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<SEC-DOCUMENT>0000950123-10-007239.txt : 20100329
<SEC-HEADER>0000950123-10-007239.hdr.sgml : 20100329
<ACCEPTANCE-DATETIME>20100201160310
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-10-007239
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100201

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AARON'S INC
		CENTRAL INDEX KEY:			0000706688
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359]
		IRS NUMBER:				580687630
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		309 E. PACES FERRY ROAD, N.E.
		STREET 2:		(NONE)
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30305-2377
		BUSINESS PHONE:		404-231-0011

	MAIL ADDRESS:	
		STREET 1:		309 E. PACES FERRY ROAD, N.E.
		STREET 2:		(NONE)
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30305-2377

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AARON RENTS INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<HEAD>
<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;AARON&#146;S, INC. LETTERHEAD&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">February&nbsp;1, 2010
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>VIA EDGAR CORRESPONDENCE AND OVERNIGHT DELIVERY</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">U.S. Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
100 F Street, NE<BR>
Mail Stop 4631<BR>
Washington, D.C. 20549

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="94%">&nbsp;</TD>
</TR>
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attention:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Craig Slivka, Special Counsel</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right"><DIV style="margin-left:0px; text-indent:-0px"><B>Re:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Aaron Rents, Inc.<br>
Form&nbsp;10-K</B> <br>
<B>Response to SEC Comments dated January&nbsp;19, 2010<br>
File Number 1-13941</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Mr.&nbsp;Slivka:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We provide below responses to the Staff&#146;s comment letter dated January&nbsp;19, 2010, which was a
follow-up comment letter to our December&nbsp;14, 2009 responses to the Staff&#146;s initial November&nbsp;30,
2009 letter. These responses are keyed to correspond to the Staff&#146;s letter, which we do by setting
out each of the Staff&#146;s comments followed by our response.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless the context requires otherwise, references to we, our, us, Aaron&#146;s or the Company in
the responses below refer to Aaron&#146;s, Inc. (formerly known as Aaron Rents, Inc.)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We understand that on a telephone conference on January&nbsp;26, 2010 between you, Ms.&nbsp;Sherry
Haywood, Staff Attorney, and our counsel, David Eaton of Kilpatrick Stockton LLP, you indicated on
behalf of the Staff that the Company need not file an amendment to its Annual Report on Form 10-K
for the year ended December&nbsp;31, 2008 in response to any of the Staff&#146;s comments below, but instead
should, as applicable, address these comments in future filings.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Form&nbsp;10-K</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Internal Control over Financial Reporting, page 54</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to prior comments 2 and 3. However, the operative issue for
judging the materiality of a remedial effort is its impact. Thus, we do not agree with
your position that because the steps taken to correct the material weakness in your
internal control over financial reporting were somehow minor or relatively easy to
implement, then they are therefore immaterial. We believe that if even a minor &#147;fix&#148; has
a material impact by correcting a material weakness, then the steps themselves are
material. Please amend your 10-K to comply with our comments.</B></TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Letter to the Securities and Exchange Commission<BR>
February&nbsp;1, 2010<BR>
Page 2

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Response</U>:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company acknowledges the Staff&#146;s position, communicated to our counsel at the
January&nbsp;26, 2010 telephone conference referred to above, that any changes to the
Company&#146;s internal control over financial reporting (&#147;ICOFR&#148;) that are made to correct a
material weakness in ICOFR should be considered material changes to ICOFR, regardless of
the nature of the change, and should be disclosed as such pursuant to Item 308(c) of
Regulation&nbsp;S-K. The Company undertakes to comply with this position in the future, and
to otherwise report any ICOFR change &#147;that has materially affected, or is reasonably
likely to materially affect&#148; Aaron&#146;s ICOFR, as required by Item&nbsp;308(c).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Definitive Proxy Statement</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Annual Cash Bonuses, page 18</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to prior comment 7. However, several items are unclear from
the disclosure in the proxy and your December&nbsp;14, 2009 response. Specifically, it is
unclear whether pre-tax earnings need to exceed the previous year&#146;s pre-tax earnings by a
certain amount in order for the percentage-based bonuses to be paid. Also, in the case
of Messrs.&nbsp;Butler and Evans, it is unclear whether their respective divisions&#146; pre-tax
earnings must be a certain amount in order for their bonuses to be paid. If bonuses are
paid as calculated in the proxy when the pre-tax earnings exceed the previous year&#146;s
pre-tax earnings by any amount, then please clarify this in future filings. Otherwise,
please amend your 10-K to disclose the specific corporate and division objectives that
must be achieved for your named executive officers to receive their bonus.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Response</U>:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We confirm that annual cash incentives are paid as calculated in the proxy statement
when the Company&#146;s pre-tax earnings (or the Aaron&#146;s Sales &#038; Lease Ownership Division&#146;s
pre-tax earnings in the case of Mr.&nbsp;Butler) exceed the prior year&#146;s pre-tax earnings by
<I>any </I>amount (conversely, no incentives whatsoever are payable if pre-tax earnings fall
below the prior year&#146;s pre-tax earnings by any amount). The Company will clarify this
in applicable future filings, including its next proxy statement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As discussed in the 2009 proxy statement, Mr.&nbsp;Evans is paid a quarterly cash incentive,
rather than an annual one, which depends on his achievement of quarterly pre-tax profit
objectives for the Aaron&#146;s Sales &#038; Lease Ownership Division&#146;s franchise operations and
on new franchised store openings. The 2009 proxy statement discloses both his pre-tax
earnings objectives and the manner of calculation</TD>
</TR>



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Letter to the Securities and Exchange Commission<BR>
February&nbsp;1, 2010<BR>
Page 3

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>for the 2008 fiscal year, starting on the bottom of page 18 and continuing to the top of
page 19.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Long-Term Equity Incentive Awards, page 19</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>It is unclear from your response to prior comment 8 how the size and type of
individual equity awards are made. Does your reference to historical award levels mean
that the named executive officers receive the same amount and type of equity awards every
year regardless of performance or other criteria? Please clarify this in your amended
10-K.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Response</U>:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In response to your comment, the Company anticipates including disclosure substantially
to the following effect in the proxy statement for its next annual meeting of
shareholders. The second paragraph in the proposed disclosure below is new; the first
and third are merely the proposed disclosure we set forth as one paragraph in our
December&nbsp;14, 2009 response, divided into two paragraphs with the new text separating
them.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the reproduced third paragraph, please note the last sentence concerning the
adjustment of award sizes between years, which is partially responsive to the portion of
your comment asking whether the reference to historical award levels means equity awards
are the same size every year.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 10%">The Compensation Committee generally intends that outstanding equity awards will
not, in the aggregate, exceed a certain percentage of the overall outstanding common
&nbsp;shares, although this percentage is a guideline subject to change depending upon
extant circumstances. The Compensation Committee also considers the amount of stock
incentive accounting expense it deems advisable, upon consultation with management,
for the Company to incur when new awards are being contemplated. Based upon the
limits set by the antidilution guidelines and stock incentive accounting expense
considerations, the Compensation Committee approves an overall pool of equity awards
available for it to award to senior executives and key employees in a given year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 10%"><I>&#091;New&#093; </I>Although the Compensation Committee may take the Company&#146;s financial
performance into consideration generally when determining the overall size of the
pool of equity awards available for it to award to eligible participants in a given
year, it generally does not take performance criteria into account when determining
the size of a particular recipient&#146;s incentive grant, or use formulas to determine
the value of equity awards to grant to individual recipients. The performance
aspect of the Company&#146;s long-term equity awards is not related to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Letter to the Securities and Exchange Commission<BR>
February&nbsp;1, 2010<BR>
Page 4

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 10%">the initial determination of individual grant sizes, but rather to the incentive
such awards give recipients to improve the Company&#146;s performance, which should
consequently increase the price of the Company&#146;s capital stock and the value of the
stock awards, thus benefiting Company shareholders and equity award recipients
alike.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 10%">Recipients are largely identified based on their level within the Company, although
not all eligible employee levels participate in all grants. The pool of incentives
is distributed to eligible participants using historical award levels, with those
employees at the same level generally receiving the same award amount. If award
amounts are adjusted, they are generally adjusted so as to keep similar proportional
differences between employee levels.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">* * * * *
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Staff is requested to direct any further questions regarding these filings and this letter
to the undersigned at (678)&nbsp;402-3388. Thank you.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Sincerely,<BR>
<BR>
<BR>
AARON&#146;S, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Robert P. Sinclair
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Robert P. Sinclair&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Vice President, Corporate Controller&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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