Advance Auto Parts 2012 Annual Report Download - page 76

F-31
Postretirement Plan
The Company provides certain health and life insurance benefits for eligible retired Team Members through a
postretirement plan. Plan participants include those Team Members who were either already retired or eligible for retirement as
of January 1, 2005. Plan benefits are subject to deductibles, co-payment provisions and other limitations. The plan has no assets
and is funded on a cash basis as benefits are paid. The accrued postretirement benefit obligation, included in Accrued expenses
and Other long-term liabilities in the accompanying consolidated balance sheets, was $5,223 and $5,925 as of December 29,
2012 and December 31, 2011, respectively.
18. Share-Based Compensation:
Overview
The Company grants share-based compensation awards to its Team Members and members of its Board of Directors as
provided for under the Company's 2004 Long-Term Incentive Plan, or LTIP. In Fiscal 2012, the Company switched from
granting restricted stock to granting restricted stock units ("RSUs"). The Company currently grants share-based compensation
in the form of stock appreciation rights ("SARs"), RSUs and deferred stock units ("DSUs"). The Company also has outstanding
restricted stock granted prior to the transition to RSUs and outstanding stock options granted prior to Fiscal 2007.
General Terms of Awards
The Company's grants of SARs, RSUs and historically, restricted stock awards, generally include both a time-service
portion and a performance-based portion, which collectively represent the target award.
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 RSUs and restricted stock are entitled to receive dividends or in the case of RSUs,
dividend equivalents, while holders of restricted stock are also entitled to voting rights. All RSU and restricted stock grants
generally vest over a three-year period in equal annual installments beginning on the first anniversary of the grant date. For
restricted stock, the shares are issued upon grant, but are restricted until they vest and cannot be sold by the recipient until the
restriction has lapsed at the end of the respective vesting period.
Performance-Based Awards
Each performance award may vest following a three-year period subject to the Company's achievement of certain financial
goals. The performance RSUs and 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 75% to 200% of the
target award (50% to 200% for certain officers).
ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 29, 2012, December 31, 2011 and January 1, 2011
(in thousands, except per share data)