Pep Boys 2008 Annual Report Download - page 60

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B -
4
Bonuses under the Plan are the exclusive means of providing incentive compensation for Eligible Employees, it being
expressly understood and agreed that the Compensation Committee has the authority to recommend to the Board of
Directors payments to any of the Eligible Employees, in cash or otherwise, based on performance measures or
otherwise, other than Bonuses under this Plan to Participants.
8. Special Rules for Qualified Performance –Based Compensation
(a) The maximum amount for a Bonus designated as “qualified performance-based compensation”
under Code section 162(m) payable to a Participant for any Fiscal Year shall not exceed three million dollars
($3,000,000).
(b) Notwithstanding anything to the contrary set forth in this Plan, the Compensation Committee shall
establish the Applicable Performance Measures for Bonuses designated as “qualified performance-based
compensation” under Code section 162(m) no later than the earliest to occur of (i) the ninetieth (90th) day
following the beginning of the Award Period or (ii) the date on which 25% of the Award Period has been
completed, or (iii) such other date as may be required under applicable regulations under Code section 162(m).
Such Applicable Performance Measures shall be set forth in the minutes of the Compensation Committee.
(c) Any Bonus payable to a Participant that is designated as “qualified performance-based
compensation” under Code section 162(m) shall be based on Applicable Performance Measures that satisfy the
requirements for “qualified performance-based compensation” under Code section 162(m), including the
requirement that the achievement of the Applicable Performance Measures be substantially uncertain at the time
they are established and that the Applicable Performance Measures be established in such a way that a third party
with knowledge of the relevant facts could determine whether and to what extent the Applicable Performance
Measures have been met. To the extent that any Bonus is designated as “qualified performance-based
compensation” under Code section 162(m), no such Bonus may be made as an alternative to any other award that is
not designated as “qualified performance based compensation” but instead must be separate and apart from all other
awards made. To the extent a Bonus is designated as “qualified performance-based compensation,” the
Compensation Committee is authorized to reduce such Bonus for any Award Period based upon its assessment of
personal performance or other factors, but may not increase the Bonus that would otherwise be payable to the
Participant. In no event shall a reduction to one Participant’s Bonus result in an increase to a Bonus designated as
“qualified performance based compensation” under Code section 162(m).
(d) If a Bonus to which a Participant may become entitled is designated as “qualified performance-
based compensation” under Code section 162(m), the Compensation Committee shall certify in writing prior to
payment of such Bonus that the Applicable Performance Measures were in fact achieved. Any such certification by
the Compensation Committee shall be set forth in its minutes.
10. Payment of Bonuses. Bonuses shall be paid in cash or otherwise deferred by the Participant (as permitted by
the Company and consistent with Code section 409A) within ninety (90) days after the end of the Award Period to
which such Bonus relates.
11. Termination of Employment.
(a) If a Participant's employment with the Company has terminated during an Award Period, for any
reason whatsoever, with or without cause, then the Participant may not receive a Bonus for such Award Period, except
as otherwise provided in Paragraph 11(b) below or in a separate written agreement between the Company and the
Participant.
(b) If during an Award Period, a Participant dies; becomes disabled; or retires on or after his Early
Retirement Date (as defined in the Company's defined benefit pension plan), such Participant (or the Participant's
designated beneficiary) shall be paid, within ninety (90) days after the end of the Award Period, an amount equal to the
amount which would have been paid if the Participant had been employed by the Company throughout the entire Award
Period, multiplied by a fraction, the numerator of which is the number of days during the Award Period that the
Participant was employed by the Company and the denominator of which is the number of days in the Award Period.