Exhibit 10.1
This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
AARON’S MANAGEMENT PERFORMANCE PLAN
(Summary of terms for Home Office Vice Presidents)
Purpose
This Aaron’s Management Performance Plan (the “AMP Plan”) has been adopted to
encourage increased profitability and to align the goals and interests of
certain management and executive employees of Aaron’s, Inc. (“Aaron’s” or the
“Company”) with the goals and interests of Aaron’s shareholders by rewarding
strong performance with Aaron’s stock. This summary describes the terms of the
AMP Plan that apply to eligible Vice Presidents in the Home Office of Aaron’s.
Other summaries describe the specific terms and conditions that are applicable
to eligible regional managers, divisional vice presidents, and directors and
other key personnel in the Home Office.
Term of AMP Plan
The AMP Plan commenced July 1, 2011 and is initially expected to continue
through December 31, 2012, but may be terminated or extended at any time in the
discretion of the Compensation Committee of the Board of Directors of Aaron’s,
Inc. (the “Compensation Committee”).
Eligibility
Vice Presidents in the Company’s Home Office (“Home Office VPs”), who are
actively employed at the beginning and end of the calendar quarter shall be
eligible to participate in the AMP Plan, unless determined otherwise by the
Compensation Committee. Other summaries describe the eligibility requirements
for other groups of eligible participants. The following executive officers
shall not be eligible to participate in the AMP Plan: William K. Butler, Jr.,
Gilbert L. Danielson, R. Charles Loudermilk, Sr., and Robert C. Loudermilk, Jr.
Performance Requirements
Restricted stock units (“RSUs”) will be granted to a Home Office VP under and
pursuant to the Aaron’s Inc. 2001 Stock Option and Incentive Award Plan (the
“Stock Plan”) based on the level of quarterly pretax profit for Aaron’s, Inc..
A minimum quarterly pretax profit of 9.0% of total revenue is required to earn
any RSUs for such quarter. In addition, the total revenue for such quarter must
exceed the total revenue for the same quarter of the previous calendar year. If
these conditions are met, RSUs shall be granted based on the following formula.
Number of RSUs = Quarterly pretax profit % X multiplier in table below:

                      % of Quarterly     Multiplier to Determine   Performance
Zone   Pretax Profit*     # of RSUs  
Red
    0-8.99       0  
Yellow
    9.0-13.99       6,250  
Green
    14.00 +       10,000  

      *   Quarterly total revenue must also exceed the total revenue for the
same quarter of the previous calendar year.

Results will be measured based upon Aaron’s GAAP financials, as publicly
reported. The number of RSUs granted will be rounded to the nearest whole
number.

 

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Terms and Conditions of RSUs
RSUs will be granted upon approval of the Compensation Committee after final
quarterly results are calculated.
As soon as practicable after RSUs are granted, each Home Office VP will be
notified of the number of RSUs he or she was granted, if any. Notification of
the grant may be made by electronic means, such as through e-mail or an online
grant notification and acceptance system. Each grant of RSUs will be subject to
the terms of the Grant Notice, the Stock Plan and the terms of a Restricted
Stock Unit Agreement. A Master RSU Agreement may be used, in which case such
Master RSU Agreement will apply to all grants of RSUs under this AMP Plan until
the Master RSU Agreement is amended or replaced. As a condition to the grant of
the RSUs and as part of the acceptance of the RSUs, the Home Office VP must
agree to the terms of an Employee Agreement, which is a part of the RSU
Agreement, and which contains certain restrictions against disclosing
confidential information, soliciting customers and employees, and competing with
Aaron’s.
Each RSU entitles the grantee to one share of common stock of Aaron’s, Inc. on
the Delivery Date specified in the Grant Notice, if such RSU has vested and has
not been forfeited prior to the specified Delivery Date. The Vesting Date of the
RSUs will be set forth in the Grant Notice or RSU Agreement and will generally
be approximately five (5) years after the grant date of the RSUs. Generally, a
grantee must be employed on the Vesting Date to vest in his or her right to the
shares. However, RSUs may also vest upon the grantee’s death or upon certain
change in control transactions, as provided in the RSU Agreement. The Delivery
Date is expected to be the September 1st following the Vesting Date.
Below are the expected Vesting and Delivery Dates for RSUs earned during the
program beginning July 1, 2011 and ending December 31, 2012. These dates are
subject to change until the RSUs have been granted. The Grant Notice and/or RSU
Agreement provided to grantees at the time of grant will specify the Vesting
Date and Delivery Date applicable to that grant of RSUs.

                  Approximate Date             of Final Quarterly   Expected
Vesting   Expected Delivery Quarter   Financials*   Date   Date
7/1/11 – 9/30/11
  November 15, 2011   August 15, 2016   September 1, 2016
10/1/11 – 12/31/11
  March 1, 2012   August 15, 2016   September 1, 2016
1/1/12 – 3/31/12
  May 15, 2012   May 15, 2017   September 1, 2017
4/1/12 – 6/30/12
  August 15, 2012   August 15, 2017   September 1, 2017
7/1/12 – 9/30/12
  November 15, 2012   August 15, 2017   September 1, 2017
10/1/12 – 12/31/12
  March 1, 2013   August 15, 2017   September 1, 2017

      *   The date shown is the approximate date when the final quarterly
financial results should be calculated. The Grant Date for Home Office VPs will
be the date such grants are approved by the Compensation Committee, which is
expected to occur at the next meeting of the Compensation Committee following
the date shown above. Any delay in the grant of the RSUs is not expected to
impact the Vesting Dates or Delivery Dates shown above.

 

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Examples
Example 1: For the quarter beginning July 1, 2011 and ending September 30, 2011,
Aaron’s reported a quarterly pretax profit of 13% of total revenue, and exceeded
its total revenue for the third quarter of 2010. Absent unusual circumstances,
Home Office VPs will be granted 813 RSUs (13% x 6,250 = 812.5, rounded to the
nearest whole number) at the first meeting of the Compensation Committee on or
after the final calculations of these quarterly results. These RSUs will have a
Vesting Date of August 15, 2016, and a Delivery Date of approximately
September 1, 2016.
Example 2: For the quarter beginning October 1, 2011 and ending December 31,
2011, Aaron’s reported a quarterly pretax profit of 16% of total revenue, and
exceeded its total revenue for the fourth quarter of 2010. Absent unusual
circumstances, Home Office VPs will be granted 1,600 RSUs (16% x 10,000 = 1,600)
at the first meeting of the Compensation Committee or after the final
calculation of these quarterly results. These RSUs will have a Vesting Date of
August 15, 2016, and a Delivery Date of approximately September 1, 2016.
Additional Terms and Conditions
The AMP Plan is discretionary and may be amended or terminated at any time by
the Compensation Committee. The termination or amendment of the AMP Plan will
not adversely affect RSUs that have already been granted and remain outstanding,
unless the grantee consents to such amendment or unless the terms of the RSUs
otherwise expressly permit such amendment.
The Compensation Committee shall have the authority to determine eligibility,
interpret, administer and implement this Plan with respect to the Home Office
VPs. The Compensation Committee may make adjustments deemed advisable in order
to give consideration to changes in accounting rules, principles or methods, or
extraordinary events, and make adjustments to financial performance measures in
recognition of such occurrences. For example, the Compensation Committee has
determined that, in calculating pretax profit under this Plan, the Company’s
GAAP financials shall be adjusted to ignore any positive or negative effect of
any increase or decrease in the charge taken by the Company related to a 2011
judgment in an employment-related lawsuit.
In the event of a restatement of the Company’s financials or a change in the
pretax profit or revenue of one or more Company stores for a quarter after the
grant of RSUs based on such quarterly performance, the grantee will forfeit the
number of RSUs that were granted in excess of the number that would have been
granted based on the corrected financials.
All grants of RSUs pursuant to the AMP Plan and the delivery of shares of
Aaron’s common stock upon settlement of the RSUs are subject to the terms of the
Stock Plan. An initial number of shares have been reserved under the Stock Plan
for issuance of RSUs pursuant to this AMP Plan; however, no RSUs will be granted
if there are insufficient shares available under the Stock Plan or such grants
would otherwise be prohibited under applicable laws, including securities laws.
The grant of RSUs could be delayed if Compensation Committee approval is needed.
The Plan and all actions taken hereunder shall be governed by the laws of the
State of Georgia without regard to conflicts of laws provisions.
The Plan is not intended to be, and does not constitute in any manner, a
contract or guarantee of employment between Aaron’s and any grantee.

 

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