Pep Boys 2010 Annual Report Download - page 48

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A-2
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,
(B) 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 (C) 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 (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or
(iv) a sale of all or substantially all of the Company’s assets is consummated.
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
Voting Securities beneficially owned by such person, a Change of Control of the Company shall then occur.
(d) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(e) “Common Stock” shall mean the common stock of the Company.
(f) “Company” shall mean The Pep Boys – Manny, Moe & Jack.
(g) “Company Affiliate” shall mean any parent or subsidiary corporation of the Company (as determined
in accordance with Code section 424), whether now existing or subsequently established.
(h) “Cash Compensation” shall mean (i) the regular base salary paid to a Participant by one or more
Participating Employers during the Participant’s period of participation in one or more Offering Periods under the
Plan plus (ii) any overtime payments, bonuses, commissions, profit-sharing distributions and other cash incentive-
type payments received during such period. Such Cash Compensation shall be calculated before deduction of (A)
any income or employment tax withholdings or (B) any contributions made by the Participant to any Code section
401(k) salary deferral plan, any Code section 125 cafeteria benefit program or any Code section 132(f)(4)
transportation fringe benefit program now or hereafter established by the Company or any Company Affiliate.
However, Cash Compensation shall not include any contributions made by the Company or any Company Affiliate
on the Participant’s behalf to any employee benefit or welfare plan now or hereafter established (other than Code
section 401(k), Code section 125, or Code section 132(f)(4) contributions deducted from such Cash Compensation).
(i) “Effective Date” shall mean July 1, 2011.
(j) “Eligible Employee” shall mean any person who is employed by a Participating Employer: (i) on a
basis under which he or she receives earnings that are considered wages under Code section 3401(a) and (ii) who has
completed at least ninety (90) days of service with the Participating Employer (including any periods of service with
any predecessor business unit acquired by the Participating Employer (whether by asset purchase, stock purchase,
merger or otherwise)).
(k) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.