Pep Boys 2008 Annual Report Download - page 59

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5. Company Performance Measures.
(a) Under the Plan, for each Award Period the Compensation Committee will establish minimum,
target and maximum performance goals for the Company using one or more of the following business criteria (the
“Company Performance Measures”): (1) return on total stockholder equity; (2) earnings per share of Common
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 the Corporation’s business operations; (12) measures of customer satisfaction; and (13) any combination
of, or a specified increase in, any of the foregoing. Such performance goals may be based upon the attainment of
specified levels of the Company’s 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 any of the Company’s business units or
divisions or any parent or subsidiary. In addition, the Compensation Committee will establish relative weightings
for the respective Company Performance Measures being used.
(b) To the extent applicable, the Compensation Committee, in determining whether and to what extent
a Company Performance Measure has been achieved, shall use the information set forth in the Company’s audited
financial statements.
6. Individual Performance Measures. Under the Plan, for each Award Period the Company will establish
individual or “small team” performance goals for each Participant (the “Individual Performance Measures”);
provided, however, that Individual Performance Measures shall not apply to a Bonus designated as “qualified
performance-based compensation” under Code section 162(m).
7. Establishment of Plan Components.
(a) During the first ninety (90) days of each Award Period (or such other period provided in
Paragraph 9 with respect to Bonuses designated as “qualified performance-based compensation” under Code section
162(m) , the Compensation Committee will establish and approve the following components of the Plan for the
Award Period: (i) the Participants; (ii) the minimum, target and maximum Company performance levels for each
Company Performance Measure being used; (iii) the relative weightings of the respective Company Performance
Measures being used; (iv) the target, minimum and maximum Bonus amounts (each expressed as a percentage of
salary) at each Bonus Level; and (v) the percentages of the Bonus amounts at each of the Bonus Levels which are
attributable to the Company’s performance and the individual Participant’s performance, respectively, during the
Award Period. The Compensation Committee shall set forth the decisions reached on each of the items in this
Paragraph 7(a) in its minutes.
(b) During the first ninety (90) days of each Award Period, the Compensation Committee will review,
approve and set forth in its minutes, the following information for the Award Period, as determined by the
Compensation Committee: (i) the Bonus Levels; (ii) the Participants in each Bonus Level (classified by title of
position held); (iii) the target Bonus amount for each Bonus Level (expressed as a percentage of salary); (iv) the
percentages of the Bonus amounts at each of the Bonus Levels which are attributable to the Company’s
performance and the individual Participant’s performance, respectively, during the Award Period; (v) the Company
Performance Measures for the current Award Period; (vi) the relative weightings of each such Company
Performance Measure; and (vii) the minimum, target and maximum performance levels for each such Company
Performance Measure.
8. Determination of Bonus. Within sixty (60) days after the end of the Award Period, actual performance will be
compared to the predetermined performance levels for both Company Performance Measures and Individual
Performance Measures, and the resulting actual Bonus amounts for Participants will be approved by the Compensation
Committee. Subject to Paragraph 9(c) hereof with respect to any Bonus designated as “qualified performance-based
compensation” under Code section 162(m), the Committee shall have the authority to increase or decrease Bonus
amounts, in its sole discretion, notwithstanding any achievement of the applicable Company Performance Measure and
Individual Performance Measure, as applicable. Nothing in this Paragraph 8 shall be used to create any presumption that