Pep Boys 2011 Annual Report Download - page 113

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 29, 2011, January 30, 2010 and January 31, 2009
NOTE 14—EQUITY COMPENSATION PLANS
The Company has a stock-based compensation plan originally approved by the stockholders on
May 21, 1990 under which it has previously granted non-qualified stock options and incentive stock
options to key employees and members of its Board of Directors. There are no awards remaining
available for grant under the 1990 Plan. The Company has a stock-based compensation plan originally
approved by the stockholders on June 2, 1999 under which it has previously granted and may continue
to grant non-qualified stock options, incentive stock options and restricted stock units (‘‘RSUs’’) to key
employees and members of its Board of Directors. On June 24, 2009, the stockholders renamed the
1999 Plan to the 2009 Plan, extended its terms to December 31, 2014 and increased the number of
shares issuable thereunder by 1,500,000. As of January 28, 2012, there were 2,952,304 awards
outstanding and 1,232,934 awards available for grant under the 2009 Plan.
Incentive stock options and non-qualified stock options granted under the 1990 and 2009 plans to
non-officers vest fully on the third anniversary of their grant date and officers vest in equal tranches
over three or four year periods. Generally, all options granted prior to March 3, 2004 carry an
expiration date of ten years and options granted on or after March 3, 2004 carry an expiration date of
seven years. RSUs previously granted to non-officers vest fully on the third anniversary of their grant
date. RSUs previously granted to officers vest in equal tranches over three or four year periods.
The Company has also granted RSUs under the 2009 plan in conjunction with its non-qualified
deferred compensation plan. Under the deferred compensation plan, the first 20% of an officer’s bonus
deferred into the Company’s stock fund is matched by the Company on a one-for-one basis with RSUs
that vest over a three-year period, with one third vesting on each of the first three anniversaries of the
grant date.
The exercise price, term and other conditions applicable to future stock option and RSU grants
under the 2009 plan are generally determined by the Board of Directors; provided that the exercise
price of stock options must be at least 100% of the quoted market price of the common stock on the
grant date. The Company currently satisfies all share requirements resulting from RSU conversions and
option exercises from its treasury stock. The Company believes its treasury share balance at January 28,
2012 is adequate to satisfy such activity during the next twelve-month period.
The following table summarizes the options under the plans:
Fiscal Year 2011
Weighted Average
Shares Exercise Price
Outstanding—beginning of year .................. 1,831,802 $ 8.55
Granted .................................... 265,139 12.30
Exercised ................................... (45,321) 7.13
Forfeited ................................... (10,507) 9.01
Expired .................................... (32,683) 15.01
Outstanding—end of year ....................... 2,008,430 8.97
Vested and expected to vest options—end of year ..... 1,978,204 8.92
Options exercisable—end of year ................. 1,241,128 $ 9.13
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