Aarons 2014 Annual Report Download - page 84

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The Company maintains a 401(k) savings plan for all its full-time employees with at least one year of service and who meet
certain eligibility requirements. As of December 31, 2014, the plan allows employees to contribute up to 100% 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 $4.3 million in 2014, $3.3 million in 2013, and $999,000 in 2012.
The Company is a party to various claims and legal proceedings arising in the ordinary course of business. Management
regularly assesses the Company’s insurance deductibles, monitors the Company's litigation and regulatory exposure with the
Company’s attorneys and evaluates its loss experience. The Company also enters into various contracts in the normal course of
business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations.
NOTE 9. RESTRUCTURING
On July 15, 2014, the Company announced that a rigorous evaluation of the Company-operated store portfolio had been
performed. As a result of this evaluation and other cost-reduction initiatives, during the year ended December 31, 2014, the
Company closed 44 underperforming Company-operated stores and restructured its home office and field support to more
closely align with current business conditions. The restructuring was completed during the third quarter of 2014 and total
restructuring charges of $9.1 million were recorded during the year ended December 31, 2014, principally comprised of $4.8
million related to contractual lease obligations, $3.3 million related to the write-off and impairment of property, plant and
equipment and $620,000 related to workforce reductions. These costs were included in the line item “Restructuring Expenses”
in the consolidated statements of earnings.
Total restructuring charges of $4.8 million have been included in the Sales and Lease Ownership segment results and total
restructuring charges of $4.3 million have been included in the Other segment results. The Company does not currently
anticipate any remaining costs related to this restructuring plan to be material.
The following table summarizes the balances and activity related to the restructuring charges for the year ended December 31,
2014:
(In Thousands)
Contractual
Obligations
Under Canceled
Leases Severance Fixed Assets Other Total
Balance at January 1, 2014 $ — $ — $ — $ — $ —
Restructuring Expenses 4,797 620 3,328 395 9,140
Payments (1,570) (620) — — (2,190)
Impairment and Assets Written Off — — (3,328)(395)(3,723)
Balance at December 31, 2014 $ 3,227 $ — $ — $ — $ 3,227
NOTE 10: SHAREHOLDERS’ EQUITY
The Company held 18,263,589 shares in its treasury and was authorized to purchase an additional 10,496,421 shares at
December 31, 2014. The holders of common stock are entitled to receive dividends and other distributions in cash, stock or
property of the Company as and when declared by its Board of Directors out of legally available funds. The Company
repurchased 1,000,952 shares of its common stock in 2014 and 3,502,627 shares of its common stock in 2013 through an
accelerated share repurchase program.
The Company has 1,000,000 shares of preferred stock authorized. The shares are issuable in series with terms for each series
fixed by, and such issuance subject to approval by, the Board of Directors. As of December 31, 2014, no preferred shares have
been issued.
On October 4, 2013, the Company amended its Amended and Restated Articles of Incorporation to confirm that shares of
common stock the Company repurchases from time to time become treasury shares. As permitted by Georgia corporate law, the
amendment was adopted by the Board of Directors of the Company without shareholder action.