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EXHIBIT 10.21
RENT-A-CENTER, INC.
EXECUTIVE TRANSITION AGREEMENT
WITH [NAME OF EXECUTIVE]
AGREEMENT
made as of the ___day of
, 2006, by and between RENT-A-CENTER, INC. ("Company") and
("Executive").
1. Background . This
Agreement is intended to provide the Executive with certain
payments and benefits upon an involuntary termination of
Executive’s employment or the occurrence of certain other
circumstances that may affect the Executive. The Company believes
this Agreement will help ensure the Executive’s undivided
focus on the business of the Company and thereby enhance
shareholder value.
2. Certain Defined
Terms . The following terms have the following meanings when
used in this Agreement.
(a)
"Accrued Compensation" means, as of any date, (1) the unpaid
amount, if any, of Executive’s previously earned base salary,
(2) the unpaid amount, if any, of the bonus earned by the
Executive for the preceding year, and (3) additional payments
or benefits, if any, earned by the Executive under and in
accordance with any employee plan, program or arrangement of or
with the Company or an Affiliate (other than this Agreement).
(b)
"Affiliate" means an entity at least 50% of the voting, capital or
profits interests of which are owned directly or indirectly by
Company.
(c)
"Benefit Continuation Coverage" means continuing group health
insurance coverage for Executive and, where applicable,
Executive’s covered spouse and covered eligible dependents
for a specified period following the termination of
Executive’s Employment with Company and its Affiliates at the
same benefit and contribution levels that would be in effect if the
Executive’s employment had continued, if and to the extent
such coverage would be permitted by the applicable plan and
applicable law. Benefit Continuation Coverage, if any, shall be in
addition to and not in lieu of COBRA coverage. Unless sooner
terminated, Benefit Continuation Coverage will be subject to early
termination if and when the Executive becomes entitled to
comparable coverage from another employer.
(d)
"Board" means the Board of Directors of the Company.
(e)
"Cause" means (1) material act or acts of willful misconduct
by Executive, whether in violation of the Company’s policies,
including, without limitation, the Company’s Code of Business
Conduct and Ethics, or otherwise; (2) Executive’s
willful and repeated failure (except where due to physical or
mental incapacity) or refusal to perform in any material respect
the duties and responsibilities of Executive’s employment;
(3) embezzlement or fraud committed by Executive, at
Executive’s direction, or with Executive’s prior
personal knowledge; (4) Executive’s conviction of, or
plea of guilty or nolo contendere to, the commission of a
felony; or (5) substance abuse or use of illegal drugs that,
in the reasonable judgment of the Compensation Committee,
(A) impairs the ability of the Executive to perform the duties
of the
Executive’s employment, or (B) causes or is likely to
cause harm or embarrassment to the Company or any of its
Affiliates. Except as specified, the Compensation Committee, acting
in its own discretion, will be responsible for determining whether
particular conduct constitutes "Cause" for the purposes of this
Agreement.
(f)
"Change in Control" means the occurrence of any of the following
after September 14, 2006:
(i) any person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended ("Exchange Act")) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 40% or more of the combined voting power of the
then outstanding voting securities of Company;
(ii) a consolidation, merger or
reorganization of the Company, unless (1) the stockholders of
Company immediately before such consolidation, merger or
reorganization own, directly or indirectly, at least a majority of
the combined voting power of the outstanding voting securities of
the corporation or other entity resulting from such consolidation,
merger or reorganization, (2) individuals who were members of
the Board immediately prior to the execution of the agreement
providing for such consolidation, merger or reorganization
constitute a majority of the board of directors of the surviving
corporation or of a corporation directly or indirectly beneficially
owning a majority of the voting securities of the surviving
corporation, and (3) no person beneficially owns more than 40%
of the combined voting power of the then outstanding voting
securities of the surviving corporation (other than a person who is
(A) Company or a subsidiary of Company, (B) an employee
benefit plan maintained by Company, the surviving corporation or
any subsidiary, or (C) the beneficial owner of 40% or more of
the combined voting power of the outstanding voting securities of
Company immediately prior to such consolidation, merger or
reorganization);
(iii) individuals who, as of
September 14, 2006, constitute the entire Board (the
"Incumbent Board") cease for any reason to constitute a majority of
the Board, provided that any individual becoming a director
subsequent to September 14, 2006 whose appointment or
nomination for election by Company’s stockholders, was
approved by a vote of at least two-thirds of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board;
(iv) approval by the stockholders
of the Company of a complete liquidation or dissolution of Company,
or a sale or other disposition of all or substantially all of the
assets of the Company (other than to an entity described in (f)(ii)
above); or
(v) any other event or transaction
which the Board, acting in its discretion, designates is a Change
in Control.
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(g)
"Code" means the Internal Revenue Code of 1986, as amended.
(h)
"Company" means Rent-A-Center, Inc. and any successor thereto.
(i)
"Compensation Committee" means the Compensation Committee of the
Board.
(j)
"Disability" means the inability of Executive to substantially
perform the customary duties and responsibilities of
Executive’s Employment with 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 which
is expected to result in death or last indefinitely, as determined
by a duly licensed physician appointed by the Company.
(k)
"Employment" means Executive’s employment with the Company
and/or any of its Affiliates.
(l)
"Good Reason" means the occurrence of any of the following without
the written consent of Executive: (1) a material diminution by
Company or an Affiliate of Executive’s duties or
responsibilities in a manner which is inconsistent with
Executive’s position or which has or is reasonably likely to
have a material adverse effect on Executive’s status or
authority; (2) a relocation by more than 50 miles of
Executive’s principal place of business; or (3) a
reduction by Company or an Affiliate of Executive’s rate of
salary or annual incentive opportunity or a breach by Company or
any of its Affiliates of a material provision of any written
employment or other agreement with Executive which is not corrected
within 15 business days following notice thereof by Executive to
Company.
(m)
"Pro Rata Bonus" means the annual bonus, if any, earned by
Executive for the calendar year preceding the year in which the
Executive’s Employment terminates multiplied by a fraction,
the numerator of which is the number of days elapsed from the
beginning of the calendar year in which the Executive’s
Employment terminates until the date the Executive’s
Employment terminates, and the denominator of which is 365. If the
Executive’s Employment terminates before April 1 of a
calendar year, the Pro Rata Bonus for such calendar year shall be
deemed to be zero.
(n)
"Salary & Bonus" means, as of the effective date of the
termination of Executive’s Employment with Company and its
Affiliates, the sum of: (1) Executive’s highest annual
rate of salary at any time during the preceding 24 months, and
(2) Executive’s average annual bonus for the two
preceding calendar years. If the number of preceding years of
Executive’s Employment is less than two, then the bonus
component of Executive’s Salary & Bonus will be equal to
bonus earned during the calendar year preceding the date of
Executive’s termination of Employment; and, if the Executive
has not completed at least a full calendar year of Employment, the
bonus component of Executive’s Salary & Bonus will be
zero.
3. General Severance
Protection . Subject to the provisions hereof, including,
without limitation, Section 7 (relating to non-duplication of
payments and benefits provided under other agreements and
arrangements) and Section 8 (relating to the execution and
delivery of a release as a condition of Executive’s (or a
beneficiary’s) entitlement to payments and benefits
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hereunder), upon termination of Employment, other than a
termination of Employment in conjunction with a Change in Control
to which Section 4 applies, Executive (or Executive’s
beneficiary, as the case may be) will be entitled to receive the
applicable severance payments and benefits set forth in this
Section.
(a)
Termination by Company or an Affiliate without Cause . If
Executive’s Employment is terminated by the Company or an
Affiliate without Cause, then Executive shall be entitled to
receive the following payments and benefits:
(i) Accrued Compensation;
(ii) Pro Rata Bonus;
(iii) 1.0 times Salary &
Bonus, payable to Executive in equal monthly (or, at the option of
the Company, more frequent) installments; and
(iv) Benefit Continuation
Coverage
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