ex10-42.htm


    Exhibit 10.42

    
 

     

    FIRST
AMENDMENT TO THE

    ADVANCE
AUTO PARTS, INC.

    DEFERRED
STOCK UNIT PLAN FOR NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    (As
Amended and Restated Effective as of January 1, 2008)

     

    WHEREAS,
Advance Auto Parts, Inc., a Delaware Corporation, (the “Company”), sponsors
the Advance Auto Parts, Inc. Deferred Stock Unit Plan for Non-Employee Directors
and Selected Executives (the “Plan”) to allow eligible individuals to elect
to defer the receipt and taxation of a portion of their compensation;
and

     

    WHEREAS,
the Company previously maintained a form of incentive bonus known as a "Roll-up
Performance Bonus," which bonus, in part, was eligible to be deferred under the
Plan by eligible executives.  The Roll-up Performance Bonus has been
replaced by a new "Annual Bonus," which is also eligible to be deferred in part
under the Plan.  It is the desire of the Company that the Plan reflect
the change of the type of bonus awarded by the Company; and

     

    WHEREAS,
it is the further desire of the Company to clarify:

     

    
      	
              ·  

            	
              That
      a delay in payment to a “specified employee” is required only if the
      payment is made by reason of a separation from service;
  and

            


    

     

    
      	
              ·  

            	
              The
      Company’s right in regard to ensuring the fulfillment of its tax
      withholding obligations with respect to a distribution from the Plan;
      and

            


    

     

    WHEREAS,
the Company further desires to amend the Plan to provide for the treatment of
new types of grants of Deferred Stock Units to be deferred under the
Plan.

     

    NOW,
THEREFORE, in consideration of the foregoing, the Plan is hereby amended in the
manner as prescribed below, effective for the Plan Year beginning on January 1,
2009, or as of such other indicated date.

     

    A.  Provisions Reflecting Change
in Bonus

     

    1. Article
2 of the Plan is hereby amended by the modification and addition of the
definitions set forth below.

     

    Section
2.18                                Eligible
Compensation.

     

     

    
      	
               
      

            	
              (a)

            	
              The
      “Eligible Compensation” of any Eligible Executive for any period means the
      Base Salary and Bonus Compensation, if any, otherwise payable to the
      Eligible Executive for services performed or performances achieved during
      such period.

            


    

     

     

     

    Page 1 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	
                 
      

              	
                (b)

              	
                The
      “Eligible Compensation” of a Director for any period means the Retainer,
      or portion thereof, payable to the Director for services performed during
      such period.

              


      

       

    

    *           *           *

     

    Section
2.32                                Annual
Bonus.  “Annual Bonus” means the bonus awarded to an Eligible
Executive for a calendar year performance period under an incentive plan
maintained by an Employer.

     

    *             *           *

     

    Section
2.38                                Bonus
Compensation.  "Bonus Compensation" for any Eligible Executive
for any period means any Quarterly Bonus or Annual Bonus awarded to such
Eligible Executive for services rendered or performance achieved for such
period.

     

    2. Article
3 of the Plan is hereby amended by the modification of the provisions set forth
below.

     

    Section
3.3                      Deferral Election
Agreement.

     

    *             *           *

     

    
      	
               
      

            	
              (b)

            	
              For
      each Plan Year, each Eligible Executive for that Plan Year will be
      permitted to submit a separate Deferral Election Agreement with respect to
      the Base Salary and Bonus Compensation (if any) otherwise payable to the
      Eligible Executive for services performed or performance achieved during
      the Plan Year.  The submission of the Deferral Election
      Agreement must be made in writing or otherwise in accordance with such
      policies and procedures established by the Plan Administration Committee
      and communicated to Eligible Individuals, which procedures may permit or
      require elections to be made by electronic media.  Eligible
      Individuals who submit a Deferral Election Agreement will be provided
      written or electronic confirmation of the terms of each Deferral Election
      Agreement.

            


    

     

    *           *           *

     

    Section
3.4                      Deferred
Amount.

     

    
      	
               
      

            	
              (a)

            	
              The
      Deferral Election Agreement of a Participant for a Board Service Period or
      Plan Year, as applicable, will designate the amount of each form of the
      Eligible Compensation for the period that the Participant elects to have
      deferred under the Plan (the “Deferred
  Amount”).

            


    

     

    
      	
               
      

            	
              (i)

            	
              A
      Director may elect to defer up to 100% of his or her Retainer for a Board
      Service Period.

            


    

     

     

    
      	
               
      

            	
              (ii)

            	
              For
      each Plan Year, an Eligible Executive will make a separate deferral
      election for the Eligible Executive’s Base Salary and Bonus Compensation
      for the Plan Year; provided, however, that the
  Plan 

            


    

     

    
      Page 2 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	
                 
      

              	
                 

              	
                Administration
      Committee in its discretion may permit separate elections to be made with
      respect to an Eligible Executive’s Quarterly Bonuses and Annual Bonus,
      respectively. The maximum or minimum amount of deferral that may be
      elected by an Eligible Individual for a Plan Year with respect to each
      form of Eligible Compensation will be established by the Plan
      Administration Committee.  The maximum or minimum amount may
      differ as to Eligible Individuals or classes of Eligible
      Individuals.

              


      

       

    

    *           *           *

     

    Section
3.7                      Deferral Election
Deadline.

     

    *           *           *

     

    
      	
               
      

            	
              (b)

            	
              A
      Deferral Election pertaining to Base Salary or Bonus Compensation that may
      otherwise become payable to an Eligible Executive for services performed
      or performance achieved during a Plan Year, including in regard to the
      Annual Bonus or the fourth quarter Quarterly Bonus for a Plan Year that
      will be paid after the end of that Plan Year, must be submitted on or
      before December 31 of the Plan Year immediately preceding the Plan
      Year for which it is effective (a “Statutory Deadline”), or as of
      such earlier submission date established by the Plan Administration
      Committee.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Notwithstanding
      subsection (b) above, the Plan Administration Committee in its discretion
      may permit an Eligible Executive to submit the Deferral Election for the
      Annual Bonus pertaining to any Plan Year on or before June 30 falling
      within the applicable Plan Year (a “Statutory Deadline”), or as of
      such earlier submission date established by the Plan Administration
      Committee, subject to the following
conditions:

            


    

     

    
      	
               
      

            	
              (i)

            	
              The
      Annual Bonus for the Plan Year must be payable by reason of the Eligible
      Executive’s satisfaction of organizational or individual performance
      criteria that is measured on the basis of a calendar year performance
      period or such other performance period of not less than
      12 months;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Eligible Executive must have performed services for the Employer
      continuously during the period beginning on the later of the beginning of
      the performance period or the date the applicable performance criteria are
      established, and ending on the date the election is made;
    and

            


    

     

    
      	
               
      

            	
              (iii)

            	
              The
      election must be made before the amount of the Annual Bonus becomes
      readily ascertainable.

            


    

     

    Section
3.8                      Election for First Year of
Eligibility.  Notwithstanding Section 3.7 above, the provisions
of this Section 3.8 will apply with respect to an individual 

     

    
      Page 3 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    who
becomes an Eligible Executive or a Director, and who thereupon becomes eligible
to participate in the Plan, after the first day of a Plan Year.

     

    
      	
              (a)  

            	
              The
      timing of the Eligible Individual’s initial Deferral Election will be
      governed by the rules prescribed
below.

            


    

     

    
      	
              (i)  

            	
              The
      initial Deferral Election must be made within 30 days after the date
      the individual becomes an Eligible Individual.  Except as
      provided in paragraph (ii) below, the Eligible Individual’s initial
      Deferral Election, or the decision to not make an initial Deferral
      Election, will become irrevocable as of the expiration of such 30-day
      election period.

            


    

     

    
      	
              (ii)  

            	
              Notwithstanding
      paragraph (i) above, an initial Deferral Election by an Eligible
      Individual that is affirmatively made and submitted under the Plan as of
      the last day immediately preceding the date for which the Deferral
      Election will first apply, and before the expiration of the otherwise
      applicable 30-day election period, will become irrevocable as of such last
      day.

            


    

     

    
      	
              (iii)  

            	
              In
      no event may the deadline for making an initial Deferral Election under
      this Plan with respect to any Eligible Individual for any Plan Year be
      subsequent to the deadline imposed on that Eligible Individual for making
      a Deferral Election for such Plan Year under any other Aggregated
      Plan.

            


    

     

    *           *           *

     

    
      	
               
      

            	
              (c)

            	
              The
      compensation to which such initial Deferral Election will apply will be
      determined in accordance with the rules set forth
  below.

            


    

     

    
      	
              (i)  

            	
              The
      Eligible Individual’s initial Deferral Election will apply only to the
      Eligible Compensation otherwise payable for services performed by the
      Eligible Individual subsequent to the date the Deferral Election has
      become irrevocable pursuant to subsection (a)
  above.

            


    

     

    
      	
              (ii)  

            	
              For
      purposes of paragraph (i) above, as with respect to a Deferral
      Election by an Eligible Executive pertaining to Bonus Compensation (i.e.,
      the Quarterly Bonuses and Annual Bonus), if the initial Deferral Election
      is made after the beginning of the applicable bonus performance period,
      the Deferral Election will apply to the total amount of the applicable
      Bonus Compensation for the applicable performance period multiplied by a
      fraction, the numerator of which is the number of days remaining in the
      performance period after the election has become irrevocable, and the
      denominator of which is the total number of days in the performance
      period.

            


    

     

    
      	
              (iii)  

            	
              The
      formula prescribed in paragraph (ii) above will also apply in regard
      to a Deferral Election pertaining to the deferral of the Eligible
      Executive’s Base Salary, or to a Director’s Retainer, unless the
      

            


    

     

    
      Page 4 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	
                 

              	
                amount
      of the individual’s Eligible Compensation for the portion of a period
      prior to the date of the irrevocability of the Deferral Election
      (i.e., the amount of the Eligible Compensation that is not eligible
      to be deferred under the Plan) can be readily
  ascertained.

              


      

       

    

     

    B.  Plan Clarification
Provisions

     

    1.           Subsection
5.6(a) of the Plan is amended to read as prescribed below.

     

    Section
5.6                      Restriction on Distributions
to Specified Employees.

     

    
      	
              (a)  

            	
              Notwithstanding
      the provisions of Section 5.5 above, if a Participant becomes
      entitled to a distribution from the Plan by reason of Retirement or other
      Separation from Service, and if the Participant is a Specified Employee as
      of the date of such Retirement or other Separation from Service, then the
      amounts held in the Participant’s Deferral Accounts will become payable as
      of the first day of the seventh month following the date of the
      Participant’s Retirement or other Separation from Service (or, if earlier,
      as of the date of the Participant’s
death).

            


    

     

    *           *           *

     

    2.           Subsection
5.12 of the Plan is amended to read as prescribed below.

     

    Section
5.12                                Withholding of
Taxes.  Notwithstanding any other provision of this Plan, an
Employer has the right to withhold from payments made hereunder, or to require a
Participant to remit to the Employer, any amount required for the Employer to
satisfy all federal, state or local tax withholding obligations pertaining to
the Participant.

     

     

    C.           Treatment of New Types of
Deferred Stock Unit Grants

     

    The
Plan is amended, effective as of May 26, 2009, by the addition of a new Article
XI set forth below.

     

     

    ARTICLE
XI

     

     

    TYPE 1 AND TYPE 2 DSU
SHARES

     

    Section
11.1                                Overview.  For
each Board Service Period, the Company may grant to each Director one or both of
two categories of Deferred Stock Units (“DSUs”).  For purposes of this
Article XI, these categories of DSUs are referred to as “Type 1 DSUs” and “Type
2 DSUs,” respectively.  Except as may be required under the terms of a
written agreement, the Company is not obligated to award Type 1 or Type 2 DSUs
for any Board Service Period, and the number of DSUs awarded may increase or
decrease for subsequent Board Service Periods.  The Type 1 and Type 2
DSUs will be held under 

     

     

     

     

    
      Page 5 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    the Plan, and will be subject to the terms and provisions of the
Plan except as otherwise specifically provided in this Article XI.

     

    Section
11.2                                Non-Elective
Deferrals. Each Type 1 and Type 2 DSU grant that is awarded to a Director
will be automatically deferred under the Plan on a non-elective basis, and will
be credited to the Director’s DSU Account.

     

    Section
11.3                                Vesting.

     

    
      	
              (a)  

            	
              A
      Director will at all times be vested in the balance of each of his or her
      DSU Accounts attributable to grants of Type 1
  DSUs.

            


    

     

    
      	
              (b)  

            	
              With
      respect to the Type 2 DSUs that are granted to a Director for any Board
      Service Period, unless a Director’s service as a member of the Board ends
      prior to the one-year anniversary of the commencement of such Board
      Service Period, then the Type 2 DSUs so granted will become vested on the
      one-year anniversary date.

            


    

     

    If
Director’s service as a member of the Board ends prior to the one-year
anniversary of the commencement of the Board Service Period, then the Type 2 DSU
Shares granted to the Director for such Board Service Period will vest on the
cessation of service date on a pro-rata basis.  The pro-rata vesting
will be based on a fraction:  the numerator of which is the number of
full or partial months of the Director’s service on the Board prior to the
cessation of such service (measured from the date of commencement of the Board
Service Period), and the denominator of which is twelve.

     

    
      	
              (c)  

            	
              Notwithstanding
      subsection (b) above, a Director whose service as a member of the Board
      ends due to death or having become Disabled, or upon a Qualified Change in
      Control Event, will become fully vested upon such cessation of
      service.

            


    

     

    Section
11.4                                Timing and Form of
Distributions.  Distributions of amounts from a Director’s DSU
Account attributable to grants of Type 1 and Type 2 DSUs will be made as
prescribed in this Section 11.4, unless the provisions of Article V provide for
an earlier distribution date (such as in the event of the death or Disability of
the Director).

     

    
      	
              (a)  

            	
              The
      value of a Director’s DSU Accounts pertaining to grants of Type 1 DSUs
      will be distributed upon a Director’s
  Retirement.

            


    

     

    
      	
              (b)  

            	
              The
      value of a Director’s DSU Accounts pertaining to a grant of Type 2 DSUs
      for a Board Service Period will be distributed as of the three-year
      anniversary of the commencement of such Board Service
    Period.

            


    

     

    
      	
              (c)  

            	
              Notwithstanding
      subject (b) above, a Director may elect to extend the distribution date of
      the Type 2 DSUs as prescribed in Section 5.8 of the
  Plan.

            


    

     

    All such
distributions will be made in the form of a lump sum payment.

     

     

    *           *           *

     

     

    
      Page 6 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    Pursuant
to the authority granted by the Compensation Committee of the Board of Directors
of Advance Auto Parts, Inc. under its resolutions adopted on August _____, 2009,
the undersigned hereby executes this Advance Auto Parts, Inc. Deferred
Stock Unit Plan for Non-Employee Directors and Selected Executives on behalf of
Advance Auto Parts, Inc.

    


    ADVANCE
AUTO PARTS, INC.

    


    By:                                                                         

    


    Title:                                                                         

    


    Dated: ,
2009

    


    
 

     

    
      Page 7 - FIRST AMENDMENT TO THE DEFERRED STOCK UNIT PLAN FOR
NON-EMPLOYEE DIRECTORS AND SELECTED EXECUTIVES