Aarons 2015 Annual Report Download - page 80

the same counsel as in the above-described Byrd litigation. In April 2013, the Company timely removed this matter to federal court. On May 8, 2013, the
Company filed a motion to stay this litigation pending resolution of the Byrd litigation, a motion to dismiss for failure to state a claim, and a motion to strike
certain allegations in the complaint. The Court subsequently stayed the case. The Company's motions to dismiss and strike certain allegations remain
pending. On June 6, 2015, the plaintiffs filed a motion to lift the stay, which was denied on July 11, 2015.
In Lomi Price v. Aaron's, Inc. and NW Freedom Corporation, filed on February 27, 2013, in the State Court of Fulton County, Georgia (Case No. 13-EV-
016812B), an individual plaintiff asserts claims against the Company and its independently owned and operated franchisee, NW Freedom Corporation, for
invasion of privacy/intrusion on seclusion, computer invasion of privacy and infliction of emotional distress. Each of these claims arises out of the alleged
use of PC Rental Agent software. The plaintiff is seeking compensatory and punitive damages of not less than $250,000. On April 3, 2013, the Company
filed an answer and affirmative defenses. On that same day, the Company also filed a motion to stay the litigation pending resolution of the Byrd litigation, a
motion to dismiss for failure to state a claim and a motion to strike certain allegations in the complaint. The Court stayed the proceeding pending rulings on
certain motions in the Byrd case, which expired upon remand of the case back to the District Court. On April 24, 2015, the Company filed a renewed motion
to stay, which was granted on June 15, 2015.
In Michael Peterson v. Aaron’s, Inc. and Aspen Way Enterprises, Inc., filed on June 19, 2014, in the United States District Court for the Northern District of
Georgia (Case No. 1:14-cv-01919-TWT), several plaintiffs allege that they leased computers for use in their law practice. The plaintiffs claim that the
Company and Aspen Way knowingly violated plaintiffs' privacy and the privacy of plaintiff’s legal clients in violation of the ECPA and the Computer Fraud
Abuse Act. Plaintiffs seek certification of a putative nationwide class. Plaintiffs based these claims on Aspen Way's use of PC Rental Agent software. The
plaintiffs claim that information and data obtained by defendants through PC Rental Agent was attorney-client privileged. The Company has filed a motion
to dismiss plaintiffs' amended complaint. On June 4, 2015, the Court granted the Company’s motion to dismiss all claims except a claim for aiding and
abetting invasion of privacy. Plaintiffs then filed a second amended complaint alleging only the invasion of privacy claims that survived the June 4, 2015
court order, and adding a claim for unjust enrichment. The Company filed a motion to dismiss the second amended complaint, and on September 16, 2015,
the Court granted the Company’s motion to dismiss plaintiffs’ unjust enrichment claim. The only remaining claim against the Company is a claim for aiding
and abetting invasion of privacy.
Regulatory Investigations
California Attorney General Investigation. The California Attorney General investigated the Company's retail transactional practices, including various
leasing and marketing practices, information security and privacy policies and practices related to the alleged use of PC Rental Agent software by certain
independently owned and operated Company franchisees. The Company reached a comprehensive resolution of this matter without litigation. The final
settlement and consent order were announced on October 13, 2014. The Court filed the final judgment on February 10, 2015. The final payment as scheduled
under the consent order was made on January 6, 2016.
Other Matters
In Foster v. Aaron’s, Inc., filed on August 21, 2015, in the United States District Court in Phoenix, Arizona (No. CV-15-1637-PHX-SRB), the plaintiff in this
putative class action alleges that the Company violates the Telephone Consumer Protection Act ("TCPA") by placing automated calls to customer references,
or otherwise violates the TCPA in the manner in which the Company contacts customer references. The Company's initial responsive pleading was filed on
October 7, 2015. A Scheduling Order was entered on January 26, 2016.
Other Commitments
At December 31, 2015, the Company had non-cancelable commitments primarily related to certain advertising and marketing programs of $22.6 million.
Payments under these commitments are scheduled to be $6.7 million in 2016, $7.2 million in 2017, $4.2 million in 2018 and $2.3 million in 2019, $1.6
million in 2020, and $568,000 thereafter.
The Company maintains a 401(k) savings plan for all its full-time employees who meet certain eligibility requirements. Effective January 1, 2015, the 401(k)
savings plan was amended to allow employees to contribute up to 75% of their annual compensation in accordance with federal contribution limits with
100% matching by the Company on the first 3% of compensation and 50% on the next 2% of compensation for a total of 4% matching compensation. The
Company’s expense related to the plan was $4.7 million in 2015, $4.3 million in 2014 and $3.3 million in 2013.
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