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Engaged Capital Nominates Five Highly Qualified Candidates for Election to the Board of Rent-A-Center


Capital, LLC
, an investment firm specializing in enhancing the value
of small and mid-cap North American equities, today sent a letter to the
Board of Directors (the "Board") of Rent-A-Center,
("RCII") (NASDAQ:RCII) formally nominating five highly
qualified candidates for election to the Board at the Company's upcoming
2017 Annual Meeting of Stockholders.

Glenn W. Welling, Managing Member of Engaged Capital, LLC commented, "It
is time for change at RCII. The current Board has presided over years of
declining operating performance, deteriorating financial results, and a
decimation of shareholder value. Despite years of underperformance,
these same directors refuse to act with a sense of urgency to explore
all alternatives to create value for the owners of the Company. As one
of the Company's largest shareholders, we felt we had no choice but to
present shareholders with an alternative slate of directors – directors
who can help stabilize the business while also evaluating all strategic
options available to the Company. We are pleased that we were able to
attract two of the most experienced operators in the industry to our
slate: Mitch Fadel, the former President and COO of RCII and Ken Butler,
the former COO of AAN, both of whom are highly qualified to replace Mark
Speese, RCII's Chairman, interim CEO and co-founder, who is up for
election at this year's meeting. Both have the capabilities and hands-on
experience that is sorely missing in RCII's boardroom today. In
addition, Carol McFate, Jeff Brown, and Chris Hetrick bring decades of
financial and transaction experience to the Board that is paramount to
assessing and taking action on the highest value option for the
Company's future. We believe it is time shareholders have directors who
exhibit an understanding that their job is to act as the fiduciaries of
all the Company's shareholders and not just those shares represented in
the boardroom."

The full text of the letter follows:

February 23, 2017

Board of Directors
Rent-A-Center, Inc.
5501 Headquarters Drive
Texas 75024

Members of the Board:

Engaged Capital, LLC (together with its affiliates, "Engaged Capital")
has a 12.9% economic interest in Rent-A-Center, Inc. ("RCII" or the
"Company"), making us one of the Company's largest shareholders. As we
have expressed numerous times, we believe the RCII Board of Directors
(the "Board") should immediately hire a financial advisor and initiate a
strategic alternatives process to evaluate a sale of the entire Company
before attempting to pursue a risky public turnaround strategy. The
Company's over 75% decline in share price from its value above $35 a
little over two years ago is a stark reminder of the need to benchmark
the risk-adjusted alternatives available to the Company. As we
highlighted in our December 7, 2016 letter, we believe the Company could
command a significant equity premium given the capital structure of the
business. For example, based on yesterday's closing price of $8.40, an
acquisition price of $16 per share would represent a 90%
for shareholders yet only a 38% premium to the
Company's enterprise value. Based on our industry research, we are
confident there are numerous parties, both strategic and financial, that
would have serious interest in acquiring the Company. Given the history
of shareholder value destruction, poor operational execution, weak
corporate governance and reactive management change, stubbornly
committing to a standalone strategy when other options remain unexplored
is simply unacceptable.

While we appreciate the open dialogue we have had to date with the
Board, we are extremely disappointed by the Company's apparent refusal
to address our concerns. We believe the recent 100,000 share open market
purchase by Mark Speese, RCII's Chairman, interim CEO and co-founder,
signals that the Board is unlikely to proactively commence a strategic
alternatives process in the near future. As a consequence of this
inaction, we have lost confidence in the willingness of the Board to
fulfill its fiduciary duty and independently identify the optimal
risk-adjusted strategy to restore value to RCII shareholders.

Our interactions with the Board thus far suggest its behavior as a whole
may reflect a personal loyalty to Mr. Speese, who owns only 2.3% of the
Company, at the expense of RCII shareholders. This is particularly
concerning because we believe Mr. Speese has a significant conflict of
interest that could prevent RCII from maximizing value for its
shareholders. By pursuing a risky turnaround strategy that allows him to
retain control of the Company he co-founded and to maintain his
leadership position, Mr. Speese clearly benefits in ways that
shareholders, whose primary interest is the Company's value, do not
benefit. Thus, it is imperative for the Board to not let the personal
interests of one director stand in the way of value creation. As we see
no evidence that the incumbent Board is willing to prioritize the
interest of shareholders, we believe the Board must be reconstituted
with new directors who will maintain an unquestionable allegiance to the
true owners of the Company – the shareholders.

Furthermore, we are extremely concerned that Mr. Speese, under the cover
provided by a group of long-tenured and apparently conflicted incumbent
directors, may materially harm shareholders if he acts to ensure his
continued control of the Company at any cost. These actions include, but
are not limited to:

1) Failing to respond to incoming communications from parties expressing
an interest in acquiring the Company. It is our understanding that Mr.
Speese may be employing this strategy so that he can either legitimately
tell the Board he has not received meaningful approaches from interested
parties or to limit his interactions to parties that are in his personal
best interest.

2) Failing to inform all members of the Board of such inbound

3) Restructuring the Company's debt in a way that transfers value from
equity holders to debt holders, effectively acting as an implicit poison
pill (e.g. onerous prepayment penalties) for would-be acquirers. Mr.
Speese is having discussions with lenders on refinancing alternatives
which we are concerned could make RCII less valuable to an acquirer or
make an acquisition of the Company more difficult.

4) Selling a piece of the Company while refusing to evaluate a sale of
the entire Company, ultimately damaging the value of the remaining

5) Diluting current shareholders by placing equity or convertible debt
with a "friendly" party to protect the status quo.

6) Negotiating a sale of the entire Company to a "friendly" party as
opposed to running a full and fair process.

7) Delaying a formal consideration of strategic alternatives to provide
interim management more time to operate the business, which, despite
their best efforts, and based upon recent performance, could result in a
continued worsening of operational performance and a further decline in
equity value.

We are hereby putting each and every director on notice. We will use any
and all
resources at our disposal to ensure that the
approximately 98% of shares outstanding not owned by Mr. Speese are
protected from further value destruction. More specifically, we call on
RCII's six independent directors (Michael J. Gade, Rishi Garg, Jeffrey
Jackson, J.V. Lentell, Leonard H. Roberts and Stephen L. Pepper) to act
objectively in these deliberations and to hold Mr. Speese accountable.
You are being closely watched by us and the rest of RCII's shareholder
base. To be clear, we intend to hold each of you personally liable to
the fullest extent permitted by law should you continue down a value
destructive path and fail to act in the best interests of the Company's
shareholders. We believe that if you choose to do what is right for the
Company's shareholders, as is your duty, the potential exists to create
a significant amount of shareholder value by capturing a large
percentage of the "fixed" value of RCII in a sale of the Company.

Given our interactions with the Company thus far, and the concerns
highlighted above in this letter, we feel we have been left with no
choice but to seek significant Board change. Given that five of seven
incumbent directors have served on the Board for over ten years and two
of such directors (including Mr. Speese) have served on the Board for
over twenty years, we believe this Board is stale and needs to be
refreshed with new directors. We are formally providing the Board notice
of our nomination of five highly qualified candidates for election to
the Board at the Company's upcoming 2017 Annual Meeting of Stockholders;
provided, however, that we intend to withdraw two of our nominees to the
extent that only three seats remain up for election at the meeting. We
believe these individuals possess the financial, operational and
strategic acumen the Board urgently needs. Our nominees are:

Mitchell E. Fadel is currently self-employed after most recently
serving as President – U.S. Pawn for EZCORP, Inc. (NASDAQ:EZPW), a
leading provider of pawn loans in the United States and Mexico, from
September 2015 to December 2016. Prior to that, Mr. Fadel served as
RCII's President (beginning in July 2000) and Chief Operating Officer
(beginning in December 2002) each until August 2015, where he also
served as a director from December 2000 to November 2013. From 1992
until 2000, Mr. Fadel served as President and Chief Executive Officer of
RCII's subsidiary ColorTyme, Inc., the largest all franchise rent-to-own
brand in the country. Mr. Fadel's professional experience with RCII also
includes previously serving as a Regional Director and a District

William K. (Ken) Butler has served as the President, Chief
Executive Officer and a director of ATL Leasing Inc., where he manages
over 70 Buddy's Home Furnishings rent-to-own stores in the Southeast,
since September 2015. He has also served as President and Chief
Executive Officer of Pro Carts, Inc. (d/b/a All Pro Carts), a family
owned and operated golf cart sales, service and rental business, since
September 2013. Prior to that, Mr. Butler held various leadership
positions with Aaron's, Inc. (NYSE:AAN) ("Aaron's"), a leading
omnichannel provider of lease-purchase solutions, from 1974 to May 2013,
where he also served as a director from 2000 until May 2013. Mr.
Butler's most recent executive positions with Aaron's include serving as
its Chief Operating Officer from 2008 to May 2013 and President of its
Sales & Lease Ownership Division from 1995 to 2008, a division he served
as Vice President of from 1986 to 1995. Mr. Butler previously served as
a director of The McPherson Family Trust (d/b/a RE/MAX of
Kentucky/Tennessee, Inc., RE/MAX of Georgia, Inc. and RE/MAX of Southern
Ohio, Inc.) from 2002 until its sale in December 2016. Mr. Butler was
the 2012 recipient of the Ernie Talley Lifetime Achievement Award
presented by the Association of Progressive Rental Organizations (APRO),
the rent-to-own industry trade group.

Carol A. McFate has served as the Chief Investment Officer of
Xerox Corporation (NYSE:XRX), a multinational document provider of
multifunction document management systems and services, where she
manages retirement investment assets for North American and U.K. plans,
since 2006. Previously, Ms. McFate served as Executive Vice President &
Global Treasurer for XL Global Services, Inc., a US-based subsidiary of
XL Capital, Ltd. (NYSE:XLC), a leading Bermuda-based global insurance
and reinsurance company, from 2003 to 2006. From 1994 to 2003, Ms.
McFate held various positions with American International Group Inc.
(NYSE:AIG), an American multinational property & casualty, life
insurance, and financial services provider, including Vice President &
Treasurer from 1998-2002. From 1988 to 1994, Ms. McFate held various
positions with The Prudential Insurance Company of America (NYSE:PRU),
an American Fortune Global 500 and Fortune 500 company whose
subsidiaries provide insurance, investment management, and other
financial products and services to both retail and institutional
customers throughout the United States and in over 30 other countries,
including Senior Vice President, Financial Restructuring Group, Senior
Vice President, Prudential Capital Group and Vice President, Corporate
Finance Group. Ms. McFate has been recognized throughout her career for
her service, including receiving a Corporate Plan Sponsor Industry
Innovation Award from Chief Investment Officer Magazine in 2012 and
Chief Investment Officer Power 100 from Chief Investment Officer
Magazine from 2011 to 2016. Ms. McFate has also been honored by
Institutional Investor, winning two awards in 2014: the Investor
Intelligence Network Thought Leadership Award and the Small Corporate
Plan Sponsor Award.

Jeffrey J. Brown is the Chief Executive Officer and founding
member of Brown Equity Partners, LLC ("BEP"), which provides capital to
management teams and companies needing equity capital. Prior to founding
BEP in 2007, Mr. Brown served as a founding partner and primary deal
originator of the venture capital and private equity firm Forrest
Binkley & Brown ("FBB") from 1993 to 2007. In his 30 years in the
investment business, Mr. Brown has been on over 40 boards of directors,
including service on 8 public companies. Since June 2015, Mr. Brown has
served as the Lead Director of Medifast, Inc. (NYSE:MED), a nutrition
and weight loss company, where he also serves as a member of each of the
Audit and Mergers & Acquisitions Committees. From April 2016 until the
completion of its sale in September 2016, Mr. Brown served as a director
of Outerwall Inc. (NASDAQ:OUTR), a provider of retail products
and services to consumers via self-service interactive kiosks. From
February 2014 until May 2016, Mr. Brown served as a director of RCS
Capital Corporation (n/k/a Aretec Group, Inc.), an investment firm. From
2011 until 2015, Mr. Brown served as a director of Midatech Pharma PLC
(LSE:MTPH), a nano-medicine company. From 2012 until 2014, Mr. Brown
served as a director of Nordion, Inc. (NYSE:NDZ), a health science
company. From 2009 until 2011, Mr. Brown served as a director of
Steadfast Income REIT, Inc., a real estate investment trust. In the
course of his career, Mr. Brown has also worked at Hughes Aircraft
Company, Morgan Stanley & Company, Security Pacific Capital Corporation
and Bank of America Corporation.

Christopher B. Hetrick has been the Director of Research at
Engaged Capital, a California based investment firm and registered
advisor with the U.S. Securities and Exchange Commission focused on
investing in small and mid-cap North American equities, since September
2012. Prior to joining Engaged Capital, Mr. Hetrick worked at Relational
Investors LLC ("Relational"), a $6 billion activist equity fund, from
January 2002 to August 2012. Mr. Hetrick began his career with
Relational as an associate analyst. He eventually became the firm's
senior consumer analyst overseeing over $1 billion in consumer sector
investments. Prior to his work heading up the consumer research team,
Mr. Hetrick was a generalist covering major investments in the
technology, financial, automotive and food sectors.

As we have discussed with you, it is always our intention to work
collaboratively with the boards and management teams of our portfolio
companies and RCII is no exception. Rather than wasting management's
time and shareholders' capital on a campaign against our highly
qualified nominees, let us work together to bring new perspectives into
the boardroom and agree on a path that will create value for all


Glenn W. Welling
Managing Member

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.


Engaged Capital, LLC ("Engaged Capital"), together with the other
participants named herein, intends to file a preliminary proxy statement
and accompanying proxy card with the Securities and Exchange Commission
("SEC") to be used to solicit votes for the election of its slate of
highly-qualified director nominees at the 2017 annual meeting of
stockholders of Rent-A-Center, Inc., a Delaware corporation (the


The participants in the proxy solicitation are Engaged Capital Flagship
Master Fund, LP ("Engaged Capital Flagship Master"), Engaged Capital
Co-Invest V, LP ("Engaged Capital Co-Invest V"), Engaged Capital
Flagship Fund, LP ("Engaged Capital Fund"), Engaged Capital Flagship
Fund, Ltd. ("Engaged Capital Offshore"), Engaged Capital, Engaged
Capital Holdings, LLC ("Engaged Holdings"), Glenn W. Welling, Jeffrey J.
Brown, William K. Butler, Mitchell E. Fadel, Christopher B. Hetrick and
Carol A. McFate.

As of the date hereof, Engaged Capital Flagship Master beneficially
owned 2,324,944 shares of common stock, $0.01 par value per share
("Common Stock"). As of the date hereof, Engaged Capital Co-Invest V
beneficially owned 2,703,611 shares of Common Stock. As of the date
hereof, 259,821 shares of Common Stock were held in an account managed
by Engaged Capital (the "Engaged Capital Account"). Each of Engaged
Capital Fund and Engaged Capital Offshore, as feeder funds of Engaged
Capital Flagship Master, may be deemed to beneficially own the 2,324,944
shares of Common Stock owned by Engaged Capital Flagship Master. Engaged
Capital, as the general partner and investment adviser of Engaged
Capital Flagship Master and Engaged Capital Co-Invest V and the
investment adviser of the Engaged Capital Account, may be deemed to
beneficially own the 5,288,376 shares of Common Stock owned in the
aggregate by Engaged Capital Flagship Master and Engaged Capital
Co-Invest V and held in the Engaged Capital Account. Engaged Holdings,
as the managing member of Engaged Capital, may be deemed to beneficially
own the 5,288,376 shares of Common Stock owned in the aggregate by
Engaged Capital Flagship Master and Engaged Capital Co-Invest V and held
in the Engaged Capital Account. Mr. Welling, as the Founder and Chief
Investment Officer of Engaged Capital and sole member of Engaged
Holdings, may be deemed to beneficially own the 5,288,376 shares of
Common Stock owned in the aggregate by Engaged Capital Flagship Master
and Engaged Capital Co-Invest V and held in the Engaged Capital Account.
As of the date hereof, Messrs. Brown, Butler, Fadel and Hetrick and Ms.
McFate did not beneficially own any shares of Common Stock.

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