ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Georgia
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58-0687630
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(State or other jurisdiction of
incorporation or organization)
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(I. R. S. Employer
Identification No.)
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400 Galleria Parkway SE, Suite 300
Atlanta, Georgia |
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30339-3194
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
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ý
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Accelerated Filer
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o
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Non-Accelerated Filer
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o
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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o
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Title of Each Class
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Shares Outstanding as of
July 29, 2016
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Common Stock, $.50 Par Value
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72,772,614
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Item 3. Defaults Upon Senior Securities
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Item 4. Mine Safety Disclosures
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Item 5. Other Information
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ITEM 1.
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FINANCIAL STATEMENTS
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(Unaudited)
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(In Thousands, Except Share Data)
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June 30,
2016 |
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December 31,
2015 |
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ASSETS:
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Cash and Cash Equivalents
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$
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242,239
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$
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14,942
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Investments
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20,863
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22,226
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Accounts Receivable (net of allowances of $33,183 in 2016 and $34,861 in 2015)
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84,091
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113,439
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Lease Merchandise (net of accumulated depreciation and allowances of $726,499 in 2016 and $738,657 in 2015)
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1,027,635
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1,138,938
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Loans Receivable (net of allowances and unamortized fees of $9,794 in 2016 and $2,971 in 2015)
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83,260
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85,795
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Property, Plant and Equipment at Cost (net of accumulated depreciation of $224,643 in 2016 and $222,752 in 2015)
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214,623
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225,836
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Goodwill
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524,832
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539,475
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Other Intangibles (net of accumulated amortization of $61,798 in 2016 and $48,021 in 2015)
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261,111
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275,912
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Income Tax Receivable
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14,384
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179,174
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Prepaid Expenses and Other Assets
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68,409
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59,434
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Total Assets
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$
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2,541,447
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$
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2,655,171
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LIABILITIES & SHAREHOLDERS’ EQUITY:
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Accounts Payable and Accrued Expenses
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$
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234,803
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$
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300,356
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Accrued Regulatory Expense
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—
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4,737
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Deferred Income Taxes Payable
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295,844
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307,481
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Customer Deposits and Advance Payments
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57,645
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69,233
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Debt
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493,507
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606,746
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Total Liabilities
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1,081,799
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1,288,553
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Commitments and Contingencies (Note 6)
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Shareholders’ Equity:
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Common Stock, Par Value $.50 Per Share: Authorized: 225,000,000 Shares at June 30, 2016 and December 31, 2015; Shares Issued: 90,752,123 at June 30, 2016 and December 31, 2015
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45,376
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45,376
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Additional Paid-in Capital
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245,306
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240,112
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Retained Earnings
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1,487,672
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1,403,120
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Accumulated Other Comprehensive Income (Loss)
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169
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(517
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)
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1,778,523
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1,688,091
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Less: Treasury Shares at Cost
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Common Stock: 17,980,470 Shares at June 30, 2016 and 18,151,560 at December 31, 2015
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(318,875
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)
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(321,473
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)
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Total Shareholders’ Equity
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1,459,648
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1,366,618
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Total Liabilities & Shareholders’ Equity
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$
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2,541,447
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$
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2,655,171
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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(In Thousands, Except Per Share Data)
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2016
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2015
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2016
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2015
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||||||||
REVENUES:
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Lease Revenues and Fees
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$
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688,677
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$
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660,472
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$
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1,430,288
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$
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1,355,754
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Retail Sales
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6,460
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7,073
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17,415
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19,067
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Non-Retail Sales
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72,610
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84,449
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151,915
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180,486
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Franchise Royalties and Fees
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14,772
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15,491
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31,067
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32,495
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Interest and Fees on Loans Receivable
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5,302
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—
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10,065
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—
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Other
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1,532
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1,564
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3,030
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3,061
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789,353
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769,049
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1,643,780
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1,590,863
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COSTS AND EXPENSES:
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Depreciation of Lease Merchandise
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321,969
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294,362
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670,271
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610,348
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Retail Cost of Sales
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3,892
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4,849
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10,957
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12,553
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Non-Retail Cost of Sales
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63,984
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76,463
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135,369
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163,315
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Operating Expenses
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330,601
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325,555
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679,025
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653,475
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Other Operating Expense (Income), Net
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755
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277
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(5,974
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)
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(1,183
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)
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721,201
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701,506
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1,489,648
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1,438,508
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OPERATING PROFIT
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68,152
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67,543
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154,132
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152,355
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Interest Income
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507
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792
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928
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1,231
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Interest Expense
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(5,904
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)
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(5,622
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)
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(12,216
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)
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(11,591
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)
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||||
Other Non-Operating (Expense) Income
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(1,631
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)
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1,641
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(1,992
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)
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189
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||||
EARNINGS BEFORE INCOME TAXES
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61,124
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64,354
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140,852
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142,184
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INCOME TAXES
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22,623
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23,808
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52,664
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52,395
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NET EARNINGS
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$
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38,501
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$
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40,546
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$
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88,188
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$
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89,789
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EARNINGS PER SHARE
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Basic
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$
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.53
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$
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.56
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$
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1.21
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$
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1.24
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Assuming Dilution
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$
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.53
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$
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.56
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$
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1.20
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$
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1.23
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CASH DIVIDENDS DECLARED PER SHARE:
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||||||||
Common Stock
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$
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.025
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$
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.023
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$
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.050
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$
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.046
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WEIGHTED AVERAGE SHARES OUTSTANDING:
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||||||||
Basic
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72,761
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72,572
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72,697
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72,544
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Assuming Dilution
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73,279
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72,965
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73,248
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72,910
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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(In Thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
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||||||||
Net Earnings
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$
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38,501
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$
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40,546
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$
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88,188
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$
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89,789
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Other Comprehensive Income:
|
|
|
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|
|
|
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||||||||
Foreign Currency Translation Adjustment
|
93
|
|
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21
|
|
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686
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24
|
|
||||
Total Other Comprehensive Income
|
93
|
|
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21
|
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|
686
|
|
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24
|
|
||||
Comprehensive Income
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$
|
38,594
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|
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$
|
40,567
|
|
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$
|
88,874
|
|
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$
|
89,813
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Six Months Ended
June 30, |
||||||
(In Thousands)
|
2016
|
|
2015
|
||||
OPERATING ACTIVITIES:
|
|
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|
||||
Net Earnings
|
$
|
88,188
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$
|
89,789
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Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
|
|
|
|
||||
Depreciation of Lease Merchandise
|
670,271
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610,348
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|
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Other Depreciation and Amortization
|
40,956
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|
|
39,756
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|
||
Accounts Receivable Provision
|
74,968
|
|
|
67,794
|
|
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Provision for Credit Losses on Loans Receivable
|
4,211
|
|
|
—
|
|
||
Stock-Based Compensation
|
10,446
|
|
|
6,725
|
|
||
Deferred Income Taxes
|
(9,522
|
)
|
|
(70,748
|
)
|
||
Other Changes, Net
|
(4,946
|
)
|
|
(2,825
|
)
|
||
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
|
|
|
|
||||
Additions to Lease Merchandise
|
(789,768
|
)
|
|
(801,620
|
)
|
||
Book Value of Lease Merchandise Sold or Disposed
|
210,547
|
|
|
236,750
|
|
||
Accounts Receivable
|
(45,475
|
)
|
|
(56,856
|
)
|
||
Prepaid Expenses and Other Assets
|
(6,435
|
)
|
|
(898
|
)
|
||
Income Tax Receivable
|
164,790
|
|
|
112,405
|
|
||
Accounts Payable and Accrued Expenses
|
(68,409
|
)
|
|
3,788
|
|
||
Accrued Regulatory Expense
|
(4,737
|
)
|
|
(9,700
|
)
|
||
Customer Deposits and Advance Payments
|
(10,746
|
)
|
|
(5,361
|
)
|
||
Cash Provided by Operating Activities
|
324,339
|
|
|
219,347
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Investments in Loans Receivable
|
(36,500
|
)
|
|
—
|
|
||
Proceeds from Loans Receivable
|
35,236
|
|
|
—
|
|
||
Additions to Property, Plant and Equipment
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(30,955
|
)
|
|
(21,821
|
)
|
||
Proceeds from Sale of Property, Plant and Equipment
|
18,457
|
|
|
2,719
|
|
||
Acquisitions of Businesses and Contracts
|
(332
|
)
|
|
(9,274
|
)
|
||
Proceeds from Dispositions of Businesses and Contracts
|
34,968
|
|
|
8,330
|
|
||
Cash Provided by (Used in) Investing Activities
|
20,874
|
|
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(20,046
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from Debt
|
90,678
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|
|
30,150
|
|
||
Repayments on Debt
|
(204,512
|
)
|
|
(141,374
|
)
|
||
Dividends Paid
|
(3,636
|
)
|
|
(1,668
|
)
|
||
Excess Tax Benefits from Stock-Based Compensation
|
(694
|
)
|
|
274
|
|
||
Issuance of Stock Under Stock Option Plans
|
248
|
|
|
912
|
|
||
Cash Used in Financing Activities
|
(117,916
|
)
|
|
(111,706
|
)
|
||
Increase in Cash and Cash Equivalents
|
227,297
|
|
|
87,595
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
14,942
|
|
|
3,549
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
242,239
|
|
|
$
|
91,144
|
|
NOTE 1.
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BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Stores as of June 30 (Unaudited)
|
2016
|
|
2015
|
||
Company-operated stores
|
|
|
|
||
Sales and Lease Ownership
|
1,221
|
|
|
1,211
|
|
HomeSmart
|
—
|
|
|
83
|
|
Total Company-operated stores
|
1,221
|
|
|
1,294
|
|
Franchised stores
|
722
|
|
|
786
|
|
Systemwide stores
|
1,943
|
|
|
2,080
|
|
Active Doors at June 30 (Unaudited)
|
2016
|
|
2015
|
||
Progressive Active Doors
1
|
13,930
|
|
|
11,749
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
(Shares In Thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Weighted average shares outstanding
|
72,761
|
|
|
72,572
|
|
|
72,697
|
|
|
72,544
|
|
Dilutive effect of share-based awards
|
518
|
|
|
393
|
|
|
551
|
|
|
366
|
|
Weighted average shares outstanding assuming dilution
|
73,279
|
|
|
72,965
|
|
|
73,248
|
|
|
72,910
|
|
(In Thousands)
|
June 30, 2016
|
|
December 31, 2015
|
||||
Customers
|
$
|
36,723
|
|
|
$
|
35,153
|
|
Corporate
|
18,020
|
|
|
26,175
|
|
||
Franchisee
|
29,348
|
|
|
52,111
|
|
||
|
$
|
84,091
|
|
|
$
|
113,439
|
|
(In Thousands)
|
2016
|
|
2015
|
||||
Bad debt expense
|
$
|
56,210
|
|
|
$
|
49,191
|
|
Provision for returns and uncollected renewal payments
|
18,758
|
|
|
18,603
|
|
||
Accounts receivable provision
|
$
|
74,968
|
|
|
$
|
67,794
|
|
(In Thousands)
|
Foreign Currency
|
|
Total
|
||||
Balance at January 1, 2016
|
$
|
(517
|
)
|
|
$
|
(517
|
)
|
Other comprehensive income
|
686
|
|
|
686
|
|
||
Balance at June 30, 2016
|
$
|
169
|
|
|
$
|
169
|
|
(In Thousands)
|
Amounts Recognized as of Acquisition Date
1
|
|
Measurement Period Adjustments
2
|
|
Amounts Recognized as of Acquisition Date (as adjusted)
|
||||||
Purchase Price
|
$
|
54,900
|
|
|
$
|
—
|
|
|
$
|
54,900
|
|
|
|
|
|
|
|
||||||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed
|
|||||||||||
Cash and Cash Equivalents
|
4,185
|
|
|
—
|
|
|
4,185
|
|
|||
Loans Receivable
3
|
89,186
|
|
|
(60
|
)
|
|
89,126
|
|
|||
Receivables
|
45
|
|
|
—
|
|
|
45
|
|
|||
Property, Plant and Equipment
|
2,754
|
|
|
—
|
|
|
2,754
|
|
|||
Other Intangibles
|
3,400
|
|
|
(500
|
)
|
|
2,900
|
|
|||
Income Tax Receivable
|
728
|
|
|
—
|
|
|
728
|
|
|||
Prepaid Expenses and Other Assets
|
671
|
|
|
—
|
|
|
671
|
|
|||
Deferred Income Tax Assets
|
375
|
|
|
2,115
|
|
|
2,490
|
|
|||
Total Identifiable Assets Acquired
|
101,344
|
|
|
1,555
|
|
|
102,899
|
|
|||
Accounts Payable and Accrued Expenses
|
(1,709
|
)
|
|
(1,265
|
)
|
|
(2,974
|
)
|
|||
Debt
|
(45,025
|
)
|
|
—
|
|
|
(45,025
|
)
|
|||
Total Liabilities Assumed
|
(46,734
|
)
|
|
(1,265
|
)
|
|
(47,999
|
)
|
|||
Goodwill
|
290
|
|
|
(290
|
)
|
|
—
|
|
|||
Net Assets Acquired
|
$
|
54,900
|
|
|
$
|
—
|
|
|
$
|
54,900
|
|
NOTE 3.
|
FAIR VALUE MEASUREMENT
|
(In Thousands)
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Deferred Compensation Liability
|
$
|
—
|
|
|
$
|
(11,929
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11,576
|
)
|
|
$
|
—
|
|
(In Thousands)
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets Held for Sale
|
$
|
—
|
|
|
$
|
9,335
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,976
|
|
|
$
|
—
|
|
(In Thousands)
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Perfect Home Notes
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,863
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,226
|
|
Fixed-Rate Long-Term Debt
2
|
—
|
|
|
(371,762
|
)
|
|
—
|
|
|
—
|
|
|
(395,618
|
)
|
|
—
|
|
1
|
The Perfect Home notes were initially measured at cost. The Company periodically reviews the carrying amount utilizing company-specific transactions or changes in Perfect Home’s financial performance to determine if fair value adjustments are necessary.
|
2
|
The fair value of fixed-rate long-term debt is estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long-term debt was
$350.0 million
and
$375.0 million
at
June 30, 2016
and
December 31, 2015
, respectively.
|
(In Thousands)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Credit Card Loans
|
|
$
|
44,806
|
|
|
$
|
13,900
|
|
Acquired Loans
|
|
48,248
|
|
|
74,866
|
|
||
Loans Receivable, Gross
|
|
93,054
|
|
|
88,766
|
|
||
|
|
|
|
|
||||
Allowance for Loan Losses
|
|
(4,096
|
)
|
|
(937
|
)
|
||
Unamortized Fees
|
|
(5,698
|
)
|
|
(2,034
|
)
|
||
Loans Receivable, Net
|
|
$
|
83,260
|
|
|
$
|
85,795
|
|
Aging Category
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
30-59 days past due
|
|
7.2
|
%
|
|
7.9
|
%
|
||
60-89 days past due
|
|
3.1
|
%
|
|
3.3
|
%
|
||
90 or more days past due
|
|
3.9
|
%
|
|
4.1
|
%
|
||
Past due loans receivable
|
|
14.2
|
%
|
|
15.3
|
%
|
||
Current loans receivable
|
|
85.8
|
%
|
|
84.7
|
%
|
||
Balance of loans receivable 90 or more days past due and still accruing interest and fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In Thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues From External Customers:
|
|
|
|
|
|
|
|
||||||||
Sales and Lease Ownership
|
$
|
461,464
|
|
|
$
|
481,208
|
|
|
$
|
968,915
|
|
|
$
|
1,016,739
|
|
Progressive
|
298,574
|
|
|
255,946
|
|
|
605,239
|
|
|
507,565
|
|
||||
HomeSmart
|
7,544
|
|
|
15,541
|
|
|
25,392
|
|
|
32,316
|
|
||||
DAMI
1
|
5,302
|
|
|
—
|
|
|
10,065
|
|
|
—
|
|
||||
Franchise
|
14,772
|
|
|
15,491
|
|
|
31,067
|
|
|
32,495
|
|
||||
Manufacturing
|
21,590
|
|
|
25,228
|
|
|
46,513
|
|
|
54,034
|
|
||||
Other
|
353
|
|
|
327
|
|
|
637
|
|
|
695
|
|
||||
Revenues of Reportable Segments
|
809,599
|
|
|
793,741
|
|
|
1,687,828
|
|
|
1,643,844
|
|
||||
Elimination of Intersegment Revenues
|
(20,246
|
)
|
|
(24,692
|
)
|
|
(44,048
|
)
|
|
(52,981
|
)
|
||||
Total Revenues from External Customers
|
$
|
789,353
|
|
|
$
|
769,049
|
|
|
$
|
1,643,780
|
|
|
$
|
1,590,863
|
|
Earnings (Loss) Before Income Taxes:
|
|
|
|
|
|
|
|
||||||||
Sales and Lease Ownership
|
$
|
38,947
|
|
|
$
|
40,690
|
|
|
$
|
95,525
|
|
|
$
|
99,731
|
|
Progressive
|
29,083
|
|
|
23,314
|
|
|
50,997
|
|
|
39,144
|
|
||||
HomeSmart
2
|
(694
|
)
|
|
48
|
|
|
(3,653
|
)
|
|
574
|
|
||||
DAMI
|
(2,280
|
)
|
|
—
|
|
|
(5,162
|
)
|
|
—
|
|
||||
Franchise
|
11,781
|
|
|
11,993
|
|
|
24,900
|
|
|
25,891
|
|
||||
Manufacturing
|
536
|
|
|
376
|
|
|
1,404
|
|
|
1,658
|
|
||||
Other
3
|
(15,816
|
)
|
|
(11,669
|
)
|
|
(21,971
|
)
|
|
(23,148
|
)
|
||||
Earnings Before Income Taxes for Reportable Segments
|
61,557
|
|
|
64,752
|
|
|
142,040
|
|
|
143,850
|
|
||||
Elimination of Intersegment Profit
|
(433
|
)
|
|
(398
|
)
|
|
(1,188
|
)
|
|
(1,666
|
)
|
||||
Total Earnings Before Income Taxes
|
$
|
61,124
|
|
|
$
|
64,354
|
|
|
$
|
140,852
|
|
|
$
|
142,184
|
|
(In Thousands)
|
June 30,
2016 |
|
December 31,
2015 |
||||
Assets:
|
|
|
|
||||
Sales and Lease Ownership
|
$
|
1,187,749
|
|
|
$
|
1,261,040
|
|
Progressive
|
877,413
|
|
|
878,457
|
|
||
HomeSmart
|
—
|
|
|
44,429
|
|
||
DAMI
|
93,576
|
|
|
97,486
|
|
||
Franchise
|
31,582
|
|
|
53,693
|
|
||
Manufacturing
1
|
28,529
|
|
|
28,986
|
|
||
Other
|
322,598
|
|
|
291,080
|
|
||
Total Assets
|
$
|
2,541,447
|
|
|
$
|
2,655,171
|
|
1
|
Includes inventory (principally raw materials and work-in-process) that has been classified within lease merchandise in the condensed consolidated balance sheets of
$19.4 million
as of
June 30, 2016
and
December 31, 2015
.
|
•
|
Generally a predetermined amount of each reportable segment’s revenues is charged to the reportable segment as an allocation of corporate overhead.
|
•
|
Accruals related to store closures are not recorded on the reportable segments’ financial statements, but are maintained and controlled by corporate headquarters.
|
•
|
Interest expense has been allocated to the Sales and Lease Ownership and HomeSmart segments based on a percentage of their revenues. Interest expense is allocated to the Progressive segment based on a percentage of the outstanding balances of its intercompany borrowings and of the debt incurred when it was acquired.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Active Doors at June 30 (Unaudited)
|
2016
|
|
2015
|
||
Progressive Active Doors
|
13,930
|
|
|
11,749
|
|
For the Three Months Ended June 30 (Unaudited and In Thousands)
|
2016
|
|
2015
|
||||
Progressive Invoice Volume
|
$
|
204,170
|
|
|
$
|
178,633
|
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|
|||||||
Sales and Lease Ownership
1
|
$
|
461,464
|
|
|
$
|
481,208
|
|
|
$
|
(19,744
|
)
|
|
(4.1
|
)%
|
Progressive
2
|
298,574
|
|
|
255,946
|
|
|
42,628
|
|
|
16.7
|
|
|||
HomeSmart
1
|
7,544
|
|
|
15,541
|
|
|
(7,997
|
)
|
|
(51.5
|
)
|
|||
DAMI
3
|
5,302
|
|
|
—
|
|
|
5,302
|
|
|
nmf
|
|
|||
Franchise
4
|
14,772
|
|
|
15,491
|
|
|
(719
|
)
|
|
(4.6
|
)
|
|||
Manufacturing
|
21,590
|
|
|
25,228
|
|
|
(3,638
|
)
|
|
(14.4
|
)
|
|||
Other
|
353
|
|
|
327
|
|
|
26
|
|
|
8.0
|
|
|||
Revenues of Reportable Segments
|
809,599
|
|
|
793,741
|
|
|
15,858
|
|
|
2.0
|
|
|||
Elimination of Intersegment Revenues
|
(20,246
|
)
|
|
(24,692
|
)
|
|
4,446
|
|
|
18.0
|
|
|||
Total Revenues from External Customers
|
$
|
789,353
|
|
|
$
|
769,049
|
|
|
$
|
20,304
|
|
|
2.6
|
%
|
nmf - Calculation is not meaningful
|
|
|
|
|
|
|
|
|||||||
1
Segment revenue principally consists of lease revenues and fees, retail sales and non-retail sales, and is presented on an accrual basis.
|
||||||||||||||
2
Segment revenue consists of lease revenues and fees.
|
||||||||||||||
3
Segment revenue consists of interest and fees on loans receivable, and excludes the effect of interest expense.
|
||||||||||||||
4
Segment revenue consists of franchise royalties and fees.
|
|
Three Months Ended June 30,
|
||||||
(In Thousands)
|
2016
|
|
2015
|
||||
Personnel costs
|
$
|
156,428
|
|
|
$
|
152,121
|
|
Occupancy costs
|
52,005
|
|
|
51,465
|
|
||
Lease merchandise adjustments
|
28,125
|
|
|
30,210
|
|
||
Bad debt expense
|
28,271
|
|
|
25,050
|
|
||
Advertising
|
11,968
|
|
|
11,600
|
|
||
Other operating expenses
|
53,804
|
|
|
55,109
|
|
||
Operating Expenses
|
$
|
330,601
|
|
|
$
|
325,555
|
|
|
Three Months Ended
June 30, |
||||||
(In Thousands)
|
2016
|
|
2015
|
||||
Losses on sales of stores
|
$
|
—
|
|
|
$
|
737
|
|
Net gains on sales of delivery vehicles
|
(241
|
)
|
|
(634
|
)
|
||
Impairment charges and net losses on asset dispositions and assets held for sale
|
996
|
|
|
174
|
|
||
Other operating expense, net
|
$
|
755
|
|
|
$
|
277
|
|
|
Six Months Ended
June 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|
|||||||
Sales and Lease Ownership
1
|
$
|
968,915
|
|
|
$
|
1,016,739
|
|
|
$
|
(47,824
|
)
|
|
(4.7
|
)%
|
Progressive
2
|
605,239
|
|
|
507,565
|
|
|
97,674
|
|
|
19.2
|
|
|||
HomeSmart
1
|
25,392
|
|
|
32,316
|
|
|
(6,924
|
)
|
|
(21.4
|
)
|
|||
DAMI
3
|
10,065
|
|
|
—
|
|
|
10,065
|
|
|
nmf
|
|
|||
Franchise
4
|
31,067
|
|
|
32,495
|
|
|
(1,428
|
)
|
|
(4.4
|
)
|
|||
Manufacturing
|
46,513
|
|
|
54,034
|
|
|
(7,521
|
)
|
|
(13.9
|
)
|
|||
Other
|
637
|
|
|
695
|
|
|
(58
|
)
|
|
(8.3
|
)
|
|||
Revenues of Reportable Segments
|
1,687,828
|
|
|
1,643,844
|
|
|
43,984
|
|
|
2.7
|
|
|||
Elimination of Intersegment Revenues
|
(44,048
|
)
|
|
(52,981
|
)
|
|
8,933
|
|
|
16.9
|
|
|||
Total Revenues from External Customers
|
$
|
1,643,780
|
|
|
$
|
1,590,863
|
|
|
$
|
52,917
|
|
|
3.3
|
%
|
nmf - Calculation is not meaningful
|
|
|
|
|
|
|
|
|||||||
1
Segment revenue principally consists of lease revenues and fees, retail sales and non-retail sales, and is presented on an accrual basis.
|
||||||||||||||
2
Segment revenue consists of lease revenues and fees.
|
||||||||||||||
3
Segment revenue consists of interest and fees on loans receivable, and excludes the effect of interest expense.
|
||||||||||||||
4
Segment revenue consists of franchise royalties and fees.
|
|
Six Months Ended June 30,
|
||||||
(In Thousands)
|
2016
|
|
2015
|
||||
Personnel costs
|
$
|
319,958
|
|
|
$
|
307,942
|
|
Occupancy costs
|
105,489
|
|
|
103,519
|
|
||
Lease merchandise adjustments
|
62,031
|
|
|
59,503
|
|
||
Bad debt expense
|
56,210
|
|
|
49,191
|
|
||
Advertising
|
21,654
|
|
|
19,711
|
|
||
Other operating expenses
|
113,683
|
|
|
113,609
|
|
||
Operating Expenses
|
$
|
679,025
|
|
|
$
|
653,475
|
|
|
Six Months Ended
June 30, |
||||||
(In Thousands)
|
2016
|
|
2015
|
||||
Losses (gains) on sales of stores
|
$
|
32
|
|
|
$
|
(1,338
|
)
|
Net gains on sales of delivery vehicles
|
(704
|
)
|
|
(952
|
)
|
||
Impairment charges and net (gains) losses on asset dispositions and assets held for sale
|
(5,302
|
)
|
|
1,107
|
|
||
Other operating income, net
|
$
|
(5,974
|
)
|
|
$
|
(1,183
|
)
|
•
|
Cash and cash equivalents
increased
$227.3 million
to
$242.2 million
at
June 30, 2016
from
$14.9 million
at
December 31, 2015
. For additional information, refer to the "Liquidity and Capital Resources" section below.
|
•
|
Accounts receivable, net
decreased
$29.3 million
to
$84.1 million
at
June 30, 2016
from
$113.4 million
at
December 31, 2015
primarily due to decreases in non-retail sales during the period.
|
•
|
Lease merchandise, net decreased
$111.3 million
to
$1.0 billion
at
June 30, 2016
from
$1.1 billion
at
December 31, 2015
primarily due to decreases in lease merchandise purchases at our core operations during the
six months
ended
June 30, 2016
compared to the
six months
ended
December 31, 2015
.
|
•
|
Income tax receivable
decreased
$164.8 million
primarily because the Company received income tax refunds, net of payments of
$115.3 million
, during the
six months
ended
June 30, 2016
.
The enactment of the Protecting Americans From Tax Hikes Act in December 2015 (the 2015 Act) extended bonus depreciation on eligible inventory held during 2015. Throughout 2015, the Company made payments based on the previously enacted law, resulting in an overpayment when the current act was signed and the Company applied for a refund at that time. The income tax receivable balance was further reduced due to adjustments to the provision for federal income taxes recorded during the
six months
ended
June 30, 2016
.
|
•
|
Accounts payable and accrued expenses
decreased
$65.6 million
due primarily to decreases in lease merchandise purchases during the
six months
ended
June 30, 2016
compared to the
six months
ended
December 31, 2015
.
|
•
|
Debt
decreased
$113.2 million
due primarily to the net repayment of
$113.8 million
in revolving credit borrowings, term loans and capital lease obligations. Refer to "Liquidity and Capital Resources" below for further details regarding the Company's financing arrangements.
|
•
|
cash flows from operations;
|
•
|
private debt offerings;
|
•
|
bank debt;
|
•
|
trade credit with vendors;
|
•
|
proceeds from the sale of lease return merchandise; and
|
•
|
stock offerings.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
1
|
||||
April 1, 2016 through April 30, 2016
|
—
|
|
—
|
|
—
|
|
10,496,421
|
|
May 1, 2016 through May 31, 2016
|
—
|
|
—
|
|
—
|
|
10,496,421
|
|
June 1, 2016 through June 30, 2016
|
—
|
|
—
|
|
—
|
|
10,496,421
|
|
Total
|
—
|
|
|
—
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
AARON’S, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|
|
|
|
|
Date:
|
August 4, 2016
|
By:
|
/s/ Robert P. Sinclair, Jr.
|
|
|
|
Robert P. Sinclair, Jr.
|
|
|
|
Vice President,
|
|
|
|
Corporate Controller
|
1.
|
AMENDMENTS TO CURRENT NOTE PURCHASE AGREEMENT.
|
1.1.
|
Indebtedness.
|
1.2.
|
Amendment and Restatement of the Definition of “Dent-A-Med Credit Agreement”.
|
1.3.
|
Addition of the Definition of “Sixth Amendment Effective Date”.
|
2.
|
WARRANTIES AND REPRESENTATIONS.
|
2.1.
|
Corporate and Other Organization and Authority.
|
2.2.
|
Authorization, etc.
|
2.3.
|
No Conflicts, etc.
|
2.4.
|
Governmental Consent.
|
2.5.
|
No Defaults.
|
3.
|
CONDITIONS TO EFFECTIVENESS OF AMENDMENTS.
|
4.
|
MISCELLANEOUS.
|
4.1.
|
Governing Law.
|
4.2.
|
Duplicate Originals; Electronic Signature.
|
4.3.
|
Waiver and Amendments.
|
4.4.
|
Costs and Expenses.
|
4.5.
|
Successors and Assigns.
|
4.6.
|
Survival.
|
4.7.
|
Part of Current Note Purchase Agreement; Future References, etc.
|
4.8.
|
Affirmation of Obligations under Current Note Purchase Agreement and Notes; No Novation.
|
|
|
|
Very truly yours,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON'S, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
AARON INVESTMENT COMPANY
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Vice President and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON'S PRODUCTION COMPANY
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert W. Kamerschen
|
|
|
|
Name:
|
Robert W. Kamerschen
|
|
|
|
Title:
|
Vice President and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99LTO, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
AARON’S LOGISTICS, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON’S STRATEGIC SERVICES, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON'S PROCUREMENT
|
|
|
|
|
COMPANY, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROGRESSIVE FINANCE HOLDINGS,
|
|
|
|
|
LLC
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prog Finance Arizona, LLC
|
|
|
|
|
Prog Finance California, LLC
|
|
|
|
|
Prog Finance Florida, LLC
|
|
|
|
|
Prog Finance Georgia, LLC
|
|
|
|
|
Prog Finance Illinois, LLC
|
|
|
|
|
Prog Finance Michigan, LLC
|
|
|
|
|
Prog Finance New York, LLC
|
|
|
|
|
Prog Finance Ohio, LLC
|
|
|
|
|
Prog Finance Texas, LLC
|
|
|
|
|
Prog Finance Mid-West, LLC
|
|
|
|
|
Prog Finance North-East, LLC
|
|
|
|
|
Prog Finance South-East, LLC
|
|
|
|
|
Prog Finance West, LLC
|
|
|
|
|
NPRTO Arizona, LLC
|
|
|
|
|
NPRTO California, LLC
|
|
|
|
|
NPRTO Florida, LLC
|
|
|
|
|
NPRTO Georgia, LLC
|
|
|
|
|
NPRTO Illinois, LLC
|
|
|
|
|
NPRTO Michigan, LLC
|
|
|
|
|
NPRTO New York, LLC
|
|
|
|
|
NPRTO Ohio, LLC
|
|
|
|
|
NPRTO Texas, LLC
|
|
|
|
|
NPRTO Mid-West, LLC
|
|
|
|
|
NPRTO North-East, LLC
|
|
|
|
|
NPRTO South-East, LLC
|
|
|
|
|
NPRTO West, LLC,
|
|
|
|
|
|
|
|
|
|
By:
|
PROG LEASING, LLC, Sole
|
|
|
|
|
Manager
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
PANGO LLC
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROG LEASING, LLC
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE GIBRALTAR LIFE INSURANCE CO., LTD.
|
||||
|
|
|
|
|
By:
|
Prudential Investment Management Japan Co., Ltd.,
|
|||
|
as Investment Manager
|
|
|
|
|
|
|
|
|
By:
|
PGIM, Inc.,
|
|
|
|
|
as Sub-Advisor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
1.
|
AMENDMENTS TO CURRENT NOTE PURCHASE AGREEMENT.
|
1.1.
|
Indebtedness.
|
1.2.
|
Amendment and Restatement of the Definition of “Dent-A-Med Credit Agreement”.
|
1.3.
|
Addition of the Definition of “Third Amendment Effective Date”.
|
2.
|
WARRANTIES AND REPRESENTATIONS.
|
2.1.
|
Corporate and Other Organization and Authority.
|
2.2.
|
Authorization, etc.
|
2.3.
|
No Conflicts, etc.
|
2.4.
|
Governmental Consent.
|
2.5.
|
No Defaults.
|
3.
|
CONDITIONS TO EFFECTIVENESS OF AMENDMENTS.
|
4.
|
MISCELLANEOUS.
|
4.1.
|
Governing Law.
|
4.2.
|
Duplicate Originals; Electronic Signature.
|
4.3.
|
Waiver and Amendments.
|
4.4.
|
Costs and Expenses.
|
4.5.
|
Successors and Assigns.
|
4.6.
|
Survival.
|
4.7.
|
Part of Current Note Purchase Agreement; Future References, etc.
|
4.8.
|
Affirmation of Obligations under Current Note Purchase Agreement and Notes; No Novation.
|
|
|
|
Very truly yours,
|
|
|
|
|
|
|
|
|
|
ISSUERS:
|
|
|
|
|
|
|
|
|
|
AARON'S, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
AARON INVESTMENT COMPANY
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Vice President and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARMERS INSURANCE EXCHANGE
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WILLIAM PENN LIFE INSURANCE COMPANY
|
||||
OF NEW YORK
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARMERS NEW WORLD LIFE INSURANCE COMPANY
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
ZURICH AMERICAN INSURANCE COMPANY
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MID CENTURY INSURANCE COMPANY
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERICAN INCOME LIFE INSURANCE COMPANY
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
GLOBE LIFE AND ACCIDENT INSURANCE
|
||||
COMPANY
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAMILY HERITAGE LIFE INSURANCE
|
||||
COMPANY OF AMERICA
|
||||
|
|
|
|
|
By:
|
Prudential Private Placement Investors, L.P.,
|
|
|
|
|
as Investment Advisor
|
|
|
|
|
|
|
|
|
By:
|
Prudential Private Placement Investors, Inc.,
|
|
|
|
|
as its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ashley Dexter
|
|
|
|
Name:
|
Ashley Dexter
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBSIDIARY GUARANTORS:
|
|
|
|
|
|
|
|
|
|
AARON'S PRODUCTION COMPANY
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert W. Kamerschen
|
|
|
|
Name:
|
Robert W. Kamerschen
|
|
|
|
Title:
|
Vice President and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99LTO, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON’S LOGISTICS, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON’S STRATEGIC SERVICES, LLC
|
|
|
|
|
By Aaron's, Inc., as sole Manager
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
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AARON'S PROCUREMENT
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COMPANY, LLC
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By:
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/s/ Steven A. Michaels
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Name:
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Steven A. Michaels
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Title:
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Chief Financial Officer and
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President, Strategic Operations
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PROGRESSIVE FINANCE HOLDINGS,
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LLC
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By:
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/s/ Ryan K. Woodley
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Name:
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Ryan K. Woodley
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Title:
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Chief Executive Officer
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Prog Finance Arizona, LLC
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Prog Finance California, LLC
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Prog Finance Florida, LLC
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Prog Finance Georgia, LLC
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Prog Finance Illinois, LLC
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Prog Finance Michigan, LLC
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Prog Finance New York, LLC
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Prog Finance Ohio, LLC
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Prog Finance Texas, LLC
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Prog Finance Mid-West, LLC
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Prog Finance North-East, LLC
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Prog Finance South-East, LLC
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Prog Finance West, LLC
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NPRTO Arizona, LLC
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NPRTO California, LLC
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NPRTO Florida, LLC
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NPRTO Georgia, LLC
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NPRTO Illinois, LLC
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NPRTO Michigan, LLC
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NPRTO New York, LLC
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NPRTO Ohio, LLC
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NPRTO Texas, LLC
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NPRTO Mid-West, LLC
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NPRTO North-East, LLC
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NPRTO South-East, LLC
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NPRTO West, LLC,
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By:
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PROG LEASING, LLC, Sole
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Manager
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By:
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PROGRESSIVE FINANCE
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HOLDINGS, LLC, Sole Manager
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By:
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/s/ Ryan K. Woodley
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Name:
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Ryan K. Woodley
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Title:
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Chief Executive Officer
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PANGO LLC
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By:
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PROGRESSIVE FINANCE
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HOLDINGS, LLC, Sole Manager
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By:
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/s/ Ryan K. Woodley
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Name:
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Ryan K. Woodley
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Title:
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Chief Executive Officer
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PROG LEASING, LLC
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By:
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PROGRESSIVE FINANCE
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HOLDINGS, LLC, Sole Manager
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By:
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/s/ Ryan K. Woodley
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Name:
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Ryan K. Woodley
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Title:
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Chief Executive Officer
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1.
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AMENDMENTS TO CURRENT NOTE PURCHASE AGREEMENT.
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1.1.
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Indebtedness.
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1.2.
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Amendment and Restatement of the Definition of “Dent-A-Med Credit Agreement”.
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1.3.
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Addition of the Definition of “Third Amendment Effective Date”.
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2.
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WARRANTIES AND REPRESENTATIONS.
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2.1.
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Corporate and Other Organization and Authority.
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2.2.
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Authorization, etc.
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2.3.
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No Conflicts, etc.
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2.4.
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Governmental Consent.
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2.5.
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No Defaults.
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3.
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CONDITIONS TO EFFECTIVENESS OF AMENDMENTS.
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4.
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MISCELLANEOUS.
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4.1.
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Governing Law.
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4.2.
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Duplicate Originals; Electronic Signature.
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4.3.
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Waiver and Amendments.
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4.4.
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Costs and Expenses.
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4.5.
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Successors and Assigns.
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4.6.
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Survival.
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4.7.
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Part of Current Note Purchase Agreement; Future References, etc.
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4.8.
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Affirmation of Obligations under Current Note Purchase Agreement and Notes; No Novation.
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Very truly yours,
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ISSUERS:
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AARON'S, INC.
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By:
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/s/ Steven A. Michaels
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Name:
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Steven A. Michaels
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Title:
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Chief Financial Officer and
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President, Strategic Operations
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AARON INVESTMENT COMPANY
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By:
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/s/ Steven A. Michaels
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Name:
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Steven A. Michaels
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Title:
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Vice President and Treasurer
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Accepted and Agreed:
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The foregoing Agreement is hereby accepted as of the date first above written.
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||||
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METROPOLITAN LIFE INSURANCE COMPANY
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||||
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METLIFE INSURANCE COMPANY USA
|
||||
by Metropolitan Life Insurance Company, its Investment Manager
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||||
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NEW ENGLAND LIFE INSURANCE COMPANY
|
||||
by Metropolitan Life Insurance Company, its Investment Manager
|
||||
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GENERAL AMERICAN LIFE INSURANCE COMPANY
|
||||
by Metropolitan Life Insurance Company, its Investment Manager
|
||||
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By:
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/s/ John A. Wills
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Name:
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John A. Wills
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Title:
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Managing Director
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SUBSIDIARY GUARANTORS:
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AARON'S PRODUCTION COMPANY
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By:
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/s/ Robert W. Kamerschen
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Name:
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Robert W. Kamerschen
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Title:
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Vice President and Secretary
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99LTO, LLC
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By Aaron's, Inc., as sole Manager
|
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By:
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/s/ Steven A. Michaels
|
|
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Name:
|
Steven A. Michaels
|
|
|
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Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
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AARON’S LOGISTICS, LLC
|
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By Aaron's, Inc., as sole Manager
|
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By:
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/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
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|
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AARON’S STRATEGIC SERVICES, LLC
|
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By Aaron's, Inc., as sole Manager
|
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By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
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|
|
AARON’S PROCUREMENT COMPANY, LLC
|
|
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By Aaron's, Inc., as sole Manager
|
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By:
|
/s/ Steven A. Michaels
|
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
PROGRESSIVE FINANCE HOLDINGS, LLC
|
|
|
|
|
|
|
|
|
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|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
Prog Finance Arizona, LLC
|
|
|
|
|
Prog Finance California, LLC
|
|
|
|
|
Prog Finance Florida, LLC
|
|
|
|
|
Prog Finance Georgia, LLC
|
|
|
|
|
Prog Finance Illinois, LLC
|
|
|
|
|
Prog Finance Michigan, LLC
|
|
|
|
|
Prog Finance New York, LLC
|
|
|
|
|
Prog Finance Ohio, LLC
|
|
|
|
|
Prog Finance Texas, LLC
|
|
|
|
|
Prog Finance Mid-West, LLC
|
|
|
|
|
Prog Finance North-East, LLC
|
|
|
|
|
Prog Finance South-East, LLC
|
|
|
|
|
Prog Finance West, LLC
|
|
|
|
|
NPRTO Arizona, LLC
|
|
|
|
|
NPRTO California, LLC
|
|
|
|
|
NPRTO Florida, LLC
|
|
|
|
|
NPRTO Georgia, LLC
|
|
|
|
|
NPRTO Illinois, LLC
|
|
|
|
|
NPRTO Michigan, LLC
|
|
|
|
|
NPRTO New York, LLC
|
|
|
|
|
NPRTO Ohio, LLC
|
|
|
|
|
NPRTO Texas, LLC
|
|
|
|
|
NPRTO Mid-West, LLC
|
|
|
|
|
NPRTO North-East, LLC
|
|
|
|
|
NPRTO South-East, LLC
|
|
|
|
|
NPRTO West, LLC,
|
|
|
|
|
|
|
|
|
|
By:
|
PROG LEASING, LLC, Sole
|
|
|
|
|
Manager
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
PANGO LLC
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROG LEASING, LLC
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BORROWER:
|
|
|
AARON’S, INC.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
GUARANTORS:
|
|
|
AARON INVESTMENT COMPANY,
|
|
|
|
|
as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Vice President and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AARON’S PRODUCTION COMPANY,
|
|
|
|
|
as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert W. Kamerschen
|
|
|
|
Name:
|
Robert W. Kamerschen
|
|
|
|
Title:
|
Vice President and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99LTO, LLC,
|
|
|
|
|
AARON’S LOGISTICS, LLC,
|
|
|
|
|
AARON’S PROCUREMENT COMPANY, LLC,
|
|
|
|
|
AARON’S STRATEGIC SERVICES, LLC,
|
|
|
|
|
each as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
AARON’S, INC., as sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROGRESSIVE FINANCE HOLDINGS, LLC,
|
|
|
|
|
as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
Prog Finance Arizona, LLC
|
|
|
|
|
Prog Finance California, LLC
|
|
|
|
|
Prog Finance Florida, LLC
|
|
|
|
|
Prog Finance Georgia, LLC
|
|
|
|
|
Prog Finance Illinois, LLC
|
|
|
|
|
Prog Finance Michigan, LLC
|
|
|
|
|
Prog Finance New York, LLC
|
|
|
|
|
Prog Finance Ohio, LLC
|
|
|
|
|
Prog Finance Texas, LLC
|
|
|
|
|
Prog Finance Mid-West, LLC
|
|
|
|
|
Prog Finance North-East, LLC
|
|
|
|
|
Prog Finance South-East, LLC
|
|
|
|
|
Prog Finance West, LLC
|
|
|
|
|
NPRTO Arizona, LLC
|
|
|
|
|
NPRTO California, LLC
|
|
|
|
|
NPRTO Florida, LLC
|
|
|
|
|
NPRTO Georgia, LLC
|
|
|
|
|
NPRTO Illinois, LLC
|
|
|
|
|
NPRTO Michigan, LLC
|
|
|
|
|
NPRTO New York, LLC
|
|
|
|
|
NPRTO Ohio, LLC
|
|
|
|
|
NPRTO Texas, LLC
|
|
|
|
|
NPRTO Mid-West, LLC
|
|
|
|
|
NPRTO North-East, LLC
|
|
|
|
|
NPRTO South-East, LLC
|
|
|
|
|
NPRTO West, LLC,
|
|
|
|
|
each as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
PROG LEASING, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
|
By: PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
PANGO LLC, as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE HOLDINGS, LLC,
|
|
|
|
|
Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
PROG LEASING, LLC, as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE HOLDINGS, LLC,
|
|
|
|
|
Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
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|
|
|
ADMINISTRATIVE AGENT:
|
|
SUNTRUST BANK,
|
||
|
|
|
as Administrative Agent, as Issuing Bank, as
|
|
|
|
|
Swingline Lender and as a Lender
|
|
|
|
|
|
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|
|
|
By:
|
/s/ Tesha Winslow
|
|
|
|
Name:
|
Tesha Winslow
|
|
|
|
Title:
|
Director
|
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|
|
LENDERS:
|
|
|
Regions Bank,
|
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|
|
as a Lender
|
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|
|
By:
|
/s/ J. Ryan Hammack
|
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|
|
Name:
|
J. Ryan Hammack
|
|
|
|
Title:
|
Vice President
|
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|
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BRANCH BANKING AND TRUST COMPANY,
|
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|
|
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as a Lender
|
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|
|
By:
|
/s/ Bradley B. Sands
|
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|
|
Name:
|
Bradley Sands
|
|
|
|
Title:
|
Assistant Vice President
|
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|
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BANK OF AMERICA, N.A.,
|
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|
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as a Lender
|
|
|
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|
|
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|
|
By:
|
/s/ Ryan Maples
|
|
|
|
Name:
|
Ryan Maples
|
|
|
|
Title:
|
Senior Vice President
|
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|
|
SYNOVUS BANK,
|
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|
|
as a Lender
|
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|
|
By:
|
/s/ Terry Herron
|
|
|
|
Name:
|
Terry Herron
|
|
|
|
Title:
|
Senior Director, Corporate Banking
|
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|
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FIFTH THIRD BANK,
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|
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as a Lender
|
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|
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By:
|
/s/ Mary Ramsey
|
|
|
|
Name:
|
Mary Ramsey
|
|
|
|
Title:
|
Vice President
|
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|
|
CITIZENS BANK, N.A.,
|
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|
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as a Lender
|
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|
|
By:
|
/s/ Peter van der Horst
|
|
|
|
Name:
|
Peter van der Horst
|
|
|
|
Title:
|
Senior Vice President
|
SPONSOR:
|
|
|
AARON’S, INC.
|
|
|
|
|
|
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|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
GUARANTORS:
|
|
|
AARON INVESTMENT COMPANY,
|
|
|
|
|
as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Vice President and Treasurer
|
|
|
|
|
|
|
|
|
|
|
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|
|
AARON’S PRODUCTION COMPANY,
|
|
|
|
|
as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert W. Kamerschen
|
|
|
|
Name:
|
Robert W. Kamerschen
|
|
|
|
Title:
|
Vice President and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99LTO, LLC,
|
|
|
|
|
AARON’S LOGISTICS, LLC,
|
|
|
|
|
AARON’S PROCUREMENT COMPANY, LLC,
|
|
|
|
|
AARON’S STRATEGIC SERVICES, LLC,
|
|
|
|
|
each as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
AARON’S, INC., as sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Name:
|
Steven A. Michaels
|
|
|
|
Title:
|
Chief Financial Officer and
|
|
|
|
|
President, Strategic Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROGRESSIVE FINANCE HOLDINGS, LLC,
|
|
|
|
|
as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
Prog Finance Arizona, LLC
|
|
|
|
|
Prog Finance California, LLC
|
|
|
|
|
Prog Finance Florida, LLC
|
|
|
|
|
Prog Finance Georgia, LLC
|
|
|
|
|
Prog Finance Illinois, LLC
|
|
|
|
|
Prog Finance Michigan, LLC
|
|
|
|
|
Prog Finance New York, LLC
|
|
|
|
|
Prog Finance Ohio, LLC
|
|
|
|
|
Prog Finance Texas, LLC
|
|
|
|
|
Prog Finance Mid-West, LLC
|
|
|
|
|
Prog Finance North-East, LLC
|
|
|
|
|
Prog Finance South-East, LLC
|
|
|
|
|
Prog Finance West, LLC
|
|
|
|
|
NPRTO Arizona, LLC
|
|
|
|
|
NPRTO California, LLC
|
|
|
|
|
NPRTO Florida, LLC
|
|
|
|
|
NPRTO Georgia, LLC
|
|
|
|
|
NPRTO Illinois, LLC
|
|
|
|
|
NPRTO Michigan, LLC
|
|
|
|
|
NPRTO New York, LLC
|
|
|
|
|
NPRTO Ohio, LLC
|
|
|
|
|
NPRTO Texas, LLC
|
|
|
|
|
NPRTO Mid-West, LLC
|
|
|
|
|
NPRTO North-East, LLC
|
|
|
|
|
NPRTO South-East, LLC
|
|
|
|
|
NPRTO West, LLC,
|
|
|
|
|
each as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
PROG LEASING, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
|
By: PROGRESSIVE FINANCE
|
|
|
|
|
HOLDINGS, LLC, Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
PANGO LLC, as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE HOLDINGS, LLC,
|
|
|
|
|
Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
PROG LEASING, LLC, as a Guarantor
|
|
|
|
|
|
|
|
|
|
By:
|
PROGRESSIVE FINANCE HOLDINGS, LLC,
|
|
|
|
|
Sole Manager
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan K. Woodley
|
|
|
|
Name:
|
Ryan K. Woodley
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERVICER:
|
|
|
SUNTRUST BANK,
|
|
|
|
|
as Servicer and as a Participant
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tesha Winslow
|
|
|
|
Name:
|
Tesha Winslow
|
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANTS:
|
|
|
REGIONS BANK,
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ J. Ryan Hammack
|
|
|
|
Name:
|
J. Ryan Hammack
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANTS:
|
|
|
BRANCH BANKING AND TRUST
|
|
|
|
|
COMPANY
|
|
|
|
|
as a Participant
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Bradley B. Sands
|
|
|
|
Name:
|
Bradley Sands
|
|
|
|
Title:
|
Assistant Vice President
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANTS:
|
|
|
BANK OF AMERICA, N.A.,
|
|
|
|
|
as a Participant
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ryan Maples
|
|
|
|
Name:
|
Ryan Maples
|
|
|
|
Title:
|
Senior Vice President
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANTS:
|
|
|
SYNOVUS BANK,
|
|
|
|
|
as a Participant
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Terry Herron
|
|
|
|
Name:
|
Terry Herron
|
|
|
|
Title:
|
Senior Director, Corporate Banking
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANTS:
|
|
|
FIFTH THIRD BANK,
|
|
|
|
|
as a Participant
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mary Ramsey
|
|
|
|
Name:
|
Mary Ramsey
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANTS:
|
|
|
CITIZENS BANK, N.A.,
|
|
|
|
|
as a Participant
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Peter van der Horst
|
|
|
|
Name:
|
Peter van der Horst
|
|
|
|
Title:
|
Senior Vice President
|
|
|
|
PAGE
|
|
|
|
|
ARTICLE I DEFINITIONS
|
1
|
||
1.1
|
Account
|
1
|
|
1.2
|
ACP or Actual Contribution Percentage
|
1
|
|
1.3
|
ACP Tests
|
1
|
|
1.4
|
Active Participant
|
1
|
|
1.5
|
Administrative Committee
|
1
|
|
1.6
|
Affiliate
|
1
|
|
1.7
|
After-Tax Account
|
2
|
|
1.8
|
After-Tax Contributions
|
2
|
|
1.9
|
Annual Addition
|
2
|
|
1.10
|
Before-Tax Account
|
2
|
|
1.11
|
Before-Tax Contributions
|
2
|
|
1.12
|
Beneficiary
|
2
|
|
1.13
|
Board
|
2
|
|
1.14
|
Break in Service
|
2
|
|
|
(a)
|
General Rule
|
2
|
|
(b)
|
Family and Medical Leave
|
3
|
1.15
|
Catch-Up Contributions
|
3
|
|
1.16
|
Code
|
3
|
|
1.17
|
Company Stock
|
3
|
|
1.18
|
Company Stock Fund
|
3
|
|
1.19
|
Compensation
|
3
|
|
|
(a)
|
Benefit Compensation
|
3
|
|
(b)
|
Top-Heavy Compensation
|
4
|
|
(c)
|
Code Section 415 Compensation
|
5
|
|
(d)
|
Key Employee and Highly Compensated Employee Compensation
|
6
|
1.20
|
Contributions
|
6
|
|
1.21
|
Controlling Company
|
6
|
|
1.22
|
Covered Employee
|
6
|
|
1.23
|
Deferral Election
|
6
|
|
1.24
|
Defined Benefit Minimum
|
6
|
|
1.25
|
Defined Benefit Plan
|
6
|
|
1.26
|
Defined Contribution Minimum
|
6
|
|
1.27
|
Defined Contribution Plan
|
7
|
|
1.28
|
Determination Date
|
7
|
|
1.29
|
Disability or Disabled
|
7
|
|
1.30
|
Effective Date
|
7
|
1.31
|
Elective Deferrals
|
7
|
|
1.32
|
Eligible Nonhighly Compensated Participant
|
7
|
|
1.33
|
Eligible Participant
|
7
|
|
1.34
|
Eligible Retirement Plan
|
7
|
|
1.35
|
Eligible Rollover Distribution
|
8
|
|
1.36
|
Employee
|
8
|
|
1.37
|
Employment Date
|
8
|
|
1.38
|
Entry Date
|
8
|
|
1.39
|
ERISA
|
8
|
|
1.40
|
Forfeiture
|
9
|
|
1.41
|
Highly Compensated Employee
|
9
|
|
|
(a)
|
General Rule
|
9
|
|
(b)
|
Compliance with Code Section 414(q)
|
9
|
1.42
|
Hour of Service
|
9
|
|
|
(a)
|
General Rule
|
9
|
|
(b)
|
Equivalencies
|
10
|
|
(c)
|
Changes by Administrative Committee
|
10
|
|
(d)
|
Computation Period
|
11
|
1.43
|
Investment Committee
|
11
|
|
1.44
|
Investment Fund or Investment Funds
|
11
|
|
1.45
|
Key Employee
|
11
|
|
1.46
|
Leave of Absence
|
11
|
|
1.47
|
Limitation Year
|
11
|
|
1.48
|
Matching Account
|
11
|
|
1.49
|
Maximum Deferral Amount
|
11
|
|
1.50
|
Named Fiduciary
|
11
|
|
1.51
|
Nonelective Account
|
11
|
|
1.52
|
Nonelective Contributions
|
11
|
|
1.53
|
Non-Key Employee
|
11
|
|
1.54
|
Normal Retirement Age
|
11
|
|
1.55
|
Participant
|
12
|
|
1.56
|
Participant Contributions
|
12
|
|
1.57
|
Participating Company
|
12
|
|
1.58
|
Permissive Aggregation Group
|
12
|
|
1.59
|
Plan
|
12
|
|
1.60
|
Plan Year
|
12
|
|
1.61
|
Prior Plan
|
12
|
|
1.62
|
Qualified Military Service
|
12
|
|
1.63
|
Qualified Spousal Waiver
|
12
|
|
1.64
|
Required Aggregation Group
|
12
|
|
1.65
|
Rollover Account
|
12
|
|
1.66
|
Rollover Contribution
|
12
|
|
1.67
|
Roth Account
|
13
|
1.68
|
Roth Contributions
|
13
|
|
1.69
|
Roth Rollover Account
|
13
|
|
1.70
|
Safe Harbor Matching Account
|
13
|
|
1.71
|
Safe Harbor Matching Contributions
|
13
|
|
1.72
|
Spouse or Surviving Spouse
|
13
|
|
1.73
|
Supplemental Account
|
13
|
|
1.74
|
Supplemental Contributions
|
13
|
|
1.75
|
Top-Heavy Group
|
13
|
|
1.76
|
Top-Heavy Plan
|
13
|
|
1.77
|
Transfer Account
|
13
|
|
1.78
|
Transfer Contributions
|
14
|
|
1.79
|
Trust or Trust Agreement
|
14
|
|
1.80
|
Trust Fund
|
14
|
|
1.81
|
Trustee
|
14
|
|
1.82
|
Valuation Date
|
14
|
|
1.83
|
Year of Eligibility Service
|
14
|
|
|
(a)
|
Predecessor Plan
|
14
|
|
(b)
|
Predecessor Employer
|
14
|
|
(c)
|
Reemployed Veterans
|
15
|
1.84
|
Years of Vesting Service
|
15
|
|
|
(a)
|
Pre-Break Service
|
15
|
|
(b)
|
Post-Break Service
|
15
|
|
(c)
|
Predecessor Plan
|
15
|
|
(d)
|
Predecessor Employer
|
15
|
|
(e)
|
Reemployed Veterans
|
15
|
ARTICLE II ELIGIBILITY
|
16
|
||
2.1
|
Initial Eligibility Requirements
|
16
|
|
|
(a)
|
General Rule
|
16
|
|
(b)
|
Safe Harbor Matching Contributions and Nonelective Contributions
|
16
|
|
(c)
|
Participation on Effective Date
|
16
|
|
(d)
|
New Participating Companies
|
16
|
2.2
|
Treatment of Interruptions of Service
|
16
|
|
|
(a)
|
Leave of Absence or Layoff
|
16
|
|
(b)
|
Termination Before Participation
|
16
|
|
(c)
|
Termination After Participation
|
17
|
2.3
|
Change in Status
|
17
|
|
|
(a)
|
Exclusion Before Participation
|
17
|
|
(b)
|
Exclusion After Participation
|
17
|
|
(c)
|
Change to Covered Employee Status
|
17
|
2.4
|
Participant Information
|
17
|
|
ARTICLE III CONTRIBUTIONS
|
18
|
||
3.1
|
Participant Contributions
|
18
|
|
|
(a)
|
Generally
|
18
|
|
(b)
|
After-Tax Contributions
|
18
|
|
(c)
|
Deferral Elections
|
18
|
|
(d)
|
Catch-Up Contributions
|
19
|
|
(e)
|
Before-Tax and Roth Contributions
|
20
|
3.2
|
Safe Harbor Matching Contributions
|
20
|
|
3.3
|
Nonelective Contributions
|
20
|
|
3.4
|
Form of Contributions
|
21
|
|
3.5
|
Timing of Contributions
|
21
|
|
|
(a)
|
Before-Tax and Roth Contributions
|
21
|
|
(b)
|
Company Contributions
|
21
|
3.6
|
Contingent Nature of Company Contributions
|
21
|
|
3.7
|
Restoration Contributions
|
21
|
|
|
(a)
|
Restoration Upon Buy-Back
|
21
|
|
(b)
|
Restoration of Forfeitures
|
22
|
|
(c)
|
Restoration Contribution
|
22
|
3.8
|
Reemployed Veterans
|
22
|
|
ARTICLE IV ROLLOVERS AND TRANSFERS BETWEEN PLANS
|
23
|
||
4.1
|
Rollover Contributions
|
23
|
|
|
(a)
|
Request by Covered Employee
|
23
|
|
(b)
|
Acceptance of Rollover
|
23
|
|
(c)
|
Rollovers to Roth Accounts
|
23
|
|
(d)
|
Separate Accounting for After-Tax Rollovers
|
23
|
4.2
|
Transfer Contributions
|
24
|
|
|
(a)
|
Direct Transfers Permitted
|
24
|
|
(b)
|
Mergers and Spin-Offs Permitted
|
24
|
|
(c)
|
Establishment of Transfer Accounts
|
24
|
|
(d)
|
Transfer Accounts
|
24
|
4.3
|
Spin-Offs to Other Plans
|
24
|
|
ARTICLE V PARTICIPANTS’ ACCOUNTS; CREDITING AND ALLOCATIONS
|
25
|
||
5.1
|
Establishment of Participants’ Accounts
|
25
|
|
5.2
|
Allocation and Crediting of Before-Tax, Roth, After-Tax, Safe Harbor Matching, Rollover and Transfer Contributions
|
25
|
|
5.3
|
Allocation and Crediting of Nonelective Contributions
|
25
|
|
5.4
|
Crediting of Restoration Contributions
|
26
|
|
5.5
|
Allocation and Crediting of Supplemental Contributions
|
26
|
|
|
(a)
|
General Provision
|
26
|
|
(b)
|
Per Capita Supplemental Contributions
|
26
|
|
(c)
|
Proportional Supplemental Contributions
|
26
|
|
(d)
|
Targeted Supplemental Contributions
|
26
|
|
(e)
|
Supplemental Matching Contributions
|
27
|
5.6
|
Allocation of Forfeitures
|
27
|
|
5.7
|
Allocation and Crediting of Investment Experience
|
27
|
|
5.8
|
Allocation of Adjustments Upon Changes in Capitalization
|
27
|
5.9
|
Good Faith Valuation Binding
|
28
|
|
ARTICLE VI CONTRIBUTION AND SECTION 415 LIMITATIONS AND NONDISCRIMINATION REQUIREMENTS
|
29
|
||
6.1
|
Maximum Limitation on Elective Deferrals
|
29
|
|
|
(a)
|
Maximum Elective Deferrals Under Participating Company Plans
|
29
|
|
(b)
|
Return of Excess Participant Contributions
|
29
|
|
(c)
|
Return of Excess Elective Deferrals Provided by Other Participating Company Arrangements
|
29
|
|
(d)
|
Discretionary Return of Elective Deferrals
|
29
|
|
(e)
|
Return of Excess Annual Additions
|
30
|
|
(f)
|
Coordination of Before-Tax Contributions and Roth Contributions
|
30
|
6.2
|
Nondiscrimination Requirements for Before-Tax and Roth Contributions
|
30
|
|
6.3
|
Nondiscrimination Requirements for After-Tax Contributions
|
30
|
|
|
(a)
|
ACP Tests
|
30
|
|
(b)
|
ACP or Actual Contribution Percentage
|
30
|
|
(c)
|
Adjustments to Actual Contribution Percentages
|
31
|
|
(d)
|
Multiple Plans
|
32
|
|
(e)
|
Separate Testing
|
32
|
|
(f)
|
Interpretation
|
32
|
6.4
|
Order of Application
|
33
|
|
6.5
|
Code Section 415 Limitations on Maximum Contributions
|
33
|
|
|
(a)
|
General Limit on Annual Additions
|
33
|
|
(b)
|
Rules of Application
|
33
|
|
(c)
|
Combined Plan Limit
|
34
|
|
(d)
|
Compliance with Code Section 415
|
34
|
6.6
|
Construction of Limitations and Requirements
|
34
|
|
ARTICLE VII INVESTMENTS
|
35
|
||
7.1
|
Establishment of Trust Account
|
35
|
|
7.2
|
Investment Funds
|
35
|
|
|
(a)
|
Establishment of Investment Funds
|
35
|
|
(b)
|
Reinvestment of Cash Earnings
|
35
|
7.3
|
Participant Direction of Investments
|
35
|
|
|
(a)
|
Investment of Contributions
|
35
|
|
(b)
|
Investment of Existing Account Balances
|
36
|
|
(c)
|
Conditions Applicable to Elections
|
36
|
|
(d)
|
Restrictions on Investments
|
36
|
|
(e)
|
Sales and Purchases of Company Stock
|
36
|
7.4
|
Valuation
|
37
|
|
7.5
|
Purchase of Life Insurance
|
37
|
|
7.6
|
Voting and Tender Offer Rights with Respect to Investment Funds
|
37
|
|
7.7
|
Fiduciary Responsibilities for Investment Directions
|
37
|
|
7.8
|
Appointment of Investment Manager; Authorization to Invest in Collective Trust
|
37
|
|
|
(a)
|
Investment Manager
|
37
|
|
(b)
|
Collective Trust
|
38
|
7.9
|
Voting and Tender Offer Rights With Respect to Company Stock
|
38
|
|
|
(a)
|
Voting Rights
|
38
|
|
(b)
|
Tender Offer Rights
|
38
|
|
(c)
|
Confidentiality
|
38
|
|
(d)
|
Dissemination of Pertinent Information
|
38
|
ARTICLE VIII VESTING IN ACCOUNTS
|
39
|
||
8.1
|
General Vesting Rule
|
39
|
|
|
(a)
|
Fully Vested Accounts
|
39
|
|
(b)
|
Matching and Nonelective Accounts
|
39
|
|
(c)
|
Transfer Accounts
|
39
|
8.2
|
Vesting Upon Attainment of Normal Retirement Age, Death or Disability
|
39
|
|
8.3
|
Timing of Forfeitures and Vesting after Restoration Contributions
|
39
|
|
|
(a)
|
Timing of Forfeitures
|
39
|
|
(b)
|
Reemployment and Vesting After Cash-Out Distribution
|
40
|
|
(c)
|
Reemployment and Vesting Before Any Distribution
|
40
|
8.4
|
Amendment to Vesting Schedule
|
40
|
|
|
(a)
|
Changes to Vesting of Future Contributions
|
40
|
|
(b)
|
Changes to Vesting of Existing Accounts
|
40
|
ARTICLE IX IN-SERVICE WITHDRAWALS AND LOANS
|
41
|
||
9.1
|
In-Service Withdrawals
|
41
|
|
|
(a)
|
General
|
41
|
|
(b)
|
Election to Withdraw
|
41
|
|
(c)
|
Payment of Withdrawal
|
41
|
|
(d)
|
Effect of Outstanding Loan
|
41
|
9.2
|
Hardship Withdrawals
|
41
|
|
|
(a)
|
Parameters of Hardship Withdrawals
|
41
|
|
(b)
|
Immediate and Heavy Financial Need
|
41
|
|
(c)
|
Necessary to Satisfy a Financial Need
|
42
|
9.3
|
Rollover Account Withdrawals
|
42
|
|
9.4
|
After-Tax Account Withdrawals
|
42
|
|
9.5
|
Age 59½ Withdrawals
|
42
|
|
9.6
|
Distributions and Withdrawals from Transfer Accounts
|
42
|
|
9.7
|
Loans to Participants
|
43
|
|
|
(a)
|
Grant of Authority
|
43
|
|
(b)
|
Nondiscriminatory Policy
|
43
|
|
(c)
|
Minimum Loan Amount
|
43
|
|
(d)
|
Maximum Loan Amount
|
43
|
|
(e)
|
Adequacy of Security
|
44
|
|
(f)
|
Rate of Interest
|
44
|
|
(g)
|
Crediting Loan Payments to Accounts
|
44
|
|
(h)
|
Remedies in the Event of Default
|
44
|
|
(i)
|
Suspension of Repayments for Leaves
|
45
|
9.8
|
Transition Rule
|
45
|
|
ARTICLE X PAYMENT OF BENEFITS FROM ACCOUNTS
|
46
|
||
10.1
|
Benefits Payable for Reasons Other Than Death
|
46
|
|
|
(a)
|
General Rule Concerning Benefits Payable
|
46
|
|
(b)
|
Timing of Distribution
|
46
|
|
(c)
|
Restrictions on Distributions from Before-Tax, Roth, Safe Harbor Matching and Supplemental Accounts
|
47
|
|
(d)
|
Delay Upon Reemployment
|
48
|
10.2
|
Death Benefits
|
48
|
|
10.3
|
Forms of Distribution
|
48
|
|
|
(a)
|
Method
|
48
|
|
(b)
|
Direct Rollover Distributions
|
50
|
10.4
|
Qualified Domestic Relations Orders
|
50
|
|
10.5
|
Beneficiary Designation
|
51
|
|
|
(a)
|
General
|
51
|
|
(b)
|
No Designation or Designee Dead or Missing
|
51
|
10.6
|
Forfeiture of Benefits by Killers
|
52
|
|
10.7
|
Claims
|
52
|
|
|
(a)
|
Participant Rights
|
52
|
|
(b)
|
Procedure
|
52
|
|
(c)
|
Review Procedure
|
53
|
|
(d)
|
Satisfaction of Claims
|
54
|
10.8
|
Explanation of Rollover Distributions
|
55
|
|
10.9
|
Unclaimed Benefits
|
55
|
|
10.10
|
Recovery of Mistaken Payments
|
55
|
|
10.11
|
Recordkeeper Transition Rule
|
55
|
|
ARTICLE XI ADMINISTRATION
|
56
|
||
11.1
|
Administrative Committee; Appointment and Term of Office
|
56
|
|
|
(a)
|
Appointment
|
56
|
|
(b)
|
Removal; Resignation
|
56
|
11.2
|
Organization of Administrative Committee
|
56
|
|
11.3
|
Powers and Responsibility
|
56
|
|
|
(a)
|
Fiduciary Responsibilities
|
56
|
|
(b)
|
Other Powers
|
57
|
11.4
|
Delegation
|
58
|
|
11.5
|
Reporting and Disclosure
|
58
|
|
11.6
|
Construction of the Plan
|
58
|
|
11.7
|
Assistants and Advisors
|
58
|
|
|
(a)
|
Engaging Advisors
|
58
|
|
(b)
|
Reliance on Advisors
|
59
|
11.8
|
Investment Committee
|
59
|
|
|
(a)
|
Appointment
|
59
|
|
(b)
|
Duties
|
59
|
11.9
|
Direction of Trustee
|
59
|
|
11.10
|
Bonding
|
60
|
|
11.11
|
Indemnification
|
60
|
|
ARTICLE XII ALLOCATION OF AUTHORITY AND RESPONSIBILITIES
|
61
|
||
12.1
|
Controlling Company
|
61
|
|
|
(a)
|
General Responsibilities
|
61
|
|
(b)
|
Authority of Participating Companies
|
61
|
12.2
|
Administrative Committee
|
61
|
|
|
(a)
|
General Responsibilities
|
61
|
|
(b)
|
Allocation of Authority
|
61
|
12.3
|
Investment Committee
|
61
|
|
12.4
|
Trustee
|
62
|
|
12.5
|
Limitations on Obligations of Fiduciaries
|
62
|
|
12.6
|
Delegation
|
62
|
|
12.7
|
Multiple Fiduciary Roles
|
62
|
|
Article XIII AMENDMENT, TERMINATION AND ADOPTION
|
63
|
||
13.1
|
Amendment
|
63
|
|
13.2
|
Termination
|
63
|
|
|
(a)
|
Right to Terminate
|
63
|
|
(b)
|
Vesting Upon Complete Termination
|
63
|
|
(c)
|
Dissolution of Trust
|
63
|
|
(d)
|
Vesting Upon Partial Termination
|
64
|
13.3
|
Adoption of the Plan by a Participating Company
|
64
|
|
|
(a)
|
Procedures for Participation
|
64
|
|
(b)
|
Single Plan
|
64
|
|
(c)
|
Authority under Plan
|
65
|
|
(d)
|
Contributions to Plan
|
65
|
|
(e)
|
Withdrawal from Plan
|
65
|
13.4
|
Merger, Consolidation and Transfer of Assets or Liabilities
|
65
|
|
ARTICLE XIV TOP-HEAVY PROVISIONS
|
66
|
||
14.1
|
Top-Heavy Plan Years
|
66
|
|
14.2
|
Determination of Top-Heavy Status
|
66
|
|
|
(a)
|
Application
|
66
|
|
(b)
|
Special Definitions
|
66
|
|
(c)
|
Special Rules
|
67
|
14.3
|
Top-Heavy Minimum Contribution
|
69
|
|
|
(a)
|
Multiple Defined Contribution Plans
|
69
|
|
(b)
|
Defined Contribution and Benefit Plans
|
69
|
|
(c)
|
Defined Contribution Minimum
|
69
|
|
(d)
|
Defined Benefit Minimum
|
69
|
14.4
|
Top-Heavy Minimum Vesting
|
70
|
|
14.5
|
Construction of Limitations and Requirements
|
70
|
ARTICLE XV MISCELLANEOUS
|
71
|
||
15.1
|
Nonalienation of Benefits and Spendthrift Clause
|
71
|
|
|
(a)
|
General Nonalienation Requirements
|
71
|
|
(b)
|
Exception for Qualified Domestic Relations Orders
|
71
|
|
(c)
|
Exception for Loans from the Plan
|
71
|
|
(d)
|
Exception for Crimes Against the Plan
|
71
|
15.2
|
Headings
|
72
|
|
15.3
|
Construction, Controlling Law
|
72
|
|
15.4
|
Legally Incompetent
|
72
|
|
15.5
|
Title to Assets, Benefits Supported Only By Trust Fund
|
72
|
|
15.6
|
Legal Action
|
73
|
|
15.7
|
Exclusive Benefit; Refund of Contributions
|
73
|
|
|
(a)
|
Permitted Refunds
|
73
|
|
(b)
|
Payment of Refund
|
73
|
|
(c)
|
Limitation on Refund
|
73
|
15.8
|
Plan Expenses
|
73
|
|
15.9
|
Satisfaction of Writing Requirement By Other Means
|
74
|
|
|
|
|
|
SCHEDULE A
|
1
|
||
|
|
||
SCHEDULE B
|
1
|
||
|
|
||
SCHEDULE C
|
1
|
Years of Vesting Service
Completed by Participant
|
Vested Percentage of Participant’s Matching and
Nonelective Accounts
|
Less than 2 Years
|
0%
|
2 Years, but less than 3
|
20%
|
3 Years, but less than 4
|
40%
|
4 Years, but less than 5
|
60%
|
5 Years, but less than 6
|
80%
|
6 Years or more
|
100%
|
|
|
|
By: /s/ James L. Cates
|
|
|
|
Title: Senior Vice President
|
|
|
|
Date: December 31, 2015
|
1.
|
An Employee who was employed by Progressive Finance Holdings, LLC, as of the date the Controlling Company acquired Progressive Finance Holdings, LLC will receive credit under the Plan for his period of employment with Progressive Finance Holdings, LLC, prior to its acquisition by the Controlling Company, for all purposes under the Plan.
|
2.
|
An Employee who was employed by Dent-A-Med, Inc. as of the date Progressive Holdings, LLC acquired Dent-A-Med, Inc. will receive credit under the Plan for this period of employment with Dent-A-Med, Inc. prior to its acquisition by Progressive Finance Holdings, LLC, for all purposes under the Plan.
|
1.
|
None.
|
1.
|
Section 7.3(d) is amended to read as follows:
|
2.
|
Except as provided herein, the Plan will remain in full force and effect.
|
|
|
|
By: /s/ Robert W. Kamerschen
|
|
|
|
Name: Robert W. Kamerschen
|
|
|
|
Date: June 28, 2016
|
|
|
|
AARON’S, INC.
|
|
|
|
By: /s/ Robert W. Kamerschen
|
|
|
|
Title: EVP & General Counsel
|
|
|
|
|
Description
|
Amount
1
|
Comment
|
Annual Retainer – RSUs
|
$100,000
|
Issued on the first business day of the calendar year and vests on the one-year anniversary thereof.
In the event Board service begins after the commencement of a Board term (i.e., a new director is appointed during the year, either before or after the Company’s annual meeting), a pro-rata portion of RSUs will be granted, which will vest on the one-year anniversary of the first business day of the calendar year in which such director is appointed (i.e., at the same time as grants made on the first business day of the calendar year).
To the extent Board service terminates without cause prior to such one-year anniversary, a pro-rata portion of RSUs will accelerate and vest on the date such service terminates. Any RSUs that do not vest will be added back to the Equity and Incentive Plan’s share pool.
See Note 1 below and Section 7.1 of the Plan.
|
Quarterly Retainer – Cash
|
$18,750
|
Can make election to receive shares of fully vested Common Stock as set forth in Section 5.2(d) of the Plan.
|
Description
|
Amount
1
|
Comment
|
Board Chair –
Quarterly Retainer
|
$25,000
|
Amount is in addition to the quarterly cash retainer received by non-employee directors of $18,750 set forth above. Can make election to receive shares of fully vested Common Stock as set forth in Section 5.2(d) of the Plan.
|
Audit Committee Chair – Quarterly Cash Retainer
|
$5,000
|
Amount is in addition to the quarterly cash retainer received by non-employee directors of $18,750 set forth above. Can make election to receive shares of fully vested Common Stock as set forth in Section 5.2(d) of the Plan.
|
Compensation Committee Chair – Quarterly Cash Retainer
|
$3,750
|
Amount is in addition to the quarterly cash retainer received by non-employee directors of $18,750 set forth above. Can make election to receive shares of fully vested Common Stock as set forth in Section 5.2(d) of the Plan.
|
Nominating and Corporate Governance Committee Chair – Quarterly Cash Retainer
|
$2,500
|
Amount is in addition to the quarterly cash retainer received by non-employee directors of $18,750 set forth above. Can make election to receive shares of fully vested Common Stock as set forth in Section 5.2(d) of the Plan.
|
|
I, John W. Robinson III, certify that:
|
||||
|
|
|
|
||
1.
|
I have reviewed this quarterly report on Form 10-Q of Aaron's, Inc.;
|
||||
|
|
|
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||
|
|
||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||
|
|
||||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||||
|
|
||||
|
a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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|
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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||||
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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August 4, 2016
|
/s/ John W. Robinson III
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John W. Robinson III
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Chief Executive Officer
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I, Steven A. Michaels, certify that:
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||
1.
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I have reviewed this quarterly report on Form 10-Q of Aaron's, Inc.;
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|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||
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|
||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||
|
|
||||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||||
|
|
||||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||
|
|
|
|||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
|
|
|
|||
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
|
|
|
|||
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
|
|
||||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
||||
|
|
||||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
|
|
|
|||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 4, 2016
|
/s/ Steven A. Michaels
|
|
|
Steven A. Michaels
|
|
|
Chief Financial Officer,
|
|
|
President Strategic Operations
|
Date:
|
August 4, 2016
|
|
/s/ John W. Robinson III
|
|
|
|
John W. Robinson III
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 4, 2016
|
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|