Pep Boys 2013 Annual Report Download - page 28

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23
In order to keep our executive compensation program competitive, we also maintain a Supplemental Executive
Retirement Plan, or SERP, known as our Account Plan. The Account Plan provides fixed annual contributions to a
retirement account based upon the participant’s age and then current compensation in accordance with the following
schedule:
If the Participant is…
Annual contribution as a
percentage of cash
compensation (salary +
short-term cash
incentive)
At least 55 years of age 19%
At least 45 years of age but not more than 54 years of age 16%
At least 40 years of age but not more than 44 years of age 13%
Not more than 39 years of age 10%
Notwithstanding the foregoing, for the first four years of a participant’s employment, the contribution
percentage is limited to 10% of cash compensation.
In fiscal 2013, all named executive officers participated in the Account Plan.
In order to incent the achievement of incremental profitability, all Company contributions to the savings plan
and Account Plan (on account of all associates, including the named executive officers) that would otherwise have
been made during calendar 2013 were conditioned upon the Company’s achievement of a level of pre-tax income in
fiscal 2012 that exceeded 2011’s level. Because this objective was achieved, such calendar 2013 contributions were
made.
Update. As more fully described above, (i) for fiscal 2014, we eliminated the historically made Company
contributions under the Deferred Compensation Plan and (ii) for calendar 2015, we will eliminate the historically
made Company contributions under the Account Plan. In place of such contributions, we will increase the target
percentage of base salary that long-term incentive grants represent.
Health and Welfare Benefits.As one element of a market-competitive compensation package, we also provide
our named executive officers with health and welfare benefits, including medical and dental coverage, life insurance
valued at one times salary, long term disability coverage and, only for those executives hired prior to 2011, an auto
allowance.
Employment Agreements. In 2012, we revised our Change of Control Agreements to eliminate the provision of
any "gross-up" payments, restructure the severance compensation and modify the definition of a change of control,
all in order to reflect current best practices in executive compensation and corporate governance. The purpose of the
Change of Control Agreements is to provide an incentive for our officers to remain in our employment and continue
to focus on the best interests of Pep Boys without regard to any potential loss of employment due to a possible
change of control.
In addition, our Stock Incentive Plan provides that all equity awards issued subsequent to 2012 do not
automatically vest upon the occurrence of a change of control, but rather only following a business combination,
asset sale or liquidation transaction if the surviving company or successor does not assume such awards or convert
them into awards of equivalent value (i.e. we have put in place double trigger vesting).
We have also entered into Non-Competition Agreements with each of our named executive officers in order to
prevent any of them from soliciting our employees or competing with us if they were to leave Pep Boys of their own