8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):   February 22, 2005

AARON RENTS, INC.

(Exact name of Registrant as Specified in its Charter)

Georgia	1-13941		58-0687630
(State or other Jurisdiction of Incorporation or Organization)	(Commission File Number)		(IRS Employer Identification No.)
309 E. Paces Ferry Road, N.E. Atlanta, Georgia		30305-2377
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code:  (404) 231-0011

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01.  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Incentive Bonuses

In 2004, the Board of Directors of Aaron Rents, Inc. (the “Company”) approved incentive bonus plans for the following executive officers of the Company for its 2004 fiscal year: R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer; Robert C. Loudermilk, Jr., President and Chief Operating Officer; Gilbert L. Danielson, Executive Vice President and Chief Financial Officer; and W. Kenneth Butler, President, Aaron’s Sales & Lease Ownership Division.  In addition, Messrs. Loudermilk, Sr. and Butler established a bonus plan for Mr. K. Todd Evans, Vice President, Franchising, Aaron’s Sales & Lease Ownership Division, during 2004.

The bonus plans provided for the payment to these executive officers of cash incentives equal to specified percentages of the pre-tax earnings of the Company for its 2004 fiscal year, provided that 2004 pre-tax earnings exceeded those of 2003, except in the cases of Mr. Butler, whose bonus depended on the cash basis pre-tax earnings of the Aaron’s Sales & Lease Ownership Division, and of Mr. Evans, whose bonus depended on achievement of quarterly pre-tax profit objectives for the Aaron’s Sales & Lease Ownership Division’s franchise operations and on new franchise store opening goals.

In accordance with these previously established incentive plans, at a meeting on February 22, 2005, the Board of Directors of the Company approved the payment of the following incentive bonuses to the following executive officers, as it had been determined that the objectives had been met: Mr. Loudermilk, Sr.—$853,435; Messrs. Loudermilk, Jr. and Danielson—$84,590 each; Mr. Butler—$149,825; and Mr. Evans—$133,500.  In addition, Mr. Butler was awarded a discretionary $50,000 bonus in December 2004.

At the meeting, the Board also approved incentive bonus plans for the Company’s 2005 fiscal year for each of these executive officers, except for Mr. Evans, whose plan was approved by Messrs. Loudermilk, Sr. and Butler.  All the 2005 plans are designed and operate similarly to the 2004 plans.

Salaries

At its February 22, 2005 meeting, the Board also approved salary raises of $25,000 for each of Messrs. Loudermilk, Jr., Danielson and Butler, and approximately $12,000 for Mr. Evans, bringing their annual salaries to the following amounts: Messrs. Loudermilk, Jr. and Danielson—$350,000 each; Mr. Butler—$425,000; and Mr. Evans—$180,000.

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Stock Option and Incentive Award Plan Agreements

Attached hereto as Exhibits 10(bb), 10(cc) and 10(dd), respectively, are the Company’s current forms of stock option agreements for employees and for non-employee directors, and restricted stock agreements for employees, under the Company’s 2001 Stock Option and Incentive Award Plan.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(a)Financial Statements of Businesses Acquired:

None.

(b)Pro Forma Financial Information:

None.

(c)Exhibits:

Exhibit No.	Description
10(bb)	Form of Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan Award Agreement (Options) for Employees
10(cc)	Form of Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan Award Agreement (Options) for Non-Employee Directors
10(dd)	Form of Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan Restricted Stock Award Agreement for Employees

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		AARON RENTS, INC.
	By:	/s/ Gilbert L. Danielson
Date: February 28, 2005		Gilbert L. Danielson Executive Vice President, Chief Financial Officer

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EX-10.(BB)

EXHIBIT 10(bb)

Form of Aaron Rents, Inc. 2001 Stock Option And Incentive Award Plan

Award Agreement (Options) for Employees

This Award Agreement (the “Agreement”) is entered into as of the                    , by and between Aaron Rents, Inc., a Georgia corporation (the “Company”), and                      (the “Grantee”).

WITTNESSETH:

WHEREAS, the Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan (the “Plan”) was adopted by the Company, a copy of which is attached hereto as Exhibit A and incorporated herein by reference; and

WHEREAS, on the date hereof, the Stock Option Committee of the Board of Directors authorized the proper officers of the Company to prepare and enter into an agreement with the Grantee evidencing the grant of the options described herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.             Grant of Option.  An option to purchase                        shares of the Company’s Common Stock, par value $.50 per share (“Common Stock”), is hereby granted to the Grantee pursuant to the Plan (hereinafter referred to as the “Option”).  The Option is subject in all respects to the terms and conditions of the Plan.  For all purposes of the Plan, the date of the Option granted hereunder (the “Grant Date”) shall be the                        .  The Option is a nonqualified stock option and is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

2.             Option Price.  The option price for all shares subject to the Option is                              per share.

3.             Securities Laws Restrictions.  The Option may not be exercised at any time unless, in the opinion of counsel for the Company, the issuance and sale of the shares issued upon such exercise is exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”), or any other applicable securities or “blue sky” laws, or the shares have been registered under such laws.  The Company shall not be required to register the shares issuable upon the exercise of the Option under any such laws.  Unless the shares have been registered under all such laws, the Grantee shall represent, warrant and agree, as a condition to the exercise of the Option, that the shares are being purchased for investment only and without a view to any sale or distribution of such shares and that such shares shall not be transferred or disposed of in any manner without registration under such laws, unless it is the opinion of counsel for the Company that such a disposition is exempt from such registration.  The Grantee acknowledges that the

certificates evidencing the shares issued upon the exercise of the Option shall bear an appropriate legend giving notice of the foregoing transfer restrictions.

4.             Transfer Restrictions.  The Option may not be sold, assigned, pledged, hypothecated, alienated or otherwise disposed of or transferred in any manner, in whole or in part, otherwise than by will or the laws of descent or distribution and may be exercised during the lifetime of the Grantee only by the Grantee.  The terms of this Agreement and the Plan shall be binding upon the executors, administrators, heirs, successors and assigns of the Grantee.

5.             Duration and Exercise of Option.

(a)           The Option may be exercised, from time to time, with respect to all or any part of the total number of shares, beginning on the date reflected on and subject to the conditions listed on Schedule I hereto, and subject to earlier termination of the Option as provided in Section 5(b) below.

(b)           The Option may not be exercised with respect to any shares subject hereto after the earlier of (i) ten (10) years from the Grant Date, (ii) the date the Grantee’s employment is terminated by the Company or a Subsidiaryfor Cause, or the Grantee voluntarily terminates his employment (other than upon Retirement), or (iii) two (2) months after the Grantee, if an employee of the Company on the Grant Date, ceases to be an employee of the Company for any other reason (other than death or Retirement, which occurrences are governed by the terms and conditions of the Plan) (herein called the “Option Expiration Date”) and may be exercised until the Option Expiration Date only in accordance with the terms of this Agreement and the Plan.

(c)           This Option may be exercised in whole or in part by delivering to the Company a written notice of exercise specifying the number of shares to be purchased together with full payment of the aggregate option price as provided in the Plan.

6.             No Right to Continued Employment.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company or an affiliate of the Company to terminate Grantee’s employment with the Company or an affiliate of the Company at any time, nor confer upon Grantee any right to continue in the employ or service of the Company or an affiliate of the Company.

7.             Definitions.  Each capitalized term not defined herein shall have the meaning given to it in the Plan.

AARON RENTS, INC.
By:
	Its Executive Vice President and CFO

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Grantee hereby (i) acknowledges that a copy of the Plan is available from the Company’s intranet site at “            ”, or upon request, (ii) represents that he is familiar with the terms and provisions hereof and thereof, and (iii) accepts the Option subject to all the terms and provisions hereof and thereof.  Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Stock Option Committee of the Board of Directors upon any questions arising under the Plan.  Grantee authorizes the Company to withhold from any compensation payable to him, or Grantee will contribute as a condition to the exercise of the Option, in accordance with applicable law, any taxes required to be withheld by federal, state or local law as a result of the grant, existence or exercise of the Option.

GRANTEE

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SCHEDULE I TO AWARD AGREEMENT

Grantee:                       

Vesting Provisions:

The Option shall vest, and may be exercised with respect to the shares subject thereto, on or after the dates set forth below, subject to earlier termination of the Option as provided in the Award Agreement or in the Plan:

Date Number of Shares

EX-10.(CC)

EXHIBIT 10(cc)

Form of Aaron Rents, Inc. 2001 Stock Option And Incentive Award Plan

Award Agreement (Options) for Non-Employee Directors

This Award Agreement (the “Agreement”) is entered into as of the                          , by and between Aaron Rents, Inc., a Georgia corporation (the “Company”), and                            (the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan (the “Plan”) was adopted by the Company, a copy of which is attached hereto as Exhibit A and incorporated herein by reference; and

WHEREAS, on the date hereof, the Stock Option Committee of the Board of Directors authorized the proper officers of the Company to prepare and enter into an agreement with the Grantee evidencing the grant of the options described herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.             Grant of Option.  An option to purchase                          shares of the Company’s Common Stock, par value $.50 per share (“Common Stock”), is hereby granted to the Grantee pursuant to the Plan (hereinafter referred to as the “Option”).  The Option is subject in all respects to the terms and conditions of the Plan.  For all purposes of the Plan, the date of the Option granted hereunder (the “Grant Date”) shall be the                                                   .  The Option is a nonqualified stock option and is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

2.             Option Price.  The option price for all shares subject to the Option is $                               per share, the Fair Market Value as of the Grant Date.

3.             Securities Laws Restrictions.  The Option may not be exercised at any time unless, in the opinion of counsel for the Company, the issuance and sale of the shares issued upon such exercise is exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”), or any other applicable securities or “blue sky” laws, or the shares have been registered under such laws.  The Company shall not be required to register the shares issuable upon the exercise of the Option under any such laws.  Unless the shares have been registered under all such laws, the Grantee shall represent, warrant and agree, as a condition to the exercise of the Option, that the shares are being purchased for investment only and without a view to any sale or

distribution of such shares and that such shares shall not be transferred or disposed of in any manner without registration under such laws, unless it is the opinion of counsel for the Company that such a disposition is exempt from such registration.  The Grantee acknowledges that the certificates evidencing the shares issued upon the exercise of the Option shall bear an appropriate legend giving notice of the foregoing transfer restrictions.

4.             Transfer Restrictions.  The Option may not be sold, assigned, pledged, hypothecated, alienated or otherwise disposed of or transferred in any manner, in whole or in part, otherwise than by will or the laws of descent or distribution and may be exercised during the lifetime of the Grantee only by the Grantee.  The terms of this Agreement and the Plan shall be binding upon the executors, administrators, heirs, successors and assigns of the Grantee.

5.             Duration and Exercise of Option.

(a)           The Option may be exercised, from time to time, with respect to all or any part of the total number of shares, beginning on the date reflected on and subject to the conditions listed on Schedule I hereto, and subject to earlier termination of the Option as provided in Section 5(b) below.

(b)           The Option may not be exercised with respect to any shares subject hereto after the earlier of (i) ten (10) years from the Grant Date, (ii) the date the Grantee’s service as a director of the Company is terminated for Cause, or (iii) two (2) months after the date the Grantee’s service as a director of the Company terminates for any other reason (other than by reason of death, which occurrence is governed by the terms and conditions of the Plan applicable to the death of employees, including any extension of the period for exercise in the event Grantee dies after termination but prior to the otherwise applicable Option Expiration Date) (herein called the “Option Expiration Date”), and may be exercised until the Option Expiration Date only in accordance with the terms of this Agreement and the Plan.

(c)           This Option may be exercised in whole or in part by delivering to the Company a written notice of exercise specifying the number of shares to be purchased together with full payment of the aggregate option price as provided in the Plan.

6.             No Right to Continued Service.  Nothing in this Agreement shall confer upon Grantee any right to continue as a director of the Company or an affiliate of the Company.

7.             Definitions.  Each capitalized term not defined herein shall have the meaning given to it in the Plan.

AARON RENTS, INC.
By:
	Its Executive Vice President and CFO

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Grantee hereby (i) acknowledges receipt of a copy of the Plan which is attached hereto, (ii) represents that he is familiar with the terms and provisions hereof and thereof, and (iii) accepts the Option subject to all the terms and provisions hereof and thereof.  Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Stock Option Committee of the Board of Directors upon any questions arising under the Plan.  Grantee authorizes the Company to withhold from any compensation payable to him, or Grantee will contribute as a condition to the exercise of the Option, in accordance with applicable law, any taxes required to be withheld by federal, state or local law as a result of the grant, existence or exercise of the Option.

GRANTEE

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SCHEDULE I TO AWARD AGREEMENT

Grantee:                             

Vesting Provisions:

The Option shall vest, and may be exercised with respect to the shares subject thereto, on or after the dates set forth below, subject to earlier termination of the Option as provided in the Award Agreement or in the Plan:

Date Number of Shares

EX-10.(DD)

EXHIBIT 10(dd)

Form of Aaron Rents, Inc. 2001 Stock Option And IncentiveAward Plan

Restricted Stock Award Agreement

THIS AGREEMENT, made and entered into as of the                    , by and between AARON RENTS, INC. (the “Company”) and                        (“Grantee”).

WITNESSETH THAT:

WHEREAS, the Company maintains the Aaron Rents, Inc. 2001 Stock Option and Incentive Award Plan (the “Plan”), and the Grantee has been selected by the Committee to receive a Restricted Stock Award under the Plan;

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Grantee, as follows:

1.             Award of Restricted Stock

1.1           The Company hereby grants to the Grantee an award of                  Shares of restricted stock (“Restricted Stock”), subject to, and in accordance with, the restrictions, terms and conditions set forth in this Agreement and the Plan.  The grant date of this award of Restricted Stock is                      (“Grant Date”).

1.2           This Agreement shall be construed in accordance with and subject to the provisions of the Plan (the provisions of which are incorporated herein by reference) and, except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

2.             Restrictions

2.1           Subject to Sections 2.2, 2.3, and 2.4 below, if the Grantee remains employed by the Company, the Grantee shall become fully vested in the Restricted Stock on                        (such date shall be the  “Vesting Date”).  On the Vesting Date, Grantee shall own the Shares of Restricted Stock free and clear of all restrictions imposed by this Agreement (except those imposed by Section 3.4 below).  The Company shall deliver a certificate(s) for the Shares of Restricted Stock to Grantee as soon as practical after the Vesting Date.  For purposes of this Agreement, employment with any Subsidiary of the Company, or service as a Director of the Company or any Subsidiary of the Company, shall be considered employment with the Company.

2.2           In the event prior to the Vesting Date Grantee dies while actively employed by the Company, the Restricted Stock shall become fully vested and nonforfeitable as of the date of Grantee’s death.  The Company shall deliver certificate(s) for the Restricted Stock, free and clear of any restrictions imposed by this Agreement (except for Section 3.4) to Grantee’s personal

representative or his estate as soon as practical after his date of death.  Except for death, or as provided in Section 2.3, if Grantee terminates employment prior to the Vesting Date, the Restricted Stock shall be forfeited and all rights of Grantee to such Shares shall be terminated.

2.3           Notwithstanding the other provisions of this Agreement, in the event of a Change in Control prior to Grantee’s Vesting Date, the Restricted Stock shall become fully vested and nonforfeitable as of the date of the Change in Control.  On the date of the Change in Control, the Company shall deliver to Grantee a certificate(s) for the Restricted Stock, free and clear of any restrictions imposed by this Agreement.

2.4           The Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date Grantee becomes vested in the Restricted Stock.

3.             Stock; Dividends; Voting

3.1           The stock certificate(s) evidencing the Restricted Stock shall be registered on the Company’s books in the name of the Grantee as of the Grant Date.  Physical possession or custody of such stock certificates shall be retained by the Company until such time as the shares or Restricted Stock are vested in accordance with Section 2.  While in its possession, the Company reserves the right to place a legend on the stock certificate(s) restricting the transferability of such certificates and referring to the terms and conditions (including forfeiture) of this Agreement and the Plan.

3.2           During the period the Restricted Stock is not vested, the Grantee shall be entitled to receive dividends and/or other distributions declared on such Restricted Stock, but Grantee shall not be entitled to vote such Restricted Stock.

3.3           In the event of any adjustments in authorized Shares as provided in Section 4.3 of the Plan, the number and class of Shares of Restricted Stock or other securities that Grantee shall be entitled to pursuant to this Agreement shall be appropriately adjusted or changed to reflect such change, provided that any such additional Shares of Restricted Stock or additional or different shares or securities shall remain subject to the restrictions in this Agreement.

3.4           The Grantee represents and warrants that he is acquiring the Restricted Stock for investment purposes only, and not with a view to distribution thereof.  The Grantee is aware that the Restricted Stock may not be registered under the federal or any state securities laws and that, in addition to the other restrictions on the Restricted Stock, the shares will not be able to be transferred unless an exemption from registration is available.  By making this award of Restricted Stock, the Company is not undertaking any obligation to register the Restricted Stock under any federal or state securities laws.

4.             No Right to Continued Employment

Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Grantee any right with respect to continuance of employment by the Company or a Subsidiary,

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nor shall this Agreement or the Plan interfere in any way with the right of the Company or a Subsidiary to terminate the Grantee’s employment at any time, subject to Grantee’s rights under this Agreement.

5.             Taxes and Withholding

The Grantee shall be responsible for all federal, state and local income taxes payable with respect to this award of Restricted Stock.  The Grantee shall have the right to make such elections under the Internal Revenue Code of 1986, as amended, as are available in connection with this award of Restricted Stock, including a “Section 83(b) election.”  The Company and Grantee agree to report the value of the Restricted Stock in a consistent manner for federal income tax purposes.  The Company shall have the right to retain and withhold from any payment of Restricted Stock the amount of taxes required by any government to be withheld or otherwise deducted and paid with respect to such payment.  At its discretion, the Company may require Grantee to reimburse the Company for any such taxes required to be withheld and may withhold any distribution in whole or in part until the Company is so reimbursed.  In lieu thereof, the Company shall have the right to withhold from any other cash amounts due to Grantee an amount equal to such taxes required to be withheld and/or withhold and cancel (in whole or in part) a number of shares of Restricted Stock having a market value equal to the amount of such taxes.

6.             Grantee Bound By The Plan

The Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

7.             Modification of Agreement

This Agreement may be modified, amended, suspended or terminated, and any terms or conditions may be waived, but only by a written instrument executed by the parties hereto.

8.             Severability

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

9.             Governing Law

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Georgia without giving effect to the conflicts of laws principles thereof.

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10.          Successors in Interest

This Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, reorganization, purchase of stock or assets, or otherwise, all or substantially all of the Company’s assets and business.  This Agreement shall inure to the benefit of the Grantee’s legal representatives.  All obligations imposed upon the Grantee and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Grantee’s heirs, executors, administrators and successors.

11.          Resolution of Disputes

Any dispute or disagreement which may arise under, or as a result of, or in any way relate to the interpretation, construction or application of this Agreement shall be determined by the Committee.  Any determination made hereunder shall be final, binding and conclusive on the Grantee and the Company for all purposes.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

AARON RENTS, INC.

By:

GRANTEE:

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