Document:

exv10w20

 

EXHIBIT 10.20

RENT-A-CENTER, INC.

FORM OF LONG-TERM INCENTIVE CASH AWARD

     THIS AGREEMENT, made as of the ___day of ___, ___, by and between Rent-A-Center, Inc. (the
“Company”) and ___(the “Executive”), pursuant to the Rent-A-Center, Inc. 2006 Long-Term
Incentive Plan (the “Plan”).

     1. Long-Term Incentive Cash Award. Subject to the vesting and other terms and
conditions set forth in this Agreement and Exhibit A annexed hereto and made a part hereof, the
Company hereby grants to the Executive a cash award of $___, of which $___will be subject to
adjustment pursuant to Exhibit A (the “Award”).

     2. Provisions of the Plan Control. The provisions of the Plan, the terms of which are
incorporated in this Agreement, shall govern if and to the extent that there are inconsistencies
between those provisions and the provisions of this Agreement. The Executive acknowledges receipt
of a copy of the Plan prior to the execution of this Agreement.

     3. Vesting.

     (a) General. Subject to the further provisions of this Agreement and provided the
Executive remains continuously employed by the Company or a subsidiary of the Company through the
applicable anniversary dates or the end of the applicable performance period described in Exhibit A
(the “Performance Period”), the Executive’s right to receive payment of the Award shall vest (if at
all) with respect to:

     (i) one-eighth of the Award ($___) on each of the first four anniversaries of the date of
this Agreement;

     (ii) one-quarter of the Award ($___) on the third anniversary of the date of this
Agreement; and

     (iii) the balance of the Award ($___, subject to adjustment pursuant to Exhibit A) at the
end of the Performance Period, subject to the attainment of the performance objectives specified in
said Exhibit A.

     (b) Accelerated Vesting. If, before the applicable vesting date described in (a)
above, the Executive’s employment with the Company and its subsidiaries is terminated due to the
Executive’s death or “disability” (as defined below), or there occurs a “change in Company
ownership” (as defined below), then the Executive’s right to receive payment of the Award (to the
extent not previously vested) will become vested on the date of such termination of employment or
immediately prior to the consummation of the change in Company ownership, as the case may be.
Notwithstanding the preceding sentence, vesting will not accelerate by reason of a change in
Company ownership unless the Executive remains in the continuous employ of the Company or a
subsidiary until the consummation of the change in Company ownership or the Executive’s employment
is terminated sooner by the Company or a subsidiary in contemplation of or in connection with such
change in Company ownership.

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     (c) Definitions. The term “disability” means the inability of Executive to
substantially perform the customary duties and responsibilities of the Executive’s employment with
the Company or an affiliate for a period of at least 120 consecutive days or 120 days in any
12-month period by reason of a physical or mental incapacity that is expected to result in death or
last indefinitely, as determined by a duly licensed physician appointed by the Company. The term
“change in Company ownership” means a transaction or series of transactions as a result of which
there is a change in the ownership or effective control of the Company or a change in the ownership
of a substantial portion of the assets of the Company, in each case within the meaning and for the
purposes of Section 409A of the Internal Revenue Code of 1986 (it being intended that a “change in
Company ownership” under this Agreement will be a permissible distribution event under said section
409A).

     4. Termination of Employment or Service. Upon the termination of the Executive’s
employment or other service with the Company and its subsidiaries for any reason other than death
or disability, the Executive’s right to receive payment of the Award, to the extent not previously
vested or terminated, will thereupon terminate and be canceled.

     5. Restoration. The Executive has been provided and is privy to intellectual property,
trade secrets, and other confidential information of the Company. For two years following the
Executive’s termination of employment, the Executive has agreed not to engage in any activity or
provide any services which are similar to or competitive with the Company’s business. For the same
two year period, the Executive also agreed not to solicit or induce, or cause or permit others to
solicit or induce, any employee to terminate their employment with the Company. These covenants are
set forth and agreed to in the Loyalty and Confidentiality Agreement between the Executive and the
Company (the “Loyalty Agreement”). The parties hereto understand and agree that the promises in
this Agreement and those in the Loyalty Agreement, and not any employment of or services performed
by the Executive in the course and scope of that employment, are the sole consideration for the
Award. Further, it is agreed that should the Executive violate or be in breach of any restrictions
set forth herein or in the Loyalty Agreement (which determination shall be made in the discretion
of the Compensation Committee of the Company’s Board of Directors), (a) the Executive shall
immediately repay to the Company, in a single cash lump sum, the amount of any Award received by
the Executive hereunder and (b) the Executive shall have no right to receive, and shall not
receive, any further Award hereunder, whether or not such Award has otherwise vested hereunder.

     6. Cash Settlement. The Award will be settled in cash if, as and when it becomes
vested in accordance with the provisions hereof; provided, however, that any amount payable
pursuant to Section 3(a)(iii) hereof shall be deferred if and to the extent necessary to (a) avoid
a loss of deduction by the Company under Section 162(m) of the Internal Revenue Code of 1986,
and/or (b) avoid the imposition of additional tax under Section 409A(a) of the Code.

     8. No Service Rights. Nothing contained in the Plan or this Agreement shall confer
upon the Executive any right with respect to the continuation of the Executive’s employment or
other service with the Company or any subsidiary of the Company or interfere in any way with the
right of the Company or any subsidiary of the Company at any time to terminate such relationship.

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     9. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas, without regard to its principles of conflict of laws.

     10. Miscellaneous. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and may not be modified other than by
written instrument executed by the parties.

     IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

	 	 	 
	RENT-A-CENTER, INC.
	 
	 	 
	By:
	 	 
	 

	 	 
	 
	 	 
	 
	 
	 	 
	Executive

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Signature Page

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EXHIBIT A

PERFORMANCE VESTING CONDITIONS

A-1

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EXHIBIT 10.22

NON-QUALIFIED

STOCK OPTION AGREEMENT

UNDER THE RENT-A-CENTER, INC.

2006 EQUITY INCENTIVE PLAN

     THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as of the ___day
of ___, 20___(the “Grant Date”), by and between RENT-A-CENTER, INC., a Delaware
corporation (the “Company”), and ___( the “Optionee”).

W I T N E S S E T H:

     WHEREAS, pursuant to the Rent-A-Center, Inc. 2006 Equity Incentive Plan (the “Plan”),
the Company desires to grant to the Optionee, and the Optionee desires to accept, an option to
purchase shares of the Company’s common stock, par value $0.01 per share (the “Common
Stock”), upon the terms and conditions set forth in this Agreement and the Plan.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and
other good and valuable consideration, the parties hereto agree as follows:

     1. Grant & Tax Status. The Company hereby grants to the Optionee an option to purchase
up to ___shares of Common Stock, at a purchase price of $______ per share pursuant to the
Plan. This option is not intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.

     2. Term. Unless sooner terminated in accordance herewith or the Plan, this option will
automatically expire on the tenth anniversary of the date hereof.

     3. Vesting Schedule. Except as otherwise provided herein, this option shall become
vested and exercisable in accordance with the following schedule, provided that the Optionee
remains in continuous employment or other service with the Company or its subsidiaries through each
applicable vesting date:

	 	 	 	 	 
	 	 	Percentage of Option that is	 
	 	 	Vested	 
	Vesting Date	 	On or After Such Vesting Date	 
	Grant Date
	 	 	0	%
	First Anniversary of Date of Grant
	 	 	25	%
	Second Anniversary of Date of Grant
	 	 	50	%
	Third Anniversary of Date of Grant
	 	 	75	%
	Fourth Anniversary of Date of Grant
	 	 	100	%

In no event may this option be exercised for a fraction of a share.

     4. Non-Transferability. This option may not be assigned or transferred except upon the
Optionee’s death to a beneficiary designated by the Optionee in a manner prescribed or approved for
this purpose by the compensation committee of the Company’s board of directors (the
“Committee”) or, if no designated beneficiary shall survive the Optionee, pursuant to the
Optionee’s will or by the laws of descent and distribution. During the Optionee’s lifetime, this

 

 

option may be exercised only by the Optionee or the Optionee’s guardian or legal
representative. Notwithstanding the foregoing, the Committee, in its sole discretion, may permit
the inter vivos transfer of this option by gift to any “immediate family member” (as defined in the
Plan) or to a trust or other entity for the benefit of an immediate family member, on such terms
and conditions as the Committee deems appropriate.

     5. Termination of Employment or other Service.

          (a) If the Optionee’s employment or other service with the Company or its subsidiaries is
terminated due to the Optionee’s death or Disability (as defined below), then: (i) that portion of
this option, if any, that is vested and exercisable on the date of termination shall remain
exercisable by the Optionee (or, in the event of death, the Optionee’s designated beneficiary or,
if no designated beneficiary survives the Optionee, by the person or persons to whom the Optionee’s
rights under this option shall pass pursuant to the Optionee’s will or by the laws of descent and
distribution, whichever is applicable) during the twelve (12) month period following the date of
termination but in no event after expiration of the stated term hereof and, to the extent not
exercised during such period, shall thereupon terminate, and (ii) that portion of this option, if
any, that is not exercisable on the date of termination shall thereupon terminate. As used herein,
the term “Disability” shall mean the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months. The determination of whether or not the Optionee’s employment
or other service is terminated by reason of Disability shall be in the sole and absolute discretion
of the Committee.

          (b) If the Optionee’s employment or other service is terminated by the Company or its
subsidiaries for cause, then this option (whether or not then vested and exercisable) shall
immediately terminate and cease to be exercisable.

          (c) If the Optionee’ s employment or other service with the Company or its affiliates is
terminated for any reason other than those set forth in Section 5(a) or (b) above, then: (i) that
portion of this option, if any, that is vested and exercisable on the date of termination shall
remain exercisable by the Optionee during the three (3) month period following the date of
termination but in no event after expiration of the stated term hereof and, to the extent not
exercised during such period, shall thereupon terminate, and (ii) that portion of this option, if
any, that is not vested and exercisable on the date of termination shall thereupon terminate.

     6. Method of Exercise. This option may be exercised by transmitting to the Secretary
of the Company (or such other person designated by the Committee) a written notice identifying the
option being exercised and specifying the number of shares being purchased, together with payment
of the exercise price and the amount of the applicable tax withholding obligations (unless other
arrangements are made for the payment of such exercise price and/or the satisfaction of such
withholding obligations). The exercise price and withholding obligation may be paid in whole or in
part (a) in cash or by check, (b) by means of a cashless exercise procedure to the extent permitted
by law, (c) if permitted by the Committee, by the surrender of previously-owned shares of Common
Stock (to the extent of the fair market value thereof), and/

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or (d) subject to applicable law, by any other form of consideration deemed appropriate by the
Committee.

     7. Stockholder Rights. No shares of Common Stock will be issued in respect of the
exercise of this option until payment of the exercise price and the applicable tax withholding
obligations have been made or arranged to the satisfaction of the Company. The holder of this
option shall have no rights as a stockholder with respect to any shares of Common Stock covered by
this option until the shares of Common Stock are issued pursuant to the exercise of this option.

     8. Compliance with Law. The Company will not be obligated to issue or deliver shares
of Common Stock pursuant to this option unless the issuance and delivery of such shares complies
with applicable law, including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the requirements of any stock exchange or market
upon which the Common Stock may then be listed. The Company may prevent or delay the exercise of
this option if and to the extent the Company deems necessary or advisable in order to avoid a
violation of applicable law or its own policies regarding the purchase and sale of Common Stock.
If, during the period of any such ban or delay, the term of this option would expire, then the term
of this option will be extended for thirty (30) days after the Company removes the restriction
against exercise.

     9. Transfer Orders; Legends. All certificates for shares of Common Stock delivered
under this option shall be subject to such stock-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange or market upon which the Common Stock may then be
listed, and any applicable federal or state securities law. The Company may cause a legend or
legends to be placed on any such certificates to make appropriate reference to such restrictions.

     10. No Rights Conferred. Nothing contained in the Plan or this Agreement shall confer
upon the Optionee any right with respect to the continuation of his or her employment or other
service with the Company or its subsidiaries or interfere in any way with the right of the Company
and its subsidiaries at any time to terminate such employment or other service or to increase or
decrease, or otherwise adjust, the other terms and conditions of the Optionee’s employment or other
service.

     11. Obligation to Execute and Return Agreement. This Agreement shall be null and void
and no option shall be granted hereby in the event the Optionee shall fail to execute and return a
counterpart hereof to the Company, at the address set forth in Section 13 hereof, within sixty (60)
days from the Grant Date.

     12. Full Satisfaction/Release of Rights. Any payment or issuance or transfer of shares
of Common Stock to the Optionee or his legal representative, heir, legatee or distributee, in
accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Committee may require the Optionee, legal representative,
heir, legatee or distributee, as a condition precedent to such payment or issuance or transfer, to
execute a release and receipt therefor in such form as it shall determine.

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     13. Notices. Any notice to the Company relating to this Agreement shall be in writing
and delivered in person or by registered mail to the Company at the Company’s main office, 5700
Tennyson Parkway, Suite 100, Plano, TX 75024, or to such other address as may be hereafter
specified by the Company, to the attention of its Secretary. All notices to the Optionee or other
person or persons then entitled to exercise this option shall be delivered to the Optionee or such
other person or persons at the Optionee’s store location (if employed by the Company or any of its
subsidiaries) or the Optionee’s address set forth in the records of the Company.

     14. Provisions of the Plan. The provisions of the Plan, the terms of which are hereby
incorporated by reference, shall govern if and to the extent that there are inconsistencies between
those provisions and the provisions hereof. The Optionee acknowledges receipt of a copy of the Plan
prior to the execution of this Agreement. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Plan.

     15. Miscellaneous. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted assigns. This Agreement
constitutes the entire agreement between the parties with respect to the subject matter hereof and,
except as otherwise provided in the Plan, may not be modified other than by written instrument
executed by the parties.

[Remainder of Page Intentionally Left Blank.]

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     IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

	 	 	 
	RENT-A-CENTER, INC.
	 
	 	 
	By:
	 	 
	 

	 	 
	 
	 	 
	 
	Optionee Name
	 
	 	 
	 
	Optionee Signature
	 
	 	 
	 
	Street Address (No P.O. Box please)
	 
	 	 
	 
	City, State and Zip Code

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