EXECUTION COPY
THE PEP BOYS - MANNY, MOE & JACK
AMENDMENT TO AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
WHEREAS, The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation (the
"Company"), established an Executive Supplemental Pension Plan (hereinafter
referred to as the "Plan") effective January 1, 1982;
WHEREAS, the Company previously amended and completely restated the Plan
effective January 1, 1988, and further amended and restated the Plan effective
on February 13, 1992, March 31, 1995 and March 26, 2002; and
WHEREAS, Section 9.1 of the Plan authorizes the Board of Directors of the
Company to amend the Plan; and
WHEREAS, pursuant to resolutions adopted March 3, 2004, the Board has taken
such actions as are necessary to change the name of the Plan to the "Executive
Supplemental Retirement Plan" and to further amend and restate the Plan with
respect to certain of those individuals who are Eligible Employees of the
Company on such date, to alter the method of delivering benefits for certain
specified Participants and to give others an election as to the manner in which
they are credited with a benefit.
NOW, THEREFORE, the Plan is hereby amended and restated, effective as of
January 31, 2004, as follows:
ARTICLE I
Definitions
1.1. "Actuarial Equivalent Benefit" shall mean a benefit payable in an
Optional Form of Benefit which is of equal value to an Eligible Employee's
benefit payable in the Normal Benefit Form determined under actuarial factors
specified in the Pension Plan. Notwithstanding the foregoing, with respect to
any lump sum distribution under Section 7.2(d), the "Actuarial Equivalent
Benefit" shall mean a benefit of equivalent current value to the benefit that
would otherwise have been provided commencing on the Designated Benefit
Commencement Date using the GATT 2003 mortality table set forth in IRS Revenue
Ruling 2001-62 (or such other table as hereafter may be proscribed by the
Internal Revenue Service to replace the same), and the Present Value Interest
Rate.
1.2. "Administrator" or "Plan Administrator" shall mean a committee composed
of three or more persons designated from time to time by the Board.
1.3. "Average Monthly Compensation" shall mean one-twelfth of the average of
an Eligible Employee's Compensation for the five Plan Years which yields the
highest average; provided, however, that for the Chief Executive Officer of the
Company "Average Monthly Compensation" shall mean one-twelfth of the average of
his Compensation for the three Plan Years which yields the highest average.
1.4. "Benefit Election Form" shall mean a written election, on a form
prescribed by the Administrator, filed by a Participant with the Administrator
to receive an Early Retirement Benefit and/or an Optional Form of Benefit under
Article VII or to choose the form of the distribution of the Plan Account under
Article IV.
1.5. "Board" shall mean the Board of Directors of the Company.
1.6. "Change of Control" shall mean the occurrence of any of the following
events:
(a) individuals who, as of the Amendment Effective Date, constitute the
Board (the "Incumbent Directors") cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a director
subsequent to the date hereof, whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent Directors then on
the Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board shall be
deemed to be an Incumbent Director;
(b) any "Person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in Sections 13
(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities eligible to vote for the election
of the Board (the "Voting Securities"); provided, however, that the event
described in this Section 1.6(b) shall not be deemed to be a Change of Control
by virtue of any of the following acquisitions: (i) by the Company or any
subsidiary of the Company in which the Company owns more than 50% of the
combined voting power of such entity (a "Subsidiary"), (ii) by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, (iii) by any underwriter temporarily holding the Company's Voting
Securities pursuant to an offering of such Voting Securities, (iv) pursuant to
a Non-Qualifying Transaction (as defined in Section 1.6(c) hereof), or (v) with
respect to a particular Eligible Employee, pursuant to any acquisition by such
Eligible Employees or a group of persons including such Eligible Employees (or
any entity controlled by such Eligible Employee or any group of persons
including such Eligible Employee);
(c) the consummation of a merger, consolidation, statutory share exchange
or similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company's stockholders, whether
for such transaction or the issuance of securities in the transaction (a
"Business Combination"), unless immediately following such Business
Combination: (i) more than 50% of the total voting power of (A) the company
resulting from such Business Combination (the "Surviving Company"), or (B) if
applicable, the ultimate parent company that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Company (the "Parent Company"), is represented by
the Company's Voting Securities that were outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into which
the Company's Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of the Company's Voting
Securities among the holders thereof immediately prior to the Business
Combination, (ii) no Person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Company or the Parent Company),
is or becomes the beneficial owner, directly or indirectly, of 20% or more of
the total voting power of the outstanding voting securities eligible to elect
directors of the Parent Company (or, if there is no Parent Company, the
Surviving Company) and (iii) at least a majority of the members of the board of
directors of the Parent Company (or, if there is no Parent Company, the
Surviving Company) following the consummation of the Business Combination were
Incumbent Directors at the time of the Board's approval of the execution of the
initial agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (i), (ii) and
(iii) above shall be deemed to be a "Non-Qualifying Transaction");
(d) a sale of all or substantially all of the Company's assets;
(e) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company; or
(f) such other events as the Board may designate.
Notwithstanding the foregoing, a Change of Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 20% of the Company's Voting Securities as a result of the acquisition of
the Company's Voting Securities by the Company which reduces the number of the
Company's Voting Securities outstanding; provided, that if after such
acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person by more
than 1% of the Company's outstanding Voting Securities, a Change of Control of
the Company shall then occur.
1.7. "Company" shall mean The Pep Boys - Manny, Moe & Jack, a Pennsylvania
corporation.
1.8. "Compensation" shall mean 100% of an Eligible Employee's cash
remuneration for services paid by the Company or a subsidiary in a Plan Year
including amounts which an Eligible Employee elects to forego to provide
benefits under a plan which satisfies the provisions of Section 401(k) or
Section 125 of the Internal Revenue Code or to provide benefits under the
Company's Deferred Compensation Plan; provided, however, that prior to
March 31, 1995 Compensation shall exclude amounts paid under any written
executive bonus plan, and on and after March 31, 1995 Compensation shall
include such amounts; provided, further, that for benefits paid or to be paid
hereunder on or after March 26, 2002 any bonus that was earned under the
Company's Annual Incentive Bonus Plan, or any other bonus plan that replaces or
is in addition to such plan, prior to the date Compensation hereunder is
determined but which is unpaid for any reason as of the calculation date shall
be included as Compensation for purposes hereof.
1.9. "Converted Benefit Amount" shall mean an amount equal to the present
value (determined using the Present Value Interest Rate) of fifty percent (50%)
of the lump sum Actuarial Equivalent Benefit of the Eligible Employee's Monthly
Base Benefit Amount, determined as of the Amendment Effective Date, that would
otherwise have become payable on such individual's Early Retirement Date;
provided, however, that for Eligible Employees over the age of 45 with at least
five Years of Service as of the Amendment Effective Date, such term shall mean
an amount equal to the present value (determined using the Present Value
Interest Rate) of 100% of the lump sum Actuarial Equivalent Benefit of such
individual's Monthly Base Benefit Amount, determined as of the Amendment
Effective Date, that would otherwise have become payable on such individual's
Early Retirement Date. For purposes of determining a Converted Participant's
Converted Benefit Amount, the Converted Participant shall be considered a
Vested Participant regardless of the number of Years of Service since his
designation as an Eligible Employee.
1.10. "Conversion Election" shall mean an agreement (in such form as is
prescribed by the Plan Administrator) in which a Participant, who is an
Eligible Employee on the Amendment Effective Date, waives his right to receive
any benefits accrued under this Plan prior to the effective date of such
agreement in exchange for the Converted Benefit Amount and the right to
receive Retirement Contributions under Article IV.
1.11. "Converted Participant" shall mean a Participant, other than a Legacy
Plan Participant, who is an Eligible Employee on the Amendment Effective Date
and provides the Company with a valid and enforceable Conversion Election no
later than April 2, 2004.
1.12. "Designated Benefit Commencement Date" shall mean
(a) if an Legacy Plan Participant terminates his employment with the
Company for any reason, other than death or on account of a Disability, prior
to his Early Retirement Date, such date between the Early Retirement Date and
the Normal Retirement Date as is selected by the Legacy Plan Participant or, if
no date is selected, the Normal Retirement Date;
(b) if an Legacy Plan Participant terminates his employment with the
Company for any reason, other than death or on account of a Disability on or
after his Early Retirement Date but prior to his Normal Retirement Date, such
date between the Legacy Plan Participant's retirement date and his Normal
Retirement Date as is selected by the Legacy Plan Participant or, if no date is
selected, the Normal Retirement Date;
(c) if a Legacy Plan Participant retires on his Normal Retirement Date, his
Normal Retirement Date; or
(d) if a Legacy Plan Participant retires after his Normal Retirement Date,
his Late Retirement Date;
provided, however, that the Administrator, at its sole discretion, may postpone
the Designated Benefit Commencement Date for a period of up to 90 days if the
Legacy Plan Participant or Vested Participant fails to notify the Administrator
in writing of the upcoming Designated Benefit Commencement Date at least 90
days prior to such Designated Benefit Commencement Date.
1.13. "Disability" shall mean that an Eligible Employee ceases employment
with the Company when he is entitled to receive benefits under the Long Term
Disability Salary Continuation Plan sponsored by the Company or a subsidiary.
1.14. "Early Retirement Benefit" shall mean a benefit payable pursuant to
Section 5.3.
1.15. "Early Retirement Date" shall mean the first day of the calendar month
next following the month in which a Legacy Plan Participant's 55th birthday
occurs.
1.16. "Eligible Employee" shall mean an employee of the Company or any of its
subsidiaries who is a key employee, including officers and directors who are
key employees, and who is designated by the Board to participate in this Plan.
1.17. "Effective Date" shall mean January 1, 1982. "Amendment Effective
Date" shall mean January 31,2004.
1.18. "Late Retirement Date" shall mean the first day of the calendar month
next following the month in which a Legacy Plan Participant terminates
employment with the Company and its subsidiaries after his Normal Retirement
Date.
1.19. "Legacy Plan Participant" shall mean any Vested Participant or Eligible
Employee who, as of the Amendment Effective Date, is:
(a) a Vested Participant.
(b) an Eligible Employee at least 54 years of age or older.
(c) an Eligible Employee who has completed at least four Years of Service
between the date of his designation as an Eligible Employee and the Amendment
Effective Date.
(d) both a Participant (other than a Legacy Plan Participant described in
(a), (b) and/or (c) above) and an Eligible Employee but who does not provide
the Company with a valid and enforceable Conversion Election no later than
April 2, 2004.
1.20. "Monthly Base Benefit Amount" for any Legacy Plan Participant shall
mean the amount determined by subtracting (d) (if applicable) from the
product of [(a) x (b) x (c)] where:
(a) = 2%;
(b) = The Legacy Plan Participant's completed full Years of Service
as of the earlier of (i) his termination of employment with the Company and its
subsidiaries or (ii) in the case of a Legacy Plan Participant who becomes a
Legacy Plan Participant by reason of Section 1.19(d), the Amendment Effective
Date; provided that a Legacy Plan Participant's completed full Years of Service
shall not exceed 25;
(c) = The Legacy Plan Participant's Average Monthly Compensation as
of the date of his termination of employment with the Company and its
subsidiaries; and
(d) = The Legacy Plan Participant's accrued monthly normal retirement
pension benefit under the Company's Pension Plan assuming the same were paid in
the form of the Normal Benefit Form under this Plan commencing at the Legacy
Plan Participant's actual retirement date under the Company's Pension Plan.
For all other Participants, "Monthly Base Benefit Amount" shall mean zero;
provided, however, that for a Converted Participant the determination of the
Converted Benefit Amount shall be based on the Monthly Base Benefit Amount that
was determinable for such Converted Participant on the Amendment Effective
Date, before the Participant became a Converted Participant.
1.21. "Normal Benefit Form" shall mean a monthly payment for a Legacy Plan
Participant's remaining life, with a survivor benefit to the spouse of the
Legacy Plan Participant to whom he was married on the Designated Benefit
Commencement Date equal to 50% of the benefit amount payable during the Legacy
Plan Participant's remaining life, commencing with the month in which benefits
first become payable and terminating with the month in which the later of the
Legacy Plan Participant's or the Legacy Plan Participant's eligible spouse's
death occurs. If the Legacy Plan Participant is not married on the Designated
Benefit Commencement Date, Normal Benefit Form shall mean a monthly payment for
the Legacy Plan Participant's remaining life, with a minimum of 120 monthly
payments guaranteed, commencing with the month in which benefits first become
payable and terminating on the later of the month in which the Legacy Plan
Participant's death occurs or the month in which the 120th monthly payment
occurs.
1.22. "Normal Retirement Date" shall mean the first day of the calendar month
next following the month in which an Eligible Employee's 65th birthday occurs.
1.23. "Optional Form of Benefit" shall mean an optional form of benefit
settlement described in Section 7.2.
1.24. "Participant" shall mean a current or former Eligible Employee who
retains a Plan Account or who has accrued or is accruing a Monthly Base Benefit
Amount that has not been completely distributed.
1.25. "Pension Plan" shall mean the funded defined benefit pension plan of
the Company titled The Pep Boys - Manny, Moe & Jack Pension Plan, as in effect
on any date of determination.
1.26. "Plan" shall mean The Pep Boys - Manny, Moe & Jack Executive
Supplemental Retirement Plan (Amended and Restated Effective January 1, 1988
and further amended and restated effective February 13, 1992, March 31, 1995,
March 26, 2002 and the Amendment Effective Date) as set forth herein and the
same as may be further amended from time to time.
1.27. "Plan Account" shall mean the individual account maintained on the
books of the Company for each Eligible Employee to record the crediting of all
Retirement Contributions and Converted Benefit Amounts (if any), and all
earnings related to such Retirement Contributions and Converted Benefit Amounts
(if any) and the debiting of all distributions to the Eligible Employee or to
his beneficiary.
1.28. "Plan Year" shall mean the calendar year.
1.29. "Present Value Interest Rate" shall mean an interest rate used to
determine the value of a lump sum distribution under Section 7.2(d) that is
cost neutral to the Company based on the Company's long-term debt rate derived
from one or more appropriate national and/or industry long-term bond rate
indices that reflect the yields of corporate bonds having a duration equivalent
to the average post-retirement life expectancy (based on the GATT 2003
mortality table set forth in IRS Revenue Ruling 2001-62 or such other table as
hereafter may be prescribed by the Internal Revenue Service to replace the
same) of the retirees expected to elect a lump sum distribution and a risk
factor rating equivalent to the Company's risk factor, as determined by the
Administrator in its sole discretion; provided, however, that the Present Value
Interest Rate for lump sum distributions in 2003 shall be 5.25%, based on the
after tax (37% tax rate) value (rounded up to the nearest 5 basis points) of
the average of (i) the 20 year + bond yields from Moody's Corporate Seasoned
Bond Index (7.11%) and (ii) the Bloomberg Fair Market Sector Curve rates for
Composite US BB bonds (9.58%). Except as set forth in the previous sentence
for the calendar year 2003, the Present Value Interest Rate for lump sum
distributions in any calendar year shall be determined by the Administrator and
communicated to all Eligible Employees and Legacy Plan Participants by
September 15 of the prior calendar year.
1.30. "Retirement Contribution" shall mean a credit to a Participant's Plan
Account pursuant to Section 4.1.
1.31. "Vested Participant" shall mean an Eligible Employee who terminates
employment with the Company and its subsidiaries on or after his Early
Retirement Date or an Eligible Employee who terminates employment with the
Company and its subsidiaries before his Early Retirement Date with four Years
of Service following his designation as an Eligible Employee.
1.32. "Year of Service" with respect to an Eligible Employee shall mean a
consecutive twelve-month period during which he is employed by the Company or
a subsidiary for the entire period. For purposes of this Plan, any partial
Years of Service shall not be included in the calculation of benefits or for
any other purpose hereunder. If a terminated employee who was not previously
designated an Eligible Employee is rehired and is designated an Eligible
Employee, his Years of Service shall not include his pre-termination
employment.
ARTICLE II
Participation
On and after the Amendment Effective Date, Sections 2.3 - 2.5 of this Article
II shall apply only with respect to Legacy Plan Participants.
2.1. Commencement. An individual's participation in the Plan shall commence
on the date he is designated an Eligible Employee by the Board; however, such
individual's Years of Service prior to such date, if any, shall be credited
under the Plan if the Participant is a Legacy Plan Participant.
2.2. Termination. An Eligible Employee's active participation in the Plan
shall terminate on the earliest of the date (a) his designation as an Eligible
Employee is terminated by the Board, (b) his employment with the Company or any
of its subsidiaries terminates for any reason other than an event giving rise
to benefits hereunder, or (c) the Plan is terminated.
2.3. Early Retirement Elections.
(a) Early Retirement Election for Employees. A Legacy Plan Participant may
elect to receive an Early Retirement Benefit hereunder by filing a Benefit
Election Form with the Administrator no later than December 31 in the year
prior to the year in which he terminates employment with the Company and at
least 90 days prior to his Designated Benefit Commencement Date.
(b) Early Retirement Election for Former Employees. A Legacy Plan
Participant whose employment with the Company and its subsidiaries terminated
prior to his Early Retirement Date may elect to receive an Early Retirement
Benefit hereunder by filing a Benefit Election Form with the Administrator no
later than December 31 in the year prior to the year in which his Early
Retirement Date occurs and at least 90 days prior to his Early Retirement Date.
The deadlines for electing an Early Retirement Benefit as set forth in Sections
2.3(a) and (b) are hereafter referred to as the "Latest Early Retirement
Election Dates".
2.4. Form of Benefit Elections. Legacy Plan Participants may elect to
receive their retirement benefit hereunder in an Optional Form of Benefit by
filing a Benefit Election Form with the Administrator indicating the Optional
Form of Benefit chosen no later than December 31 in the year prior to the year
in which his Designated Benefit Commencement Date occurs and at least 90 days
prior to his Designated Benefit Commencement Date (the "Latest Optional Form of
Benefit Election Date").
2.5. Changes to Benefit Elections - Late Elections. Legacy Plan Participants
may change their Designated Benefit Commencement Date and/or form of retirement
benefit at any time prior to the deadlines set forth in Sections 2.3 and 2.4
above.
(a) Late or Accelerated Early Retirement Elections. Subject to the 10%
penalty described below, aLegacy Plan Participant may elect after his Latest
Early Retirement Election Date but before his Normal Retirement Date to receive
an Early Retirement Benefit or may elect after his Latest Early Retirement
Election Date but prior to his previously elected Designated Benefit
Commencement Date to accelerate the receipt of a previously elected Early
Retirement Benefit to a date on or after his Early Retirement Date but prior to
such previously elected Designated Benefit Commencement Date upon advance
written notice to the Administrator (in either case, a "Late Benefit
Commencement Election").
(b) Late or Modified Form of Benefit Elections. Subject to the 10% penalty
described below, a Legacy Plan Participant may elect an Optional Form of
Benefit after his Latest Optional Form of Benefit Election Date but prior to
his Designated Benefit Commencement Date or choose an alternative Optional Form
of Benefit to a previously chosen Optional Form of Benefit after his Latest
Optional Form of Benefit Election Date but prior to his Designated Benefit
Commencement Date upon advance written notice to the Administrator (in either
case, a "Late Benefit Form Election").
(c) Penalty for Untimely Benefit Elections. To the extent that a Legacy
Plan Participant files a Late Benefit Commencement Election or a Late Benefit
Form Election with the Administrator, his retirement benefit hereunder shall be
reduced by 10% and the Administrator may postpone the commencement of benefits
hereunder by up to 90 days to accommodate such late request. The election
deadlines and penalties set forth above are intended to prevent a Legacy Plan
Participant from constructively receiving his retirement benefit prior to the
date of actual receipt for tax purposes and for administrative convenience.
The Administrator may impose additional penalties in individual cases in order
to prevent constructive receipt by a Legacy Plan Participant and may waive
penalties in certain cases which would not impose constructive receipt on a
Legacy Plan Participant. In addition, the Administrator may postpone the
commencement of a retirement benefit hereunder if, in its sole discretion, it
determines that it would be an unreasonable or impracticable administrative
burden to commence the retirement benefit as elected by a Legacy Plan
Participant, provided that the postponed retirement benefit must commence as
soon as reasonably practicable.
ARTICLE III
Plan Accounts
3.1. Establishment of Accounts. The Plan Administrator shall establish a
Plan Account on behalf of each individual who is credited with a Converted
Benefit Amount or one or more Retirement Contributions.
3.2. Investment Funds. Amounts credited to a Participant's Plan Account
shall be credited with earnings, at periodic intervals determined by the Plan
Administrator, at a rate equal to the actual rate of return for such period of
an investment fund or funds or index or indices selected by that Participant
from a range of investment vehicles authorized by the Plan Administrator. The
rate of return on investment vehicles shall be tracked solely for the purpose
of computing the amount of benefits payable to Participants under the Plan.
The Company shall not be obligated to make any actual investment. It is
intended that, unless otherwise determined by the Plan Administrator, the
applicable investment funds shall be the same as those offered under The Pep
Boys Deferred Compensation Plan.
3.3. Bookkeeping Entries. The maintenance of an individual Plan Account on
behalf of each Participant is for bookkeeping purposes only. The Company and
its subsidiaries shall not be obligated to acquire or set aside any particular
assets for the discharge of their obligations under the Plan, nor is any
Participant to have any property rights in any particular assets that may be
held by the Company or its subsidiaries with respect to the Plan.
3.4. Statements. Statements shall be sent to each Participant who is not a
Legacy Plan Participant no less frequently than quarterly setting forth the
value of the Participant's Plan Accounts.
ARTICLE IV
Retirement Contributions
The provisions of this Article IV shall apply only with respect to Converted
Participants and individuals who are designated as Eligible Employees on or
after the Amendment Effective Date.
4.1. Amount. The Plan Account of each Participant (other than a Legacy Plan
Participant) shall be credited with a Retirement Contribution based on a
percentage of his or her Compensation for a Plan Year provided that the
Participant is an Eligible Employee on the last day of such Plan Year. The
applicable percentage for any Plan Year shall be determined in accordance with
the following schedule:
If the Participant is.... RetirementContribution Percentage
- ------------------------- ---------------------------------
At least 55 years of age 19%
At least 45 years of age but not more than 54 years of age 16%
At least 40 years of age but not more than 44 years of age 13%
Not more than 39 years of age 10%
For purposes of this Section 4.1, a Participant's age shall be determined at
the end of each Plan Year. Notwithstanding anything herein to the contrary,
(i) for the first four Plan Years that a Participant is an Eligible Employee,
if hired on after the Amendment Effective Date, the Retirement Contribution
shall be limited to 10% irrespective of the Participant's age, and (ii) in the
case of a Participant who ceases to be an Eligible Employee during a Plan Year
by reason of death or a Disability, a pro rata portion of the Retirement
Contribution shall be credited based on the number of months during the Plan
Year in which the Eligible Employee was employed by the Company prior to death
or the Disability.
4.2. Converted Benefit Amount. The Plan Account of each Converted
Participant shall also be credited with an amount equal to such individual's
Converted Benefit Amount.
4.3. Crediting. Retirement Contributions shall be credited to an Eligible
Employees' Plan Account as soon as practicable following the completion of each
Plan Year or such earlier date as is designated by the Company provided that
such credit shall be tentative until the end of the Plan Year in order that the
requirements of Section 4.1 be determined to be satisfied. Any credit
attributable to a Converted Benefit Amount shall be credited as soon as
practicable following the Company's receipt of a valid and binding Conversion
Election.
4.4. Vesting. Each Participant will vest in the portion of his or her Plan
Account attributable to any Retirement Contributions, and the related earnings
thereon (if any), upon such individual's completion of four Years of Service as
an Eligible Employee under the Plan. The Plan Administrator, in its sole
discretion, shall determine the date an individual becomes a key employee and
shall communicate that date to the Eligible Employee in writing at the time he
or she becomes eligible to receive Retirement Contributions.
4.5. Distribution of Benefits.
(a) Distribution of Benefits on or after Early Retirement
Date. In the case of a Participant whose employment with the Employer
terminates on or after Early Retirement Date and whose Plan Account balance
exceeds $25,000, the Participant's Plan Account shall be distributed in one of
the following methods, on the first day of the thirteenth month following the
Participant's termination of employment, as elected by the Participant on a
Benefit Election Form completed prior to the date of the Participant's
termination of employment: (i) in a lump sum; (ii) in annual installments over
a 5, 10, 15 or 20 year period or (iii) by any other formula that is
mathematically derived and is acceptable to the Plan Administrator. The first
annual installment payment shall be equal to (i) the value of such Plan Account
as of the last business day of the Plan Year preceding the date of payment,
divided by (ii) the number of annual installment payments elected by the
Participant. The remaining annual installments shall be paid not later than
January 31 of each succeeding Plan Year in an amount equal to (i) the value of
such Plan Account as of the last business day of the immediately preceding Plan
Year divided by (ii) the number of installments remaining. A Participant may
change the election regarding the manner of payment of the Participant's Plan
Account at any time prior to the Participant's termination of employment.
(b) Distribution of Benefits Upon Termination of
Employment. In the case of a Participant who incurs a termination of
employment prior to an Early Retirement Date, or whose Plan Account balance
does not exceed $25,000, the Participant's Plan Account shall be distributed in
a lump sum payment as soon as administratively practicable following the
Participant's termination notwithstanding any other election by the Participant.
4.6. Death.
(a) In the event of a Participant's death prior to the
commencement of benefits in accordance with this Article IV, distribution of
the Participant's Plan Account shall be made to the Participant's Beneficiary
in a lump sum on the first day of the seventh month following the Participant's
death. The amount of any lump sum benefit payable in accordance with this
Section shall equal the value of the Participant's Plan Account as of the last
business day of the calendar month immediately preceding the date on which such
benefit is paid. In lieu of the lump sum, the Beneficiary of a Participant who
dies after Early Retirement Date may elect, in the form and manner, and at the
time specified by, the Plan Administrator, any form of payment allowed under
Section 4.5 that the Participant would have been able to elect had the
Participant retired on the day before death.
(b) In the event a Participant dies after annual
installment benefits payable under Section 4.5 have commenced, but before the
entire balance of the Plan Account has been paid, any remaining installments
shall continue to be paid to the Participant's Beneficiary at such times and
in such amounts as they would have been paid to the Participant had the
Participant survived.
4.7. Beneficiary Designation. Each Participant shall have the right to
designate one or more beneficiaries and contingent beneficiaries to receive
any vested amount in such individual's Plan Account at the time of his death
by filing a written designation with the Plan Administrator on the form
prescribed by it for such purpose. Participants may thereafter designate
different beneficiaries at any time by filing a new written designation.
The consent of the beneficiary is not required for any revocation or change
of election of beneficiary. Any written designation shall become effective
only upon its receipt by the Plan Administrator. If all of the designated
beneficiaries should die on or before the commencement of distribution of
death benefits and the Participant fails to make a new designation, his
beneficiary shall be determined pursuant to Section 4.9. If the beneficiary
(or last contingent beneficiary) determined pursuant to this Section 4.8 or the
initial beneficiary determined pursuant to Section 4.9 dies before all payments
are made, then the balance of the payments shall be made to such beneficiary's
estate unless such beneficiary (or last contingent beneficiary) designates a
second-level beneficiary by filing a written designation with the Company on
the form prescribed by it for such purpose, in which case such second-level
beneficiary shall be treated as a beneficiary hereunder.
4.8. Beneficiary List. If a Participant omits or fails to designate a
beneficiary or if no designated beneficiary survives such individual, the
vested amount in such individual's Plan Account at the time of his death shall
be paid to the beneficiary determined from the following priority list; (a)
surviving spouse, or if none, then (b) the Participant's estate.
ARTICLE V
Retirement Benefits
On and after the Amendment Effective Date, the provisions of this Article V
shall apply only with respect to Legacy Plan Participants.
5.1. Normal Retirement Benefit. A Legacy Plan Participant who terminates
employment with the Company and its subsidiaries on his Normal Retirement Date
shall receive a monthly retirement benefit equal to his Monthly Base Benefit
Amount calculated as a Normal Benefit Form and payable in the Normal Benefit
Form, or Optional Form of Benefit if properly elected pursuant to Section 2.4
and subject to any applicable penalties under Section 2.5, commencing on his
Designated Benefit Commencement Date.
5.2. Late Retirement Benefit. A Legacy Plan Participant who terminates
employment with the Company and its subsidiaries after his Normal Retirement
Date shall receive a monthly retirement benefit equal to his Monthly Base
Benefit Amount calculated as a Normal Benefit Form and payable in the Normal
Benefit Form, or Optional Form of Benefit if properly elected pursuant to
Section 2.4 and subject to any applicable penalties under Section 2.5,
commencing on his Designated Benefit Commencement Date, except that for the
purpose of calculating the Monthly Base Benefit Amount under Section 1.20, the
reduction for the benefit payable under the Company's Pension Plan shall be the
late retirement benefit thereunder assuming the same were paid in the Normal
Benefit Form under this Plan.
5.3. Early Retirement Benefit. A Legacy Plan Participant who terminates
employment with the Company and its subsidiaries on or after his Early
Retirement Date but before his Normal Retirement Date shall be entitled to
receive a monthly retirement benefit equal to his Monthly Base Benefit Amount
calculated as a Normal Benefit Form and payable in the Normal Benefit Form, or
Optional Form of Benefit if properly elected pursuant to Section 2.4 and
subject to any applicable penalties under Section 2.5, commencing on the
Designated Benefit Commencement Date, except that for the purpose of
calculating the Monthly Base Benefit Amount under Section 1.20 (a) the product
of [(a) x (b) x (c)] in Section 1.20 shall be reduced by multiplying the
difference between (i) 1 and (ii) the product of 0.00333 multiplied by the
number of full months, not to exceed 84, by which the Designated Benefit
Commencement Date precedes the first day of the calendar month next following
the month in which the Legacy Plan Participant's 62nd birthday occurs, and (b)
the reduction for the benefit payable under the Company's Pension Plan, if any,
shall be the early retirement benefit thereunder assuming the same were paid in
the Normal Benefit Form under this Plan. There shall be no reduction in the
Monthly Base Benefit Amount under Section 1.20 if the Designated Benefit
Commencement Date is on or after the first day of the calendar month following
the calendar month in which the Legacy Plan Participant's 62nd birthday occurs.
5.4. Disability. A Legacy Plan Participant who terminates employment with
the Company and its subsidiaries on account of a Disability and who receives
benefits under the disability plan of the Company or a subsidiary until his
Normal Retirement Date shall be deemed to have retired on his Normal Retirement
Date under this Plan. For purposes of calculating such a Legacy Plan
Participant's Monthly Base Benefit Amount under Section 1.20 (a), "Years of
Service" shall include all periods during which the Legacy Plan Participant
received disability benefits up to his Normal Retirement Date or the Amendment
Effective Date, as applicable, and (b) "Compensation" for each Plan Year during
the Disability shall mean the Legacy Plan Participant's Compensation for the
last full Plan Year of his active employment. A Participant who incurs a
Disability after Normal Retirement Date shall be deemed to have then elected a
Late Retirement Date.
5.5. Other Terminations. If a Legacy Plan Participant's employment with the
Company and its subsidiaries terminates for any reason, other than death or a
Disability for which benefits are payable as provided in Section 5.4, before he
has attained his Early Retirement Date, then he shall be entitled to receive a
monthly retirement benefit equal to his Monthly Base Benefit Amount calculated
as a Normal Benefit Form and payable under this Section 5.5. Such benefit will
be paid in the Normal Benefit Form, or Optional Form of Benefit if properly
elected pursuant to Section 2.3 and subject to any applicable penalties under
Section 2.3, commencing on the Designated Benefit Commencement Date. The
Monthly Base Benefit Amount shall be subject to the adjustments set forth in
Section 5.3.
5.6. Change of Control Distribution. Notwithstanding any provisions herein
to the contrary, in the event a Legacy Plan Participant's employment with the
Company terminates for any reason (including, but not limited to, a voluntary
termination by the Participant) in connection with, or within one year after
any Change of Control of the Company (regardless of whether such change has
been approved or opposed by the Company's then Board), he shall receive a lump
sum retirement benefit (the "Distribution Amount") determined under this
Section 5.6 and payable no later than 10 days following such termination of
employment. The Distribution Amount for a Legacy Plan Participant whose
employment with the Company terminated on or after his Early Retirement Date
shall be equal to the lump sum Actuarial Equivalent Benefit of his Monthly Base
Benefit Amount, calculated as a Normal Benefit Form, that would have been
payable to the Legacy Plan Participant under this Plan as of his date of
termination of employment using his Years of Service (as modified below) and
Average Monthly Compensation as of his actual date of termination of employment
in computing his Monthly Base Benefit Amount payable under Section 5.3. The
Distribution Amount for each such other Legacy Plan Participant shall be equal
to the present value of the lump sum Actuarial Equivalent Benefit of his
Monthly Base Benefit Amount, calculated as a Normal Benefit Form, that would
have been payable to such Legacy Plan Participant under this Plan as of his
Early Retirement Date using his Years of Service (as modified below) and
Average Monthly Compensation as of his actual date of termination of
employment in computing his Monthly Base Benefit Amount payable under Section
5.3. The discount rate used to determine the present value of the lump sum
shall be the interest rate provided under Section 1.1. For purposes of
calculation of the Monthly Base Benefit Amount under this Section 5.6 for any
Participant who was receiving credit for Years of Service after the Amendment
Effective Date, Years of Service for a Legacy Plan Participant who is employed
by the Company at the time of the Change of Control shall include any period
for which severance benefits are guaranteed with respect to the Change of
Control under a change of control or other employment agreement between the
Legacy Plan Participant and the Company. For purposes of this Section 5.6,
severance benefits are deemed to be guaranteed for a period of time if they are
measured by reference to increments of salary (e.g. two times annual base
salary or three months of salary) or where benefits are provided for a period
of time beyond the termination of employment other than on account of the
continuation health care coverage requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985 or any similar state or local statute.
5.7. Rehire. If a terminated Legacy Plan Participant is rehired and is
again designated as an Eligible Employee, his Years of Service shall include
his pre-termination employment (except to the extent that such Eligible
Employee lost his right to benefits under Section 6.1) and his employment after
rehire for any Participant who was receiving credit for Years of Service after
the Amendment Effective Date However, such a Participant shall thereafter be
eligible for Retirement Contributions and there shall be no further increase in
such Participant's Monthly Base Benefit Amount.
5.8. Termination. If the Plan is terminated, each Eligible Employee will
receive a benefit under Section 5.5 determined as if he had terminated
employment on the date of Plan termination. If the designation of an Eligible
Employee as such is terminated by the Board, such Eligible Employee will
receive a benefit under Section 5.5 determined as if he had terminated
employment on the date his designation as an Eligible Employee terminated.
ARTICLE VI
Loss of Benefits
6.1. Loss of Benefits. Notwithstanding any provision of Article IV or V, a
person who is a Vested Participant shall cease to have any right to receive
any payment hereunder and all obligations of the Company to make payments to
or on account of a Vested Participant shall cease and terminate should the
Administrator find, after full consideration of the facts presented on behalf
of the Company and the Vested Participant, that
(a) such Vested Participant during his employment with the Company or any
of its subsidiaries or within one year after his termination of employment
with the Company, or any of its subsidiaries, unless the Vested Participant is
terminated by the Company without Cause, as defined in the Non-Competition
Agreement between the Company and the Vested Participant, directly or
indirectly, engages in (as a principal, partner, director, officer, agent,
employee, consultant or otherwise) or becomes financially interested in any
business operating within the United States of America, if (i) such business'
primary business is the retail and/or commercial sale of automotive parts,
accessories, tires and/or repair/maintenance services including, without
limitation, the entities (including their franchisees and affiliates) listed on
Schedule 6.1(a) hereto, or (ii) the retail and/or commercial sale of automotive
parts, accessories, tires and/or repair/maintenance services is the primary
focus of such engagement or financial interest. However, nothing contained in
this Section 2b shall prevent the Officer from holding for investment up to two
percent (2%) of any class or equity securities of a company whose securities
are traded on a national or foreign securities exchange;
(b) such Vested Participant, during his employment with the Company or any
of its subsidiaries or for one year thereafter, directly or indirectly, induces
or attempts to influence any employee of the Company to terminate his
employment with the Company or hires or solicits for hire on behalf of another
employer any person then employed or who had been employed by the Company
during the immediately preceding six months; or
(c) such Vested Participant's employment by the Company or any of its
subsidiaries was terminated (other than in connection with or following a
Change of Control) in connection with any act of disloyalty to the Company or
any of its subsidiaries including, without limitation, fraud, embezzlement,
theft, breach of the Company's Conflict of Interest or Ethics Policies,
commission of a felony or proven dishonesty in the course of his employment or
service or unauthorized disclosure of trade secrets or confidential
information of the Company or any of its subsidiaries.
ARTICLE VII
Benefit Options
On and after the Amendment Effective Date, the provisions of this Article VII
shall apply only with respect to Legacy Plan Participants.
7.1. Normal Form. Benefits shall be paid in the Normal Benefit Form unless
the Legacy Plan Participant, as applicable, elects an Optional Form of Benefit
permitted under Section 7.2 in accordance with Sections 2.4 or 2.5.
7.2. Optional Forms of Benefit. A Legacy Plan Participant may elect that
retirement benefits be paid as an Actuarial Equivalent Benefit in an optional
form of settlement from the alternatives below:
(a) A straight life annuity for the Legacy Plan Participant's life;
(b) A joint and survivor annuity with the survivor benefit payable to the
Legacy Plan Participant's spouse equal to 75% or 100% of the benefit amount
payable during the Legacy Plan Participant's life;
(c) Equal monthly installments over a period of not less than 10 years or
more than 25 years; or
(d) A lump sum payment.
ARTICLE VIII
Death Benefits
On and after the Amendment Effective Date, the provisions of this Article VIII
shall apply only with respect to Legacy Plan Participants.
8.1. Pre-Retirement Death Benefit - Active Legacy Plan Participants. The
beneficiary of a Legacy Plan Participant who dies while in the employ of the
Company or a subsidiary but prior to attaining his Normal Retirement Date,
shall be entitled to an annual death benefit, payable in equal monthly
installments, equal to 50% of the base salary rate of the Legacy Plan
Participant in effect on the date of his death; provided, however, in the case
of the CEO, the same shall be equal to 60% of his base salary rate in effect on
the date of death. The payments shall commence with the month following the
month in which the Legacy Plan Participant dies and shall end with the later to
occur of the month in which (a) the 180th monthly payment is made or (b) the
Legacy Plan Participant would have attained his Normal Retirement Date.
8.2. Death Benefit - Former Legacy Plan Participants. Subject to Section
6.1, the beneficiary of a Legacy Plan Participant who dies while not in the
employ of the Company or a subsidiary but before he has attained his Normal
Retirement Date, shall be entitled to a monthly death benefit with 120 monthly
payments guaranteed commencing with the month following the month in which the
Legacy Plan Participant dies equal to the Monthly Base Benefit Amount under
Section 1.20. The beneficiary of a Legacy Plan Participant shall have the
right to postpone the commencement of benefits under this Section 8.2 until a
later month designated by the beneficiary, but not later than the calendar
month next following the month in which the Legacy Plan Participant's 65th
birthday would have occurred. If the beneficiary shall commence receiving
benefits under this Section 8.2 prior to the month next following the month in
which the Legacy Plan Participant's 65th birthday would have occurred, for the
purpose of calculating the Monthly Base Benefit Amount payable to such Legacy
Plan Participant's beneficiary, such amount shall be reduced by the factor(s)
that would be applicable to such Legacy Plan Participant if he was not deceased
and elected to receive benefits after his Early Retirement Date and prior to
his Normal Retirement Date under this Plan (and which factor(s) are set forth
in the version of Section 5.3 of this Plan that is applicable to such Legacy
Plan Participant). In addition, if the beneficiary of a Legacy Plan
Participant shall commence receiving benefits under this Section 8.2 prior to
the month next following the month in which the Legacy Plan Participant's 55th
birthday occurs, for the purpose of calculating the Monthly Base Benefit Amount
the amount determined under the preceding sentence of this Section 8.2 shall be
further reduced to be the Actuarial Equivalent Benefit of such amount
calculated as of the date benefits actually commence.
8.3. Late Retirement Death Benefit. The beneficiary of a Legacy Plan
Participant who dies while in the employ of the Company or a subsidiary after
attaining his Normal Retirement Date shall be entitled to a monthly death
benefit with 120 monthly payments guaranteed commencing with the month
following the month in which the Legacy Plan Participant dies equal to the
Monthly Base Benefit Amount; provided, however, that for the purpose of
calculating the Monthly Base Benefit Amount under Section 1.20 the reduction
for the benefit payable under the Company's Pension Plan shall be the benefit
thereunder.
8.4. Death Benefit in Lieu of Retirement Benefit. If a Legacy Plan
Participant dies after the commencement of his retirement benefits hereunder,
no death benefit shall be payable under this Article VIII. Moreover, to the
extent that a death benefit is payable under this Article VIII, no retirement
benefit shall be payable under Article V.
8.5. Disability. The beneficiary of a Legacy Plan Participant who
terminates employment with the Company and its subsidiaries under circumstances
which entitled him to benefits under the Long Term Disability Salary
Continuation Plan sponsored by the Company or a subsidiary and who is receiving
such benefits on the date of his death shall be entitled to the benefit
provided in Section 8.1 based on his base salary rate in effect when his active
employment terminated.
8.6. Other Cases. Except as expressly provided by the terms of the Plan, no
death benefits shall be payable under this Plan.
8.7. Beneficiary Designation. Each Eligible Employee and Vested Participant
shall have the right to designate one or more beneficiaries and contingent
beneficiaries to receive any death benefit payable with respect to such
individual by filing a written designation with the Company on the form
prescribed by it for such purpose. Eligible Employees and Vested Participants
may thereafter designate different beneficiaries at any time by filing a new
written designation. The consent of the beneficiary is not required for any
revocation or change of election of beneficiary. Any written designation shall
become effective only upon its receipt by the Company. If the designated
beneficiaries should die on or before the commencement of distribution of death
benefits and the Eligible Employee or Vested Participant fails to make a new
designation, his beneficiary shall be determined pursuant to Section 8.8. If
the beneficiary (or last contingent beneficiary) determined pursuant to this
Section 8.7 or the initial beneficiary determined pursuant to Section 8.8 dies
before all payments are made, then the balance of the payments shall be made to
such beneficiary's estate unless such beneficiary (or last contingent
beneficiary) designates a second-level beneficiary by filing a written
designation with the Company on the form prescribed by it for such purpose, in
which case such second-level beneficiary shall be treated as a beneficiary
hereunder.
8.8. Beneficiary List. If an Eligible Employee or Vested Participant omits
or fails to designate a beneficiary or if no designated beneficiary survives
such individual, the death benefits shall be paid to the beneficiary determined
from the following priority list; (a) surviving spouse, or if none, then (b)
the Eligible Employee's or Vested Participant's estate.
ARTICLE IX
Termination and Amendments
9.1. Amendments. The Company may amend this Plan in whole or in part by
appropriate resolution of the Board; provided, however, that no amendment shall
(i) decrease or limit any benefits or rights accrued under the Plan prior to
the date of the amendment, or (ii) modify any provision of this Article IX
without the consent of a majority of the Eligible Employees and Vested
Participants affected by such amendment.
9.2. Termination. The Company reserves the right to terminate this Plan in
its entirety at any time by an appropriate resolution of the Board; provided,
however, that any termination of the Plan shall not (i) terminate or diminish
any benefits then payable under the Plan, (ii) terminate or diminish any
benefits payable in the future under the Plan with respect to benefits accrued
as of the date of termination of the Plan, or (iii) decrease or limit any
benefits or rights accrued under the Plan prior to the date of termination
without the consent of a majority of the Eligible Employees and Vested
Participants affected by such termination.
ARTICLE X
Plan Administration
10.1. Named Fiduciary and Plan Administrator. The committee designated by
the Board shall be the Administrator and Named Fiduciary (within the meaning of
the Employee Retirement Income Security Act of 1974, as amended (hereinafter
referred to as "ERISA")) of this Plan. The Administrator shall have the
authority to control and manage the operation and administration of the Plan.
The Administrator shall act by majority vote of the committee members. No
Eligible Employee who is a member of the committee shall participate in
committee decisions affecting him.
10.2. Delegation of Duties. The Administrator may (a) delegate all or a
portion of the responsibilities of controlling and managing the operation and
administration of the Plan to one or more persons; and (b) appoint such agents,
advisors, counsel, or other representatives to render advice with regard to any
of its responsibilities under the Plan. Wherever the term "Administrator" is
used herein in connection with the operation or administration of the Plan,
such term shall include all delegates appointed by the Administrator.
10.3. Powers and Duties. The authority and responsibility to control and
manage the operation and administration of the Plan shall include, but shall
not be limited to, the performance of the following acts:
(a) The filing of all reports required of the Plan.
(b) The distribution to Eligible Employees, Vested Participants and
beneficiaries of all reports and other information required of the Plan.
(c) The keeping of complete records of the administration of the Plan.
(d) Developing rules and regulations for administration and interpretation
of the Plan consistent with the terms and provisions of the Plan.
(e) The interpretation of the Plan including the determination of any
questions of fact arising under the Plan and the making of all decisions
required by the Plan. The construction of the Plan and any actions and
decision taken thereon in good faith by the Administrator shall be final and
conclusive. The Administrator may correct any defect, or supply any omission,
or reconcile any inconsistency in the Plan in such manner and to such extent
as shall be expedient to carry the Plan into effect and shall be the sole
judge of such expediency.
The Administrator's determinations (including those made by any person or
persons to whom the Administrator's power has been delegated hereunder) on all
matters relating to the Plan shall be final, binding and conclusive for all
purposes, upon all persons, including without limitation, the Company, all
Eligible Employees, all Vested Participants and their respective beneficiaries
and successors hereunder. Each Eligible Employee and Vested Participant, by
accepting status as a Participant in the Plan agrees that (i) all benefits
shall be paid strictly in Accordance with the terms of the Plan, and (ii) that
the Administrator shall have the discretion and authority set forth in this
Article X and in the Plan generally.
10.4. Payment of Expenses. All expenses of the Administrator shall be paid
by the Company.
10.5. Indemnity of Plan Administrator. The Company shall indemnify the Plan
Administrator or any individual who is a delegate against any and all claims,
loss, damage, expense or liability arising from any action or failure to act,
except when due to gross negligence or willful misconduct.
10.6. Agent for Service of Process. The Company shall be the agent for the
Plan for service of legal process.
ARTICLE XI
Claims Procedure
11.1. Claim. An Eligible Employee or Vested Participant or his beneficiary
or authorized representative (each one being hereinafter referred to as a
"Claimant") who expects a benefit under the Plan which he has not received may
file a formal claim for benefits under the Plan with the Administrator. The
Administrator shall review the claim and render a determination relating to the
claim based on this Plan document (including the Administrator's power and
authority to interpret and construe the Plan and to make rules relating to the
administration of the Plan) and consistent with prior determinations rendered
with respect to similarly situated claims. The Administrator shall notify the
Claimant within 90 days of the receipt of the claim of the Administrator's
determination relating to the claim, unless the Administrator determines that
special circumstances require an extension of time for processing a claim, in
which case the Administrator shall notify the Claimant of the extension within
90 days of receipt of the claim, specifying the special circumstances requiring
an extension and the date by which it expects to render a determination on the
claim, which determination must be rendered and notice given to the Claimant no
later than the 180th day following the receipt of the claim. If an extension
is required because the Claimant failed to submit the information necessary to
decide a claim, the time period for making a benefit determination set forth in
the prior sentence shall be tolled from the date on which the notification of
the extension is sent to the claimant until the date on which the Claimant
responds to the request for additional information. The determination notice
shall be in writing, sent by regular mail to the address specified by the
Claimant or if none is specified to the Claimant's last known address, and must
contain the following information:
(a) The specific reasons for a determination adverse to the Claimant, if
applicable;
(b) The specific reference to the pertinent Plan provision(s) on which the
determination is based;
(c) If applicable, a description of any additional information or material
necessary to perfect the claim, and an explanation of why such information or
material is necessary; and
(d) An explanation of the claims review procedure and the time limitations
of the review procedure applicable thereto, including a statement of the
Claimant's right to bring a civil action under Section 502(a) of ERISA
following an appeal of any adverse benefit determination.
For purposes of this Article XI, claims, notifications and determinations shall
be deemed to be received when actually received and parties shall be deemed to
be notified and a notification shall be deemed to be sent or submitted on the
date that such notification is postmarked or actually delivered by courier if
not mailed.
11.2. Appeal Procedure. A Claimant is entitled to request an appeal of any
adverse determination of his claim by the Administrator. The request for
appeal must be submitted in writing within 60 days of the receipt by the
Claimant of the notification of an adverse claim determination. Absent a
request for appeal within the 60-day period, the determination of the
Administrator regarding the claim will be deemed to be final and conclusive.
During the appeal process, the Claimant shall have a reasonable opportunity to
submit written comments, documents, records and other information relating to
the claim and shall be entitled, free of charge, to reasonable access to and
copies of all documents, records and other information relevant to the claim.
The Administrator shall review the appeal of the initial claim determination
(including all comments, documents, records and other information submitted by
the Claimant, regardless of whether such information was submitted with the
original claim) and render a final determination.
11.3. Final Determination. Within 60 days following receipt by the
Administrator of the Claimant's request for appeal, the Administrator shall
render a final determination relating to the claim, unless the Administrator
determines that special circumstances (such as the need to hold a hearing)
require an extension of time for processing the appeal, in which case the
Administrator shall notify the Claimant of such extension within 60 days
following receipt by the Administrator of the request for appeal, specifying
the special circumstances requiring an extension and the date by which it
expects to render a final determination on the appeal, which determination must
be rendered and notice given to the Claimant no later than the 120th day
following the receipt by the Administrator of the request for appeal. If an
extension is required because the Claimant failed to submit the information
necessary to decide a claim, the time period for making a benefit determination
set forth in the prior sentence shall be tolled from the date on which the
extension notification is sent to the Claimant until the date on which the
Claimant responds to the request for additional information. The final
determination shall be made in writing to the Claimant. The final
determination shall (i) recite the specific reasons for a determination adverse
to the Claimant, if applicable, with specific reference to the pertinent Plan
provision(s) on which the determination is based, (ii) state that the Claimant
is entitled to receive, upon request and free of charge, reasonable access to
and copies of all documents, records and other information relevant to the
claim and (iii) state that the Claimant has a right to bring an action under
Section 502(a) of ERISA.
ARTICLE XII
Source of Benefits and Payments
12.1. Unfunded Plan. The Company shall pay the benefits provided hereunder
out of its general assets in cash when due. The Company shall not be required
to establish any segregated account, trust, escrow, reserve or other
arrangement to discharge such benefits.
12.2. Non-Alienation. None of the payments, benefits or rights of any
Eligible Employee, Vested Participant or beneficiary thereof shall be subject
to any claim of any creditor of such person and, in particular, to the fullest
extent permitted by law, shall be free from attachment, garnishment, trustee's
process, or any other legal or equitable process available to any creditor of
such person. No Eligible Employee, Vested Participant or beneficiary thereof
shall have the right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments which he may expect to receive,
contingently or otherwise, under this Plan, except the right to designate a
beneficiary or beneficiaries as hereinabove provided.
12.3. Incapacity. If the Company determines that a person entitled to
receive any benefit payment is under a legal disability or is incapacitated in
any way so as to be unable to manage his financial affairs, the Company may
make payments to such person's legal representative or to a relative or other
person for his benefit, or apply the payment for the benefit of such person in
such manner as the Company considers advisable. Any payment of a benefit in
accordance with the provisions of this Section 12.3 shall be a complete
discharge of any liability to make such payment.
ARTICLE XIII
Miscellaneous
13.1. Employment Obligations. The establishment of this Plan shall not be
construed as creating any contract of employment between the Company or any
subsidiary and any Eligible Employee or Vested Participant. Nothing herein
contained shall give any Eligible Employee or Vested Participant the right to
inspect the books of the Company or to interfere with the right of the Company
to discharge any Eligible Employee from employment at any time for any reason
whatsoever, with or without cause.
13.2. Conflicts of Law. All matters respecting the validity, effect,
interpretation and administration of this Plan shall be determined in
accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent superseded by ERISA.
13.3. References. The masculine pronoun shall include the feminine and the
singular form shall include the plural, as necessary for proper interpretation
of this Plan.
13.4. Effective Date; Applicability to Vested Participants. The amendment
and restatement of the Plan is effective as of the Amendment Effective Date and
shall be applicable only to all individuals who are Eligible Employees of the
Company on that date and to all future individuals who become Eligible
Employees after the Amendment Effective Date, except as set forth below. In
addition, except as specifically set forth below, none of the substantive
amendments to the Plan incorporated into the March 26, 2002 amendment and
restatement of the Plan shall be applicable to former Eligible Employees or
individuals who were Vested Participants as of March 26, 2002. Except as
specifically set forth below, the rights and benefits under the Plan, if any,
of individuals who were Eligible Employees prior to, but not on the Amendment
Effective Date shall be governed by the terms of the Plan in effect prior to
the Amendment Effective Date. Notwithstanding the foregoing, the following
provisions of the Plan, amended and restated as of March 26, 2002, shall apply
to individuals who were Vested Participants as of March 26, 2002:
(a) The revision to Section 1.9 (now 1.10) shall be effective and is
intended to memorialize a prior decision of the Board of Directors with respect
to the applicability of earned but unpaid bonuses;
(b) The addition of Section 7.2 is effective and is intended to document an
existing administrative interpretation of the Plan benefits for Eligible
Employees who are described in such Section;
(c) The revisions to Articles X and XI (now XII and XII) shall apply;
(d) The deadline for electing an Early Retirement Benefit set forth in
Section 2.3(b) shall apply;
(e) To the extent needed to determine the benefit payable pursuant to
Section 7.2, the definition of Monthly Base Benefit Amount set forth in Section
1.20 (and any other defined term used in Section 1.20) shall apply; and
(f) To the extent that any provision of the March 26, 2002 amendment and
restatement merely clarifies or amplifies a pre-existing right or benefit, as
determined in the sole discretion of the Administrator, such provision shall
apply.
In no event shall any Optional Form of Benefit added by virtue of the March 26,
2002 amendment and restatement of the Plan be available to any individual who
was not an Eligible Employee of the Company as of March 26, 2002 or does not
become one after March 26, 2002.
IN WITNESS WHEREOF, this Amendment and Restatement of the Executive
Supplemental Retirement Plan is hereby executed effective as of the 31st day of
January, 2004.
THE PEP BOYS - MANNY, MOE & JACK
By: /s/ Lawrence N. Stevenson