Document:

exv10w42

 

Exhibit 10.42

Final March 18, 2008

CSK AUTO, INC.

2008 CASH IN LIEU BONUS PLAN

ARTICLE I

General

     1.1 Purpose. This CSK Auto, Inc. Cash in Lieu Plan (the “Plan”) is established by the Board of
Directors (the “Board”) of CSK Auto, Inc. (the “Company”). The Plan is intended to provide a
payment to employees of the Company and its Subsidiaries selected to participate in the Plan who
otherwise would have received annual grants of stock options and/or restricted stock in 2008.

     1.2 Plan Administration.

          (a) This Plan shall be administered by the Compensation Committee of the Board (the
“Committee”), as appointed from time to time by the Board. The foregoing notwithstanding, the
Board or the Committee may expressly delegate to a subcommittee (the “Subcommittee”), consisting of
one or more officers of the Company, the authority to administer the Plan.

          (b) Subject to the provisions hereof, (1) the Committee (including any Subcommittee) shall
have complete control of the administration of this Plan, with all powers necessary to enable it
properly to carry out its duties; (2) the Committee (including any Subcommittee) shall be
authorized to interpret this Plan and shall have the discretion to determine all questions arising
in the administration, construction and application of this Plan; and (3) the decisions of the
Committee (including any Subcommittee) upon all matters within the scope of its authority shall be
conclusive and binding on all parties.

     1.3 Definitions. The following terms shall have the following meanings when used in this
Plan:

          (a) “Base Salary” shall mean the Participant’s regular annual rate of base pay as of the date
a Bonus is awarded to the Participant under the Plan.

          (b) “Bonus” shall mean the grant to a Participant of a bonus award pursuant to this Plan.

          (c) “Cause” shall have the same meaning as in the Stock Plan.

          (d) “Change in Control” shall have the same meaning as in the Stock Plan.

          (e) “Good Reason” shall either have the definition set forth in the employment or severance
agreement between the Company and the Participant, or if there is no such agreement or definition
contained therein, the Participant’s resignation from employment within 180 days after the
occurrence of any of the following, provided, however, that the Participant must provide written
notice to the Company within ninety (90) days after the occurrence of the event allegedly
constituting Good Reason, and the Company shall have thirty

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Final March 18, 2008

(30) days after such notice is given to cure: (i) a relocation of the Participant’s principal
place of employment of more than 50 miles without the consent of the Participant, or (ii) a
material reduction in the Participant’s Base Salary.

          (f) “Involuntary Termination” shall mean any termination of the Participant’s employment with
the Company and its Subsidiaries (i) by the Company for any reason other than Cause or the
Participant’s death or disability (as defined under the terms of any of the Company’s short-term or
long-tern disability plans), or (ii) by the Participant for Good Reason.

          (g) “Notice of Participation” means a notice provided to a Participant that he or she has been
designated by the Committee as a Participant in the Plan, and setting forth the Eligible
Participant’s Bonus amount.

          (h) “Stock Plan” shall mean the CSK Auto Corporation 2004 Stock and Incentive Plan, as
amended.

          (i) “Subsidiary” means any corporation of which the Company owns, directly or indirectly, at
least fifty percent (50%) of the total voting power that is formed and has employees during the
term of this Plan.

ARTICLE II

Participation

     2.1 Participation. All employees and executives of the Company or any Subsidiary at the
Manager-level and above, as of the date the Plan is adopted by the Board, who are eligible to
receive annual grants of stock options and/or restricted stock shall be eligible to participate in
the Plan. Each such individual who is awarded a Bonus hereunder is referred to herein as a
“Participant”.

ARTICLE III

Bonus Payment

     3.1 Bonus Amount. Each Participant’s Bonus shall be calculated as a percentage of his or Base
Salary, as set forth in each Participant’s Notice of Participation.

     3.2 Form of Bonus. The Bonus, upon vesting, is payable in cash. However, notwithstanding the
above, the Committee may, at the time a Bonus is awarded under the Plan, grant the Participant an
economically equivalent award (as determined by the Committee) under the Stock Plan in lieu of such
cash Bonus. For the avoidance of doubt, the form of payment under a Bonus (stock or cash) may not
be changed following a Change in Control without the Participant’s consent.

     3.3 Vesting.

          (a) Subject to Participant’s continuous employment by the Company and its Subsidiaries through
the applicable vesting date, the Bonus awarded to each Participant will vest and become payable as
follows: (i) 50% of the Bonus will vest and become payable on March 1, 2009; and (ii) 50% of the
Bonus will vest and become payable on March 1, 2010. If the

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Final March 18, 2008

Participant’s employment terminates prior to a vesting date for any reason other than an
Involuntary Termination, the portion of the Bonus scheduled to vest and become payable on or after
the date of termination will be immediately forfeited. Except as set forth in Section 3.3(b), in
the event that a Participant’s employment terminates prior to a vesting date by reason of an
Involuntary Termination, the Bonus awarded to such Participant shall continue to vest and become
payable in accordance with the schedule set forth in this Section 3.3(a).

          (b) In the event of a Change in Control, notwithstanding anything set forth in Section 3.3(a)
to the contrary, subject to the Participant’s continuous employment by the Company and its
Subsidiaries through the applicable vesting date (specified below), the vesting of any unvested
and/or unpaid portion of the Bonus awarded to each Participant shall accelerate and become vested
and payable in full upon the earliest of: (i) the date that is six months following the Change in
Control or (ii) the date the Participant’s employment terminates by reason of an Involuntary
Termination after the date the Change in Control is consummated. If the Participant’s employment
with the Company and its Subsidiaries (including any successor thereto) terminates for any reason
other than an Involuntary Termination prior to the six-month anniversary of the Change in Control,
the Participant’s Bonus (to the extent then unvested and unpaid) will be immediately forfeited.

     3.4 Payment. Unless a Participant’s Bonus has been awarded in the form of an award under the
Stock Plan as set forth in Section 3.2, each Participant shall be entitled to payment in cash equal
to the Bonus amount set forth in the Notice of Participation (or the applicable portion thereof)
within ten days following the date the Bonus (or the applicable portion thereof) vests in
accordance with Section 3.3.

ARTICLE IV

Amendment or Termination

     4.1 Amendment; Termination. The Committee shall be entitled to amend or terminate this Plan at
any time, but no amendment or termination shall be made that would impair the rights of any
Participant, without such Participant’s consent, under any Bonus theretofore granted, provided that
no such consent shall be required if the Committee determines in its sole discretion and prior to
the date of any Change in Control that such amendment or alteration either (i) is required or
advisable in order for the Company, the Plan or the Bonus to satisfy any law or regulation or to
meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly
diminish the benefits provided under such Bonus, or that any such diminishment has been adequately
compensated. After the Change in Control, no amendment or termination of this Plan shall be
effective without the express written consent of each Participant.

     4.2 Successors. The Company will require any successor (whether by purchase of assets, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform all of the obligations of the Company under this
Plan (including the obligation to cause any subsequent successor to also assume the obligations of
this Plan) unless such assumption occurs by operation of law.

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Final March 18, 2008

ARTICLE V

Miscellaneous

     5.1 Set-Off. The Company shall be entitled to set off against the amounts payable to a
Participant hereunder any amounts owed to the Company by such Participant.

     5.2 Parachute Payments. Unless the Participant is party to an employment or severance
agreement with the Company or any Subsidiary that provides the specified treatment of payments in
the event payments to the Participant are deemed “parachute payments” under Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) (whether or not such agreement provides for
a gross-up payment for excise taxes under Section 4999 of the Code), in the event that any Bonus or
other amount that may be paid or otherwise provided to or in respect of a Participant by or on
behalf of the Company and its Subsidiaries pursuant to this Plan (the “Covered Payments”) is or may
become subject to the tax imposed under Section 4999 of the Code (or any successor provision or any
comparable provisions of state, local or foreign law) (“Excise Tax”), then the portion of the
Covered Payments that would be treated as “parachute payments” under Code Section 280G (“Covered
Parachute Payments”) shall be reduced so that the Covered Parachute Payments, in the aggregate, are
reduced to the Safe Harbor Amount (as defined below). For the purposes of this Plan, the term
“Safe Harbor Amount” means the largest portion of the Covered Payments that would result in no
portion of the Covered Payments being subject to the Excise Tax.

     5.3 Non-Alienation. No Participant shall have any right to pledge, hypothecate, anticipate or
in any way create a lien upon any amounts provided under this Plan, and no benefits payable
hereunder shall be assignable in anticipation of payment either by voluntary or involuntary acts or
by operation of law, other than by will or the laws of decent and distribution.

     5.4 Withholding. All payments to a Participant under this Plan will be subject to all
applicable withholding of state, local, provincial and federal taxes.

     5.5 Source of Payments. The obligations of the Company under the Plan are solely contractual,
and any amount payable under the terms of the Plan shall be paid from the general assets of the
Company or from one or more trusts, the assets of which are subject to the claims of the Company’s
general creditors.

     5.6 Notices. Any notice or document required to be given under the Plan shall be considered to
be given if actually delivered or mailed by certified mail, postage prepaid, if to the Company, to
[ADDRESS], Attention: [POSITION] or, if to a Participant, at the last address of such Participant
filed with the Company.

     5.7 Gender and Number. Where the context permits, words in any gender shall include any other
gender, words in the singular shall include the plural, and the plural shall include the singular.

     5.8 No Right to Employment or Continuation of Relationship. Nothing in this Plan shall confer
upon or be construed as giving any Participant any right to remain in the employ of the Company or
any Subsidiary. The Company or any of its Subsidiaries may, at any time, dismiss a Participant from
employment free from any liability or any claim except as

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Final March 18, 2008

expressly provided in this Plan. No employee of the Company or any Subsidiary shall have any
claim to be designated a Participant and there is no obligation for uniformity of treatment of any
employee of the Company or any Subsidiary.

     5.9 Governing Law. THE VALIDITY, CONSTRUCTION AND EFFECT OF THIS PLAN AND ANY RULES AND
REGULATIONS RELATING TO THIS PLAN SHALL BE DETERMINED IN ACCORDANCE WITH APPLICABLE FEDERAL LAW AND
THE LAWS OF THE STATE OF ARIZONA, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

     5.10 Severability. If any provision of this Plan is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or as to any individual Participant, or would
disqualify this Plan under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable law, or if it cannot be construed or deemed
amended without, in the sole determination of the Committee, materially altering the intent of this
Plan, such provision shall be stricken as to such jurisdiction or Participant and the remainder of
this Plan shall remain in full force and effect.

     5.11 No Limitation Upon the Rights of the Company. This Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications, or changes of its capital or
business structure; to merge, convert or consolidate; to dissolve or liquidate; or sell or transfer
all or any part of its business or assets.

5exv10w42w1

 

Exhibit 10.42.1

Final March 18, 2008

CSK AUTO, INC.

March [  ], 2008

[Name]

[Address]

[Address]

     Re:     Notice of Participation in 2008 Cash in Lieu Bonus Plan

Dear [Name]:

     I am pleased to confirm that the Company has selected you as a Participant in the 2008 CSK
Auto, Inc. Cash in Lieu Bonus Plan (the “Plan”). The Plan is intended to provide a payment (the
“Bonus”) to selected employees of the Company and its Subsidiaries who otherwise would have annual
grants of stock options and/or restricted stock in 2008.

General terms

     Your Bonus under the Plan is $___(equal to ___% of your Base Salary in effect on
the date hereof). Such amount is referred to herein as the “Bonus Amount”. This is the amount you
are eligible to receive under the Plan so long as you remain employed with the Company through the
applicable vesting dates described in this Notice of Participation and the Plan, or, if a Change in
Control occurs, the six-month anniversary of the consummation of the Change in Control, unless your
employment is terminated as a result of an Involuntary Termination before the applicable date.

     The basic terms of your participation in the Plan are set forth in this Notice of
Participation, but other important terms and conditions are described in the Plan. We encourage
you to carefully review the Plan, a copy of which is included with this Notice. Capitalized words
in this Notice of Participation which are not defined herein are defined in the Plan. In the event
of any conflict between the provisions of this Notice of Participation and the provisions of the
Plan, the terms of the Plan shall control. This letter constitutes the Notice of Participation
called for in the Plan.

Payment Terms

     In accordance with Section 3.3 of the Plan, except as set forth below, your Bonus Amount shall
be payable as follows:

     (a) Subject to your continuous employment by the Company and its Subsidiaries through the
applicable vesting date, your Bonus will vest and become payable as follows: (i) 50% of the Bonus
will vest and become payable on March 1, 2009; and (ii) 50% of the Bonus will vest and become
payable on March 1, 2010. If your employment terminates prior to a vesting date for any reason
other than an Involuntary Termination, the portion of the Bonus scheduled to vest and become
payable on or after the date of termination will be immediately forfeited. Except as set
forth below, in the event that your employment terminates prior to a vesting date by reason of
an

 

 

Involuntary Termination, your Bonus shall continue to vest and become payable in accordance with
the schedule set forth in this paragraph.

     (b) In the event of a Change in Control, notwithstanding anything set forth in the preceding
paragraph to the contrary, subject to your continuous employment by the Company and its
Subsidiaries through the applicable vesting date (set forth below), the vesting of any unvested
and/or unpaid portion of your Bonus shall accelerate and become vested and payable upon the
earliest of: (i) the date that is six months following the Change in Control or (ii) the date your
employment terminates by reason of an Involuntary Termination after the date the Change in Control
is consummated. If your employment with the Company and its Subsidiaries (including any successor
thereto) terminates for any reason other than an Involuntary Termination prior to the six-month
anniversary of the Change in Control, your Bonus (to the extent then unvested and unpaid) will be
immediately forfeited.

Parachute Payments

     Unless you are party to an employment or severance agreement with the Company or any
Subsidiary that provides the specified treatment of payments in the event payments to the
Participant are deemed “parachute payments” under Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”) (whether or not such agreement provides for a gross-up payment for
excise taxes under Section 4999 of the Code), in the event that your Bonus or other amount that may
be paid or otherwise provided to or in respect of you by or on behalf of the Company and its
Subsidiaries pursuant to the Plan and this Notice of Participation (the “Covered Payments”) is or
may become subject to the tax imposed under Section 4999 of the Code (or any successor provision or
any comparable provisions of state, local or foreign law) (“Excise Tax”), then the portion of the
Covered Payments that would be treated as “parachute payments” under Code Section 280G (“Covered
Parachute Payments”) shall be reduced so that the Covered Parachute Payments, in the aggregate, are
reduced to the Safe Harbor Amount. For the purposes of this Plan, the term “Safe Harbor Amount”
means the largest portion of the Covered Payments that would result in no portion of the Covered
Payments being subject to the Excise Tax.

Nontransferability

     As set forth in the Plan, you shall not have any right to pledge, hypothecate, anticipate or
in any way create a lien upon any amounts provided under this Plan, and no benefits payable
hereunder shall be assignable in anticipation of payment either by voluntary or involuntary acts or
by operation of law, other than by will or the laws of decent and distribution.

Miscellaneous Provisions

     Successors. The Company will require any successor (whether by purchase of assets,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
the Company to expressly assume and agree to perform all of the obligations of the Company under
the Plan (including the obligation to cause any subsequent successor to also assume the obligations
of the Plan) unless such assumption occurs by operation of law.

 

 

     Governing Law. This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona excluding those laws that direct the application
of the laws of another jurisdiction.

     Amendment. Prior to a Change in Control, the Board and the Committee shall each have
the right to amend this Notice of Participation in any manner not materially adverse to your rights
under the Plan. Following a Change in Control, this Notice of Participation may only be amended
with your consent.

     Withholding. The Company may withhold and deduct from any payment under the Plan and
this Notice of Participation all legally required amounts necessary to satisfy any and all federal,
state, local and foreign withholding and employment-related tax requirements.

     This is not an employment contract. This Notice of Participation is not to be
interpreted as a guarantee or contract of continuing employment.

     We value your efforts and look forward to your continued contribution.

Sincerely,

Lawrence N. Mondry

CEO

I accept and agree to the terms of this Notice of Participation and the Plan.

	 	 	 	 	 
	 	 	 	, 2008	 
	[Name]	 	Date

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