Pep Boys 2008 Annual Report Download - page 51

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meaning of Rule 144 under the Act and are subject to restrictions on transfer and (ii) the Company is under no
obligation to register the Shares under the Act or to take any action which would make available to the Optionee
any exemption from such registration, (c) such Shares may not be transferred without compliance with all applicable
federal and state securities laws, and (d) an appropriate legend referring to the foregoing restrictions on transfer and
any other restrictions imposed under the Option Documents may be endorsed on the certificates. Notwithstanding
the above, should the Company be advised by counsel that issuance of Shares should be delayed pending (A)
registration under federal or state securities laws or (B) the receipt of an opinion that an appropriate exemption
therefrom is available, the Company may defer exercise of any Option granted hereunder until either such event in
(A) or (B) has occurred.
(d) Medium of Payment. An Optionee shall pay for Shares subject to an Option (i) in cash, (ii) by
certified check payable to the order of the Company, or (iii) 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. Furthermore, the Committee may provide in an Option Document issued to an employee
(and shall provide in the case of Option Documents issued to Non-management Directors) that payment may be
made all or in part in shares of the Company's Common Stock held by the Optionee for at least six months, subject
to such limitations and prohibitions as the Committee deems appropriate. If payment is made in whole or in part in
shares of the Company's Common Stock, then such Optionee shall deliver to the Company certificates registered in
the name of such Optionee representing such shares of the Company's Common Stock owned by such Optionee,
free of all liens, claims and encumbrances of every kind and having an aggregate Fair Market Value on the date of
delivery that is equal to but not greater than the Option Price of the Shares with respect to which such Option is to
be exercised, accompanied by stock powers duly endorsed in blank by the Optionee. The Committee may impose
from time to time such limitations and prohibitions on the use of shares of the Company's Common Stock to
exercise an Option as it deems appropriate.
(e) Termination of Options. No Option shall be exercisable after the first to occur of the following:
(i) Expiration of the Option term specified in the Option Document, which shall not exceed
(A) ten years from the date of grant, or (B), with respect to ISOs, five years from the date of grant if the Optionee on
the date of grant owns, directly or by attribution under Section 424(d) of the Code, shares possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or of an Affiliate;
(ii) Expiration of sixty (60) days (or such other period determined by the Committee) from
the date the Optionee's employment or service with the Company or its Affiliates terminates for any reason other
than Disability, death or as specified in subsection 8(e)(iv), (v) or (vi) or Section 10, below;
(iii) Expiration of one hundred and eighty (180) days (or such other period determined by the
Committee) from the date the Optionee's employment or service with the Company or its Affiliates terminates due
to the Optionee's Disability or death;
(iv) The date that the employment of an Optionee who is an employee terminates for cause,
as determined by the Committee;
(v) Immediately upon the occurrence of an act or omission by an Optionee who is an
employee which constitutes either (i) the willful breach of his employment agreement with the Company or an
Affiliate, or his engagement in any sort of disloyalty to the Company or an Affiliate, including, without limitation,
fraud, embezzlement, theft, commission of a felony or dishonesty in the course of his employment; or (ii) the
disclosure or misuse by Optionee of trade secrets or confidential information of the Company or an Affiliate. The
employment of such Optionee shall be deemed to have terminated for cause as of the date of such act or omission,
and any Option granted by the Company to said Optionee and held by such Optionee shall, without the requirement
of any notice, terminate as of the date of such act or omission, so long as within 90 days after the Company has
obtained sufficient information as to such act or omission, including investigatory confirmation in proper
circumstances, to make evaluation by the Committee appropriate, there has been a finding by the Committee, after
full consideration of the facts, that there has been an act or omission by the Optionee the nature of which is as set