Advance Auto Parts 2010 Annual Report Download - page 88

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 1, 2011, January 2, 2010 and January 3, 2009
(in thousands, except per share data)
.
F-34
The Company expects plan contributions to completely offset benefits paid. The following table summarizes the
Company's expected benefit payments (net of retiree contributions) to be paid for each of the following fiscal years:
Amount
2011 811$
2012 816
2013 806
2014 819
2015 799
2016-2020 1,956
At January 1, 2011, the net unrealized gain on the Plan consists of an unrealized gain of $3,532 related to prior
service cost and an unrealized net gain of $1,659 related to actuarial gains. Approximately $581 of the unrealized
gain related to prior service cost and $92 related to the actuarial loss are expected to be recognized as a component
of Net periodic postretirement benefit cost in Fiscal 2011. The Company reserves the right to change or terminate
the employee benefits or Plan contributions at any time.
19. Share-Based Compensation:
Overview
The Company grants share-based compensation awards to its employees and members of its Board of Directors
as provided for under the Company’s 2004 Long-Term Incentive Plan, or LTIP. The Company currently grants
share-based compensation in the form of stock appreciation rights, or SARs, restricted stock (considered nonvested
stock under ASC Topic 718) and deferred stock units, or DSUs. The Company also has outstanding stock options
granted prior to Fiscal 2007.
General Terms of Awards
Time Vested Awards
The SARs generally vest over a three-year period in equal annual installments beginning on the first anniversary
of the grant date. All SARs granted are non-qualified, terminate on the seventh anniversary of the grant date and
contain no post-vesting restrictions other than normal trading black-out periods prescribed by the Company’s
corporate governance policies.
During the vesting period, holders of restricted stock are entitled to receive dividends and voting rights. The
shares are restricted until they vest and cannot be sold by the recipient until the restriction has lapsed at the end of
the three-year period. All restricted stock granted generally vests over a three-year period in equal annual
installments beginning on the first anniversary of the grant date.
Performance-Based Awards
Beginning in Fiscal 2008, each grant of share-based compensation is comprised of SARs and restricted stock,
including a 75% time-service portion and 25% performance-based portion which collectively represent the target
award. Each performance award may vest following a three-year period subject to the Company’s achievement of
certain financial goals. The performance restricted stock awards do not have dividend equivalent rights and do not
have voting rights until earned and issued following the end of the applicable performance period. Depending on the
Company’s results during the three-year performance period, the actual number of shares vesting at the end of the
period may range from 0% to 200% of the target shares.