Exhibit 10.33
EMPLOYMENT AGREEMENT
AGREEMENT (the
“Agreement”), dated as of June 4, 2008, between
Advance Auto Parts, Inc. (“Advance” or the
“Company”), a Delaware corporation, and(the
“Executive”).
The Company and the
Executive agree as follows:
1.
Position;
Term of Employment . Subject
to the terms and conditions of this Agreement, the Company agrees
to employ the Executive, and the Executive agrees to serve the
Company, as its (“Executive’s
Position”). The parties intend that the Executive shall
continue to so serve in this capacity throughout the Employment
Term (as such term is defined below).
The
term of the Executive’s employment by the Company
pursuant to this Agreement shall commence on June 4, 2008
(“Commencement Date”) and shall end on the day
prior to the first anniversary of the Commencement Date,
unless sooner terminated under the provisions of Paragraph 4
below (“Employment Term”); provided, however, that
commencing on the first anniversary of the Commencement Date
and on each anniversary thereafter the Employment Term shall
be automatically extended for an additional period of one year
unless, not later than 90 days prior to such automatic
extension date, either party shall have given notice to the
other that it does not wish to extend the Employment Term, in
which case the Employment Term shall end on the day prior to
such automatic extension date.
2.
Duties.
(a)
Duties
and Responsibilities . The
Executive shall have such duties and responsibilities of the
Executive’s Position and such other duties and
responsibilities reasonably consistent with the
Executive’s Position as the Company may request from
time to time and shall perform such duties and carry out such
responsibilities to the best of the Executive’s ability
for the purpose of advancing the business of the Company and
its subsidiaries, if any (jointly and severally,
“Related Entities”). The Executive
shall observe and conform to the applicable policies and
directives promulgated from time to time by the Company and
its Board of Directors or by any superior officer(s) of the
Company. Subject to the provisions of Subsection
2(b) below, the Executive shall devote the Executive’s
full time, skill and attention during normal business hours to
the business and affairs of the Company and its Related
Entities, except for holidays and vacations consistent with
applicable Company policy and except for illness or
incapacity. The services to be performed by the
Executive hereunder may be changed from time to time at the
discretion of the Company. The Company shall retain
full direction and control of the means and methods by which
the Executive performs the Executive’s services and of
the place or places at which such services are to be
rendered.
(b)
Other
Activities. During the Term of this
Agreement, it shall not be a violation of this Agreement for
the Executive to, and the Executive shall be entitled to (i)
serve on corporate, civic, charitable, retail industry
association or professional association boards or
committees
within the limitations of the Company’s Guidelines on
Significant Governance Issues, (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions and
(iii) manage personal investments, so long as such activities
do not significantly interfere with the performance of the
Executive’s duties and responsibilities as required by
this Agreement and do not involve a conflict of interest with
the Executive’s duties or responsibilities
hereunder.
(a)
Base Salary . During
the Employment Term, the Company shall pay to the Executive a
salary of $ _____ per annum, payable consistent with the
Company’s standard payroll practices then in effect
(“Base Salary”). Such Base Salary shall be
reviewed by the Compensation Committee of Advance’s Board of
Directors (hereinafter the “Compensation Committee”) at
least annually, with any changes taking into account, among other
factors, the Company and individual performance.
(b)
Bonus . The
Executive shall receive a bonus in such amounts and based upon
achievement of such corporate and individual performance and other
criteria as shall be approved by the Compensation Committee from
time to time, with a target amount, if such performance and other
criteria are achieved, of __ percent (__%) of the Base Salary
(the “Target Bonus Amount”), with a maximum payout
of percent __ (__%) of the Base Salary during the
initial Term of this Agreement, which bonus shall be paid in a
manner consistent with the Company’s bonus practices then in
effect. The Target Bonus Amount and the maximum payout
for any subsequent renewal Term of the Agreement shall be
determined by the Compensation Committee. To be eligible
to receive a bonus, the Executive must be employed by the Company
on the date the bonus is paid.
(c)
Benefit
Plans . During
the Employment Term, the Executive shall be entitled to participate
in all retirement and employment benefit plans and programs of the
Company that are generally available to senior executives of the
Company, including, but not limited to, the Company’s
Executive Choice Program. Such participation shall be
pursuant to the terms and conditions of such plans and programs, as
the same shall be amended from time to time. The
Executive shall be entitled to __ weeks paid vacation
annually. In addition, during the Employment Term, the
Executive shall be provided with a Company-paid annual physical
examination.
(d) Business
Expenses .
During the Employment Term, the Company shall, in
accordance with policies then in effect with respect to
payments of business expenses, pay or reimburse the Executive
for all reasonable out-of-pocket travel and other expenses
(other than ordinary commuting expenses) incurred by the
Executive in performing services hereunder; provided,
however, that, with respect to reimbursements, if any, not
otherwise excludible from the Executive’s gross income,
to the extent required to comply with the provisions of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), no reimbursement of expenses
incurred by the Executive during any taxable year shall be
made after the last day of the following taxable year, and
the right to reimbursement of such expenses shall not be
subject to liquidation or exchange for another
benefit. All such expenses shall be accounted for
in such reasonable detail as the Company may
require.
4.
Termination
of Employment.
(a)
Death
.
In the event of the death of the Executive during
the Employment Term, the Executive’s employment shall be
automatically terminated as of the date of death and a lump
sum amount, equivalent to the Executive’s annual Base
Salary and Target Bonus then in effect, shall be paid, within
60 days after the date of the Executive’s death, to the
Executive’s designated beneficiary, or to the
Executive’s estate or other legal representative if no
beneficiary was designated at the time of the
Executive’s death. In the event of the death
of the Executive during the Employment Term, the shares of
Restricted Stock granted to the Executive pursuant to the
Company’s 2004 Long-Term Incentive Plan (“2004
LTIP”) or any successor plan shall vest immediately and
the Stock Options or Stock Appreciation Rights
(“SARs”) granted to the Executive pursuant to the
Company’s 2004 LTIP or any successor plan shall become
exercisable upon the date of the Executive’s death for
all such Stock Options and SARs if not then exercisable in
full. The foregoing benefit will be provided in
addition to any death, disability or other benefits provided
under the Company’s benefit plans and programs in which
the Executive was participating at the time of his death.
Except in accordance with the terms of the Company’s
benefit programs and other plans and programs then in effect,
after the date of the Executive’s death, the Executive
shall not be entitled to any other compensation or benefits
from the Company or hereunder.
(b)
Disability
.
In the event of the Executive’s Disability
as hereinafter defined, the employment of the Executive may be
terminated by the Company, effective upon the Disability
Termination Date (as defined below). In such event,
the Company shall pay the Executive an amount equivalent to
thirty percent (30%) of the Executive’s Base Salary for
a one year period, which amount shall be paid in one lump sum
within forty-five days following the Executive’s
“separation from service,” as that term is defined
in Section 409A of the Code and regulations promulgated
thereunder, from the Company (his “Separation From
Service”), provided that the Executive or an individual
duly authorized to execute legal documents on the
Executive’s behalf executes and does not revoke within
any applicable revocation period the release described in
Section 4(j)(ii)(B). In the event of the Disability
of the Executive during the Employment Term, the shares of
Restricted Stock granted to the Executive pursuant to the
Company’s 2004 LTIP or any successor plan shall vest
immediately upon the date of the Executive’s Separation
from Service and the Stock Options or SARs granted to the
Executive pursuant to the Company’s 2004 LTIP or any
successor plan shall become exercisable upon the date of the
Executive’s Separation from Service for all such Stock
Options and SARs if not then exercisable in
full. The foregoing benefit will be provided in
addition to any disability or other benefits provided under
the Company’s benefit plans in which the Executive
participates. The purpose and intent of the
preceding two sentences is to ensure that the Executive
receives a combination of insurance benefits and Company
payments following the Disability Termination Date equal to
100% of his then-applicable Base Salary for such one-year
period. The Company shall also pay to the Executive
a lump sum amount equivalent to the Executive’s Target
Bonus Amount then in effect, which amount shall be paid in one
lump sum within forty-five days following the
Executive’s Separation from Service, provided that the
Executive or an individual duly authorized to execute legal
documents on the Executive’s behalf executes and does
not revoke within any applicable revocation period the release
described in Section 4(j)(ii)(B). Otherwise, after
the Disability Termination Date, except in accordance with
the
Company’s
benefit programs and other plans then in effect, the Executive
shall not be entitled to any compensation or benefits from the
Company or hereunder.
“Disability,”
for purposes of this Agreement, shall mean the
Executive’s incapacity due to physical or mental illness
causing the Executive’s complete and full-time absence
from the Executive’s duties, as defined in Paragraph 2,
for either a consecutive period of more than six months or at
least 180 days within any 270-day period. Any
determination of the Executive’s Disability made in good
faith by the Company shall be conclusive and binding on the
Executive, unless within 10 days after written notice to the
Executive of such determination, the Executive elects by
written notice to the Company to challenge such determination,
in which case the determination of Disability shall be made by
arbitration pursuant to Paragraph 11 below. Except
as provided in this Subsection 4(b), the Company shall not be
required to provide the Executive any compensation or benefits
after the determination by the Company unless the arbitration
results in a determination that the Executive is not disabled,
in which case the Company shall pay to the Executive within 10
days after such arbitration decision all compensation due
through the date of such arbitration decision. The
Company shall not be deemed to have breached its obligations
related to such compensation and benefits under this Agreement
if it makes such payment within 10 days after such arbitration
decision. The “Disability Termination
Date” shall be the date on which the Company makes such
determination of the Executive’s Disability unless the
arbitration, if any, results in a determination that the
Executive is not disabled. The Executive
shall have a legally binding right to the disability severance
benefit as of the Disability Termination
Date.
(c)
Termination
by the Company for Due Cause .
Nothing herein shall prevent the Company from
terminating the Executive’s employment at any time for
“Due Cause” (as hereinafter
defined). The Executive shall continue to receive
the Base Salary provided for in this Agreement only through
the period ending with the date of such
termination. Any rights and benefits the Executive
may have under employee benefit plans and programs of the
Company shall be determined in accordance with the terms of
such plans and programs. Except as provided in the
two immediately preceding sentences, after termination of
employment for Due Cause, the Executive shall not be entitled
to any compensation or benefits from the Company or
hereunder.
For purposes of this
Agreement, “Due Cause” shall mean:
(i)
a material breach by the Executive of the Executive’s
duties and obligations under this Agreement or violation in
any material respect of any code or standard of conduct
generally applicable to the officers of the Company,
including, but not limited to, the Company’s Code of
Ethics and Business Conduct, (1) which is willful and
deliberate on the Executive’s part, (2) which is not due
to the Disability of the Executive (within the meaning of
Subsection 4(b) but without regard to the requirement that it
continue for more than six months or 180 days within a 270-day
period), (3) which is committed in bad faith or without
reasonable belief that such breach is in the best interests of
the Company, and (4) which, if curable, has not been cured by
the Executive within 15 business days after the
Executive’s receipt of notice to the Executive
specifying the nature of such violations;
(ii)
a material violation by the Executive of the Executive’s
Loyalty Obligations as provided in Paragraph 19;
(iii)
conviction of a crime of
moral turpitude or a felony involving fraud, breach of trust,
or misappropriation;
(iv) the
Executive’s willfully engaging in bad faith conduct that
is demonstrably and materially injurious to the Company,
monetarily or otherwise; or
(v)
a determination by the Company that the Executive is in
material violation of the Company’s Substance Abuse
Policy.
(d) Termination
by the Company Other than for Due Cause, Death or
Disability . The
foregoing notwithstanding, the Company may terminate the
Executive’s employment for any or no reason, as it may
deem appropriate in its sole discretion and judgment;
provided
, however
, that in the event such termination is not due to Death,
Disability or Due Cause, the Executive shall (i) be entitled
to a Termination Payment as hereinafter defined and (ii) be
sent written notice stating the termination is not due to
Death, Disability or Due Cause. In the event of
such termination by the Company, the Executive shall receive
certain payments and benefits as set forth in this Subsection
4(d).
(i) Termination
Payment . If
the Company terminates the Executive’s employment for
other than Death, Disability or Due Cause prior to the
expiration of the Employment Term, the term
“Termination Payment” shall mean a cash payment
equal to the sum of:
(A)
an amount equal to the Executive’s annual Base Salary,
as in effect immediately prior to such termination (unless the
termination is in connection with an action that would have
enabled the Executive to terminate his employment for Good
Reason pursuant to Section 4(e)(i)(A), in which case, it shall
be the Base Salary in effect prior to any such material
diminution of the Base Salary) (the “Termination Salary
Payment”),
(B) an amount equal to the
Executive’s Target Bonus Amount, as in effect
immediately prior to such termination (unless the termination
is in connection with an action that would have enabled the
Executive to terminate his employment for Good Reason
pursuant to Sections 4(e)(i)(A) or (E), in which case, it
shall be the Target Bonus in effect prior to any such
material diminution of the Target Bonus or termination of the
bonus plan, respectively) (the “Termination Bonus
Payment”), and
(C) a lump sum payment
equal to the prorated value of the Executive’s annual
coverage under the Company’s Executive Choice Program
(the “Termination ECP Payment”).
(ii) Outplacement
Services . The
Company shall make outplacement services available to the
Executive, at a cost to the Company not to exceed
$12,000,
for
a period of time not to exceed 12 months following the date of
termination pursuant to the Company’s executive
outplacement program with the Company’s selected vendor,
to include consulting, search support and administrative
services.
(iii) Medical
Coverage . In
addition, the Company shall provide the Executive with
medical, dental and vision insurance benefits (which may also
cover, if applicable, the Executive’s spouse and
eligible dependents) for three hundred sixty-five (365) days
from the date of the Executive’s termination
of employment or until such time as the Executive obtains
other group health coverage, whichever occurs
first. In order to trigger the Company’s
obligation to provide health care continuation benefits, the
Executive must elect continuation coverage pursuant to the
Consolidation Omnibus Budget Act of 1985, as amended
(“COBRA”), upon such eligibility. The
Company’s obligation shall be satisfied solely through
the payment of the Executive’s COBRA premiums during
the 365-day period, but only to the extent that such premiums
exceed the amount that would otherwise have been payable by
the Executive for coverage of the Executive and the
Executive’s eligible dependents that were covered by
the Company’s medical, dental, and vision insurance
programs at the time of the Executive’s termination of
employment had the Executive continued to be employed by the
Company.
(iv) Timing
of Payments . The
Termination Salary Payment, Termination Bonus Payment and
Termination ECP Payment shall be paid in one lump sum within
forty-five days following the date of the Executive’s
Separation From Service, provided that the Executive executes
and does not revoke within any applicable revocation period
the release described in Section 4(j)(ii)(B)
below.
(v) Entire
Obligation .
Except as provided in Subsection 4(i) of this Agreement,
following the Executive’s termination of employment
under this Subsection 4(d), the Executive will have no
further obligation to the Company pursuant to this Agreement
(other than under Sections 6, 7, 8, 9, 10, 11, 17, 19, 20 (to
the extent such policies, guidelines and codes by their terms
apply post-employment) and 21). Except for the
Termination Payment and as otherwise provided in accordance
with the terms of the Company’s benefit programs and
plans then in effect or as expressly required under
applicable law, after termination by the Company of
employment for other than Death, Disability or Due Cause, the
Executive shall not be entitled to any other compensation or
benefits from the Company or hereunder.
(e)
Resignation from Employment by the Company for Good Reason
. Termination by the Company without Due
Cause under Subsection 4(d) shall be deemed to have occurred if the
Executive elects to terminate the Executive’s employment for
Good Reason.
(i)
Good
Reason. For purposes of this Agreement,
“Good Reason” shall mean:
(A) a material diminution
in the Executive’s “Total Direct
Compensation,” which shall mean the value of the total
of the Executive’s Base Salary, Target Bonus
opportunity, and annual equity award taken
together;
(B) a material diminution
in the Executive’s authority, duties, or
responsibilities;
(C) a material diminution
in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to
report;
(D) the
termination of the Advance Auto Parts, Inc. Executive
Incentive Plan without replacement thereof with a similar
plan;
(E) a
material reduction in aggregate benefits available to the
Executive if no similar reduction is made for all other senior
executives of the Company;
(F) the Company’s
requiring the Executive to be based more than 60 miles from
the Company’s office in _______ at which the Executive
was principally employed immediately prior to the date of the
relocation;
(G) delivery by the Company
of a notice discontinuing the automatic extension of the Term
of the Executive’s employment under this Agreement;
or
(H) any other action or
inaction that constitutes a material breach by the Company of
the terms of this Agreement.
(ii)
N otice of
Good Reason Condition.
In order to be considered a resignation for Good
Reason for purposes of this Agreement, the Executive must provide
the Company with written notice and description of the existence of
the Good Reason condition within ninety (90) days of the initial
discovery by the Executive of the existence of said Good Reason
condition and the Company shall have 15 business days to cure such
Good Reason condition.
(iii)
Effective Date of Resignation.
The effective date of the Executive’s
resignation for Good Reason must occur no longer than one year
following the expiration of the cure period set forth in Section
4(e)(ii), above. If Executive has not resigned for Good
Reason effective within one year following the expiration of the
cure period set forth in Section 4(e)(ii), above the Executive
shall be deemed to have waived said Good Reason
condition.
(f)
Termination
by the Company Other Than For Due Cause, Death or Disability
or Resignation from Employment for Good Reason Within Twelve
Months After a Change In Control . If the
Company terminates the Executive’s employment for other
than Death, Disability or Due Cause prior to the expiration of
the Employment Term and within twelve (12) months after a
Change In Control (as defined below), or if the Executive
elects to terminate the Executive’s employment for Good
Reason prior to the expiration of the Employment Term and
within
twelve
(12) months after a Change In Control, then (i) the Executive
shall be entitled to a Change In Control Termination Payment
as hereinafter defined and the Executive shall receive
benefits as defined in Subsections 4(d)(ii) and (iii) above,
and (ii) either the Company or the Executive, as the case may
be, shall provide Notice of Termination pursuant to Subsection
4(j).
(i)
Change In Control Termination Payment . The term
“Change In Control Termination Payment” shall mean a
cash payment equal to the sum of:
(A)
an
amount equal to two times the Executive’s annual Base Salary,
as in effect immediately prior to such termination (unless the
termination is due to Section 4(e)(i)(A), in which case, it shall
be two times the Executive’s annual Base Salary in effect
prior to any such material diminution of the Base Salary) (the
“Change In Control Termination Salary
Payment”),
(B)
an
amount equal to two times the Executive’s Target Bonus
Amount, as in effect immediately prior to such termination (unless
the termination is due to Sections 4(e)(i)(A) or (E), in which
case, it shall be two times the Executive’s Target Bonus in
effect prior to any such material diminution of the Target Bonus or
termination of the bonus plan, respectively) (the “Change In
Control Termination Bonus Payment”), and
(C)
a
lump sum payment equal to the prorated value of the
Executive’s annual coverage under the Company’s
Executive Choice Program (the “Change In Control Termination
ECP Payment”).
(ii)
Timing of Payments . The
Change In Control Termination Salary Payment, the Change In Control
Termination Bonus Payment and the Change In Control Termination ECP
Payment shall be paid in lump sum payments within forty-five days
following the date of the Executive’s Separation From
Service, provided that the Executive executes and does not revoke
within any applicable revocation period the release described in
Section 4(j)(ii)(B) below.
(iii)
Entire
Obligation .
Except as provided in Subsection 4(i) of this Agreement,
following the Executive’s termination of employment
under this Subsection 4(f), the Executive will have no further
obligation to the Company pursuant to this Agreement (other
than under Sections 6, 7, 8, 9, 10, 11, 17, 19, 20 (to the
extent such policies, guidelines and codes by their terms
apply post-employment) and 21). Except for the
Change In Control Termination Payment and as otherwise
provided in accordance with the terms of the Company’s
benefit programs and plans then in effect or as expressly
required under applicable law, within twelve (12) months after
a Change In Control, after termination by the Company of
employment for other than Death, Disability or Due Cause or
after termination by the Executive for Good Reason, the
Executive shall not be entitled to any other compensation or
benefits from the Company or hereunder.
(iv)
Change
In Control . For
purposes of this Agreement, “Change In Control”
shall have the same meaning as set forth in the 2004 LTIP, as
in existence on the date hereof.
(v)
Gross-Up
Payment .
(A)
Anything
in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the
Company, any individual or entity whose actions result in a Change
in Control, or their respective subsidiaries or affiliates to or
for the benefit of the Executive (including any payment or benefits
received in connection with a Change in Control or the Executive's
termination of employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement) (all such
payments and benefits, excluding the Gross-Up Payment (as defined
below), being hereinafter referred to as the "Total Payments") will
be subject to any excise tax imposed under Section 4999 of the
Code (such tax, the "Excise Tax"), the Company shall pay
to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction of
any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up
Payment, and after taking into account the phase out of itemized
deductions and personal exemptions attributable to the Gross-Up
Payment, shall be equal to the Total Payments.
(B)
For
purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i)
all of the Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code) unless, in
the opinion of tax counsel ("Tax Counsel") reasonably acceptable to
the Executive and selected by the accounting firm which was,
immediately prior to the Change in Control, the Company's
independent auditor (the "Auditor") (which Tax Counsel may be the
Company's general counsel), such payments or benefits (in whole or
in part) do not constitute parachute payments, including by reason
of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute
payments" within the meaning of section 280G(b)(l) of the Code
shall be treated as subject to t
