Pep Boys 2008 Annual Report Download - page 18

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Certain Relationships and Related Transactions
The Audit Committee, which is comprised of independent directors, has established a written Related Party
Transaction Policy. Such policy provides that to help identify related-party transactions and relationships (i) all
transactions between the Company and another party are reviewed by the Company’s legal and finance departments
prior to the execution of definitive transaction documents and (ii) each director and executive officer completes a
questionnaire that requires the disclosure of any transaction or relationship that the person, or any member of his or
her immediate family, has or will have with the Company. The full Board of Directors reviews and approves,
ratifies or rejects any transactions and relationships of the nature that would be required to be disclosed under Item
404 of Regulation S-K. In reviewing any such related-party transaction or relationship, the Board considers such
information as it deems important to determine whether the transaction is on reasonable and competitive terms and
is fair to the Company. No such relationships or transactions of a nature required to be disclosed under Item 404 of
Regulation S-K currently exist.
Report of the Audit Committee of the Board of Directors
The Audit Committee reviews Pep Boys’ financial statements and makes recommendations to the full Board of
Directors on matters concerning the audits of Pep Boys’ books and records. Each committee member is
“independent” as defined by the listing standards of the New York Stock Exchange. Ms. Scaccetti (chair), Ms.
Atkins, Mr. Hotz, Mr. Reid and Mr. Williams are the current members of the Audit Committee. Both Ms. Scaccetti
and Ms. Atkins have been designated by the full Board as Audit Committee Financial Experts as defined by SEC
regulations. A written charter adopted by the full Board governs the activities of the Audit Committee. The charter
is reviewed, and when necessary revised, annually.
Management has primary responsibility for Pep Boys’ internal accounting controls and financial reporting
process. The independent registered public accounting firm is responsible for performing an independent audit of
Pep Boys’ consolidated financial statements and internal control over financial reporting in accordance with
standards of the Public Company Accounting Oversight Board (United States) and to issue a report as a result of
such audit and to issue an attestation of management’s assertion of Pep Boys internal control over financial
reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee
serves as a focal point for communication among the Board of Directors, the independent registered public
accounting firm, management and Pep Boys’ internal audit function, as the respective duties of such groups, or their
constituent members, relate to Pep Boys’ financial accounting and reporting and to its internal controls.
In this context, the Audit Committee reviewed and discussed the audited consolidated financial statements with
management and the independent registered public accounting firm. These discussions included the matters
required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). The
Audit Committee also reviewed and discussed with management, the internal auditors and the independent
registered public accounting firm, management’s report, and the independent registered public accounting firm’s
attestation, on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of
2002.
The Audit Committee also discussed with the independent registered public accounting firm its independence
from Pep Boys and its management, including the written disclosures submitted to the Audit Committee by the
independent registered public accounting firm as required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees).
Based upon the discussions and reviews referred to above, the Audit Committee recommended that the Board of
Directors include the audited consolidated financial statements and management’s report on internal control over
financial reporting in Pep Boys’ Annual Report on Form 10-K for the fiscal year ended January 31, 2009 filed with
the SEC.
This report is submitted by: Jane Scaccetti; M. Shân Atkins; Robert H. Hotz; Irvin D. Reid; and James A.
Williams.