Exhibit 10.38
ADVANCE AUTO PARTS,
INC.
2008 SARS AWARD
AGREEMENT
(STOCK SETTLED)
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Number of Shares
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November 17, 2008
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#
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$25.81
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November 17, 2015
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THIS CERTIFIES THAT Advance Auto
Parts, Inc. (the “Company”) has on the Award Date
specified above granted to
[Executive’s
name]
(“Participant”) Stock
Appreciation Rights (the “SARs”) with respect to the
number of shares of Advance Auto Parts, Inc. Common Stock, $.0001
par value per share (“Stock”), indicated above in the
box labeled “Number of Shares” (the
“Shares”). The initial value of each Share is indicated
above in the box labeled “Grant Price.” The SARs that
this Certificate represents shall vest and become exercisable in
accordance with the vesting schedule, all as set forth in
Section 2 below, and upon vesting shall be fully exercisable
until the Expiration Date. This Award is subject to the terms and
conditions set forth below and in the Advance Auto Parts, Inc. 2004
Long-Term Incentive Plan (the “Plan”). A copy of the
Plan is available upon request. In the event of any conflict
between the terms of the Plan and this Award, the terms of the Plan
shall govern. Any terms not defined herein shall have the meaning
set forth in the Plan.
* * * * *
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1.
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Duration of
SARs . Subject to the
following, these SARs shall expire on the Expiration Date. However,
if your employment or other association with the Company and its
Affiliates ends before that date, these SARs shall expire on
Expiration Date or, if earlier, the date specified in whichever of
the following applies :
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(a)
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If your
employment or other association is terminated on account of
retirement, the time-vested SARs, as defined in Section 2
below, will expire ninety (90) days after the date on which
all of your SARs are exercisable as to all of the SARs. If your
employment or other association is terminated prior to
March 1, 2012, on account of retirement, your performance
SARs, as described in Section 2 below, will expire ninety
(90) days after March 1, 2012. If all of your SARs are
exercisable as of the date of your retirement, your SARs will
expire ninety (90) days after the date your employment or
other association ends on account of retirement. For all purposes
of this Award, “retirement” means termination of
employment or other association upon the attainment of at least age
55 and at least 10 years of service, of which the last three must
be consecutive years with the Company.
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(b)
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If the
termination of your employment or other association is on account
of Disability, your time-vested SARs will expire ninety
(90) days after the date of the termination of your employment
or other association on account of Disability. If your employment
or other association is terminated prior to March 1, 2012, on
account of Disability, your performance-based SARs, as described in
Section 2 below, will expire ninety (90) days after
March 1, 2012. If all of your SARs are exercisable as of the
date of the termination of your employment or other association on
account of Disability, your SARs will expire ninety (90) days
after the date your employment or other association ends. For all
purposes of this Award, “Disability” shall have the
same meaning as that term is defined in your employment agreement
with the Company in effect as of the date of this Award
Agreement.
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(c)
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If the
termination of your employment or other association is on account
of your death, or you die within ninety (90) days of the
termination of your employment or other association (other than
when terminated for cause), your time-vested SARs will expire on
the date that is twelve (12) months after your death. Your
performance-based SARs will expire on the date that is the later of
twelve (12) months after the date of your death or ninety
(90) days after March 1, 2012.
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(d)
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If the
termination of your employment or other association is for cause,
as determined in good faith by the Committee, the date your
employment ends.
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(e)
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In all other
cases, ninety (90) days after your employment or other
association ends.
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Notwithstanding any contrary
provision of this Award, as to any SARs which have not then become
exercisable, the Company may cancel these SARs at any time and
without prior notice, and as to SARs which are then exercisable the
Company may cancel these SARs at any time on ninety (90) days
prior notice to you, in response to actions taken by you that could
be considered detrimental to the Company or any of its Affiliates.
Whether any of your actions could be considered detrimental will be
determined by the Compensation Committee of the Board of Directors
(the “Committee”) consistent with the definition of
Cause as defined in your employment agreement.
The Shares shall be divided into two
portions for vesting:
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(a)
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Time-vested
SARs : Seventy-five
percent (75%) of the number of shares at target level will
vest in equal annual installments on each November 17 over a
consecutive three-year period, with the first installment vesting
on November 17, 2009, until fully vested.
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(b)
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Performance
SARs : Except in the case
that your employment or other association is terminated or there is
a Change in Control prior to March 1, 2012, as set forth
below, the remaining twenty-five percent (25%) of the number
of shares at target level will vest on March 1, 2012,
following certification by the Committee of the performance of the
Company based on the level of the Company’s net operating
profit after taxes (“NOPAT”) less a charge for the
Company’s weighted average cost of capital
(“WACC”), in the aggregate for the 2009 through 2011
fiscal years. If the Company’s performance target is met for
the three-year performance period, the remaining 25 percent
(25%) of the shares will vest and become exercisable on
March 1, 2012. If the Company’s performance meets the
minimum specified performance threshold level but falls below the
target level, a portion of the performance-based grants of SARs
will vest on a pro rata basis. If the Company’s performance
exceeds the target level, you may receive ad
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