Document:

EX-10.1

Exhibit 10.1

RESTRICTED SHARE AWARD AGREEMENT

PURSUANT TO THE VECTOR GROUP LTD.

AMENDED AND RESTATED 1999 LONG-TERM INCENTIVE PLAN

          THIS RESTRICTED SHARE AWARD AGREEMENT, effective as of April 7, 2009, by and between Vector
Group Ltd., a Delaware corporation (the “Company”), and Howard M. Lorber (the “Executive”).

WITNESSETH:

          A. WHEREAS, the Executive serves as President and Chief Executive Officer of the Company,
pursuant to an Amended and Restated Employment Agreement dated as of January 27, 2006 (the
“Employment Agreement”); and

          B. WHEREAS, the Company wishes to retain the Executive by awarding him a proprietary interest
in the Company through ownership of an equity interest therein, which interest shall be subject to
the restrictions on vesting and transferability hereinafter set forth;

          NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the Company and the
Executive hereby agree as follows:

     1. Share Award.

          Subject to the terms and conditions of this Agreement, the Company hereby grants to the
Executive 500,000 shares (collectively, the “Award Shares”) of its Common Stock, $.10 par value per
share (the “Common Stock”), pursuant to the Company’s Amended and Restated 1999 Long-Term Incentive
Plan as in effect and amended from time to time (the “Plan”). Except to the extent otherwise
provided herein, the Award Shares shall vest in the Executive to the extent of 100,000 shares on
September 15, 2010 and on each anniversary thereof through September 15, 2014.

 

 

     2. Issuance; Transfer Restrictions.

          Certificates for the Award Shares shall be issued in the name of the Executive as soon as
practicable after the date hereof, provided the Executive has (i) executed appropriate blank stock
powers and any other documents which the Company may reasonably require and (ii) delivered to the
Company a check for $50,000, representing the par value of the Award Shares. The certificates for
the unvested Award Shares shall be deposited, together with the stock powers, or other documents
required by the Company, with the Company. Except to the extent provided in Section 7 hereof or as
otherwise provided by the terms of this Agreement, upon deposit of such unvested Award Shares with
the Company, the Executive shall have all of the rights of a shareholder with respect to such
shares, including the right to vote the shares and to receive all dividends or other distributions,
if any, paid or made with respect to such shares. Upon vesting of any portion of the Award Shares,
the Company shall cause a stock certificate for such shares to be delivered to the Executive. No
interest in this Agreement or in any portion of the Award Shares may be sold, transferred,
assigned, pledged, encumbered or otherwise alienated or hypothecated, nor shall certificates for
any Award Shares be delivered to the Executive, except to the extent of any portion of the Award
Shares that has vested in the Executive in accordance with the terms hereof.

     3. Certificates Legended.

          The Executive acknowledges that
certificates for the Award Shares shall bear the legends required by
Section 8.1 of the Plan.

- 2 -

 

The
Company shall enter in its records a notation of the foregoing legends and of the
restrictions on transfer provided therein.

     4. Termination of Employment.

          Except to the extent provided in Section 5 hereof, in the event the Executive’s employment
with the Company is terminated for any reason, any remaining balance of the Award Shares not
theretofore vested shall be forfeited by the Executive and transferred back to the Company, without
payment of any consideration by the Company.

     5. Vesting.

          In the event of (i) the death or Disability of the Executive, (ii) the termination of the
Executive’s employment by the Company without cause, (iii) the voluntary termination by the
Executive of his employment (to the extent the provisions of Section 6(a) of the Employment
Agreement apply), or (iv) the occurrence of a Change of Control of the Company, any remaining
balance of the Award Shares not theretofore vested in the Executive shall vest immediately in the
Executive. For purposes of this Agreement, the term “Cause” is as defined in Section 6(d) of the
Employment Agreement, and the term “Change of Control” is as defined in Section 6(f) of the
Employment Agreement, other than any Change of Control arising by reason of a testamentary bequest
by Bennett S. LeBow to or for the benefit of his surviving spouse of any or all securities of the
Company beneficially owned by him as of his date of death so long as, following the bequest, the
event referenced in Section 6(f)(ii) of the Employment Agreement shall not have occurred.

     6. Adjustment of Award Shares.

          In the event of any change in the outstanding shares of the same class of shares of the
Company as the Award Shares by reason of a stock dividend, recapitalization, merger, consolidation,
split-up, subdivision, contribution or exchange of shares, or the like, the aggregate number and
kind of Award Shares shall be proportionately adjusted by the Company.

- 3 -

 

     7. Dividend Payments.

          With respect to any unvested portion of the Award Shares, the Executive shall be entitled to
receive a payment equal to the amount that would otherwise have been paid on or after the date
hereof as dividends or other distributions on the Award Shares had such unvested portion been
vested in the Executive as of the record date for such dividend or other distribution, provided
such payment shall only be made to the Executive at the time of vesting of the unvested portion of
the Award Shares on which such dividend or other distribution was paid.

     8. Limitations.

          Nothing in this Agreement shall be construed to provide the Executive any rights whatsoever
with respect to the Award Shares except as specifically provided herein, or constitute evidence of
any agreement or understanding, express or implied, that the Company shall employ the Executive
other than as provided in the Employment Agreement.

     9. Tax Withholding.

          The Company may, in its discretion, require the Executive to pay to the Company, at the time
any portion of the Award Shares vests in the Executive or any amounts are

- 4 -

 

paid
under Section 7, an amount that the Company deems necessary to satisfy its obligations to withhold
federal, state or local income or other taxes incurred by reason thereof.

     10. Incorporation by Reference; Plan Document Receipt.

          This Agreement is subject in all respects to the terms and provisions of the Plan (including,
without limitation, any amendments thereto adopted at any time and from time to time unless such
amendments are expressly intended not to apply to the award provided hereunder), all of which terms
and provisions are made a part of and incorporated in this Agreement as if they were expressly set
forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is
ascribed thereto in the Plan. The Executive hereby acknowledges receipt of a true copy of the Plan
and that the Executive has read the Plan carefully and fully understands its content. In the event
of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan
shall control.

     11. Miscellaneous.

          a. The parties agree to execute such further instruments and to take such further action as
may reasonably be necessary to carry out the intent of this Agreement.

          b. All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand or overnight delivery service or
mailed within the continental United States by first class, certified mail, return receipt
requested, to the applicable party and addressed as follows:

if to the Company:

Vector Group Ltd.

100 S.E. Second Street, 32nd Floor

Miami, Florida 33131

Attn:     Vice President

               and General Counsel

- 5 -

 

if to the Executive:

Howard M. Lorber

[address]

Addresses may be changed by notice in writing signed by the addressee.

          c. This Agreement shall not entitle the Executive to any preemptive rights to subscribe to any
securities of any kind hereinafter issued by the Company.

          d. This Agreement shall inure to the benefit of the successors and assigns of the Company and,
subject to the restrictions on the Executive herein set forth, be binding upon and inure to the
benefit of the Executive, his heirs, executors, administrators, successors and assigns.

          e. This Agreement contains the entire agreement between the parties hereto with respect to the
subject matter contained herein, and supersedes all prior agreements or prior understandings,
whether written or oral, between the parties relating to such subject matter. The Board or the
Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time
to time in accordance with and as provided in the Plan; provided, however, that no
such modification or amendment shall materially adversely affect the rights of the Executive under
this Agreement without the consent of the Executive. The Company shall give notice to the
Executive of any such modification or amendment of this Agreement as soon as practicable after the
adoption thereof. This Agreement may also be modified or amended by a writing signed by both the
Company and the Executive.

- 6 -

 

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	VECTOR GROUP LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Richard J. Lampen	 	 
	 

	 	 	 	     Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Howard M. Lorber	 	 

- 7 -EX-10.1

Exhibit 10.1

AARON RENTS, INC.

2001 STOCK OPTION AND INCENTIVE AWARD PLAN

As Amended and Restated

Effective as of February 24, 2009

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1 - GENERAL PROVISIONS	 	 	1	 
	 	 	 	 	 	 	 	 	 
	 	1.1	 	 	Amendment and Restatement of Plan
	 	 	1	 
	 	1.2	 	 	Purpose of Plan
	 	 	1	 
	 	1.3	 	 	Types of Awards
	 	 	1	 
	 	1.4	 	 	Effective Date
	 	 	1	 
	 	1.5	 	 	Duration of the Plan
	 	 	1	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 2 - DEFINITIONS	 	 	1	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 3 - ADMINISTRATION	 	 	6	 
	 	 	 	 	 	 	 	 	 
	 	3.1	 	 	General
	 	 	6	 
	 	3.2	 	 	Authority of the Committee
	 	 	7	 
	 	3.3	 	 	Participation Outside of the United States
	 	 	7	 
	 	3.4	 	 	Delegation of Authority
	 	 	7	 
	 	3.5	 	 	Award Agreements
	 	 	7	 
	 	3.6	 	 	Indemnification
	 	 	8	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 4 - SHARES SUBJECT TO THE PLAN	 	 	8	 
	 	 	 	 	 	 	 	 	 
	 	4.1	 	 	Number of Shares
	 	 	8	 
	 	4.2	 	 	Individual Limits
	 	 	9	 
	 	4.3	 	 	Adjustment of Shares
	 	 	10	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 5 - STOCK OPTIONS	 	 	10	 
	 	 	 	 	 	 	 	 	 
	 	5.1	 	 	Grant of Options
	 	 	10	 
	 	5.2	 	 	Agreement
	 	 	11	 
	 	5.3	 	 	Option Exercise Price
	 	 	11	 
	 	5.4	 	 	Duration of Options
	 	 	11	 
	 	5.5	 	 	Exercise of Options
	 	 	11	 
	 	5.6	 	 	Payment
	 	 	11	 
	 	5.7	 	 	Nontransferability of Options
	 	 	12	 
	 	5.8	 	 	Special Rules for ISOs
	 	 	12	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 6 - STOCK APPRECIATION RIGHTS	 	 	12	 
	 	 	 	 	 	 	 	 	 
	 	6.1	 	 	Grant of Stock Appreciation Rights (or SARs)
	 	 	12	 
	 	6.2	 	 	Agreement
	 	 	13	 
	 	6.3	 	 	Tandem SARs
	 	 	13	 
	 	6.4	 	 	Payment
	 	 	13	 
	 	6.5	 	 	Exercise of SARs
	 	 	13	 

-i-

 

Table
of Contents
(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 7 - STOCK AWARDS, RESTRICTED STOCK AND RESTRICTED STOCK UNITS	 	 	13	 
	 	 	 	 	 	 	 	 	 
	 	7.1	 	 	Grant of Stock Awards, Restricted Stock and Restricted Stock Units
	 	 	13	 
	 	7.2	 	 	Restricted Stock Agreement
	 	 	14	 
	 	7.3	 	 	Restricted Stock Unit Agreement
	 	 	14	 
	 	7.4	 	 	Nontransferability
	 	 	14	 
	 	7.5	 	 	Certificates
	 	 	14	 
	 	7.6	 	 	Dividends and Other Distributions
	 	 	15	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 8 - PERFORMANCE SHARES AND UNITS	 	 	15	 
	 	 	 	 	 	 	 	 	 
	 	8.1	 	 	Grant of Performance Shares/Units
	 	 	15	 
	 	8.2	 	 	Value of Performance Shares/Units
	 	 	15	 
	 	8.3	 	 	Earning of Performance Shares/Units
	 	 	15	 
	 	8.4	 	 	Form and Timing of Payment of Performance Shares/Units
	 	 	15	 
	 	8.5	 	 	Nontransferability
	 	 	16	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 9 - PERFORMANCE MEASURES	 	 	16	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 10 - BENEFICIARY DESIGNATION	 	 	17	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 11 - DEFERRALS	 	 	17	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 12 - WITHHOLDING	 	 	17	 
	 	 	 	 	 	 	 	 	 
	 	12.1	 	 	Tax Withholding
	 	 	17	 
	 	12.2	 	 	Share Withholding
	 	 	18	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 13 - AMENDMENT AND TERMINATION	 	 	18	 
	 	 	 	 	 	 	 	 	 
	 	13.1	 	 	Amendment of Plan
	 	 	18	 
	 	13.2	 	 	Amendment of Award Agreement
	 	 	18	 
	 	13.3	 	 	Termination of Plan
	 	 	18	 
	 	13.4	 	 	Cancellation of Awards for Detrimental Activity
	 	 	18	 
	 	13.5	 	 	Assumption or Cancellation of Awards Upon a Corporate Transaction
	 	 	19	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 14 - CHANGE IN CONTROL	 	 	20	 
	 	 	 	 	 	 	 	 	 
	ARTICLE 15 - MISCELLANEOUS PROVISIONS	 	 	20	 
	 	 	 	 	 	 	 	 	 
	 	15.1	 	 	Restrictions on Shares
	 	 	20	 
	 	15.2	 	 	Rights of a Shareholder
	 	 	20	 

-ii-

 

Table
of Contents
(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	15.3	 	 	No Implied Rights
	 	 	20	 
	 	15.4	 	 	Compliance with Laws
	 	 	21	 
	 	15.5	 	 	Successors
	 	 	21	 
	 	15.6	 	 	Tax Elections
	 	 	21	 
	 	15.7	 	 	Compliance With Code Section 409A
	 	 	21	 
	 	15.8	 	 	Legal Construction
	 	 	21	 

-iii-

 

AARON RENTS, INC.

2001 STOCK OPTION AND INCENTIVE AWARD PLAN

ARTICLE 1 — GENERAL PROVISIONS

     1.1 Amendment and Restatement of Plan. Aaron Rents, Inc., a Georgia corporation (the
“Company”), previously established an incentive compensation plan known as the “Aaron Rents, Inc.
2001 Stock Option and Incentive Award Plan” (the “Plan”), which was originally effective as of
March 13, 2001. The Company hereby amends and restates the Plan as set forth in this document.

     1.2 Purpose of Plan. The objectives of the Plan are to (i) attract and retain
employees, directors, consultants, advisors and other persons who perform services for the Company
by providing compensation opportunities that are competitive with other companies; (ii) provide
incentives to those individuals who contribute significantly to the long-term performance and
growth of the Company and its affiliates; and (iii) align the long-term financial interests of
employees’ and other Eligible Participants (as defined below) with those of the Company’s
shareholders.

     1.3 Types of Awards. Awards under the Plan may be made to Eligible Participants in
the form of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Stock Awards, Performance Shares, Performance Units or
any combination of these.

     1.4 Effective Date. The Plan, as amended and restated, shall be effective on February
24, 2009, the date it was approved by the Board of Directors of the Company (the “Effective Date”),
subject to approval by the Company’s shareholders within the 12-month period immediately
thereafter.

     1.5 Duration of the Plan. The Plan shall commence on the Effective Date, and shall
remain in effect, subject to the right of the Committee (as defined below) to amend or terminate
the Plan at any time pursuant to Article 13, until the day prior to the tenth (10th)
anniversary of the Effective Date.

ARTICLE 2 — DEFINITIONS

     Except where the context otherwise indicates, the following definitions apply:

     2.1 “Act” means the Securities Exchange Act of 1934, as now in effect or as hereafter
amended. All citations to sections of the Act or rules thereunder are to such sections or rules as
they may from time to time be amended or renumbered.

     2.2 “Agreement” means the written agreement evidencing an Award granted to the
Participant under the Plan.

-1-

 

     2.3 “Award” means an award granted to a Participant under the Plan that is an Option,
Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock Award, Performance Share,
Performance Unit or combination of these.

     2.4 “Board” means the Board of Directors of the Company.

     2.5 “Cause” means, unless provided otherwise in the Agreement, (i) with respect to the
Company or any Employer, the commission by the Participant of an act of fraud, embezzlement, theft
or proven dishonesty, or any other illegal act or practice (whether or not resulting in criminal
prosecution or conviction); (ii) the willful engaging by the Participant in misconduct which is
deemed by the Committee, in good faith, to be materially injurious to the Company or any Employer,
monetarily or otherwise; or (iii) the willful and continued failure or habitual neglect by the
Participant to perform his duties with the Company or the Employer substantially in accordance with
the operating and personnel policies and procedures of the Company or the Employer generally
applicable to all their employees. For purposes of this Plan, no act or failure to act by the
Participant shall be deemed to be “willful” unless done or omitted to be done by the Participant
not in good faith and without reasonable belief that the Participant’s action or omission was in
the best interest of the Company and/or the Employer. “Cause” under either (i), (ii) or (iii)
shall be determined by the Committee in its sole discretion. Notwithstanding the foregoing, if the
Participant has entered into an employment agreement with the Company that is binding as of the
date of employment termination, and if such employment agreement defines “Cause,” then the
definition of “Cause” in such agreement shall apply to the Participant in this Plan.

     2.6 “Change in Control” means:

     (a) The acquisition (other than from the Company) by any Person of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Act (but without regard to any time
period specified in Rule 13d-3(d)(1)(i))), of 50 percent or more of the combined voting
power of then outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); excluding, however, (1)
any acquisition by the Company or (2) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation controlled by the
Company; and provided, however, that for purposes of this Section 2.6, Person shall not
include any person who on the date hereof owns 20% or more of any class of the Company’s
outstanding securities;

     (b) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of such Board; provided that
any individual who becomes a director of the Company subsequent to the Effective Date whose
election, or nomination for election by the Company’s shareholders, was approved by the vote
of at least a majority of the directors then comprising the Incumbent Board shall be deemed
a member of the Incumbent Board; and provided further, that any individual who was initially
elected as a director of the Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act,
or any other actual or
threatened solicitation of proxies or consents by or on behalf of any Person other then
the Board shall not be deemed a member of the Incumbent Board;

-2-

 

     (c) Consummation by the Company of a reorganization, merger, or consolidation or sale
of all or substantially all of the assets of the Company (a “Transaction”); excluding,
however, a Transaction pursuant to which (i) all or substantially all of the individuals or
entities who are the beneficial owners, respectively, of the Outstanding Company Voting
Securities immediately prior to such Transaction will beneficially own, directly or
indirectly, more than 50 percent of the combined voting power of the outstanding securities
of such corporation entitled to vote generally in the election of directors of the
corporation resulting from such Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such Transaction, of the
Outstanding Company Voting Securities; or

     (d) Approval by the shareholders of the Company of a plan of complete liquidation or
dissolution of the Company.

     2.7 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended. All citations to sections of the Code are to such sections as they may from time to time
be amended or renumbered.

     2.8 “Committee” means the Compensation Committee of the Board or such other committee
consisting of two or more members as may be appointed by the Board to administer this Plan pursuant
to Article 3. All members shall be independent directors within the meaning of the Listing
Standards and any other standards as the Board or the Committee may prescribe from time to time;
provided, however, that, (a) if the Committee is comprised of at least three
directors, and (b) the Listing Standards permit one member of the Committee not to be independent
within the meaning of the Listing Standards, then the Board may appoint a member who is not so
independent, provided, further, that such appointment otherwise complies with the
Listing Standards. If any member of the Committee does not qualify as (i) a “Non-Employee
Director” within the meaning of Rule 16b-3 under the Exchange Act, and (ii) an “outside director”
within the meaning of Section 162(m) of the Code, a subcommittee of the Committee shall be
appointed to grant Awards to Named Executive Officers and to officers who are subject to Section 16
of the Act, and each member of such subcommittee shall satisfy the requirements of (i) and (ii)
above. References to the Committee in the Plan shall include and, as appropriate, apply to any
such subcommittee.

     2.9 “Company” means Aaron Rents, Inc., a Georgia corporation, and its successors and
assigns.

     2.10 “Director” means any individual who is a member of the Board of Directors of the
Company; provided, however, that any Director who is employed by the Company or any Employer shall
not be considered a Director for purposes of grants of Awards under the Plan, but instead shall be
considered an employee for purposes of grants of Awards under the Plan.

-3-

 

     2.11 “Disability” means, unless provided otherwise in an Award Agreement (in which
case such definition shall apply for purposes of the Plan with respect to that particular Award):
(i) with respect to any Incentive Stock Option, disability as determined under Code Section
22(e)(3), and (ii) with respect to any other Award, that the Participant is “disabled” as
determined under Code Section 409A(a)(2)(C) and any regulations promulgated thereunder. All
determinations of Disability shall be made by the Committee or its designee.

     2.12 “Effective Date” shall have the meaning ascribed to such term in Section 1.4
hereof.

     2.13 “Eligible Participant” means an employee of the Employer (including an officer)
as well as any other natural person, including a Director or proposed Director and a consultant or
advisor who provides bona fide services to the Employer not in connection with the offer or sale of
securities in a capital-raising transaction, subject to limitations as may be provided by the Code,
the Act or the Committee, as shall be determined by the Committee.

     2.14 “Employer” means the Company and any entity controlled by the Company,
controlling the Company or under common control with the Company, including any entity during any
period that it is a “parent corporation” or a “subsidiary corporation” with respect to the Company
within the meaning of Code Sections 424(e) and 424(f). With respect to all purposes of the Plan,
including but not limited to, the establishment, amendment, termination, operation and
administration of the Plan, the Company shall be authorized to act on behalf of all other entities
included within the definition of “Employer.”

     2.15 “Fair Market Value” means the fair market value of a Share, as determined in good
faith by the Committee; provided, however, that

     (a) if the Shares are traded on a national or regional securities exchange on a given
date, Fair Market Value on such date shall be the closing sales price for a Share on the
securities exchange on such date (or, if no sales of Shares were made on such exchange on
such date, on the next preceding day on which sales were made on such exchange), all as
reported in The Wall Street Journal or such other source as the Committee deems reliable;
and

     (b) if the Shares are not listed on any securities exchange, but nevertheless are
publicly traded and reported (through the OTC Bulletin Board or otherwise), Fair Market
Value on such date shall be the closing sales price on such date (or, if there are no sales
on such date, on the next preceding day).

For purposes of subsection (a) above, if Shares are traded on more than one securities exchange
then the largest U.S. exchange on which Shares are traded shall be referenced to determine Fair
Market Value.

     2.16 “Incentive Stock Option” or “ISO” means an Option granted to an Eligible
Participant under Article 5 of the Plan that is intended to meet the requirements of Section 422 of
the Code.

-4-

 

     2.17 “Insider” shall mean an individual who is, on the relevant date, subject to the
reporting requirements of Section 16(a) of the Act.

     2.18 “Listing Standards” means the listing standards of any exchange or
self-regulatory organization which lists or quotes the securities of the Company.

     2.19 “Named Executive Officer” means a Participant who is (or is expected to be as of
the date of vesting and/or payout of an Award) one of the group of “covered employees” as defined
in the regulations promulgated or other guidance issued under Section 162(m) of the Code, as
determined by the Committee.

     2.20 “Nonqualified Stock Option” or “NQSO” means an Option granted to an
Eligible Participant under Article 5 of the Plan that is not intended or otherwise fails to meet
the requirements of Section 422 of the Code.

     2.21 “Option” means an Incentive Stock Option or a Nonqualified Stock Option. An
Option shall be designated as either an Incentive Stock Option or a Nonqualified Stock Option, and
in the absence of such designation, shall be treated as a Nonqualified Stock Option.

     2.22 “Option Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

     2.23 “Participant” means an Eligible Participant to whom an Award has been granted.

     2.24 “Performance Measures” means the performance measures set forth in Article 9,
which are used for performance-based Awards to Named Executive Officers.

     2.25 “Performance Share” means an Award under Article 8 of the Plan that is valued by
reference to a Share, which value may be paid to the Participant by delivery of such property as
the Committee shall determine, including without limitation, cash or Shares, or any combination
thereof, upon achievement of such performance objectives during the relevant performance period as
the Committee shall establish at the time of such Award or thereafter, but not later than the time
permitted by Section 162(m) of the Code in the case of a Named Executive Officer, unless the
Committee determines not to comply with Section 162(m) of the Code.

     2.26 “Performance Unit” means an Award under Article 8 of the Plan that has a value
set by the Committee, which value may be paid to the Participant by delivery of such property as
the Committee shall determine, including without limitation, cash or Shares, or any combination
thereof, upon achievement of such performance objectives during the relevant performance period as
the Committee shall establish at the time of such Award or thereafter, but not later than the time
permitted by Section 162(m) of the Code in the case of a Named Executive Officer, unless the
Committee determines not to comply with Section 162(m) of the Code.

     2.27 “Permitted Transferee” means any members of the immediate family of the
Participant (e.g., spouse, parent, sibling, children, grandchildren, niece and nephew), any trusts
for the benefit of such family members or any partnerships whose only partners are such family
members, each as determined by the Committee in accordance with applicable tax and securities
laws.

-5-

 

     2.28 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) thereof.

     2.29 “Plan” means this Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan,
as amended and restated, and as further amended from time to time.

     2.30 “Restricted Stock” means an Award of Shares under Article 7 of the Plan, which
Shares are issued with such restriction(s) as the Committee, in its sole discretion, may impose,
including without limitation, any restriction on the right to retain such Shares, to sell,
transfer, pledge or assign such Shares, to vote such Shares, and/or to receive any cash dividends
with respect to such Shares, which restrictions may lapse separately or in combination at such time
or times, in installments or otherwise, as the Committee may deem appropriate.

     2.31 “Restricted Stock Unit” or “RSU” means a right granted under Article 7 of
the Plan to receive a number of Shares, or a cash payment for each such Share equal to the Fair
Market Value of a Share, on a specified date.

     2.32 “Restriction Period” means the period commencing on the date an Award of
Restricted Stock or an RSU is granted and ending on such date as the Committee shall determine.

     2.33 “Retirement” means termination of employment with the Company and all Employers
other than for Cause after a Participant has reached the age of 65 years.

     2.34 “Share” means one share of common stock of the Company (as such Share may be
adjusted pursuant to the provisions of Section 4.3 of the Plan including any new or different stock
or securities resulting from the changes described in Section 4.3).

     2.35 “Stock Appreciation Right” or “SAR” means an Award granted under Article
6 which provides for an amount payable in Shares and/or cash, as determined by the Committee, equal
to the excess of the Fair Market Value of a Share on the day the Stock Appreciation Right is
exercised over the specified purchase price.

     2.36 “Stock Award” means a grant of Shares under Article 7 that is not generally
subject to restrictions and pursuant to which a certificate for the Shares is transferred to or
registered in the name of, the Participant.

ARTICLE 3 — ADMINISTRATION

     3.1 General. This Plan shall be administered by the Committee. The Committee, in its
discretion, may delegate to one or more of its members such of its powers as it deems appropriate.

-6-

 

     3.2 Authority of the Committee.

     (a) The Committee shall have the exclusive right to interpret, construe and administer
the Plan, to select the persons who are eligible to receive an Award, and to act in all
matters pertaining to the granting of an Award and the contents of the Agreement evidencing
the Award, including without limitation, the determination of the number of Options, Stock
Appreciation Rights, RSUs, Shares of Restricted Stock, Shares subject to a Stock Award,
Performance Shares or Performance Units subject to an Award and the form, terms, conditions
and duration of each Award, and any amendment thereof consistent with the provisions of the
Plan. The Committee may adopt such rules, regulations and procedures of general application
for the administration of this Plan, as it deems appropriate.

     (b) The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Agreement in the manner and to the extent it shall deem
desirable to carry it into effect.

     (c) In the event the Company shall assume outstanding employee benefit awards or the
right or obligation to make future such awards in connection with the acquisition of another
corporation or business entity, the Committee may, in its discretion, make such adjustments
in the terms of Awards under the Plan as it shall deem appropriate.

     (d) The Committee shall have the authority, without shareholder approval, to reprice
outstanding Options or SARs, and to grant Awards to Participants in consideration of the
cancellation of outstanding Options or other Awards.

     (e) All acts, determinations and decisions of the Committee made or taken pursuant to
grants of authority under the Plan or with respect to any questions arising in connection
with the administration and interpretation of the Plan, including the severability of any
and all of the provisions thereof, shall be conclusive, final and binding upon all parties,
including the Company, its shareholders, Participants, Eligible Participants and their
estates, beneficiaries and successors.

     3.3 Participation Outside of the United States. The Committee or its designee shall
have the authority to amend the Plan (including by the adoption of appendices or subplans) and/or
the terms and conditions relating to an Award to the extent necessary to permit participation in
the Plan by eligible individuals who are located outside of the United States on terms and
conditions comparable to those afforded to eligible individuals located within the United States.

     3.4 Delegation of Authority. Except with respect to Named Executive Officers and
Insiders, the Committee may, at any time and from time to time, delegate to one or more persons any
or all of its authority under Section 3.2, to the full extent permitted by law.

     3.5 Award Agreements. Each Award granted under the Plan shall be evidenced by a
written Agreement. Each Agreement shall be subject to and incorporate, by reference or otherwise,
the applicable terms and conditions of the Plan, and any other terms and conditions,

-7-

 

not inconsistent with the Plan, as may be imposed by the Committee, including without
limitation, provisions related to the consequences of termination of employment. A copy of such
document shall be provided to the Participant, and the Committee may, but need not, require that
the Participant sign a copy of the Agreement.

     3.6 Indemnification. In addition to such other rights of indemnification as they may
have as directors or as members of the Committee, the members of the Committee shall be indemnified
by the Company against reasonable expenses, including attorney’s fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection with
any appeal therein, to which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Award granted thereunder, and against
all amounts paid by them in settlement thereof, provided such settlement is approved by independent
legal counsel selected by the Company, or paid by them in satisfaction of a judgment or settlement
in any such action, suit or proceeding, except as to matters as to which the Committee member has
been negligent or engaged in misconduct in the performance of his duties; provided, that within 60
days after institution of any such action, suit or proceeding, a Committee member shall in writing
offer the Company the opportunity, at its own expense, to handle and defend the same.

ARTICLE 4 — SHARES SUBJECT TO THE PLAN

     4.1 Number of Shares.

     (a) Subject to adjustment as provided in (b) below and in Section 4.3, the aggregate
number of Shares that are available for issuance pursuant to Awards under the Plan is seven
million eight hundred fifty thousand (7,850,000) Shares. All of the Shares available for
issuance under the Plan may be issued pursuant to Incentive Stock Options. If Options,
Restricted Stock, Restricted Stock Units or other Awards are issued in respect of options,
restricted stock, restricted stock units or other equity awards of an entity acquired, by
merger or otherwise, by the Company (or any subsidiary of the Company or any Employer), to
the extent such issuance shall not be inconsistent with the terms, limitations and
conditions of Code Section 422 or Exchange Act Rule 16b-3, the aggregate number of Shares
for which Awards may be made hereunder shall automatically be increased by the number of
Shares subject to Awards so issued. Such Shares shall be made available from Shares
currently authorized but unissued or Shares currently held (or subsequently acquired) by the
Company as treasury shares, including Shares purchased in the open market or in private
transactions.

     (b) The following rules shall apply for purposes of the determination of the number of
Shares available for grant under the Plan:

     (i) If, for any reason, any Shares awarded or subject to purchase under the
Plan are not delivered or purchased, or are reacquired by the Company, for reasons
including, but not limited to, a forfeiture of Restricted Stock, an exercise of a
Stock Appreciation Right with the delivery of fewer Shares than are subject to the
Stock Appreciation Right, or termination, expiration or cancellation of an Option,
Stock Appreciation Right, Restricted Stock Unit, Performance Shares or

-8-

 

Performance Units, such Shares (the “Returned Shares”) shall not be charged
against, or if previously charged against, shall be added back to, the aggregate
number of Shares available for issuance pursuant to Awards under the Plan. If the
exercise price and/or tax withholding obligation under an Award is satisfied by
tendering Shares to the Company (either by actual delivery or attestation) or by
reducing the number of Shares to be delivered to the Participant, only the number of
Shares issued net of the Shares so tendered or withheld shall be deemed delivered
for purposes of determining the maximum number of Shares available for issuance
under the Plan.

     (ii) Each Share subject to a Stock Award shall be counted as one Share subject
to an Award. Each RSU and each Performance Share awarded that may be settled in
Shares shall be counted as one Share subject to an Award. Each Performance Unit
awarded that may be settled in Shares shall be counted as a number of Shares subject
to an award, with the number determined by dividing the value of the Performance
Unit at grant by the Fair Market Value of a Share at Grant. Performance Shares and
Units and RSUs that may not be settled in Shares shall not result in a charge
against the aggregate number of Shares available for issuance pursuant to Awards
under this Plan.

     (iii) Each Stock Appreciation Right that may be settled in Shares shall be
counted as one Share subject to an award. Stock Appreciation Rights that may not be
settled in Shares shall not result in a charge against the aggregate number of
Shares available for issuance. In addition, if a Stock Appreciation Right is
granted in connection with an Option and the exercise of the Stock Appreciation
Right results in the loss of the Option right, the Shares that otherwise would have
been issued upon the exercise of such related Option shall not result in a charge
against the aggregate number of Shares available for issuance pursuant to Awards
under this Plan. Upon exercise of a Stock Appreciation Right, only the actual
number of Shares delivered shall be charged against the aggregate number of Shares
available, and any additional Shares that were the subject of the Stock Appreciation
Right shall be added back to aggregate number of Shares available for issuance and
shall again be available for the grant of Awards.

     4.2 Individual Limits. Except to the extent the Committee determines that an Award to
a Named Executive Officer shall not comply with the performance-based compensation provisions of
Section 162(m) of the Code, the following rules shall apply to Awards under the Plan:

     (a) Options and SARs. The maximum number of Shares subject to Options and
Stock Appreciation Rights that, in the aggregate, may be granted in any one calendar year to
any one Participant shall be four hundred thousand (400,000) Shares.

     (b) Restricted Stock and RSUs. The maximum aggregate number of Shares of
Restricted Stock and Restricted Stock Units that may be granted in any one calendar year to
any one Participant shall be four hundred thousand (400,000) Shares.

-9-

 

     (c) Performance Awards. With respect to Performance Awards that have a
specific dollar-value target or are performance units, the maximum aggregate payout
(determined as of the end of the applicable performance cycle) with respect to Performance
Awards granted in any one calendar year to any one Participant shall be $2,000,000. With
respect to Performance Awards that are payable in Shares, the maximum aggregate payout
(determined as of the end of the applicable performance cycle) with respect to Performance
Awards granted in any calendar year to any one Participant shall be four hundred thousand
(400,000) Shares.

     4.3 Adjustment of Shares. If any change in corporate capitalization, such as a stock
split, reverse stock split, stock dividend, or any corporate transaction such as a reorganization,
reclassification, merger or consolidation or separation, including a spin-off, of the Company or
sale or other disposition by the Company of all or a portion of its assets, any other change in the
Company’s corporate structure, or any distribution to shareholders (other than a cash dividend)
results in the outstanding Shares, or any securities exchanged therefor or received in their place,
being exchanged for a different number or class of shares or other securities of the Company, or
for shares of stock or other securities of any other corporation; or new, different or additional
shares or other securities of the Company or of any other corporation being received by the holders
of outstanding Shares; then equitable adjustments shall be made by the Committee, as it determines
are necessary and appropriate, in:

     (a) the limitations on the aggregate number of Shares that may be awarded as set forth
in Section 4.1, including, without limitation, with respect to Incentive Stock Options;

     (b) the limitations on the aggregate number of Shares that may be awarded to any one
single Participant as set forth in Section 4.2;

     (c) the number and class of Shares that may be subject to an Award, and that have not
been issued or transferred under an outstanding Award;

     (d) the Option Price under outstanding Options and the number of Shares to be
transferred in settlement of outstanding Stock Appreciation Rights; and

     (e) the terms, conditions or restrictions of any Award and Agreement, including the
price payable for the acquisition of Shares; provided, however, that, to the extent
possible, all such adjustments made in respect of each ISO shall be accomplished so that
such Option shall continue to be an incentive stock option within the meaning of Section 422
of the Code.

ARTICLE 5 — STOCK OPTIONS

     5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be
granted to Eligible Participants at any time and from time to time as shall be determined by the
Committee. The Committee shall have sole discretion in determining the number of Shares subject to
Options granted to each Participant. The Committee may grant a Participant ISOs,
NQSOs or a combination thereof, and may vary such Awards among Participants; provided that
only an employee of the Employer may be granted ISOs.

-10-

 

     5.2 Agreement. Each Option grant shall be evidenced by an Agreement that shall
specify the Option Exercise Price, the duration of the Option, the number of Shares to which the
Option pertains and such other provisions as the Committee shall determine. The Option Agreement
shall further specify whether the Award is intended to be an ISO or an NQSO. Any portion of an
Option that is not designated in the Agreement as an ISO or otherwise fails or is not qualified as
an ISO (even if designated as an ISO) shall be an NQSO. The Committee may provide in the Option
Agreement for transfer restrictions, repurchase rights, vesting requirements and other limitations
on the Shares to be issued pursuant to the exercise of an Option.

     5.3 Option Exercise Price. The Option Exercise Price for each grant of an ISO shall
not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date the
Option is granted. The Option Exercise Price for each grant of a NQSO shall be established by the
Committee and, in its discretion, may be less than, equal to or more than the Fair Market Value of
a Share on the date the Option is granted. Any Option granted with an Option Exercise Price less
than the Fair Market Value of a Share on the date of grant shall include terms and conditions
intended to be ensure that the Option is exempt from or complies with Code Section 409A.

     5.4 Duration of Options. Each Option shall expire at such time as the Committee shall
determine at the time of grant; provided, however, that no Option shall be exercisable later than
the tenth (10th) anniversary of its grant date.

     5.5 Exercise of Options. Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall in each instance
approve, including, without limitation, conditions related to the employment of or provision of
services by the Participant with the Company or any Employer, which need not be the same for each
grant or for each Participant. The Committee may provide in the Agreement for automatic
accelerated vesting and other rights upon the occurrence of a Change in Control of the Company or
upon the occurrence of other events as specified in the Agreement.

     5.6 Payment. Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to which the Option is to
be exercised, accompanied by full payment for the Shares (less any amount previously paid by the
Participant to acquire the Option). The Option Exercise Price upon exercise of any Option shall be
payable to the Company in full, in any of the following manners: (a) in cash, (b) in cash
equivalent approved by the Committee, (c) unless not permitted by the Committee, by tendering
previously acquired Shares (or delivering a certification or attestation of ownership of such
Shares) having an aggregate Fair Market Value at the time of exercise equal to the total Option
Exercise Price (provided that the tendered Shares must have been held by the Participant for six
months or such other period required by the Committee), (d) unless not permitted by the Committee,
by having the Company withhold Shares from the Shares acquired upon exercise of the Option having
an aggregate Fair Market Value at the time of exercise equal to the total Option Exercise Price, or
(e) by a combination of (a), (b), (c) and (d). The Committee also may allow cashless exercises as
permitted under Federal Reserve Board’s Regulation T, subject to
applicable securities law restrictions, or by any other means which the Committee determines
to be consistent with the Plan’s purpose and applicable law.

-11-

 

     5.7 Nontransferability of Options.

     (a) Incentive Stock Options. No ISO granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, all ISOs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.

     (b) Nonqualified Stock Options. Except as otherwise provided in a Participant’s Award
Agreement consistent with securities and other applicable laws, rules and regulations, no NQSO
granted under this Article 5 may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant’s Award Agreement, all NQSOs granted to a Participant under
this Article 5 shall be exercisable during his or her lifetime only by such Participant. In the
event of a transfer permitted by the Agreement, appropriate evidence of any transfer to the
Permitted Transferees shall be delivered to the Company at its principal executive office. If all
or part of an Option is transferred to a Permitted Transferee, the Permitted Transferee’s rights
thereunder shall be subject to the same restrictions and limitations with respect to the Option as
the Participant, and any reference in the Option Agreement to the employment by or performance of
services for the Company by the Participant shall continue to refer to the employment of, or
performance of services by, the Participant who transferred the Option.

     5.8 Special Rules for ISOs. Notwithstanding the above, in no event shall any
Participant who owns (within the meaning of Section 424(d) of the Code) stock of the Company
possessing more than ten percent (10%) of the total combined voting power of all classes of stock
of the Company be eligible to receive an ISO at an Option Exercise Price less than one hundred ten
percent (110%) of the Fair Market Value of a Share on the date the ISO is granted or be eligible to
receive an ISO that is exercisable later than the fifth (5th) anniversary date of its grant. No
Participant may be granted ISOs (under the Plan and all other incentive stock option plans of the
Employer) which are first exercisable in any calendar year for Shares having an aggregate Fair
Market Value (determined as of the date an Option is granted) that exceeds One Hundred Thousand
Dollars ($100,000). Any such excess shall instead automatically be treated as a NQSO.

ARTICLE 6 — STOCK APPRECIATION RIGHTS

     6.1 Grant of Stock Appreciation Rights (or SARs). A Stock Appreciation Right may be
granted to an Eligible Participant in connection with an Option granted under Article 5 of this
Plan or may be granted independently of any Option. A Stock Appreciation Right shall entitle the
holder, within the specified period (which may not exceed 10 years), to exercise the SAR and
receive in exchange therefor a payment having an aggregate value equal to the amount by which the
Fair Market Value of a Share on the exercise date exceeds the specified purchase price (which,
unless provided otherwise, shall be the Fair Market Value on the grant date), times the number of
Shares with respect to which the SAR is exercised. The Committee may provide in

-12-

 

the Agreement for automatic exercise on a certain date, for payment of the proceeds on a
certain date, and/or for accelerated vesting and other rights upon the occurrence of a Change in
Control or upon the occurrence of other events specified in the Agreement. A SAR granted in
connection with an Option (a “Tandem SAR”) shall entitle the holder of the related Option,
within the period specified for the exercise of the Option, to surrender the unexercised Option, or
a portion thereof, and to receive in exchange therefore a payment having an aggregate value equal
to the amount by which the Fair Market Value of a Share on the exercise date exceeds the Option
Exercise Price per Share, times the number of Shares subject to the Option, or portion thereof,
which is surrendered. SARs shall be subject to the same transferability restrictions as
Nonqualified Stock Options.

     6.2 Agreement. Each SAR grant shall be evidenced by an Agreement that shall specify
the exercise price, the duration of the SAR, the number of Shares to which the SAR pertains and
such other provisions as the Committee shall determine.

     6.3 Tandem SARs. Each Tandem SAR shall be subject to the same terms and conditions as
the related Option, including limitations on transferability, and shall be exercisable only to the
extent such Option is exercisable and shall terminate or lapse and cease to be exercisable when the
related Option terminates or lapses. The grant of Stock Appreciation Rights related to ISOs must
be concurrent with the grant of the ISOs. With respect to NQSOs, the grant either may be
concurrent with the grant of the NQSOs, or in connection with NQSOs previously granted under
Article 5, which are unexercised and have not terminated or lapsed.

     6.4 Payment. The Committee shall have sole discretion to determine in each Agreement
whether the payment with respect to the exercise of an SAR will be in the form of all cash, all
Shares, or any combination thereof. If payment is to be made in Shares, the number of Shares shall
be determined based on the Fair Market Value of a Share on the date of exercise or the date of
payment, as applicable. If the Committee elects to make full payment in Shares, no fractional
Shares shall be issued and cash payments shall be made in lieu of fractional Shares. The Committee
shall have sole discretion to determine and set forth in the Agreement the timing of any payment
made in cash or Shares, or a combination thereof, upon exercise of SARs, including whether payment
will be made in a lump sum, in annual installments or otherwise deferred; and the Committee shall
have sole discretion to determine and set forth in the Agreement whether any deferred payments may
bear amounts equivalent to interest or cash dividends.

     6.5 Exercise of SARs. Upon exercise of a Tandem SAR, the number of Shares subject to
exercise under any related Option shall automatically be reduced by the number of Shares
represented by the Option or portion thereof which is surrendered.

ARTICLE 7 — STOCK AWARDS, RESTRICTED STOCK

AND RESTRICTED STOCK UNITS

     7.1 Grant of Stock Awards, Restricted Stock and Restricted Stock Units. Stock Awards
and Awards of Restricted Stock and Restricted Stock Units (“RSUs”) may be made to Eligible
Participants as a reward for past service or as an incentive for the performance of future services
that will contribute materially to the successful operation of the Employer. Stock
Awards and Awards of Restricted Stock and RSUs may be made either alone or in addition to or
in tandem with other Awards granted under the Plan and may be current grants of Restricted Stock
and RSUs or deferred grants of Stock Awards or Restricted Stock and RSUs.

-13-

 

     7.2 Restricted Stock Agreement. The Restricted Stock Agreement shall set forth the
terms of the Restricted Stock Award, as determined by the Committee, including, without limitation,
the purchase price, if any, to be paid for such Restricted Stock, which may be zero, subject to
such minimum consideration as may be required by applicable law; any restrictions applicable to the
Restricted Stock such as continued service or achievement of performance goals; the length of the
Restriction Period, if any, and whether any circumstances, such as death, Disability, or a Change
in Control, will shorten or terminate the Restriction Period; and rights of the Participant to vote
or receive dividends with respect to the Shares during the Restriction Period.

     7.3 Restricted Stock Unit Agreement. The Restricted Stock Unit Agreement shall set
forth the terms of the RSU Award, as determined by the Committee, including without limitation, the
number of RSUs granted to the Participant; the restrictions, terms and conditions of the RSU;
whether the RSU will be settled in cash, Shares, or a combination of the two and the date when the
RSU will be settled; any requirements such as continued service or achievement of certain
performance measures; the length of the Restriction Period, if any; whether any circumstances such
as Change in Control, termination of employment, Disability or death will shorten or terminate any
vesting or Restriction Period; and whether dividend equivalents will be paid or accrued with
respect to the RSUs.

     7.4 Nontransferability. Except as otherwise provided in a Participant’s Award
Agreement, no RSUs and no Shares of Restricted Stock received by a Participant shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction
Period.

     7.5 Certificates. Upon an Award of Restricted Stock to a Participant, Shares of
Restricted Stock shall be registered in the Participant’s name. Certificates, if issued, may
either be held in custody by the Company until the Restriction Period expires or until restrictions
thereon otherwise lapse and/or be issued to the Participant and registered in the name of the
Participant, bearing an appropriate restrictive legend and remaining subject to appropriate
stop-transfer orders. If required by the Committee, the Participant shall deliver to the Company
one or more stock powers endorsed in blank relating to the Restricted Stock. Upon grant of a Stock
Award, settlement of an RSU in Shares, and with respect to Restricted Stock, if and when the
Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, unrestricted certificates for such shares shall be delivered to the Participant
or registered in the Participant’s name on the Company’s records; provided, however, that the
Committee may cause such legend or legends to be placed on any such certificates as it may deem
advisable under the terms of the Plan and the rules, regulations and other requirements of the
Securities and Exchange Commission and any applicable federal or state law. The Company shall not
be required to deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value
(determined as of the date the restrictions lapse for Restricted Stock or the RSU is settled) of
such fractional Share to the holder thereof. Concurrently with the grant of an unrestricted Stock
Award, the settlement of an RSU or the lapse of any risk of forfeiture applicable to the
Restricted Stock, the Participant shall be required to pay an amount necessary to satisfy any
applicable federal, state and local tax requirements as set out in Article 12 below.

-14-

 

     7.6 Dividends and Other Distributions. Except as provided in this Article 7 or in the
Award Agreement, a Participant receiving a Restricted Stock Award shall have, with respect to such
Restricted Stock Award, all of the rights of a shareholder of the Company, including the right to
vote the Shares to the extent, if any, such Shares possess voting rights and the right to receive
any dividends; provided, however, the Committee may require that any dividends on such Shares of
Restricted Stock shall be automatically deferred and reinvested in additional Restricted Stock
subject to the same restrictions as the underlying Award, or may require that dividends and other
distributions on Restricted Stock shall be paid to the Company for the account of the Participant.
The Committee shall determine whether interest shall be paid on such amounts, the rate of any such
interest, and the other terms applicable to such amounts.

ARTICLE 8 — PERFORMANCE SHARES AND UNITS

     8.1 Grant of Performance Shares/Units. Performance Shares, Performance Units or both
may be granted to Participants in such amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee.

     8.2 Value of Performance Shares/Units. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. Each Performance Share shall have
an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee
shall set performance goals in its discretion which, depending on the extent to which they are met,
will determine the number and/or value of Performance Shares, Performance Units or both that will
be paid out to the Participant. For purposes of this Article 8, the time period during which the
performance goals must be met shall be called a “Performance Period.” Performance Periods shall
generally equal or exceed two (2) years in length. For Awards intended to qualify under the
performance-based compensation provisions of Code Section 162(m), the performance goals shall be
established at the beginning of the Performance Period within the time period as is permitted by
Code Section 162(m).

     8.3 Earning of Performance Shares/Units. Subject to the terms of this Plan, after the
applicable Performance Period has ended, the holder of Performance Shares/Units shall be entitled
to receive a payout of the number and value of Performance Shares/Units earned by the Participant
over the Performance Period, to be determined as a function of the extent to which the
corresponding performance goals have been achieved.

     8.4 Form and Timing of Payment of Performance Shares/Units. Subject to the terms of
this Plan, the Committee, in its sole discretion, may pay earned Performance Shares/Units in the
form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value
equal to the value of the earned Performance Shares/Units at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions deemed appropriate by
the Committee. The determination of the Committee with respect to the form and timing of payout of
such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award and, for
Awards intended to qualify under the performance-based compensation provisions of Code Section
162(m), shall meet the requirements of Code Section 162(m).

-15-

 

     Except as otherwise provided in the Participant’s Award Agreement, a Participant shall be
entitled to receive any dividends declared with respect to Shares earned in connection with earned
grants of Performance Shares/Units, that have not yet been distributed to the Participant (such
dividends may be subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in Section 7.6 herein).

     8.5 Nontransferability. Except as otherwise provided in a Participant’s Award
Agreement, Performance Shares/Units may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and distribution. Further,
except as otherwise provided in a Participant’s Award Agreement, a Participant’s rights under the
Plan shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s legal representative.

ARTICLE 9 — PERFORMANCE MEASURES

     Until the Committee proposes for shareholder vote and shareholders approve a change in the
general Performance Measures set forth in this Article 9, the attainment of which may determine the
degree of payout and/or vesting with respect to Named Executive Officers’ Awards that are intended
to qualify under the performance-based compensation provisions of Section 162(m) of the Code, the
Performance Measure(s) to be used for purposes of such Awards shall be chosen from among the
following (which may relate to the Company or a business unit, division or subsidiary): earnings,
earnings per share, consolidated pre-tax earnings, net earnings, estimated earnings, operating
income, EBIT (earnings before interest and taxes), EBITDA (earnings before interest, taxes,
depreciation and amortization), gross margin, revenues, revenue growth, market value added,
economic value added, return on equity, return on investment, return on assets, return on net
assets, return on capital employed, total shareholder return, profit, economic profit, capitalized
economic profit, after-tax profit, pre-tax profit, net income, cash flow measures, cash flow
return, sales, sales volume, revenues per employee, stock price, cost, or goals related to
acquisitions or divestitures. The Committee can establish other Performance Measures for
performance Awards granted to Eligible Participants that are not Named Executive Officers and for
performance Awards granted to Named Executive Officers that are not intended to qualify under the
performance-based compensation exception of Section 162(m) of the Code.

     The Committee shall be authorized to make adjustments in performance-based criteria or in the
terms and conditions of other Awards in recognition of unusual or nonrecurring events affecting the
Company or its financial statements or changes in applicable laws, regulations or accounting
principles. The Committee shall also have the discretion to adjust the determinations of the
degree of attainment of the pre-established Performance Measures; provided, however, that Awards
which are designed to qualify for the performance-based compensation exception from the
deductibility limitations of Section 162(m) of the Code, and which are held by Named Executive
Officers, may not be adjusted upward (except as a result of adjustments permitted by this
paragraph), but the Committee shall retain the discretion to adjust such Awards downward.

     If applicable tax and/or securities laws change to permit Committee discretion to alter the
governing Performance Measures without obtaining shareholder approval of such changes, the
Committee shall have sole discretion to make such changes without obtaining shareholder approval.
In addition, in the event that the Committee determines that it is advisable to grant
Awards which shall not qualify for the performance-based compensation exception from the
deductibility limitations of Section 162(m) of the Code, the Committee may make such grants without
satisfying the requirements of Section 162(m) of the Code.

-16-

 

ARTICLE 10 — BENEFICIARY DESIGNATION

     Each Participant may, from time to time, name any beneficiary or beneficiaries (who may be
named contingently or successively) to whom any benefit under the Plan is to be paid in case of his
or her death before he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing with the Company
during the Participant’s lifetime. In the absence of any such designation, benefits remaining
unpaid at the Participant’s death shall be paid to the Participant’s spouse, and if the Participant
has no surviving spouse, to the Participant’s estate. If required, the spouse of a married
Participant domiciled in a community property jurisdiction shall join in any designation of a
beneficiary or beneficiaries other than the spouse.

ARTICLE 11 — DEFERRALS

     The Committee may permit a Participant to defer such Participant’s receipt of the payment of
cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the
exercise of an Option or SAR, the lapse or waiver of restrictions with respect to Restricted Stock,
or RSUs, or the satisfaction of any requirements or goals with respect to Performance Shares. If
any such deferral election is permitted, the Committee shall, in its sole discretion, establish
rules and procedures for such payment deferrals, which rules and procedures shall comply with
Section 409A of the Code. . Notwithstanding the foregoing, no stock option or SAR that was not
both earned and vested as of December 31, 2004 or that is materially modified after October 3,
2004, determined in each case within the meaning of Section 409A of the Code, shall contain a
feature for the deferral of compensation within the meaning of Treasury Regulation §
1.409A-1(b)(5)(i)(A)(3) or § 1.409A-1(b)(5)(i)(B)(3), respectively.

ARTICLE 12- WITHHOLDING

     12.1 Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of any Award under this Plan. If a
Participant makes a disposition within the meaning of Section 424(c) of the Code and regulation
promulgated thereunder, of any Share or Shares issued to him pursuant to his exercise of an
Incentive Stock Option within the two-year period commencing on the day after the date of the grant
or within the one-year period commencing on the day after the date of transfer of such Share or
Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such
disposition, notify the Company thereof, by delivery of written notice to the Company at its
principal executive office.

-17-

 

     12.2 Share Withholding. With respect to withholding required upon the exercise of
Options or SARS, upon the lapse of restrictions on Restricted Stock or RSUs, or upon any other
taxable event arising as a result of Awards granted hereunder which are to be paid in the form
of Shares, Participants may elect, unless not permitted by the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold Shares having a fair
market value on the date the tax is to be determined equal to not more than the minimum amount of
tax required to be withheld with respect to the transaction. All such elections shall be subject
to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

ARTICLE 13 — AMENDMENT AND TERMINATION

     13.1 Amendment of Plan. The Committee or the Board may at any time terminate or from
time to time amend the Plan in whole or in part, but no such action shall materially adversely
affect any rights or obligations with respect to any Awards previously granted under the Plan,
unless the affected Participants consent in writing. To the extent required by Section 162(m) or
Section 422 of the Code, other applicable law, and/or any Listing Standards, no amendment shall be
effective unless approved by the shareholders of the Company.

     13.2 Amendment of Award Agreement. The Committee may, at any time, amend outstanding
Agreements in a manner not inconsistent with the terms of the Plan; provided, however, except as
provided in Sections 13.4 and 13.5, if such amendment is materially adverse to the Participant, as
determined by the Committee, the amendment shall not be effective unless and until the Participant
consents to such amendment. To the extent not inconsistent with the terms of the Plan, the
Committee may, at any time, amend an outstanding Agreement in a manner that is not unfavorable to
the Participant without the consent of such Participant.

     13.3 Termination of Plan. No Awards shall be granted under the Plan on or after the
tenth anniversary of the Effective Date of the Plan.

     13.4 Cancellation of Awards for Detrimental Activity. All Awards shall be subject to
the Committee’s right to cancel such Awards and/or to impose forfeitures to the extent required
under Section 304 of the Sarbanes-Oxley Act of 2002. The Committee may also provide in the Award
Agreement that if a Participant engages in any “Detrimental Activity” (as defined below or in the
Award Agreement), the Committee may, notwithstanding any other provision in this Plan to the
contrary, cancel, rescind, suspend, withhold or otherwise restrict or limit any unexpired,
unexercised, unpaid or deferred Award as of the first date the Participant engages in the
Detrimental Activity, unless sooner terminated by operation of another term of this Plan or any
other agreement. Without limiting the generality of the foregoing, the Agreement may also provide
that if the Participant exercises an Option or SAR, receives a Performance Share, Performance Unit,
or RSU payout, or receives Shares under an Award at any time during the period beginning six months
prior to the date the Participant first engages in Detrimental Activity and ending six months after
the date the Participant ceases to engage in any Detrimental Activity, the Participant shall be
required to pay to the Company the excess of the then fair market value of the Shares subject to
the Award over the total price paid by the Participant for such Shares.

          For purposes of this Section, “Detrimental Activity” means any of the following, as determined
by the Committee in good faith: (i) the violation of any agreement between the Company and the
Participant relating to the disclosure of confidential information or trade secrets, the
solicitation of employees, customers, suppliers, licensees, licensors or contractors, or

-18-

 

the performance of competitive services; (ii) conduct that constitutes Cause (as defined in
Section 2.5 above), whether or not the Participant’s employment is terminated for Cause; (iii)
making, or causing or attempting to cause any other person to make, any statement, either written
or oral, or conveying any information about the Company which is disparaging or which in any way
reflects negatively upon the Company; (iv) improperly disclosing or otherwise misusing any
confidential information regarding the Company; or (v) the refusal or failure of a Participant to
provide, upon the request of the Company, a certification, in a form satisfactory to the Company,
that he or she is in full compliance with the terms and conditions of the Plan; provided, that the
Committee may provide in the Agreement that only certain of the restrictions provided above apply
for purposes of the Award Agreement.

     13.5 Assumption or Cancellation of Awards Upon a Corporate Transaction. In the event
of a proposed sale of all or substantially all of the assets or stock of the Company, the merger of
the Company with or into another corporation such that shareholders of the Company immediately
prior to the merger exchange their shares of stock in the Company for cash and/or shares of another
entity or any other Change in Control or corporate transaction to which the Committee deems this
provision applicable (any such event is referred to as a “Corporate Transaction”), the Committee
may, in its discretion, cause each Award to be assumed or for an equivalent Award to be substituted
by the successor corporation or a parent or subsidiary of such successor corporation (with such
assumed or substituted Award adjusted as appropriate).

     In addition or in the alternative, the Committee, in its discretion, may determine that all or
certain types of Awards will be cancelled at or immediately prior to the time of the Corporate
Transaction; provided, however, that at least 15 days prior to the Corporate Transaction (or, if
not feasible to provide 15 days notice, within a reasonable period prior to the Corporate
Transaction), the Committee notifies the Participant that, subject to rescission if the Corporate
Transaction is not successfully completed within a certain period, the Award will be terminated and
provides the Participant, either, at the election of the Committee, (i) a payment (in cash or
Shares) equal to value of the Award, as determined below, or (ii) the right to exercise the Option
or other Award as to all Shares, including Shares as to which the Option or other Award would not
otherwise be exercisable (or with respect to Restricted Stock, RSUs, Performance Shares or
Performance Units, provide that all restrictions shall lapse) prior to the Corporate Transaction.
For purposes of this provision, the value of the Award shall be the value determined in good faith
by the Committee and shall generally be measured as of the date of the Corporate Transaction and
shall generally equal the amount of cash or Shares that would be payable to the Participant upon
exercise or vesting of the Award, less the amount of any payment required to be tendered by the
Participant upon such exercise; provided, however, the Committee may also determine that the amount
payable to the Participant upon cancellation of an Award shall equal the consideration the
Participant would have received under the terms of the Corporate Transaction if the Award was fully
vested, paid, or exercised (as applicable) immediately prior to the closing of the Corporate
Transaction and, thus, the Participant was treated as a Shareholder with respect to the Shares that
would have been paid upon such vesting, payment, or exercise. For example, the amount payable to
the Participant upon the Committee’s decision to cancel outstanding Options would usually equal the
difference between the Fair Market Value of the Shares subject to the Options and the Exercise
Price for such Options, computed as of the date of the Corporate Transaction.

-19-

 

ARTICLE 14 — CHANGE IN CONTROL

     Upon the occurrence of a Change in Control, except as provided otherwise in the Award
Agreement or unless otherwise specifically prohibited by the terms of Article 15, but subject to
Article 13:

     (a) Any and all Options and SARs granted to Participants under the Plan shall become fully
vested and immediately exercisable;

     (b) All restrictions on Awards of Restricted Stock and RSUs shall lapse and Shares shall be
delivered to the Participant in accordance with Article 7 and the terms of the Award Agreement; and

     (c) Subject to Article 13 hereof, the Committee shall have the authority to make any
modifications to the Awards as determined by the Committee to be appropriate before the effective
date of the Change in Control.

ARTICLE 15 — MISCELLANEOUS PROVISIONS

     15.1 Restrictions on Shares. All certificates for Shares delivered under the Plan
shall be subject to such stop-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the Securities and Exchange
Commission, any Listing Standards and any applicable federal or state laws, and the Committee may
cause a legend or legends to be placed on any such certificates to make appropriate reference to
such restrictions. In making such determination, the Committee may rely upon an opinion of counsel
for the Company.

          Notwithstanding any other provision of the Plan, the Company shall have no liability to
deliver any Shares under the Plan or make any other distribution of the benefits under the Plan
unless such delivery or distribution would comply with all applicable state and federal laws
(including, without limitation and if applicable, the requirements of the Securities Act of 1933),
and any applicable requirements of any securities exchange or similar entity.

     15.2 Rights of a Shareholder. Except as otherwise provided in Article 7 of the Plan
and in the Restricted Stock Agreement, each Participant who receives an Award of Restricted Stock
shall have all of the rights of a shareholder with respect to such Shares, including the right to
vote the Shares to the extent, if any, such Shares possess voting rights and receive dividends and
other distributions. Except as provided otherwise in the Plan or in an Agreement, no Participant
awarded an Option, Stock Appreciation Right, RSU, Performance Unit, or Performance Share shall have
any right as a shareholder with respect to any Shares covered by such Award prior to the date of
issuance to him or his delegate of a certificate or certificates for such Shares or the date the
Participant’s name is registered on the Company’s book as the shareholder of record with respect to
such Shares.

     15.3 No Implied Rights. Nothing in the Plan or any Award granted under the Plan shall
confer upon any Participant any right to continue in the service of the Employer, or to serve as a
Director thereof, or interfere in any way with the right of the Employer to terminate his or

-20-

 

her employment or other service relationship at any time. Unless otherwise determined by the
Committee, no Award granted under the Plan shall be deemed salary or compensation for the purpose
of computing benefits under any employee benefit plan, severance program, or other arrangement of
the Employer for the benefit of its employees. No Participant shall have any claim to an Award
until it is actually granted under the Plan. To the extent that any person acquires a right to
receive payments from the Company under the Plan, such right shall, except as otherwise provided by
the Committee, be no greater than the right of an unsecured general creditor of the Company.

     15.4 Compliance with Laws.

     (a) At all times when the Committee determines that compliance with Section 162(m) of
the Code is required or desirable, all Awards to Named Executive Officers shall comply with
the requirements of Section 162(m) of the Code. In addition, in the event that changes are
made to Section 162(m) of the Code to permit greater flexibility with respect to any Awards,
the Committee may, subject to the requirements of Article 13, make any adjustments it deems
appropriate.

     (b) The Plan and the grant of Awards shall be subject to all applicable federal and
state laws, rules, and regulations and to such approvals by any United States government or
regulatory agency as may be required. Any provision herein relating to compliance with Rule
16b-3 under the Exchange Act shall not be applicable with respect to participation in the
Plan by Participants who are not Insiders.

     15.5 Successors. The terms of the Plan shall be binding upon the Company, and its
successors and assigns.

     15.6 Tax Elections. Each Participant agrees to give the Committee prompt written
notice of any election made by such Participant under Code Section 83(b) or any similar provision
thereof.

     15.7 Compliance With Code Section 409A. The Plan is intended to satisfy the
requirements of Code Section 409A and any regulations or guidance that may be adopted thereunder
from time to time. The Plan may be amended or interpreted by the Committee as it determines
necessary or appropriate in accordance with Code Section 409A and to avoid a plan failure under
Code Section 409A(a)(1). If any Award is subject to and not exempt from, Code Section 409A, and
if amounts under the Award are payable upon a Participant’s “separation from service” (as defined
in Code Section 409A) when the Participant is a “specified employee” (as defined in Code Section
409A), the payment shall be delayed until the first business day that is at least six months after
the Participant’s “separation from service.”

     15.8 Legal Construction.

     (a) Severability. If any provision of this Plan or an Agreement is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any
Agreement under any law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws or if it cannot be construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan or the Agreement, it shall be stricken and the remainder of the Plan or the
Agreement shall remain in full force and effect.

     (b) Gender and Number. Where the context admits, words in any gender shall include
the other gender, words in the singular shall include the plural and words in the plural shall
include the singular.

     (c) Governing Law. To the extent not preempted by federal law, the Plan and all
Agreements hereunder, shall be construed in accordance with and governed by the laws of the State
of Georgia.

     IN WITNESS WHEREOF, this Plan is executed as of the date approved by the Board of Directors of
the Company, the 24th day of February, 2009.

	 	 	 	 	 
	 	AARON RENTS, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

-21-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]