Pep Boys 2008 Annual Report Download - page 35

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while the grantee is employed by or providing service to us or an affiliate or within a specified period of time after
such termination of employment or service. Unless the Committee determines otherwise or the earlier termination
occurs on account of the term of the stock option, stock options are exercisable (i) 60 days after the grantee’s
termination of employment or service if such termination is for any reason other than on account of disability, death
or cause, (ii) 180 days after the grantee’s termination of employment or service if such termination is on account of
death or disability, or (iii) immediately upon termination of employment or service if such termination is on account
of cause, a willful breach of a grantee’s employment contract, an act of disloyalty to us or one of our affiliates,
disclosure or misuse of trade secrets or confidential information, or, in the case of a non-employee director, certain
intentional acts that are adverse to us or one of our affiliates.
A grantee may exercise a stock option by paying cash, through a certified check payable to us, or by such other
mode of payment as the Committee may approve, including payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board. The Committee may also permit a grantee to
exercise a stock option through payment of shares, subject to certain conditions that the Committee deems
appropriate.
Restricted Stock/Phantom Units
The Committee may grant awards of restricted stock and phantom units to anyone eligible to participate in the
2009 Plan. Awards of restricted stock are grants of shares of Pep Boys Stock that are subject to a vesting condition,
while awards of phantom units are phantom rights that are convertible to an equivalent number of shares of Pep
Boys Stock if certain vesting and other conditions are satisfied. The Committee determines the number of shares of
Pep Boys Stock subject to an award of restricted stock and phantom units. The Committee will determine the
restriction period for awards of restricted stock and phantom units, provided that no such awards will vest prior to
one year from the date of grant of such award. Unless the Committee determines otherwise, during the period from
the date a restricted stock grant is awarded to the date the restriction period for such award expires, the grantee will
be entitled to all rights of a stockholder, including the right to vote the shares of Pep Boys Stock and to receive
dividends and other distributions declared on such shares from time to time, as distributed. With respect to grants of
phantom units, the participant will not have any rights as a stockholder until such date phantom units are redeemed
as shares of Pep Boys Stock; however, subject to the determination of the Committee, may receive dividend
equivalents on such units as if they were shares of Pep Boys Stock and the equivalent of other distributions declared
on the shares of Pep Boys Stock from time to time. The Committee may also determine whether dividends of stock
or other non-cash distributions (or equivalents of such in connection with phantom units) will be subject to vesting
and forfeiture provisions applicable to the award of restricted stock and phantom units.
The Committee may permit or require a grantee to defer receipt of the payment of the delivery of shares that
would otherwise be due to the grantee in connection with any award of phantom units, subject to the applicable
requirements of Section 409A of the Code.
Automatic Grants to Non-Employee Directors. Unless otherwise determined by the Committee, awards will be
automatically granted, without further action by the Committee, to each non-employee director on the Board of
Directors, (i) upon their initial election to the Board of Directors and (ii) annually thereafter, on the date of our
Annual Meeting. On the date of each Annual Meeting, each non-employee director will receive an award with a
value of $45,000 in such form as determined by the Committee, with the value received calculated utilizing the
“RSU Annualized Value” and/or “Option Annualized Value,” each as described below. On a non-employee
director’s initial election to the Board of Directors, such non-employee director will receive a pro rata portion of the
annual award based on a fraction, the numerator of which is the number of days remaining until the next scheduled
Annual Meeting and the denominator of which is 365. Fractional awards will be rounded up to the nearest whole
award. These automatic awards will vest in cumulative installments of one-third on each of the first three
anniversaries of the date of grant. The Committee has the discretion to make additional awards under the 2009 Plan
to non-employee directors. “RSU Annualized Value” means, as of the date an award is granted, the average fair
market value of a share of Pep Boys Stock during the immediately preceding year. “Option Annualized Value”
means, as of the date the award is granted, one-third of the RSU Annualized Value.