CHANGE OF CONTROL AGREEMENT

This CHANGE OF CONTROL AGREEMENT (this "Agreement") is made by and between THE
PEP BOYS - MANNY, MOE & JACK, a Pennsylvania corporation (the "Company"), and
_____________________ (the "Executive"), dated as of _______.

WHEREAS, the Company and Executive desire to set forth certain of the terms and
conditions of the Executive's employment with the Company in the event of any
"Change of Control," and certain compensation that will be paid to the Executive
if the Executive's employment is terminated in connection with a Change of
Control.

IT IS, THEREFORE, AGREED:

Operation of Agreement

.

The "Effective Date" shall be the date during the "Change of Control Period" (as
defined in Section 1(b) hereof) on which a Change of Control occurs. Anything in
this Agreement to the contrary notwithstanding, if the Executive's employment
with the Company is terminated within twelve (12) months prior to the date on
which a Change of Control occurs, and the Executive can reasonably demonstrate
that such termination (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately prior to the date
of such termination.

The "Change of Control Period" is the period commencing on the date hereof and
ending on the second anniversary of such date; provided, however, that
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate two years from such Renewal
Date, unless at least sixty (60) days prior to the Renewal Date the Company
shall give notice that the Change of Control Period shall not be so extended.

Change of Control

. For the purpose of this Agreement, a "Change of Control" shall be deemed to
have taken place if:

individuals who, on the date hereof, constitute the Board of Directors (the
"Board") of the Company (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;

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 35% 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 2(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 2(c) hereof), or (v) pursuant to any
acquisition by Executive or any group of persons including Executive (or any
entity controlled by Executive or any group of persons including Executive);

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 35% 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");

a sale of all or substantially all of the Company's assets; or

the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

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 35% 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 one percent (1%) of the Company's outstanding Voting Securities, a Change
of Control of the Company shall then occur.

Employment Period

. The Company hereby agrees to continue the Executive in its employ, for the
period commencing on the Effective Date and ending on the date two (2) years
after such date (the "Employment Period").

Position and Duties

.

During the Employment Period, (i) the Executive's position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least comparable in all material respects with the
most significant of those held, exercised and assigned at any time during the
ninety (90) day period immediately preceding the Effective Date and (ii) the
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or at an office or location
less than fifty (50) miles from such location.

Excluding periods of vacation, sick leave and disability to which the Executive
is entitled, the Executive agrees to devote reasonable attention and time during
normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive's reasonable best efforts to perform faithfully
and efficiently such responsibilities. The Executive may (i) serve on corporate,
civic or charitable boards or committees, (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (iii) manage
personal investments, subject to internal approval policies, including that such
activities do not significantly interfere with the performance of the
Executive's responsibilities. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the Executive prior to
the Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.

 

 

Compensation

.

Base Salary

. During the Employment Period, as consideration for services rendered, the
Company shall pay to the Executive a base salary at an annual rate at least
equal to the annual rate of base salary paid to the Executive by the Company,
and any affiliated companies, during the ninety-day period immediately preceding
the month in which the Effective Date occurs ("Base Salary") payable over the
calendar year at the regular pay periods of the Company. During the Employment
Period, Base Salary shall be reviewed by the Board (or the Compensation
Committee thereof) at least annually and shall be increased, but not decreased,
at any time and from time to time as shall be consistent with increases in Base
Salary awarded by the Company in the ordinary course of business to other
similarly positioned executives. Any increase in Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
Executive's Base Salary shall not be reduced after any such increase. As used in
this Agreement, the term "affiliated companies" includes any company
controlling, controlled by or under common control with the Company and
"similarly positioned" means officers of the same level by reference to title
(e.g., Senior Vice President).

Bonus Plan

. During the Employment Period, the Executive shall receive an annual bonus (a
"Bonus") at least equal to the greater of (i) the average annual dollar bonus
amount that was earned by the Executive under the Company's Annual Incentive
Bonus Plan (or any predecessor or successor plan, policy or arrangement thereto)
(the "Bonus Plan") for the three completed fiscal years of the Company (each a
"Fiscal Year") immediately prior to the Effective Date, or (ii) Executive's
Target (as defined in the Bonus Plan) bonus amount under the Bonus Plan for the
Fiscal Year which includes the Effective Date or, if no target has been set with
respect to Executive for such Fiscal Year, the Target bonus amount for the
immediately preceding Fiscal Year (in either case, based on Executive's target
percentage of Base Salary established pursuant to the Bonus Plan). The Bonus
shall be paid to the Executive as soon as practicable after the Fiscal Year for
which the Bonus applies, but not later than April 30 following the end of such
Fiscal Year.

Employee Benefit Plans

. In addition to the Base Salary and Bonus payable as hereinabove provided, the
Executive shall be entitled to participate during the Employment Period in all
savings, pension and retirement plans and programs (collectively, "Employee
Benefit Plans") applicable to other similarly positioned executives [and to
receive the same automobile allowance as is provided to other similarly
positioned executives]. In no event shall such plans and programs, in the
aggregate, provide the Executive with compensation, benefits and reward
opportunities less favorable than the most favorable of those provided by the
Company and its affiliated companies for the Executive under such plans and
programs as in effect at any time during the ninety-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as provided
at any time thereafter with respect to other similarly positioned executives. As
used herein, "similarly positioned means officers of the same level by reference
to title (e.g., Senior Vice President).

Welfare Benefit Plans

. During the Employment Period, the Executive and/or the Executive's family, as
the case may be, shall be eligible for participation in and shall receive all
benefits under each welfare benefit plan of the Company, including, without
limitation, all medical, supplemental medical, prescription, dental, disability,
salary continuance, life, accidental death and travel accident insurance plan
and programs of the Company and its affiliated companies, in each case not less
favorable than those in effect at any time during the ninety-day period
immediately preceding the Effective Date which would be most favorable to the
Executive or, if more favorable to the Executive, as in effect at any time
thereafter with respect to other similarly positioned executives.

Expenses

. During the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Executive in
the performance of his duties hereunder, which reimbursement shall be paid to
the Executive over a period that is no longer than that required under the
Company's reimbursement policy as in effect at any time during the ninety-day
period immediately preceding the Effective Date which would be most favorable to
the Executive or, if more favorable to the Executive, as in effect at any time
thereafter with respect to other similarly positioned executives.

Office and Support Staff

. During the Employment Period, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and to
secretarial and other assistance, at least equal to those provided to the
Executive at any time during the ninety-day period immediately preceding the
Effective Date, or, if more favorable to the Executive, as provided at any time
thereafter with respect to other similarly positioned executives.

Vacation

. During the Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable policies of the Company as in effect at
any time during the ninety-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect at any time thereafter with
respect to other similarly positioned executives.

Termination

. This Agreement shall terminate under the following circumstances:

Expiration of the Employment Period

. This Agreement shall terminate automatically upon the expiration of the
Employment Period.

Death or Disability

. This Agreement shall terminate automatically upon the Executive's death. The
Company may terminate this Agreement, after having established the Executive's
Disability (pursuant to the definition of "Disability" set forth below), by
giving to the Executive written notice of its intention to terminate the
Executive's employment. In such a case, the Executive's employment with the
Company shall terminate effective on the 180th day after receipt of such notice
(the "Disability Effective Date"), provided that, within 180 days after such
receipt, the Executive shall not have returned to full performance of the
Executive's duties. For purposes of this Agreement, "Disability" means personal
injury, illness or other cause which, after the expiration of not less than 180
days after its commencement, renders the Executive unable to perform his duties
with substantially the same level of quality as immediately prior to such
incident and such disability is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably).

With or Without Cause

. The Company may terminate the Executive's employment with or without "Cause."
For purposes of this Agreement, "Cause" means (i) the willful and continued
failure of Executive to perform substantially his duties with the Company (other
than any such failure resulting from Executive's incapacity due to physical or
mental illness or any such failure subsequent to Executive being delivered a
Notice of Termination without Cause by the Company or delivering a Notice of
Termination for Good Reason to the Company) after a written demand for
substantial performance is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that Executive
has not substantially performed Executive's duties and the Executive has failed
to cure such failure to the reasonable satisfaction of the Board; (ii) the
willful engaging by Executive in gross negligence or willful misconduct which is
demonstrably and materially injurious to the Company or its affiliates; or (iii)
Executive's conviction of or pleading guilty or no contest to a felony. For
purpose of this
Section 6(c)
, no act or failure to act by Executive shall be considered "willful" unless
done or omitted to be done by Executive in bad faith and without reasonable
belief that Executive's action or omission was in the best interests of the
Company or its affiliates. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board, based upon the advice
of counsel for the Company or upon the instructions of the Company's chief
executive officer or another senior officer of the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company. Cause shall not exist unless and until the
Company has delivered to Executive, along with the Notice of Termination for
Cause, a copy of a resolution duly adopted by three-quarters (3/4) of all
members of the Board (excluding Executive if Executive is a Board member) at a
meeting of the Board called and held for such purpose (after reasonable notice
to Executive and an opportunity for Executive, together with counsel, to be
heard before the Board), finding that in the good faith opinion of the Board an
event set forth in clauses (i) - (iii) above has occurred and specifying the
particulars thereof in detail. The Board must notify Executive of any event
constituting Cause within ninety (90) days following the Board's knowledge of
its existence or such event shall not constitute Cause under this Agreement.

With or Without Good Reason

. The Executive's employment may be terminated by the Executive with or without
Good Reason. For purposes of this Agreement, "Good Reason" means:

A material diminution in the Executive's authority, duties or responsibilities
as compared with the Executive's authority, duties or responsibilities with the
Company immediately prior to the Effective Date; provided, however, that Good
Reason shall not be deemed to occur upon a change in authority, duties or
responsibilities that is solely and directly a result of the Company no longer
being a publicly traded entity and does not involve any other event set forth in
this Section 6(d);

A material change in the geographic location at which the Executive must perform
services for the Company, which for this purposes shall mean the Company
requiring the Executive to be based at any office or location other than that
described in Section 4(a)(ii) hereof, except for travel required in the
performance of the Executive's responsibilities which shall be no more extensive
than the customary travel requirements of Executive prior to the Effective Date;
or

Any other action or inaction that constitutes a material breach of this
Agreement by the Company;

provided, however, that a termination by Executive for Good Reason shall be
effective only if (i) the Executive has provided a Notice of Termination to the
Company within 90 days after the initial existence of the event constituting
Good Reason that an event constituting Good Reason has occurred, (ii) within 30
days following the delivery of such Notice of Termination by Executive to the
Company, the Company has failed to cure the circumstances giving rise to Good
Reason and (iii) the Executive resigns from employment prior to the end of the
Employment Period.

Any termination by the Company with or without Cause or by the Executive with or
without Good Reason shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 13(d) hereof. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (x) indicates
the specific termination provision in this Agreement relied upon, (y) sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(z) if the termination date is other than the date of receipt of such notice,
specifies the proposed termination date.

Obligations of the Company Upon Termination

.

Expiration of Employment Period

. If the Executive's employment shall be terminated on account of the expiration
of the Employment Period, the Company shall pay the Executive his Base Salary
through the expiration of the Employment Period, plus any Bonus amounts earned
but not paid during such period and any benefits to which the Executive is
entitled under the terms of any of the Company's benefit plans, policies or
arrangements, and the Company shall have no further obligations to the Executive
under this Agreement.

Death

. If the Executive's employment is terminated by reason of the Executive's
death, this Agreement shall terminate without further obligations to the
Executive's legal representatives, other than those death benefits provided by
the Company to which Executive is entitled at the date of the Executive's death,
which shall be at least comparable to those in effect at any time during the
ninety-day period immediately preceding the Effective Date or, if more favorable
to the Executive and/or the Executive's designees, as in effect on the date of
the Executive's death with respect to other similarly positioned executives and
their designees.

Disability

. If the Executive's employment is terminated by reason of the Executive's
Disability, this Agreement shall terminate without further obligations to the
Executive, other than those disability benefits provided by the Company to which
Executive is entitled as of the Disability Effective Date, which benefits shall
be at least comparable to those in effect at any time during the ninety-day
period immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's designees, as in effect on the date of the
Executive's Disability with respect to other similarly positioned executives and
their designees.

With Cause or Without Good Reason

. If the Executive's employment shall be terminated (i) by the Company with
Cause, or (ii) by Executive without Good Reason, the Company shall pay the
Executive his Base Salary through the date of termination at the rate in effect
at the time Notice of Termination is given, plus any Bonus amounts earned but
not paid through the date of termination and any benefits to which the Executive
is entitled under the terms of any of the Company's benefit plans, policies or
arrangements, and the Company shall have no further obligations to the Executive
under this Agreement.

Without Cause or With Good Reason

. If, during the Employment Period, Executive's employment shall be terminated
(i) by the Company without Cause, or (ii) by Executive for Good Reason, the
Company shall pay to the Executive in a lump sum in cash within ten (10) days
after the date of termination (unless a delay is required pursuant to
Section 14(b)
below), the aggregate of the following amounts, with respect to which Executive
shall have no duty of mitigation and the Company shall have no right of set-off:

to the extent not theretofore paid, the Executive's Base Salary through the date
of termination at the rate in effect on the date of termination plus any Bonus
amounts which have become payable and any accrued vacation pay;

a pro rata portion of Executive's Bonus for the Fiscal Year in which the date of
termination occurs equal to the product of (1) the greater of (x) the average
annual dollar bonus amount that was earned by the Executive under the Bonus Plan
for the three completed Fiscal Years immediately prior to the date of
termination, or (y) Executive's Target bonus amount under the Bonus Plan for the
Fiscal Year which includes the date of termination or, if no target has been set
with respect to Executive for such Fiscal Year, the Target bonus amount for the
immediately preceding Fiscal Year (in either case, based on Executive's target
percentage of Base Salary established pursuant to the Bonus Plan) (the greater
of (x) and (y) being referred to as the "Target Bonus"), multiplied by (2) a
fraction, the numerator of which is the number of days in the Fiscal Year in
which the date of termination occurs through the date of termination and the
denominator of which is three hundred sixty-five (365);

an amount equal to two (2) times the Executive's Base Salary and Target Bonus;

an amount equal to twenty four (24) multiplied by the applicable monthly COBRA
premium as in effect on the date of the Executive's termination that the
Executive would have to pay to continue the welfare benefits for which COBRA
continuation rights are available for the Executive and, where applicable, his
or her family, with respect to those plans, programs and policies described in
Section 5(d); and

(E) an amount equal to twenty four (24) multiplied by the applicable monthly
premium or allowance as in effect on the date of the Executive's termination
that would have to be paid to continue the programs and benefits which are
available for the Executive and, where applicable, his or her family, with
respect to those plans, programs and policies described in Sections 5(d), other
than those covered by clause (D) above and specifically excluding Executive's
automobile allowance.

In addition, upon a termination of Executive in accordance with this Section
7(e), all non-vested stock options, and any other non-vested stock or
stock-based awards held by Executive, shall immediately become fully vested (at
target levels with respect to performance-based awards), non-forfeitable and
exercisable.

In addition, upon a termination of Executive in accordance with this Section
7(e), for purposes of calculating "Years of Service" under any Employee Benefit
Plan, Executive shall receive vesting credit for two (2) additional years, but
no additional contributions.

Notwithstanding anything herein to the contrary, in the event that Executive is
entitled to the amounts set forth above as a result of a termination of
Executive's employment prior to a Change of Control and Executive reasonably
demonstrates pursuant to Section 1(a) that such termination was at the direction
of a third party or in connection with the Change of Control, the Executive
shall receive the amounts set forth in this Section 7(e), less any severance
compensation paid to Executive in connection with such termination, within ten
(10) days following the Change of Control; provided however, that if these
amounts are deemed to constitute deferred compensation subject to the
requirements of Section 409A of the Code, such amounts shall be paid to the
Executive as follows: (i) if the Change of Control qualifies as a permissible
distribution event within the meaning of Section 409A(a)(2)(A)(v) of the Code,
it will be paid within ten (10) days following the Change of Control, unless
payment is required to be delayed pursuant to Section 14(b) below in which case
it will be paid at the end of the period described in Section 14(b) if such date
is later than the ten (10) day period following the Change of Control, or (ii)
if the Change of Control does not qualify as a permissible distribution event
within the meaning of Section 409A(a)(2)(A)(v) of the Code, it will be payable
in a single sum on the first business day of the month immediately following the
six (6) month anniversary of the date Executive terminated employment with the
Company.

Non-Exclusivity of Rights

. Nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor shall anything herein limit such rights as the
Executive may have under any stock option or other agreements with the Company
or any of its affiliated companies. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or program of the
Company or any of its affiliated companies at or subsequent to the date on which
the Executive's employment is terminated shall be payable in accordance with
such plan or program. Anything herein to the contrary notwithstanding, if the
Executive becomes entitled to payments pursuant to Section 7(e) hereof, such
Executive agrees to waive payments under any severance plan or program of the
Company.

Confidential Information

. The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by the Executive during the Executive's
employment by the Company or any of its affiliated companies and which shall not
be public knowledge (other than by acts by the Executive or his representatives
in violation of this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of
the Company, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 9 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.

Covenant Against Competition

.

If, after the occurrence of a Change of Control, the Executive's employment by
the Company is terminated pursuant to Sections 7(d) or 7(e) hereof, then for two
(2) years following such termination, the Executive shall not, directly or
indirectly, (i) induce or attempt to influence any employee of the Company to
terminate his employment with the Company or hire or solicit 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 (ii) engage in (as a
principal, partner, director, officer, agent, employee, consultant or otherwise)
or be financially interested in any business operating within the United States
of America, if (A) such business' primary business is the retail and/or
commercial sale of automotive parts, accessories, tires and/or automotive
repair/maintenance services including, without limitation, the entities
(including their franchisees and affiliates) listed on Schedule 10(a)(ii)(A)
hereto, or (B) such business is a general retailer which generates revenues from
the retail and/or commercial sale of automotive parts, accessories, tires and/or
automotive repair/maintenance services in an aggregate amount in excess of $1
billion, including, without limitation, the entities (including their
franchisees and affiliates) listed on Schedule 10(a)(ii)(B) hereto. However,
nothing contained in this Section 10(a) shall prevent the Officer from holding
for investment up to two percent (2%) of any class of equity securities of a
company whose securities are traded on a national or foreign securities
exchange.

Executive acknowledges that the restrictions contained in Sections 9 and 10
hereof, in view of the nature of the business in which the Company is engaged,
are reasonable and necessary in order to protect the legitimate interests of the
Company, and that any violation thereof would result in irreparable injuries to
the Company, and the Executive therefore acknowledges that, in the event of his
violation of any of these restrictions, the Company shall be entitled to obtain
from any court of competent jurisdiction preliminary and permanent injunctive
relief (without the posting of any bond) as well as damages and an equitable
accounting of all earnings, profits and other benefits arising from such a
violation, which rights shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled.

If the Executive violates any of the restrictions contained in the foregoing
Section 10(a), the period during which the restrictions contained in Section
10(a) shall remain in effect shall be tolled as of the time of commencement of
such violation, and shall not begin to run again until such time as such
violation shall be cured by the Executive to the satisfaction of the Company.

Executive acknowledges and agrees that the covenants and other provisions set
forth in Sections 10(a), 10(b) and 10(c) hereof are reasonable and valid in
geographical and temporal scope and in all other respects. If any of such
covenants or other provisions are found to be invalid or unenforceable by a
final determination of a court of competent jurisdiction, then (I) the remaining
covenants and other provisions set forth in Sections 10(a), 10(b) and 10(c)
shall be unimpaired, and (ii) the invalid or unenforceable covenant or provision
shall be deemed replaced by a covenant or provision that is valid or enforceable
and that comes closest to expressing the intention of the covenant or provision
found to be invalid or unenforceable.

(e) In connection with a Change of Control, the Company will engage, at its sole
cost and expense (subject to the limit set forth below), a nationally recognized
valuation firm to value the benefit provided to the Company of the covenant
against competition granted by Executive pursuant to this Section 10 (the
"Valuation"). The Valuation shall be issued in a form that expressly names the
Executive as a third party beneficiary thereof for the purpose of determining
whether a Payment (as defined in Section 11 below) would be subject to an Excise
Tax (as defined in Section 11 below). The Valuation engagement shall cover all
executives of the Company having similar covenants against competition triggered
by a Change of Control; provided, however, that the Company's cost of such
Valuation shall be capped at $200,000.

 

Excise Taxes

.

Notwithstanding anything to the contrary contained herein, if it is determined
(as hereafter provided) that any payment or distribution by the Company to or
for the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any restriction on or the vesting
or exercisability of any of the foregoing (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local law, or any interest or
penalties with respect to such excise tax (such tax or taxes, together with any
such interest and penalties, are hereafter collectively referred to as the
"Excise Tax"), then the Company shall pay to the Executive either (i) the full
Payment, which shall be subject to the Excise Tax (without the Company being
responsible for any gross-up payment in connection therewith) or (ii) the
Payment reduced to an amount such that no Excise Tax would be due thereupon,
such that the actual Payment made yields the greater amount to Executive, net of
all taxes due thereupon.

The determination whether an Excise Tax is payable by Executive and the amount
of such Excise Tax (as well as the amount by which the Payment would need to be
reduced such that no Excise Tax would be due thereupon) will be made by a
nationally recognized firm of certified public accountants (the "Accounting
Firm") selected by the Company. In connection with such determination, the
Accounting Firm will utilize the Valuation of Covenant Against Competition
granted by Executive pursuant to Section 10 hereof. Within ten (10) business
days of Executive's termination, the Company will provide Executive with the
Accounting Firm's determination and detailed supporting calculations and shall
make the payment provided for in Section 11(a) above (unless such Payment is
required to be delayed pursuant to Section 14(b) below). If the Accounting Firm
determines that no Excise Tax is payable by Executive, the Accounting Firm will,
at the same time as it makes such determination, furnish Executive with an
opinion that he has substantial authority not to report any Excise Tax on his
federal, state, local income or other tax return.

The Company and Executive will each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
Executive, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation
and issuance of the determination contemplated by Section 11(b) hereof.

The fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by this Section 11 will be
borne by the Company.

 

Successors

.

This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive other than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal representatives.

This Agreement shall inure to the benefit of and be binding upon the Company and
its successors.

The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

Miscellaneous

.

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania without reference to principles of conflict of
laws. The parties hereto agree that the exclusive jurisdiction of any dispute
regarding this Agreement shall be the state courts located in Philadelphia,
Pennsylvania. The Company shall reimburse Executive for the fees and expenses
incurred by him in enforcing this Agreement, provided that at least one matter
in dispute is decided in favor of Executive.

The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect.

This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.

All notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

If to the Executive, to the Executive's most recent home address reflected on
the Company's books and records; and

If to the Company

:

The Pep Boys - Manny, Moe & Jack

3111 West Allegheny Avenue

Philadelphia, PA 19132

Attention: President & Chief Executive Officer
cc: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.

The Company may withhold from any amounts payable under this Agreement such
Federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

This Agreement contains the entire understanding of the Company and the
Executive with respect to the subject matter hereof, and, effective December 20,
2012, supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, with respect to the
subject matter hereof, including the Original Agreement.

The Executive and the Company acknowledge that the employment of the Executive
by the Company, prior to the Effective Date, is "at will", and may be terminated
by either the Executive or the Company at any time. Upon a termination of the
Executive's employment or upon the Executive's ceasing to be an officer of the
Company, in each case, prior to the Effective Date, there shall be no further
rights under this Agreement.

Section 409A of the Internal Revenue Code

.

This Agreement shall be interpreted to avoid any penalty sanctions under section
409A of the Code. Accordingly, all provisions herein, or incorporated by
reference, shall be construed and interpreted to comply with Section 409A of the
Code, to the extent applicable, and, if necessary, any such provision shall be
deemed amended to comply with section 409A of the Code and regulations
thereunder. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under section 409A of the Code,
then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. All payments to be made upon
a termination of employment under this Agreement may only be made upon a
"separation from service" (as defined under Section 409A of the Code). In no
event may the Executive, directly or indirectly, designate the calendar year of
payment.

To the maximum extent permitted under section 409A of the Code, the cash
severance payments payable under this Agreement are intended to comply with the
"short-term deferral exception" under Treas. Reg. Section 1.409A-1(b)(4);
provided, however, any amount payable to the Executive during the six (6) month
period following the Executive's termination date that does not qualify within
such exception and is deemed as deferred compensation subject to the
requirements of section 409A of the Code, then such amount shall hereinafter be
referred to as the "Excess Amount." If at the time of the Executive's
termination of employment, the Company's (or any entity required to be
aggregated with the Company under section 409A of the Code) stock is
publicly-traded on an established securities market or otherwise and the
Executive is a "specified employee" (as defined in section 409A of the Code and
determined in the sole discretion of the Company (or any successor thereto) in
accordance with the Company's (or any successor thereto) "specified employee"
determination policy), then the Company shall postpone the commencement of the
payment of the portion of the Excess Amount that is payable within the six (6)
month period following the Executive's termination date with the Company (or any
successor thereto) for six (6) months following the Executive's separation from
service with the Company (or any successor thereto). The delayed Excess Amount
shall be paid in a lump sum to the Executive within ten (10) days following the
date that is six (6) months following the Executive's separation from service
with the Company (or any successor thereto). If the Executive dies during such
six (6) month period and prior to the payment of the portion of the Excess
Amount that is required to be delayed on account of section 409A of the Code,
such Excess Amount shall be paid to the personal representative of the
Executive's estate within sixty (60) days after the Executive's death.

All reimbursements provided under this Agreement shall be made or provided in
accordance with the requirements of Section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement is for expenses incurred
during the Executive's lifetime (or during a shorter period of time specified in
this Agreement), (ii) the amount of expenses eligible for reimbursement during a
calendar year may not affect the expenses eligible for reimbursement in any
other calendar year, (iii) the reimbursement of an eligible expense will be made
on or before the last day of the taxable year following the year in which the
expense is incurred, and (iv) the right to reimbursement is not subject to
liquidation or exchange for another benefit. Any tax gross up payments to be
made hereunder shall be made not later than the end of the Executive's taxable
year next following the Executive's taxable year in which the related taxes are
remitted to the taxing authority.

IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.

 

_______________________________ Name:

 

THE PEP BOYS - MANNY, MOE & JACK

By:_______________________________ Troy E. Fee, SVP - Human Resources

Schedule 10(a)(ii)(A)

Advance (API), Auto Parts Warehouse, AutoZone, CarQuest (WorldPac), Discount
Tire, Driven Brands (Meineke), Firestone (Tires Plus), Goodyear (Just Tires),
Jiffy Lube, Les Schwab, Monro (Mr. Tire), NAPA, O'Reilly, Rock Auto, TBC (Big O
Tire, Carol Tire, Merchants, Midas, National Tire & Battery, Tire Kingdom), Tire
Rack

Schedule 10(a)(ii)(B)

Amazon, BJ's Wholesale, Costco, Sam's Club, Sears/Kmart, Target, Wal-Mart