Pep Boys 2007 Annual Report Download - page 18

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How are candidates identified and evaluated?
Identification. The Nominating and Governance Committee considers all candidates recommended by our
shareholders, directors and senior management on an equal basis. The Nominating and Governance Committee’s
preference is to identify nominees using our own resources, but has the authority to and will engage search firms(s)
as necessary.
Qualifications. The Nominating and Governance Committee evaluates each candidate’s judgment, diversity
(age, gender, ethnicity, etc.) and professional background and experience, as well as, his or her independence from
Pep Boys. Such qualifications are evaluated against our then current requirements, as expressed by the Chief
Executive Officer, and the current make up of the full Board.
Evaluations. Candidates are evaluated on the basis of their resume, third party references, public reputation and
personnel interviews. Before a candidate can be recommended to the full Board, such candidate must, at a
minimum, have been interviewed by each member of the Nominating and Governance Committee and have met, in
person, with at least one member of the Nominating and Governance Committee, the Chairman of the Board and the
Chief Executive Officer.
How are directors compensated?
Base Compensation. Each non-management director (other than the Chairman of the Board) receives an annual
director’s fee of $35,000. Our Chairman of the Board receives an annual director’s fee of $80,000.
Committee Compensation. Directors serving on our standing Board committees also receive the following
annual fees.
Chair Member
Audit $25,000 $15,000
Human Resources $10,000 $ 5,000
Nominating and Governance $10,000 $ 5,000
In addition, members of special committees appointed by the Board receive a one-time fee upon appointment to
such committees of $15,000.
A director may elect to have all or a part of his or her director’s fees deferred. Amounts deferred receive a rate
of return equal to the prime interest rate or the performance of Pep Boys Stock (represented by stock units), as
elected by the director, and are paid at a later date chosen by the director at the time of deferral. A director who is
also an employee of Pep Boys receives no additional compensation for service as a director.
Equity Grants. The Pep Boys 1999 Stock Incentive Plan, or the 1999 Plan, provides for an annual grant of
restricted stock units and options having an aggregate value of $45,000 to non-management directors. Restricted
stock units granted to non-management directors vest in 25% increments over four years commencing on the first
anniversary of the date of grant; provided, however, that the receipt of the shares underlying the restricted stock
units is automatically deferred until termination of service as a director. The stock options granted to non-
management directors are priced at the fair market value of Pep Boys Stock on the date of grant. Twenty percent of
the stock options granted are exercisable immediately and an additional 20% become exercisable on each of the next
four anniversaries of the grant date. The 1999 Plan is administered, interpreted and implemented by the Human
Resources Committee of the Board of Directors.
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