Pep Boys 2013 Annual Report Download - page 49

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on the date of our Annual Meeting. On the date of each Annual Meeting, (i) each non-employee director (other than
the Chairman of the Board or Lead Director) will receive $80,000 in awards and (ii) the Chairman of the Board or
Lead Director, as the case may be, will receive $92,500 in awards, in such form as determined by the Compensation
Committee. On a non-employee director’s initial election to the Board of Directors, such non-employee director will
receive a pro rata portion of the annual award based on a fraction, the numerator of which is the number of days
remaining until the next scheduled Annual Meeting and the denominator of which is 365. Fractional awards will be
rounded up to the nearest whole award. These automatic awards will vest and shall be subject to such terms and
conditions as determined by the Committee. Currently, these awards vest in cumulative installments of one-third on
each of the first three anniversaries of the date of grant, but the Compensation Committee retains the discretion to
change the vesting period for future grants. The Compensation Committee has the discretion to make additional
awards under the Stock Incentive Plan to non-employee directors.
Adjustment Provisions. If there is any change in the number or kind of shares of Pep Boys Stock outstanding (i)
by reason of a stock dividend, stock split, spin-off, recapitalization or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation, (iii) by reason of a reclassification or change in par value or (iv)
by reason of any other extraordinary or unusual event affecting the outstanding shares of Pep Boys Stock as a class
without our receipt of consideration, or if the value of shares of Pep Boys Stock is substantially reduced as a result of
a spin-off or our payment of an extraordinary dividend or distribution, the aggregate number of shares of Pep Boys
Stock as to which awards may be granted under the Stock Incentive Plan, the maximum number of shares of Pep
Boys Stock for which awards may be granted to any individual during any calendar year, the kind and number of
shares of Pep Boys Stock covered by each outstanding award and the exercise price for a stock option will be
equitably adjusted by the Compensation Committee, in such manner as the Compensation Committee deems
appropriate, to reflect any increase or decrease in the number of, or change in the kind or value of, the issued shares
of Pep Boys Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under the
Stock Incentive Plan and such outstanding awards; provided, that any fractional shares resulting from such
adjustment will be eliminated.
No Repricing of Options Without Shareholder Approval. Without prior shareholder approval, the Board of
Directors will not reprice stock options, including, but not limited to, cancelling a stock option for cash (other than in
connection with a change of control) when the consideration to be paid for a stock option exceeds the fair market
value of Pep Boys Stock.
Change of Control. With respect to any award granted on or after August 3, 2012, upon a change of control (as
defined in the Stock Incentive Plan and described below) (i) unless such award is assumed, substituted or replaced by
the surviving corporation or other successor to our business with an award of equivalent value, such award shall
become immediately vested (at target level with respect to performance-based awards) and exercisable as to 100% of
the shares of Pep Boys Stock subject thereto and (ii) the performance criteria of any performance-based award
assumed, substituted or replaced by the surviving corporation or other successor to our business with an award of
equivalent value shall be deemed to have been achieved at target level; provided that such award shall continue to be
subject to time-based vesting equal to the remaining performance period of the original award. Such acceleration,
assumption, substitution, replacement and/or modification shall take place as of the date of the change of control.
A change of control includes certain mergers or consolidations involving us or a subsidiary as a result of which
the shares that were outstanding before the transaction cease to constitute more than 50% of the shares outstanding
after the transaction, a sale of all or substantially all of our assets, or the shareholders approve of a plan of complete
liquidation or dissolution.
Amendment and Termination of the Stock Incentive Plan. The Board of Directors may amend the Stock
Incentive Plan from time to time as it may deem advisable, subject to shareholder approval if required to comply
with the Code or other applicable laws, or to comply with the requirements of the New York Stock Exchange. If the
shareholders approve the Stock Incentive Plan, no grants may be issued under the Stock Incentive Plan after
December 31, 2019. If the shareholders do not approve the Stock Incentive Plan, the Current Plan will remain in
effect, but no grants may be issued under the Current Plan after December 31, 2014, and awards granted prior to the
expiration of the Current Plan will remain in effect for the periods specified in their award agreements.