Pep Boys 2013 Annual Report Download - page 44

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39
To the extent bonuses under the Bonus Plan satisfy the requirements for qualified performance-based
compensation under Section 162(m) or are otherwise deductible as compensation, we will be entitled to a
corresponding tax deduction in the year the bonus is paid.
Tax Treatment of Bonuses. The participants will recognize ordinary compensation income with respect to any
bonus payable under the Bonus Plan at the time such bonus is paid. Accordingly, if a participant elects to defer
receipt of one or more bonuses under our Deferred Compensation Plan, he or she will not recognize ordinary
compensation income until such time as those amounts are subsequently distributed. In general, we will be entitled
to a corresponding federal income tax deduction at the time the participant recognizes ordinary compensation
income.
Tax Withholding. We will deduct from all bonuses, any federal, state or local taxes required by law to be
withheld with respect thereto.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
"FOR"
THE RE-APPROVAL OF OUR ANNUAL INCENTIVE BONUS PLAN
TO ALLOW CERTAIN AMOUNTS PAID UNDER THE PLAN TO CONTINUE TO BE DEDUCTIBLE
UNDER SECTION 162(m) OF THE INTERNAL REVENUE CODE