Rent-A-Center Inc. on Feb. 5 entered into a cooperation agreement with hedge fund sponsor Engaged Capital LLC ahead of its 2018 annual meeting of shareholders.
Engaged Capital owns 16.9% of the rent-to-own company's outstanding common stock.
Under the agreement, Rent-A-Center will nominate one independent director proposed by Engaged Capital for election at the company's 2018 annual meeting. The nominee will replace Rishi Garg, who has informed the company that he does not plan to stand for re-election.
Two other board members, JV Lentell and Michael Gade, whose terms will end at the 2018 annual meeting, informed the company that they intend to stand for re-election. Engaged Capital agreed to vote in favor of Lentell and Gade's re-election in addition to the new nominee, according to the release.
Engaged Capital has also agreed to certain standstill provisions, Rent-A-Center said, and agreed to vote all of its shares in favor of the company's previously announced proposal to declassify the board. The proposal, if approved, will result in all directors standing for re-election on an annual basis.
JP Morgan is serving as financial adviser and Winston & Strawn LLP is serving as legal adviser to Rent-A-Car.
