Pep Boys 2009 Annual Report Download - page 36

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The material terms of the 2009 Stock Incentive Plan are summarized below. This summary of the 2009 Stock
Incentive Plan is not intended to be a complete description of the 2009 Stock Incentive Plan and is qualified in its
entirety by the actual text of the 2009 Stock Incentive Plan, which is attached to this Proxy Statement as Exhibit A.
Material Features of the 2009 Stock Incentive Plan
General. The 2009 Stock Incentive Plan provides that awards may be in any of the following forms: (i) incentive
stock options, (ii) nonqualified stock options and (iii) restricted stock (including phantom units convertible into
shares of Pep Boys Stock).
The 2009 Stock Incentive Plan authorizes 6,000,000 shares of Pep Boys Stock for issuance, subject to
adjustments in certain circumstances as described below. If a stock option terminates or expires without having
being fully exercised for any reason, or if any shares of Pep Boys Stock with respect to an award of restricted stock
or phantom units is forfeited for any reason, the shares subject to such award may again be the subject of an award
under the 2009 Stock Incentive Plan.
The 2009 Stock Incentive Plan provides that awards covering no more than 500,000 shares of Pep Boys Stock
may be granted to any individual during any calendar year that the 2009 Stock Incentive Plan is in effect, subject to
adjustment as described below. Participants may not accrue dividend equivalents during any calendar year under the
2009 Stock Incentive Plan in excess of $250,000. Prior to this amendment and restatement of the 2009 Stock
Incentive Plan there was no limit on the value of dividend equivalents that could accrue on phantom units under the
2009 Stock Incentive Plan.
Administration. The 2009 Stock Incentive Plan is currently administered and interpreted by the Compensation
Committee. The Compensation Committee has plenary authority and absolute discretion to (i) determine the key
employees and members of the Board of Directors (including directors who are not employees) to whom and the
times and the prices at which awards will be granted, (ii) determine the type of award to be granted and the number
of shares of Pep Boys Stock subject to such awards, (iii) determine the vesting conditions with respect to awards of
restricted stock and phantom units and the time or times after which stock options will become exercisable, (iv)
determine whether or not stock options are intended to qualify as an incentive stock option, (v) determine the
duration of the restricted period and the restrictions and conditions to be imposed with respect to each award, (vi)
adopt guidelines separate from the 2009 Stock Incentive Plan that set forth the specific terms and conditions for
awards under the 2009 Stock Incentive Plan, and (vii) approve the form and terms and condition of the award
agreements for awards granted under the 2009 Stock Incentive Plan, all subject to the express provisions of the 2009
Stock Incentive Plan. The interpretations and constructions of the Compensation Committee are final, binding and
conclusive on all persons having an interest in the 2009 Stock Incentive Plan or in any award granted under the 2009
Stock Incentive Plan.
Eligibility for Participation. All of our key employees and those of our affiliates are eligible for grants under the
2009 Stock Incentive Plan. Also, all non-employee members of the Board of Directors are eligible to receive grants
under the 2009 Stock Incentive Plan. The Compensation Committee, in its sole discretion, will determine whether
an individual qualifies as a key employee. As of April 9, 2010, approximately 165 employees and nine non-employee
directors were eligible to receive awards under the 2009 Stock Incentive Plan.
Types of Awards
Stock Options
The Compensation Committee may grant stock options intended to qualify as incentive stock options within the
meaning of Section 422 of the Code (“ISOs”) or so-called “nonqualified stock options” that are not so intended to
qualify (“NQSOs”) or any combination of ISOs and NQSOs. Anyone eligible to participate in the 2009 Stock
Incentive Plan may receive a grant of NQSOs. Only our employees and those of our affiliates, which qualify as a
parent or subsidiary corporation under Section 424 of the Code, may receive a grant of ISOs.