Pep Boys 2013 Annual Report Download - page 48

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units. The Compensation Committee will determine the restriction period for awards of restricted stock and phantom
units, provided that no such awards will vest prior to one year from the date of grant of such award. Unless the
Compensation Committee determines otherwise, during the period from the date a restricted stock grant is awarded
to the date the restriction period for such award expires, the grantee will be entitled to all rights of a shareholder,
including the right to vote the shares of Pep Boys Stock and to receive dividends and other distributions declared on
such shares from time to time, as distributed. With respect to grants of phantom units, the grantee will not have any
rights as a shareholder until such date the phantom units are redeemed as shares of Pep Boys Stock; however, subject
to the determination of the Compensation Committee, the grantee may receive dividend equivalents on such units as
if they were shares of Pep Boys Stock and the equivalent of other distributions declared on the shares of Pep Boys
Stock from time to time. Dividend equivalents may be accrued as a cash obligation, or may be converted to
additional phantom units for the grantee, as determined by the Compensation Committee. With respect to any
dividends or distributions on performance-based restricted stock (or equivalents of such in connection with phantom
units), the Compensation Committee shall determine whether such dividends and distributions will be withheld by us
and whether they will be subject to the same vesting and forfeiture provisions applicable to the award of restricted
stock (or phantom units). The Compensation Committee shall determine whether interest shall be paid on such
amounts withheld, the rate of any such interest, and the other terms applicable to such withheld amounts. Dividend
equivalents may be paid out in cash or Pep Boys Stock, or a combination of the two, at the Compensation
Committee’s election.
The Compensation Committee may permit or require a grantee to defer receipt of the payment of the delivery of
shares that would otherwise be due to the grantee in connection with any award of phantom units, subject to the
applicable requirements of Section 409A of the Code.
Qualified Performance-Based Compensation. The Compensation Committee may impose and specify objective
performance goals that must be met with respect to grants of restricted stock, phantom units and dividend equivalents
issued with respect to phantom units intended to qualify as performance-based compensation under Section 162(m)
of the Code to anyone eligible to participate in the Stock Incentive Plan. The Compensation Committee will
determine the performance periods for the performance goals. Forfeiture of all or part of any such grant will occur if
the performance goals are not met, as determined by the Compensation Committee. Similarly, any dividends or
distributions on performance-based restricted stock (or equivalents of such in connection with phantom units), will
be subject to the same vesting and forfeiture provisions applicable to the award of restricted stock (or phantom
units). Prior to, or soon after the beginning of, the performance period, the Compensation Committee will establish
in writing the performance goals that must be met, the applicable performance periods, the amounts to be paid if the
performance goals are met and any other conditions. Awards designated as qualified performance-based
compensation for purposes of Section 162(m) of the Code may be decreased at the discretion of the Compensation
Committee, but may not be increased.
The performance goals, to the extent designed to meet the requirements of Section 162(m) of the Code, will be
based on one or more of the following measures: return on total stockholder equity; earnings per share of Pep Boys
Stock; net income (before or after taxes); earnings before interest, taxes, depreciation and amortization; sales or
revenue targets; return on assets, capital or investment; cash flow; market share; cost reduction goals; budget
comparisons; implementation or completion of projects or processes strategic or critical to our business operation;
measures of customer satisfaction; and/or 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 and may also be based on the performance of
one of our units or divisions or any of our subsidiaries, or measured comparing the performance of any of the
foregoing with other companies based on one or more of the measures described above, or any combination of the
foregoing. The Compensation Committee will determine the objective business criteria upon which the performance
goals are based and the weight to be accorded such goals. Performance goals need not be uniform among
participants.
Automatic Grants to Non-Employee Directors. Unless otherwise determined by the Compensation Committee,
awards will be automatically granted, without further action by the Compensation Committee, to each non-employee
director on the Board of Directors, (i) upon their initial election to the Board of Directors and (ii) annually thereafter,