EXHIBIT 10.38

ADVANCE AUTO PARTS, INC.

2004 LONG-TERM INCENTIVE PLAN

STOCK OPTION AGREEMENT

        THIS AGREEMENT dated as of May 24, 2004, between Advance Auto Parts,
Inc., a corporation organized under the laws of the State of Delaware (the
“Company”), and the individual identified in paragraph 1 below, currently
residing at the address set out at the end of this Agreement (the “Optionee”).

        1.        Grant of Option. Pursuant and subject to the Company’s 2004
Long-Term Incentive Plan (as the same may be amended from time to time, the
“Plan”), the Company grants to you, the Optionee identified below, an option
(the “Option”) to purchase from the Company all or any part of a total of the
number of shares set forth below (the “Optioned Shares”) of the common stock,
par value $.0001 per share, in the Company (the “Stock”), at the exercise price
per share set out below.

        Optionee          

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        Number of Shares  

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        Exercise Price Per Share   $ 42.10  

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        Grant Date   May 24, 2004  

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        Expiration Date   May 24, 2011  

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        2.        Character of Option. This Option is not intended to be treated
as an “incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.

        3.        Duration of Option. Subject to the following sentence, this
Option shall expire on the Expiration Date. However, if your employment or other
association with the Company and its Affiliates ends before that date, this
Option shall expire on Expiration Date or, if earlier, the date specified in
whichever of the following applies:

                    (a)        If the termination of your employment or other
association is for cause, as determined in good faith by the Board of Directors
of the Company, the date your employment ends.

                    (b)        If the termination of your employment or other
association is on account of death, or you die within ninety (90) days of the
termination of your employment or other association (other than when terminated
for cause), twelve (12) months after your employment or other association ends
or your death.

                    (c)        If the termination of your employment or other
association is on account of retirement or disability, ninety (90) days after
the date on which your Option becomes exercisable as to all of the Shares or, if
your Option had become exercisable as to all of the Shares prior to such
termination, ninety (90) days after the date your employment or other
association ends on account of retirement or disability.

                    (d)        In all other cases, ninety (90) days after your
employment or other association ends.

For all purposes of this Agreement, “disability” means having become disabled
within the meaning of Section 22(e)(3) of the Code and “retirement” means
termination of employment or other association upon the attainment of at least
age 55 with at least 10 years of continuous service. Notwithstanding any
contrary provision of this Agreement, as to any Optioned Shares for which this
Option has not then become exercisable the Company may cancel this Option at any
time and without prior notice, and as to any Optioned Shares for which it is
then exercisable the Company may cancel this Option at any time on ninety (90)
days prior notice to you, in response to actions taken by you that could be
considered detrimental to the Company or any of its Affiliates. Whether any of
your actions could be considered detrimental will be determined by the Committee
in its sole discretion and may include, but will not be limited to the
following: your employment by or other association with a direct competitor of
the Company or an Affiliate; your establishment of a business which competes
with the Company or an Affiliate; and your unauthorized release of confidential
information of the Company or an Affiliate.

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        4.        Exercise of Option.

                    (a)        Subject to the balance of this Section 4, until
this Option expires, you may exercise it as to the number of Optioned Shares
identified in the table below, in full or in part, at any time on or after the
applicable exercise date or dates identified in the table.

  Number of Shares
in Each Installment           Initial Exercise Date
for Shares in Installment  

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 416         May 24, 2005   417         May 24, 2006   417         May 24, 2007 

                    (b)        During any period that this Option remains
outstanding after your employment or other association with the Company and its
Affiliates ends, you may exercise it only to the extent it was exercisable
immediately prior to the end of your employment or other association except in
the following circumstances. If your employment or other association ends on
account of retirement or disability, this Option shall nevertheless continue to
become exercisable in accordance with the table above. If your employment or
other association ends on account of your death, or you die within ninety (90)
days after your employment or other association ends, this Option shall become
exercisable for all of the Optioned Shares if not then exercisable in full. In
no event may this Option be exercised after it expires as determined in
accordance with Section 3.

                    (c)        At any time, you may only exercise this Option in
increments of 100 Optioned Shares, or the remaining number of Optioned Shares,
if less. You may exercise this Option by delivery of the following to the
Company at its principal executive offices (the date such delivery occurs is
hereinafter referred to as, the “Exercise Date”):

                        (1)        a written notice of exercise which identifies
this Agreement and states the purchase price and expiration date of the Options
being exercised, and the number of Shares to be purchased;

 

                        (2)        a check, cash or any combination thereof in
the amount of the aggregate purchase price (or payment of the aggregate Purchase
Price in such other form of lawful consideration, or by such other means, such
as delivery previously acquired Stock or a broker-assisted cashless exercise),
as the Committee may approve from time to time under the provisions of Section
6(a)(iv) of the Plan);

 

                        (3)        a check or cash in the amount reasonably
requested by the Company to satisfy any withholding obligations under federal,
state or other applicable tax laws with respect to the taxable income, if any,
you recognize in connection with the exercise of your Option (unless the Company
and you shall have made other arrangements for deductions or withholding from
your income, provided, however, such arrangements satisfy the requirements of
all applicable tax laws); and

 

                        (4)        such further acts as may be necessary to
register Optionee as a stockholder of the Company.

 

        5.        Transfer of Option. You may not transfer this Option except by
will or the laws of descent and distribution, and, during your lifetime, only
you (or in the event of your disability, your legal guardian or representative)
may exercise this Option. Any attempt to sell, pledge, assign, hypothecate,
transfer or otherwise dispose of the Option granted by this Agreement in
contravention of this Agreement or the Plan shall be void.

        6.        Representations and Warranties.

                    (a)        By signing this Agreement, you acknowledge that
in the event the issuance of the Optioned Shares has not been registered under
the Securities Act of 1933, as amended (the “Act”), as a condition to your
exercise of the Option the Company may require that you deliver to the Company
such representations and undertakings as the Company may reasonably require in
order to secure the availability of certain exemptions from the registration
requirements under the Act, including a representation that you are acquiring
the Shares for investment and not with a present intention of selling or
otherwise disposing of such Shares. You further acknowledge that, because Shares
received upon exercise of an Option may

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be unregistered, you may be required to hold the Shares indefinitely unless they
are subsequently registered for resale under the Act or an exemption from such
registration requirements is available.

                    (b)        By signing this Agreement, you also acknowledge
you understand that federal securities laws and the securities laws of the state
in which you reside or work may require the placement of certain restrictive
legends upon the Optioned Shares issued upon exercise of this Option, and you
hereby consent to the placing of any such legends upon certificates evidencing
the Optioned Shares as the Company, or its counsel, may reasonably deem
necessary; provided, however, that any such legend or legends shall be removed
when no longer applicable.

                    (c)        By signing this Agreement, you also acknowledge
your receipt of this Agreement, and concurrently or previous a copy of the Plan
and of the Plan’s Section 10(a) prospectus under Form S-8 of the Act, and that
you understand that all rights and liabilities connected with the Options are
set forth herein and in the Plan.

        7.        No Rights as a Stockholder. You shall have no rights as a
stockholder of any Stock covered by this Option until the Exercise Date and
entry evidencing such ownership is made in the stock transfer books of the
Company. Except as may be provided under Section 4(c) of the Plan, the Company
will make no adjustment for dividends (ordinary or extraordinary whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the Exercise Date.

        8.        Limitation of Company’s Liability for Nonissuance. Inability
of the Company to obtain, from any regulatory body having jurisdiction,
authority reasonably deemed by the Company’s counsel to be necessary for the
lawful issuance and sale of any Optioned Shares hereunder and under the Plan
shall relieve the Company of any liability in respect of the nonissuance or sale
of such Shares as to which such requisite authority shall not have been
obtained.

        9.        This Agreement Subject to Plan; Interpretation of the
Committee. This Agreement is made under the provisions of the Plan and shall be
interpreted in a manner consistent with it. To the extent that any provision in
this Agreement is inconsistent with the Plan, the provisions of the Plan shall
control. The interpretation of the Committee of any provision of the Plan, the
Option or this Agreement, and any determination with respect thereto or hereto
by the Committee, shall be binding on all parties.

        10.        Notices. Except as otherwise provided herein, all notices,
requests, demands and other communications under this Agreement shall be in
writing, and if by telecopy, shall be deemed to have been validly served, given
or delivered when sent, or if by personal delivery or messenger or courier
service, shall be deemed to have been validly served, given or delivered upon
actual delivery (but in no event may notice be given by deposit in the United
States mail), at the following addresses, telephone and facsimile numbers (or
such other address(es), telephone and facsimile numbers a party may designate
for itself by like notice):

                         If to the Company:
                         Advance Auto Parts, Inc.
                         5673 Airport Road
                         Roanoke, VA 24012
                         Attention:       General Counsel
                         Telephone:     (540) 561-3225
                         Telecopy:       (540) 561-1448

                         With copy to:
                         Advance Auto Parts, Inc.
                         5673 Airport Road
                         Roanoke, VA 24012
                         Attention:       Senior Vice President, Human Resources
                         Telephone:     (540) 561-6841
                         Telecopy:       (540) 561-6918

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                         If to Optionee:
                        To your home address on record at Advance Auto Parts or
your business address at Advance Auto Parts.

        11.        Not an Employment Agreement. Nothing contained in this
Agreement shall confer, intend to confer or imply any rights to an employment
relationship or rights to a continued employment relationship with the Company
or any Affiliate in your favor or limit the ability of the Company or an
Affiliate, as the case may be, to terminate, with or without cause, in its sole
and absolute discretion, your employment relationship with the Company or such
Affiliate, subject to the terms of any written employment agreement to which
your are a party.

        12.        Miscellaneous. This Agreement shall be construed and enforced
in accordance with the laws of the State of Delaware, without regard to the
conflict of laws principles thereof and shall be binding upon and inure to the
benefit of any successor or assign of the Company and any executor,
administrator, trustee, guardian, or other legal representative of you. For
purposes of this Agreement, “Optionee,” “you” and “your” include any person or
persons who may succeed to your rights under this Agreement in the event of your
death. Capitalized terms used but not defined herein shall have the meaning
assigned under the Plan. This Agreement may be executed in one or more
counterparts all of which together shall constitute but one instrument.

        13.        Tax Consequences. The Company makes no representation or
warranty as to the tax treatment to you of your receipt or exercise of this
Option or upon your sale or other disposition of the Optioned Shares. You should
rely on your own tax advisors for such advice.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

ADVANCE AUTO PARTS, INC.

By:

 

 

 

 

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Signature of Optionee

 

Title:

 

 

 

 

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Optionee’s Address:

 

 

 

 

 

 

 

 

 

 

 

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