Pep Boys 2013 Annual Report Download - page 42

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designated as qualified performance-based compensation under the Bonus Plan that is payable to a participant for
any fiscal year is $3,000,000.
Performance Goals. For any bonus under the Bonus Plan designated to qualify as qualified performance-based
compensation under Section 162(m) of the Code, the performance goals will be based on pre-established, objective
business criteria and will be set forth in writing by the Compensation Committee within the period required under
Section 162(m) of the Code. The relevant business criteria will be one or more of the following: (1) return on total
shareholder equity; (2) earnings per share of Pep Boys Stock; (3) net income (before or after taxes); (4) earnings
before interest, taxes, depreciation and amortization; (5) sales or revenue targets; (6) return on assets, capital or
investment; (7) cash flow; (8) market share; (9) cost reduction goals; (10) budget comparisons; (11) implementation
or completion of projects or processes strategic or critical to our business operation; (12) measures of customer
satisfaction; and/or (13) any combination of, or a specified increase in, any of the foregoing. The performance goals
established by the Compensation Committee may be based upon the attainment of specified levels of our
performance under one or more of the measures described above relative to the performance of other entities and
may also be based on the performance of one of our business units or divisions or any subsidiary. The
Compensation Committee will determine the objective business criteria upon which the performance goals are based
and the weight to be accorded each.
In addition, the performance goals for bonuses that are intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code will satisfy the other requirements of “qualified performance-based
compensation” of Section 162(m) of the Code, including the requirement that the achievement of the performance
goals be substantially uncertain at the time they were established and that the goals 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.
For any bonus under the Bonus Plan not designated to qualify as qualified performance-based compensation
under Section 162(m) of the Code, the performance goals may be based on one or more of the objective business
criteria listed above and/or such other individual or small team performance measures or goals, whether quantitative
or qualitative, as may be determined by the Compensation Committee in its sole discretion.
The Compensation Committee may, at any time prior to the final determination of the bonus amounts payable,
change a participant’s minimum, maximum and/or target bonus amounts or assign a different minimum, maximum
and/or target bonus amount to reflect a change in the participant’s level of responsibility or position during the
performance period; provided, however, that no such changes may be made with respect to any bonus designated as
qualified performance-based compensation for purposes of Section 162(m) of the Code under the Bonus Plan.
Earning Bonuses. Generally, a participant earns a bonus for a performance period based on the level of
achievement of the performance goals established by the Compensation Committee for that period. Except for
bonuses designated as qualified performance-based compensation under Section 162(m) of the Code, bonus amounts
may be increased or decreased at the discretion of the Compensation Committee. Bonuses designated as qualified
performance-based compensation for purposes of Section 162(m) of the Code may only be decreased at the
discretion of the Compensation Committee; however, in no event will a reduction in one participant’s bonus result in
an increase to another bonus as designated qualified performance-based compensation.
Determination and Payment of Bonuses. Within sixty days after the end of the performance period, the
performance goals will be measured and the resulting bonus amounts for participants will be approved by the
Compensation Committee. If a bonus is designated as qualified performance-based compensation under Section
162(m) of the Code, the Compensation Committee will certify in writing prior to payment of such bonus that the
applicable performance measures were in fact achieved.
Upon certification of the achievement of the applicable performance goals by the Compensation Committee, a
participant’s bonus will normally be payable in a single lump sum cash payment as soon as practicable following the
close of the performance period, but not later than ninety days after the close of the performance period; provided,