Exhibit 10.16

 

THE PEP BOYS - MANNY, MOE & JACK
ACCOUNT PLAN

 

(formerly part of The Pep Boys - Manny, Moe & Jack
Executive Supplemental Retirement Plan)

 

 

RECITALS

 

WHEREAS, The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation (the
“Company”), established an Executive Supplemental Pension Plan (hereinafter
referred to as the “Supplemental Plan”) effective January 1, 1982;

 

WHEREAS, the Company previously amended and completely restated the Supplemental
Plan effective January 1, 1988, and further amended and restated the
Supplemental Plan effective on February 13, 1992, March 31, 1995, and March 26,
2002;

 

WHEREAS, pursuant to resolutions adopted March 3, 2004, the Board changed the
name of the Supplemental Plan to the “Executive Supplemental Retirement Plan”
(the “Executive Plan”) and amended and restated the Executive Plan with respect
to certain of those individuals who were Eligible Employees (as defined in the
Executive Plan) on such date, altered the method of delivering benefits for
certain specified Participants and gave others an election as to the manner in
which they were credited with a benefit;

 

WHEREAS, the foregoing changes were incorporated into an amendment and
restatement of the Executive Plan, effective as of January 31, 2004;

 

WHEREAS, effective January 1, 2009, the Executive Plan was split to create the
Legacy Plan and this Account Plan to, among other things  implement changes
required pursuant to and consistent with section 409A of the Internal Revenue
Code; 

 

WHEREAS, the Account Plan provides for Retirement Contributions to made
hereunder;

 

WHEREAS, the Board desires to reserve the ability to make future Retirement
Contributions discretionary; and

 

WHEREAS, Section 9.1 of the Executive Plan authorizes the Board to amend the
Executive Plan.

 

NOW, THEREFORE, the Account Plan is hereby amended and restated, effective as of
January 31, 2009, as follows:

 

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ARTICLE I

Definitions

 

1.1           “Administrator” or “Plan Administrator” shall mean a committee
composed of three or more persons designated from time to time by the Board.

 

1.2           “Board” shall mean the Board of Directors of the Company.

 

1.3           “Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time and includes any regulations issued thereunder.

 

1.4           “Company” shall mean The Pep Boys - Manny, Moe & Jack, a
Pennsylvania corporation.

 

1.5           “Compensation” shall mean, for each Plan Year, 100% of an Eligible
Employee’s annual base salary for such Plan Year and annual bonus paid under the
Employer’s Annual Incentive Bonus Plan, or any other bonus plan that replaces
such plan or is in addition to such plan for the Plan Year, before taking into
account amounts which an Eligible Employee elects to forego to provide benefits
under a plan which satisfies the provisions of section 401(k) or 125 of the Code
or to provide benefits under the Company’s Deferred Compensation Plan; provided,
further, that any bonus that was payable under the Employer’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.

 

1.6           “Disability” shall mean that a Participant ceases employment with
the Employer when he or she is entitled to receive benefits under the Long Term
Disability Salary Continuation Plan sponsored by the Employer.

 

1.7           “Effective Date” shall mean January 1, 2009.

 

1.8           “Eligible Employee” shall mean an employee of the Employer who is
a key employee, including officers and directors who are key employees, and is
designated by the Board to participate in this Plan.  Any individual who is
actively participating in the Legacy Plan shall not qualify as an Eligible
Employee for purposes of this Plan.

 

1.9           “Employer” shall mean the Company or any of its subsidiaries.

 

1.10         “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and includes any regulations issued
thereunder.

 

1.11         “Executive Plan” shall mean such term as is defined in the Recitals
of this Plan.

 

1.12         “Investment Election Form” shall mean the form prescribed by the
Administrator, filed by a Participant with the Administrator, to designate the
investment vehicles for which the amounts credited to the Participant’s Plan
Account shall be deemed to be invested under Section 3.2 of the Plan.

 

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1.13         “Legacy Plan” shall mean The Pep Boys — Manny, Moe & Jack Legacy
Plan.

 

1.14         “Legacy Plan Participant” shall mean such term as is defined in the
Legacy Plan.

 

1.15         “Non-Legacy Plan Participant” shall mean any participant in the
Executive Plan who was not a Legacy Plan Participant.

 

1.16         “Participant” shall mean each Non-Legacy Plan Participant who is
entitled to receive a benefit from the Executive Plan immediately prior to the
Effective Date and did not commence receipt of his or her benefit under the
Executive Plan immediately prior to the Effective Date, and each Eligible
Employee who first becomes eligible to participate in the Plan pursuant to
Sections 2.1 and 2.2 on or after the Effective Date and is entitled to receive a
benefit under the Plan.

 

1.17         “Plan” shall mean The Pep Boys — Manny, Moe & Jack Account Plan as
set forth herein as of the Effective Date, and the same as may be further
amended from time to time.

 

1.18         “Plan Account” shall mean for each Participant his or her
Retirement Contribution Account and the Prior Executive Plan Account, if
applicable.

 

1.19         “Plan Year” shall mean the calendar year.

 

1.20         “Prior Executive Plan Account” shall mean the individual account
maintained on the books of the Company for each Non-Legacy Plan Participant
under the Executive Plan and all sums accounted for therein immediately prior to
the Effective Date.

 

1.21         “Retirement Contribution” shall mean a credit to a Participant’s
Retirement Contribution Account pursuant to Section 4.1 of the Plan.  For
periods prior to the Effective Date, the term “Retirement Contribution” shall
have the meaning in the Executive Plan.

 

1.22         “Retirement Contribution Account” shall mean the individual account
maintained on the books of the Company for each Participant to record the
crediting of all Retirement Contributions, and all earnings related to such
Retirement Contributions, on and after the Effective Date, and the debiting of
all distributions to the Participant or to his or her beneficiary on and after
the Effective Date with respect to such Retirement Contributions.

 

1.23         “Separation Date” shall mean the last day on which a Participant is
employed by an Employer on account of a Separation From Service.

 

1.24         “Separation From Service” shall mean a Participant’s separation
from service with the Employer within the meaning of section 409A of the Code
and the regulations issued thereunder.

 

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1.25         “Specified Employee” shall mean any Participant who, at any time
during the twelve month period ending on the identification date (as determined
by the Company or its delegate), is a specified employee under section 409A of
the Code, as determined by the Company (or its delegate).  The determination of
“specified employees,” including the number and identity of persons considered
“specified employees” and identification date, shall be made by the Company (or
its delegate) in accordance with the provisions of sections 416(i) and 409A of
the Code and the regulations issued thereunder.

 

1.26         “Year of Service” shall mean a consecutive twelve-month period
during which an individual is continuously employed by the Employer as an
Eligible Employee.  Each Year of Service earned prior to the Effective Date
under the Executive Plan shall count as a Year of Service under this Plan.  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 and Years of Service
for which the individual did not qualify as an Eligible Employee shall not
count.  If a terminated employee is rehired and is designated as an Eligible
Employee, his or her Years of Service shall not include his or her
pre-termination employment.  If a Legacy Plan Participant after ceasing to
participate in the Legacy Plan is subsequently designated as an Eligible
Employee for purposes of this Plan and such Legacy Plan Participant was
continuously employed during such subsequent period, such Legacy Plan
Participant shall receive credit for his or her Years of Service prior to being
so designated.

 

ARTICLE II

Participation

 

2.1           Eligibility to Participate.  Each Non-Legacy Participant who was
entitled to receive a benefit under the Executive Plan on December 31, 2008, but
did not receive payment of his or her benefit prior to the Effective Date, shall
be a Participant in the Plan as of the Effective Date and such Participant’s
benefit paid on or after the Effective Date shall be governed by the terms of
the Plan as set forth herein.  Each individual who becomes an Eligible Employee
on or after the Effective Date shall commence participation in the Plan on the
date he or she is designated as an Eligible Employee by the Administrator and
for as long as such individual is entitled to receive a benefit from the Plan
such individual shall be deemed a Participant.

 

2.2           Procedure for and Effect of Admission.  On and after the Effective
Date, each individual who first becomes an Eligible Employee for a Plan Year
shall become a Participant in the Plan for such Plan Year at the time designated
by the Administrator.  Prior to active participation in the Plan such
Participant shall be provided with such forms as the Administrator determines
necessary to effectuate the participation of such Eligible Employee in the Plan,
including an Investment Election Form and beneficiary designation form in the
event of the death of the Eligible Employee.

 

2.3           Termination.  An individual shall continue as a Participant in the
Plan for as long as he or she is entitled to receive a benefit from the Plan;
provided, however, that a Participant’s active participation in the Plan for
purposes of eligibility to receive Retirement Contributions shall terminate on
the earliest of the date (a) his or her designation as an Eligible

 

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Employee is terminated by the Board, (b) he or she has a Separation From Service
from the Employer for any reason, or (c) the Plan is terminated.

 

2.4           Reemployment.  If an Eligible Employee ceases being eligible to
participate in the Plan and subsequently becomes eligible to participate in the
Plan on or after the Effective Date, such Eligible Employee’s participation in
the Plan shall commence for the Plan Year designated by the Administrator.  Such
Eligible Employee shall be required to execute such forms as required by the
Administrator, including an Investment Election Form and beneficiary designation
form in the event of the death of the Eligible Employee.

 

ARTICLE III

Plan Accounts

 

3.1           Establishment of Accounts.  The Plan Administrator shall maintain
a Plan Account on behalf of each Participant in the Plan.  Such Plan Account
shall consist of a Prior Executive Plan Account for each Participant who had
such under the Executive Plan and a Retirement Contribution Account to reflect
Retirement Contributions credited on behalf of such Participant on and after the
Effective Date.

 

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
on his or her Investment Election Form 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.  Neither the Company nor any other
Employer shall be obligated to make any actual investment.  A Participant may
change the investment allocations for existing amounts credited to his or her
Plan Account or for future amounts credited to his or her Plan Account by
completing a new Investment Election Form and submitting such to the Plan
Administrator.  Amended Investment Election Forms may be submitted by the
Participant to the Plan Administrator at such times as permitted by the Plan
Administrator in or her sole discretion.

 

3.3           Bookkeeping Entries.  The maintenance of an individual Plan
Account on behalf of each Participant is for bookkeeping purposes only.  Neither
the Company nor any other Employer shall be obligated to acquire or set aside
any particular assets for the discharge of their obligations under the Plan, nor
shall any Participant to have any property rights in any particular assets that
may be held by the Company or any other Employer with respect to the Plan.

 

3.4           Statements.  Statements shall be sent to each Participant no less
frequently than quarterly setting forth the value of the Participant’s Plan
Accounts.

 

ARTICLE IV

Retirement Contributions

 

4.1           Amount.  The Retirement Contribution Account of each Participant
shall be credited with a Retirement Contribution, if any, based on a percentage
of his or her Compensation for a Plan Year provided that the Participant is an
Eligible Employee on the last

 

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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

 

Retirement
Contribution
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 to which the particular Retirement Contribution relates. 
Notwithstanding the foregoing, (i) for the first four Plan Years that a
Participant is an Eligible Employee, including Plan Years under the Executive
Plan, but only with respect to Eligible Employees who were eligible to
participate in the Plan on the Effective Date, the Retirement Contribution shall
be limited to 10% of Compensation 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 Employer prior
to death or Disability.  If an Eligible Employee is rehired by the Employer
after the Effective Date, such Eligible Employee will not receive any credit for
Years of Service earned prior to such rehire date and such Eligible Employee
will be subject to satisfying the requirements of clause (i) above for his first
four Plan Years after his rehire date.

 

Notwithstanding the foregoing, for all periods after March 8, 2009, the Board,
by resolution duly adopted prior to applicable period, may condition the making
of the Retirement Contribution for the applicable period upon the Company’s
achievement of certain specified objectives; provided, however, that any such
resolution and the resulting conditionality shall be of no force and effect
hereunder following a change in control of the Company.

 

4.2           Crediting.  Retirement Contributions shall be credited to an
Eligible Employee’s Retirement Contribution Account for a Plan Year as soon as
administratively practicable following the completion of the Plan Year for which
the Retirement Contribution relates 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.

 

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ARTICLE V

Vesting

 

5.1          Vesting.  Each Participant will vest in the amounts credited to his
or her Plan Account, and the related earnings thereon (if any), upon such
individual’s completion of four Years of Service.

 

ARTICLE VI

Distributions

 

6.1          Separation From Service.  Each Participant’s Plan Account shall be
distributed to him on account of his Separation from Service.  Such distribution
shall be paid in a single lump sum in cash to the Participant within sixty (60)
days following the six month anniversary of his Separation Date.  The lump sum
payment shall be equal to the value of such Plan Account as of the last business
day immediately preceding the date of payment.

 

6.2          Death.

 

(a)           In the event of a Participant’s death prior to his or her
Separation From Service, distribution of the Participant’s Plan Account shall be
made to the Participant’s beneficiary in a lump sum within sixty (60) days
following the date of the Participant’s death.  The amount of any lump sum
benefit payable in accordance with this subsection shall equal the value of the
Participant’s Plan Account as of the last business day immediately preceding the
date on which such benefit is paid.

 

(b)           In the event a Participant dies after the Participant’s Separation
From Service, and prior to the full distribution of the amounts credited to the
Participant’s Plan Account, the Participant’s Plan Account shall 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.

 

6.3          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 or her 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 or her
beneficiary shall be determined pursuant to Section 6.4.  If the beneficiary (or
last contingent beneficiary) determined pursuant to this Section 6.3 or the
initial beneficiary determined pursuant to Section 6.4 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 Administrator
on the form prescribed by it for such purpose, in which case such second-level
beneficiary shall be treated as a beneficiary hereunder.

 

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6.4          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 or her 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 VII

Loss of Benefits

 

7.1          Loss of Benefits.  Notwithstanding any provision of the Plan, a
person who has a vested benefit in his or her Plan Account 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 such Participant shall cease and terminate
should the Administrator find, after full consideration of the facts presented
on behalf of the Company and the Participant, that:

 

(a)           such Participant, during his or her employment with the Employer
and during the one year thereafter, unless the Participant was terminated by the
Employer without Cause (as defined in the Non-Competition Agreement between the
Employer and the Participant), directly or indirectly, engaged in (as a
principal, partner, director, officer, agent, employee, consultant or otherwise)
or was 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 automotive
repair/maintenance services including, without limitation, the entities
(including their franchisees and affiliates) listed on Schedule
7.1(a)(i) hereto, or (ii) 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
7.1(a)(ii) hereto.  However, nothing contained in this Section 7.1(a) shall
prevent the Participant 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;

 

(b)           such Participant, during his or her employment with the Employer
or during the one year thereafter, directly or indirectly, induced or attempted
to influence any employee of the Employer to terminate his or her employment
with the Employer or hired or solicited for hire on behalf of another employer
any person then employed or who had been employed by the Employer during the
immediately preceding six months; or

 

(c)           such Participant’s employment by the Employer was terminated
(other than in connection with or following a Change of Control) in connection
with any act of disloyalty to the Employer 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 or
her employment or service or unauthorized disclosure of trade secrets or
confidential information of the Employer.

 

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ARTICLE VIII

Termination and Amendments

 

8.1          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 VIII without
the consent of a majority of the Participants affected by such amendment. 
Notwithstanding the foregoing, the Board, without the consent of a Participant,
may make all technical, administrative, regulatory and compliance amendments to
the Plan that the Board deems necessary and appropriate so that the Plan meets
the requirements of section 409A of the Code.

 

8.2          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 Participants affected by such
termination.  Any termination of the Plan shall be done in a manner that
complies with the requirements of Treas. Reg. §1.409A-3(j)(4)(ix) (or any
successor regulation thereto).

 

ARTICLE IX

Plan Administration

 

9.1          Named Fiduciary and Plan Administrator.  The committee designated
by the Board shall be the Administrator and “named fiduciary” (within the
meaning of 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
Participant who is a member of the committee shall participate in committee
decisions affecting him.

 

9.2          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.

 

9.3          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 Participants and beneficiaries of all reports
and other information required of the Plan.

 

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(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 and any
other Employer and all Participants and their respective beneficiaries, and
successors hereunder.  Each 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 IX and in the Plan generally.

 

9.4          Payment of Expenses.  All expenses of the Administrator shall be
paid by the Company.

 

9.5          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.

 

9.6          Agent for Service of Process.  The Company shall be the agent for
the Plan for service of legal process.

 

ARTICLE X
Claims Procedure

 

10.1        Claim.  A Participant or his or her 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
ninety (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
ninety (90) days of receipt of the claim, specifying the special circumstances
requiring an extension and the date by which it

 

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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 X, 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.

 

10.2        Appeal Procedure.  A Claimant is entitled to request an appeal of
any adverse determination of his or her 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.

 

10.3        Final Determination.  Within sixty (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

 

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appeal, in which case the Administrator shall notify the Claimant of such
extension within sixty (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 XI

Source of Benefits and Payments

 

11.1        Unfunded Plan.  The Plan is intended to constitute an “unfunded”
plan of deferred compensation for Participants.  Benefits payable hereunder
shall be payable out of the general assets of the Company, and no segregation or
any assets whatsoever for such benefits shall be made.  Nothing contained herein
shall give any Participant or beneficiary any rights to assets that are greater
than those of a general creditor of the Employer.

 

11.2        Non-Alienation.  None of the payments, benefits or rights of
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 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.

 

11.3        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 or her financial affairs, the Company
may make payments to such person’s legal representative or to a relative or
other person for his or her 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 11.3 shall be a
complete discharge of any liability to make such payment.

 

ARTICLE XII

Miscellaneous

 

12.1        Effective Date.  This Plan is effective as of the Effective Date and
shall be applicable to each Non-Legacy Plan Participant who did not receive
payment of his or her

 

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benefit from the Executive Plan prior to the Effective Date and each individual
who becomes an Eligible Employee on or after the Effective Date and is entitled
to receive a benefit under the Plan.  The rights and benefits of any Non-Legacy
Plan Participant who commenced benefit payments prior to January 1, 2009 are
governed by the terms of the Executive Plan as it existed prior to the Effective
Date and are either grandfathered from the requirements of section 409A of the
Code or payable pursuant to a fixed schedule as required by, and in compliance
with, section 409A of the Code, with payments made between January 1, 2005 and
December 31, 2008, the Executive Plan has been operated in accordance with
transition relief established by the Treasury Department and Internal Revenue
Service pursuant to section 409A of the Plan.  The rights and benefits of a
Legacy Plan Participant shall not be governed by the terms of this Plan.

 

12.2        Employment Obligations.  The establishment of this Plan shall not be
construed as creating any contract of employment between the Employer and any
Participant.  Nothing in this Plan shall be construed as conferring upon any
Participant any right to continue in the employment of the Employer, nor shall
it interfere with the rights of the Employer to terminate the employment of any
Participant and/or to take any personnel action affecting any Participant
without regard to the effect that such action may have upon such Participant as
a recipient or prospective recipient of benefits under the Plan.  Any amount
payable hereunder shall not be deemed salary or other compensation to a
Participant for the purposes of computing benefits to which the Participant may
be entitled under any qualified retirement arrangement established by the
Employer for the benefit of its employees.  Nothing herein contained shall give
any Participant the right to inspect the books of the Company or to interfere
with the right of the Employer to discharge any Participant from employment at
any time for any reason whatsoever, with or without cause.

 

12.3        No Limitation of Employer Action.  Nothing contained in the Plan
shall be construed to prevent the Employer from taking any action that is deemed
by it to be appropriate or in its best interest.  No Participant, beneficiary,
or other person shall have any claim against the Employer as a result of such
action.

 

12.4        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.

 

12.5        References.  The masculine pronoun shall include the feminine and
the singular form shall include the plural, as necessary for proper
interpretation of this Plan.

 

12.6        Withholding Taxes.  The Employer may make such provisions and take
such actions as it may deem necessary or appropriate for the withholding of any
taxes that the Employer is required to withhold by any law or regulation of any
governmental authority, whether Federal, state or local, to withhold in
connection with any amounts credited and benefits distributed under the Plan. 
Each Participant (or his or her beneficiary); however, shall be responsible for
the payment of all individual tax liabilities resulting from any such benefits.

 

12.7        Severability.  If any provision of this Plan is held unenforceable,
the remainder of the Plan shall continue in full force and effect without regard
to such unenforceable

 

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provision and shall be applied as though the unenforceable provision were not
contained in the Plan.

 

12.8        Successors.  The provisions of this Plan shall bind and inure to the
benefit of the Employer and its successors and assigns.  The term, “successors,”
as used herein, shall include any corporate or other business entity which
shall, whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Employer, and successor of
any such corporation or other business entity.

 

12.9        Headings.  Headings are inserted in this Plan for convenience of
reference only and are to be ignored in the construction of the provisions of
the Plan.

 

12.10      Notice.  Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or certified
mail.  Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.  Mailed notice to the Administrator shall be
directed to the Company’s corporate headquarters.  Mailed notice to a
Participant or beneficiary shall be directed to the individual’s last known
address on the Employer’s records.

 

12.11      Section 409A of the Code.  The Plan is intended to comply with the
applicable requirements of section 409A of the Code and related guidance, and
shall be administered in accordance with such.  Notwithstanding anything in the
Plan to the contrary, elections as to form and distributions from the Plan may
only be made under the Plan upon an event and in a manner permitted by section
409A of the Code.  To the extent that any provision of the Plan would cause a
conflict with the requirements of section 409A of the Code, or would cause the
administration of the Plan to fail to satisfy the requirements of section 409A,
such provision shall be deemed null and void.  In no event shall a Participant,
directly or indirectly, designate the calendar year of payment.  Notwithstanding
anything in the Plan to the contrary, in no event may a Specified Employee
commence receipt of his benefit under the Plan on account of a Separation From
Service prior to the date that is six months from his Separation Date.

 

IN WITNESS WHEREOF, this The Pep Boys — Manny, Moe & Jack Account Plan is hereby
executed effective as of the 29th day of January, 2009.

 

 

THE PEP BOYS — MANNY, MOE & JACK

 

 

 

 

 

/s/ Michael R. Odell, Chief Executive Officer

 

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