Proposal 2-Advisory Vote on Executive Compensation

We provide our shareholders with the annual opportunity to cast an advisory vote on the compensation of our named executive officers. The vote on this proposal represents an additional means by which we obtain feedback from our shareholders about executive compensation. Among other responsibilities, our Compensation Committee sets executive compensation for our named executive officers, which is designed to link pay with performance while enabling us to competitively attract, motivate and retain key executives. The overall objective of our executive compensation program is to encourage and reward the creation of sustainable, long-term shareholder value.

To meet this objective, during 2019, the Compensation Committee’s deliberations regarding how much to pay our named executive officers included, among other performance metrics, (i) objective measurements of business performance, (ii) the accomplishment of strategic, financial and compliance objectives, (iii) the development of management talent, (iv) enhancement of shareholder value and (v) other matters relevant to both the short- and the long-term success of Aaron’s. Our focus on internal financial performance as measured in our annual incentive plans led to solid results for 2019, and we believe has positioned our operations well for the future. Our equity program serves to align the interests of our named executive officers with those of our shareholders.

We encourage our shareholders to read the “Compensation Discussion and Analysis” section of this joint proxy statement/prospectus, which discusses how our compensation policies and programs support our compensation philosophy. Our Board of Directors and the Compensation Committee believe these policies and programs are strongly aligned with the long-term interests of our shareholders.

Accordingly, we ask for shareholder approval of the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this joint proxy statement/prospectus, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure, is hereby APPROVED.”

This vote is advisory and therefore not binding on us, our Board of Directors or the Compensation Committee. At last year’s annual meeting of shareholders, over 81% of votes cast were in support of the compensation paid to our named executive officers. Our Board of Directors and the Compensation Committee value the opinions of our shareholders, and the Compensation Committee takes seriously its role in the governance of compensation. The Compensation Committee will consider the result of this year’s vote, as well as other communications from shareholders relating to our compensation practices, and take them into account in future determinations concerning our executive compensation program.

Assuming a quorum is present, the resolution above approving our executive compensation will be approved if the votes cast by holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the resolution exceed the votes cast against the resolution.

Our Board of Directors recommends that you vote “FOR”
the resolution approving our executive compensation.

11

Table of Contents

Proposal 3-Ratification of the Appointment of the Independent Registered Public Accounting Firm

The Audit Committee of our Board of Directors has appointed Ernst & Young LLP, which we refer to as “EY,” to audit our consolidated financial statements for the year ending December 31, 2020, as well as the effectiveness of our internal controls over financial reporting as of December 31, 2020. A representative of EY will be present at the Annual Meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions from shareholders.

We are asking our shareholders to ratify EY’s appointment as our independent registered public accounting firm. Although ratification is not required by our bylaws or otherwise, our Board of Directors is submitting the selection of EY to our shareholders for ratification because we value our shareholders’ views on our independent registered public accounting firm and view the ratification vote as a matter of good corporate practice. In the event that our shareholders fail to ratify the appointment, it is anticipated that no change in our independent registered public accounting firm would be made for fiscal year 2020 because of the difficulty and expense of making any change during the current fiscal year. However, our Board of Directors and the Audit Committee would consider the vote results in connection with the engagement of an independent registered public accounting firm for fiscal year 2021. Even if EY’s appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and its shareholders.

Assuming a quorum is present, the proposal to ratify the appointment of our independent registered public accounting firm for 2020 will be approved if the votes cast by holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the proposal exceed the votes cast against the proposal.

Our Board of Directors recommends that you vote “FOR” the ratification of
the appointment of our independent registered public accounting firm for 2020.

12

Table of Contents

Proposal 4-Effect the Holding Company Formation and Approve the Agreement and Plan of Merger, by and among Aaron’s, Inc., Aaron’s Holdings Company, Inc. and Aaron’s Merger Sub, Inc.

This section of the joint proxy statement/prospectus describes the holding company formation proposal. The summary of the material provisions of the merger agreement provided below is qualified in its entirety by reference to the merger agreement, among Aaron’s, HoldCo and Merger Sub, which we have attached as Appendix B to this joint proxy statement/prospectus and which we incorporate by reference into this joint proxy statement/prospectus. You should carefully read the entire joint proxy statement/prospectus and the merger agreement for a more complete understanding of the holding company formation proposal. Your approval of the holding company formation proposal will constitute approval of the holding company formation, the merger agreement, and the articles of incorporation and bylaws of HoldCo.

Reasons for the Holding Company Formation; Recommendation of Our Board

As part of their ongoing evaluation of the Company’s business, the Company’s senior management team, together with the Aaron’s Board, regularly evaluates a range of strategic opportunities. As part of this evaluation, the Company’s senior management team and the Aaron’s Board identified the implementation of a holding company structure as a possible course of action that could facilitate future corporate actions and provide us with greater operational and financing flexibility for the Company’s Progressive Leasing and Aaron’s Business segments. During 2019 and 2020, Aaron’s periodically consulted with its legal and financial advisors to discuss the benefits and considerations associated with the potential implementation of a holding company structure. The Company’s senior management team and its legal and financial advisors also discussed the potential implementation of a holding company structure with the Aaron’s Board during this period.

After deliberation, the Company and the Aaron’s Board determined to approve the holding company formation proposal. The Aaron’s Board considered a number of factors in reaching this conclusion, including the following:

After careful consideration, the Aaron’s Board has unanimously approved the holding company formation, determined that the terms of the holding company formation and merger agreement are advisable and in the best interests of Aaron’s shareholders, and has adopted and approved the related merger agreement.

Our Board of Directors recommends that you vote “FOR”
the holding company formation proposal (including approval of the merger agreement) at the annual meeting.

13

Table of Contents

Holding Company Formation

Aaron’s currently owns all of the issued and outstanding common stock of HoldCo, and HoldCo currently owns all of the common stock of Merger Sub, which newly-created subsidiaries were formed for purposes of completing the holding company formation. Following the approval of the merger agreement by the requisite Aaron’s shareholders and the satisfaction or waiver of the other conditions specified in the merger agreement (which are described below), Merger Sub will merge with and into Aaron’s with Aaron’s continuing as the surviving corporation. This merger will in large part effect the holding company formation. As a result of this merger:

Copies of the HoldCo’s articles of incorporation and bylaws that will be in effect upon completion of the holding company formation are included as Appendix C and Appendix D, respectively, to this joint proxy statement/prospectus. For more information regarding your rights as a shareholder before and after the holding company formation, see “Description of HoldCo Capital Stock” beginning on page 18.

In all other respects, the management and business of our company will remain the same immediately following the holding company formation and we expect that the current directors of Aaron’s will be the directors of HoldCo following the holding company formation and the current executive officers of Aaron’s will remain the same.

What Aaron’s Shareholders will Receive in the Holding Company Formation

Each share of Aaron’s common stock will convert into one share of HoldCo common stock. You will own the same percentage of shares of HoldCo common stock as you owned of Aaron’s common stock immediately prior to the completion of the holding company formation.

Exchange of Stock Certificates Not Required

Following the completion of the holding company formation, the certificates representing your shares of Aaron’s common stock will represent the same number of shares of HoldCo common stock. You will not be required to exchange your stock certificates as a result of the holding company formation.

Aaron’s Stock Plans, Employee Stock Purchase Plan and Retirement Plan

After the holding company formation, each outstanding option to acquire shares of Aaron’s common stock will become an option to acquire the same number of shares of HoldCo common stock with the same exercise price per share in effect before the holding company formation. Each outstanding restricted stock unit (“RSU”) or restricted stock award, will entitle the holder to receive a share of HoldCo common stock (or its equivalent if the RSU is settled in cash) when the restricted stock vests or the RSU is settled. In addition, each outstanding stock appreciation right, performance share, performance unit or other stock award will entitle the holder to receive a share of HoldCo common stock (or its equivalent if the award is settled in cash) when the award vests or is settled. As of the record date, there were options to purchase 2,084,753 shares of Aaron’s common stock, 89,175 restricted stock units, 774,088 shares to be issued upon settlement of performances shares or performance units assuming maximum achievement of performance goals and 485,494 shares of restricted stock outstanding under the Aaron’s, Inc. 2001 Stock Option and Incentive Award Plan and the Aaron’s Inc. Amended and Restated 2015 Equity and Incentive Award Plan (the “Stock Plans”). Awards of Aaron’s common stock that are converted into awards of HoldCo common stock as a result of the holding company formation will have the same terms and conditions as before the holding company formation.

After the holding company formation, each participant eligible to purchase a share of Aaron’s common stock under Aaron’s, Inc. Employee Stock Purchase Plan (the “ESPP”) will be eligible to purchase one share of HoldCo common stock on the same terms and conditions as before the holding company formation.

14

Table of Contents

Any shares of Aaron’s common stock that remain available for issuance under the Stock Plans or the ESPP after the holding company formation will be converted into the number of shares of HoldCo common stock equal to the number of such shares of Aaron’s common stock.

Each share of Aaron’s common stock held under the Aaron’s, Inc. Employees Retirement Plan (the “Retirement Plan”) before the holding company formation will be converted into a number of shares of HoldCo common stock equal to the number of such shares of Aaron’s common stock after the holding company formation.

In addition, HoldCo will assume and agree to perform all obligations of Aaron’s under its Stock Plans and ESPP as well as the Retirement Plan and the Aarons, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) after the holding company formation. This will allow HoldCo to grant equity awards under the Stock Plans and will permit eligible employees of HoldCo and its affiliates to participate in the ESPP, the Retirement Plan and the Deferred Compensation Plan following the holding company formation. The grants of equity awards under the Stock Plans, the stock purchases under the ESPP and the investment in company stock under the Retirement Plan that occur following the holding company formation will be denominated in HoldCo common stock but otherwise, will be on the same terms and conditions as those that applied before the holding company formation.

Conditions to Holding Company Formation

We will complete the holding company formation only if each of the following conditions is satisfied or waived:

The merger agreement or the completion of the merger may be deferred or terminated at any time prior to the completion of the holding company formation (even after approval by our shareholders) by the Aaron’s Board.

Completion of the Holding Company Formation

The holding company formation will be completed when we file articles of merger with the Georgia Secretary of State. We currently plan to complete the holding company formation once our shareholders approve the holding company formation and all other conditions to completion of the holding company formation have been satisfied. Nonetheless, we may delay or terminate the holding company formation, even if Aaron’s shareholders approve the holding company formation proposal.

Material U.S. Federal Income Tax Consequences

The following discussion summarizes the material U.S. federal income tax consequences of the holding company formation (which for purposes of the following discussion includes the merger and conversion). This discussion is based upon current provisions of the Code, current and proposed Treasury Regulations, and judicial and administrative decisions and rulings as of the date of this joint proxy statement/prospectus, all of which are subject to change (possibly with retroactive effect) and all of which are subject to differing interpretation. This discussion does not address all aspects of taxation that may be relevant to you in light of your personal investment or

15

Table of Contents

tax circumstances, and does not address persons that are subject to special treatment under the U.S. federal income tax laws. In particular, this discussion deals only with shareholders that hold Aaron’s common stock as capital assets within the meaning of the Code. In addition, this discussion does not address the tax treatment of special classes of shareholders, such as banks, insurance companies, tax-exempt organizations, financial institutions, broker-dealers, persons holding Aaron’s common stock as part of a hedging or conversion transaction or as part of a “straddle,” U.S. expatriates, persons subject to the alternative minimum tax, foreign corporations, foreign partnerships, foreign estates or trusts, and persons who are not citizens or residents of the United States. This discussion may not be applicable to holders who acquired Aaron’s common stock pursuant to the exercise of options or warrants or otherwise as compensation. Furthermore, this discussion does not address any state, local or foreign tax considerations.

We urge you to consult your own tax advisors about the application of the U.S. federal income tax laws to your particular situation as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.

Our counsel, King & Spalding LLP, is providing an opinion to us, which we refer to as the tax opinion, in connection with the filing of this joint proxy statement/prospectus to the effect that the holding company formation will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The tax opinion will be subject to customary assumptions, qualifications and limitations, and will be based on representations made by us regarding factual matters, and covenants undertaken by Aaron’s and HoldCo. If any assumption or representation is inaccurate, or any covenant is not complied with, the tax consequences of the holding company formation could differ from those described below and in the tax opinion. The tax opinion is not binding on the IRS or the courts and there can be no assurance that the IRS would not assert, or that a court would not sustain, a position contrary to the conclusions set forth in the tax opinion.

As noted and subject to the qualifications above, in the opinion of King & Spalding LLP, the holding company formation will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Accordingly, for U.S. federal income tax purposes:

If you own at least five percent of Aaron’s common stock (by vote or value) or your tax basis in Aaron’s common stock, immediately prior to the completion of the holding company formation, is $1,000,000 or more, you may be required to attach a statement to your federal income tax return for the taxable year in which the holding company formation is completed that contains information such as your tax basis in the Aaron’s common stock surrendered and the fair market value of such stock.

Anticipated Accounting Treatment

For accounting purposes, the holding company formation will be treated as a transaction between entities under common control, resulting in no change in the carrying amount of Aaron’s existing assets or liabilities. The accounting treatment for such events is similar to the former “pooling of interests method.” Accordingly, the financial position and results of operations of Aaron’s on the same basis as currently presented will be included in the consolidated financial statements of HoldCo.

16

Table of Contents

Listing of HoldCo Common Stock on the New York Stock Exchange; Delisting and Deregistration of Aaron’s Common Stock

A condition to completion of the holding company formation is the approval for listing on the New York Stock Exchange of shares of HoldCo common stock. This includes both shares issuable in the holding company formation and any other shares to be reserved for issuance in connection with the holding company formation. We expect that the HoldCo common stock will trade under the ticker symbol “AAN.” In addition, HoldCo will become a reporting company under the Exchange Act.

Following the holding company formation, Aaron’s common stock will no longer be listed on the New York Stock Exchange and will no longer be registered under the Exchange Act. In addition, Aaron’s will cease to be a reporting company under the Exchange Act.

Interests of Directors and Executive Officers in the Holding Company Formation

Our directors and executive officers own Aaron’s common stock and stock options and/or other stock-based awards that entitle them to acquire Aaron’s common stock, and, to that extent, their interest in the holding company formation is the same as the interest in the holding company formation of our shareholders generally.

As of May 4, 2020, our directors and executive officers beneficially owned shares of our common stock, representing approximately 2.84% of the issued and outstanding shares of common stock as calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934. Each director and executive officer has advised us that she or he plans to vote all of her or his shares of common stock in favor of the holding company formation.

Required Vote

In order to approve the holding company formation proposal, the vote of holders of a majority of the shares of Aaron’s common stock outstanding on the record date is required to approve the agreement and plan of merger. As a result, if a shareholder abstains or otherwise does not vote on the holding company formation proposal, or if a shareholder holds shares in “street name” and does not provide instructions to such shareholder’s broker, it has the same effect as a vote AGAINST the holding company formation proposal.

Statutory Appraisal Rights

Holders of Aaron’s common stock do not have dissenters’ rights under Georgia law as a result of the holding company formation.

17

Table of Contents

DESCRIPTION OF HOLDCO CAPITAL STOCK

HoldCo is incorporated in the State of Georgia, as is Aaron’s. Upon completion of the holding company formation proposal, the rights of shareholders of HoldCo will generally be governed by Georgia law and HoldCo’s articles of incorporation and bylaws, which will be the same in all material respects as those of Aaron’s. Therefore, your rights as a HoldCo shareholder will be substantially the same as your rights as an Aaron’s shareholder.

The following summary highlights selected information regarding HoldCo’s capital stock. It may not contain all of the information that may be important to you. This summary is qualified by reference to, Georgia law, including the Georgia Business Corporation Code, and HoldCo’s articles of incorporation and bylaws, which are attached as Appendices C and D, respectively, to this joint proxy statement/prospectus.

Capitalization

Upon completion of the holding company formation proposal, the authorized capital stock of HoldCo will consist of 225 million shares of common stock, par value $0.50 per share, and 1 million shares of preferred stock, par value $1.00 per share. All of the shares issued and outstanding upon completion of the holding company formation will be fully paid and nonassessable. Upon completion of the holding company formation, the number of shares of HoldCo common stock that will be outstanding will be the same number of shares of Aaron’s common stock outstanding immediately prior to the holding company formation.

Common Stock

Voting Rights. Holders of HoldCo common stock will be entitled to one vote per share, and, in general, a majority of issued and outstanding shares of HoldCo common stock will be sufficient to authorize action upon all matters submitted for a vote. Directors will be elected by a majority of the votes cast at the annual meeting of the shareholders, and shareholders of HoldCo will not have the right to cumulate their votes in the election of directors. This means that the holders of a majority of the votes represented by the common stock can elect all of the directors then standing for election.

Dividends. Holders of outstanding shares of HoldCo common stock will be entitled to receive dividends and other distributions legally available therefor in amounts as the HoldCo board of directors may determine from time to time, subject to preferential dividend rights of any outstanding preferred stock. Funds for HoldCo dividends generally will be provided through dividends and distributions from its subsidiaries, including Aaron’s. All shares of HoldCo common stock will be entitled to participate ratably with respect to dividends or other distributions.

Preemptive Rights. Holders of HoldCo common stock will not have any preemptive, subscription, redemption or conversion rights and are not entitled to the benefit of any sinking fund.

Liquidation. In the event of the liquidation, dissolution or winding up of HoldCo, the holders of HoldCo common stock will be entitled to receive, after payment or provision for payment of all its debts and liabilities, all of the assets of HoldCo available for distribution, subject to the prior rights of preferred stock, if any, outstanding.

Transfer Agent and Registrar. The transfer agent and registrar for the HoldCo common stock is Computershare, Inc., which is also the transfer agent for the Aaron’s common stock.

Preferred Stock

Aaron’s does not have any preferred stock outstanding and HoldCo will not issue any preferred stock in connection with the holding company formation. Nonetheless, HoldCo will be authorized to issue preferred stock in the future.

Anti-Takeover Effects of HoldCo’s Articles of Incorporation and Bylaws

Upon completion of the holding company formation proposal, HoldCo’s articles of incorporation and bylaws will contain provisions that could delay or make more difficult the acquisition of control of us through a hostile tender offer, open market purchases, proxy contest, merger or other takeover attempt that a shareholder might consider in his or her best interest, including those attempts that might result in a premium over the market price of our common stock.

18

Table of Contents

Authorized but Unissued Capital. HoldCo will have an aggregate of 225 million authorized shares of common stock and 1 million authorized shares of preferred stock. One of the consequences of HoldCo’s authorized but unissued common stock and undesignated preferred stock may be to enable HoldCo’s board of directors to make more difficult or to discourage an attempt to obtain control of HoldCo. If, in the exercise of its fiduciary obligations, HoldCo’s board of directors determined that a takeover proposal was not in HoldCo best interest, HoldCo’s board of directors could authorize the issuance of those shares without shareholder approval, subject to limits imposed by the New York Stock Exchange. The shares could be issued in one or more transactions that might prevent or make the completion of a proposed change of control transaction more difficult or costly by, among other things:

In this regard, HoldCo’s articles of incorporation will grant the board of directors broad power to establish the rights and preferences of the authorized and unissued preferred stock. HoldCo’s board of directors could therefore establish one or more series of preferred stock that entitle holders to:

Shareholder Action by Written Consent; Special Meetings of Shareholders. HoldCo’s bylaws will provide that any action permitted to be taken by shareholders at any annual or special meeting may be taken without a meeting by written consent if all HoldCo’s shareholders consent thereto in writing. Special meetings of HoldCo’s shareholders may only be called by the chief executive officer or secretary (i) when directed by the chairman of our board of directors or by a majority of our entire board of directors, or (ii) upon the demand of shareholders representing at least 25% of all votes entitled to be cast on each issue to be considered at the proposed special meeting of shareholders.

Election and Removal of Directors. HoldCo’s bylaws will provide that the number of directors shall be at least 3, but may be increased and fixed from time to time by resolution of the board of directors. However, no decrease in the size of the board of directors will shorten the term of any incumbent director.

HoldCo’s bylaws will also provide that a director may be removed by the shareholders only for cause and only by the affirmative vote of at least a majority of the issued and outstanding capital stock entitled to vote for the election of directors.

Finally, HoldCo’s bylaws will provide that vacancies, including vacancies resulting from an increase in the number of directors or from removal of a director, may be filled by a majority vote of the remaining directors then in office, even if less than a quorum or a sole remaining director.

Advance Notice Procedure for Director Nomination and Shareholder Proposals. HoldCo’s bylaws will provide the manner in which shareholders may give notice of director nominations and other business to be brought before an annual meeting. In general, to bring a matter before an annual meeting, other than a proposal being presented in accordance with the provisions of Rule 14a-8 under the Exchange Act, a shareholder will need to provide notice of the proposed matter in writing not less than 90 and not more than 120 days prior to the meeting and satisfy the other requirements in our bylaws. To nominate a candidate for election as a director, a shareholder will need to provide notice of the proposed nomination in writing not less than 60 or more than 120 days prior to the first anniversary of the prior year’s annual meeting. If the annual meeting is more than 30 days before or more than 70 days after the first anniversary of the prior year’s annual meeting, a shareholder will instead need to provide notice of a proposed

19

Table of Contents

nomination in writing no more than 120 days prior to such annual meeting and no less than 60 days prior to the annual meeting or the 10th day following the public announcement of when the meeting will be held. Any notice to nominate a candidate for election as a director will also need to satisfy all other requirements specified in our bylaws.

Amendments of HoldCo’s Articles of Incorporation and Bylaws. Amendments to HoldCo’s articles of incorporation will generally need to be approved by the board of directors and by a majority of the outstanding stock entitled to vote on the amendment, and, if applicable, by a majority of the outstanding stock of each class or series entitled to vote on the amendment as a class or series. HoldCo’s bylaws will provide that the bylaws may be amended by a majority vote of the board of directors. HoldCo’s bylaws will also provide that any bylaws adopted by the board of directors may be amended, and new bylaws may be adopted, by the HoldCo’s shareholders by majority vote of all of the shares having voting power.

Georgia Anti-Takeover Statutes

The Georgia Business Corporation Code restricts certain business combinations with “interested shareholders” and contains fair price requirements applicable to certain mergers with certain interested shareholders that are summarized below. The restrictions imposed by these statutes will not apply to a corporation unless it elects to be governed by these statutes. HoldCo will not elect to be covered by these restrictions, but, although we have no present intention to do so, we could elect to do so in the future.

The Georgia Business Corporation Code regulates business combinations such as mergers, consolidations, share exchanges and asset purchases where the acquired business has at least 100 shareholders residing in Georgia and has its principal office in Georgia, and where the acquiror became an interested shareholder of the corporation, unless either:

For purposes of this statute, an interested shareholder generally is any person who directly or indirectly, alone or in concert with others, beneficially owns or controls 10% or more of the voting power of the outstanding voting shares of the corporation. The statute prohibits business combinations with an unapproved interested shareholder for a period of five years after the date on which such person became an interested shareholder.

The statute restricting business combinations is broad in its scope and is designed to inhibit unfriendly acquisitions.

The Georgia Business Corporation Code also prohibits certain business combinations between a Georgia corporation and an interested shareholder unless:

20

Table of Contents

The fair price statute is designed to inhibit unfriendly acquisitions that do not satisfy the specified “fair price” requirements.

Limitation of Liability of Directors

Upon completion of the holding company formation proposal, HoldCo’s articles of incorporation will provide that none of HoldCo’s directors will be personally liable to HoldCo or its shareholders for monetary damages resulting from a breach of the duty of care or any other duty owed to us as a director to the fullest extent permitted by Georgia law. HoldCo’s bylaws will require HoldCo to indemnify any person to the fullest extent permitted by law for any liability and expense resulting from any threatened, pending or completed legal action, suit or proceeding resulting from the fact that such person is or was a director or officer of HoldCo, including service at HoldCo’s request as a director, officer partner, trustee, employee, administrator or agent of another entity. HoldCo’s directors and officers will also be insured against losses arising from any claim against them in connection with their service as directors and officers for wrongful acts or omissions, subject to certain limitations.

21

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE HOLDING COMPANY FORMATION PROPOSAL

The following questions and answers are intended to address briefly some commonly asked questions regarding the holding company formation proposal. These questions and answers do not address all questions that may be important to you as an Aaron’s shareholder. Please refer to “Proposal 4 - Effect the Holding Company Formation and Approve the Agreement and Plan of Merger, by and among Aaron’s, Inc., Aaron’s Holdings Company, Inc. and Aaron’s Merger Sub, Inc.” beginning on page 13 and the more detailed information contained elsewhere in this joint proxy statement/prospectus and the documents incorporated by reference into this joint proxy statement/prospectus, which you should read carefully.

Q: What is the holding company formation proposal?

A: We are asking you to approve the formation of a new Georgia holding company. In the holding company formation, Aaron’s, which is a Georgia corporation, will become a wholly owned subsidiary of HoldCo, which is also a Georgia corporation. The holding company formation will be effected by merging Aaron’s with a subsidiary of HoldCo. In the merger, the current shareholders of Aaron’s will become shareholders of HoldCo, with the same number of shares of HoldCo as they held of Aaron’s prior to the holding company formation. Following the merger, in connection with the holding company formation, Aaron’s will convert to a limited liability company, which we refer to as the “conversion”. The merger agreement, which sets forth the plan of merger and conversion, is attached as Appendix B to this joint proxy statement/prospectus. You are encouraged to read the merger agreement carefully.

Q: Why are shareholders of the Company being asked to vote on the holding company formation proposal?

A: Aaron’s is incorporated in Georgia. Unlike the corporate law of other jurisdictions, such as Delaware, which generally do not require a vote by shareholders to implement a holding company structure, Georgia law requires Aaron’s shareholders to vote on this transaction. Under the Georgia Business Corporation Code, Aaron’s shareholders are required to vote on the holding company formation proposal, even though Aaron’s shareholders will receive an identical number of shares with the same rights in HoldCo relative to their share ownership in Aaron’s prior to completion of the holding company formation.

Q: Why is Aaron’s proposing the holding company formation?

A: We are proposing the holding company formation because we believe it will:

Q: Will the management or the business of the company change as a result of the holding company formation?

A: No. The management and business of our company will remain the same immediately following the holding company formation. We expect that the directors and executive officers of Aaron’s will also serve in the same capacities for HoldCo, including their capacities as members of board committees.

Q: What will happen to my stock as a result of the holding company formation?

A: In the holding company formation, each share of common stock of Aaron’s will convert into one share of common stock of HoldCo. As a result, you will become a shareholder of HoldCo and will own the same number and the same percentage of shares of HoldCo common stock that you now own of Aaron’s common stock. We expect that HoldCo common stock will be listed on the New York Stock Exchange under the symbol “AAN,” the same ticker symbol currently used for Aaron’s common stock.

Q: Will my rights as a HoldCo shareholder be different from my rights as an Aaron’s shareholder?

A: No. HoldCo is a Georgia corporation, as is Aaron’s. The articles of incorporation and bylaws of HoldCo are the same in all material respects as those for Aaron’s. For more information, see “Description of HoldCo Capital Stock” beginning on page 18.

22

Table of Contents

Q: Will I have to turn in my stock certificates?

A: No. We will not require you to exchange your stock certificates as a result of the holding company formation. After the holding company formation, each certificate currently representing your shares of Aaron’s common stock will be deemed for all purposes to evidence the same number of shares of HoldCo common stock.

Q: Will the CUSIP number for my common stock change as a result of the holding company formation?

A: Yes. Following the holding company formation, the CUSIP number for your shares of HoldCo common stock will be 00258R 109.

Q: Does the holding company formation affect my federal income taxes?

A: The proposed holding company formation (including the conversion) will be a tax-free transaction under federal income tax laws. We expect that you will not recognize any gain or loss for federal income tax purposes upon your receipt of HoldCo common stock in exchange for your shares of Aaron’s common stock in the holding company formation. The tax consequences to you will depend on your own situation. We urge you to consult your own tax advisors concerning the specific tax consequences of the holding company formation to you, including any foreign, state, or local tax consequences of the holding company formation. For further information, see “The Holding Company Formation Proposal—Material U.S. Federal Income Tax Consequences.”

Q: How will the holding company formation be treated for accounting purposes?

A: For accounting purposes, the holding company formation will be treated as a transaction between entities under common control, resulting in no change in the carrying amount of Aaron’s existing assets or liabilities. Accordingly, the financial position and results of operations of Aaron’s on the same basis as currently presented will be included in the consolidated financial statements of HoldCo.

Q: Do Aaron's directors and executive officers have any interests in the holding company formation that may be different from, or in addition to, the interests of Aaron's shareholders generally?

A: Our directors and executive officers do not have any material interests in the holding company formation that differ from those of Aaron's shareholders generally. Our directors and executive officers own Aaron's common stock and other stock-based awards that entitle them to acquire Aaron's common stock, and, to that extent, their interests in the holding company formation is the same as the interests our shareholders generally in the transaction. If the holding company formation is completed, the Aaron's common stock owned by our directors and executive officers will be converted into an equal number of shares of HoldCo common stock, and the other stock-based awards that entitle our directors and executive officers to acquire Aaron's common stock will be converted into the right to acquire common stock of HoldCo on the same terms as conditions underlying such awards prior to the completion of the holding company formation. Moreover, completion of the holding company formation will not result in our directors or executive officers receiving any increased compensation or other benefits under the terms of our Executive Severance Pay Plan or our severance and change of control agreements with any of our directors and executive officers because the holding company formation will not result in a “change in control” under such plan and agreements.

Q: What vote is required to approve the holding company formation proposal?

A: In order to approve the holding company formation proposal, holders of at least a majority of all outstanding shares of Aaron’s common stock must vote in favor of the proposal. If you abstain or otherwise do not vote on the holding company formation proposal, or if you hold your shares in “street name” and do not provide instructions to your broker, it will have the same effect as a vote AGAINST the holding company formation proposal.

Q: If the shareholders approve the holding company formation, when will it occur?

A: The holding company formation will be completed when we file articles of merger with the Georgia Secretary of State. We currently plan to complete the holding company formation promptly following satisfaction of conditions to the holding company formation, including shareholder approval, or at such later time as Aaron’s determines.

23

Table of Contents

However, we may choose not to complete the holding company formation, even if Aaron’s shareholders approve the holding company formation proposal. See “Risk Factors — The holding company formation may not be completed, even with shareholder approval.”

Q: Do I have dissenters’ (or appraisal) rights?

A: No. Holders of Aaron’s common stock do not have dissenters’ rights under Georgia law as a result of the holding company formation.

Q: Whom do I contact if I have questions about the holding company formation proposal?

A: You may contact our proxy solicitor:

Innisfree M&A Incorporated
501 Madison Avenue
19th Floor
New York, New York
1-888-750-5834
info@innisfreema.com

24

Table of Contents

RISK FACTORS

In considering whether to vote in favor of the holding company formation proposal, you should consider all of the information we have included in this joint proxy statement/prospectus, including its appendices, and all of the information in the documents we have incorporated by reference, including our Annual Report for the year ended December 31, 2019. In particular, you should review the risk factors described in our Form 10-K incorporated by reference. Please see “Where You Can Find Additional Information” beginning on page 81.

In addition, you should pay particular attention to the risks described below. If any of the risks described below or in the documents incorporated by reference develops into actual events, our business, financial condition or results of operations could be negatively affected and the market price of our common stock or other securities could decline.

We may not obtain the expected benefits of the holding company formation.

We believe the holding company formation could facilitate future corporate actions and provide us with greater operational and financing flexibility for our Progressive Leasing and Aaron’s Business segments. These expected benefits may not be obtained if market conditions or other circumstances prevent us from taking advantage of facilitating future corporate actions and the expected operational and financing flexibility for our Progressive Leasing and Aaron’s Business segments that we anticipate as a result of the holding company formation. Accordingly, we may incur the costs of the holding company formation without realizing the possible benefits.

As a holding company, HoldCo will be dependent on the operations and funds of its subsidiaries.

After the completion of the holding company formation, HoldCo will be a holding company with no business operations of its own. HoldCo’s only significant assets will be the direct or indirect ownership of the outstanding common stock and membership interests in its subsidiaries, including Aaron’s. As a result, HoldCo will rely on payments from its subsidiaries to meet its financial obligations.

We currently expect that a significant portion of the cash flows of Aaron’s, which will become a wholly owned subsidiary of HoldCo upon the completion of the holding company formation, will be retained and used by it in its operations, including to service any debt obligations Aaron’s may have. Additionally, in the future, subsidiaries may be restricted in their ability to pay cash dividends or to make other distributions to HoldCo, which may limit the payment of cash dividends or other distributions, if any, to the holders of HoldCo common stock. Future credit facilities and other debt obligations of HoldCo, as well as statutory provisions, may limit the ability of HoldCo and its subsidiaries to pay dividends.

The holding company formation may not be completed, even with shareholder approval.

The merger agreement or the completion of the holding company formation may be deferred or terminated at any time prior to its completion (even after approval by our shareholders) by the Aaron’s Board. In addition, the holding company formation will only be completed if the conditions set forth in the merger agreement are satisfied or waived. Accordingly, it is possible that, even with shareholder approval, the holding company formation will not be completed.

25

Table of Contents

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

You should carefully consider the risk factors included under the heading “Risk Factors” in this joint proxy statement/prospectus and the risk factors incorporated in this joint proxy statement/prospectus by reference. This joint proxy statement/prospectus and documents incorporated by reference in this joint proxy statement/prospectus contain forward-looking statements. You should not place undue reliance on these statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These forward-looking statements reflect the views of our senior management with respect to our financial performance and future events with respect to our business and our industry in general. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” or the negative and similar statements of a future or forward-looking nature may identify forward-looking statements. These forward-looking statements address matters that involve risks, uncertainties and assumptions that could cause our actual results and the timing of certain events to differ materially from those expressed in these statements. These factors include, among others, those set forth below in “Risk Factors,” and in the other documents that we file with the SEC. There also are other factors that we may not describe, generally because we currently do not perceive them to be material, which could cause actual results to differ materially from our expectations.

We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

26

Table of Contents

GOVERNANCE

Nominees to Serve as Directors

	Kelly H. Barrett, 55, has served as a director of the Company since May 2019. Prior to her retirement in 2018, Ms. Barrett was employed by The Home Depot for sixteen years, commencing in 2003 serving in various roles of increasing responsibility including most recently as Senior Vice President-Home Services where she ran the $5 billion Home Services division of The Home Depot, including in-home sales and installation, operations, customer contact centers as well as contractor sourcing, onboarding and compliance. She also held the positions of Vice President-Internal Audit and Corporate Compliance, Senior Vice President -Enterprise Program Management and Vice President-Corporate Controller. Before joining The Home Depot, Ms. Barrett served for more than 10 years in senior management positions and ultimately as Senior Vice President and Chief Financial Officer of Cousins Properties Incorporated, a publicly traded real estate investment trust. Ms. Barrett currently serves on the Board of Directors of Piedmont Office Realty Trust, a real estate investment trust, and also on the Board of Directors of Americold Realty, since May 2019. She previously served on the Board of Directors of State Bank Financial Corporation from 2011 to 2016. Her leadership positions in the Atlanta community include currently serving as Chair of the Board of the Metro Atlanta YMCA, the Georgia Tech Foundation Board of Trustees and a member of the Advisory Board of Scheller College of Business at Georgia Tech. She has previously served on the Board of the Girl Scouts of Greater Atlanta, Partnership Against Domestic Violence and the Atlanta Rotary Club. Among other qualifications, Ms. Barrett brings significant operational management and financial experience to our Board of Directors. Her experience in multiple senior executive leadership positions and service on other boards provide her with retail operations, accounting, financial and compliance expertise which are utilized by our Board of Directors. These skills and experiences qualify her to serve on our Board of Directors.
	Kathy T. Betty, 64, has served as a director of the Company since August 2012. From 2009 until 2011, Ms. Betty was the owner and Chief Executive Officer of the Atlanta Dream of the WNBA. She also founded The Tradewind Group, an incubator company, where she worked until 2007. Her other experience includes serving as Executive Vice President and Partner of ScottMadden from 1993 to 2000, where she worked on international mergers and acquisitions, and working at Ernst & Young LLP from 1989 to 1993, including serving as one of the first women admitted to the partnership. Among other qualifications, Ms. Betty brings over 30 years of business management and consultancy experience to our Board of Directors. Her leadership positions in the Atlanta community, include serving on the boards of the Chick-fil-A Foundation, the Alexander-Tharpe Fund, Georgia Institute of Technology, and the Board of Councilors of the Carter Center as well as serving on the Board of Trustees for the Georgia Institute of Technology Athletic Association and Board of Advisors for Synergy Laboratories and Sure Med Compliance. She has also served on the boards of the Children’s Health Care of Atlanta Foundation, YMCA of Metropolitan Atlanta and Big Brothers Big Sisters of Atlanta. These positions provided her with management, entrepreneurial, financial and accounting experience, which are utilized by our Board of Directors. These skills and experience qualify her to serve on our Board of Directors.

27

Table of Contents

	Douglas C. Curling, 65, has served as a director of the Company since January 2016. Since March 2009, Mr. Curling has been the managing principal of New Kent Capital LLC, a family-run investment business, and New Kent Consulting LLC, a privacy and mergers and acquisitions consulting business. From 1997 until September 2008, Mr. Curling held various executive positions at ChoicePoint Inc., a provider of identification and credential verification services that was sold to Reed Elsevier in 2008, including serving as President from April 2002 to September 2008, as Chief Operating Officer from 1999 to September 2008 and as Executive Vice President, Chief Financial Officer and Treasurer from 1997 to May 1999. Mr. Curling also served as a director of ChoicePoint Inc. from May 2000 to September 2008. Mr. Curling currently serves on the Board of Directors of CoreLogic, a New York Stock Exchange listed company providing global property information, analytics and data-enabled services to financial services organizations and real estate professionals. Among other qualifications, Mr. Curling brings substantial experience in managing and operating businesses with privacy, data analytics and other data-enabled matters to our Board of Directors. His prior service as a chief financial officer provides him with valuable accounting and financial expertise, and his consulting experience provides him with significant mergers and acquisitions expertise, all of which is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.
	Cynthia N. Day, 55, has served as a director of the Company since October 2011. Ms. Day has been the President and Chief Executive Officer of Citizens Bancshares Corporation and Citizens Trust Bank since February 2012. Citizens Bancshares Corporation was a publicly held corporation until January 2017. She served as Chief Operating Officer and Senior Executive Vice President of Citizens Trust Bank from February 2003 to January 2012 and served as its acting President and Chief Executive Officer from January 2012 to February 2012. She previously served as the Executive Vice President and Chief Operating Officer and in other capacities of Citizens Federal Savings Bank of Birmingham from 1993 until its acquisition by Citizens Trust Bank in 2003. Before joining Citizens Trust Bank, she served as an audit manager for KPMG. Ms. Day also serves on the board of directors of Primerica., the National and Georgia Banker’s Associations and the Atlanta Area Council of Boy Scouts of America. She is also a member of the Rotary Club of Atlanta, the Georgia Society of CPAs, and the AICPA. Among other qualifications, Ms. Day brings significant management and financial experience to our Board of Directors. Her experience in multiple senior executive leadership positions and service on other boards, provide her with accounting and financial expertise, which are utilized by our Board of Directors. In addition, the customer base served by Citizens Bancshares Corporation is very similar to that served by the Company, giving her a great understanding of their buying habits, the products they purchase and effective marketing and communication methods. These skills and experiences qualify her to serve on our Board of Directors.
	Curtis L. Doman, 47, has served as a director of the Company since August 2015. Mr. Doman currently serves as the Chief Innovation Officer of the Company’s Progressive Leasing segment, and is a co-founder of Progressive Leasing. Previously, he served as Chief Technology Officer of Progressive Leasing from 1999 until December 2017 and Chief Product Officer from January 2018 until December 2019. He was also President of IDS, Inc. from September 1993 until October 2015. Among other qualifications, Mr. Doman brings significant experience in technology and data analytics matters to our Board of Directors. Mr. Doman’s intimate knowledge of our Progressive segment, including as the creator of the dynamic decision-making engine used by our Progressive segment in evaluating underwriting criteria for our lease products, is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

28

Table of Contents

	Walter G. Ehmer, 53, has served as a director of the Company since May 2016. Mr. Ehmer is currently the President and Chief Executive Officer of Waffle House, Inc., or “Waffle House,” a position he has held since 2012. Mr. Ehmer has held various positions with Waffle House since joining the company in 1992 as a senior buyer in the purchasing department, including most recently serving as its President and Chief Operating Officer from 2006 until 2012 and as Chief Financial Officer from 1998 until 2002. Mr. Ehmer previously served as a member of the Georgia Tech Industrial Engineering Advisory Board, the Georgia Tech Alumni Association Board of Trustees and the Georgia Tech President’s Advisory Board. Mr. Ehmer is also a past chairperson of the Georgia Tech Alumni Association and currently serves as a member of the board of the Georgia Tech Foundation. Mr. Ehmer also serves on the boards of the City of Atlanta Police Foundation, the Metro Atlanta Chamber of Commerce, and Children’s Healthcare of Atlanta Foundation. Among other qualifications, Mr. Ehmer brings significant management and financial experience to our Board of Directors. His experience in multiple senior executive leadership positions, including with responsibility for accounting-related matters, provide him with managerial and financial expertise that is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.
	Hubert L. Harris, Jr., 76, has served as a director of the Company since August 2012. Since 1992, Mr. Harris has owned and operated Harris Plantation, Inc., a cattle, hay and timber business. Mr. Harris has also served as a trustee for SEI mutual funds since 2008. Mr. Harris previously served as CEO of Invesco North America, CFO of Invesco PLC and Chairman of Invesco Retirement Services, and served on the Board of Directors of Invesco from 1993 to 2004. From 1988 to 2005, Mr. Harris was President and Executive Director of the International Association for Financial Planning. Mr. Harris also served as the Assistant Director of the Office of Management and Budget in Washington, D.C. from 1977 to 1980. Mr. Harris is on the Board of Councilors of the Carter Center, and he previously served as chair of the Georgia Tech Foundation and chair of the Georgia Tech Alumni Association. Among other qualifications, Mr. Harris brings a strong financial background and extensive business experience to our Board of Directors. His service on numerous for-profit and non-profit boards and management experience provide him with governance and financial expertise, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.
	John W. Robinson III, 48, has been a director of the Company since November 2014 when he was named the Chief Executive Officer of the Company. Mr. Robinson was also named President of the Company as of February 2016. From 2012 to November 2014, Mr. Robinson served as the Chief Executive Officer of Progressive Finance Holdings, LLC, which was acquired by Aaron’s, Inc. in April 2014. Prior to working at Progressive, he served as the President and Chief Operating Officer of TMX Finance LLC, or “TMX Finance.” He joined TMX Finance as Chief Operating Officer in 2004 and was appointed President in 2008. TMX Finance filed a voluntary Chapter 11 bankruptcy proceeding in April 2009 from which it emerged in April 2010. Prior to working at TMX Finance, he worked in the investment banking groups at Morgan Stanley, Lehman Brothers and Wheat First Butcher Singer. Among other qualifications, Mr. Robinson brings significant operational and financial experience to our Board of Directors. His considerable experience in senior management, and his leadership and intimate knowledge of our business, including our Progressive segment in particular, provide him with strategic and operational expertise generally and for the Company specifically, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

29

Table of Contents

Ray M. Robinson, 72, has served as a director of the Company since November 2002 and has been our Chairman since April 2014. From November 2012 until his appointment as Chairman, Mr. Robinson was the Company’s independent lead director. Mr. Robinson started his career at AT&T in 1968, and prior to his retirement in 2003, he held several executive positions, including President of the Southern Region, its largest region, President and Chief Executive Officer of AT&T Tridom, Vice President of Operations for AT&T Business Customer Care, Vice President of AT&T Outbound Services, and Vice President of AT&T Public Relations. Mr. Robinson is also a director of Acuity Brands, Inc., a lighting solutions company, American Airlines Group Inc., a holding company operating various commercial airlines (including American Airlines and US Airways), and Fortress Transportation and Infrastructure Investors LLC, an investor in infrastructure and equipment for the transportation of goods and people, all of which are public companies. Since 2003, Mr. Robinson has also served as a director and non-executive Chairman of Citizens Bancshares Corporation and its subsidiary, Citizens Trust Bank, the largest African American-owned bank in the Southeastern United States and the nation’s second largest. As of January 2017, Citizens Bancshares Corporation’s stock is traded only on over-the-counter markets. Its subsidiary, Citizens Trust Bank, is not a publicly traded company. Mr. Robinson previously served as a director of RailAmerica, Inc. from 2010 to 2012 and Avnet, Inc. from 2000 -2018. Mr. Robinson has also been Vice Chairman of the East Lake Community Foundation in Atlanta, Georgia since November 2003. Among other qualifications, Mr. Robinson brings experience in senior management and board service for numerous public companies to our Board of Directors. His service on the boards of a number of organizations of varying sizes provides him with extensive operational skills and governance expertise, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

30

Table of Contents

Composition, Meetings and Committees of the Board of Directors

Our Board of Directors is currently comprised of nine directors having terms expiring at the Annual Meeting. Each of our directors will continue to hold office until the expiration of his or her term and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office or death.

Our Corporate Governance Guidelines include categorical standards adopted by our Board of Directors to determine director independence that meet the listing standards of the New York Stock Exchange, or “NYSE.” Our Corporate Governance Guidelines also require that at least 75% of our Board of Directors be “independent,” a requirement that is more stringent than the NYSE listing requirement that a majority of the Board of Directors be independent. Our Board of Directors has affirmatively determined that all of our directors are “independent” in accordance with NYSE listing requirements and the requirements of our Corporate Governance Guidelines, other than Mr. John Robinson, our President and Chief Executive Officer, and Mr. Doman, the Chief Innovation Officer of our Progressive Leasing segment.

Our Board of Directors currently has three standing committees consisting of an Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. From time to time, our Board of Directors may establish ad-hoc committees at its discretion. Our Board of Directors has adopted a charter for each of its standing committees, copies of which are available on the Investor Relations section of our website located at aarons.com. The current members of each committee are identified in the table below:

31

Table of Contents

Meetings

Our Board of Directors held ten meetings during 2019. The number of meetings held by each of our committees in 2019 is shown in the table above. Each of our directors attended 75% or more of the total of all meetings of our board and the committees on which he or she served during 2019 that occurred during the time when he or she served as a director.

It is our policy that directors are expected to attend the annual meeting of shareholders in the absence of a scheduling conflict or other valid reason. All of our directors attended the 2019 Annual Meeting of Shareholders held on May 8, 2019.

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

Committees

Audit Committee. The function of the Audit Committee is to assist our Board of Directors in fulfilling its oversight responsibility relating to: (i) the integrity of the Company’s consolidated financial statements; (ii) the financial reporting process and the systems of internal accounting and financial controls; (iii) the performance of the Company’s internal audit function and independent auditors; (iv) the independent auditors’ qualifications and independence; (v) the Company’s compliance with ethics policies (including oversight and approval of related party transactions and reviewing and discussing certain calls to the Company’s ethics hotline and the Company’s investigation of and response to such calls) and legal and regulatory requirements; (vi) the adequacy of the Company’s policies and procedures to assess, monitor and manage business risks including financial, regulatory and cybersecurity risks and its corporate compliance programs, including receiving quarterly reports related to such risks and programs; and (vii) the adequacy of the Company’s information security and privacy program and cybersecurity initiatives. The Audit Committee is directly responsible for the appointment, compensation, retention, and termination of our independent auditors, who report directly to the Audit Committee, and for recommending to our Board of Directors that the board recommend to our shareholders that the shareholders ratify the retention of our independent auditors. In connection with its performance of these responsibilities, the Audit Committee regularly receives reports from and holds discussions with Company management, leaders from the Company’s internal audit department, leaders from the Company’s legal department, and the independent auditors. Many of those discussions are held in executive session with the Audit Committee.

Each member of the Audit Committee satisfies the independence requirements of the NYSE and SEC rules applicable to audit committee members, and each is financially literate. Our Board of Directors has designated each member of the Audit Committee as an “audit committee financial expert” as defined by SEC regulations.

Compensation Committee. The purpose of the Compensation Committee is to assist our Board of Directors in fulfilling its oversight responsibilities relating to: (i) executive and director compensation; (ii) equity compensation plans and other compensation and benefit plans; and (iii) other significant human resources matters.

The Compensation Committee has the authority to review and approve performance goals and objectives for the named executive officers in connection with the Company’s compensation programs, and to evaluate the performance of the named executive officers, in light of such performance goals and objectives and other matters, for compensation purposes. Based on such evaluation and other matters, the Compensation Committee determines the compensation of the named executive officers, including our President and Chief Executive Officer. The Compensation Committee also has the authority to approve grants of equity incentives and to consider from time to time, and recommend to our Board of Directors, changes to director compensation.

Each member of the Compensation Committee satisfies the independence requirements of the NYSE applicable to compensation committee members and is a non-employee director under Rule 16b-3 of the Securities Exchange Act of 1934, or the “Exchange Act.”

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

Each member of the Nominating and Corporate Governance Committee satisfies the independence requirements of the NYSE.

32

Table of Contents

Assessment of Director Candidates and Required Qualifications

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

We believe that, at a minimum, a director should have the highest personal and professional ethics, moral character and integrity, demonstrated accomplishment in his or her field and the ability to devote sufficient time to carry out the duties of a director. To help ensure the ability to devote sufficient time to board matters, no director may serve on the board of more than four other public companies while continuing to serve on our Board of Directors, and no director that serves as chief executive officer of another company may serve on the board of more than two other public companies while continuing to serve on our Board of Directors, unless our board determines in its business judgment that such simultaneous service will not impair the director’s ability to serve on our Board of Directors, and that such simultaneous service is otherwise in the best interests of the shareholders.

In addition to these minimum qualifications, our Board of Directors may consider all information relevant in their business judgment to the decision of whether to nominate a particular candidate for a particular board seat. These factors may include a candidate’s professional and educational background, reputation, industry knowledge and business experience and the relevance of those characteristics to us and our Board of Directors. In addition, candidates will be evaluated on their ability to complement or contribute to the mix of talents, skills and other characteristics needed to maintain the effectiveness of our Board of Directors and their ability to fulfill the responsibilities of a director and of a member of one or more of the standing committees of our Board of Directors. While our Board of Directors does not have a specific policy regarding diversity among directors, diversity of race, ethnicity, gender, age, cultural background and professional experience is considered in evaluating candidates for membership on our Board of Directors.

No person may be nominated for election to our Board of Directors or appointed to fill a vacancy on the Board of Directors if he or she will be age 75 or older upon his or her election or appointment, unless a waiver is granted by our Board of Directors. Our Board has granted such a waiver with respect to our director, Hubert L. Harris, Jr., who is age 76, after considering a number of factors, including his experience, talents and skills, his exemplary attendance record for Board and Board committee meetings, and the valuable contributions Mr. Harris continues to make to the Board and the committees on which he serves. A director is required to offer his or her resignation immediately in the event the director, or any of his or her respective affiliates or associates, takes any action (including encouraging or supporting others) to (i) nominate, propose or vote in favor of any candidate to serve on our Board of Directors (other than the nominees proposed by our Board of Directors) or oppose for election any nominee proposed by our Board of Directors or (ii) solicit proxies with respect to any of our securities within the meaning of the Exchange Act and the rules thereunder (other than any proxy solicitation in favor of a matter approved by our Board of Directors).

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

Shareholder Recommendations and Nominations for Election to the Board

Our Nominating and Corporate Governance Committee will consider nominees recommended by shareholders. Any shareholder wishing to nominate a candidate for director at the next annual shareholders’ meeting must submit a proposal as described under “Additional Information—Shareholder Proposals for the 2021 Annual Meeting of Shareholders” and otherwise comply with the advance notice provisions and information requirements contained in our bylaws. The shareholder submission should be sent to the President of Aaron’s, Inc. at 400 Galleria Parkway, S.E., Suite 300, Atlanta, Georgia 30339.

33

Table of Contents

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

Board Leadership Structure

We currently separate the roles of Chairman and Chief Executive Officer in recognition of the differences between the two roles. The Chairman is responsible for leading our Board of Directors in its duty to oversee the management of our business and affairs. The Chief Executive Officer is responsible for oversight of our day-to-day operations and business affairs, including directing the business conducted by our employees, managers and officers.

Our Chief Executive Officer serves on our Board of Directors, which we believe helps to serve as a bridge between management and our Board of Directors, ensuring that both groups act with a common purpose. We believe that Mr. John Robinson’s presence on our Board of Directors enhances his ability to provide insight and direction on important strategic initiatives to both management and the independent directors.

Our Board of Directors does not have a formal policy on whether the Chairman and Chief Executive Officer roles should be separated or combined but, instead, makes that determination from time to time employing its business judgment. Our Board of Directors, however, does believe that if the Chairman and Chief Executive Officer roles are combined, or if the Chairman is not an independent director, that our Board of Directors should appoint an independent Lead Director to serve as the leader and representative of the independent directors in interacting with the Chairman and Chief Executive Officer and, when appropriate, our shareholders and the public. Our Board of Directors has determined that Mr. Ray Robinson, who serves as our Chairman, is independent under NYSE listing requirements. As a result, our Board of Directors has not designated a Lead Director.

Board of Directors and Committee Evaluations

Our Board of Directors and each of its committees conduct an annual evaluation, which includes a qualitative assessment by each director of the performance of our Board of Directors and the committee or committees on which the director sits. In 2020, our Board of Directors also engaged a third-party legal advisor to facilitate our board self-evaluation process and board and committee reviews. The results of the evaluation and any recommendations for improvement were reported to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee oversees the evaluation process.

Board Role in Risk Oversight

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

Likewise, the Compensation Committee considers risks that may be implicated by our compensation programs. For 2019, our Compensation Committee, aided by its independent third-party compensation consultant, reviewed our compensation policies and practices and determined that they do not encourage excessive or unnecessary risk taking, and do not otherwise create risks that are reasonably likely to have a material adverse effect on the Company.

34

Table of Contents

As part of its risk oversight role, our full Board of Directors periodically receives reports from management, external professional advisors and others regarding various types of risks faced by the Company and the Company’s risk mitigation efforts related thereto, including cybersecurity risks and related mitigation efforts. The board received presentations from management regarding trends in cybersecurity risks and risk mitigation initiatives and plans, including briefings on recent breaches and key takeaways and lessons learned that are applicable to our business and the role of various federal and state agencies in helping companies prepare for and respond to cybersecurity incidents. The Board also reviewed key cybersecurity-related benchmarks for the Company. In addition, our Board of Directors reviewed our cybersecurity-related investments, initiatives, and plans with management.

Board Diversity

We endeavor to have a Board representing diverse experience at policymaking levels of business, government, education and technology, and in other areas that are relevant to the Company’s activities. Diversity of race, ethnicity, gender and age are also important factors our Board considers when evaluating candidates for Board membership. We believe the diverse business and occupational experiences, skills, talents, expertise, educational backgrounds, and the diversity of race, ethnicity, gender, age and cultural backgrounds possessed by our Board of Directors and employees helps strengthen our businesses and drive increased shareholder value. Our Board of Directors includes individuals with diverse prior and current occupational and board experiences, areas of expertise, races, gender and age. As of March 2020, our Board included six men and three women, and two of our directors are African American.

Social Responsibility

Our Board of Directors and management team recognize that social and environmental responsibility by public companies is of increasing importance to investors and believe that being a responsible corporate citizen helps drive shareholder value. We are committed to making a positive impact on the environment and the communities where our customers and employees live and work.

Through our Aaron’s, Inc. Foundation and our Matching Gift Program, both of which are funded from the earnings of our Progressive Leasing and Aaron’s Business segments, and also through Progressive’s philanthropic program, “ProgReach” and the Aaron’s Business’s “Aaron’s Community Outreach Program,” our initiatives are helping build stronger communities where our customers and employees live and work, with a special focus on improving the lives of underserved youth. We have a goal of contributing 1% of our annual, consolidated pre-tax profits to these efforts each year. In 2019, our contributions exceeded $2.6 million, representing approximately 1.3% of our 2019 adjusted pre-tax profits.

Recently, our initiatives have included:

35

Table of Contents

Environmental Responsibility

In addition to the initiatives described above, we have also undertaken steps to proactively and positively impact the environment, including programs to reduce waste and encourage recycling, reduce energy consumption, and improve the fuel efficiency of our vehicle fleet. Those steps and related accomplishments have included:

36

Table of Contents

Energy Management

Electricity is the primary form of energy used by our Aaron’s Business stores and fulfillment centers. During 2019, the Company-owned stores of our Aaron’s Business used a total of approximately 120 million kilowatt hours of electricity, and the Aaron’s Business fulfillment centers used a total of approximately 3.8 million kilowatt hours of electrical energy. According to data provided by Verantis, Inc., the firm we have engaged to assist us with measuring and reducing our energy usage: (i) on a per-store basis, our electrical energy usage decreased by approximately 9.4% for 2019, as compared to 2015, due in part to initiatives such as installing LED lighting in certain locations, accelerating the replacement of older HVAC units with newer, more energy-efficient units, and emphasizing stricter controls regarding in-store temperature/thermostat settings; and (ii) the average amount of electricity used at each of our fulfillment centers in 2019 decreased by approximately 5.7%, as compared to 2015, due in part to initiatives such as installing more energy-efficient lighting, including LED lighting, installing motion sensors to activate and deactivate lighting by zone, and converting older material handling equipment that was powered by electricity to more efficient equipment that is powered by propane.

During 2019, our fleets of delivery, long-haul, service and other trucks used a total of approximately 4.25 million gallons of fuel, as compared to a total of approximately 6 million gallons during 2015. We believe this decrease in fuel usage is due in large part to our initiatives such as removing and/or replacing our fleet with lighter, more fuel-efficient vehicles; adopting a strict no-idling policy; regulating our trucks to a maximum speed of 65 miles-per-hour; and closing and consolidating stores to improve operating efficiencies, including reducing the number of trucks we need to deliver products to customers. We expect to continue our efforts to improve the energy efficiency of our operations because we believe it is good for our business and for the environment. We did not directly utilize any renewable energy sources in 2019, but we intend to explore the possibility of doing so in 2020 and future years, including through possibly entering into renewable power purchase agreements, that are accompanied by renewable energy certifications or guarantees of origin.

Cybersecurity and Data Privacy

We have developed a program designed to detect, identify, classify and mitigate cybersecurity and other data security threats, as part of our efforts to protect and maintain the confidentiality and security of customer, employee and vendor information, and non-public information about our Company. That program is based in-part on, and its maturity is measured using, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework. Our program classifies potential threats by risk levels and we typically prioritize our threat mitigation efforts based on those risk classifications, while focusing on maintaining the resiliency of our systems. In recent years, we have increased our investments in our ability to detect, identify, and mitigate cybersecurity and other data privacy risks within our environment. In the event we identify a potential privacy or data security issue, we have defined procedures for responding to such issues, including procedures that address when and how to engage with Company management, our Board of Directors, other stakeholders and law enforcement, when responding to such issues. We have a dedicated team of employees overseeing our cybersecurity and data privacy initiatives, led by our Vice President of Enterprise Risk and Security, in consultation with internal and external attorneys and other professional advisors. We also have an Enterprise Information Security Committee comprised of a cross-functional group of senior executives and other employees that meets on a regular basis to provide oversight with respect to our cybersecurity and data privacy risk detection, classification and mitigation efforts. Our Vice President of Enterprise Risk and Security regularly provides updates to the Audit Committee of our Board of Directors, and periodically to our Board of Directors, regarding the status and effectiveness of our cybersecurity and data privacy programs. Some of the other steps we have taken to detect, identify and attempt to mitigate data security and privacy risks include:

37

Table of Contents

We also understand the importance of collecting, storing, using, sharing and disposing of personal information in a manner that complies with all applicable laws. To facilitate compliance with those laws, we have privacy policies in place regarding our treatment of customer data in both our offline and online retail environments, as well as policies relating to the protection of employee and vendor data. Our policies provide explanations of the types of information we collect, how we use and share information, and generally describe the measures we take to protect the security of that information. Our policies also describe how customers may initiate inquiries and raise concerns regarding the collection, storage, sharing and use of their personal data. In addition, our employees also must complete mandatory training to understand the behaviors and technical requirements necessary to safeguard information resources at the Company.

We are not aware of any data breaches occurring during the Company’s 2019 fiscal year.

Labor Practices and Human Rights

All of our employees earn more than the federal minimum wage. The average hourly wage, excluding incentive compensation, of a full-time hourly employee in our Company-owned, Aaron’s Business stores and fulfillment centers as of December 31, 2019 was $13.75, with a meaningful portion of those employees earning an average hourly wage of $15 or more. The average total compensation and benefits for a full-time hourly employee in our Aaron’s Business stores and fulfillment centers is approximately $32,000 including bonuses and benefits. The average wage of a full-time hourly employee in our Progressive Leasing call centers as of December 31, 2019 was $16.50, with approximately 99% of those employees earning an average hourly wage of $15 or more. The average total compensation and benefits for a full-time hourly employee in those call centers is approximately $39,000 including wages, bonuses and benefits, such as paid time off.

We strive to help associates maintain job stability so they are encouraged to stay with the Company and positioned to grow their skills and knowledge on the job. The 2019 annualized voluntary turnover rate in our Aaron’s Business stores and fulfillment centers was approximately 44% and the 2019 annualized involuntary turnover rate in those stores and fulfillment centers was approximately 43%. The 2019 annualized voluntary turnover rate in our Progressive Leasing call centers was about 48% and the 2019 annualized involuntary turnover rate in those call centers was 6%. In an effort to reduce employee turnover, we engage in quarterly surveys with employees, conduct interviews to help identify any issues before they cause an employee to leave the Company, and review exit interview data, hotline calls and root cause analysis to help deter turnover.

Aaron’s respects the rights of workers of other companies who offer services to Aaron’s and create the products that we purchase from our suppliers. We communicate our expectations to suppliers on social conditions, worker safety and integrity in the workplace, and compliance with applicable laws through our Supplier Code of Conduct. Our Supplier Code of Conduct outlines our expectations with respect to hiring practices, forced labor, child labor, discrimination, and other labor rights. Suppliers must comply with our Supplier Code of Conduct, conduct their business with a high level of integrity, and maintain accurate records to demonstrate that compliance.

Workforce Diversity and Inclusion and Human Capital Management

We believe in being an inclusive workplace for all of our employees and are committed to having a diverse workforce that is representative of the customers that choose to shop with us in-store or online, and the communities in which we operate our businesses. A variety of perspectives enriches our culture, leads to innovative solutions for our business and enables us to better meet the needs of a diverse customer base and reflects the communities we serve. Our aim is to develop inclusive leaders and an inclusive culture, while also recruiting, developing, mentoring, training, and retaining a diverse workforce, including a diverse group of management-level employees. As of December 31, 2019, for the employees that disclosed this information, for the Aaron’s Business, 32% of our total workforce was female, 23% of management (which we define as manager level employees and higher) was

38

Table of Contents

female, 25% of our total Aaron’s Business workforce was comprised of people of color and 32% of management was comprised of people of color. For Progressive Leasing and Vive, on a combined basis, 48% of the total workforce is female, 32% of management (which we define as manager level employees and higher) is female, 40% of the total workforce is comprised of people of color and 27% of management is comprised of people of color. Our diversity and inclusion initiatives include:

We believe in offering career opportunities, resources, programs and tools to help employees grow and develop, as well as competitive wages and benefits. Our efforts in these areas include:

From time to time, we are party to legal proceedings arising in the ordinary course of business including those alleging employment discrimination or violations of wage-and-hour laws, for example. During 2019, the total amount we paid to resolve proceedings alleging employment discrimination was immaterial to our earnings, and we did not make any payments to resolve allegations of wage-and-hour violations. In our efforts to have all of our employees comply with federal and state employment-related laws, and reduce the number of employment discrimination claims brought against us, we provide non-discrimination and anti-harassment training as part of the Company’s mandatory compliance training, including for the hourly employees in our call centers, fulfillment centers and stores.

39

Table of Contents

Product Sourcing, Packaging and Marketing

We expect our suppliers to provide us with safe, energy-efficient, high quality products. We strive to set high expectations for our suppliers. Our suppliers enter into a Master Supply Agreement with us in which they represent and warrant that all products are manufactured, packaged, tagged and sold in compliance with all applicable laws and are legal for retail re-sale in each store that we operate without violation of any law. Specifically, all products must be packaged, labeled and tested in compliance with all applicable laws and the supplier must obtain and maintain all permits, licenses, certifications and registrations required by all applicable laws to provide their products.

As described in more detail in the “Environmental Responsibility” discussion set forth above, our manufacturing operations have implemented meaningful initiatives and strategies to reduce the amount of materials and packaging they use and dispose of, while significantly increasing the portion of those materials that are recycled. With respect to our Aaron’s Business, certain of those stores are already recycling paper and packaging materials, and we have begun the process of discussing possible strategies for developing centralized, corporate-driven initiatives to reduce packaging and increase recycling of those materials in our Company-owned stores.