date of death to exercise any stock option vested in the Employee at
the time of death and (y) subject to applicable securities laws, release any
contractual restrictions on transfer applying to shares of common stock acquired
or to be acquired by the Employee pursuant to the exercise of stock options of
the Corporation.
At the Corporation’s discretion, the bonus and vacation payments provided for in
this subsection (d) may be made in one lump sum within 30 business days
following the effective date of the Employee’s termination of employment because
of death.
          (e) Reduction In Fringe Benefits. Medical and health Fringe Benefits
under this Section will be reduced to the extent of any medical and health
fringe benefits provided by and available to the Employee from any subsequent
employer.
          (f) Determination of Disability. Any questions as to the existence of
a physical or mental condition which would give rise to the Disability of the
Employee upon which the Employee and the Corporation cannot agree will be
determined by a qualified independent physician selected by the Corporation and
reasonably acceptable to the Employee (or, if the Employee is incapacitated and
unable to make a selection, the determination of acceptability of the physician
will be made by any adult member of his immediate family). The physician’s
written determination to the Corporation and to the Employee will be final and
conclusive for all purposes of this Agreement.

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          (g) Continuation of Healthcare Coverage. For purposes of COBRA
continuation healthcare coverage, the “qualifying event” will be deemed to have
occurred at the end of the period during which health and medical benefits are
provided under this Section 8.
          (h) Indemnity. During the term of the Employee’s employment under this
Agreement and thereafter, the Employer shall indemnify the Employee to the full
extent permitted under its articles of incorporation and bylaws and pursuant to
any other agreements or policies in effect from time to time in connection with
any claim or proceeding arising out of his employment by the Employer. For a
60-month period following the date of the Employee’s termination of employment
regardless of reason, in the event the Corporation is unable or unwilling to
continue any directors’ and officers’ liability insurance insuring the Employee
at the date of such termination, the Employer will provide the Employee with
written notice of such determination at least 60 days in advance of the date
such insurance coverage will expire.
     9. Additional Payments. Notwithstanding anything in this Agreement or any
other agreement to the contrary, in the event it is determined that any payments
or distributions (including, without limitation, the vesting of an option or
other non-cash benefit or property or the forgiveness of any indebtedness) by
the Corporation or any affiliate (as defined under the Securities Act of 1933,
as amended, and the regulations thereunder) thereof or any other person to or
for the benefit of the Employee, whether paid or payable pursuant to the terms
of this Agreement, or pursuant to any other agreement or arrangement with the
Corporation or any such affiliate (“Payments”), would be subject to the excise
tax imposed by Section 4999 of the Code, or any successor provision, or any
interest or penalties with respect to the excise tax (the excise tax, together
with any interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Employee will be entitled to receive an additional
payment from the Corporation (a “Gross-Up Payment”) in an amount that after
payment by the Employee of all taxes (including, without limitation, any
interest or penalties imposed with respect to such taxes and any Excise Tax)
imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. The amount
of the Gross-Up Payment will be calculated by the Corporation’s independent
accounting firm, engaged immediately prior to the event that triggered the
payment, in consultation with the Corporation’s outside legal counsel. For
purposes of making the calculations required by this Section, the accounting
firm may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code, provided that the accounting
firm’s determinations must be made with substantial authority (within the
meaning of Section 6662 of the Code). The Gross-Up Payment will be paid on the
Employee’s last day of employment or on the occurrence of the event that results
in the imposition of the Excise Tax, if later. If the precise amount of the
Gross-Up Payment cannot be determined on the date it is to be paid, an amount
equal to the best estimate of the Gross-Up Payment will be made on that date
and, within 10 days after the precise calculation is obtained, either the
Corporation will pay any additional amount to the Employee or the Employee will
pay any excess amount to the Corporation, as the case may be. If subsequently
the Internal Revenue Service (the “IRS”) claims that any additional Excise Tax
is owing, an additional Gross-Up Payment will be paid to the Employee within
30 days of the Employee providing substantiation of the claim made by the IRS.
After payment to the Employee of the Gross-Up Payment, the Employee will provide
to the Corporation any information reasonably requested by the Corporation
relating to the Excise Tax, the Employee

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will take those actions as the Corporation reasonably requests to contest the
Excise Tax, cooperate in good faith with the Corporation to effectively contest
the Excise Tax and permit the Corporation to participate in any proceedings
contesting the Excise Tax. The Corporation will bear and pay directly all costs
and expenses (including any interest or penalties on the Excise Tax), and
indemnify and hold the Employee harmless, on an after-tax basis, from all such
costs and expenses related to such contest. Should it ultimately be determined
that any amount of an Excise Tax is not properly owed, the Employee will refund
to the Corporation the related amount of the Gross-Up Payment.
     10. Non-exclusivity of Rights. Except as otherwise specifically provided,
nothing in this Agreement will prevent or limit the Employee’s continued or
future participation in any benefit, incentive, or other plan, practice, or
program provided by the Corporation and for which the Employee may qualify. Any
amount of vested benefit or any amount to which the Employee is otherwise
entitled under any plan, practice, or program of the Corporation will be payable
in accordance with the plan, practice, or program, except as specifically
modified by this Agreement.
     11. Confidentiality. During the course of his employment, the Employee will
have access to confidential information relating to the lines of business of the
Corporation, its trade secrets, marketing techniques, technical and cost data,
information concerning customers and suppliers, information relating to product
lines, and other valuable and confidential information relating to the business
operations of the Corporation not generally available to the public (the
“Confidential Information”). The parties hereby acknowledge that any
unauthorized disclosure or misuse of the Confidential Information could cause
irreparable damage to the Corporation. The parties also agree that covenants by
the Employee not to make unauthorized use or disclosures of the Confidential
Information are essential to the growth and stability of the business of the
Corporation. Accordingly, the Employee agrees to the confidentiality covenants
set forth in this Section.
          The Employee agrees that, except as required by his duties with the
Corporation as he reasonably determines or as authorized by the Corporation in
writing, he will not use or disclose to anyone at any time, regardless of
whether before or after the Employee ceases to be employed by the Corporation,
any of the Confidential Information obtained by him in the course of his
employment with the Corporation. The Employee will not be deemed to have
violated this Section 10 by disclosure of Confidential Information that at the
time of disclosure (a) is publicly available or becomes publicly available
through no act or omission of the Employee, or (b) is disclosed as required by
court order or as otherwise required by law, on the condition that notice of the
requirement for such disclosure is given to the Corporation prior to making any
disclosure.
          The Employee agrees that since irreparable damage could result from
his breach of the covenants in this Section, in addition to any and all other
remedies available to the Corporation, the Corporation will have the remedies of
a restraining order, injunction or other equitable relief to enforce the
provisions thereof. The Employee consents to jurisdiction in Erie County,
Pennsylvania, on the date of the commencement of any action for purposes of any
claims under this Section. In addition, the Employee agrees that the issues in
any action brought under this Section will be limited to claims under this
Section, and all other claims or counterclaims under other provisions of this
Agreement will be excluded.

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     12. Non-competition. In consideration of the compensation and other
benefits to be paid to the Employee under and in connection with this Agreement,
the Employee agrees that, beginning on the date of this Agreement and continuing
until the Covenant Expiration Date (as defined in subsection (b) below), he will
not, directly or indirectly, for his own account or as agent, employee, officer,
director, trustee, consultant, partner, stockholder or equity owner of any
corporation or any other entity (except that he may passively own securities
constituting less than 1% of any class of securities of a public company), or
member of any firm or otherwise, (i) engage or attempt to engage, in the
Restricted Territory (as defined in subsection (d) below), in any business
activity which is directly or indirectly competitive with the business conducted
by the Corporation or any Affiliate at the Reference Date (as defined in
subsection (c) below), (ii) employ or solicit the employment of any person who
is employed by the Corporation or any Affiliate at the Reference Date or at any
time during the 12-month period preceding the Reference Date, except that the
Employee will be free to employ or solicit the employment of any such person
whose employment with the Corporation or any Affiliate has terminated for any
reason (without any interference from the Employee) and who has not been
employed by the Corporation or any Affiliate for at least 12 months,
(iii) canvass or solicit business in competition with any business conducted by
the Corporation or any Affiliate at the Reference Date from any person or entity
who during the 12-month period preceding the Reference Date was a customer of
the Corporation or any Affiliate or from any person or entity which the Employee
has reason to believe might in the future become a customer of the Corporation
or any Affiliate as a result of marketing efforts, contacts or other facts and
circumstances of which the Employee is aware, (iv) willfully dissuade or
discourage any person or entity from using, employing or conducting business
with the Corporation or any Affiliate or (v) intentionally disrupt or interfere
with, or seek to disrupt or interfere with, the business or contractual
relationship between the Corporation or any Affiliate and any supplier who
during the 12-month period preceding the Reference Date will have supplied
products, materials or services to the Corporation or any Affiliate.
          Notwithstanding the foregoing, the restrictions imposed by this
Section (i) will not in any manner be construed to prohibit, directly or
indirectly, the Employee from serving as an employee or consultant of the
Corporation or any Affiliate, and (ii) will not apply if the termination of the
Employee’s employment was a Termination in Connection With A Change In Control
or occurs by reason of expiration of the term of this Agreement (which term
includes any extension period pursuant to the operation of Section 7 hereof) or
occurs after the expiration of the term of this Agreement (which term includes
any extension period pursuant to the operation of Section 7 hereof).
          For purposes of this Agreement, the following terms have the meanings
given to them below:
          (a) “Affiliate” means any joint venture, partnership or subsidiary now
or hereafter directly or indirectly owned or controlled by the Corporation. For
purposes of clarification, an entity will not be deemed to be indirectly or
directly owned or controlled by the Corporation solely by reason of the
ownership or control of such entity by shareholders of the Corporation.
          (b) “Covenant Expiration Date” means the date, which is 730 days after
the Termination Date.

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          (c) “Reference Date” means (A) for purposes of applying the covenants
set forth in this Section at any time prior to the Termination Date, the then
current date, or (B) for purposes of applying the covenants set forth in this
Section at any time on or after the Termination Date, the Termination Date.
          (d) “Restricted Territory” means the 50 states of the United States of
America and wherever the Corporation has planned or is operating stores at the
Termination Date.
          (e) “Termination Date” means the date of termination of the Employee’s
employment with the Corporation; provided however that the Employee’s employment
will not be deemed to have terminated so long as the Employee continues to be
employed or engaged as an employee or consultant of the Corporation or any
Affiliate, even if such employment or engagement continues after the expiration
of the term of this Agreement.
     13. Successors. This Agreement is personal to the Employee and may not be
assigned by the Employee other than by will or the laws of descent and
distribution. This Agreement will inure to the benefit of and be enforceable by
the Employee’s legal representatives or successors in interest. Notwithstanding
any other provision of this Agreement, the Employee may designate a successor or
successors in interest to receive any amounts due under this Agreement after the
Employee’s death. If he has not designated a successor in interest, payment of
benefits under this Agreement will be made to his estate. A designation of a
successor in interest must be made in writing, signed by the Employee, and
delivered to the Employer pursuant to Section 16. Except as otherwise provided
in this Agreement, if the Employee has not designated a successor in interest,
payment of benefits under this Agreement will be made to the Employee’s estate.
This Section will not supersede any designation of beneficiary or successor in
interest made by the Employee or provided for under any other plan, practice, or
program of the Employer.
          The Agreement will inure to the benefit of and be binding upon the
Corporation and its successors and assigns.
          The Corporation will require any successor (whether direct or indirect
by acquisition of assets, merger, consolidation or otherwise) to all or
substantially all of the operations or assets of the Corporation or any
successor and without regard to the form of transaction used to acquire the
operations or assets of the Corporation, to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform it if no succession had taken place. As used in this
Agreement, “Corporation” means the Corporation and any successor to its
operations or assets as set forth in this Section that is required by this
clause to assume and agree to perform this Agreement or that otherwise assumes
and agrees to perform this Agreement.
     14. Failure, Delay or Waiver. No course of action or failure to act by the
Corporation or the Employee will constitute a waiver by the party of any right
or remedy under this Agreement, and no waiver by either party of any right or
remedy under this Agreement will be effective unless made in writing.

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     15. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such a manner as to be enforceable under applicable law.
However, if any provision of this Agreement is deemed unenforceable under
applicable law by a court having jurisdiction, the provision will be
unenforceable only to the extent necessary to make it enforceable without
invalidating the remainder thereof or any of the remaining provisions of this
Agreement.
     16. Notice. All written communications to parties required hereunder must
be in writing and (a) delivered in person, (b) mailed by registered or certified
mail, return receipt requested, (such mailed notice to be effective 4 days after
the date it is mailed) or (c) sent by facsimile transmission, with confirmation
sent by way of one of the above methods, to the party at the address given below
for the party (or to any other address as the party designates in a writing
complying with this Section, delivered to the other party):
If to the Corporation:
Rent-Way, Inc.
One RentWay Place
Erie, Pennsylvania 16505
Attention: Chairman of the Board
Telephone: (814) 455-5378
Telecopier: (814) 455-5379
If to the Employee:
William Short
5022 Robinhood Lane
Erie, Pennsylvania 16509
(814) 838-1753
     17. Arbitration of Disputes. Except for an alleged violation of Section 11
or 12 of this Agreement, the Employee and the Corporation waive any right to a
court (including jury) proceeding and instead agree to submit any dispute over
the Employee’s employment with the Corporation or the application,
interpretation, validity or any other aspect of this Agreement to final and
binding arbitration consistent with the application of the Federal Arbitration
Act and the procedural rules of the American Arbitration Association (“AAA”)
before an arbitrator who is a member of the National Academy of Arbitrators
(“NAA”) out of an NAA panel of 11 arbitrators to be supplied by the AAA. Only
true neutrals will be eligible for consideration as arbitrators and under no
circumstances will AAA furnish the names of individuals who represent employees,
unions or companies. Unless otherwise agreed by the parties, any such
arbitration will take place in Erie, Pennsylvania. The Corporation will pay all
of the fees, if any, and expenses of the arbitrator and, if the Employee is the
prevailing party in the arbitration, the Corporation will pay the Employee’s
expenses (including reasonable attorney’s fees) related to the arbitration or
reimburse the Employee for such expenses.
     18. Miscellaneous. This Agreement (a) may not be amended, modified or
terminated orally or by any course of conduct pursued by the Corporation or the
Employee, but may be

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amended, modified or terminated only by a written agreement duly executed by the
Corporation and the Employee, (b) is binding upon and inures to the benefit of
the Corporation and the Employee and each of their respective heirs,
representatives, successors and assignees, except that the Employee may not
assign any of his rights or obligations pursuant to this Agreement, (c) except
as provided in Sections 4 and 10 of this Agreement, constitutes the entire
agreement between the Corporation and the Employee with respect to the subject
matter of this Agreement, and supersedes all oral and written proposals,
representations, understandings and agreements previously made or existing with
respect to such subject matter, including, but not limited to, the Existing
Employment Agreement, and (d) will be governed by, and interpreted and construed
in accordance with, the laws of the Commonwealth of Pennsylvania, without regard
to principles of conflicts of law.
     19. Multiple Counterparts. This Agreement may be executed in one or more
counter parts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. Any party may execute this
Agreement by facsimile signature and the other party will be entitled to rely on
such facsimile signature as evidence that this Agreement has been duly executed
by such party. Any party executing this Agreement by facsimile signature will
immediately forward to the other party an original page by overnight mail.
     20. Construction. As used in this Agreement, unless the context otherwise
requires: (a) the terms defined herein will have the meanings set forth herein
for all purposes; (b) references to “Section” are to a section hereof; (c)
“include,” “includes” and “including” are deemed to be followed by “without
limitation” whether or not they are in fact followed by such words or words of
like import; (d) “writing,” “written” and comparable terms refer to printing,
typing, lithography and other means of reproducing words in a visible form; (e)
“hereof,” “herein,” “hereunder” and comparable terms refer to the entirety of
this Agreement and not to any particular section or other subdivision hereof or
attachment hereto; (f) references to any gender include references to all
genders; and (g) references to any agreement or other instrument or statute or
regulation are referred to as amended or supplemented from time to time (and, in
the case of a statute or regulation, to any successor provision).
     21. Section 409A Compliance. The parties to this Agreement intend that the
Agreement complies with Section 409A of the Code, where applicable, and this
Agreement will be interpreted in a manner consistent with that intention. To the
extent not otherwise provided by this Agreement, and solely to the extent
required by Section 409A of the Code, no payment or other distribution required
to be made to the Employee hereunder (including any payment of cash, any
transfer of property and any provision of taxable benefits) as a result of his
termination of employment with the Corporation will be made earlier than the
date that is six (6) months and one day following the date on which the Employee
separates from service with the Corporation and its affiliates (within the
meaning of Section 409A of the Code).

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     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

              CORPORATION:
 
            RENT-WAY, INC.
 
       
 
  By:    
 
       
 
           Marc Joseffer
 
           Chair, Compensation Committee of the
 
           Board of Directors
 
            EMPLOYEE:
 
             
 
           William Short

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