UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.      2))

Filed by the Registrant  x                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Aaron’s, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT

SUBJECT TO COMPLETION—DATED MAY 12, 2014

Aaron’s, Inc.

309 E. Paces Ferry Road, N.E.

Atlanta, Georgia 30305-2377

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JUNE 10, 2014MAY 6, 2015

The 20142015 Annual Meeting of Shareholders of Aaron’s, Inc., which we refer to as Aaron’s“Aaron’s” or the Company,“Company,” will be held on Tuesday, June 10, 2014, at 9:Wednesday, May 6, 2015, at9:00 a.m. Eastern Time,, local time, at the Capital City Country Club, 53 W. Brookhaven Drive N.E.,Atlanta Financial Center, 3343 Peachtree Road, NE, Atlanta, Georgia 30319,30326, for the purpose of considering and voting on the following:

Information relating to the above items is set forth in the accompanying Proxy Statement.

Only shareholders of record, as shown byon the stock transfer books of Aaron’s, at 4:00 p.m. Eastern Time on April 17, 2014March 26, 2015 are entitled to notice of, or to vote at, the meeting. Any shareholder of record who submits a proxy card retains the right to revoke such proxy card by: (i) submitting a written notice of such revocation to the Secretary of the Company so that it is received no later than 9:00 a.m. (Eastern Time) on June 9, 2014; (ii) submitting a duly signed proxy card bearing a later date than the previously signed and dated proxy card to the Secretary of the Company so that it is received no later than the closing of the polls at the Annual Meeting; or (iii) attending the Annual Meeting and voting in person thereat the shares represented by such proxy card. Attendance at the Annual Meeting will not, in and of itself, constitute revocation of a completed, signed and dated proxy card previously returned. All such later-dated proxy cards or written notices revoking a proxy card should be sent to Aaron’s, Inc., 309 E. Paces Ferry Road, N.E. Atlanta, Georgia 30305-2377, Attention: Robert W. Kamerschen, Secretary. If you hold shares through a bank, broker or other nominee, more commonly known as holding shares in street“street name,” you must contact the firm that holds your shares for instructions on how to changevote your shares.

If you were a shareholder of record on March 26, 2015, you are strongly encouraged to vote in one of the following ways whether or revoke any prior voting instructions. For assistancenot you plan to attend the Annual Meeting: (1) by completing, signing and dating the accompanying proxy card and returning it promptly in votingthe enclosed postage-prepaid envelope; (2) by completing your shares, please callproxy on the Company’sInternet at the website listed on the proxy solicitor, MacKenzie Partners, toll free at 800-322-2885card; or collect at 212-929-5500 or via email at aarons@mackenziepartners.com.

IF YOU WERE A SHAREHOLDER OF RECORD ON APRIL 17, 2014, YOU ARE STRONGLY ENCOURAGED TO VOTE IN ONE OF THE FOLLOWING TWO WAYS WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING: (1) BY COMPLETING, SIGNING AND DATING THE ACCOMPANYING BLUE PROXY CARD AND RETURNING IT PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE; OR (2) BY COMPLETING YOUR PROXY ON THE INTERNET AT THE ADDRESS LISTED ON THE BLUE PROXY CARD OR BY TELEPHONE USING THE TELEPHONE NUMBER LISTED ON THE BLUE PROXY CARD. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE PROXY STATEMENT. YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN THE PROXY CARD. IF NO INSTRUCTION IS GIVEN ON A PROPERLY SUBMITTED PROXY, YOUR SHARES WILL BE VOTED “FOR” PROPOSALS 1, 2 AND 3.(3) by telephone using the telephone number listed on the proxy card.

BY ORDER OF THE BOARD OF DIRECTORS

Robert W. Kamerschen

Executive Vice President, General Counsel

and Corporate Secretary

Atlanta, Georgia

May     , 2014April7, 2015

TABLE OF CONTENTS

i

Aaron’s, Inc.

309 E. Paces Ferry Road, N.E.

Atlanta, Georgia 30305-2377

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

GENERAL INFORMATION; ATTENDING THE ANNUAL MEETINGINFORMATION

This Proxy Statement is furnished in connection with the solicitation by the board of directors of Aaron’s, Inc., which we refer to as Aaron’s“Aaron’s” or the Company,“Company,” of proxies for use at the 20142015 Annual Meeting of Shareholders to be held at the Capital City Country Club, 53 W. Brookhaven Drive N.E.,Atlanta Financial Center, 3343 Peachtree Road, NE, Atlanta, Georgia 3031930326 on Tuesday, June 10, 2014 at 9:Wednesday, May 6, 2015 at9:00 a.m. Eastern Time,, local time, which we refer to as the Annual“Annual Meeting,” and any adjournment or postponement of the Annual Meeting.

On or about May     , 2014,April 7, 2015, the Company first sent this Proxy Statement, the enclosed BLUE proxy card, andthe accompanying Notice of Annual Meeting of Shareholders to registered and beneficial shareholders. On or about May 1, 2014, the Company first mailed to its shareholders itsCompany’s Annual Report to Shareholders for the fiscal year ended December 31, 2013,2014, which we refer to as the Annual Report.“Annual Report,” to our registered and beneficial shareholders. All shareholders have the ability to access this Proxy Statement, the enclosed BLUE proxy card, the accompanying Notice of Annual Meeting of Shareholders and the Annual Report by (i) accessing the materials athttp://www.aarons.com/proxy andhttp://www.aarons.com/annualreport or (ii) requesting a printed set of these materials from us or our proxy solicitor, MacKenzie Partners, at no charge. To request a printed copy of these materials, please write to us at our principal executive offices located at the address above, or contact MacKenzie Partners using the contact information appearing on page 53 of this Proxy Statement.above.

Only shareholders, the Board, Boardboard of directors, board nominees, management of the Company and management’s invited guests are permitted to attend the Annual Meeting. If you are a shareholder holds their shares as aof record shareholder and wisheswish to attend the Annual Meeting, in person, such shareholderyou must provide valid picture identification, such as a driver’s license or passport, showing a name that matches a name on the recordCompany’s list of record shareholders as of April 17, 2014. Any shareholder who holdsMarch 26, 2015 to be admitted to the Annual Meeting. If you hold your shares through a bank, broker or other nominee, more commonly known as holding shares in “street name,” whether through a broker, bank or other custodian, and desiresdesire to attendvote at the Annual Meeting, shouldyou must inform the shareholder’syour broker or other custodiannominee and request a “legal” proxy from the broker or custodian. The shareholdernominee. You will need to bring the legal proxy to the Annual Meeting along with valid picture identification. If the shareholder doesyou do not have a legal proxy, then the shareholder should bring to the Annual Meeting the shareholder’s most recent brokerage account statement showing that the shareholder owned Aaron’s common stock as of the record date; however, in any event, a street name shareholderyou will not be able to vote at the Annual Meeting. You are, however, still welcome to attend the Annual Meeting, without a legal proxy. Shareholdersbut you must bring your most recent brokerage account statement showing that you owned Aaron’s common stock as of the record date along with valid picture identification to be admitted to the Annual Meeting. You are advised that if theyyou own shares in street name and obtain a legal proxy, any proxy you have previously executed proxy will be revoked, and the shareholder’syour vote will not be counted unless the shareholder appearsyou appear at the Annual Meeting and votesvote in person or legally appointsappoint another proxy to vote on itsyour behalf.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY

MATERIALS FOR THE SHAREHOLDERANNUAL MEETING

TO BE HELD ON JUNE 10, 2014MAY 6, 2015

TheThis Proxy Statement and the Annual Report to Shareholders are available at:

http://www.aarons.com/proxyand http://www.aarons.com/annualreport, respectively.respectively

VOTING SECURITIES AND VOTE REQUIRED

Record Date;Date and Shares Outstanding

As of April 17, 2014,March 26, 2015, the record date for determination of personsdetermining shareholders entitled to receive notice of, and vote at, the Annual Meeting, there were 72,220,35772,539,881 shares of Aaron’s common stock outstanding. Each share of Aaron’s common stock entitles the holder thereof to one vote foron each matter properly coming before the Annual Meeting, and any adjournment or postponement of the Annual Meeting.

Voting Instructions

If you are a holdershareholder of record of common stock as of the record date, you may vote for the Board’s Director-nominees, Mr. Ronald W. Allen and Mr. Ray M. Robinson, by completing, signing, dating and returning the enclosed BLUE proxy card by mail. To vote by using the enclosed BLUE proxy card, mark your selections on the enclosed BLUE proxy card, date the BLUE proxy card and sign your name exactly as it appears on your BLUE proxy card, and return your BLUE proxy card by mail in the pre-addressed, postage-paid envelope enclosed with this Proxy Statement for such purpose.Statement. If you are a holdershareholder of record of common stock as of the record date, you may also vote by (i) completing your proxy on the internetInternet at the addresswebsite listed on your BLUE proxy card, or by(ii) telephone using the telephone number listed on the BLUEyour proxy card or (ii)(iii) attending the Annual Meeting and voting thereat in person. Votes at the Annual Meeting will be taken by written ballot. At the commencement of the Annual Meeting, we will distribute a written ballot to any shareholder of record who attends the Annual Meeting and wishes to vote thereat in person.

If your shares are registered in your name with our transfer agent, Computershare, you are a stockholder of record. If your shares are held in “streetthe name” whether through a of your bank, broker bank or other nominee, only they can sign a BLUE proxy card with respect to your shares. You are therefore urged to contact the person responsible for your account and give them instructions for how to complete a BLUE proxy card representing your shares so that it can be timely returned onare held in street name, and you should receive information from your behalf. You also should confirm in writingbank, broker or other nominee about your instructions to the person responsible for your account and provide a copy of those instructions to our proxy solicitor, MacKenzie Partners (using the contact information on page 53 of this Proxy Statement), so that they can attempt to ensure that your instructions are followed.

The Board unanimously recommends a vote “FOR” each of the Board’s two Director-nominees, Mr. Ronald W. Allen and Mr. Ray M. Robinson.

If you have any questions about the procedures for admission to the Annual Meeting, please contact our proxy solicitors, MacKenzie Partners, toll free at (800) 322-2885 or collect at (212) 929-5500 or via e-mail at aarons@mackenziepartners.com. Please see below for a discussion of how to revoke your proxy.

Shareholder Solicitation

As discussed in more detail under the caption “Additional Information—Shareholder Solicitation”, Vintage Capital Management, LLC, which we refer to as Vintage Capital, has submitted a letter to the Company, which we refer to as the Vintage Letter, stating that it intends to nominate five insurgent Director candidates for the two Board seats up for election at the Annual Meeting and on May 5, 2014, Vintage Capital filed its preliminary proxy statement in which it nominated two of such five candidates as its director candidates for such two Board seats up for election. Starboard Value and Opportunity Master Fund Ltd, which we refer to as Starboard, also submitted a letter to the Company, which we refer to as the Starboard Letter stating that it intended to nominate four insurgent Director-candidates for the two Board seats up for election at the Annual Meeting. On May 6, 2014, Starboard delivered a letter to the Board withdrawing its nomination notice and its slate of candidates for election to the Board at the Annual Meeting and publicly announced such withdrawal. The Company notified Starboard that it has accepted Starboard’s withdrawal of its slate of directors for election at the Annual Meeting and that it will treat the Starboard slate as withdrawn.specific voting options.

In the event that you receive proxy materials from Vintage Capital, the Board recommends that youDO NOT sign or return any proxy card sent to you by Vintage Capital. A vote to “withhold authority” with respect to Vintage Capital’s insurgent Director-candidates on a proxy card that Vintage Capital sends you is not

the same as voting “for” the Board’s Director-nominees, because a vote to “withhold authority” with respect to Vintage Capital’s insurgent Director-candidates on its proxy card will revoke any previous proxy submitted by you. The only way to vote “for” the Board’s two Director-nominees is to sign, date and return a BLUE proxy card in the enclosed postage-paid envelope. If you have previously submitted a proxy card sent by Vintage Capital, we urge you to revoke that proxy by voting in favor of the Board’s two Director-nominees, Mr. Ronald W. Allen and Mr. Ray M. Robinson, by using the enclosed BLUE proxy card.Only the latest validly executed proxy that you submit will be counted.

Quorum And Vote Required

The presence, in person or by proxy, of holders of more than 50%a majority of theAaron’s outstanding common stock as of April 17, 2014,March 26, 2015, the record date for the Annual Meeting, is necessary to constitute a quorum for the transaction of business at the Annual Meeting. All proxies representing shares that are entitled to vote at the meeting,Annual Meeting, including abstentions votes to withhold authority and broker non-votes, will be counted toward establishing whether there is a quorum present at the Annual Meeting.

Assuming a quorum is present, for either of proposals 1 or 3 to be approved, the votes cast by holders of shares of common stock present, in person or represented by proxy, at the Annual Meeting in favor of a proposal must exceed the votes cast rejecting the proposal.

If Vintage Capital does not properly nominate any candidates for election to the Board, which we refer to as an Uncontested Election, shareholdersShareholders may vote “for”, “against”“FOR,” “AGAINST” or “abstain”“ABSTAIN” for each of the Director-nominees. In the case of an Uncontested Election, a Director-nomineedirector-nominees pursuant to proposal 1. A director-nominee will be elected upon the affirmative vote of a majority of the total votes cast at the Annual Meeting, which means that the number of votes cast “FOR” a director’s election exceeds the number of votes cast “against”“AGAINST” that director’s election. In an Uncontested Election, ifIf an incumbent director fails to receive a majority of the votes cast, the incumbent director will promptly tender his or her resignation to the Boardour board of directors which can then choose to accept it, reject it or take other action.action our board of directors deems appropriate.

If Vintage Capital does properly nominate one or more insurgent Director-candidates for election to the Board and any such nomination has not been withdrawn by Vintage Capital on or prior to the 10^th day preceding the date that the Company first mails its notice of meeting to shareholders, which we refer to as a Contested Election, shareholdersShareholders may vote “for”“FOR,” “AGAINST” or “withhold authority”“ABSTAIN” for the Director-nominees or insurgent Director-candidates. In the caseeach of proposals 2, 3 and 4. Assuming a Contested Election, directors willquorum is present, for each of proposals 2, 3 and 4 to be elected by a plurality ofapproved, the votes cast by holders of shares of common stock present, in person or by proxy, at the annual meeting. “Plurality” means thatAnnual Meeting in favor of the nominees or candidates receivingproposal must exceed the greatest number of affirmative votes will be elected as directors, up tocast against the number of directors to be chosen at the meeting.proposal.

For any other mattersmatter that may be properly presented at the Annual Meeting and assuming a quorum is present, the matter will be approved if the votes cast favoringby holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the matter exceed the votes cast opposingagainst the matter, unless a greater vote is required by law.

Broker

Abstentions and broker non-votes, abstentions and voteswhich occur when a bank, broker or other nominee of shares held in street name is not permitted to withhold authorityvote without instructions from the shareholder, will have no effect on the outcome onof the vote for the election of directors or any other matter. Broker non-votes occurmatter expected to be voted on a matter up for vote when a broker, bank orat the Annual Meeting. Other than with respect to proposal 3 regarding the ratification of Ernst & Young LLP as our independent registered public accounting firm, banks, brokers and other holdernominees of shares you ownheld in “street name” isstreet name are not expected to be permitted to vote on that particular matter without instructions from you, you do not give suchthe shareholder on any of the matters expected to be voted on at the Annual Meeting. The ratification of Ernst & Young LLP as our independent registered public accounting firm is considered to be a routine matter on which banks, brokers and other nominees of shares held in street name may permissibly vote without receiving instructions andfrom the broker or other nominee indicates on its proxy card, or otherwise notifies us, that it does not have authority to vote its shares on that matter. Whether a broker has authority to vote its shares on uninstructed matters is determined by stock exchange rules.shareholder.

Revocation

Each BLUE proxy card that is properly executed and returned by a shareholder will be voted as specified therein by the shareholder unless it is revoked. Shareholders are requested to execute the enclosed BLUE proxy card and return it in the enclosed envelope or submitotherwise vote their proxy in the mannershares as described on the enclosed BLUE proxy card.herein. If no direction is specified on the enclosed BLUE proxy card as to any matter being acted

upon, the shares represented by the proxy will be votedFOR each of proposals 1 and 2, and 3proposal described in this Proxy Statement and in accordance with the proxy holder’s best judgment as to any other business that may properly come before the Annual Meeting.

Voting via telephone or the internetInternet should be acccomplishedaccomplished prior to June 9, 2014May 5, 2015 at11:59 p.m., Eastern Time; proxytime. Proxy cards will be accepted when received up through the closing of the polls at the Annual Meeting. Any shareholder giving a proxy has the power to revoke it at any time before it is voted by submitting another proxy bearing a later date or by giving written notification to the Corporate Secretary of the Company. Shareholders who are present at the Annual Meeting may revoke their proxy and vote in person. If you hold your shares through a broker or other nominee (i.e., in “street name”),street name, your bank, broker or other nominee should provide you with instructions on how you may instruct themit to vote your shares on your behalf.behalf and how you may revoke any voting instructions given.

Solicitation

Only shareholders of record at 4:00 p.m. Eastern Timethe close of business on April 17, 2014the record date are entitled to vote at the Annual Meeting. A list of all shareholders entitled to vote will be available for inspection at the Annual Meeting. The Company will bear the cost of soliciting proxies will be borne by the Company, including expenses in connection with preparing and mailing this Proxy Statement, the chargesenclosed proxy card and expenses of brokerage firms, banks, and others for forwarding solicitation materialany other communications that we will be sending to beneficial owners of sharesyou in advance of the Company’s Common Stock.Annual Meeting. The principalCompany has engaged the firm of MacKenzie Partners, Inc., as its proxy solicitor, at a fee estimated to be up to $20,000 for the initial solicitation is being madeservices, plus reimbursement of out-of-pocket expenses.

In addition to solicitation by mail. Additional solicitations, however, may be made by telephone, facsimile, or personal interview bymail and the Internet, certain officers, directors and employees of the Company may solicit proxies by telephone, email, facsimile or in person, although no additional compensation will be paid for such solicitation. The Company may also request banks, brokers and other nominees to solicit their customers who have a beneficial interest in our common stock registered in their names and will not be additionally compensated.reimburse such banks, brokers and other nominees for their reasonable out-of-pocket expenses.

PROPOSAL ONE

AMENDMENT TO THE BYLAWS TO DECLASSIFY THE BOARD OF DIRECTORS

The Company’s bylaws currently divide the Company’s Board into three classes, which shall be as nearly equal in number as possible. At each annual meeting of shareholders, a class of directors is elected for a three-year term to succeed the directors of the same class whose terms are then expiring. The Board is currently comprised of two Class I directors: Ronald W. Allen and Ray M. Robinson, whose terms expire in 2014; three Class II directors, Kathy T. Betty, Leo Benatar and John B. Schuerholz whose terms expire in 2015; and three Class III directors, Cynthia N. Day, Hubert L. Harris and David K. Kolb, whose terms expire in 2016.

Our Board evaluates on an ongoing basis our corporate governance policies, including the classified board structure. Our Board has carefully evaluated the current need for classified board structure and members of our Board have discussed this structure with certain of our shareholders as part of our regular shareholder communication. As a result of this evaluation and after carefully considering the advantages of both classified and declassified structures, our board of directors unanimously determined that declassification would be in the best interests of the Company and its shareholders.

Declassification of the Board requires an amendment to the bylaws which must be approved by the Company’s shareholders. Accordingly, on May 11, 2014, the board of directors unanimously resolved to recommend that the shareholders of the Company approve the amendment to the Company’s bylaws set forth on Appendix B attached hereto, which we refer to as the Proposed Amendment, to declassify the Board such that subsequent to such declassification, directors standing for election at each annual meeting of shareholders, commencing with the Annual Meeting, will be elected for a term expiring at the next annual meeting following their election and until their respective successor are elected and qualified. The Proposed Amendment will not shorten the term of any existing director.

If the Proposed Amendment is approved by the shareholders of the Company by the requisite vote at the Annual Meeting, then the Proposed Amendment will become effective immediately and will apply to the election of directors at the Annual Meeting. If the Proposed Amendment is approved: (i) at the Annual Meeting the two Class I directors whose term expires the Annual Meeting, or their successors, will stand for election for a term that expires at the annual meeting of shareholders in 2015; (ii) at the annual meeting of shareholders in 2015 the two Class I directors elected at the Annual Meeting, or their successors, as well as the three directors Class II directors whose term expires at the annual meeting of shareholders in 2015, or their successors, will stand for election for a term that expires at the annual meeting of shareholders in 2016; and (iii) at the annual meeting of shareholders in 2016, all directors will stand for election for a term that expires at the annual meeting of shareholders in 2017, and upon such election at the annual meeting of shareholders in 2016, the declassification of the Company’s board of directors will be complete and all directors thereafter will serve terms expiring upon the next annual meeting of shareholders following their election and until their respective successors are elected and qualify.

If the Proposed Amendment is not approved by the shareholders of the Company by the requisite vote at the Annual Meeting, the Company will continue to have a classified board of directors as currently provided for in the Company’s bylaws.

For the Proposed Amendment to be approved, the votes cast by holders of shares of common stock present, in person or represented by proxy, at the Annual Meeting in favor of proposal 1 must exceed the votes cast rejecting such proposal.

No appraisal rights are available under the Georgia Business Corporation Code, our Amended and Restated Articles of Incorporation or our bylaws to any shareholder who does not vote in favor of the adoption and approval of the Proposed Amendment.

After careful consideration, the Board concluded that an amendment to the Company’s bylaws to provide for declassification of the Board and for the annual election of directors would be in the best interests of the Company and its shareholders. Accordingly,OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE AMENDMENT OF THE BYLAWS TO DECLASSIFY OUR BOARD OF DIRECTORS.

PROPOSAL TWO

ELECTION OF DIRECTORS

The Boardboard of directors is currently comprised of twoten directors, seven of which have terms expiring at the Annual Meeting and three of which have terms expiring at our 2016 Annual Meeting of Shareholders. Prior to our 2014 Annual Meeting of Shareholders, our bylaws divided the board of directors into three classes, with each class being elected for a three-year term. Effective as of our 2014 Annual Meeting of Shareholders, shareholders approved an amendment to our bylaws to declassify our board structure so that directors standing for election after the declassification will be elected for a term expiring at the next annual meeting following their election. Therefore, at our 2014 Annual Meeting of Shareholders, each of our historical Class I directors threewas elected for a one-year term expiring at the Annual Meeting. In addition, each of our historical Class II directors, and each director that was appointed by the board of directors subsequent to our 2014 Annual Meeting of Shareholders, has a term expiring at the Annual Meeting. The terms of the three remaining historical Class III directors. Currently,directors will expire at each annual meetingour 2016 Annual Meeting of shareholders, a classShareholders. At our 2016 Annual Meeting of Shareholders, all directors is electedwill stand for election for a three-yearone-year term that expires at our 2017 Annual Meeting of Shareholders. Each of our directors will continue to succeedhold office until the directorsexpiration of the same class whose terms are then expiring. his or her term and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office or death.

The Boardboard of directors recommends the election of the twoseven nominees listed below, to constitute directorseach of the Company, who, if proposal 1 is approved,whom will holdhave a term of office until the annual meetingexpiring at our 2016 Annual Meeting of shareholders in 2015 and until their successors are duly elected and qualified, or if proposal 1 is not approved, will hold office until the annual meeting of shareholders in 2017 and until their successors are duly elected and qualified.Shareholders. If, at the time of the Annual Meeting, any of such nominees should be unable to serve, the persons named in the proxy will vote for such substitutes or will vote to reduce the number of directors inserving on the Class for the ensuing year,board of directors, as the Board recommends, but inboard of directors recommends. In no event will the proxy be voted for more than twoseven nominees. Management has no reason to believe that any substitute nominee or reduction infor election at the number of directors in the Class for the ensuing yearAnnual Meeting will be required.unable to serve if elected, however.

All of the nominees listed below are now directors of the Company and have consented to serve as directors if elected. The following information relating

Nominees to age, positions with the Company, principal occupation, and directorshipsServe as Directors Whose Terms, if Elected, Will Expire at our Next Annual Meeting in companies with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (which we refer to in this Proxy Statement as the “Exchange Act”), subject to the requirements of Section 15(d) of that Act or registered as an investment company under the Investment Company Act of 1940, has been furnished by the respective nominees.

NOMINEES TO SERVE AS DIRECTORS WHOSE TERMS, IF ELECTED, WILL EXPIRE IN 2015 (OR IF PROPOSAL 1 IS NOT APPROVED, WILL SERVE AS CLASS I DIRECTORS WHOSE TERMS, IF ELECTED, WILL EXPIRE IN 2017)2016

Ronald W. Allen,Matthew E. Avril, 72,54, has beenserved as a director of the Company since 1996 andJuly 2014. Mr. Avril has been named the Chief Executive Officer of the Company since February 2012.Starwood Vacation Ownership, a vacation ownership business that is expected to be spun-off from Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) into a separate publicly-traded company. Mr. Allen alsoAvril retired from Starwood in December 2012, where he had served as Chairman ofPresident, Hotel Group since September 2008. Mr. Avril began his career with Starwood in 1989 through Vistana, Inc., the Board from November 2012 through April 2014original predecessor to Starwood Vacation Ownership, and as President of the Company from February 2012 through April 2014. Mr. Allen served as interim Presidentboth Chief Financial Officer and Chief Executive OfficerCo-President of the Company from November 2011 to February 2012 and has served as a Director of the Company since 1997. He was Chairman and Chief Executive Officer of Delta Air Lines, Inc., an international air passenger carrier, from 1987 to 1997 and served in various senior roles at the airline prior to that appointment. He currently serves asStarwood Vacation Ownership during his tenure. Mr. Avril is also a director of The Coca-Cola CompanyAPI Technologies Corp., a designer and Aircastle Limited. He ismanufacturer of systems, subsystems, modules and components for multiple applications and Zentila, a former directorSaaS based meetings management technology company.

Among other qualifications, Mr. Avril brings senior executive experience to our board of Forward Air Corporationdirectors. His extensive management and Guided Therapeutics, Inc.

Mr. Allen has extensive public company operatingexecutive service, and leadership experience, having served as President, Chairmanservice on other boards provides him with operational skills and Chief Executive Officerfinancial and strategic expertise, which are utilized by our board of Delta Air Lines, Inc. He led Delta Air Lines through a major restructuring that resulted in several years of growth for the company. Mr. Allen also has served on numerous boards, including the boards of Presbyterian College, Smithsonian Air/Space Museum, Georgia Tech Foundationdirectors. These skills and NationsBank. Mr. Allen’s considerable experience in senior management, operational leadership and business prominence makeexperiences qualify him well suited to serve on theour board of directors.

Ray M. Robinson,Leo Benatar, 66,85, has beenserved as a director of the Company since 2002 and has1994. Mr. Benatar is currently a Principal with consulting firm Benatar & Associates. Mr. Benatar previously served as ourChairman of packaging manufacturer Engraph, Inc. and, from 1981 to 1992, served as Engraph’s Chief Executive Officer. Mr. Benatar also previously served as Chairman of the Board since April 2014. From November 2012 until his appointment as Chairman, Mr. Robinson was independent lead director. He is President EmeritusFederal Reserve Bank of the East Lake Golf Club and Vice Chairman of the East Lake Community Foundation. Prior to his retirement in 2003 as Southern Region President, Mr. Robinson was employed with AT&T from 1968. He currently servesAtlanta, as a director for Avnet,of Paxar Corporation and Mohawk Industries, Inc., Acuity Brands, Inc., and AMR and isas nonexecutive Chairman of Interstate Bakeries Corporation.

Among other qualifications, Mr. Benatar brings intimate knowledge of the BoardCompany to our board of Citizens Trust Bank of Atlanta.

Mr. Robinson bringsdirectors. His strong leadership and management experience, inpast experience as a long-term senior managementexecutive, experience as an entrepreneur and board service for numerous public companies. His service on the boards of variousseveral other prominent companies and organizations of various sizes lends to his extensive operational skillsgives Mr. Benatar valuable strategic, financial and gives him insight into compensation dynamicsaccounting experience, which are a complementary addition tois utilized by our board of directors.

These skills and experienceexperiences qualify him well to serve on our board of directors, as well as serving as Chairman of the board of directors and of the Compensation Committee.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS USE THE ENCLOSED BLUE PROXY CARD TO VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES ABOVE.

CLASS II DIRECTORS OF THE COMPANY WHOSE TERMS WILL EXPIRE IN 2015directors.

Kathy T. Betty, 58, has served on our boardas a director of directorsthe Company since 2012. From 2009 until 2011, Ms. Betty was the owner of the Atlanta Dream of the WNBA. She also founded The Tradewind Group, an incubator company, where she worked until 2007. Her other experience includes serving as Executive Vice President and Partner of Scott, Madden from 1993 to 2000, where she worked on international mergers and acquisitions, andworking at Ernst & Young LLP from 1989 to 1993, including serving as one of the first women admitted to the partnership.

Among other qualifications, Ms. Betty hasbrings over 30 years of business management and consultancy experience. She currently holds manyexperience to our board of directors. Her leadership positions in the Atlanta community, including serving on the boards of the Children’s Healthcare of Atlanta Foundation, YMCA of Metropolitan Atlanta and the Alexander-Tharpe Fund, Georgia Institute of Technology, as well as the Board of Councilors of the Carter Center. Ms. Betty’sCenter, provide her with management, entrepreneurial, financial and financialaccounting experience, along withwhich is utilized by our board of directors. These skills and experience qualify her experience as an entrepreneur and strong community presence, are valuable assets and make her well qualified to serve on our board of directors.directors

Leo Benatar,Brian R. Kahn 84,, 41, has served as a director of the Company since 1994. He is currently a Principal with consulting firm Benatar & Associates. He wasMay 2014. Mr. Kahn founded and has served as the investment manager of Vintage Capital and its predecessor, KCM, since 1998, which focuses on public and private market investments in the consumer, manufacturing and defense industries. Mr. Kahn has served as Chairman of packaging manufacturer Engraph, Inc., andAPI Technologies Corp. since January 2011; from January 2011 to August 2012, Mr. Kahn also served as Chief Executive Officer of that company from 1981API. From October 2010 to 1995. HeJuly 2011, Mr. Kahn was a director of Integral Systems, Inc., a provider of products, systems and services for satellite command and control, telemetry and digital signal processing, data communications, enterprise network management and communications information assurance. Mr. Kahn also previously served as the Chairman of White Electronic Designs Corporation, a provider of products for defense and aerospace applications from February 2009 to May 2010. Mr. Kahn is also a member of the Federal Reserve BankBoard of Atlanta,Managers and a controlling shareholder of Buddy’s Newco, LLC d/b/a/ Buddy’s Home Furnishings, an owner and franchisor of rent-to-own stores. Earlier in his career, Mr. Kahn was the owner of Rosey Rentals L.P., which we refer to as RRLP, which at that time was the second-largest franchisee of the Company, as well as Ace TV Rental and Choice Rent-to-Own. In December 2008, Vintage Capital acquired RRLP. Mr. Kahn was previously an analyst covering the rent-to-own sector with Fidelity Investments.

Among other qualifications, Mr. Kahn brings extensive knowledge of the rent-to-own industry to our board of directors. His industry experience and understanding of technology, together with his other board service, provide him with operational and financial experience, which is utilized by our board of directors. These skills and experiences qualify him to serve on our board of directors

H. Eugene Lockhart, 65, has served as a director of Paxar Corporationthe Company since August 2014. Mr. Lockhart currently serves as Senior Advisor to General Atlantic, a leading global growth equity firm providing capital and Mohawk Industries, Inc. andstrategic support for growth companies, a position he has held since January 2012. Mr. Lockhart also serves as nonexecutivethe Chairman of Interstate Bakeries Corporation.

Mr. Benatar has been a member of ourDiamond Castle LLC and Mission OG LLC, and on the board of directors for 20 years. His intimate knowledge of our Company, strong leadershipHuron Consulting, IMS Health and management experience, past experienceRadioshack Corporation. Mr. Lockhart previously served as a long-term senior executive, experiencePresident and Chief Executive Officer of MasterCard Worldwide and, prior to that, he led the retail and commercial banking businesses as an entrepreneurPresident of the Global Retail Bank at Bank of America until its sale to NationsBank. Mr. Lockhart also previously served as the CEO of Midland Bank UK, Chairman of First Direct and serviceThomas Cook, and on the boards of severaldirectors of Progressive Finance Holdings, LLC (which, together with its subsidiaries, we refer to as “Progressive”), First Republic Bank, RJR/Nabisco and Cognizant.

Among other prominent organizations givesqualifications, Mr. Benatar insight intoLockhart brings extensive experience in the managementfinance and payment industries to our board dynamics of organizations,directors. His knowledge of the Progressive business, extensive leadership and senior executive experience and other board service provide him with deep industry knowledge, financial expertise and operational experience, which is invaluableutilized by our board of directors. These skills and experiences qualify him to serve on our board of directors.

John B. Schuerholz,W. Robinson III,73,43, has been a director of the Company since 2006. Mr. Schuerholz is currently PresidentNovember 2014, when he was named the Chief Executive Officer of the Atlanta Braves professional baseball organization, a positionCompany. Mr. Robinson served as the Chief Executive Officer of Progressive Finance Holdings, LLC from 2012 until November 2014 when he has held since 2007.was named Aaron’s Chief Executive Officer. Prior to this,that, he was Executive Viceserved as the President and General ManagerChief Operating Officer of that organization.TMX Finance LLC (d/b/a TitleMax), one of the largest auto title lenders in the U.S. He joined TitleMax as Chief Operating Officer in 2004 and was employed from 1968 withappointed President in 2008. Prior to TitleMax, he worked in the Kansas City Royals professional baseball organization in various management positions until being named Executive Vice Presidentinvestment banking groups at Morgan Stanley, Lehman Brothers, and General Manager of that organization in 1981.Wheat First Butcher Singer where he covered the rent-to-own industry.

Among other qualifications, Mr. Schuerholz has over 45 years of leadershipRobinson brings significant operational and managementfinancial experience including as an executive with Major League Baseball. His service on numerous committees of Major League Baseball, and his appointment to lead the league’s program on leadership and management demonstrate the management skills which, together with Mr. Schuerholz’s strong community prominence, are a valuable asset to our board of directors. His considerable experience in senior management, and his leadership and intimate knowledge of the Progressive business, provide him with strategic and operational expertise, which is utilized by our board of directors. These skills and experiences qualify him to serve on our board of directors.

Ray M. Robinson, 66, has served as a director of the Company since 2002 and has been our Chairman since April 2014. From November 2012 until his appointment as Chairman, Mr. Robinson was the Company’s independent lead director. Mr. Robinson started his career at AT&T in 1968, and prior to his retirement in 2003, he held several executive positions, including President of the Southern Region, its largest region, President and Chief Executive Officer of AT&T Tridom, Vice President of Operations for AT&T Business Customer Care, Vice President of AT&T Outbound Services, and Vice President of AT&T Public Relations. Mr. Robinson is also a director of Acuity Brands, Inc., a lighting solutions company, American Airlines Group Inc., a holding company operating various commercial airlines (including American Airlines and US Airways), and Avnet, Inc., a distributor of electronic components, enterprise computer and storage products, information technology services and embedded subsystems, all of which are public companies. Since 2003, Mr. Robinson has also served as a director and non-executive Chairman of Citizens Bancshares Corporation of Atlanta, Georgia, the largest African American-owned bank in the Southeastern U.S. and the nation’s second largest. He previously served as a director of RailAmerica Inc. from 2010 to 2012. Mr. Robinson has also been Vice Chairman of the East Lake Community Foundation in Atlanta, Georgia since November 2003.

Among other qualifications, Mr. Robinson brings experience in senior management and board service for numerous public companies to our board of directors. His service on the boards of a number of organizations of varying sizes provides him with extensive operational skills and governance expertise, which is utilized by our board of directors. These skills and experiences qualify him to serve on our board of directors.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “CLASS III DIRECTORSFOR” THE ELECTION OF EACH OF THE COMPANY WHOSE TERMS WILL EXPIRE INNOMINEES ABOVE.

Continuing Class III Directors of the Company Whose Terms Will Expire at Our Next Annual Meeting in 2016

Cynthia N. Day, 48,has beenserved as a memberdirector of our board of directorsthe Company since 2011. Ms. Day is currently President and Chief Executive Officer of Citizens Bancshares Corporation and Citizens Trust Bank. She served as Chief Operating Officer and Senior Executive Vice President of Citizens Trust Bank from 2003 to January 2012 and served as its acting President and Chief Executive Officer from January 2012 to February 2012. Ms. Day previously served as the Executive Vice President and Chief Operating Officer and in other capacities of Citizens

Federal Savings Bank of Birmingham from 1993 until its acquisition by Citizens Trust Bank in 2003 and

previously served as an audit manager for KPMG. She currently serves on the board of directors of Primerica, Inc., Citizens Bancshares Corporation and Citizens Trust Bank.

Ms. Day’s management and financial experience together with her Certified Public Accountant credentials make her well qualified to serve as a member of our board of directors. Ms. Day has also served as a member of the board of directors of the National Banker’s Association, the Georgia Society of CPA’s,CPAs, the University of Alabama Continuing Education Advisory Board and the United Negro College Fund.

Ms. Day brings management and financial experience to our board of directors. Her experience in multiple senior executive leadership positions and service on other boards, provider her with accounting and financial expertise, which is utilized by our board of directors. These skills and experiences qualify her to serve on our board of directors.

Hubert L. Harris, Jr., 70,71, has served on our boardas a director of directorsthe Company since 2012. Since 1992, Mr. Harris has been the ownerowned and operator ofoperated Harris Plantation, Inc., a cattle, hay and timber business. He isMr. Harris has also served as a Trusteetrustee for SEI mutual funds since 2008. Mr. Harris previously served as CEO of Invesco North America and Chairman of Invesco Retirement Services, and served on the board of directors of Invesco from 1993 to 2004. From 1988 to 2005, Mr. Harris was President and Executive Director of the International Association for Financial Planning. HeMr. Harris also served as the Assistant Director of the Office of Management and Budget in Washington, DCD.C. from 1977 to 1980.

Mr. Harris also servesis on the Board of Councilors of the Carter Center, and he previously served as a director of Colonial BancGroup, Inc., chair of the Georgia Tech Foundation and chair of the Georgia Tech Alumni Association.

Among other qualifications, Mr. Harris’sHarris brings a strong financial background and extensive business experience includingto our board of directors. His service on numerous for-profit and non-profit boards makesand management experience provide him a qualifiedwith governance and valuable memberfinancial expertise, which is utilized by our board of directors. These skills and experiences qualify him to serve on our board of directors. 

David L. Kolb, 75, has beenserved as a director of the Company since 2003. Mr. Kolb was Chairman of Mohawk Industries, Inc., a manufacturer of flooring products, from 2001 until 2004. Prior to 2001, he served as Chief Executive Officer of Mohawk from 1988 to 2001. He also serves on the board of directors for Chromcraft Revington Corporation and was previously a director of Paxar Corporation.

Among other qualifications, Mr. Kolb has servedbrings intimate knowledge of the Company and experience as a member and chair of public company boards, including on various audit, nominating and corporate governance committees.committees, to the board of directors. His management and accounting expertise, together with his senior executive leadership experience and service on the boards of several other prominent companies and organizations, provide Mr. Kolb with valuable strategic financial operational expertise, which is utilized by our board committeeof directors. These skills and governance experience, as well as his leadership and management experience, qualifiesexperiences qualify him well to serve on our board of directors as well as Chair of our Nominating and Corporate Governance Committee.directors.

Executive Officers Who Are Not Directors

Set forth below are the names and ages of each executive officer of the Company who is not a director. All positions and offices with the Company held by each such person are also indicated.

Name (Age)		Position with Mr. Kamerschen began his legal career in 1994 in the Company and Principal Occupation During Atlanta office of the Past Five Years international law firm Troutman Sanders LLP.
Steven A. Michaels (42)(43)		President of Aaron’s, Inc. since April 2014. Prior to this, Mr. Michaels served as (i) Vice President FinanceStrategic Planning & Business Development from 20122013 until April 2014, (ii) Vice President, Strategic Planning & Business DevelopmentFinance from 20132012 until April 2014 and (iii) Vice President, Finance, Aaron’s Sales & Lease Ownership Division from 2008 until 2013.2011.
Tristan J. Montanero (42)(43)		Senior Vice President, Operations since 2013. Prior to this, Mr. Montanero held a Divisional Vice President position since 2002.
John W. Robinson (42)Michael P. Ryan (52)		ExecutiveSenior Vice President, President and Chief Executive Officer of the Company’s recently acquired subsidiary, virtual lease-to-own company Progressive Finance Holdings, LLC.Operations since 2013. Prior to the Company’s acquisition of Progressive,this, Mr. RobinsonRyan served as its Chief Executive Officer.Vice President, Franchise in 2014 and Divisional Vice President, Northern Operations from 2013 until 2014.
Robert P. Sinclair, Jr. (52)(53)		Vice President, Corporate Controller since 1999.
D. Chad Strickland (38)(39)		Senior Vice President, Associate Resources since April 2014. Prior to this, Mr. Strickland served as Vice President, Associate Resources from 2010 until April 2014 and Vice President, Employee Relations from 2006 until 2010.
John T. Trainor (41)(42)		Vice President, Chief Information Officer since November 2010. Prior to this, Mr. Trainor was Information Technology Director for the Company from 1999 to 2007 when he was appointed Vice President, Information Technology, Aaron’s Sales & Lease Ownership Division.
Ryan Woodley (38)		Chief Executive Officer of Progressive Finance Holdings, LLC since January 2015. Mr. Woodley joined Progressive Finance Holdings, LLC as Chief Operating Officer and Chief Financial Officer in June of 2013. Prior to that, he was Chief Operating Officer and Chief Financial Officer at DigiCert, a digital security certificate provider which was sold to TA Associates in November 2012.

Composition, Meetings and Committees of the Board of Directors

Our board of directors currently has eightten members. Our Corporate Governance Guidelines include categorical standards adopted by our board of directors to determine director independence that meet the listing standards set forth by the New York Stock Exchange, or “NYSE.” Our Corporate Governance Guidelines also require that at least

75% of our board of directors must be “independent” in accordance with NYSE listing requirements. Upon recommendation by our Nominating and Corporate Governance Committee, our board of directors has affirmatively determined by resolutionthat all of the directors on the board of directors as a whole, that seven of our directors are not officers or employees of the Company or its subsidiaries or individuals having a relationship that, in our board of director’s opinion, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and are therefore considered “independent” in accordance with NYSE listing requirements and the New York Stock Exchange Listed Company Manual. The directors thatrequirements of our Corporate Governance Guidelines, other than Mr. John Robinson, our Chief Executive Officer. Mr. Ray Robinson is the Chairman of our board of directors has determined to be independent in accordance with the foregoing standards are Mses. Betty and Day and Messrs. Benatar, Harris, Kolb, Ray Robinson and Schuerholz. The position of Chairman is held by Mr. Ray Robinson.directors.

Our board of directors currently has established threefour standing committees consisting of thean Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee and fromOperational and Financial Advisory Committee. From time to time, our board of directors may establish ad-hoc committees at its discretion. OurOther than the Operational and Financial Advisory Committee, our board of directors has adopted a charter for each of theits standing committees, a copycopies of which isare available on our website athttp://www.aaronsinc.com. The current members of the committeeseach committee are identified in the table below:

*

Each member of the Audit Committee has been designated an “audit committee financial expert” as defined by SEC regulations.

Meetings

The Board held fiveboard of directors held24 meetings during the year ended December 31, 2013.2014. The number of meetings held by each of our committees in 20132014 is set forth in the table above. Each of our directors then in office attended at least 75% of the total number of meetings of the board of directors and committees75% of the total number of meetings of each committee on which he or she served. It is our policy that directors are expected to attend the annual meeting of shareholders in the absence of a scheduling conflict or other valid reason. All of our directors then in office attended in person the 2013 annual meeting2014 Annual Meeting of Shareholders held on May 7, 2013.June 10, 2014.

The non-management and independent members of the board of directors meet frequently in executive session, without management present. Mr. Ray Robinson chairs these meetings.

Committees 

Audit Committee. The function of the Audit Committee is to assist the board of directors in fulfilling its oversight responsibility relating to: (i) the integrity of the Company’s consolidated financial statements; (ii) the financial reporting process and the systems of internal accounting and financial controls; (iii) the performance of the Company’s internal audit function and independent auditors; (iv) the independent auditors’ qualifications and independence; and (v) the Company’s compliance with ethics policies and legal and regulatory requirements. The Audit Committee is directly responsible for the appointment, compensation, retention, and termination of theour independent auditors, who report directly to the Audit Committee.

Each member of the Audit Committee satisfies the independence requirements of the NYSE and Securities and Exchange Commission, or “SEC,” rules applicable to audit committee members, and each is financially literate. The Boardboard of directors has designated each of Mses. Betty and Day and Messrs.Messrs.Avril, Benatar and Kolb as an “audit committee financial expert” within the meaning of Section 407 of the Sarbanes-Oxley Act of 2002.as defined by SEC regulations.

Compensation Committee. The purpose of the Compensation Committee is to assist our board of directors in fulfilling its oversight responsibilities with respect torelating to: (i) executive and director compensation,compensation; (ii) equity compensation plans and other compensation and benefit plans,plans; (iii) management successionsuccession; and (iv) other significant humanassociate resources matters.

The Compensation Committee has the authority to review and approve performance goals and objectives for the named executive officers in connection with the Company’s compensation programs, and to evaluate the performance of the named executive officers, in light of such performance goals and objectives and other matters, for compensation purposes. Based on such evaluation and other matters, the Compensation Committee recommends to the independent members of the board of directors for determination (or makes such determination itself in some circumstances) the compensation of the named executive officers, including the Chief Executive Officer. The Compensation Committee also has the authority to approve grants of stock options, restricted stock, stock appreciation rights (“SARs”), restricted stock units (“RSUs”), performance shares and other equity incentives and to consider from time to time, and recommend to the board of directors, changes to director compensation.

Each member of the Compensation Committee satisfies the independence requirements of the NYSE applicable to compensation committee members, is a non-employee director under Rule 16b-3 of the Securities Exchange Act of 1934, or the “Exchange Act,” and is an outside director under Section 162(m) of the Internal Revenue Code.

Nominating and Corporate Governance Committee. The primary purpose of the Nominating and Corporate Governance Committee is to assist our board of directors in fulfilling its responsibilities with respect torelating to: (i) board and committee membership, organization, and function,function; (ii) director qualifications and performanceperformance; and (iii) corporate governance. The Nominating and Corporate Governance Committee from time to time identifies and recommends to the board of directors individuals to be nominated for election as directors and develops and recommends to the board of directors for adoption corporate governance principles applicable to the Company.

OurEach member of the Nominating and Corporate Governance Committee recommendssatisfies the independence requirements of the NYSE.

Operational and Financial Advisory Committee.The primary purpose of the Operational and Financial Advisory Committee is to act as an advisory committee to assist the Company and the board of directors bothby generating and sharing ideas and methodologies, in respect of operational matters, capital allocation, strategic transactions, management succession, franchisee relations (or any other areas the Committee deems appropriate), that the committee members believe will benefit the Company.

Assessment of Director Candidates and Required Qualifications

The Nominating and Corporate Governance Committee is responsible for considering and recommending to our board of directors nominees for the Company’selection as director at our annual meetingsmeeting of shareholders and nominees to fill vacanciesany vacancy on theour board of directors. BothOur board of directors, after taking into account the assessment provided by the Nominating and Corporate Governance Committee, is responsible for considering and recommending to our shareholders nominees for election as director at our annual meeting of shareholders. In accordance with our Corporate Governance Guidelines, both the Nominating and Corporate Governance Committee and theour board of directors, periodicallyin evaluating director candidates, consider the experience, talents, skills and other characteristics of each candidate and the board of directors as a whole in assessing potential nominees to serve as director.

We believe that, at a minimum, a director should possesshave the highest personal and professional ethics, moral character and integrity, demonstrated accomplishment in orderhis or her field and the ability to devote sufficient time to carry out the duties of a director. To help ensure the ability to devote sufficient time to board matters, no director may serve on the board of more than five other public companies while continuing to serve on the board of directors, and no director that serves as chief executive officer of another company may serve on the board of more than one other public company (other than the board of the company where such director serves as chief executive officer) while continuing to serve on our board of directors.

In addition to these minimum qualifications, the board of directors may consider all information relevant in their business judgment to the decision of whether to nominate a particular candidate for a particular board seat. These factors may include a candidate’s professional and educational background, reputation, industry knowledge and business experience and the relevance of those characteristics to the Company and the board of directors. In addition, candidates will be evaluated on their ability to complement or contribute to the mix of talents, skills and other characteristics needed to maintain its effectiveness.

Following the Annual Meeting, no person may be nominated for election to the board of directors after his or her 80th birthday and must offer his or her resignation, effective as of the next annual meeting of shareholders, from the board of directors in accordance with our Corporate Governance Guidelines following his or her 80th birthday. Further, following the Annual Meeting, any director will also be required to offer his or her resignation immediately in the event the director, or any of his or her respective affiliates or associates, takes any action (including encouraging or supporting others) to (i) nominate, propose or vote in favor of any candidate to serve on the board of directors (other than the nominees proposed by the board of directors) or oppose for election any nominee proposed by the board of directors or (ii) solicit proxies with respect to any of our securities within the meaning of the Exchange Act and the rules thereunder (other than any proxy solicitation in favor of a matter approved by the board of directors).

In determining whether to nominate an incumbent director for reelection, the Nominating and Corporate Governance Committee and the board of directors evaluate each incumbent’s continued service, in light of these collective requirements. When the need for a new director arises (whether because of a newly created seat or vacancy), the Nominating and Corporate Governance Committee and the board of directors proceed by whatever means they deem appropriate to identify a qualified candidate or candidates. The Nominating and Corporate Governance Committee and the board of directors evaluate the qualifications of each candidate. Final candidates are generally interviewed by one or more members of the Nominating and Corporate Governance Committee or other members of our board of directors before a decision is made.

AtMr. Lockhart was recommended by our Chief Executive Officer Mr. John Robinson to fill a minimum, a director should havevacancy occurring on the highest personalboard of directors in 2014. Mr. Lockhart’s candidacy was subsequently considered by the Nominating and professional ethics, moral character and integrity, demonstrated accomplishment in his or her fieldCorporate Governance Committee and the abilityboard of directors in accordance with this process for evaluating candidates to devote sufficient time to carry out the duties of a director. In addition to these minimum qualifications, the board may consider all information relevant in their business judgment to the decision of whether to nominate a particular candidate for a particular board seat, taking into account the then current composition of the board. These factors may include a candidate’s professional and educational background, reputation, industry knowledge and business experience, diversity (including occupational, geographic and age diversity) and the relevance of those characteristics to the Company andserve on the board of directors. In addition, candidates will be evaluated on their abilityMr. Avril was appointed to complement or contributefill a vacancy resulting from an increase in the size of our board of directors in July 2014 pursuant to the mixterms of talents, skillsthe agreement among the Company, a group of investors led by Vintage Capital Management, L.L.C. and other characteristics needed to maintainMr. Avril entered into in May 2014.Mr. Avril’s candidacy was considered by the Nominating and Corporate Governance Committee and the board of directors’ effectiveness.directors in accordance with this process for evaluating candidates to serve on the board of directors. See “Certain Relationships and Related Transactions—Related Party Transactions—Vintage Group Agreement” for additional information.

Shareholder Recommendations and Nominations for Election to the Board

Our Nominating and Corporate Governance Committee will consider nominees recommended by shareholders. Any shareholder wishing to nominate a candidate for director at the next annual shareholders’ meeting must submit a proposal as described under “Additional Information—Shareholder Proposals for the 2016 Annual Meeting of Shareholders in 2015”” and otherwise comply with the advance notice provisions and information requirements contained in the Company’sour bylaws. The shareholder submission should be sent to the President of Aaron’s, Inc. at 309 EastE. Paces Ferry Road, N.E., Atlanta, Georgia 30305.30305-2377.

The shareholder’s nominee must satisfyShareholder nominees are evaluated under the minimum qualificationssame standards as other candidates for board membership described in “—Director Qualifications” above. In addition, in evaluating shareholder nominees for inclusion with the board’s slate of nominees, the Nominating and Corporate Governance Committee and the board of directors may consider allany other information they deem relevant, information, including (i) the factors described above, (ii) whether there are or will be any vacancies on the board of directors, (iii) the size of the nominating shareholder’s holdings in the Company, and (iv) the length of time such shareholder has owned such holdings.holdings and (v) any statements by the nominee or the shareholder regarding proposed changes in the operation of the Company.

Board Leadership Structure and Role in Risk Oversight

In April 2014, we separated the roles of Chairman and Chief Executive Officer and Chairman in recognition of the important differences between the two roles. The Chairman is responsible for leading the board of directors in its duty to oversee the management of the business and affairs of the Company. The Chief Executive Officer is responsible for oversight of the day-to-day operations and business affairs of the Company, including directing the business conducted by the employees, managers and officers of the Company. The independent Lead Director, when applicable, is responsible for serving as the leader and representative of the non-management and independent directors in interacting with the Chairman and Chief Executive Officer, and when appropriate, the shareholders and public. The board of directors has determined that Mr. Ray Robinson, who serves as our Chairman, is independent under NYSE listing requirements, so currently our board of directors has not designated a Lead Director.

Our Chief Executive Officer serves on our board of directors, which we believe helps to serve as a bridge between management and our board of directors, ensuring that both groups act with a common purpose. We believe that Mr. Allen’sJohn Robinson’s presence on our board of directors enhances his ability to provide insight and direction on important strategic initiatives to both management and the independent directors and, at the same time, ensures that the appropriate level of independent oversight is applied to all decisions by our board of directors.

Our board of directors does not have a formal policy on whether the Chairman and Chief Executive Officer roles should be separated or combined but, instead, makes that determination from time to time employing its business judgment. Our board of directors, however, does believe that if the Chairman and Chief Executive Officer roles are combined, or if the Chairman is not an independent director, that the board of directors should appoint an independent Lead Director.

Board Role in Risk Oversight

Senior management is responsible for day-to-day risk management, while the board oversees planning and responding to risks, as a whole, through its committees and independent directors. Although our board of directors has ultimate responsibility with respect to risk management oversight, primary responsibility for certain areas has been delegated, as appropriate, to our committees. For example, our Audit Committee is charged with, among other matters, overseeing risks attendant to (i) our system of disclosure controls and procedures, (ii) internal control over financial reporting, and (iii) performance of our internal audit functions and independent auditors. The Audit Committee considers the steps management has taken to monitor and control such risks, including our risk assessment and risk management policies. The Audit Committee also considers issues relating to our legal and regulatory compliance obligations, including consumer protection laws in the rent-to-own industry in particular, at each meeting together with our General Counsel or another representative from our legal department.

Likewise, our Compensation Committee considers risks that may be implicated by our executive compensation programs. For 2013,2014, our Compensation Committee has reviewed the Company’s compensation policies and practices and determined that they do not encourage excessive risk or unnecessary risk taking and do not otherwise create risks that are reasonably likely to have a material adverse effect on the Company.

Compensation Committee Interlocks and Insider Participation

For the year ended December 31, 2013,2014, our Compensation Committee consisted of Ms. Betty and Messrs. Avril, Benatar, Harris, RobinsonLockhart and Schuerholz,Ray Robinson, each of whom our board of directors determined was independent in accordance with the New York Stock Exchange Listed Company Manual.listing requirements. Mr. John B. Schuerholz also served on our Compensation Committee prior to his retirement from the board of directors in August 2014.

Other than Mr. Schuerholz, noNo member of our Compensation Committee during 20132014 is or was formerly an officer or employee of the Company or any of its subsidiaries or was a related person in a transaction with the Company where the amount exceeded $120,000.$120,000, other than Mr. Schuerholz. Please see the disclosure under “Certain Relationships and Related Transactions—Related Party Transactions” for additional disclosureinformation related to Mr. Schuerholz.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Policies and Procedures Dealing with the Review, Approval and Ratification of Related Party Transactions

The charter of the Nominating and Corporate Governance Committee provides that the Committee shall review and ratify all transactions to which the Company is a party and in which any director and executive officer has a direct or indirect material interest, apart from their capacity as director or executive officer of the Company.

In addition, the Company’s Code of Business Conduct and Ethics provides that conflict of interest situations involving directors or executive officers must receive the prior review and approval of the Audit Committee. The Code of Conduct sets forth various examples of when conflict of interest situations may arise, including: when an officer or director or members of his or her family receive improper personal benefits as a result of his or her position in or with the Company; have certain relationships with competing businesses or businesses with a material financial interest in the Company, such as suppliers or customers; or receive improper gifts or favors from such businesses.

Described below are transactions that we have entered into with parties that are related to us.

Aaron Ventures

Aaron Ventures I, LLC, which we refer to as Aaron Ventures, was formed in December 2002 for the purpose of acquiring properties from the Company and leasing them back to the Company. In December 2002, Aaron Ventures purchased eleven properties from the Company, all former Heilig-Meyers stores, for a total purchase price of $5,000,000. The Company acquired these properties from Heilig-Meyers in 2001 and 2002 for an aggregate purchase price of approximately $4,000,000. The price paid by Aaron Ventures was arrived at by adding the Company’s acquisition cost to the cost of improvements made by the Company to the properties prior to the sale to Aaron Ventures.

In October and November of 2004, Aaron Ventures purchased an additional eleven properties from the Company for a total purchase price of $6,895,000. The Company acquired these properties over a period of several years. The purchase price paid by Aaron Ventures was determined from the individual fair market value and the results of current formal written appraisals completed for each location. In 2006, Aaron Ventures sold one of the properties to a third party.

During 2013, Messrs. Buck, Butler, Danielson, Cates, Sinclair and Mitchell S. Paull, a former executive officer of the Company, each served as managers of Aaron Ventures. All of Aaron’s Ventures owners are current or former officers of the Company including, in addition to the preceding group, Mr. Montanero. The combined ownership interest for all current executive officers represents approximately 40%. The approximate value of the individual interest of each Aaron Ventures manager or owner who has been an executive officer of the Company since January 1, 2013 is as follows: Messrs. Butler and Danielson—$2.25 million each; and Messrs. Buck, Cates, Montanero, Paull and Sinclair, and Mr. K. Todd Evans, a former executive officer of the Company—$1.13 million each. The foregoing values were estimated as of December 31, 2013 by applying each manager’s or owner’s ownership percentage to a third party valuation of Aaron Ventures, less debt and deferred maintenance.

In 2013, Aaron Ventures leased 19 properties to the Company for 15-year terms at a current annual rental of approximately $1,943,000. The Company does not intend to enter into further capital leases with related parties.

Marketing Agreement with Atlanta Braves

In February 2013, the Company entered into a three-year marketing agreement with the Atlanta National League Baseball Club, or the Atlanta Braves. In exchange for sponsorship fees of $440,200, $440,200, $453,406 in 2013, 2014 and 2015, respectively, the Company received certain benefits related to marketing, advertising, merchandising and media. Mr. Schuerholz, a current director of the Company, is President of the Atlanta Braves.

BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table sets forth information, as of March 21, 2014, with respect to the beneficial ownership, as defined in Section 13(d) under the Exchange Act, of the Company’s outstanding common stock by (i) each person known by us to beneficially own 5% or more of the outstanding shares of the Company’s common stock, (ii) each of the Company’s directors and nominees for director, (iii) each named executive officer (as defined below under “Compensation Discussion and Analysis”), and (iv) all executive officers and directors and director nominees of the Company as a group.

As of March 21, 2014, there were 72,215,602 shares of common stock issued and outstanding. Except as otherwise indicated, all shares shown in the table below are held with sole voting and investment power. The Percent of Class column represents the percentage that the named person or group would beneficially own if such person or group, and only such person or group, exercised all options to purchase shares that were exercisable within 60 days of March 21, 2014.

which has been delegated to Price Associates may be revoked in whole or in part at any time. Except as may be indicated if this is a joint filing with one of the registered investment companies sponsored by Price Associates which it also serves as investment adviser, not more than 5% of the class of such securities is owned by any one client subject to the investment advice of Price Associates.

(16)	Mr. Butler’s address is c/o Vintage Capital Management, LLC, 4705 S. Apopka Vineland Road, Suite 210, Orlando FL 32819. Assumes Mr. Butler has not sold any shares since his May 1, 2013 Form 4 filing.

(17)	Includes 8,250 shares of common stock issuable upon the exercise of options issued under our incentive plan that are currently exercisable. Does not include 1,698 shares of restricted common stock that remain subject to vesting conditions.

(18)	Does not include 3,198 shares of restricted common stock that remain subject to vesting conditions.

(19)	Does not include 1,698 shares of restricted common stock that remain subject to vesting conditions.

(20)	Includes 6,000 shares of common stock issuable upon the exercise of options issued under our incentive plan that are currently exercisable. Does not include 1,698 shares of restricted common stock that remain subject to vesting conditions.

(21)

Includes 8,250 shares of common stock issuable upon the exercise of options issued under our incentive plan that are currently exercisable. 7,125 shares beneficially owned by Mr. Robinson are pledged as part of an omnibus pledge of a brokerage account as security for a line of credit. Does not include 1,698 shares of restricted common stock that remain subject to vesting conditions.

(22)

Includes (i) 179,250 shares of common stock issuable upon the exercise of options issued under our incentive plan that are currently exercisable and (ii) 18,059 shares of common stock held in 401(k) plan accounts. Does not include (i) 154,790 shares of common stock issuable upon the exercise of options issued under our incentive plan that remain subject to vesting conditions, (ii) 12,500 shares of restricted common stock that remain subject to vesting conditions and (iii) 424,679 restricted stock units that remain subject to vesting conditions.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of the Company’s common stock, to file with the CommissionSEC certain reports of beneficial ownership of the Company’s common stock. Based solely on a review of information furnished to us, the Company believes that all applicable Section 16(a) filing requirements were complied with by its directors, officers and more than 10% shareholders during the year ended December 31, 2013, with the exception of (i) a Form 3 and2014, other than one Form 4 filed latefiling by Mr. Kamerschen relating to the withholding of shares for the payment of taxes in connection with the vesting of restricted stock and (ii) afive Form 4 filed latefilings by Ms. Betty, six Form 4 filings by Mr. Cates.Kolb and four Form 4 filings by Mr. Schuerholz, all of which related to shares of our common stock issued to these directors in lieu of cash fees payable for service on our board of directors.

Securities Authorized for Issuance under Equity Compensation Plans

NON-MANAGEMENT DIRECTOR COMPENSATION IN 2014

The current compensation program for non-management directors is designed to fairly pay directors for work required for a company of our size and scope and to align directors’ interests with the long-term interests of our shareholders. For 2014, each non-employee director received a $50,000 annual stock retainer as well as cash quarterly retainers of $8,000. Our Lead Director, however, received cash quarterly retainers of $13,000 reflecting the additional demands of the position. During 2014, Mr. Ray Robinson served as our Lead Director until he was appointed Chairman of the Board in April 2014. In recognition of the demands of serving as Chairman, Mr. Robinson receives a cash retainer of $100,000, paid quarterly in $25,000 installments. Our board of directors has not appointed a Lead Director following table sets forth aggregate informationMr. Ray Robinson’s appointment as Chairman.

Each director was paid board meeting fees of December 31, 2013 about$4,000 per meeting. For our Compensation Committee and Nominating and Corporate Governance Committee, meeting fees were set at $2,000 per meeting while the Audit Committee meeting fee was $2,500 per meeting. The Chair of each of the Compensation Committee and Nominating and Corporate Governance Committee, however, received a meeting fee of $2,500 per meeting while the Chair of the Audit Committee received a meeting fee of $5,000 per meeting.

Directors who are employees of the Company receive no compensation for attendance at board of directors or committee meetings.

Stock Ownership Guidelines

In March 2015, our board of directors adopted stock ownership guidelines for non-employee directors to further align the interests of our non-employee directors with those of our shareholders. Under these guidelines, each director is expected to own or acquire shares of our common stock and common stock equivalents having a value of at least $300,000 prior to the later of March 10, 2021 and six years from when such director first joined the board of directors.

PROPOSAL TWO

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Compensation Discussion and Analysis section of this Proxy Statement describes our executive compensation program and the compensation decisions made by our Compensation Committee with respect to the fiscal year 2014 compensation of our named executive officers and the Remuneration of Executive Officers section described the compensation paid during that year. In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, our board of directors is requesting shareholders to cast a non-binding advisory vote on the following resolution:

“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, compensation plans under whichtables and narrative disclosure, is hereby APPROVED.”

We believe that our equity securitiesexecutive compensation programs have been effective at incentivizing the achievement of positive results, appropriately aligning pay and performance and in enabling us to attract and retain very talented executives within our industry.

Accordingly, we are authorizedrequesting our shareholders to indicate their support for issuance.our named executive officer compensation as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives you as a shareholder the opportunity to express your views on our fiscal year 2014 executive compensation policies and procedures for named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and procedures described in this Proxy Statement. While the advisory vote we are requesting you to cast is non-binding, our Compensation Committee values the views of our shareholders and expects to consider the outcome of the vote when considering future compensation decisions for our named executive officers.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU

VOTE “FOR” THE RESOLUTION APPROVING OUR EXECUTIVE COMPENSATION.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

Introduction. The purpose of this section is to provide material information about the compensation objectives and policies for our named executive officers and to explain how the Compensation Committee of our board of directors, which we refer to as our Compensation Committee, made its compensation decisions for 2013.2014.

For 2013,2014, our named executive officers are listed below and consist of (i) our Chief Executive Officer, (ii) our Chief Financial Officer, (iii) our three most highly compensated executive officers for 2013 other2014 (other than our Chief Executive Officer and our Chief Financial Officer) and (iv) our former Chief Executive Officer and (iv) our former Chief Operating Officer, who would have been included in the preceding group but for his retirementtheir respective retirements in 2013.2014.

Our compensation programs are designed to retain key executives and to motivate them to foster a culture of engagement and performance. We believe that doing so will enable the Company to meet the operational, financial and strategic objectives established by our board of directors.

Fiscal Year Operational Results. OperationalKey operational results from 20132014 include:

Pay for Performance Linkage. Our 20132014 compensation program linked a substantial portion of executive compensation to our financial results. Although our performance was solid in many areas, we did not fully meet the financial performance goals set by the Compensation Committee for the annual and long-term incentive plans in which our named executive officers participated.

AsThe impact of our financial performance on incentive awards to our named executive officers is summarized below and discussed in greater detail under “—Components of the Executive Compensation Program”Program:”

Summary of our Executive Compensation Practices. The following discussion highlights key practices that we believe contribute to aligning the interests of our named executive officers with those of our shareholders.

Say on Pay Vote. Last year, our shareholders had the opportunity to cast an advisory vote on our executive compensation practices as described in our 20132014 proxy statement, and the result was that they93% of the total votes actually cast approved the compensation of our named executive officers with approximately 86%officers. In light of this high level of shareholder support from our shareholders, the total votes actually cast. The Compensation Committee viewed this result as reflecting strongcontinued applying the same overall compensation practices. The Committee appreciates the shareholder support forthat this vote reflected and regularly evaluates and revises the philosophy and objectives of our executive compensation program.program to reflect the Company’s evolving business circumstances.

After carefully considering our existing programs, the impact of our acquisition of Progressive, and our upcoming business challenges, the Compensation Committee determined that certain changes to the overall structure of the program for 20142015 would better align incentives across our organization, reflect the changing nature of our business in light of the Progressive acquisition, and further enhance our program’s ability to support our business and strategic objectives. These program changes are described under each of the sections titled “—Annual Cash Bonus—Bonuses—Program Changes for 2014”2015” and “—Long-Term Equity Incentive Awards—Program Changes for 2014”2015.”

Objectives of Executive Compensation

The primary objectives and priorities of our executive compensation program are to:

To accomplish these objectives, the Compensation Committee provides the named executive officers with compensation opportunities based on the range of compensation paid by similar companies for positions of similar responsibility. Opportunities for compensation and amounts delivered reflect (i) the Company’s performance results, (ii) the individual’s performance and (iii) other factors the Compensation Committee views as relevant, as described in greater detail in this Compensation Discussion & Analysis.

Compensation Process

Role of the Compensation Committee. The Compensation Committee is comprised solely of independent directors. Its role is to oversee (i) executive and outside director compensation, (ii) benefit plans and policies, including equity compensation plans and other forms of compensation and (iii) other significant associate resources matters, including management succession.matters.

More specifically, the Compensation Committee reviews and discusses proposed compensation for the named executive officers, and evaluates their performance and sets their compensation. In addition, the Compensation Committee approves all equity awards for named executive officers and other executive officers, based on the recommendations of senior management, as appropriate.

Role of Management. TheDuring 2014, the Compensation Committee considersconsidered the input and recommendations of Mr. Allen and, later, Mr. Robinson, with respect to our executive compensation programs and decisions that impact other named executive officers and other employees. Mr. Danielson and our Senior Vice President of Associate Resources also provide input

with respect to financial goals and recommendations and overall program design. Although management and other invitees at Compensation Committee meetings may participate in discussions and provide input, all votes and final decision-making on named executive officer compensation are solely the responsibility of the Compensation Committee.

Independent Compensation Consultants. In 2011, theThe Compensation Committee retained Grant Thornton LLP, which we refer to as Grant Thornton, to conduct market assessments of executive compensation for the Company’s top three officers and the compensation program for outside directors. To develop its recommendations, Grant Thornton used an executive compensation database and a report for the retail and general industry sectors, and reviewed proxy disclosures of executive compensation for a group of 11 retailers viewed as similar to the Company in terms of size, complexity and revenues (see “Peer Group” for discussion). The results of these analyses were one of several factors used by the Compensation Committee to make compensation decisions during 2012 and in early 2013.

In 2013, the Compensation Committeehas retained Meridian Compensation Partners, LLC, which we refer to as Meridian, as its ongoing independent consultant with respect to executive and outside director compensation matters. In this role, Meridian reports directly to the Compensation Committee, but works with management at the direction of the Compensation Committee. The Compensation Committee assessed Meridian’s independence, including the potential for conflicts of interest as required by New York Stock Exchange listing requirements, and concluded that Meridian was appropriately independent and free from potential conflicts of interest.

During 2013,2014, Meridian assisted the Compensation Committee with several matters, including:

Meridian representatives attended a majority of the Compensation Committee meetings and also participated in executive sessions as requested by the Compensation Committee.

Determination of 20132014 Executive Compensation. For 2013, the Compensation Committee recommended Mr. Allen’s salary to the independent members of the Board for final determination. The Compensation Committee established the salaries ofbase salary for Mr. Allen and the other named executive officers,officers. The Committee also set annual bonus opportunities and determined the size and performance conditions of equity awards for Mr. Allen and the other named executive officers.

In making these compensation decisions, in February and March 2013, the Compensation Committee considered the conclusions of the Grant Thornton reportMeridian’s analyses from 2011.2013. Other factors material to the Compensation Committee’s deliberations includeincluded (i) objective measurements of business performance, (ii) the accomplishment of strategic and financial objectives, (iii) the development of management talent, (iv) enhancement of shareholder value and (v) other matters relevant to both the short- and the long-term success of the Company.

In connection with Mr. Robinson’s appointment as Chief Executive Officer of the Company, the Compensation Committee approved the terms of his compensation and employment agreement. Due to the importance of this promotion, these terms were then reviewed with the full board of directors for its input and concurrence.

Benchmarking

Use of Market Data. We use compensation market data as a reference for understanding the competitive positioning of each element of our compensation program and of total compensation. The Compensation Committee does not manage total compensation for our named executive officers within a prescribed competitive position or percentile of the compensation market. Rather, the Compensation Committee reviews compensation for each named executive officer relative to market data as well asand considers other internal and external factors when exercising its business judgment as to compensation decisions.

Peer Group. The proxy peer group used for compensation decisions made in early 2013 was reviewed and revised by the Compensation Committee during the year for use in program reviews and pay decisions made in early 2014. In revising the peer group, the Compensation Committee2014 emphasized publicly traded retail and related consumer finance peers that arewere similar to the Company in terms of size, complexity and business focus. The revised group shown below includes prior peersfocus at that continuetime. Annual revenues for the peer companies generally range between 1/2x to be publicly-traded2x the annual revenues of Aaron’s but may extend outside that range for key competitors for talent. Median revenues for the peer companies for 2012 (based on the most recent financial information and additions that reflect a broader view ofexecutive pay data available for the marketanalysis referred to for managementearly 2014 pay decisions) were $2.4 billion and operational talent.ranged from $935 million to $7.4 billion:

During 2014, the Committee conducted its annual review of the peer group and, with input from Meridian, determined that it should be revised for future benchmarking purposes. DFC Global, a consumer finance company, was removed from the group because it was acquired. To maintain the consumer finance focus, Springleaf Holdings was added to the peer group. With these changes, median revenues for the peer group remained constant, at $2.4 billion.

Survey Data. Because data from the proxy peer group are not available for all named executive officer positions, the Committee also reviews broader survey benchmarking data from time to time, as necessary. To adjust Mr. Kamerschen’s target annual and long-term incentive awards, the Committee considered data from both the historical peer group described above as well as from a broad group of retailers who participate in an executive pay database maintained by Aon Hewitt.

Components of the Executive Compensation Program

Direct Compensation. The three primary direct components of theeach named executive officer’s total direct compensation program for 2013 are:2014 were:

These components are designed to be competitive with comparable employers with whom we compete for executive talent and to support our compensation program objectives. The Compensation Committee has not set a prescribed mix or allocation for each component, but rather focuses on total direct compensation when making compensation decisions for our executives. In determining direct compensation, the Compensation Committee also considers a number of related factors including: (i) performance against corporate and individual objectives for the previous year; (ii) performance of general management responsibilities; (iii) the value of any unique skills and capabilities; (iv) contributions as a member of the executive management team; and (v) competitive market considerations.

The named executive officers generally have a greater portion of their total direct compensation that is variable and performance-based than do other employees. This is consistent with a philosophy that variable, performance-basedincentive compensation opportunities linked to performance—including financial, operating, and stock price performance—should increase as overall responsibility increases.

The following discussion first summarizes the actions of the Compensation Committee with respect to establishing the compensation terms for Mr. Robinson upon our acquisition of Progressive and his subsequent promotion to Chief Executive Officer of the Company. It then describes the annual base salary, annual performance-based cash bonus awards and long-term equity incentive compensation awards for 2013. Programour other named executive officers for 2014. Significant program design changes effective for 20142015 are also described.

Chief Executive Officer – Mr. John W. Robinson III

Terms of Employment Agreements. Effective November 10, 2014, the board of directors appointed Mr. Robinson as the Company’s Chief Executive Officer.

Prior to this appointment, and following the Company’s acquisition of Progressive, Mr. Robinson served as Executive Vice President of the Company and Chief Executive Officer of our subsidiary Progressive. The key terms of the employment agreement we entered into with him at the close of the Progressive acquisition include the following:

In connection with Mr. Robinson’s appointment as Chief Executive Officer of the Company, the Company entered into a new employment agreement (“CEO Agreement”) with him that supersedes the prior agreement. Key terms of the CEO Agreement include:

Mr. Robinson’s compensation as Chief Executive Officer of the Company was established by the Compensation Committee after considering the following: his compensation as Chief Executive Officer of Progressive, the significant increase in his responsibilities as a result of his appointment as Chief Executive Officer of the Company, market compensation levels generally for chief executive officers across the Company’s historical peer group (as described above), and the need to provide compensation opportunities to Mr. Robinson commensurate with his experience in and knowledge of the industry.

Additional details concerning post termination payments under the CEO Agreement are summarized below under “Executive Compensation—Potential Payments upon Termination or Change in Control.”

Annual Incentive Award. Due to the timing of Mr. Robinson’s promotion to Chief Executive Officer of the Company late in the fiscal year, the Committee determined that he should continue to participate in the annual incentive plan established by Progressive through the end of 2014. At the time of the acquisition, the Committee determined that the program for Progressive employees should remain in place, and that achieving the challenging goals established at the start of the year was critical to the success of Progressive and to motivating participants.

Under the Progressive annual incentive program, Mr. Robinson’s performance was assessed against goals for each of the following equally weighted performance categories:

Progressive established quarterly and annual goals for each of the three financial performance measures above. Interim payments may be made based on quarterly performance results, but any quarterly payment could not exceed 20% of the overall target award for Mr. Robinson (or for other plan participants). At year-end, Mr. Robinson’s final cash incentive award was based on Progressive’s full year 2014 financial results, with any final payment due reduced by the sum of interim payments made to him.

Threshold payouts for the three financial metrics were to be made at 50% of the weighted target award when performance results were achieved between 75% and 79.99% of target. When performance was at 80% of target, the payout also would be 80% of the target award and would increase by one percentage point for each percentage point improvement in performance until the target was achieved. Thereafter, payouts would increase by two percentage points for each percentage point improvement in results and were capped at 150% of target.

The table below shows the 2014 quarterly and annual financial performance goals, results achieved, and related payouts:

Under the Progressive plan, any award earned for the personal goals category could not exceed 100% of the weighted target assigned to that category. No specific individual performance objectives were established for Mr. Robinson for 2014. However, based on his successful performance during the year both in leading Progressive and during his subsequent transition to the role of Chief Executive Officer of the Company, the Compensation Committee subjectively determined that Mr. Robinson’s performance for this category should be assessed at 100% of target.

Based on these results, Mr. Robinson’s overall annual incentive award was earned at 115% of target, or $461,336. The target award amount was prorated based on the time he was employed as Chief Executive Officer of Progressive and of the Company, respectively, during the year.

Long-term Incentive Awards. Mr. Robinson did not participate in our regular long-term incentive program in 2014. When we acquired Progressive, the Compensation Committee granted certain key executives retention equity grants with a value of 225% of base salary. At the time of our acquisition of Progressive, Mr. Robinson received a grant of 28,846 time-based RSUs that vest in full upon the fourth anniversary of the grant, based on his continued employment.

When Mr. Robinson was appointed as our Chief Executive Officer, the employment agreement we entered into with him provided for his participation in our 2015 long-term incentive program with an annual target award value of $5.2 million. As noted above, this agreement also provided for a grant of 5,000 time-based RSUs that vests in full upon the first anniversary of the grant date.

Based on subsequent discussions between the Compensation Committee and Mr. Robinson after his appointment as Chief Executive Officer, the Committee determined that it would be appropriate to provide additional motivation to Mr. Robinson in his new role by immediately granting the portion of Mr. Robinson’s 2015 LTIP award that was allocable to stock options. Accordingly, Mr. Robinson was granted 160,919 stock options in December 2014, with a grant date exercise price of $27.80, the Company’s closing stock price on the grant date. These options will vest one-third on each of the first, second and third anniversaries of the date Mr. Robinson signed his employment agreement.

The remaining performance share and time-based RSU components of Mr. Robinson’s 2015 LTIP award were made as part of our normal annual cycle when awards were granted to our other named executive officers during 2015.

Base Salary

The Compensation Committee views base salary as fixed compensation intended to reflect the scope of an executive’s role. It reviews base salaries annually and adjusts them as necessary to ensure that salary levels remain appropriate and competitive. Salary increases are periodic rather than annual and are made after the Compensation Committee considers relevant factors including:

In 2013, the Compensation Committee approved merit2014, Messrs. Danielson, Kamerschen, Montanero, Allen and promotional increases for certain named executive officers. Mr. AllenBuck did not receive an increaseincreases because his salary wastheir salaries were viewed as appropriately aligned with the market. Mr. DanielsonMichaels, however, received a meritan increase to align with general market increase levels. Messrs. Buck and Montanero received significant increasesof $90,000 in January 2013 to reflect that each was promoted to the role of SVP, Operations. Mr. Buck received a subsequent significant increase in May 2013April 2014 to reflect his promotion to his currentthe role of Chief Operating officer. Mr. Kamerschen’s salary level was established at his time of hire.President.

The table below sets forth base salary increases occurring during 2013:

Base Salary for 2014. The Compensation Committee considered base salary adjustments for Messrs. Allen, Danielson and Buck at its February 2014 meeting. Based on their competitive positioning and our 2013 business results, the Committee decided that these executives should not receive salary increases for 2014. It is expected that salary levels for Messrs. Montanero and Kamerschen will be reviewed later this year and the Committee may or may not adjust their base salaries based on this review.

Annual Cash Bonuses

Annual incentive awards provide the opportunity to earn cash rewards for meeting Company financial and individualoperational performance goals. Amounts earned are directly linked to performance results, and can vary based on the degree to which the related performance goals are achieved.

In 2013,2014, our named executive officers other than Mr. Robinson participated in one of twoour Company annual incentive plans. Eachplan.

Financial Goals for Messrs. Danielson, Kamerschen, Montanero, Allen and Buck. Under the annual incentive program designed for our executive officers at the beginning of 2014, these plans usesnamed executive officers had the potential to earn an annual cash incentive award based on performance against pre-determined goals for pre-tax earnings as a performance measure because that metric is viewed as an effective indicator of the

Company’s performance for the year. For purpose of calculations under either annual incentive plan formula, pre-tax earnings may be adjustedand same store revenue growth. These goals were selected by the Compensation Committee to remove the impactbecause they were viewed as key indicators of unusual charges or income items, extraordinary items, or unanticipated tax law changes. The Compensation Committee also has the authority to adjust awards otherwise earned, based on factors it determines appropriate.

Messrs. Allenour financial success and Danielson participated in a legacy annual incentive structure under which our executive officers (as determinedgrowth at the beginning of 2014.

For this purpose, pre-tax earnings is measured on a non-GAAP basis, with adjustments for certain items as approved by the fiscal year) historically have been eligible to earn awards based on specified percentages of the Company’s pre-tax earnings. The 2013 percentages for Messrs. Allen and Danielson were 0.25% and 0.23%, respectively.

Messrs. Buck, Montanero and Kamerschen participated in a separate annual incentive structure first implemented in 2012 thatCommittee. Same store revenue growth is aligned with current market program designs. Under this program, they and other participants have target awards expressed as a percentage of salary earningsmeasured by comparing revenues for the year to revenues for the prior year for all stores open for the entire 24-month period but excluding stores that received lease agreements from other acquired, closed or merged stores.

As a result of the Progressive acquisition during 2014 and the resulting change in our business strategy, the performance goals for these measures were revised. In addition, total Company revenues (based on financial statement results) was added as a third performance metric to reflect our strategic goal of growing both our existing business and our newly-acquired business.

At the beginning of the year, the Compensation Committee set the target awards for Messrs. Danielson, Kamerschen, Montanero, Allen and Buck at 70%, 45%, 45%, 100% and 70%, respectively, of base salary. Mr. Kamerschen’s target was increased during the year from 45% to 60% to reflect his promotion to the level of Executive Vice President and to more closely align with amountsmarket-competitive award levels for his role.

Awards earned based on pre-tax earnings and individual performance. Awards for pre-tax earningseach metric could range from 70%25% of target for achieving the threshold performance goal to 125%200% of target for results at or above the maximum performance goal. Awards for performance results between these levels would bethreshold and target, and between target and maximum, are interpolated on a straight-line basis. Any awards so earned could then be decreased to the extent that individual goals were

Performance results for 2014 did not met, and could be increased by 25% for any participant whose overall performance was rated as exceptional.

For 2013, target awards for Messrs. Buck, Montanero and Kamerschen were set at 40% of base salary. Mr. Buck’s target was increased to 50% of base salary when he was promoted to Chief Operating Officer to recognize his increased responsibilities.

Performance Results for 2013. Messrs. Allen and Danielson earned awards under the Executive Bonus Plan of $461,336 and $424,344, respectively. After considering other possible adjustments, the Compensation Committee reduced their awards to approximately 70% of the amounts otherwise earned because both the Compensation Committee and Messrs. Allen and Danielson believed that it was appropriate to decrease their awards so their annual incentive payments would more closely align with those of other executive officers and home office employees.

The Company’smeet expectations. Because pre-tax earnings for 2013and same store revenues results were below the threshold level of $264 million requiredgoals established for the bonus payments under the annual incentive structure applicable to Messrs. Buck, Montanero and Kamerschen. For this reason,each measure, no awards were earned for those performance categories. Performance against our total Company revenues goal was slightly below target, and resulted in awards being earned at 32% of target as indicated below.

As described above, Messrs. Allen and Buck also were participants in the 2014 incentive plan described above, with target awards set at 100% and 70%, respectively, of base salary. Due to their retirements during the year, neither was entitled to a payment under the plan. However, at the Committee’s discretion, Mr. Buck received a prorated payment under this program for the portion of the year for which he served as our Chief Operating Officer. Mr. Allen received a prorated annual cash incentive award under the terms of his employment agreement, as described below.

Operational Goals for Mr. Michaels. Upon his promotion to President, the Compensation Committee concluded that structure.Mr. Michaels should focus on key aspects of our Core business operations in this new role. Accordingly, the Committee increased Mr. Michaels’ target award from 45% to 100% of his base salary to provide additional incentive commensurate with the additional responsibilities he assumed at that time.

For 2014, the Compensation Committee assessed Mr. Michaels’ performance against the following categories of operational performance:

The Committee selected these performance categories to focus Mr. Michaels’ efforts on key aspects of our Core operations in his new role as President. However, in light of the broad and strategic nature of these performance categories, the Committee did not assign specific or discrete metrics within each performance category, nor were specific weightings assigned. Further, because the strategies related to motivate managementthese operational performance areas extend longer than a single fiscal year, the Committee evaluated Mr. Michaels’ performance against these goals subjectively rather than being based on specific or discrete metrics.

Based on its review of his performance, and its subjective assessment of accomplishments in each category, the Committee determined that Mr. Michaels had earned an annual cash bonus for 2014 of $265,000. This award reflected a prorated calculation based on his base salary and target annual incentive award levels both before and after his promotion to President.

Discretionary Awards. To recognize extraordinary efforts in the face of a challenging business climate and to encourage retention and stability in a second year of significant leadership transitions, the Compensation Committee approved discretionary awards for all participants comprising (i) 50%Messrs. Kamerschen and Montanero.

The Committee awarded Mr. Kamerschen a discretionary cash payment of target, (ii) a supplemental pool for allocation$150,000 in November 2014 to top performersreflect his promotion earlier in the year, his performance during and contributions to the success of the Progressive acquisition, and his contributions during our various leadership transitions, as well as (iii)to encourage his retention. This payment is subject to repayment if Mr. Kamerschen voluntarily terminates his employment other than for good reason prior to November 4, 2015.

In addition, the Committee awarded additional discretionary payments at year-end to Messrs. Kamerschen and Montanero of $10,000 and $67,500, respectively. These amounts were determined based on the Committee’s concurrence with Mr. Allen’sRobinson’s recommendations regarding theirthe individual performance of Messrs. Kamerschen and Montanero during the year, with a particular emphasis on their efforts in assisting with the integration of Progressive’s operations with those of our Core business and in connection with their success in achieving the operational performance goals for which Mr. Michaels was responsible.

All Plans. The chart below shows the year.

Final bonus paymentsfinal annual cash incentive awards to our named executive officers other than Messrs. Buck, MontaneroRobinson, Allen and Kamerschen were comprised as follows:Buck:

Named Executive Officer		Award Earned under Annual Incentive Plan				Discretionary Awards for Individual Performance				2014 Cash Bonus
Gilbert L. Danielson		$	153,090				—			$	153,090
Steven A. Michaels		$	265,000				—			$	265,000
Robert W. Kamerschen		$	63,180			$	160,000			$	223,180
Tristan J. Montanero		$	54,675			$	67,500			$	122,175

Program Changes for 20142015. After a comprehensive review and comparison ofconsidering the two incentive plan structures,evolving business challenges we face, the Compensation Committee determinedconcluded that revising the programs should be combined for 2014performance measures to more closely reflect peer design practices for such programsinclude revenues and toadjusted EBITDA, weighted 40% and 60%, respectively, would better support the Company’s compensation objectives.

As a result, key changesobjectives during 2015. Further, results for 2014 include:

Long-Term Equity Incentive Awards

Aaron’s long-term equity awards are intended to:

The Compensation Committee considers a number of factors in structuring our long-term equity awards program. In addition to the objectives outlined above, the Compensation Committee also considers market design practices, potential for dilution, accounting expense and other internal considerations when deciding on the structure and size of equity awards.

The Compensation Committee generally intends that outstanding equity awards will not, in the aggregate, exceed a certain percentage of the overall outstanding common shares, although this percentage is a guideline subject to change depending upon extant circumstances. The Compensation Committee also considers the amount of stock incentive accounting expense it deems advisable, upon consultation with management, for the Company to incur when new awards are being contemplated. These anti-dilution guidelines and stock incentive accounting expense considerations help establish a cap on the amount of equity incentives the Committee may grant from time to time.

Recipients are largely identified based on their level within the Company, although not all eligible employees participate in all grants. Incentives are generally awarded to eligible participants using historical grant sizes, with those employees at the same level generally receiving the same award amount. If award amounts are adjusted, they are generally adjusted so as to keep similar proportional differences between employee levels.

Although2014 Program. Each year, the Compensation Committee may takegrants equity awards to our named executive officers. The Committee designed the Company’s financial2014 program to measure performance into consideration generally when determiningfrom multiple perspectives because this approach better supports the overall size ofcompensation program objectives. For this reason, in February 2014, the pool ofCommittee granted equity awards available for it to award to eligible participants in a given year (subject to the cap suggested by the anti-dilution and equity compensation expenses considerations discussed above), it generally does not take performance criteria into account when determining the size of a particular recipient’s incentive grant. It also generally does not use financial formulas to determine the size of an initial grant to individual recipients, although it may establish a recipient’s incentive award size by reference to a percentage of the individual’s base salary or total cash compensation. However, while financial performance does not generally factor into the initial determination of individual grant sizes, it does factor into whether any such awards are earned, through the imposition of performance-based vesting criteria.

Equity incentives granted to certaineach of our named executive officers (other than Mr. Robinson) in 2013 included performance-based vesting criteria. Service-basedthe form of performance shares, stock options, and time-based RSUs. In the aggregate, these equity awards alsohelp to align the interests of our named executive officers with those of our shareholders.

The key objectives, relative allocation of grant date award values, and features of each form of equity award granted under our 2014 long-term incentive award program are linkeddescribed below.

Target awards. Target awards for our named executive officers for 2014, other than Mr. Robinson who did not participate in our regular long-term incentive award program, are shown below:

These award target percentages were set by the Compensation Committee after reviewing the general award levels across our historical retail-oriented peer group, as described above, and considering the responsibilities of each named executive officer. The award levels for Messrs. Michaels and Kamerschen reflect their increased target award percentage after each was promoted mid-year and were increased from 60% of base salary to performance, as they give recipients extra motivation to improve150% and 110%, respectively. Awards granted in February 2014 were based on the Company’s performance, which should over time increaseinitial target awards at the pricestart of the Company’syear. Promotional awards subsequently granted later in the year were determined based on the effective date of each named executive officer’s promotion.

Awards are converted to a target number of performance shares and the number of time-based RSUs by dividing the allocable portion of the grant date award value by our closing stock price on the date of grant. To determine the number of options to grant, the allocable portion of the grant date award value was divided by the estimated fair value of an option, as determined for benchmarking purposes using the Black-Scholes valuation methodology.

Key details of each type of award under our program, and the allocation of the grant date value of the equityaward, are described below.

Performance shares – 50%.Performance shares could be earned based on the following parameters:

Although our total revenue growth results of 22% fell between the threshold and target performance goals established for this metric of 18.59% and 23.06%, respectively, the pre-tax profit margin results were below the threshold goal of 8.71%. Accordingly, no performance shares were earned under the 2014 program by any of our named executive officers.

Time-based RSUs – 25%. Time-based RSUs vest in full on the third anniversary of the grant date, to promote retention and greater alignment with the interests of our shareholders.

Stock options – 25%. Stock options vest in full on the third anniversary of the grant date, to promote retention and greater alignment with the interests of our shareholders.

CEO Discretionary Equity Award Pool. In February 2014, the Compensation Committee established a pool of 100,000 shares to be granted by the Chief Executive Officer to employees (other than himself) at his discretion for retention and recognition purposes. Any awards proposed for executive officers must be approved by the Compensation Committee’s approval.

In total, Mr. Allen recommended grants of 70,350 shares from this pool during 2014. Based on their individual performance efforts during 2013, Mr. Allen recommended that each of Messrs. Michaels, Kamerschen, Montanero and Buck should receive a grant of 2,000 time-based RSUs from this award pool. The Compensation Committee approved this recommendation, and the time-based RSUs were granted in February 2014.

Promotional Awards and Other. To recognize the additional responsibilities that several of our named executive officers assumed in connection with the various leadership transitions that occurred throughout the year, and to provide additional motivation and retention, the Committee approved additional grants to select named executive officers.

CEO/Total 2014 Equity Awards. The long-term incentive awards that were granted to our named executive officers (other than Mr. Robinson) pursuant to the revised 2014 program structure, as well as any discretionary grants and promotional or other awards, are set forth in the table below:

CFO LTIP Equity Awards. In each of 2012 and 2013, Messrs. Allen andMr. Danielson werewas granted 100,000 and 75,000 performance-based restricted stock units, respectively, which we refer to as performance based RSUs.units. These awards can be earned upon the achievement of annual revenue growth and pre-tax margin targets. These performance measures were selected because of their importance to our overall business results and because they are viewed as solid indicators of our success as a Company.financial success.

The structure of the performance based RSU awardsperformance-based restricted stock units granted in 2012 and 2013 is shown in the table below:

As indicated, one third of each grant cancould be earned at the end of each year in the three-year performance period. Of each third, 50% can be earned based on meeting the revenue growth goal and 50% based on meeting the pre-tax margin goal. Annual results are measured separately for each goal so that an award can be earned for meeting one goal without regard to whether the second goal is met.

Any earned performance based RSUsperformance-based restricted stock units will vest and be settled atafter the end of the three-year performance period in shares of common stock. No awards are earned unless either of the performance targets areis met. Furthermore, no additional performance based RSUsperformance-based restricted stock units may be earned if actual performance exceeds the targets.

LTIP Equity Awards for other Named Executive Officers. Historically, equity incentives were not granted annually to other levels of management. To address this gap relative to market, in 2011Based on meeting the Compensation Committee adopted an 18 month program to provide equity grants on a more formal, structured basis to a broader group of executives and managers. This program was intended to both reward performance and to align the interests of these participants more closely with those of our shareholders.

The Compensation Committee restructured this program in 2013 to transition from its initial design to one that was more closely aligned with current market practices. The changes included lengthening the performance timeframe, emphasizing revenue growth and broadening the measurement focus for certain participants.

Specific changes for 2013 included the following:

Messrs. Buck and Montanero were participants in this program, with target awards set at 35% of salary earnings. Mr. Kamerschen did not participate in this program due to being hired mid-year and also due to the sign-on awards25,000 performance-based restricted stock units. However, he was granted.

2013 Performance Results. No equity awards were earned by any of our named executive officers because the respective revenue growth and pre-tax margin goals for 2013 were not met.

Messrs. Allen and Danielson forfeited the portion of the performance based RSUs granted to them in 2012 and 201325,000 performance-based restricted stock units that could have been earned based on meeting the 2013 performance goals. Mr. Allen forfeited a total of 66,666 performance based RSUs and Mr. Danielson forfeited a total of 50,000 performance based RSUs. The forfeited awards for Messrs. Allen and Danielson had year-end values of approximately $1.9 million and $1.5 million, respectively.pre-tax margin because that goal was not met.

Program Changes for 20142015. After conducting a comprehensive review and comparison of the two long-term incentive programs,For 2015 the Compensation Committee concluded that the programsoverall structure of the LTIP should remain the same as in 2014, in terms of the mix of award types. However, it determined that certain features should be combined and revised to better support the Company’s compensation objectives and to bettermore closely align the long-term incentive compensation of our key executives and managers.with the interests of our shareholders.

As a result, key changes tofeatures of the programsprogram approved by the Compensation Committee for 20142015 include:

CEO Discretionary Equity Award Pool. In February 2014,2015, the Compensation Committee again established a pool of 100,000 shares to be granted by Mr. Allenthe Chief Executive Officer at his discretion for retention and recognition purposes. Any awards proposed by Mr. AllenRobinson for other executive officers must be approved by the Compensation Committee.

Long Term Incentive Plan Awards granted in 2014. The 2014 long-term incentive awards that were granted to our named executive officers pursuant to the revised program structure are set forth in the table below:

Indirect Compensation and Perquisites

TheOur executive compensation program also provides certain benefits and perquisites to our named executive officers that we believe are key elements of a competitive total compensation program.officers. The valuesvalue of these components generally representbenefits and perquisites represents a small portion of theira named executive officer’s overall total compensation opportunities,opportunity and dodoes not materially influence the Compensation Committee’s decisions with respect to the salary and incentive elements of the compensation of the named executive officers.

Benefits. Our named executive officers receive a full range of standard benefits, including the medical, dental and voluntary disability coverage available to our employees generally. They also are eligible to participate on the same basis as other employees in the 401(k) Retirement Savings Plan, which we refer to as the 401(k) Plan, for all full-time employees. Employees with at least one year of service with the Company and who meet certain eligibility requirements are eligible for a Company match.

During 2013, theAs of January 1, 2015, our 401(k) Plan was transitioned touses a safe harbor formula. The revised 401(k) Planformula that allows employees to contribute up to 100%75% of their annual compensation with 100% matching by the Company on the first 3% of compensation and an additional 50% match on the next 2% of compensation. All matching by the Company is immediately vested under the new plan formula and any prior contributions will continue to vest under the preceding vesting schedule.

The Company paid aggregate matching 401(k) Plan contributions of $39,004 for the named executive officers in 2013.

Under the Company’s Nonqualified Deferred Compensation Plan, which we refer to as the Deferred Compensation Plan, a select group of management or highly compensated employees are eligible to elect to defer up to 75% of their base paysalary and up to 100% of their annual bonus compensation on a pre-tax basis. In addition,Should they so elect, the Company maywill make restoration matching contributions on behalf of employees.under the same formula that applies for our 401(k) Plan.

The obligationsCompany paid aggregate matching 401(k) Plan contributions of $57,731, respectively for the named executive officers in 2014. The Company did not make any matching contributions for the named executive officers under the Deferred Compensation Plan are unsecured general obligations to pay in the future the balance of the book entry deferred compensation accounts. The value of deferred compensation accounts is determined based upon the performance of designated measurement funds selected by the participants, although the contributions are not actually invested in such funds. The Company has established a grantor trust, known as a “rabbi trust,” to allow it to accumulate assets to help fund payment of Deferred Compensation Plan obligations. Distributions generally will be made in cash.2014 other than $258 for Mr. Michaels.

The Company did not pay any Deferred Compensation Plan matching contributions in 2013.

Corporate Aircraft Use. The named executive officers may use the Company’s aircraft from time to time for non-business use. Incremental variable operating costs associated with such personal use is paid by the Company. The amount of income attributed to the named executive officer for income tax purposes from personal aircraft use is determined by the Standard Industry Fare Level method, and the executives are responsible for paying the tax on this income. The aggregate incremental cost to the Company of such use by each named executive officer, if any, is set forthincluded under the “All Other Compensation” column of the “Executive Compensation—Summary Compensation Table.Table.”

Club Dues. The Company reimbursed Mr. Danielson’s monthly club dues during 2013.2014.

Our Compensation Committee periodically reviews the perquisites and other personal benefits that we provide to senior management to ensure they remain in the best interests of the Company.

Employment Agreements and Other Post Termination Protections

Employment Agreements. In April 2012, the Company entered into new employment agreements with each of Messrs. Allen and Danielson. The agreements encourage management continuity and provide important protections to both the Company and the executives. The employment agreements contain provisions addressing matters such as (i) compensation, (ii) benefits, (iii) change-in-control payments, and (iv) restrictive covenants.

As described above, in 2014 the Company entered into an employment agreement with Mr. Robinson when we acquired Progressive. We then entered into a new employment agreement with Mr. Robinson when he was promoted to serve as Chief Executive Officer of the Company.

The terms of all these agreements are summarized below under “—Chief Executive Officer – Mr. John W. Robinson III” and “Remuneration of Executive Officers and Directors—Compensation—Employment Agreements with Named Executive Officers”Officers.”.

None of our other named executive officers have employment agreements with the Company.

The terms of Mr. Butler’s retirement and severance for Messrs. Robinson, Danielson and Allen are described more fully in the section titled “Executive Compensation—Potential Payments upon Termination or Change in Control”.Control.”

Severance Plan. In 2013, the Compensation Committee considered the highly competitive nature of the relevant market for key leadership in our industry, and our need to enhance our ability to attract talented executives to join our management team. In January 2014, the Compensation Committee adopted an executive severance pay plan,Executive Severance Pay Plan, which we refer to as the Severance“Severance Plan,” intended to assureprovide senior managers that they will be treated fairlycertain benefits in the event their employment is terminated by us without cause or after a corporate transaction. This Severance Plan is intended to:

Under the Severance Plan, in the event that a participant is involuntarily terminated by the Company without cause or resigns from the Company for good reason, upon the execution by the Participant of a waiver and release agreement in the form provided by the Company, the participant would be entitled to (i) severance consisting of continued base salary for a period of twelve (12) months and (ii) a lump sum payment intended to cover the employee’s after-tax cost of twelve (12) months of COBRA premiums for continued coverage under the Company’s group health insurance plan.terminated.

In the event that the separation described in the preceding paragraph occurs within the two-year period following a change in control, the participant would be entitled to severance consisting of continued base salary for a minimum of twelve (12) months and a maximum of twenty-four (24) months, based on the executive’s level of seniority. The executive would also receive an aggregate lump sum payment (i) approximating COBRA premiums (for the same number of months for which the executive is entitled to receive continued base salary and (ii) equivalent to a pro-rata portion of the executive’s target annual bonus for the year in which the separation occurred.

Related Policies and Considerations

Stock Ownership Guidelines. In February 2014, the Compensation Committee approved the adoption of stock ownership guidelines to further align the interests of senior executives with our shareholders. The table below summarizes the guidelines that will apply to equity awards beginning in 2014:current guidelines:

Policy on Compensation Deductibility. Under Section 162(m) of the Internal Revenue Code, certain executive compensation in excess of $1 million paid to Mr. Allenour Chief Executive Officer and the three-other most highly-paid named executive officers (excluding our Chief Financial Officer Mr. Danielson) is not deductible for federal income tax purposes unless that compensation (i) is “performance-based,” (ii) was awarded under a performance-based plan approved by shareholders, and (iii) complies with certain other tax law requirements. The Company’s shareholders have previously approved the plans and terms under which the Company’s annual and long-term performance incentive awards may qualify as performance-based.

The Compensation Committee intends to preserve the tax deductibility of compensation paid to our executive officers to the extent consistent with our overall program objectives and philosophy, but recognizes that doing so may not always be feasible. Other compensation objectives, such as attracting, motivating and retaining qualified executives, are important and may supersede the goal of maintaining deductibility. Consequently, compensation decisions may be made without regard to deductibility when it is in the best interests of the Company and its shareholders to do so.

Forfeiture of Awards for Misconduct. The plan rulesCompensation Committee has adopted a policy that govern theprovides that annual incentive structure forand equity awards to our executive officers provide thatmay be recouped if the Company restates itswe restate our consolidated financial statements, participants willstatements. Under this policy, covered employees including our named executive officers may be required to repay to the Company the difference between the amount of bonusincentives received and the amount that would have been payable under the restated financial statements.

Securities Trading Policy. As part of our Insider Trading Policy, all of our officers and directors are prohibited from trading any interest or position relating to the future price of the Company’s securities. These prohibited transactions include trading in puts, calls, short sales or hedging transactions. Pledging of Company securities also is prohibited under our Insider Trading Policy.

COMPENSATION COMMITTEE REPORT

The Compensation Committee operates pursuant to a written charter adopted by the board of directors and available through the Company’s website,http://www.aaronsinc.com. The Committee is composed of five “independent”six independent members of the Board as defined under the listing standards of the New York Stock Exchange and under the Charter.charter. The Compensation Committee is responsible for assisting the board of directors in fulfilling its oversight responsibilities with respect to executive and director compensation.

In keeping with its responsibilities, the Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section included in the Proxy Statement related to its 20142015 Annual Meeting of Shareholders and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.2014. Based on such review and discussion, the Committee recommended to the board of directors that the Compensation Discussion and Analysis section be included in the Proxy Statement and the Annual Report on Form 10-K.

This report is respectfully submitted by the Compensation Committee of the board of directors.

Ray M. Robinson, ChairmanKathy T. Betty (Chair)

Matthew E. Avril

Leo Benatar

Kathy T. Betty

Hubert L. Harris, Jr.

John B. SchuerholzH. Eugene Lockhart

Ray M. Robinson

REMUNERATION OF EXECUTIVE OFFICERSCOMPENSATION

The following Summary Compensation Table summarizes the total compensation earned by, or awarded to, our named executive officers in 2014, 2013 2012 and 2011,2012, as applicable.

Summary Compensation Table