EXHIBIT 10.27 - THE PEP BOYS
ANNUAL INCENTIVE BONUS PLAN (AMENDED AND RESTATED AS OF
DECEMBER 9, 2003)
THE PEP BOYS - MANNY, MOE & JACK
ANNUAL INCENTIVE BONUS PLAN
(as amended and restated as of December 9,
2003)
The
Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation (the
“Company”), established, effective January 29, 1989, an
Annual Incentive Bonus Plan for the benefit of officers of the
Company who were eligible to participate as provided therein. On
March 31, 1992, March 30, 1994, March 31, 1995 and March 31, 1998,
the Board of Directors of the Company (the “Board”)
amended the plan in numerous respects. By action of the Board on
December 9, 2003, the plan was further amended to read in its
entirety as hereinafter set forth (the
“Plan”).
1.
Purpose . The Plan is intended to increase the profitability
of the Company by giving employees of the Company holding positions
at the levels of officer or director (such employees being
hereinafter collectively referred to as the “Eligible
Employees”) a financial stake in the growth and profitability
of the Company. The Plan has the further objective of enhancing the
Company’s compensation packages for Eligible Employees, thus
enabling the Company to attract and retain officers and other key
employees of the highest ability. The Plan is intended to provide
Eligible Employees with incentive opportunities that: (a)
provide compensation opportunities which are competitive with other
companies of similar size and industry focus; (b) focus Eligible
Employees’ attention on the accomplishment of specific
Company goals; and (c) recognize different levels and types of
individual contributions by providing a portion of the incentive
payout for the achievement of individual objectives. The Plan is
intended to supplement, not replace, any other bonus paid by the
Company to any of its Eligible Employees and is not intended to
preclude the continuation of such arrangements or the adoption of
additional bonus or incentive plans, programs or
contracts.
2.
Definitions .
(a) “
Applicable Performance Measures ” shall mean the
Company Performance Measures and/or the Individual Performance
Measures upon which a Participant’s right to receive a Bonus
is based.
(b) “
Award Period ” shall mean a measuring period of one
Fiscal Year.
(c) “
Bonus ” shall mean a cash payment made by the Company
to a Participant after an Award Period, based on performance
against specific predetermined performance objectives for both the
Company and the Participant, as calculated in accordance with the
provisions of this Plan document.
(d) “
Bonus Level ” shall mean the level at which a
Participant shall participate in the Plan as set forth in Paragraph
4(b) hereof.
(e) “
CEO ” shall mean the person elected to the office of
Chief Executive Officer of the Company by the Board of
Directors.
(f) “
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
(g) “
Compensation Committee ” shall mean the Compensation
Committee of the Board. The Compensation Committee shall consist of
two or more persons appointed by the Board, each of whom shall be
an “outside director” as defined under Code section
162(m) and related Treasury regulations.
(h) “
Executive Officer ” shall mean an executive officer
(within the meaning of the Securities Exchange Act of 1934, as
amended) who is among the top five most highly compensated
employees of the Company at the beginning of any Award
Period.
(i) “
Fiscal Year ” shall mean the Fiscal Year of the
Company which ends on the Saturday nearest January 31 in each
year.
(j) “
Participant ” shall have the meaning set forth in
Paragraph 4 hereof.
(k) “
President ” shall mean the person elected to the
office of President, Chief Operating Officer or equivalent of the
Company by the Board of Directors.
(l) “
Salary ” shall mean the base salary of a Participant
for a Fiscal Year. For purposes of the foregoing, base salary shall
include (i) amounts which the Participant elects to forego to
provide benefits under a plan which satisfies the provisions of
Section 401(k) or Section 125 of the Internal Revenue Code and (ii)
amounts which the Participant elects to defer under a deferred
compensation plan or program, other than an equity-based deferred
compensation plan, adopted by the Company. Base salary shall not
include any amount attributable to any bonus paid or accrued
(including any bonus deferred under a deferred compensation plan or
program adopted by the Company), whether or not pursuant to a plan
or program.
3.
Administration, Amendment and Termination .
(a) The
Plan shall be administered by the Compensation Committee acting by
a majority vote of its members. The Compensation Committee shall
have the power and authority to take all actions and make all
determinations which it deems necessary or desirable to effectuate,
administer or interpret the Plan. The Company’s adoption and
continuation of the Plan is voluntary. The Compensation Committee
shall have the power and authority to extend, amend, modify or
terminate the Plan at any time; provided, however, that the
Compensation Committee shall not have the power to amend or modify
any provision of the Plan without stockholder approval in a manner
that would affect the terms of the Plan applicable to Executive
Officers, if stockholder approval would be required under Code
section 162(m). The Compensation Committee’s authority to
extend, amend or modify the Plan shall include, without limitation,
the right to change Award Periods, to determine the time or times
of paying Bonuses, to establish and approve Company and individual
performance goals and the relative weightings of the goals, and to
establish such other measures as may be necessary to meet the
objectives of the Plan. In particular, but without limitation of
the foregoing, the Compensation Committee shall have the power and
authority to make any amendments or modifications to the Plan which
may be necessary for the Plan to maintain compliance with Section
162(m) of the Internal Revenue Code of 1986, as amended. An action
to terminate or to substantively amend or modify the Plan shall
become effective immediately upon its adoption or on such date as
specified by the Compensation Committee, but not with respect to
any Fiscal Year prior to the Fiscal Year in which the Compensation
Committee so acts.
(b) All
actions taken and all determinations made by the Compensation
Committee in accordance with the power and authority conferred upon
the Compensation Committee under Paragraph 3(a) above shall be
final, binding and conclusive on all parties, including the Company
and all Participants.
4.
Participants .
(a) Each
Eligible Employee shall be entitled to participate in the Plan for
each Fiscal Year or portion thereof in which such employee holds a
position at the level of officer or director of the Company (the
“Participants”, or individually,
“Participant”), unless excluded from participation by
the Compensation Committee or as provided by Paragraph 11 hereof.
With respect to an individual who becomes an Eligible Employee
during an Award Period, such individual shall become a Participant,
unless excluded from participation by the Compensation Committee or
as provided in Paragraph 11 hereof, and shall be eligible to
receive an amount equal to the amount which would have been paid if
the Participant had been an Eligible Employee for the entire Award
Period, multiplied by a fraction, the numerator of which is the
number of days during the Award Period that the Participant was an
Eligible Employee of the Company and the denominator of which is
the number of days in the Award Period.
(b) Each
Participant shall participate in the Plan and earn Bonuses at one
of five Bonus Levels, as set forth below:
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Bonus Level
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Participant
Group
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