Pep Boys 2008 Annual Report Download - page 54

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(i) individuals who, on the date hereof, constitute the Board of Directors (the "Incumbent
Directors") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person
becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the Board of Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially
elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect
to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any
person other than the Board of Directors shall be deemed to be an Incumbent Director;
(ii) any "Person" (as such term is defined in Section 3(a)(9) of the Securities Exchange Act
of 1934 (the "Exchange Act") and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's then outstanding securities
eligible to vote for the election of the Board of Directors (the "Voting Securities"); provided, however, that the
event described in this paragraph (b) shall not be deemed to be a Change of Control by virtue of any of the
following acquisitions: (i) by the Company or any subsidiary of the Company in which the Company owns more
than 50% of the combined voting power of such entity (a "Subsidiary"), (ii) by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary, (iii) by any underwriter temporarily
holding the Company's Voting Securities pursuant to an offering of such Voting Securities, or (iv) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (c));
(iii) a merger, consolidation, statutory share exchange or similar form of corporate transaction
is consummated involving the Company or any of its Subsidiaries that requires the approval of the Company's
stockholders, whether for such transaction or the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business Combination: (i) more than 50% of the total voting
power of (A) the corporation resulting from such Business Combination (the "Surviving Corporation"), or (B) if
applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the "Parent Corporation"), is represented by the
Company's Voting Securities that were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which the Company's Voting Securities were converted pursuant to such
Business Combination), and such voting power among the holders thereof is in substantially the same proportion as
the voting power of the Company's Voting Securities among the holders thereof immediately prior to the Business
Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of 20%
or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (iii) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the
Board of Directors’ approval of the execution of the initial agreement providing for such Business Combination
(any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to
be a "Non-Qualifying Transaction");
(iv) a sale of all or substantially all of the Company's assets is consummated;
(v) the stockholders of the Company approve a plan of complete liquidation or dissolution of
the Company; or
(vi) there occur such other events as the Board of Directors may designate.
Notwithstanding the foregoing, a Change of Control of the Company shall not be deemed to occur solely because
any person acquires beneficial ownership of more than 20% of the Company's Voting Securities as a result of the
acquisition of the Company's Voting Securities by the Company which reduces the number of the Company's
Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the
beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company