**Exhibit 10.20**

**THE PEP BOYSGRANTOR TRUST AGREEMENT**

This Grantor TrustAgreement (the “Trust Agreement”) is dated as of January 31, 2004, by andbetween THE PEP BOYS—MANNY, MOE & JACK****(“theCompany”) and **WACHOVIA BANK, NATIONAL ASSOCIATION,**(“theTrustee”).

**Recitals**

(a)           **WHEREAS**,the Company has adopted, and may in the future adopt, the nonqualified deferredcompensation Plans and Agreements (the “Arrangements”) listed in Attachment A,and as Attachment A may be supplemented from time to time by the Company’sChief Executive Officer (the “CEO”);

(b)          **WHEREAS**, theCompany maintained The Pep Boys—Manny, Moe & Jack Trust Agreement forthe Executive Supplemental Pension Plan and certain Contingent CompensationPlans, dated as of February 13, 1992 (“the Former Trust”), but terminatedthe Former Trust as of January 31, 2004 and wishes to add the fundingunder the Former Trust to the funding that will be used for the Arrangementsunder this Trust Agreement (hereinafter, part of the “Arrangements” asotherwise described above;

(c)           **WHEREAS**,the Company has incurred or expects to incur liability under the terms of suchArrangements with respect to the individuals participating in such Arrangements(the “Participants and Beneficiaries”);

(d)          **WHEREAS**,the Arrangements, copies of which are attached hereto as Attachment B, as ineffect from time to time, and incorporated herein by this reference, areintended to provide benefits for certain Participants and Beneficiaries; and

(e)           **WHEREAS**,the Company hereby establishes a Trust (the “Trust”) and shall contribute tothe Trust assets that shall be held therein, subject to the claims of theCompany’s creditors in the event of the Company’s Insolvency, as hereindefined, until paid to Participants and their Beneficiaries in such manner andat such times as specified in the Arrangements and in this Trust Agreement;

(f)             **WHEREAS**,it is the intention of the parties that this Trust shall constitute an unfundedarrangement and shall not affect the status of the Arrangements as unfundedplans, each maintained for the purpose of providing deferred compensation for aselect group of management or highly compensated employees for purposes ofTitle I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);and

(g)           **WHEREAS**,it is the intention of the Company to make contributions to the Trust toprovide itself with a source of funds (the “Fund”) to assist it in satisfyingits liabilities under the Arrangements.

**NOW, THEREFORE,** the parties do hereby establish the Trust and agreethat the Trust shall be comprised, held and disposed of as follows:

**Section 1.   *Establishment of The Trust***

(a)           The Trust is intendedto be a Grantor Trust, of which the Company is the Grantor, within the meaningof subpart E, part I, subchapter J, chapter 1, subtitle A of the InternalRevenue Code of 1986, as amended, and shall be construed accordingly.

(b)          The Company shall beconsidered the Grantor for the purposes of the Trust.

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(c)           The Trust herebyestablished is irrevocable.

(d)          The Company hereby depositswith the Trustee in the Trust one hundred dollars and zero cents ($100.00)which shall become the principal of the Trust to be held, administered anddisposed of by the Trustee as provided in this Trust Agreement.

(e)           The principal of theTrust, and any additions thereto and earnings thereon, shall be held separateand apart from other funds of the Company and shall be used exclusively for theuses and purposes of Participants, Beneficiaries and general creditors asherein set forth. Participants and their Beneficiaries shall have no preferredclaim on, or any beneficial ownership interest in, any assets of the Trust. Anyrights created under the Arrangements and this Trust Agreement shall beunsecured contractual rights of Participants and their Beneficiaries againstthe Company. Any assets held by the Trust will be subject to the claims of thegeneral creditors of the Company under federal and state law in the event theCompany is Insolvent, as defined in Section 3(a) herein.

(f)             The Company, in itssole discretion, may at any time, or from time to time, make additionaldeposits of cash or other property acceptable to the Trustee in the Trust toaugment the principal to be held, administered and disposed of by the Trusteeas provided in this Trust Agreement. Prior to a Change in Control, neither theTrustee nor any Participant or Beneficiary shall have any right to compeladditional deposits.

(g)           Upon a Potential Changein Control, as defined herein, the Company shall, as soon as possible, but inno event longer than thirty (30) days following the occurrence of a PotentialChange of Control, make a contribution to the Trust in an amount that issufficient (taking into account the Trust assets, if any, resulting from priorcontributions) to fund the Trust in an amount equal to no less than 100% but nomore than 120% of the amount necessary to pay each Participant or Beneficiarythe benefits to which Participants or their Beneficiaries would be entitledpursuant to the terms of the Arrangements as of the date on which the PotentialChange in Control occurred.

(h)          In the event a Change inControl, as defined herein, does not occur within one year of a PotentialChange in Control, the Company shall have the right to recover any amountscontributed to and remaining on hand in the Trust pursuant to Section 1(g).

(i)             Upona Change in Control, the Company shall, as soon as possible, but in no eventlonger than thirty (30) days following the occurrence of a Change in Control,make an irrevocable contribution to the Trust in an amount that is sufficient(taking into account the Trust assets, if any, resulting from priorcontributions) to fund the Trust in an amount equal to no less than 100 percentbut no more than 120 percent of the amount necessary to pay each Participantor Beneficiary the benefits to which Participants or their Beneficiaries wouldbe entitled pursuant to the terms of the Arrangements as of the date on whichthe Change in Control occurred. The Company shall also fund an Expense Reservefor the Trustee, and other service providers, which shall be equal to theamount estimated to be sufficient to pay all fees and expenses that maythereafter become due.

**Section 2.   *Payments to Participants and Their Beneficiaries***

(a)           Prior to a Change inControl, distributions from the Trust shall be made by the Trustee toParticipants and Beneficiaries at the direction of the Company except as mayotherwise be provided herein. Prior to a Change in Control, the entitlement ofa Participant or his or her Beneficiaries to benefits under the Arrangementsshall be determined by the Committee or Committees appointed by the Companyunder the Arrangements, and any claim for such benefits shall be considered andreviewed under the procedures set out in the Arrangements unless the Trusteedetermines, in its sole and absolute discretion, that there has been a Failureto Pay.

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(b)          The Company may makepayment of benefits directly to Participants or their Beneficiaries as theybecome due under the terms of the Arrangements. The Company shall notify theTrustee of its decision to make payment of benefits directly prior to the timeamounts are payable to Participants or their Beneficiaries. In addition, if theprincipal of the Trust, and any earnings thereon, are not sufficient to makepayments of benefits in accordance with the terms of the Arrangements, theCompany shall make the balance of each such payment as it falls due inaccordance with the Arrangements. The Trustee shall notify the Company whenprincipal and earnings are not sufficient. Nothing in this Agreement shallrelieve the Company of its liabilities to pay benefits due under theArrangements except to the extent such liabilities are actually satisfied byapplication of assets of the Trust.

(c)           The Company shalldeliver to the Trustee a schedule of benefits due under the Arrangements on anannual basis. After a Potential Change in Control and before a Change inControl, the Company shall deliver an updated schedule of benefits due underthe Arrangements that is signed by the CEO and authorized by the Company’sBoard of Directors (the “Board”). After a Change in Control, the Trustee shallpay benefits due in accordance with such schedule. After a Change in Control,the Committee or Committees appointed by the Company shall continue to make thedetermination of benefits due to Participants or their Beneficiaries and shallprovide the Trustee with an updated schedule of benefits due; provided however,that a Participant or the Beneficiaries of a deceased Participant may makeapplication to the Trustee for an independent decision as to the amount or formof their benefits due under the Arrangements. In making any determinationrequired or permitted to be made by the Trustee under this Section, the Trusteeshall, in each such case, reach its own independent determination, in itsabsolute and sole discretion, as to the Participant’s or Beneficiary’sentitlement to a payment hereunder.

(d)          Notwithstanding anythingherein to the contrary, upon the occurrence of a Failure to Pay, eachParticipant covered by the situation described in clause (i) of thedefinition of Failure to Pay, or each of the Participants in the event of asituation described in clause (ii) of that definition, as the case may be,shall be entitled to receive from the Trust the payments described by theunderlying Arrangement, as determined by the Trustee, in its sole and absolutediscretion.

(e)           In making itsdetermination under part (c) or part (d) of this Section 2, theTrustee may consult with and make such inquiries of such persons, including theParticipant or Beneficiary, the Company, legal counsel, actuaries or otherpersons, as the Trustee may reasonably deem necessary. Any reasonable costsincurred by the Trustee in arriving at its determination shall be reimbursed bythe Company and, to the extent not paid by the Company****withina reasonable time, shall be charged to the Trust, first to be satisfied fromthe Expense Reserve. The Company waives any right to contest any amount paidover by the Trustee hereunder pursuant to a good faith determination made bythe Trustee made in accordance with the claims procedure set forth in theapplicable arrangement or, if none, in accordance with the claims proceduresset forth in the Company’s Deferred Compensation Plan, notwithstanding anyclaim by or on behalf of the Company (absent a manifest abuse of discretion bythe Trustee) that such payments should not be made.

(f)             The Trustee agrees thatit will not itself institute any action at law or at equity, whether in thenature of an accounting, interpleading action, request for a declaratoryjudgment or otherwise, requesting a court or administrative or quasi-judicialbody to make the determination required to be made by the Trustee under this Section 2in the place and stead of the Trustee. The Trustee may (and, if necessary orappropriate, shall) institute an action to collect a contribution due the Trustfollowing a Change in Control or in the event that the Trust should everexperience a shortfall in the amount of assets necessary to make paymentspursuant to the terms of the Arrangements.

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(g)           Inthe event any Participant or his or her Beneficiary is determined to be subjectto federal income tax on any amount to the credit of his or her account underany Arrangement prior to the time of payment hereunder, whether or not due tothe establishment of or contributions to this Trust, a portion of such taxableamount equal to the federal, state and local taxes (excluding any interest orpenalties)****owed on such taxable amount, shall bedistributed by the Trustee as soon thereafter as practicable to suchParticipant or Beneficiary. The Company shall promptly reimburse the Trust forany such distribution in an amount certified by the Trustee to be needed forthe Participant’s benefits. For these purposes, a Participant or Beneficiaryshall be deemed to pay state and local taxes at the highest marginal rate oftaxation in the state in which the Participant resides or is employed (or both)where a tax is imposed and federal income taxes at the highest marginal rate oftaxation, net of the maximum reduction in federal income taxes which could beobtained from deduction of such state and local taxes. Such distributions shallbe at the direction of the Company or the Trustee, or upon proper applicationof the Participant or Beneficiary; provided that the actual amount of thedistribution shall be determined by the Company prior to a Change in Controland the Trustee following a Change in Control. An amount to the credit of aParticipant’s Account shall be determined to be subject to federal income taxupon the earliest of: (a) a final determination by the United StatesInternal Revenue Service addressed to the Participant or his Beneficiary whichis not appealed to the courts; (b) a final determination by the UnitedStates Tax Court or any other federal court affirming any such determination bythe Internal Revenue Service; or (c) an opinion by the Company’s taxcounsel, addressed to the Company and the Trustee, to the effect that by reasonof Treasury Regulations, amendments to the Internal Revenue Code, publishedInternal Revenue Service rulings, court decisions or other substantialprecedent, amounts to the credit of Participants hereunder are subject tofederal income tax prior to payment. The Company shall undertake at its soleexpense to defend any tax claims described herein which are asserted by theInternal Revenue Service against any Participant or Beneficiary, includingattorney fees and cost of appeal, and shall have the sole authority todetermine whether or not to appeal any determination made by the Service or bya lower court. The Company also agrees to reimburse any Participant orBeneficiary for any interest or penalties in respect of tax claims hereunderupon receipt of documentation of same. Any distributions from the Fund to aParticipant or Beneficiary under this Section 2(g) shall be appliedin accordance with the provisions of the Arrangement to reduce the Companyliabilities to such Participant and/or Beneficiary under the Arrangement withsuch reductions to be made on a pro-rata basis over the term of benefitpayments under the Arrangement; provided, however, that in no event shall any Participant,Beneficiary or estate of any Participant or Beneficiary have any obligation toreturn all or any part of such distribution to the Company if such distributionexceeds benefits payable under an Arrangement. Any reduction in accordance withthe foregoing sentence and the Arrangements shall be****determinedby the Company prior to a Change in Control. Following a Change in Control, theCompany shall continue to make such determination subject to the right of aParticipant to petition the Trustee under Section 2(c).

**Section 3.**   *Trustee Responsibility Regarding Payments To The Trust Beneficiary When The Company Is Insolvent*

(a)           The Trustee shall ceasepayment of benefits to Participants and their Beneficiaries if the Company isInsolvent. The Company shall be considered “Insolvent” for purposes of thisTrust Agreement if (i) the Company is unable to pay its debts as theybecome due, or (ii) the Company is subject to a pending proceeding as adebtor under the United States Bankruptcy Code.

(b)          At all times during thecontinuance of this Trust, the principal and income of the Trust shall besubject to claims of general creditors of the Company under federal and statelaw as set forth below.

(1)         The Board and the ChiefExecutive Officer of the Company shall have the duty to inform the Trustee inwriting that the Company is Insolvent. If a person claiming to be a creditor ofthe 

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Company alleges in writingto the Trustee that the Company has become Insolvent, the Trustee shalldetermine whether the Company is Insolvent and, pending such determination, theTrustee shall discontinue payment of benefits to Participants or theirBeneficiaries.

(2)         Unless the Trustee hasactual knowledge that the Company is Insolvent, or has received notice from theCompany or a person claiming to be a creditor alleging that the Company isInsolvent, the Trustee shall have no duty to inquire whether the Company isInsolvent. The Trustee may in all events rely on such evidence concerning theCompany’s solvency as may be furnished to the Trustee and that provides theTrustee with a reasonable basis for making a determination concerning theCompany’s solvency.

(3)         If at any time theTrustee has determined that the Company is Insolvent, the Trustee shalldiscontinue payments to Participants or their Beneficiaries and shall hold theassets of the Trust for the benefit of the Company’s general creditors. Nothingin this Trust Agreement shall in any way diminish any rights of Participants ortheir Beneficiaries to pursue their rights as general creditors of the Company withrespect to benefits due under the Arrangements or otherwise.

(4)         The Trustee shall resumethe payment of benefits to Participants or their Beneficiaries in accordancewith Section 2 of this Trust Agreement only after the Trustee hasdetermined that the Company is not Insolvent (or is no longer Insolvent).

(c)           Providedthat there are sufficient assets, if the Trustee discontinues the payment ofbenefits from the Trust pursuant to Section 3(b) hereof andsubsequently resumes such payments, the first payment following suchdiscontinuance shall include the aggregate amount of all payments due toParticipants or their Beneficiaries under the terms of the Arrangements for theperiod of such discontinuance, less the aggregate amount of any payments madeto Participants or their Beneficiaries by the Company in lieu of the paymentsprovided for hereunder during any such period of discontinuance.

**Section 4.   *Payments When a Shortfall of The Trust Assets Occurs***

(a)           If there are notsufficient assets for the payment of current and expected future benefitspursuant to Section 2 or Section 3(c) hereof and the Companydoes not otherwise make such payments within a reasonable time after demandfrom the Trustee, the Trustee shall allocate the Trust assets among the Participantsor their Beneficiaries in the following order of priority:

(1)         first, among allParticipants and their Beneficiaries in proportion to benefits under theCompany’s Deferred Compensation Plan determined as of the date of a Change inControl;

(2)         second, among vestedParticipants (including partially vested Participants, and regardless ofwhether they are actively employed) and their Beneficiaries in proportion totheir vested benefits under the Company’s Executive Supplemental RetirementPlan determined as of the date of a Change in Control;

(3)         third, among Participants(regardless of whether they are actively employed) and their Beneficiaries inproportion to their benefits under any severance agreement between theParticipant and the Company determined as of the date of a Change in Control

(4)         fourth, among non-vestedand partially vested Participants (regardless of whether they are activelyemployed) and their Beneficiaries in proportion to their unvested benefitsunder any other Arrangement.

(b)          Within each category,assets shall be allocated pro-rata with respect to the total present value ofbenefits expected for each Participant or Beneficiary within the category, andpayments to each Participant or Beneficiary shall be made to the extent of the assetsallocated to each Participant or Beneficiary.

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(c)           Uponreceipt of a contribution from the Company necessary to make up for a shortfallin the payments due, the Trustee shall resume payments to all the Participantsand Beneficiaries under the Arrangements. Following a Change in Control, theTrustee shall have the right and duty to compel a contribution to the Trustfrom the Company to make-up for any shortfall.

**Section 5.**   *Payments to the Company*

(a)           Except as provided in Section 3and Sections 5(b) and (c) hereof, the Company shall have no right orpower to direct the Trustee to return to the Company or to divert to others anyof the Trust assets before all payment of benefits have been made toParticipants and their Beneficiaries pursuant to the terms of the Arrangements.

(b)          In the event that theCommittee, prior to a Change in Control, or the Trustee in its sole andabsolute discretion, after a Change in Control, determines that the Trustassets exceed 110 percent (125 percent following a Change in Control) ofthe anticipated benefit obligations and administrative expenses that are to bepaid under the Arrangements, the Trustee, at the written direction of theCommittee, prior to a Change in Control, or the Trustee in its sole andabsolute discretion, after a Change in Control, shall distribute to the Companysuch excess portion of Trust assets.

(c)           In the event that the Company makes a payment of benefits directly toParticipants or their Beneficiaries after notifying the Trustee of its decisionto make payment of benefits directly pursuant to Section 2(b) hereof,upon submission of proof of payment to the Trustee, the Company shall bereimbursed from the Trust assets in the amount of such payment.

**Section 6.**   *Investment Authority*

(a)           The Trustee shall notbe liable in discharging its duties hereunder, including without limitation itsduty to invest and reinvest the Fund, if it acts for the exclusive benefit ofthe Participants and their Beneficiaries, in good faith and as a prudent personwould act in accomplishing a similar task and in accordance with the terms ofthis Trust Agreement and any applicable federal or state laws, rules orregulations.

(b)          Subject to investment guidelinesagreed to in writing from time to time by the Company and the Trustee prior toa Change in Control, the Trustee shall have the power in investing andreinvesting the Fund in its sole discretion:

(1)         To invest and reinvest inany readily marketable common and preferred stocks, bonds, notes, debentures(including convertible stocks and securities but not including any stock orsecurity of the Trustee or the Company **other than** a *de minimis* amount held in a mutual fund), any United StatesTreasury security, investment grade corporate and United States governmentagency debt instrument, money market-fund eligible commercial paper debtinstrument or money market fund of the Trustee, or an affiliate of the Trustee,and life insurance policies (including underlying mutual funds) without beinglimited to the classes or property in which the trustees are authorized toinvest by any law or any rule of court of any state and without regard tothe proportion any such property may bear to the entire amount of the Fund;

(2)         To commingle forinvestment purposes all or any portion of the Fund with assets of any othersimilar trust or trusts established by the Company with the Trustee for thepurpose of safeguarding deferred compensation or retirement income benefits ofits employees and/or directors;

(3)         To retain any property atany time received by the Trustee;

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(4)         To participate in anyplan of reorganization, consolidation, merger, combination, liquidation orother similar plan relating to property held by it and to consent to or opposeany such plan or any action thereunder or any contract, lease, mortgage,purchase, sale or other action by any person;

(5)         To deposit any propertyheld by it with any protective, reorganization or similar committee, todelegate discretionary power thereto, and to pay part of the expenses andcompensation thereof any assessments levied with respect to any such propertyto deposited;

(6)         To extend the time ofpayment of any obligation held by it;

(7)         To hold uninvested anymoneys received by it, without liability for interest thereon, but only inanticipation of payments due for investments, reinvestments, expenses ordisbursements;

(8)         To exercise all voting orother rights with respect to any property held by it and to grant proxies, discretionaryor otherwise;

(9)         To employ suitablecontractors and counsel, who may be counsel to the Company or to the Trustee,and to pay their reasonable expenses and compensation from the Fund, first fromthe Expense Reserve, to the extent not paid by the Company;

(10)  To register investments in itsown name or in the name of a nominee; to hold any investment in bearer form;and to combine certificates representing securities with certificates of thesame issue held by it in other fiduciary capacities or to deposit or to arrangefor the deposit of such securities with any depository, even though, when sodeposited, such securities may be held in the name of the nominee of suchdepository with other securities deposited therewith by other persons, or to depositor to arrange for the deposit of any securities issued or guaranteed by theUnited States government, or any agency or instrumentality thereof, includingsecurities evidenced by book entries rather than by certificates, with theUnited States Department of the Treasury or a Federal Reserve Bank, eventhough, when so deposited, such securities may not be held separate fromsecurities deposited therein by other persons; provided, however, that nosecurities held in the Fund shall be deposited with the United StatesDepartment of the Treasury or a Federal Reserve Bank or other depository in thesame account as any individual property of the Trustee, and provided, further,that the books and records of the Trustee shall at all times show that all suchsecurities are part of the Trust Fund;

(11)  To settle, compromise or submitto arbitration any claims, debts or damages due or owing to or from the Trust,respectively, to commence or defend suits or legal proceedings to protect anyinterest of the Trust, and to represent the Trust in all suits or legalproceedings in any court or before any other body or tribunal; provided,however, that the Trustee shall not be required to take any such action unlessit shall have been indemnified by the Company to its reasonable satisfactionagainst liability or expenses it might incur therefrom;

(12)  To hold and retain policies oflife insurance, annuity contracts, and other property of any kind whichpolicies are contributed to the Trust by the Company or any subsidiary of theCompany or are purchased by the Trustee;

(13)  To hold any other class ofassets which may be contributed by the Company and that is deemed reasonable bythe Trustee, unless expressly prohibited herein; and

(14)  Generally, to do all acts,whether or not expressly authorized, that the Trustee may deem necessary ordesirable for the protection of the Fund.

(c)           Notwithstanding anyother provision of this Section 6, prior to a Change in Control:

(1)         Grantor shall have theright, subject to this Section, to direct the Trustee with respect to theinvestment of all or any portion of the assets of the Trust. Grantor may alsoat any time prior to a 

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Change in Control directthe Trustee to segregate all or a portion of the Trust in a separate investmentaccount or accounts and appoint one or more investment managers to direct theinvestment and reinvestment of each such investment account or accounts. Insuch event, the Company shall notify the Trustee of the appointment of eachsuch investment manager and/or investment committee. No such investment managershall be related, directly or indirectly, to the Company, but members of theinvestment committee may be employees of the Company.

(2)         It shall be the duty ofthe Trustee to act strictly in accordance with each direction issued to Trusteeby Grantor or an investment manager appointed by Grantor. The Trustee shall beunder no duty to question any such direction, to review any securities or otherproperty acquired by it pursuant to such directions or to make any recommendationswith respect to such securities or other property.

(3)         Notwithstanding theforegoing, the Trustee, without obtaining prior approval or direction, shallinvest cash balances held by it from time to time in short term cashequivalents including, but not limited to, through the medium of any short termcommon, collective or commingled trust established and maintained by theTrustee subject to the instrument establishing such trust fund, or mutual fund,U.S. Treasury Bills, commercial paper (including such forms of commercial paperas may be available through the Trustee’s Trust Department), certificates ofdeposit (including certificates issued by the Trustee in its separate corporatecapacity), and similar type securities, with a maturity not to exceed one year;and, furthermore, sell such short term investments as may be necessary to carryout the instructions of Grantor or an investment manager regarding morepermanent type investment and directed distributions.

(4)         The Trustee shall neitherbe liable nor responsible for any loss resulting to the Trust by reason of anysale or purchase of an investment directed by Grantor or Grantor’s investmentmanager nor by reason of the failure to take any action with respect to anyinvestment which was acquired pursuant to any such direction in the absence offurther directions of Grantor or its investment manager so long as the Trusteeacts in good faith.

(5)         Notwithstanding anythingin this Agreement to the contrary, the Trustee shall be indemnified as permittedby applicable law and saved harmless by Grantor, in accordance with theprovisions of Section 10(b), from and against any and all personalliability to which the Trustee may be subjected by carrying out any directionsof Grantor or its investment manager issued pursuant hereto or for failure toact in the absence of directions of Grantor or its investment manager includingall expenses reasonably incurred in its defense in the event Grantor fails toprovide such defense, so long as the Trustee acts in good faith; provided,however, the Trustee shall not be so indemnified if it participates knowinglyin, or knowingly undertakes to conceal, an act or omission of Grantor or itsinvestment manager, having actual knowledge that such act or omission is a breachof a fiduciary duty; provided further, however, that the Trustee shall not bedeemed to have knowingly participated in or knowingly undertaken to conceal anact or omission of Grantor or its investment manager with knowledge that suchact or omission was a breach of fiduciary duty by merely complying in goodfaith with directions of Grantor or its investment manager or for failure toact in the absence of directions of Grantor or its investment manager. TheTrustee may rely in good faith upon any order, certificate, notice, directionor other documentary confirmation purporting to have been issued by Grantor orits investment manager which the Trustee believes to be genuine and to havebeen issued by Grantor or its investment manager. The Trustee shall not becharged with knowledge of the termination of the appointment of its investmentmanager until it receives written notice thereof from Grantor.

(d)          Following a Change inControl, and subject to the specific provisions of this subsection that provideotherwise, the Trustee shall have the sole and absolute discretion in themanagement of the Trust 

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assets and shall have allthe powers set forth under Section 6(b). In investing the Trust assets,the Trustee shall consider:

(1)         the needs of theArrangements;

(2)         the need for matching ofthe Trust assets with the liabilities of the Arrangements; and

(3)         the duty of the Trusteeto act solely in the best interests of the Participants and theirBeneficiaries.

The Trustee shall invest the assets of the Trustrelated to the Company’s Supplemental Executive Retirement Plan (“SERP”) andthe Deferred Compensation Plan primarily in universal variable life insurancepolicies. To the extent the Trust holds cash that may not be invested inuniversal variable life insurance policies, the Trustee shall invest such cashin its proprietary money market mutual funds. The Trustee shall invest thesub-accounts of the universal variable life insurance policies as follows:

It is the intent of the Company that the cash value ofthe universal variable life insurance policies be invested in sub-accountsdesignated from time to time by the administrator of the universal variablelife insurance policies. The Trustee shall follow the directions of theadministrator of the universal variable life insurance policies with respect tothe investment of the cash surrender value.

Following a Change in Control, the Trustee shallcontinue to follow the investment policy set forth above with respect to theSERP and the Deferred Compensation Plan. Should the Trustee need to raise cashfrom the universal variable life insurance policies, the Trustee shall followthe directions of the administrator. However, the Trustee shall invest any cashit receives from the SERP or the Deferred Compensation Plan assets in moneymarket instruments.

Any assets contributed to the Trust following a Changein Control for any additional Arrangements covered by the Trust shall beinvested in the Trustee’s proprietary money market funds unless, prior to theChange in Control, the Company specified a different investment policy.

The Company maydesignate the administrator of the universal variable life insurance policiesby separate letter. The Trustee shall be indemnified and held harmless, inaccordance with the provisions of Section 10(b), for acting in good faithupon direction of the administrator.

(e)           The Trustee shall havethe right, in its sole discretion, to delegate its investment responsibility toan investment manager who may be an affiliate of the Trustee. In the event theTrustee shall exercise this right, the Trustee shall remain, at all timesresponsible for the acts of an investment manager.

(f)             TheCompany shall have the right at any time, and from time to time in its solediscretion, to substitute assets (other than securities issued by the Trusteeor the Company) of equal fair market value for any asset held by the Trustprovided such assets are not illiquid. This right is exercisable by the Companyin a nonfiduciary capacity without the approval or consent of any person in afiduciary capacity; provided, however, that, following a Change in Control, nosuch substitution shall be permitted unless the Trustee determines that thefair market values of the substituted assets are equal.

**Section 7.   *Insurance Contracts***

(a)           To the extent that theTrustee is directed by the Company prior to a Change in Control to invest partor all of the Trust Fund in insurance contracts, the Trustee shall follow suchdirection, and the type and amount thereof shall be specified by the Company. TheTrustee shall be under no duty to make inquiry as to the propriety of the typeor amount so specified.

(b)          Each insurance contractissued shall provide that the Trustee shall be the owner thereof with the powerto exercise all rights, privileges, options and elections granted by orpermitted under such 

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contract or under the rules ofthe insurer. The exercise by the Trustee of any incidents of ownership underany contract shall, prior to a Change in Control, be subject to the directionof the Company. After a Change in Control, the Trustee shall have all suchrights.

(c)           The Trustee shall haveno power to name a beneficiary of the policy other than the Trust, to assignthe policy (as distinct from conversion of the policy to a different form) otherthan to a successor Trustee, or to loan to any person the proceeds of anyborrowing against an insurance policy held in the Trust Fund.

(d)          Noinsurer shall be deemed to be a party to the Trust and an insurer’s obligationsshall be measured and determined solely by the terms of contracts and otheragreements executed by the insurer.

**Section 8.**   *Disposition of Income*

All income received by theTrust shall be accumulated and reinvested within the Trust.

**Section 9.**   *Accounting by The Trustee*

The Trustee shall keepaccurate and detailed records of all investments, receipts, disbursements, andall other transactions required to be made, including such specific records asshall be agreed upon in writing between the Company and the Trustee. Withinsixty (60) days following the close of each calendar year and within sixty (60)days after the removal or resignation of the Trustee, the Trustee shall deliverto the Company a written account of its administration of the Trust during suchyear or during the period from the close of the last preceding year to the dateof such removal or resignation setting forth all investments, receipts,disbursements and other transactions effected by it, including a description ofall securities and investments purchased and sold with the cost or net proceedsof such purchases or sales (accrued interest paid or receivable being shownseparately), and showing all cash, securities and other property held in theTrust at the end of such year or as of the date of such removal or resignation,as the case may be. The Company may approve such account by an instrument inwriting delivered to the Trustee. In the absence of the Company’s filing withthe Trustee objections to any such account within one hundred eighty (180) daysafter its receipt, the Company shall be deemed to have so approved such account.In such case, or upon the written approval by the Company of any such account,the Trustee shall, to the extent permitted by law, be discharged from allliability to the Company for its acts or failures to act described by suchaccount. The foregoing, however, shall not preclude the Trustee from having itsaccounting settled by a court of competent jurisdiction. The Trustee shall beentitled to hold and to commingle the assets of the Trust in one Fund forinvestment purposes but at the direction of the Company prior to a Change inControl, the Trustee shall create one or more sub-accounts.

**Section 10.   *Responsibility of The Trustee***

(a)           The Trustee shall actwith the care, skill, prudence and diligence under the circumstances thenprevailing that a prudent person acting in like capacity and familiar with suchmatters would use in the conduct of an enterprise of a like character and withlike aims, provided, however, that the Trustee shall incur no liability to anyperson for any action taken in good faith pursuant to a direction, request orapproval given by the Company which is contemplated by, and in conformity with,the terms of the Arrangements or this Trust and is given in writing by theCompany. In the event of a dispute between the Company and a party, the Trusteemay apply to a court of competent jurisdiction to resolve the dispute, subject,however to Section 2(f) hereof.

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(b)          The Company herebyindemnifies the Trustee against losses, liabilities, claims, costs and expensesin connection with the administration of the Trust, unless resulting from thenegligence or misconduct of Trustee. To the extent the Company fails to makeany payment on account of an indemnity provided in this paragraph 10(b), in areasonably timely manner, the Trustee may obtain payment from the Trust, firstfrom the Expense Reserve. If the Trustee undertakes or defends any litigationarising in connection with this Trust or to protect a Participant’s orBeneficiary’s rights under the Arrangements, the Company agrees to indemnifythe Trustee against the Trustee’s costs, reasonable expenses and liabilities(including, without limitation, attorneys’ fees and expenses) relating theretoand to be primarily liable for such payments. If the Company does not pay suchcosts, expenses and liabilities in a reasonably timely manner, the Trustee mayobtain payment from the Trust, first from the Expense Reserve. No suchindemnification shall be required unless the Trustee (i) provides theCompany with prompt written notice, unless the Company is not prejudiced bylate notice, of the possibility that indemnification might be required and (ii) offersthe Company the right of defense provided there is no conflict of interestbetween the Company’s position and that of the Trustee.

(c)           Prior to a Change inControl, the Trustee may consult with legal counsel (who may also be counselfor the Company generally) with respect to any of its duties or obligationshereunder. Following a Change in Control the Trustee shall select independentlegal counsel and may consult with counsel or other persons with respect to itsduties and with respect to the rights of Participants or their Beneficiariesunder the Arrangements.

(d)          The Trustee may hireagents, accountants, actuaries, investment advisors, financial consultants orother professionals to assist it in performing any of its duties or obligationshereunder and may rely on any determinations made by such agents andinformation provided to it by the Company.

(e)           The Trustee shall have,without exclusion, all powers conferred on the Trustee by applicable law,unless expressly provided otherwise herein.

(f)             Notwithstandingany powers granted to the Trustee pursuant to this Trust Agreement or toapplicable law, the Trustee shall not have any power that could give this Trustthe objective of carrying on a business and dividing the gains therefrom,within the meaning of section 301.7701-2 of the Procedure andAdministrative Regulations promulgated pursuant to the Internal Revenue Code.

**Section 11.   *Compensation and Expenses of The Trustee***

The Trustee’s compensationshall be as agreed in writing from time to time by the Company and the Trustee.The Company shall pay all administrative expenses and the Trustee’s fees andshall promptly reimburse the Trustee for any fees and expenses of its agents. Ifnot so paid, the fees and expenses shall be paid from the Trust, first from theExpense Reserve, but to the extent the Expense Reserve has been exhausted, fromthe remainder of the Trust.

**Section 12.   *Resignation and Removal of The Trustee***

(a)           Prior to a Change inControl, the Trustee may resign at any time by written notice to the Company,which shall be effective sixty (60) days after receipt of such notice unlessthe Company and the Trustee agree otherwise. Following a Change in Control, theTrustee may resign only after the appointment of a successor Trustee.

(b)          The Trustee may beremoved by the Company on sixty days (60) days notice or upon shorter noticeaccepted by the Trustee prior to a Change in Control. Subsequent to a PotentialChange in Control, the Trustee may only be removed by the Company with theconsent of a Majority of the Participants.

(c)           If the Trustee resignswithin two years after a Change in Control, as defined herein, the Company, orif the Company fails to act within a reasonable period of time following suchresignation, the Trustee, 

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shall apply to a court ofcompetent jurisdiction for the appointment of a successor Trustee whichsatisfies the requirements of Section 13 or for instructions.

(d)          Upon resignation orremoval of the Trustee and appointment of a successor Trustee, all assets shallsubsequently be transferred to the successor Trustee. The transfer shall becompleted within sixty (60) days after receipt of notice of resignation,removal or transfer, unless the Company extends the time limit.

(e)           Ifthe Trustee resigns or is removed, a successor shall be appointed by theCompany with the consent of a Majority of Participants if a Change in Controlhas occurred, in accordance with Section 13 hereof, by the effective dateof resignation or removal under paragraph(s) (a) or (b) of thissection. If no such appointment has been made, the Trustee may apply to a courtof competent jurisdiction for appointment of a successor or for instructions. Allexpenses of the Trustee in connection with the proceeding shall be allowed asadministrative expenses of the Trust, first from the Expense Reserve.

**Section 13.**   *Appointment of Successor*

(a)           If the Trustee resignsor is removed in accordance with Section 12 hereof, the Company mayappoint, subject to Section 12, any third party legally permitted to actas Trustee pursuant to the terms of this Agreement with assets exceeding$1,000,000,000, and wholly independent of the Company, to replace the Trusteeupon resignation or removal. The successor Trustee shall have all of the rightsand powers of the former Trustee, including ownership rights in the Trust. Theformer Trustee shall execute any instrument necessary or reasonably requestedby the Company or the successor Trustee to evidence the transfer.

(b)          Thesuccessor Trustee need not examine the records and acts of any prior Trusteeand may retain or dispose of existing Trust assets, subject to Section 8and 9 hereof. The successor Trustee shall not be responsible for and theCompany shall indemnify and defend the successor Trustee from any claim orliability resulting from any action or inaction of any prior Trustee or fromany other past event, or any condition existing at the time it becomessuccessor Trustee, all pursuant to the provisions of Section 10(b) hereof.

**Section 14.   *Amendment or Termination***

(a)           This Trust Agreementmay be amended by a written instrument executed by the Trustee and the Company,except as otherwise provided in this Section 14. Notwithstanding theforegoing, no such amendment shall conflict with the terms of the Arrangementsor shall make the Trust revocable.

(b)          Following a Change inControl, the Trust shall not terminate until the date on which Participants andtheir Beneficiaries have received all of the benefits due to them under theterms and conditions of the Arrangements.

(c)           Prior to a Change inControl, upon written approval of two third of the Participants orBeneficiaries entitled to payment of benefits pursuant to the terms of theArrangements, the Company may terminate this Trust prior to the time allbenefit payments under the Arrangements have been made. All assets in the Trustat termination shall be returned to the Company.

(d)          ThisTrust Agreement may not be amended by the Company following a Change in Controlwithout the written consent of a Majority of Participants except as may berequired, in the opinion of the Trustee, to maintain the tax status or ERISAstatus of this Trust.

**Section 15.   *Definitions***

(a)           For purposes of thisTrust, the following terms shall be defined as set forth below:

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(1)         Failure to Pay shall meanthat the circumstances described in either (i) or (ii) have occurred:

i.                    AnyParticipant or Beneficiary shall have notified the Trustee and the Company inwriting that the Company shall have failed to pay to the Participant, when due,either directly or by direction to the Trustee in accordance with the terms ofthis Trust, at least 75% of any and all amounts which the Participant wasentitled to receive at any time in accordance with the terms of any Plan, thepayment schedule or this Trust Agreement and that such amount remains unpaid. Suchnotice must set forth the amount, if any, which was paid to the Participant (orBeneficiary), and the amount which the Participant (or Beneficiary) believes heor she was entitled to receive under the Plans, the payment and this TrustAgreement. The failure to make such payment shall have continued for a periodof 30 days after receipt of such notice by the Trustee and by the Company, andduring such 30-day period the Company shall have failed to prove, byclear and convincing evidence as determined by the Trustee in its sole andabsolute discretion, that such amount was in fact paid or was not due andpayable; or

ii.                More than two PlanParticipants (or the Beneficiaries thereof) shall have notified the Trustee andthe Company in writing, either individually or jointly, that they have not beenpaid, when due, amounts to which they are entitled under the Plans payment, andthat such amount remains unpaid. Each such notice must set forth the amount, ifany, which was paid to the Participant (or Beneficiary), and the amount whichthe Participant (or Beneficiary) believes he or she was entitled to receiveunder the Plans, the payment and this Trust Agreement. Within 15 days afterreceipt of each such notice, the Trustee shall determine, on a preliminarybasis, whether any failure to pay such Participants (or their Beneficiaries)has resulted in a failure to pay when due, directly or by direction, at least75% of the aggregate amount due to all Participants (or their Beneficiaries)under all the Plans, the schedule and this Trust Agreement in any two-yearperiod, and that such amount remains unpaid. If the Trustee determines thatsuch a failure has occurred, then it shall so notify the Company and theParticipants (or their Beneficiaries) in writing within the same 15 day period.Within a period of 20 days after receipt of such notice from the Trustee, theCompany shall have failed to prove by clear and convincing evidence, in thesole and absolute discretion of the Trustee, that such amount was paid or wasnot due and payable.

(2)         Change in Control. Forpurposes of this Plan, a “Change in Control” shall be deemed to have occurredas of the first day any one or more of the following conditions shall have beensatisfied:

(i)             individuals who, onthe Effective Date, constitute the Board of Directors (the “Incumbent Directors”)cease for any reason to constitute at least a majority of the Board ofDirectors, provided that any person becoming a director subsequent to the datehereof, whose election or nomination for election was approved by a vote of atleast two-thirds of the Incumbent Directors then on the Board of Directors(either by a specific vote or by approval of the proxy statement of the Companyin which such person is named as a nominee for director, without writtenobjection to such nomination) shall be an Incumbent Director; *provided*, *however*, thatno individual initially elected or nominated as a director of the Company as aresult of an actual or threatened election contest with respect to directors oras a result of any other actual or threatened solicitation of proxies orconsents by or on behalf of any person other than the Board of Directors shallbe deemed to be an Incumbent Director;

(ii)         any “Person” (as suchterm is defined in Section 3(a)(9) of the Securities Exchange Act of1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) ofthe Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3under the Exchange Act), directly or indirectly, of securities of the Companyrepresenting 20% or more of the 

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combined voting power ofthe Company’s then outstanding securities eligible to vote for the election ofthe Board of Directors (the “Voting Securities”); *provided*,*however*, that the event described inthis paragraph (b) shall not be deemed to be a Change in Control by virtueof any of the following acquisitions: (i) by the Company or any subsidiaryof the Company in which the Company owns more than 50% of the combined votingpower of such entity (a “Subsidiary”), (ii) by any employee benefit plan(or related trust) sponsored or maintained by the Company or any Subsidiary, (iii) byany underwriter temporarily holding the Company’s Voting Securities pursuant toan offering of such Voting Securities, or (iv) pursuant to aNon-Qualifying Transaction (as defined in paragraph (c));

(iii)     a merger, consolidation,statutory share exchange or similar form of corporate transaction isconsummated involving the Company or any of its Subsidiaries that requires theapproval of the Company’s stockholders, whether for such transaction or theissuance of securities in the transaction (a “Business Combination”), unlessimmediately following such Business Combination: (i) more than 50% of thetotal voting power of (A) the corporation resulting from such BusinessCombination (the “Surviving Corporation”), or (B) if applicable, the ultimateparent corporation that directly or indirectly has beneficial ownership of 100%of the voting securities eligible to elect directors of the SurvivingCorporation (the “Parent Corporation”), is represented by the Company’s VotingSecurities that were outstanding immediately prior to such Business Combination(or, if applicable, is represented by shares into which the Company’s VotingSecurities were converted pursuant to such Business Combination), and suchvoting power among the holders thereof is in substantially the same proportionas the voting power of the Company’s Voting Securities among the holdersthereof immediately prior to the Business Combination, (ii) no person(other than any employee benefit plan (or related trust) sponsored ormaintained by the Surviving Corporation or the Parent Corporation), is orbecomes the beneficial owner, directly or indirectly, of 20% or more of thetotal voting power of the outstanding voting securities eligible to electdirectors of the Parent Corporation (or, if there is no Parent Corporation, theSurviving Corporation) and (iii) at least a majority of the members of theboard of directors of the Parent Corporation (or, if there is no ParentCorporation, the Surviving Corporation) following the consummation of theBusiness Combination were Incumbent Directors at the time of the Board ofDirectors’ approval of the execution of the initial agreement providing forsuch Business Combination (any Business Combination which satisfies all of thecriteria specified in (i), (ii) and (iii) above shall be deemed to bea “Non-Qualifying Transaction”);

(iv)       a sale of all orsubstantially all of the Company’s assets is consummated;

(v)           the stockholders of theCompany approve a plan of complete liquidation or dissolution of the Company;or

(vi)       there occur such otherevents as the Board of Directors may designate.

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Notwithstanding theforegoing, a Change in Control of the Company shall not be deemed to occursolely because any person acquires beneficial ownership of more than 20% of theCompany’s Voting Securities as a result of the acquisition of the Company’sVoting Securities by the Company which reduces the number of the Company’sVoting Securities outstanding; *provided*, *that* if after such acquisition by the Company such personbecomes the beneficial owner of additional Company Voting Securities thatincreases the percentage of outstanding Company Voting Securities beneficiallyowned by such person, a Change in Control of the Company shall then occur. 

(3)         Majority of Participantsshall mean participants the present value of whose vested rights under theArrangements exceed 50% of the present value of the vested rights of allParticipants. The Trustee shall determine the present value of vested rightsfollowing a Change in Control.

(4)         Potential Change inControl shall mean:

(i)             the announcement byany person of an intention to take actions which might reasonably result in abusiness combination between the Company and an entity which has a marketcapitalization equal to or greater than 50% of the Company;

(ii)         the issuance of a proxystatement by the Company with respect to an election of directors for whichthere is proposed one or more directors who are not recommended by the Board orits nominating committee, where the election of such proposed director ordirectors would result in a Change in Control as defined in Section 15(a)(2)(a);or

(iii)     submission to the IncumbentBoard of nominations which, if approved, would change the Executive Officerconfiguration of the Company (at the Executive Vice President level and above)by 50% or more.

(5)         TheGeneral Counsel of the Company shall have the specific authority to determinewhether a Potential Change in Control or Change in Control has transpired underthe guidance of this Section 15 and shall be required to give the Trusteenotice of a Change in Control or a Potential Change in Control. The Trusteeshall be entitled to rely upon such notice, but if the Trustee receives noticeof a Change in Control from another source, the Trustee shall make its ownindependent determination.

**Section 16.   *Miscellaneous***

(a)           Any provision of thisTrust Agreement prohibited by law shall be ineffective to the extent of anysuch prohibition, without invalidating the remaining provisions hereof.

(b)          The Company herebyrepresents and warrants that all of the Arrangements have been established,maintained and administered in accordance with all applicable laws, includingwithout limitation, ERISA. The Company hereby indemnifies and agrees to holdthe Trustee harmless from all liabilities, including attorney’s fees, relatingto or arising out of the establishment, maintenance and administration of theArrangements. To the extent the Company does not pay any of such liabilities ina reasonably timely manner, the Trustee may obtain payment from the Trust.

(c)           Benefits payable toParticipants and their Beneficiaries under this Trust Agreement may not beanticipated, assigned (either at law or in equity), alienated, pledged,encumbered or subjected to attachment, garnishment, levy, execution or otherlegal or equitable process.

(d)          This Trust Agreementshall be governed by and construed in accordance with the laws of Delaware.

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**IN WITNESS WHEREOF,** this Grantor Trust Agreement has been executed onbehalf of the parties hereto on the day and year first above written.

| **/s/ THE PEP BOYS—MANNY,  MOE & JACK** | ** ** | **/s/ WACHOVIA  BANK, NATIONAL ASSOCIATION** |
|-------------------------------------------------------|------------|----------------------------------------------|

 

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**Attachment A**

The followingArrangements are covered by this Trust:

| **Deferred Compensation Plan**                 |
|------------------------------------------------|
| **Executive  Supplemental Retirement Plan**    |
| **Employment  Agreements (Change of Control)** |

 

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