Document:

exv10w1

Exhibit 10.1

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT (this “Agreement”) is made this 9th day of June, 2009, by
and between Concho Resources Inc., a Delaware corporation (the “Company”), and Steven L. Beal
(“Consultant”) (the Company and Consultant are collectively referred to herein as the “Parties”).

W I T N E S S E T H:

     WHEREAS, the Company and Consultant have previously entered into that certain Employment
Agreement effective as of January 1, 2009 (the “Employment Agreement”); and

     WHEREAS, Consultant desires to retire as an executive officer of, and from employment with,
the Company; and

     WHEREAS, following Consultant’s retirement from the Company, the Company desires to benefit
from the experience and ability of Consultant in the capacity of a consultant to the Company; and

     WHEREAS, Consultant is willing to serve as a consultant to the Company, upon the terms and
conditions contained herein;

     NOW, THEREFORE, for and in consideration of the compensation to be paid Consultant under this
Agreement and the mutual promises, covenants, and undertakings contained in this Agreement, and
intending to be legally bound, the Parties agree as follows:

     1. Transition from Employee to Contractor:

          A. General: As of July 1, 2009 (the “Transition Date”), Consultant’s employment under
the Employment Agreement will terminate and the relationship presently existing between the Parties
shall change from an employment relationship to a contractor relationship. Notwithstanding any
provision in the Employment Agreement to the contrary, the termination of Consultant’s employment
shall not constitute (i) an automatic resignation of Consultant from the Board of Directors of the
Company (the “Board”) or (ii) a termination of the post-employment rights and obligations of the
Parties under the Employment Agreement. Consultant expressly acknowledges and agrees that he has
received all compensation to which he is entitled under the Employment Agreement through the date
hereof, and that he is not entitled to any additional compensation, severance pay, bonuses or
benefits under the Employment Agreement other than with respect to base salary and employee
benefits for the period from the date hereof and ending on the date of Consultant’s termination of
employment with the Company. Accordingly, from and after the Transition Date, the Company’s
obligations to pay compensation to Consultant for services rendered shall be governed exclusively
by this Agreement; provided, however, that during any period after the Transition Date in which
Consultant is a non-employee member of the Board, Consultant shall also be entitled to

 

 

compensation from the Company for his services as a member of the Board in accordance with the
Company’s policies in effect from time to time for compensating its non-employee directors.

          B. Confidentiality: In the course of performing his duties for the Company,
Consultant acknowledges that he will be provided, or will be in a position to access, utilize,
create, obtain, and/or receive confidential information and trade secrets, which are valuable,
special, and unique assets of the Company used in its business to obtain a competitive advantage
over the Company’s competitors who do not know or use this information. Consultant further
acknowledges that protection of the Company’s confidential information and trade secrets against
unauthorized disclosure and use is of critical importance to the Company in maintaining its
competitive position. Accordingly, Consultant hereby agrees that his actions will be governed by
the confidentiality provisions set forth in Appendix A attached hereto. The obligations of
Consultant set forth in Appendix A shall apply during the term of this Agreement and shall survive
termination of this Agreement and/or the termination of Consultant’s services under this Agreement
regardless of the reason for such termination.

          C. Non-Competition: Consultant agrees that during the term of his consulting
relationship with the Company, Consultant shall not, without the prior written approval of the
Company’s chief executive officer (which approval shall not be unreasonably withheld or delayed),
directly or indirectly participate in the ownership, management, operation or control of, or be
connected as an officer, employee, consultant, partner, director, contractor or otherwise, or have
any financial interest in or aid or assist anyone else in the conduct of, any business in the oil
and gas industry; provided, however, that this provision shall not preclude Consultant from and
after the Transition Date from serving as a member of the board of directors and/or owning
securities of any publicly held entity engaged in the oil and gas industry so long as Consultant
does not, without such prior written approval, serve as an officer, employee, consultant or
contractor to such entity.

     2. Consulting: There shall be created pursuant to this Agreement an independent
contractor relationship between the Company and Consultant whereby Consultant shall supply
consulting services to the Company in accordance with and subject to the terms and conditions set
forth in this Agreement.

     3. Term: The term of this Agreement shall be for the period beginning on the
Transition Date and ending on the date this Agreement is terminated pursuant to Section 8 hereof.
If for any reason the employment relationship between Consultant and the Company is terminated
prior to the Transition Date, then this Agreement shall be void and of no further force and effect
as of the date of the termination of such employment relationship.

     4. Services: During the term of this Agreement, Consultant shall make himself
available to the Company to perform consulting and advisory services related to the oil and gas
industry. The Parties intend that the level of such consulting and advisory services that
Consultant will perform after the Transition Date will be greater than 20% of the average level of
bona fide services Consultant performed as an employee of the Company over the 36-month period
immediately preceding the Transition Date and, accordingly, the transition from employee to
independent contractor provided for in this Agreement shall not give rise to a “separation from
service” under Section 409A of the Internal Revenue Code of 1986, as amended, and applicable

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administrative guidance issued thereunder. In providing such consulting and advisory
services, Consultant shall provide the Company with such of his assessments and evaluations as the
Company may deem necessary. Consultant agrees to attend such meetings as the Company may require
for proper communication of his advice and consultation. Consultant shall coordinate the
furnishing of his services pursuant to this Agreement with representatives of the Company in order
that such services can be provided in such a way as to generally conform to the business schedules
and requirements of the Company, but the method of performance, place of performance, hours
utilized in such performance, and other details of the manner of performance of Consultant’s
services hereunder shall be within the sole control of Consultant. Subject to the provisions of
Section 1C hereof, while retained as a consultant by the Company, Consultant shall have the right
to devote his business day and working efforts to other business, professional, public service,
community and other pursuits as do not interfere with the rendering of consulting services by
Consultant hereunder.

     5. Compensation and Expense Reimbursement:

          A. Compensation: As compensation to Consultant for his services under this Agreement,
Consultant shall receive, during the term of this Agreement, a monthly consulting fee equal to the
sum of (i) $20,000 plus (ii) the Health Care Reimbursement Amount, which sum shall be payable on
the last day of each calendar month and shall be prorated for any fractional calendar month at the
end of such term. For purposes of the preceding sentence, the term “Health Care Reimbursement
Amount” means (a) for each month during the period Consultant receives reimbursements pursuant to
Section 5B hereof, $0, and (b) for each month thereafter, the lesser of (I) the amount actually
paid by Consultant for medical and dental coverage for such month for Consultant and his dependents
who would otherwise be eligible to participate in the medical and dental plans of the Company had
Consultant been employed by the Company during such month (and Consultant shall provide the Company
with reasonable documentation evidencing such amount) and (II) the difference, if any, between (x)
the amount the Company would be allowed to charge for such month for COBRA Continuation Coverage
(as defined in Section 5B hereof) with respect to Consultant and such dependents assuming they were
eligible for such coverage for such month and (y) the employee contribution amount that active
senior executive employees of the Company pay for the same or similar coverage for such month.

          B. COBRA: During the portion, if any, of the period during which Consultant is (i)
providing consulting services to the Company under this Agreement and (ii) eligible and elects to
continue coverage for Consultant and Consultant’s eligible dependents under the Company’s group
health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and/or
Sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended,
(“COBRA Continuation Coverage”), the Company shall promptly reimburse Consultant on a monthly basis
for the difference between the amount Consultant pays to effect and continue such coverage and the
employee contribution amount that active senior executive employees of the Company pay for the same
or similar coverage under such group health plans.

          C. Expenses: The Company shall reimburse Consultant for all reasonable out-of-pocket
expenses actually incurred by Consultant in performance of his services hereunder,

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provided that such expenses are incurred and submitted to the Company (with proper supporting
documentation) in accordance with the Company’s policy then in effect for employee expense
reimbursements. Upon receipt of the expense statements (but in no event later than the close of
Consultant’s taxable year following the taxable year in which the expense is incurred by
Consultant), the Company shall promptly reimburse Consultant for his expenses.

     6. Capacity and Benefits: At all times while serving under this Agreement, Consultant
shall be an independent contractor and not a common-law employee. Therefore, except as provided in
Sections 5B and 7 hereof, Consultant shall not, during the term of this Agreement, be entitled to
participate in the Company’s benefit plans and programs for its employees. Further, Consultant
will in no way be considered to be an agent, employee, executive officer, or servant of the
Company. In his capacity as a consultant under this Agreement, Consultant shall have no authority
to bind the Company in any capacity for any purpose. It is not the purpose or intention of this
Agreement or the parties to create, and the same shall not be construed as creating, any
partnership, partnership relation, joint venture, agency, or employment relationship.

     7. Stock Options and Restricted Stock:

          A. Stock Options: Consultant was granted various stock options by the Company or its
predecessors while employed by such entities, including, without limitation, (i) a nonstatutory
stock option to purchase 150,000 shares of the common stock of the Company pursuant to the Concho
Resources Inc. 2006 Stock Incentive Plan (the “2006 Plan”) on February 27, 2008 (the “2008
Option”), (ii) a nonstatutory stock option to purchase 62,500 shares of the common stock of the
Company (after taking into account certain adjustments previously made to the option) pursuant to
the 2006 Plan on June 12, 2006 (the “2006 Option”), and (iii) a nonstatutory stock option to
purchase 89,269 shares of the common stock of the Company (after taking into account certain
adjustments previously made to the option) pursuant to the Concho Equity Holdings Corp. 2004 Stock
Option Plan (which plan was assumed by the Company and amended and restated into the 2006 Plan) on
August 13, 2004 (the “2004 Option,” and together with the 2008 Option and the 2006 Option, the
“Stock Options”). Notwithstanding anything to the contrary in the agreements evidencing the grants
of the Stock Options and the amendments thereto (collectively, the “Stock Option Agreements”), (a)
Consultant shall not be treated as having terminated employment with the Company on the Transition
Date for purposes of the Stock Option Agreements, (b) Consultant shall be deemed to be continuing
in the employment of the Company for purposes of the Stock Option Agreements for so long as
Consultant is providing consulting services to the Company under this Agreement, (c) if the Company
terminates Consultant’s service relationship with the Company under this Agreement prior to June
12, 2010, in the case of the 2006 Option, or prior to February 27, 2012, in the case of the 2008
Option, for any reason other than for Cause (as such term is defined in Section 8B hereof), then to
the extent outstanding and unvested at the time of such termination, the Stock Option shall become
fully vested and exercisable with respect to 100% of the shares subject to such Stock Option as of
the date of such termination, and (d) if Consultant’s service relationship with the Company under
this Agreement is terminated by Consultant for any reason whatsoever or by the Company for Cause
prior to June 12, 2010, in the case of the 2006 Option, or prior to February 27, 2012, in the case
of the 2008 Option, then to the extent outstanding at the time of such termination, the portion, if
any, of the Stock Option that remains unvested as of the date of

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such termination shall be immediately forfeited to the Company as of the date of such
termination.

          B. Restricted Stock: Consultant was granted 11,561 restricted shares of the Company’s
common stock (the “Restricted Stock Award”) pursuant to the 2006 Plan on November 19, 2007.
Notwithstanding anything to the contrary in the Restricted Stock Agreement evidencing the
Restricted Stock Award (the “Restricted Stock Agreement”), (i) Consultant shall not be treated as
having terminated employment with the Company on the Transition Date for purposes of the Restricted
Stock Agreement, (ii) Consultant shall be deemed to be continuing in the employment of the Company
for purposes of the Restricted Stock Agreement for so long as Consultant is providing consulting
services to the Company under this Agreement, (iii) if the Company terminates Consultant’s service
relationship with the Company under this Agreement prior to June 12, 2010 for any reason other than
for Cause, then any portion of the shares subject to such award that would otherwise remain subject
to the Forfeiture Restrictions (as such term is defined in the Restricted Stock Agreement) as of
the date of such termination shall vest in full and shall cease to be subject to the Forfeiture
Restrictions as of the date of such termination, and (iv) if Consultant’s service relationship with
the Company under this Agreement is terminated prior to June 12, 2010 by Consultant for any reason
whatsoever, by the Company for Cause or by reason of Consultant’s death, then any portion of the
shares subject to such award that would otherwise remain subject to the Forfeiture Restrictions as
of the date of such termination shall be immediately forfeited to the Company as of the date of
such termination.

          C. Amendment of Award Agreements: The actions described in this Section 7 have been
approved by the Compensation Committee of the Board and the Parties hereby agree that the
provisions of this Section 7 constitute amendments to the Stock Option Agreements and the
Restricted Stock Agreement.

     8. Termination:

          A. Death: If Consultant dies during the term of this Agreement, the Company’s
obligations under this Agreement shall terminate, and Consultant’s estate shall be entitled to an
amount equal to the sum of (i) pro-rata compensation under Section 5A hereof for the month that
includes the date of his death and (ii) a lump sum cash payment in an amount equal to $60,000. The
amount described in the preceding sentence shall be paid by the Company within 30 days after the
date of Consultant’s death.

          B. Termination by the Company for Cause: The Company may terminate Consultant’s
service relationship with the Company under this Agreement for Cause at any time by giving prior
written notice to Consultant which notice shall set forth the grounds for Cause. For purposes of
this Agreement, the term “Cause” shall mean Consultant (i) has engaged in gross negligence, gross
incompetence or willful misconduct in the performance of Consultant’s duties hereunder, (ii) has
refused, without proper reason, to perform Consultant’s duties hereunder, (iii) has materially
breached any material provision of this Agreement or corporate policy or code of conduct
established by the Company that is known to Consultant and is generally applicable to consultants
of the Company, (iv) has willfully engaged in conduct which is materially injurious to the Company
or its subsidiaries (monetarily or otherwise), (v) has committed an act of fraud,

5

 

embezzlement or willful breach of a fiduciary duty to the Company or an affiliate (including
the unauthorized disclosure of confidential or proprietary material information of the Company or
an affiliate), or (vi) has been convicted of (or pleaded no contest to) a crime involving fraud,
dishonesty or moral turpitude or any felony. Upon termination of Consultant’s service relationship
with the Company under this Agreement for Cause, the Company’s obligations under this Agreement
shall terminate.

          C. Termination by the Company Without Cause and Termination by Consultant: The
Company may terminate Consultant’s service relationship with the Company under this Agreement
without Cause at any time by giving prior written notice to Consultant at least 90 days prior to
the effective date of such termination. Likewise, Consultant may terminate Consultant’s service
relationship with the Company under this Agreement for any reason at any time by giving prior
written notice to the Company at least 90 days prior to the effective date of such termination. In
either event, Consultant shall be entitled to pro-rata compensation under Section 5A hereof for the
month that includes the effective date of such termination.

          D. Effect of Termination on Stock Options and Restricted Stock: Notwithstanding
anything in this Section 8 to the contrary, the provisions of this Section 8 shall not apply to the
Stock Options and the Restricted Stock Award, and the treatment of the Stock Options and the
Restricted Stock Award following the termination of Consultant’s service relationship with the
Company for any reason shall be governed exclusively by Section 7 hereof.

     9. Notices: For purposes of this Agreement, notice, demands and all other
communications provided for in this Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:

	 	 	 	 	 
	 

	 	If to the Company to:
	 	Concho Resources Inc.
	 

	 	 	 	550 W. Texas Avenue, Suite 100
	 

	 	 	 	Midland, Texas 79701
	 

	 	 	 	Attention: Chairman of the Board of Directors
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	Concho Resources Inc.
	 

	 	 	 	550 W. Texas Avenue, Suite 100
	 

	 	 	 	Midland, Texas 79701
	 

	 	 	 	Attention: Vice President, General Counsel
	 
	 	 	 	 
	 

	 	If to Consultant to:
	 	Steven L. Beal
	 

	 	 	 	9400 County Road 258
	 

	 	 	 	Early, Texas 76802

or to such other address as either party may furnish to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

     10. Successor Obligations and Assignment: The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon the successors

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and assigns of the Company. Consultant cannot assign any rights accruing to him under this
Agreement.

     11. Amendment: This Agreement may not be modified except by an agreement in writing
executed by both the Company and Consultant.

     12. Governing Laws: This Agreement shall be subject to and governed by the laws of
the State of Texas, without giving effect to principles of conflicts of law.

     13. Validity: In the event that any portion or provision of this Agreement is found
to be invalid or unenforceable, the other portions or provisions hereof shall not be affected
thereby.

     14. Counterparts: This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.

     15. Effect of Agreement: This Agreement constitutes the entire agreement of the
parties with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to the independent
contractor relationship between the Company and Consultant. Without limiting the scope of the
preceding sentence, but subject to the second sentence of Section 1A hereof, all understandings and
agreements preceding the date of execution of this Agreement and relating to the subject matter
hereof are hereby null and void and of no further force and effect.

[Signatures begin on the following page.]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	Concho Resources Inc.

 	 
	 	By:  	/s/ Timothy A. Leach
 	 
	 	 	Name:  	Timothy A. Leach 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

COMPANY

	 	 	 	 	 
	 	Steven L. Beal

 	 
	 	/s/ Steven L. Beal
 	 
	 	 	 
	 	 	 
	 

CONSULTANT

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APPENDIX A

TO

CONSULTING AGREEMENT

BY AND BETWEEN CONCHO RESOURCES INC.

AND STEVEN L. BEAL

DATED JUNE 9, 2009

PROTECTION OF CONFIDENTIAL INFORMATION

     1. Disclosure to and Property of the Company: All information, designs, ideas,
concepts, improvements, product developments, discoveries and inventions, whether patentable or
not, that are conceived, made, developed or acquired by Consultant, individually or in conjunction
with others, during the period of Consultant’s service relationship with the Company (whether
during business hours or otherwise and whether on the Company’s premises or otherwise) that relate
to the Company’s (or any of its affiliates’) business, trade secrets, products or services
(including, without limitation, all such information relating to corporate opportunities, product
specification, compositions, manufacturing and distribution methods and processes, research,
financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisitions
prospects, the identity of customers or their requirements, the identity of key contacts within the
customer’s organizations or within the organization of acquisition prospects, marketing and
merchandising techniques, business plans, computer software or programs, computer software and
database technologies, prospective names and marks) (collectively, “Confidential Information”)
shall be disclosed to the Company and are and shall be the sole and exclusive property of the
Company (or its affiliates). Moreover, all documents, videotapes, written presentations,
brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, E-mail, voice mail, electronic databases, maps, drawings,
architectural renditions, models and all other writings or materials of any type embodying any of
such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of
expression (collectively, “Work Product”) are and shall be the sole and exclusive property of the
Company (or its affiliates). Upon the termination of Consultant’s service relationship with the
Company, for any reason, Consultant promptly shall deliver such Confidential Information and Work
Product, and all copies thereof, to the Company.

     2. No Unauthorized Use or Disclosure: Consultant agrees to preserve and protect the
confidentiality of all Confidential Information or Work Product of the Company (or its affiliates).
Consultant agrees that he will not, at any time during or after Consultant’s service relationship
with the Company, make any unauthorized disclosure of, and will prevent the removal from the
Company premises of, Confidential Information or Work Product of the Company (or its affiliates),
or make any use thereof, except in the carrying out of Consultant’s responsibilities during the
course of Consultant’s service relationship with the Company. Consultant shall use commercially
reasonable efforts to cause all persons or entities to whom any Confidential Information shall be
disclosed by him hereunder to observe the terms and conditions set forth herein as though each such
person or entity was bound hereby. Consultant shall have no obligation hereunder to keep
confidential any Confidential Information if and to

A-1

 

the extent disclosure thereof is specifically required by law; provided, however, that in the
event disclosure is required by applicable law, Consultant shall provide the Company with prompt
notice of such requirement prior to making any such disclosure, so that the Company may seek an
appropriate protective order. At the request of the Company at any time, Consultant agrees to
deliver to the Company all Confidential Information that he may possess or control. Consultant
agrees that all Confidential Information of the Company (whether now or hereafter existing)
conceived, discovered or made by him during the period of Consultant’s service relationship with
the Company exclusively belongs to the Company (and not to Consultant), and Consultant will
promptly disclose such Confidential Information to the Company and perform all actions reasonably
requested by the Company to establish and confirm such exclusive ownership. Affiliates of the
Company shall be third party beneficiaries of Consultant’s obligations under this Appendix A. As a
result of Consultant’s service relationship with the Company, Consultant may also from time to time
have access to, or knowledge of, Confidential Information or Work Product of third parties, such as
customers, suppliers, partners, joint venturers, and the like, of the Company and its affiliates.
Consultant also agrees to preserve and protect the confidentiality of such third party Confidential
Information and Work Product to the same extent, and on the same basis, as the Company’s
Confidential Information and Work Product.

     3. Ownership by the Company: If, during Consultant’s service relationship with the
Company, Consultant creates any work of authorship fixed in any tangible medium of expression that
is the subject matter of copyright (such as videotapes, written presentations, or acquisitions,
computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural
renditions, models, manuals, brochures, or the like) relating to the Company’s business, products,
or services, whether such work is created solely by Consultant or jointly with others (whether
during business hours or otherwise and whether on the Company’s premises or otherwise), including
any Work Product, the Company shall be deemed the author of such work if the work is prepared by
Consultant in the scope of Consultant’s service relationship with the Company; or, if the work is
not prepared by Consultant within the scope of Consultant’s service relationship with the Company
but is specially ordered by the Company as a contribution to a collective work, as a part of a
motion picture or other audiovisual work, as a translation, as a supplementary work, as a
compilation, or as an instructional text, then the work shall be considered to be work made for
hire and the Company shall be the author of the work. If such work is neither prepared by
Consultant within the scope of Consultant’s service relationship with the Company nor a work
specially ordered that is deemed to be a work made for hire, then Consultant hereby agrees to
assign, and by these presents does assign, to the Company all of Consultant’s worldwide right,
title, and interest in and to such work and all rights of copyright therein.

     4. Assistance by Consultant: During the period of Consultant’s service relationship
with the Company and thereafter, Consultant shall, at the Company’s expense, assist the Company and
its nominee, at any time, in the protection of the Company’s (or its affiliates’) worldwide right,
title and interest in and to Work Product and the execution of all formal assignment documents
requested by the Company or its nominee and the execution of all lawful oaths and applications for
patents and registration of copyright in the United States and foreign countries.

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     5. Remedies: Consultant acknowledges that money damages would not be sufficient
remedy for any breach of this Appendix A by Consultant, and the Company or its affiliates shall be
entitled to enforce the provisions of this Appendix A by terminating payments then owing to
Consultant under this Agreement or otherwise and to specific performance and injunctive relief as
remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive
remedies for a breach of this Appendix A but shall be in addition to all remedies available at law
or in equity, including the recovery of damages from Consultant and his agents.

A-3Exhibit 10.1

Exhibit 10.1

Aaron’s, Inc.

Deferred Compensation Plan

Master Plan Document

Effective July 1, 2009

Copyright © 2009

By Clark Consulting, Inc.

All Rights Reserved

 

 

 

Aaron’s, Inc.

Deferred Compensation Plan

Master Plan Document

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE 1 Definitions
	 	 	1	 
	 
	ARTICLE 2 Selection, Enrollment, Eligibility
	 	 	6	 
	 
	2.1 Selection by Committee
	 	 	6	 
	2.2 Enrollment and Eligibility Requirements; Commencement of Participation
	 	 	6	 
	 
	ARTICLE 3
Deferral Commitments/Company Contribution Amounts/Company Restoration Matching Amounts/Restricted Stock Amounts/Vesting/Crediting/Taxes
	 	 	6	 
	 
	3.1 Maximum Deferral
	 	 	6	 
	3.2 Timing of Deferral Elections; Effect of Election Form
	 	 	7	 
	3.3 Withholding and Crediting of Annual Deferral Amounts
	 	 	8	 
	3.4 Company Contribution Amount
	 	 	8	 
	3.5 Company Restoration Matching Amount
	 	 	9	 
	3.6 Restricted Stock Amount
	 	 	9	 
	3.7 Vesting
	 	 	9	 
	3.8 Crediting/Debiting of Account Balances
	 	 	9	 
	3.9 FICA and Other Taxes
	 	 	11	 
	 
	ARTICLE 4 Scheduled Distributions; Unforeseeable Emergencies
	 	 	12	 
	 
	4.1 Scheduled Distributions
	 	 	12	 
	4.2 Postponing Scheduled Distributions
	 	 	12	 
	4.3 Other Benefits Take Precedence Over Scheduled Distributions
	 	 	12	 
	4.4 Unforeseeable Emergencies
	 	 	13	 
	 
	ARTICLE 5 Retirement Benefit
	 	 	13	 
	 
	5.1 Retirement Benefit
	 	 	13	 
	5.2 Payment of Retirement Benefit
	 	 	13	 
	 
	ARTICLE 6 Termination Benefit
	 	 	14	 
	 
	6.1 Termination Benefit
	 	 	14	 
	6.2 Payment of Termination Benefit
	 	 	14	 
	 
	ARTICLE 7 Disability Benefit
	 	 	14	 
	 
	7.1 Disability Benefit
	 	 	14	 
	7.2 Payment of Disability Benefit
	 	 	14	 
	 
	ARTICLE 8 Death Benefit
	 	 	14	 
	 
	8.1 Death Benefit
	 	 	14	 
	8.2 Payment of Death Benefit
	 	 	14	 

 

-i-

 

Aaron’s, Inc.

Deferred Compensation Plan

Master Plan Document

	 	 	 	 	 
	 	 	Page	 
	 
	ARTICLE 9 Beneficiary Designation
	 	 	15	 
	 
	9.1 Beneficiary
	 	 	15	 
	9.2 Beneficiary Designation; Change
	 	 	15	 
	9.3 Acknowledgement
	 	 	15	 
	9.4 No Beneficiary Designation
	 	 	15	 
	9.5 Doubt as to Beneficiary
	 	 	15	 
	9.6 Discharge of Obligations
	 	 	15	 
	 
	ARTICLE 10 Leave of Absence
	 	 	15	 
	 
	10.1 Paid Leave of Absence
	 	 	15	 
	10.2 Unpaid Leave of Absence
	 	 	15	 
	 
	ARTICLE 11 Termination of Plan, Amendment or Modification
	 	 	16	 
	 
	11.1 Termination of Plan
	 	 	16	 
	11.2 Amendment
	 	 	16	 
	11.3 Plan Agreement
	 	 	16	 
	11.4 Effect of Payment
	 	 	16	 
	 
	ARTICLE 12 Administration
	 	 	16	 
	 
	12.1 Committee Duties
	 	 	16	 
	12.2 Administration Upon Change In Control
	 	 	17	 
	12.3 Agents
	 	 	17	 
	12.4 Binding Effect of Decisions
	 	 	17	 
	12.5 Indemnity of Committee
	 	 	17	 
	12.6 Employer Information
	 	 	17	 
	12.7 Section 16 Compliance
	 	 	17	 
	 
	ARTICLE 13 Other Benefits and Agreements
	 	 	18	 
	 
	13.1 Coordination with Other Benefits
	 	 	18	 
	 
	ARTICLE 14 Claims Procedures
	 	 	18	 
	 
	14.1 Presentation of Claim
	 	 	18	 
	14.2 Notification of Decision
	 	 	18	 
	14.3 Review of a Denied Claim
	 	 	18	 
	14.4 Decision on Review
	 	 	19	 
	14.5 Legal Action
	 	 	19	 

 

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	 	 	Page	 
	 
	ARTICLE 15 Trust
	 	 	19	 
	 
	15.1 Establishment of the Trust
	 	 	19	 
	15.2 Interrelationship of the Plan and the Trust
	 	 	19	 
	15.3 Distributions From the Trust
	 	 	19	 
	 
	ARTICLE 16 Miscellaneous
	 	 	19	 
	 
	16.1 Status of Plan
	 	 	19	 
	16.2 Unsecured General Creditor
	 	 	19	 
	16.3 Employer’s Liability
	 	 	20	 
	16.4 Nonassignability
	 	 	20	 
	16.5 Not a Contract of Employment
	 	 	20	 
	16.6 Furnishing Information
	 	 	20	 
	16.7 Terms
	 	 	20	 
	16.8 Captions
	 	 	20	 
	16.9 Governing Law
	 	 	20	 
	16.10 Notice
	 	 	20	 
	16.11 Successors
	 	 	20	 
	16.12 Spouse’s Interest
	 	 	21	 
	16.13 Validity
	 	 	21	 
	16.14 Incompetent
	 	 	21	 
	16.15 Distribution in the Event of Income Inclusion Under Code Section 409A
	 	 	21	 
	16.16 Deduction Limitation on Benefit Payments
	 	 	21	 

 

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Aaron’s, Inc.

Deferred Compensation Plan

Master Plan Document

Purpose

The purpose of this Plan is to provide specified benefits to Directors and a select group of
management or highly compensated Employees who contribute materially to the continued growth,
development and future business success of Aaron’s, Inc, a Georgia corporation, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for
purposes of Title I of ERISA.

This Plan is intended to comply with all applicable law, including Code Section 409A and
related Treasury guidance and regulations, and shall be operated and interpreted in accordance with
this intention.

ARTICLE 1

Definitions

For the purposes of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

	1.1	 	“Account Balance” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the sum of the Participant’s Annual Accounts. The Account Balance shall be
a bookkeeping entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.

	1.2	 	“Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

	1.3	 	“Annual Account” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to (a) the sum of the Participant’s Annual Deferral Amount, Company
Contribution Amount, Company Restoration Matching Amount and Restricted Stock Amount for any
one Plan Year, plus (b) amounts credited or debited to such amounts pursuant to this Plan,
less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this
Plan that relate to the Annual Account for such Plan Year. The Annual Account shall be a
bookkeeping entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.

	1.4	 	“Annual Deferral Amount” shall mean that portion of a Participant’s Base Salary, Bonus, LTIP
Amounts, Cash Director Fees and Stock Director Fees that a Participant defers in accordance
with Article 3 for any one Plan Year, without regard to whether such amounts are withheld and
credited during such Plan Year.

	1.5	 	“Annual Installment Method” shall mean the method used to determine the amount of each
payment due to a Participant who has elected to receive a benefit over a period of years in
accordance with the applicable provisions of the Plan. The amount of each annual payment due
to the Participant shall be calculated by multiplying the balance of the Participant’s benefit
by a fraction, the numerator of which is one and the denominator of which is the remaining
number of annual payments due to the Participant. Shares of Stock that shall be distributable
from a Participant’s Account Balance that are attributable to Stock Director Fees and/or
Restricted Stock shall be distributable in shares of actual Stock in the same manner
previously described.
However, the Committee may, in its sole discretion, adjust the annual installments in order
to distribute whole shares of actual Stock. The amount of the first annual payment shall be
calculated as of the close of business on or around the Participant’s Benefit Distribution
Date, and the amount of each subsequent annual payment shall be calculated on or around each
anniversary of such Benefit Distribution Date. For purposes of this Plan, the right to
receive a benefit payment in annual installments shall be treated as the entitlement to a
single payment.

	1.6	 	“Base Salary” shall mean the annual cash compensation relating to services performed during
any calendar year, excluding distributions from nonqualified deferred compensation plans,
bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive
payments, non-monetary awards, director fees and other fees, and automobile and other
allowances paid to a Participant for employment services rendered (whether or not such
allowances are included in the Employee’s gross income). Base Salary shall be calculated
before reduction for compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to
include amounts not otherwise included in the Participant’s gross income under Code Sections
125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the Employee.

 

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Master Plan Document

	1.7	 	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated
in accordance with Article 9, that are entitled to receive benefits under this Plan upon the
death of a Participant.

	1.8	 	“Beneficiary Designation Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to designate one or
more Beneficiaries.

	1.9	 	“Benefit Distribution Date” shall mean the date upon which all or an objectively determinable
portion of a Participant’s vested benefits will become eligible for distribution. Except as
otherwise provided in the Plan, a Participant’s Benefit Distribution Date shall be determined
based on the earliest to occur of an event or scheduled date set forth in Articles 4 through
8, as applicable.

	1.10	 	“Board” shall mean the board of directors of the Company.

	1.11	 	“Bonus” shall mean any compensation, in addition to Base Salary and LTIP Amounts, earned by a
Participant under any Employer’s annual bonus and cash incentive plans. Bonus shall be
calculated before reduction for compensation voluntarily deferred or contributed by the
Participant pursuant to all qualified or nonqualified plans of the Employer and shall be
calculated to include amounts not otherwise included in the Participant’s gross income under
Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Employer;
provided, however, that all such amounts will be included in compensation only to the extent
that had there been no such plan, the amount would have been payable in cash to the Employee.

	1.12	 	“Cash Director Fees” shall mean the annual fees payable in cash that are earned by a Director
from any Employer, including retainer fees and meetings fees, as compensation for serving on
the Board.

	1.13	 	“Change in Control” shall be deemed to have occurred if:

	 	(a)	 	the Company consolidates or merges with or into another corporation, or is
otherwise reorganized, and the Company is not the surviving corporation in such
transaction or if after such transaction any other corporation, association or other
person, entity or group of the shareholders thereof own, directly and/or indirectly,
more than 50% of the then outstanding shares of Class A Common Stock or more than 50%
of the assets of the Company; or

	 
	 	(b)	 	more than 50% of the then outstanding shares of Class A Common Stock of the
Company are, in a single transaction or in a series of related transactions, sold or
otherwise transferred to or are acquired by (except as collateral security for a loan)
any other corporation, association or other person, entity or group, whether or not any
such shareholder or any shareholders included in such group were shareholders of the
Company prior to the Change in Control; or

	 
	 	(c)	 	all or substantially all of the assets of the Company are sold or otherwise
transferred to or otherwise acquired by any other corporation, association or other
person, entity or group; or

	 
	 	(d)	 	the occurrence of any other event or circumstance which is not covered by (a)
through (c) above which the Committee determines affects control of the Company and
constitutes a Change in Control for purposes of the Plan.

	1.14	 	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

	 
	1.15	 	“Committee” shall mean the committee described in Article 12.

	1.16	 	“Company” shall mean Aaron’s, Inc., a Georgia corporation, and any successor to all or
substantially all of the Company’s assets or business.

	1.17	 	“Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in
accordance with Section 3.4.

	1.18	 	“Company Restoration Matching Amount” shall mean, for any one Plan Year, the amount
determined in accordance with Section 3.5.

 

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Aaron’s, Inc.

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Master Plan Document

	1.19	 	“Director” shall mean any non-employee member of the board of directors of any Employer.

	1.20	 	“Disability” or “Disabled” shall mean that a Participant is either (a) unable to engage in
any substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (b) by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering employees of the
Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled if
determined to be totally disabled by the Social Security Administration. A Participant shall
also be deemed Disabled if determined to be disabled in accordance with the applicable
disability insurance program of such Participant’s Employer, provided that the definition of
“disability” applied under such disability insurance program complies with the requirements of
this Section.

	1.21	 	“Election Form” shall mean the form, which may be in electronic format, established from time
to time by the Committee that a Participant completes, signs and returns to the Committee to
make an election under the Plan.

	1.22	 	“Employee” shall mean a person classified as an employee by the Employer for payroll
purposes.

	1.23	 	“Employer(s)” shall be defined as follows:

	 	(a)	 	Except as otherwise provided in part (b) of this Section, the term “Employer”
shall mean the Company and/or any of its subsidiaries (now in existence or hereafter
formed or acquired) that have been selected by the Board to participate in the Plan and
have adopted the Plan as a sponsor.

	 	(b)	 	For the purpose of determining whether a Participant has experienced a
Separation from Service, the term “Employer” shall mean:

	 	(i)	 	The entity for which the Participant performs services and with
respect to which the legally binding right to compensation deferred or
contributed under this Plan arises; and

	 	(ii)	 	All other entities with which the entity described above would be
aggregated and treated as a single employer under Code Section 414(b)
(controlled group of corporations) and Code Section 414(c) (a group of trades or
businesses, whether or not incorporated, under common control), as applicable.
In order to identify the group of entities described in the preceding sentence,
the Committee shall use an ownership threshold of at least 50% as a substitute
for the 80% minimum ownership threshold that appears in, and otherwise must be
used when applying, the applicable provisions of (A) Code Section 1563 for
determining a controlled group of corporations under Code Section 414(b), and
(B) Treas. Reg. §1.414(c)-2 for determining the trades or businesses that are
under common control under Code Section 414(c).

	1.24	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time.

	1.25	 	“401(k) Plan” shall mean, with respect to an Employer, a plan qualified under Code Section
401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted
by the Employer, as it may be amended from time to time, or any successor thereto.

	1.26	 	“LTIP Amounts” shall mean any cash portion of the compensation attributable to a Plan Year
that is earned by a Participant under any Employer’s long-term incentive plan or any other
long-term incentive arrangement designated by the Committee. LTIP Amounts shall be calculated
before reduction for compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or nonqualified plans of the Employer and shall be calculated to
include amounts not otherwise included in the Participant’s gross income under Code Sections
125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Employer; provided,
however, that all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the Employee.

 

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Master Plan Document

	1.27	 	“Participant” shall mean any Employee or Director (a) who is selected to participate in the
Plan, (b) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are
accepted by the Committee, and (c) whose Account Balance has not been completely distributed.

	1.28	 	“Performance-Based Compensation” shall mean compensation the entitlement to or amount of
which is contingent on the satisfaction of pre-established organizational or
individual performance criteria relating to a performance period of at least 12 consecutive
months, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(e).

	1.29	 	“Plan” shall mean the Aaron’s, Inc. Deferred Compensation Plan, which shall be evidenced by
this instrument, as it may be amended from time to time, and by any other documents that
together with this instrument define a Participant’s rights to amounts credited to his or her
Account Balance.

	1.30	 	“Plan Agreement” shall mean a written agreement in the form prescribed by or acceptable to
the Committee that evidences a Participant’s agreement to the terms of the Plan and which may
establish additional terms or conditions of Plan participation for a Participant. Unless
otherwise determined by the Committee, the most recent Plan Agreement accepted with respect to
a Participant shall supersede any prior Plan Agreements for such Participant. Plan Agreements
may vary among Participants and may provide additional benefits not set forth in the Plan or
limit the benefits otherwise provided under the Plan.

	1.31	 	“Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year. Notwithstanding the foregoing, in the case of the
first year in which the Plan is in effect, the term “Plan Year” shall mean the period
beginning on July 1, 2009 and ending on December 31, 2009.

	1.32	 	“Restricted Stock” shall mean rights to receive unvested shares of restricted stock selected
by the Committee in its sole discretion and awarded to the Participant under any Aaron’s, Inc.
stock incentive plan or director compensation program.

	1.33	 	“Restricted Stock Account” shall mean the aggregate value, measured on any given date, of (i)
the number of shares of Restricted Stock deferred by a Participant as a result of all
Restricted Stock Amounts, plus (ii) the number of additional shares credited to a
Participant’s Restricted Stock Account as a result of the deemed reinvestment of dividends in
accordance with this Plan, less (iii) the number of shares of Restricted Stock previously
distributed to the Participant or his or her Beneficiary pursuant to this Plan, subject in
each case to any adjustments to the number of such shares determined by the Committee with
respect to the Aaron’s, Inc. Stock Unit Fund pursuant to Section 3.8(c). This portion of the
Participant’s Account Balance shall only be distributable in actual shares of Stock.

	1.34	 	“Restricted Stock Amount” shall mean, with respect to a Participant for any one Plan Year,
the amount of Restricted Stock deferred in accordance with Section 3.6 of this Plan,
calculated using the closing price of Stock at the end of the business day closest to the date
such Restricted Stock would otherwise vest (and/or all restrictions on such Restricted Stock
would have lapsed), but for the election to defer. In the event of a Participant’s
Retirement, Termination of Employment, Disability, or death prior to the end of a Plan Year,
such year’s Restricted Stock Amount shall be the actual amount withheld prior to such event.

	1.35	 	“Retirement,” “Retire(s)” or “Retired” shall mean with respect to a Participant who is an
Employee, a Separation from Service on or after the attainment of age 65, and shall mean with
respect to a Participant who is a Director, a Separation from Service.

	1.36	 	“Separation from Service” shall mean a termination of services provided by a Participant to
his or her Employer, whether voluntarily or involuntarily, other than by reason of death or
Disability, as determined by the Committee in accordance with
Treas. Reg. §1.409A-1(h). In determining whether a Participant has experienced a Separation
from Service, the following provisions shall apply:

	 	(a)	 	For a Participant who provides services to an Employer as an Employee, except
as otherwise provided in part (c) of this Section, a Separation from Service shall
occur when such Participant has experienced a termination of employment with such
Employer. A Participant shall be considered to have experienced a termination of
employment when the facts and circumstances indicate that the Participant and his or
her Employer reasonably anticipate that either (i) no further services will be
performed for the Employer after a certain date, or (ii) that the level of bona fide
services the Participant will perform for the Employer after such date (whether as an
Employee or as an independent contractor) will permanently decrease to no more than 20%
of the average level of bona fide services performed by such Participant (whether as an
Employee or an independent contractor) over the immediately preceding 36-month period
(or the full period of services to the Employer if the Participant has been providing
services to the Employer less than 36 months).

 

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If a Participant is on military leave, sick leave, or other bona fide leave of
absence, the employment relationship between the Participant and the Employer shall
be treated as continuing intact, provided that the period of such leave does not
exceed 6 months, or if longer, so long as the Participant retains a right to
reemployment with the Employer under an applicable statute or by contract. If the
period of a military leave, sick leave, or other bona fide leave of absence exceeds 6
months and the Participant does not retain a right to reemployment under an
applicable statute or by contract, the employment relationship shall be considered to
be terminated for purposes of this Plan as of the first day immediately following the
end of such 6-month period. In applying the provisions of this paragraph, a leave of
absence shall be considered a bona fide leave of absence only if there is a
reasonable expectation that the Participant will return to perform services for the
Employer.

	 	(b)	 	For a Participant, if any, who provides services to an Employer as an
independent contractor, except as otherwise provided in part (c) of this Section, a
Separation from Service shall occur upon the expiration of the contract (or in the case
of more than one contract, all contracts) under which services are performed for such
Employer, provided that the expiration of such contract(s) is determined by the
Committee to constitute a good-faith and complete termination of the contractual
relationship between the Participant and such Employer.

	 	(c)	 	For a Participant, if any, who provides services to an Employer as both an
Employee and an independent contractor, a Separation from Service generally shall not
occur until the Participant has ceased providing services for such Employer as both an
Employee and as an independent contractor, as determined in accordance with the
provisions set forth in parts (a) and (b) of this Section, respectively. Similarly, if
a Participant either (i) ceases providing services for an Employer as an independent
contractor and begins providing services for such Employer as an Employee, or (ii)
ceases providing services for an Employer as an Employee and begins providing services
for such Employer as an independent contractor, the Participant will not be considered
to have experienced a Separation from Service until the Participant has ceased
providing
services for such Employer in both capacities, as determined in accordance with the
applicable provisions set forth in parts (a) and (b) of this Section.

	 
	 	 	 	Notwithstanding the foregoing provisions in this part (c), if a Participant provides
services for an Employer as both an Employee and as a member of the Board, to the
extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such
Participant as a member of the Board shall not be taken into account in determining
whether the Participant has experienced a Separation from Service as an Employee.

	1.37	 	“Stock” shall mean Aaron’s, Inc. common stock, $.50 par value.

	1.38	 	“Stock Director Fees” shall mean the annual fees payable in Stock that are earned by a
Director from any Employer, including retainer fees and meetings fees, as compensation for
serving on the Board.

	1.39	 	“Trust” shall mean one or more trusts established by the Company in accordance with Article
15.

	1.40	 	“Unforeseeable Emergency” shall mean a severe financial hardship of the Participant resulting
from (a) an illness or accident of the Participant, the Participant’s spouse, the
Participant’s Beneficiary or the Participant’s dependent (as defined in Code Section 152
without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a loss of the
Participant’s property due to casualty, or (c) such other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the
Participant, all as determined by the Committee based on the relevant facts and circumstances.

 

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Deferred Compensation Plan

Master Plan Document

ARTICLE 2

Selection, Enrollment, Eligibility

	2.1	 	Selection by Committee. Participation in the Plan shall be limited to Directors and,
as determined by the Committee in its sole discretion, a select group of management or highly
compensated Employees. From that group, the Committee shall select, in its sole discretion,
those individuals who may actually participate in this Plan.

	2.2	 	Enrollment and Eligibility Requirements; Commencement of Participation.

	 	(a)	 	As a condition to participation, each Director or selected Employee shall
complete, execute and return to the Committee a Plan Agreement, an Election Form and a
Beneficiary Designation Form by the deadline(s) established by the Committee in
accordance with the applicable provisions of this Plan. In addition, the Committee
shall establish from time to time such other enrollment requirements as it determines,
in its sole discretion, are necessary.

	 	(b)	 	Each Director or selected Employee who is eligible to participate in the Plan
shall commence participation in the Plan on the date that the Committee determines that
the Director or Employee has met all enrollment requirements set forth in this Plan and
required by the Committee, including returning all required documents to the Committee
within the specified time period.

	 	(c)	 	If a Director or an Employee fails to meet all requirements established by the
Committee within the period required, that Director or Employee shall not be eligible
to participate in the Plan during such Plan Year.

ARTICLE 3

Deferral Commitments/Company Contribution Amounts/

Company Restoration Matching Amounts/Restricted Stock Amounts/Vesting/Crediting/Taxes

	3.1	 	Maximum Deferral.

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, Base Salary, Bonus, LTIP Amounts, Cash
Director Fees and/or Stock Director Fees up to the following maximum percentages for
each deferral elected:

	 	 	 	 	 
	Deferral	 	Maximum Percentage	 
	Base Salary
	 	 	75	%
	Bonus
	 	 	100	%
	LTIP Amounts
	 	 	100	%
	Cash Director Fees
	 	 	100	%
	Stock Director Fees
	 	 	100	%

	 	(b)	 	Restricted Stock Amount. If deferrals of Restricted Stock are
permitted by the Committee, for each grant of Restricted Stock, a Participant may elect
to defer, as his or her Restricted Stock Amount, Restricted Stock in the following
maximum percentage:

	 	 	 	 	 
	Deferral	 	Maximum Percentage	 
	Restricted Stock
	 	 	100	%

	 	(c)	 	Short Plan Year. Notwithstanding the foregoing, in the case of (i) the
first Plan Year in which the Plan is in effect or (ii) an individual first becoming a
Participant after the first day of a Plan Year, then to the extent required by Section
3.2 and Code Section 409A and related Treasury regulations, the maximum amount of the
Participant’s Base Salary, Bonus, LTIP Amounts, Cash Director Fees or Stock Director
Fees that may be deferred by the Participant for the Plan Year shall be determined by
applying the percentages set forth in Section 3.1(a) to the portion of such
compensation attributable to services performed after the date that the Participant’s
deferral election is made.

 

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	3.2	 	Timing of Deferral Elections; Effect of Election Form.

	 	(a)	 	General Timing Rule for Deferral Elections. Except as otherwise
provided in this Section 3.2, in order for a Participant to make a valid election to
defer Base Salary, Bonus, LTIP Amounts, Cash Director Fees and/or Stock Director Fees,
the Participant must submit an Election Form on or before the deadline established by
the Committee, which in no event shall be later than the December 31st
preceding the Plan Year in which such compensation will be earned.

Any deferral election made in accordance with this Section 3.2(a) shall be
irrevocable; provided, however, that if the Committee permits or requires
Participants to make a deferral election by the deadline described above for an
amount that qualifies as Performance-Based Compensation, the Committee may permit a
Participant to subsequently change his or her deferral election for such compensation
by submitting a new Election Form in accordance with Section 3.2(d) below.

	 	(b)	 	Timing of Deferral Elections for Newly Eligible Plan Participants. A
Director or selected Employee who first becomes eligible to participate in the Plan on
or after the beginning of a Plan Year, as determined in accordance with Treas. Reg.
§1.409A-2(a)(7)(ii) and the “plan aggregation” rules provided in Treas. Reg.
§1.409A-1(c)(2), may be permitted by the Committee to make an election to defer (i)
Restricted Stock that may be initially granted to the Participant under the terms of
the applicable Aaron’s, Inc. stock incentive plan or director compensation program
subsequent to such election and/or (ii) the portion of Base Salary, Bonus, LTIP
Amounts, Cash Director Fees and/or Stock Director Fees attributable to services to be
performed after such election, provided that the Participant submits an Election Form
on or before the deadline established by the Committee, which in no event shall be
later than 30 days after the Participant first becomes eligible to participate in the
Plan.

If a deferral election made in accordance with this Section 3.2(b) relates to
compensation earned based upon a specified performance period, the amount eligible
for deferral shall be equal to (i) the total amount of compensation for the
performance period, multiplied by (ii) a fraction, the numerator of which is the
number of days remaining in the service period after the Participant’s deferral
election is made, and the denominator of which is the total number of days in the
performance period.

Any deferral election made in accordance with this Section 3.2(b) shall become
irrevocable no later than the 30th day after the date the Director or
selected Employee becomes eligible to participate in the Plan.

	 	(c)	 	Restricted Stock Deferral. For an election to defer Restricted Stock
to be valid, (i) an Election Form must be completed and signed by the Participant with
respect to such Restricted Stock, and (ii) such Election Form must be timely delivered
to the Committee and accepted by the Committee no later than (A) the end of the
calendar year preceding the Plan Year during which such Restricted Stock may be
initially granted to the Participant under the terms of the applicable Aaron’s, Inc.
stock incentive plan or director compensation program, or (B) such other deadline
established by the Committee in accordance with the requirements of Code Section 409A
and related Treasury guidance or
regulations, including, without limitation, such deadline as may be applicable under
Section 3.2(e) below.

	 	(d)	 	Timing of Deferral Elections for Performance-Based Compensation.
Subject to the limitations described below, the Committee may determine that an
irrevocable deferral election for an amount that qualifies as Performance-Based
Compensation may be made by submitting an Election Form on or before the deadline
established by the Committee, which in no event shall be later than 6 months before the
end of the performance period.

In order for a Participant to be eligible to make a deferral election for
Performance-Based Compensation in accordance with the deadline established pursuant
to this Section 3.2(d), the Participant must have performed services continuously
from the later of (i) the beginning of the performance period for such compensation,
or (ii) the date upon which the performance criteria for such compensation are
established, through the date upon which the Participant makes the deferral election
for such compensation. In no event shall a deferral election submitted under this
Section 3.2(d) be permitted to apply to any amount of Performance-Based Compensation
that has become readily ascertainable.

 

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Deferred Compensation Plan

Master Plan Document

	 	(e)	 	Timing Rule for
Deferral of Compensation Subject to Risk of Forfeiture.
With respect to compensation (i) to which a Participant has a legally binding right to
payment in a subsequent year, and (ii) that is subject to a forfeiture condition
requiring the Participant’s continued services for a period of at least 12 months from
the date the Participant obtains the legally binding right, the Committee may determine
that an irrevocable deferral election for such compensation may be made by timely
delivering an Election Form to the Committee in accordance with its rules and
procedures, no later than the 30th day after the Participant obtains the
legally binding right to the compensation, provided that the election is made at least
12 months in advance of the earliest date at which the forfeiture condition could
lapse, as determined in accordance with Treas. Reg. §1.409A-2(a)(5).

Any deferral election(s) made in accordance with this Section 3.2(e) shall become
irrevocable no later than the 30th day after the Participant obtains the
legally binding right to the compensation subject to such deferral election(s).

	3.3	 	Withholding and Crediting of Annual Deferral Amounts. For each Plan Year, the Base
Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled
Base Salary payroll in equal amounts, as adjusted from time to time for increases and
decreases in Base Salary. The Bonus, LTIP Amounts, Cash Director Fees and/or Stock Director
Fees portion of the Annual Deferral Amount shall be withheld at the time the Bonus, LTIP
Amounts, Cash Director Fees or Stock Director Fees are or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts
shall be credited to the Participant’s Annual Account for such Plan Year at the time such
amounts would otherwise have been paid to the Participant.

Base Salary that is both (i) attributable solely to services performed during the final
payroll period containing the last day of the Plan Year, and (ii) payable in the subsequent
Plan Year, will be treated as earned in that subsequent Plan Year; accordingly, Base Salary
related to such final
payroll period shall be withheld in accordance with the Participant’s Base Salary deferral
election applicable to such subsequent Plan Year.

	3.4	 	Company Contribution Amount.

	 	(a)	 	For each Plan Year, an Employer may be required to credit amounts to a
Participant’s Annual Account in accordance with employment or other agreements entered
into between the Participant and the Employer, which amounts shall be part of the
Participant’s Company Contribution Amount for that Plan Year. Such amounts shall be
credited to the Participant’s Annual Account for the applicable Plan Year on the date
or dates prescribed by such agreements.

	 	(b)	 	For each Plan Year, an Employer, in its sole discretion, may, but is not
required to, credit any amount it desires to any Participant’s Annual Account under
this Plan, which amount shall be part of the Participant’s Company Contribution Amount
for that Plan Year. The amount so credited to a Participant may be smaller or larger
than the amount credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other Participants
receive a Company Contribution Amount for that Plan Year. The Company Contribution
Amount described in this Section 3.4(b), if any, shall be credited to the Participant’s
Annual Account for the applicable Plan Year on a date or dates to be determined by the
Committee.

	 	(c)	 	If not otherwise specified in the Participant’s employment or other agreement
entered into between the Participant and the Employer, the amount (or the method or
formula for determining the amount) of a Participant’s Company Contribution Amount
shall be set forth in writing in one or more documents, which shall be deemed to be
incorporated into this Plan in accordance with Section 1.29, no later than the date on
which such Company Contribution Amount is credited to the applicable Annual Account of
the Participant.

 

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Master Plan Document

	3.5	 	Company Restoration Matching Amount. A Participant’s Company Restoration Matching
Amount for any Plan Year shall be an amount determined by the Committee to make up for certain
limits applicable to the 401(k) Plan or other qualified plan for such Plan Year, as identified
by the Committee, or for such other purposes as determined by the Committee in its sole
discretion. The amount so credited to a Participant under this Plan for any Plan Year (a) may
be smaller or larger than the amount credited to any other Participant, and (b) may differ
from the amount credited to such Participant in the preceding Plan Year. The Participant’s
Company Restoration Matching Amount, if any, shall be credited to the Participant’s Annual
Account for the applicable Plan Year on a date or dates to be determined by the Committee.
The amount (or the method or formula for determining the amount) of a Participant’s Company
Restoration Matching Amount shall be set forth in writing in one or more documents, which
shall be deemed to be incorporated into this Plan in accordance with Section 1.29, no later
than the date on which such Company Restoration Matching Amount is credited to the applicable
Annual Account of the Participant.

	3.6	 	Restricted Stock Amount. If permitted by the Committee (and subject to any terms and
conditions that may be imposed by the Committee), a Participant may elect to defer Restricted
Stock under the Plan, which amount shall be for that Participant the Restricted Stock Amount
for that Plan Year. The portion of any Restricted Stock deferred shall, at the time the
Restricted Stock
would otherwise vest (and/or all
restrictions on such Restricted
Stock would have lapsed) under
the terms of the applicable
Aaron’s, Inc. stock incentive
plan or director compensation
program, but for the election to
defer, be reflected on the books
of the Company as an unfunded,
unsecured promise to deliver to
the Participant a specific number
of actual shares of Stock in the
future.

	3.7	 	Vesting.

	 	(a)	 	A Participant shall at all times be 100% vested in his or her Restricted Stock
Account and the portion of his or her Account Balance attributable to Annual Deferral
Amounts, plus amounts credited or debited on such amounts pursuant to Section 3.8.

	 	(b)	 	A Participant shall be vested in the portion of his or her Account Balance
attributable to any Company Contribution Amounts, plus amounts credited or debited on
such amounts pursuant to Section 3.8, in accordance with the vesting schedule(s) set
forth in his or her Plan Agreement, employment agreement or any other agreement entered
into between the Participant and his or her Employer. If not addressed in such
agreements, a Participant shall vest in the portion of his or her Account Balance
attributable to any Company Contribution Amounts, plus amounts credited or debited on
such amounts pursuant to Section 3.8, in accordance with the vesting schedule declared
by the Committee in its sole discretion.

	 	(c)	 	A Participant shall be vested in the portion of his or her Account Balance
attributable to any Company Restoration Matching Amounts, plus amounts credited or
debited on such amounts pursuant to Section 3.8, only to the extent that the
Participant would be vested in such amounts under the provisions of the 401(k) Plan, as
determined by the Committee in its sole discretion.

	 	(d)	 	Notwithstanding anything to the contrary contained in this Section 3.7, in the
event of a Change in Control, or upon a Participant’s Disability, Separation from
Service on or after qualifying for Retirement, or death prior to Separation from
Service, any amounts that are not vested in accordance with Sections 3.7(b) or 3.7(c)
above, shall immediately become 100% vested.

	3.8	 	Crediting/Debiting of Account Balances. In accordance with, and subject to, the
rules and procedures that are established from time to time by the Committee, in its sole
discretion, amounts shall be credited or debited to a Participant’s Account Balance in
accordance with the following rules:

	 	(a)	 	Measurement Funds. Subject to the restrictions found in Section 3.8(c)
below, the Participant may elect one or more of the measurement funds selected by the
Committee, in its sole discretion, which are based on certain mutual funds (the
“Measurement Funds”), for the purpose of crediting or debiting additional amounts to
his or her Account Balance. As necessary, the Committee may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. Each such action will take effect
as of the first day of the first calendar quarter that begins at least 30 days after
the day on which the Committee gives Participants advance written notice of such
change.

 

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	 	(b)	 	Election of Measurement Funds. Subject to the restrictions found in
Section 3.8(c) below, a Participant, in connection with his or her initial deferral
election in accordance with Section 3.2 above, shall elect, on the Election Form, one
or
more Measurement Fund(s) (as described in Section 3.8(a) above) to be used to
determine the amounts to be credited or debited to his or her Account Balance. If a
Participant does not elect any of the Measurement Funds as described in the previous
sentence, the Participant’s Account Balance shall automatically be allocated into the
lowest-risk Measurement Fund, as determined by the Committee, in its sole discretion.
Subject to the restrictions found in Section 3.8(c) below, the Participant may (but
is not required to) elect, by submitting an Election Form to the Committee that is
accepted by the Committee, to add or delete one or more Measurement Fund(s) to be
used to determine the amounts to be credited or debited to his or her Account
Balance, or to change the portion of his or her Account Balance allocated to each
previously or newly elected Measurement Fund. If an election is made in accordance
with the previous sentence, it shall apply as of the first business day deemed
reasonably practicable by the Committee, in its sole discretion, and shall continue
thereafter for each subsequent day in which the Participant participates in the Plan,
unless changed in accordance with the previous sentence. Notwithstanding the
foregoing, the Committee, in its sole discretion, may impose limitations on the
frequency with which one or more of the Measurement Funds elected in accordance with
this Section 3.8(b) may be added or deleted by such Participant; furthermore, the
Committee, in its sole discretion, may impose limitations on the frequency with which
the Participant may change the portion of his or her Account Balance allocated to
each previously or newly elected Measurement Fund.

	 	(c)	 	Aaron’s, Inc. Stock Unit Fund.

	 	(i)	 	The portion of a Participant’s Account Balance attributable to
the deferral of Stock Director Fees and Restricted Stock pursuant to the terms
of this Plan will be automatically and irrevocably allocated to the Aaron’s,
Inc. Stock Unit Fund Measurement Fund. Participants may not select any other
Measurement Fund to be used to determine the amounts to be credited or debited
to the portion of their Account Balance attributable to Stock Director Fees and
Restricted Stock. Furthermore, no other portion of the Participant’s Account
Balance can be either initially allocated or re-allocated to the Aaron’s, Inc.
Stock Unit Fund. Amounts allocated to the Aaron’s, Inc. Stock Unit Fund shall
only be distributable in actual shares of Stock.

	 	(ii)	 	Any stock dividends, cash dividends or other non-cash dividends
that would have been payable on the Stock credited to a Participant’s Account
Balance shall be credited to the Participant’s Account Balance in the form of
additional shares of Stock and shall automatically and irrevocably be deemed to
be re-invested in the Aaron’s, Inc. Stock Unit Fund until such amounts are
distributed to the Participant. The number of shares credited to the
Participant for a particular stock dividend shall be equal to (A) the number of
 shares of Stock credited to the Participant’s Account Balance as of the payment
date for such dividend in respect of each share of Stock, multiplied by (B) the
number of additional or fractional shares of Stock actually paid as a dividend
in respect of each share of Stock. The number of shares credited to the
Participant for a particular cash dividend or other non-cash dividend shall be
equal to (A) the number of shares of Stock credited to the Participant’s Account
Balance as of the payment
date for such dividend in respect of each share of Stock, multiplied by (B)
the fair market value of the dividend, divided by (C) the fair market value of
the Stock on the payment date for such dividend.

	 	(iii)	 	The number of shares of Stock credited to the Participant’s
Account Balance may be adjusted by the Committee, in its sole discretion, to
prevent dilution or enlargement of a Participant’s rights with respect to the
portion of his or her Account Balance allocated to the Aaron’s, Inc. Stock Unit
Fund in the event of any reorganization, reclassification, stock split, or other
unusual corporate transaction or event which affects the value of the Stock,
provided that any such adjustment shall be made taking into account any
crediting of shares of Stock to the Participant under Section 3.8.

	 	(iv)	 	For purposes of this Section 3.8(c), the fair market value of the
Stock shall be determined by the Committee in its sole discretion.

 

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Master Plan Document

	 	(v)	 	Notwithstanding the preceding provisions of this Section, the
Committee may at any time alter the effective date of any investment or
allocation involving the Aaron’s, Inc. Stock Unit Fund pursuant to Section 12.1
(relating to safeguards against insider trading). The Committee may also, to
the extent necessary to ensure compliance with Rule 16b-3(f) of the Act, arrange
for tracking of any such transaction defined in Rule 16b-3(b)(1) of the Act and
bar any such transaction to the extent it would not be exempt under Rule
16b-3(f). The Company may also impose blackout periods pursuant to the
requirements of the Sarbanes-Oxley Act of 2002 whenever the Company determines
that circumstances warrant. Further, the Company may impose quarterly blackout
periods on insider trading in the Aaron’s, Inc. Stock Unit Fund as needed (as
determined by the Company), timed to coincide with the release of the Company’s
quarterly earnings reports. The commencement and termination of these blackout
periods in each quarter, the parties to which they apply and the activities they
restrict shall be as set forth in the official insider trading policy
promulgated by the Company from time to time.

	 	(d)	 	Proportionate Allocation. In making any election described in Section
3.8(b) above, the Participant shall specify on the Election Form, in increments of one
percent (1%), the percentage of his or her Account Balance or Measurement Fund, as
applicable, to be allocated/reallocated.

	 	(e)	 	Crediting or Debiting Method. The performance of each Measurement Fund
(either positive or negative) will be determined on a daily basis based on the manner
in which such Participant’s Account Balance has been hypothetically allocated among the
Measurement Funds by the Participant.

	 	(f)	 	No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant’s election of any such Measurement Fund,
the allocation of his or her Account Balance thereto, the calculation of additional
amounts and the crediting or debiting of such amounts to a Participant’s Account
Balance shall not be considered or construed in any manner as an actual investment of
his or her Account Balance in any such Measurement Fund. In the event that the Company
or the Trustee (as that term is defined in the Trust), in its own discretion, decides
to invest funds in any or all
of the investments on which the Measurement Funds are based, no Participant shall
have any rights in or to such investments themselves. Without limiting the
foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry
only and shall not represent any investment made on his or her behalf by the Company
or the Trust; the Participant shall at all times remain an unsecured creditor of the
Company.

	3.9	 	FICA and Other Taxes.

	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s Employer(s)
shall withhold from that portion of the Participant’s Base Salary, Bonus and/or LTIP
Amounts that is not being deferred, in a manner determined by the Employer(s), the
Participant’s share of FICA and other employment taxes on such Annual Deferral Amount.
If necessary, the Committee may reduce the Annual Deferral Amount in order to comply
with this Section 3.9.

	 	(b)	 	Company Restoration Matching Amounts and Company Contribution Amounts.
When a Participant becomes vested in a portion of his or her Account Balance
attributable to any Company Restoration Matching Amounts and/or Company Contribution
Amounts, the Participant’s Employer(s) shall withhold from that portion of the
Participant’s Base Salary, Bonus and/or LTIP Amounts that is not deferred, in a manner
determined by the Employer(s), the Participant’s share of FICA and other employment
taxes on such amounts. If necessary, the Committee may reduce the vested portion of
the Participant’s Company Restoration Matching Amount or Company Contribution Amount,
as applicable, in order to comply with this Section 3.9.

	 	(c)	 	Restricted Stock Amounts. For each Plan Year in which a Restricted
Stock Amount is being first withheld from an Employee Participant, the Participant’s
Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus,
LTIP Amounts and/or Restricted Stock that is not being deferred, in a manner determined
by the Employer(s), the Participant’s share of FICA and other employment taxes on such
Restricted Stock Amount. If necessary, the Committee may reduce the Restricted Stock
Amount in order to comply with this Section 3.9.

	 	(d)	 	Distributions. The Participant’s Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.

 

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Master Plan Document

ARTICLE 4

Scheduled Distribution; Unforeseeable Emergencies 

	4.1	 	Scheduled Distributions. In connection with each election to defer an Annual
Deferral Amount, a Participant may elect to receive all or a portion of such Annual Deferral
Amount, plus amounts credited or debited on that amount pursuant to Section 3.8, in the form
of a lump sum payment, calculated as of the close of business on or around the Benefit
Distribution Date designated by the Participant in accordance with this Section (a “Scheduled
Distribution”). The Benefit
Distribution Date for the amount subject to a Scheduled Distribution election shall be the
first day of any Plan Year designated by the Participant, which may be no sooner than 3 Plan
Years after the end of the Plan Year to which the Participant’s deferral election relates,
unless otherwise provided on an Election Form approved by the Committee.

Subject to the other terms and conditions of this Plan, each Scheduled Distribution elected
shall be paid out during a 60 day period commencing immediately after the Benefit
Distribution Date. By way of example, if a Scheduled Distribution is elected for the Annual
Deferral Amount earned in the Plan Year commencing January 1, 2010, the earliest Benefit
Distribution Date that may be designated by a Participant would be January 1, 2014, and the
Scheduled Distribution would be paid out during the 60 day period commencing immediately
after such Benefit Distribution Date.

	4.2	 	Postponing Scheduled Distributions. A Participant may elect to postpone a Scheduled
Distribution described in Section 4.1 above, and have such amount paid out during a 60 day
period commencing immediately after an allowable alternative Benefit Distribution Date
designated in accordance with this Section 4.2. In order to make such an election, the
Participant must submit an Election Form to the Committee in accordance with the following
criteria:

	 	(a)	 	The election of the new Benefit Distribution Date shall have no effect until at
least 12 months after the date on which the election is made;

	 	(b)	 	The new Benefit Distribution Date selected by the Participant for such
Scheduled Distribution must be the first day of a Plan Year that is no sooner than 5
years after the previously designated Benefit Distribution Date; and

	 	(c)	 	The election must be made at least 12 months prior to the Participant’s
previously designated Benefit Distribution Date for such Scheduled Distribution.

For purposes of applying the provisions of this Section 4.2, a Participant’s election to
postpone a Scheduled Distribution shall not be considered to be made until the date on which
the election becomes irrevocable. Such an election shall become irrevocable no later than
the date that is 12 months prior to the Participant’s previously designated Benefit
Distribution Date for such Scheduled Distribution.

	4.3	 	Other Benefits Take Precedence Over Scheduled Distributions. Should an event occur
prior to any Benefit Distribution Date designated for a Scheduled Distribution that would
trigger a benefit under Articles 5 through 8, as applicable, all amounts subject to a
Scheduled Distribution election shall be paid in accordance with the other applicable
provisions of the Plan and not in accordance with this Article 4.

 

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	4.4	 	Unforeseeable Emergencies.

	 	(a)	 	If a Participant experiences an Unforeseeable Emergency prior to the occurrence
of a distribution event described in Articles 5 through 8, as applicable, the
Participant may petition the Committee to receive a partial or full payout from the
Plan. The payout, if any, from the Plan shall not exceed the lesser of (i) the
Participant’s vested Account Balance, excluding the portion of the Account Balance
attributable to the Restricted Stock Account, calculated as of the close
of business on or around the Benefit Distribution Date for such payout, as determined
by the Committee in accordance with provisions set forth below, or (ii) the amount
necessary to satisfy the Unforeseeable Emergency, plus amounts necessary to pay
Federal, state, or local income taxes or penalties reasonably anticipated as a result
of the distribution. A Participant shall not be eligible to receive a payout from
the Plan to the extent that the Unforeseeable Emergency is or may be relieved (A)
through reimbursement or compensation by insurance or otherwise, (B) by liquidation
of the Participant’s assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship or (C) by cessation of deferrals under this
Plan.

If the Committee, in its sole discretion, approves a Participant’s petition for
payout from the Plan, the Participant’s Benefit Distribution Date for such payout
shall be the date on which such Committee approval occurs and such payout shall be
distributed to the Participant in a lump sum no later than 60 days after such Benefit
Distribution Date. In addition, in the event of such approval the Participant’s
outstanding deferral elections under the Plan shall be cancelled.

	 	(b)	 	A Participant’s deferral elections under this Plan shall also be cancelled to
the extent the Committee determines that such action is required for the Participant to
obtain a hardship distribution from an Employer’s 401(k) Plan pursuant to Treas. Reg.
§1.401(k)-1(d)(3).

ARTICLE 5

Retirement Benefit

	5.1	 	Retirement Benefit. If a Participant experiences a Separation from Service that
qualifies as a Retirement, the Participant shall be eligible to receive his or her vested
Account Balance in either a lump sum or annual installment payments, as elected by the
Participant in accordance with Section 5.2 (the “Retirement Benefit”). A Participant’s
Retirement Benefit shall be calculated as of the close of business on or around the applicable
Benefit Distribution Date for such benefit, which shall be the first day after the end of the
6-month period immediately following the date on which the Participant experiences such
Separation from Service; provided, however, if a Participant changes the form of distribution
for one or more Annual Accounts in accordance with Section 5.2(b), the Benefit Distribution
Date for the Annual Account(s) subject to such change shall be determined in accordance with
Section 5.2(b).

	5.2	 	Payment of Retirement Benefit.

	 	(a)	 	In connection with a Participant’s election to defer an Annual Deferral Amount,
the Participant shall elect the form of Retirement Benefit in which his or her Annual
Account for such Plan Year will be paid. The Participant may elect to receive the
Retirement Benefit for each Annual Account in the form of a lump sum payment or
pursuant to an Annual Installment Method of 5, 10 or 15 years. If a Participant does
not make any election with respect to the Retirement Benefit for an Annual Account,
then the Participant shall be deemed to have elected to receive such Annual Account as
a lump sum.

	 	(b)	 	A Participant may change the form of Retirement Benefit payment for an Annual
Account by submitting an Election Form to the Committee in accordance with the
following criteria:

	 	(i)	 	The election shall not take effect until at least 12 months after
the date on which the election is made;

	 	(ii)	 	The new Benefit Distribution Date for such Annual Account shall
be 5 years after the Benefit Distribution Date that would otherwise have been
applicable to such Annual Account; and

	 	(iii)	 	The election must be made at least 12 months prior to the
Benefit Distribution Date that would otherwise have been applicable to such
Annual Account.

 

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Master Plan Document

For purposes of applying the provisions of this Section 5.2(b), a Participant’s
election to change the form of Retirement Benefit payment for an Annual Account shall
not be considered to be made until the date on which the election becomes
irrevocable. Such an election shall become irrevocable no later than the date that
is 12 months prior to the Benefit Distribution Date that would otherwise have been
applicable to such Annual Account. Subject to the requirements of this Section
5.2(b), the Election Form most recently accepted by the Committee that has become
effective for an Annual Account shall govern the form of payout of such Annual
Account.

	 	(c)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the applicable Benefit Distribution Date. Remaining
installments, if any, shall continue in accordance with the Participant’s election for
each Annual Account and shall be paid no later than 60 days after each anniversary of
the Benefit Distribution Date.

ARTICLE 6

Termination Benefit

	6.1	 	Termination Benefit. If a Participant experiences a Separation from Service that
does not qualify as a Retirement, the Participant shall receive his or her vested
Account Balance in the form of a lump sum payment or annual installment payments, as elected
by Participant in accordance with Section 6.2 (the “Termination Benefit”). A Participant’s
Termination Benefit shall be calculated as of the close of business on or around the Benefit
Distribution Date for such benefit, which shall be the first day after the end of the 6-month
period immediately following the date on which the Participant experiences such Separation
from Service.

	6.2	 	Payment of Termination Benefit.

	 	(a)	 	In connection with a Participant’s election to defer an Annual Deferral Amount,
the Participant shall elect the form of Termination Benefit in which his or her Annual
Account for such Plan Year will be paid. The Participant may elect to receive the
Termination Benefit for each Annual Account in the form of a lump sum payment or
pursuant to an Annual Installment Method of 5 years. If a Participant does not make
any election with respect to the Termination Benefit for an Annual Account, then the
Participant shall be deemed to have elected to receive such Annual Account as a lump
sum.

	 	(b)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the Participant’s Benefit Distribution Date. Remaining
installments, if any, shall be paid no later than 60 days after each anniversary of the
Participant’s Benefit Distribution Date.

ARTICLE 7

Disability Benefit

	7.1	 	Disability Benefit. If a Participant becomes Disabled prior to the occurrence of a
distribution event described in Articles 5 or 6, as applicable, the Participant shall receive
his or her vested Account Balance in the form of a lump sum payment (the “Disability
Benefit”). The Disability Benefit shall be calculated as of the close of business on or
around the Participant’s Benefit Distribution Date for such benefit, which shall be the date
on which the Participant becomes Disabled.

	7.2	 	Payment of Disability Benefit. The Disability Benefit shall be paid to the
Participant no later than 60 days after the Participant’s Benefit Distribution Date.

ARTICLE 8

Death Benefit

	8.1	 	Death Benefit. In the event of a Participant’s death prior to the complete
distribution of his or her vested Account Balance, the Participant’s Beneficiary(ies) shall
receive the Participant’s unpaid vested Account Balance in a lump sum payment (the “Death
Benefit”). The Death Benefit shall be calculated as of the close of business on or around the
Benefit Distribution Date for such benefit, which shall be the date of the Participant’s
death.

	8.2	 	Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s
Beneficiary(ies) no later than 60 days after the Participant’s Benefit Distribution Date.

 

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Master Plan Document

ARTICLE 9

Beneficiary Designation

	9.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable
under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary designation under any
other plan of an Employer in which the Participant participates.

	9.2	 	Beneficiary Designation; Change. A Participant shall designate his or her
Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to
the Committee or its designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary
Designation Form and the Committee’s rules and procedures, as in effect from time to time.
Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and accepted by the Committee
prior to his or her death.

	9.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Committee or its designated agent.

	9.4	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If
the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the Participant’s
estate.

	9.5	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in
its discretion, to cause the Participant’s Employer to withhold such payments until this
matter is resolved to the Committee’s satisfaction.

	9.6	 	Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary
shall fully and completely discharge all Employers and the Committee from all further
obligations under this Plan with respect to the Participant, and that Participant’s Plan
Agreement shall terminate upon such full payment of benefits.

ARTICLE 10

Leave of Absence

	10.1	 	Paid Leave of Absence. If a Participant is authorized by the Participant’s Employer
to take a paid leave of absence from the employment of the Employer, and such leave of absence
does not constitute a Separation from Service, (a) the Participant shall continue to be
considered eligible for the benefits provided under the Plan, and (b) the Annual Deferral
Amount and any previously elected deferrals of Restricted Stock shall continue to be withheld
during such paid leave of absence in accordance with Section 3.2.

	10.2	 	Unpaid Leave of Absence. If a Participant is authorized by the Participant’s
Employer to take an unpaid leave of absence from the employment of the Employer for any
reason, and such leave of absence does not constitute a Separation from Service, such
Participant shall continue to be eligible for the benefits provided under the Plan. During
the unpaid leave of absence, the Participant shall not be allowed to make any additional
deferral elections. However, if the Participant returns to employment, the Participant may
elect to defer an Annual Deferral Amount and Restricted Stock Amount for the Plan Year
following his or her return to employment and for every Plan Year thereafter while a
Participant in the Plan, provided such deferral elections are otherwise allowed and an
Election Form is delivered to and accepted by the Committee for each such election in
accordance with Section 3.2 above.

 

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Aaron’s, Inc.

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Master Plan Document

ARTICLE 11

Termination of Plan, Amendment or Modification

	11.1	 	Termination of Plan. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any Employer will continue
the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer
reserves the right to terminate the Plan with respect to all of its Participants. In the
event of a Plan termination no new deferral elections shall be permitted for the affected
Participants and such Participants shall no longer be eligible to receive new company
contributions. However, after the Plan termination the Account Balances of such Participants
shall continue to be credited with Annual Deferral Amounts and/or Restricted Stock Amounts,
as applicable, attributable to a deferral election that was in effect prior to the Plan
termination to the extent deemed necessary to comply with Code Section 409A and related
Treasury regulations, and additional amounts shall continue to credited or debited to such
Participants’ Account Balances pursuant to Section 3.8. The Measurement Funds available to
Participants following the termination of the Plan shall be comparable in number and type to
those Measurement Funds available to Participants in the Plan Year preceding the Plan Year in
which the Plan termination is effective. In addition, following a Plan termination,
Participant Account Balances shall remain in the Plan and shall not be distributed until such
amounts become eligible for distribution in accordance with the other applicable provisions of
the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg.
§1.409A-3(j)(4)(ix), the Employer may provide that upon termination of the Plan, all Account
Balances of the Participants shall be distributed, subject to and in accordance with any rules
established by such Employer deemed necessary to comply with the applicable requirements and
limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

	 
	11.2	 	Amendment. Any Employer may, at any time, amend or modify the Plan in whole or in
part with respect to that Employer. Notwithstanding the foregoing, (a) no amendment or
modification shall be effective to decrease the value of a Participant’s vested Account
Balance in existence at the time the amendment or modification is made, and (b) no amendment
or modification of this Section 11.2 or Section 12.2 of the Plan shall be effective.

	 
	11.3	 	Plan Agreement. Despite the provisions of Sections 11.1, if a Participant’s Plan
Agreement contains benefits or limitations that are not in this Plan document, the Employer
may only amend or terminate such provisions with the written consent of the Participant.

	 
	11.4	 	Effect of Payment. The full payment of the Participant’s vested Account Balance in
accordance with the applicable provisions of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under this Plan, and the
Participant’s Plan Agreement shall terminate.

ARTICLE 12

Administration

	12.1	 	Committee Duties. Except as otherwise provided in this Article 12, this Plan shall
be administered by a Committee, which shall consist of the Board, or such committee as the
Board shall appoint. Members of the Committee
may be Participants under this Plan. The Committee shall also have the discretion and
authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations
for the administration of this Plan, and (b) decide or resolve any and all questions,
including benefit entitlement determinations and interpretations of this Plan, as may arise
in connection with the Plan. Any individual serving on the Committee who is a Participant
shall not vote or act on any matter relating solely to himself or herself. When making a
determination or calculation, the Committee shall be entitled to rely on information
furnished by a Participant or the Company.

	 
	 	 	Notwithstanding any other provision of the Plan except provisions relating to compliance
with Code Section 409A, the Committee may take any action it deems is necessary to assure
compliance with any policy of the Company respecting insider trading as may be in effect
from time to time. Such actions may include altering the effective date of intra-fund
transfers or the distribution date of Annual Accounts. Any such actions shall alter the
normal operation of the Plan to the minimum extent necessary.

 

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Master Plan Document

	12.2	 	Administration Upon Change In Control. Within 120 days following a Change in Control,
the individuals who comprised the Committee immediately prior to the Change in Control
(whether or not such individuals are members of the Committee following the Change in Control)
may, by written consent of the majority of such individuals, appoint an independent third
party administrator (the “Administrator”) to perform any or all of the Committee’s duties
described in Section 12.1 above, including without limitation, the power to determine any
questions arising in connection with the administration or interpretation of the Plan, and the
power to make benefit entitlement determinations. Upon and after the effective date of such
appointment, (a) the Company must pay all reasonable administrative expenses and fees of the
Administrator, and (b) the Administrator may only be terminated with the written consent of
the majority of Participants with an Account Balance in the Plan as of the date of such
proposed termination.

	12.3	 	Agents. In the administration of this Plan, the Committee or the Administrator, as
applicable, may, from time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed representative) and may from
time to time consult with counsel.

	12.4	 	Binding Effect of Decisions. The decision or action of the Committee or
Administrator, as applicable, with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

	12.5	 	Indemnity of Committee. The Employer shall indemnify and hold harmless the members
of the Committee, any Employee to whom the duties of the Committee may be delegated, and the
Administrator against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such Employee or the Administrator.

	12.6	 	Employer Information. To enable the Committee and/or Administrator to perform its
functions, the Company shall supply full and timely information to the Committee and/or
Administrator, as the case may be, on all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the Participants, the
compensation of its Participants, the date and
circumstances of the Separation from Service,
Disability or death of its Participants, and
such other pertinent information as the
Committee or Administrator may reasonably
require.

	12.7	 	Section 16 Compliance.

	 	(a)	 	This Plan is intended to be a formula plan for purposes of Section 16 of the
Act. Accordingly, in the case of a deferral or other action under the Plan that
constitutes a transaction that could be covered by Rule 16b-3(d) or (e), if it were
approved by the Company’s Board or Compensation Committee (“Board Approval”), it is
intended that the Plan shall be administered by delegates of the Compensation
Committee, in the case of a Participant who is subject to Section 16 of the Act, in a
manner that will permit the Board Approval of the Plan to avoid any additional Board
Approval of specific transactions to the maximum possible extent.

	 	(b)	 	This Subsection shall govern the distribution of a deferral that (i) is wholly
or partly invested in the Aaron’s, Inc. Stock Unit Fund at the time the deferral would
be valued to determine the amount of cash to be distributed to a Participant, (ii)
either was the subject of a revised payment election or was not covered by an
agreement, made at the time of the Participant’s original deferral election, that any
investments in the Aaron’s, Inc. Stock Unit Fund would, once made, remain in that fund
until distribution of the deferral, and (iii) is made to a Participant who is subject
to Section 16 of the Act at the time the interest in the Aaron’s, Inc. Stock Unit Fund
would be liquidated in connection with the distribution, and (iv) if paid at the time
the distribution would be made without regard to this subsection, could result in a
violation of Section 16 of the Act because there is an opposite way transaction that
would be matched with the liquidation of the Participant’s interest in the Aaron’s,
Inc. Stock Unit Fund (either as a discretionary transaction (within the meaning of Rule
16b-3(b)(1)) or as a regular transaction, as applicable) (a “Covered Distribution”).
In the case of a Covered Distribution, if the liquidation of the Participant’s interest
in the Aaron’s, Inc. Stock Unit Fund in connection with the distribution has not
received Board approval by the time the distribution would be made if it were not a
Covered Distribution, or if it is a discretionary transaction, then the actual
distribution to the Participant shall be delayed only until the earlier of:

	 	(i)	 	In the case of a transaction that is not a discretionary
transaction, Board Approval of the liquidation of the Participant’s interest in
the Aaron’s, Inc. Stock Unit Fund in connection with the distribution, and

	 	(ii)	 	The date the distribution would no longer violate Section 16 of
the Act, e.g., when the Participant is no longer subject to Section 16 of the
Act, when the Annual Account related to the distribution is no longer invested
in the Aaron’s, Inc. Stock Unit Fund or when the time between the liquidation
and an opposite way transaction is sufficient.

 

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Deferred Compensation Plan

Master Plan Document

ARTICLE 13

Other Benefits and Agreements

	13.1	 	Coordination with Other Benefits. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any
other plan or program for employees of the Participant’s Employer. The Plan shall
supplement and shall not supersede, modify or amend any other such plan or program except as
may otherwise be expressly provided.

ARTICLE 14

Claims Procedures

	14.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within 60 days after such notice was received by the
Claimant. All other claims must be made within 180 days of the date on which the event that
caused the claim to arise occurred. The claim must state with particularity the determination
desired by the Claimant.

	14.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than 90 days after receiving the claim. If the Committee
determines that special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the termination of
the initial 90 day period. In no event shall such extension exceed a period of 90 days from
the end of the initial period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to render the
benefit determination. The Committee shall notify the Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or

	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any part
of it;

	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;

	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;

	 	(iv)	 	an explanation of the claim review procedure set forth in
Section 14.3 below; and

	 	(v)	 	a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

	14.3	 	Review of a Denied Claim. On or before 60 days after receiving a notice from the
Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s
duly authorized representative) may file with the Committee a written request for a review of
the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claim for benefits;

	 	(b)	 	may submit written comments or other documents; and/or

	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may grant.

 

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Deferred Compensation Plan

Master Plan Document

	14.4	 	Decision on Review. The Committee shall render its decision on review promptly, and
no later than 60 days after the Committee receives the Claimant’s written request for a review
of the denial of the claim. If the Committee determines that special circumstances require an
extension of time for processing the claim, written notice of the extension shall be furnished
to the Claimant prior to the termination of the initial 60 day period. In no event shall such
extension exceed a period of 60 days from the end of the initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and the date by which
the Committee expects to render the benefit determination. In rendering its decision, the
Committee shall take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination. The decision must be
written in a manner calculated to be understood by the Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;

	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the decision
was based;

	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and

	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

	14.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this
Article 14 is a mandatory prerequisite to a Claimant’s right to commence any legal action with
respect to any claim for benefits under this Plan. 

ARTICLE 15

Trust

	15.1	 	Establishment of the Trust. In order to provide assets from which to fulfill its
obligations to the Participants and their Beneficiaries under the Plan, the Company may
establish a trust by a trust agreement with a third party, the trustee, to which the Employer
may, in its discretion, contribute cash or other property, including securities issued by the
Company, to provide for the benefit payments under the Plan (the “Trust”).

	15.2	 	Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions pursuant to the
Plan. The provisions of the Trust shall govern the rights of the Employer, Participants and
the creditors of the
Employer to the assets transferred to the Trust. The Employer shall at all times remain
liable to carry out its obligations under the Plan.

	15.3	 	Distributions From the Trust. The Employer’s obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such
distribution shall reduce the Employer’s obligations under this Plan.

ARTICLE 16

Miscellaneous

	16.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted (a) to the extent possible in a
manner consistent with the intent described in the preceding sentence, and (b) in accordance
with Code Section 409A and related Treasury guidance and regulations.

	16.2	 	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any property or
assets of an Employer. For purposes of the payment of benefits under this Plan, any and all
of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of
the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

 

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Deferred Compensation Plan

Master Plan Document

	16.3	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be
defined only by the Plan and the Plan Agreement, as entered into between the Employer and a
Participant. An Employer shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.

	 
	16.4	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise, including but not limited to a domestic relations order.

	 
	16.5	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between the Employer and the Participant. Such
employment is hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment agreement. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the service of the
Employer, either as an Employee or a Director, or to interfere with the right of the
Employer to discipline or discharge the Participant at any time.

	 
	16.6	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with
the Committee by furnishing any and all information requested by the Committee and take such
other actions as may be requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.

	 
	16.7	 	Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.

	 
	16.8	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.

	 
	16.9	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Georgia without regard to its
conflicts of laws principles.

	 
	16.10	 	Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

	 	 	 	 	 
	 

	 	Aaron’s, Inc.
	 	 
	 

	 	Attn: James L. Cates	 	 
	 

	 	309 East Paces Ferry Road NE	 	 
	 

	 	Atlanta, GA 30305-2377	 	 

	 	 	Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.

	 
	 	 	Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.

	 
	16.11	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.

 

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Aaron’s, Inc.

Deferred Compensation Plan

Master Plan Document

	16.12	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass to the Participant
and shall not be transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate succession.

	 
	16.13	 	Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal or invalid
provision had never been inserted herein.

	 
	16.14	 	Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the Participant
and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.

	 
	16.15	 	Distribution in the Event of Income Inclusion Under Code Section 409A. If any
portion of a Participant’s Account Balance under this Plan is required to be included in
income by the Participant prior to receipt due to a failure of this Plan to comply with the
requirements of Code Section 409A and related Treasury regulations, the Committee may
determine that such Participant shall receive a distribution from the Plan in an amount equal
to the lesser of (i) the portion of his or her Account Balance required to be included in
income as a result of the failure of the Plan to comply with the requirements of Code Section
409A and related Treasury regulations, or (ii) the unpaid vested Account Balance.

	 
	16.16	 	Deduction Limitation on Benefit Payments. If the Employer reasonably anticipates
that the Employer’s deduction with respect to any distribution from this Plan would be limited
or eliminated by application of Code Section 162(m), then to the extent permitted by Treas.
Reg. §1.409A-2(b)(7)(i), payment shall be delayed as deemed necessary to ensure that the
entire amount of any distribution from this Plan is deductible. Any amounts for which
distribution is delayed pursuant to this Section shall continue to be credited/debited with
additional amounts in accordance with Section 3.8. The delayed amounts (and any amounts
credited thereon) shall be distributed to the Participant (or his or her Beneficiary in the
event of the Participant’s death) at the earliest date the Employer reasonably anticipates
that the deduction of the payment of the amount will not be limited or eliminated by
application of Code Section 162(m).

IN WITNESS WHEREOF, the Company has signed this Plan document as of                     , 2009.

	 	 	 	 	 	 	 	 	 
	 	 	“Company”

Aaron’s, Inc.,

a Georgia corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

-21-

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