Exhibit 10.36
Advance Auto Parts
2006 Executive Bonus Plan
Purpose
The purpose of the Advance Auto Parts 2006
Executive Bonus Plan (the “Plan”) is to tie a portion
of each participant’s annual compensation to the achievement
of established financial goals as defined in the fiscal year budget
of Advance Auto Parts, Inc. (the “Company”).
Eligibility
Cash awards (“Awards”) may be made
under this Plan to certain key employees of the Company or its
subsidiaries who have been designated by the Compensation Committee
of the Company’s Board of Directors (the
“Committee”) to participate in the Plan
(“Participants”).
Annual Bonus
Target
For each fiscal year for which the Committee
determines Awards may be made under the Plan (the
“Performance Period”), the Committee will establish a
Bonus Target for each Participant. Any Award payable under this
Plan is calculated by comparing the actual results with budget
goals for each respective performance measure using full-year,
consolidated company financial measures.
Annual Bonus Performance
Measures
Each Participant’s Annual Bonus Target
includes Annual Performance Measures (as more fully explained
below), with a respective weighting, as follows:
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Measure
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Consolidated Company Sales
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Consolidated Operating Income
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Consolidated Operating Income compared to
prior year Operating Income
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Consolidated Company Sales
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30% of Annual Bonus Target
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If the Company achieves its Consolidated
Company Sales Goal (“CSG”) as defined by the Board of
Directors in the Company’s annual budget for a Performance
Period, the Participant will receive an Award equal to 30% of his
or her Annual Bonus Target. For example, if the Participant’s
Annual Bonus Target is $200,000, 30% of the Annual Bonus Target
would equal $60,000. Performance above or below the CSG, and the
related effects on Award payouts are outlined below:
Participants are eligible to receive payouts
above and below the Annual Bonus Target level based on actual CSG
performance as compared to the goal. Actual CSG performance equal
to 96% of goal will result in a 25% payout of the CSG target. CSG
performance between 96% and 100% results in an equally incremental
pro-rata Award payout. CSG performance below 96% of goal will
result in no Award payout.
Actual CSG performance above goal will
increase a Participant’s Award. CSG performance of 104% of
goal results in a maximum Award payout of 200% of the CSG target.
CSG performance between 100% and 104% of goal will result in an
equally incremental pro-rata Award payout.
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Consolidated
Operating Income
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30% of Annual Bonus Target
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If the Company achieves its Consolidated
Operating Income Goal (COIG) as defined by the Board of Directors
in the annual budget for a Performance Period, the Participant will
receive an Award equal to 30% of his or her Annual Bonus Target.
For example, if a Participant’s Annual Bonus Target is
$200,000, 30% of the Annual Bonus Target equals $60,000.
Performance above or below the COIG, and the related effects on
Awards are outlined below:
Participants are eligible to receive Award
payouts above and below the Annual Bonus Target level based on
actual COIG perform
