THE PEP BOYS -
MANNY, MOE & JACK
ANNUAL INCENTIVE
BONUS PLAN
(as amended and
restated as of June 24, 2009)
The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation
(the "Company"), previously established, effective January 29,
1989, an Annual Incentive Bonus Plan (the "Plan") for the benefit
of officers of the Company who were eligible to participate as
provided therein. The Plan has been amended and restated in its
entirely as follows and approved by the Company's shareholders to
be effective as of June 24, 2009.
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.
" Fiscal Year " shall mean the Fiscal Year of the Company
which ends on the Saturday nearest January 31 in each year.
i.
" Participant " shall have the meaning set forth in
Paragraph 4 hereof.
j.
" 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 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 a Bonus
intended to constitute qualified performance-based compensation
under Code section 162(m), 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 Code section 162(m).
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:
Bonus Level Participant
Group
Tier
I
CEO
Tier
II
Executive Vice Presidents
Tier
III
Senior Vice Presidents
Tier
IV
Vice Presidents
With respect to any Participant who was employed at more than
one of the Bonus Levels during an Award Period, the total Bonus
amount for such Award Period for which such Participant shall be
eligible shall be the sum of prorated Bonus payments corresponding
to the applicable Bonus Levels. Each such prorated Bonus payment
shall equal the amount which would have been paid if the
Participant had been an Eligible Employee at the applicable Bonus
Level 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 employed at such Bonus Level and the
denominator of which is the number of days in the Award Period.
5. Company
Performance Measures .
a.
Under the Plan, for each Award Period the Compensation Committee
will establish minimum, target and maximum perfo
