Contract
AMENDED AND RESTATED
NON-COMPETITION AGREEMENT
This Amended and Restated Non-Competition Agreement (this ?Agreement?) is
made by and between The Pep Boys-Manny, Moe & Xxxx, a Pennsylvania corporation
(the "Company"), and ___________ (the "Officer"), on this ____ day of
______________________ (the ?Effective Date?).
WHEREAS, the Company and Officer previously entered into that certain Non-
Competition Agreement, dated as of _____________________ (the ?Original
Agreement?), which provides for certain severance benefits to the Officer in the event of
a covered termination in exchange for the Officer?s willingness to provide the Company
with the covenant against competition contained in the Original Agreement;
WHEREAS, the Company and Officer desire to amend the Original Agreement
so that it complies with the requirements of section 409A of the Internal Revenue Code
of 1986, as amended (the ?Code?), and the final regulations issued thereunder, as well as
to make certain other changes; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and incorporating the foregoing recitals,
the parties agree as follows:
1. Severance Benefit.
a. If the Officer?s employment shall be terminated by the Company
without Cause (as defined below) and the Officer executes, and does not revoke, the
Company?s then current standard separation and release agreement (the ?Release?), the
Company shall pay to the Officer a lump sum cash payment equal in value to the
Officer?s annual base salary, as in effect immediately prior to the Officer?s termination
date, (the ?Severance Benefit?); provided, however, that the Severance Benefit shall not
be payable if the Officer?s employment shall be terminated during such Officer?s
Employment Period (as defined in that certain Change of Control Agreement, dated as of
the date hereof, between the Company and the Officer (the ?Change of Control
Agreement?)). During the Employment Period, the Change of Control Agreement shall
supercede this Agreement in its entirety. Unless the payment is required to be delayed
pursuant to Section 4b below, such Severance Benefit shall be paid to the Officer within
sixty (60) days following the Officer?s termination date, provided that the Officer
executes the Release during the sixty (60) day period and the revocation period for the
Release has expired without revocation by Executive.
b. For the purposes of this Agreement, ?Cause? shall mean (i) the
continued failure of the Officer to perform substantially his duties with the Company
(other than any such failure resulting from the Officer?s incapacity due to physical or
mental illness), (ii) any act by the Officer of illegality, dishonesty or fraud in connection
with the Officer?s employment, (iii) the willful engaging by the Officer in gross
misconduct which is demonstrably and materially injurious to the Company or its
affiliates, (iv) the Officer?s conviction of or pleading guilty or no contest to a felony, or
(v) a violation of Section 2 hereof.
2. Covenant Against Competition.
a. The Officer shall not, during his employment with the Company
and for one year thereafter, directly or indirectly, induce or attempt to influence any
employee of the Company to terminate his employment with the Company or hire or
solicit for hire on behalf of another employer any person then employed or who had been
employed by the Company during the immediately preceding six months.
b. The Officer shall not, during his employment with the Company
and for one year thereafter, unless the Officer is terminated by the Company without
Cause, directly or indirectly, engage in (as a principal, partner, director, officer, agent,
employee, consultant or otherwise) or be financially interested in any business operating
within the United States of America, if (i) such business? primary business is the retail
and/or commercial sale of automotive parts, accessories, tires and/or automotive
repair/maintenance services including, without limitation, the entities (including their
franchisees and affiliates) listed on Schedule 2(b)(i) hereto, or (ii) such business is a
general retailer which generates revenues from the retail and/or commercial sale of
automotive parts, accessories, tires and/or automotive repair/maintenance services in an
aggregate amount in excess of $1 billion, including, without limitation, the entities
(including their franchisees and affiliates) listed on Schedule 2(b)(ii) hereto. However,
nothing contained in this Section 2b shall prevent the Officer from holding for investment
up to two percent (2%) of any class of equity securities of a company whose securities are
traded on a national or foreign securities exchange.
c. Officer acknowledges that the restrictions contained in this Section
2, in view of the nature of the business in which the Company is engaged, are reasonable
and necessary in order to protect the legitimate interests of the Company, and that any
violation thereof would result in irreparable injuries to the Company, and the Officer
therefore acknowledges that, in the event of his violation of any of these restrictions, the
Company shall be entitled to obtain from any court of competent jurisdiction preliminary
and permanent injunctive relief (without the posting of any bond) as well as damages and
an equitable accounting of all earnings, profits and other benefits arising from such a
violation, which rights shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled.
d. If the Officer violates any of the restrictions contained in this
Section 2, the restrictive period shall be extended from the time of the commencement of
any such violation until such time as such violation shall be cured by the Officer to the
satisfaction of the Company.
e. The invalidity or unenforceability of any provision or provisions of
this Section 2 shall not affect the validity or enforceability of any other provision or
provisions of this Section 2, which shall remain in full force and effect. If any provision
of this Section 2 is held to be invalid, void or unenforceable in any jurisdiction, any court
or arbitrator so holding shall substitute a valid, enforceable provision that preserves, to the
maximum lawful extent, the terms and intent of this Agreement and shall correspondingly
modify the Company?s obligations under Section 1. If any of the provisions of, or
covenants contained in, this Section 2 are hereafter construed to be invalid or
unenforceable in any jurisdiction, the same shall not affect the remainder of the provisions
or the enforceability thereof in any other jurisdiction, which shall be given full effect,
without regard to the invalidity or unenforceability in such other jurisdiction. Any such
holding shall affect such provision of this Section 2, solely as to that jurisdiction, without
rendering that or any other provisions of this Section 2 invalid, illegal, or unenforceable in
any other jurisdiction. If any covenant contained in this Section 2 should be deemed
invalid, illegal or unenforceable because its scope is considered excessive, such covenant
will be modified so that the scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable and a
corresponding reduction in the scope of the Company?s obligations under Section 1 shall
also be made.
3. Miscellaneous.
a. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors.
b. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania without reference to principles of
conflict of laws. The parties hereto agree that exclusive jurisdiction of any dispute
regarding this Agreement shall be the state or federal courts located in Philadelphia,
Pennsylvania. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
IN CONNECTION WITH ANY PROCEEDING OVER ANY DISPUTE ARISING
UNDER THIS AGREEMENT.
c. This Agreement, together with the Change of Control Agreement,
constitutes the entire agreement among the parties pertaining to the subject matter hereto,
and supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, including the Original Agreement.
4. Section 409A of the Internal Revenue Code.
a. Interpretation. This Agreement shall be interpreted to avoid any
penalty sanctions under section 409A of the Code. Accordingly, all provisions herein, or
incorporated by reference, shall be construed and interpreted to comply with Section
409A of the Code, to the extent applicable, and, if necessary, any such provision shall be
deemed amended to comply with section 409A of the Code and regulations thereunder.
If any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under section 409A of the Code, then such benefit or
payment shall be provided in full at the earliest time thereafter when such sanctions will
not be imposed. All payments to be made upon a termination of employment under this
Agreement may only be made upon a ?separation from service? under Section 409A of
the Code. In no event may the Officer, directly or indirectly, designate the calendar year
of payment.
b. Payment Delay. To the maximum extent permitted under section
409A of the Code, the cash severance payment payable under this Agreement is intended
to comply with the ?short-term deferral exception? under Treas. Reg. section 1.409A-
1(b)(4); provided, however, any amount payable to the Officer during the six (6) month
period following the Officer?s termination date that does not qualify within such
exception and is deemed as deferred compensation subject to the requirements of section
409A of the Code, then such amount shall hereinafter be referred to as the ?Excess
Amount.? If at the time of the Officer?s termination of employment, the Company?s (or
any entity required to be aggregated with the Company under section 409A of the Code)
stock is publicly-traded on an established securities market or otherwise and the Officer is
a ?specified employee? (as defined in section 409A of the Code and determined in the
sole discretion of the Company (or any successor thereto) in accordance with the
Company?s (or any successor thereto) ?specified employee? determination policy), then
the Company shall postpone the commencement of the payment of the portion of the
Excess Amount that is payable within the six (6) month period following the Officer?s
termination date with the Company (or any successor thereto) for six (6) months
following the Officer?s termination date with the Company (or any successor thereto).
The delayed Excess Amount shall be paid in a lump sum to the Officer within ten (10)
days following the date that is six (6) months following the Officer?s termination date
with the Company (or any successor thereto). If the Officer dies during such six (6)
month period and prior to the payment of the portion of the Excess Amount that is
required to be delayed on account of section 409A of the Code, such Excess Amount
shall be paid to the personal representative of the Officer?s estate within sixty (60) days
after the Officer?s death.
IN WITNESS WHEREOF, the Officer has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, all as of the
Effective Date.
NON-COMPETITION AGREEMENT
This Amended and Restated Non-Competition Agreement (this ?Agreement?) is
made by and between The Pep Boys-Manny, Moe & Xxxx, a Pennsylvania corporation
(the "Company"), and ___________ (the "Officer"), on this ____ day of
______________________ (the ?Effective Date?).
WHEREAS, the Company and Officer previously entered into that certain Non-
Competition Agreement, dated as of _____________________ (the ?Original
Agreement?), which provides for certain severance benefits to the Officer in the event of
a covered termination in exchange for the Officer?s willingness to provide the Company
with the covenant against competition contained in the Original Agreement;
WHEREAS, the Company and Officer desire to amend the Original Agreement
so that it complies with the requirements of section 409A of the Internal Revenue Code
of 1986, as amended (the ?Code?), and the final regulations issued thereunder, as well as
to make certain other changes; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and incorporating the foregoing recitals,
the parties agree as follows:
1. Severance Benefit.
a. If the Officer?s employment shall be terminated by the Company
without Cause (as defined below) and the Officer executes, and does not revoke, the
Company?s then current standard separation and release agreement (the ?Release?), the
Company shall pay to the Officer a lump sum cash payment equal in value to the
Officer?s annual base salary, as in effect immediately prior to the Officer?s termination
date, (the ?Severance Benefit?); provided, however, that the Severance Benefit shall not
be payable if the Officer?s employment shall be terminated during such Officer?s
Employment Period (as defined in that certain Change of Control Agreement, dated as of
the date hereof, between the Company and the Officer (the ?Change of Control
Agreement?)). During the Employment Period, the Change of Control Agreement shall
supercede this Agreement in its entirety. Unless the payment is required to be delayed
pursuant to Section 4b below, such Severance Benefit shall be paid to the Officer within
sixty (60) days following the Officer?s termination date, provided that the Officer
executes the Release during the sixty (60) day period and the revocation period for the
Release has expired without revocation by Executive.
b. For the purposes of this Agreement, ?Cause? shall mean (i) the
continued failure of the Officer to perform substantially his duties with the Company
(other than any such failure resulting from the Officer?s incapacity due to physical or
mental illness), (ii) any act by the Officer of illegality, dishonesty or fraud in connection
with the Officer?s employment, (iii) the willful engaging by the Officer in gross
misconduct which is demonstrably and materially injurious to the Company or its
affiliates, (iv) the Officer?s conviction of or pleading guilty or no contest to a felony, or
(v) a violation of Section 2 hereof.
2. Covenant Against Competition.
a. The Officer shall not, during his employment with the Company
and for one year thereafter, directly or indirectly, induce or attempt to influence any
employee of the Company to terminate his employment with the Company or hire or
solicit for hire on behalf of another employer any person then employed or who had been
employed by the Company during the immediately preceding six months.
b. The Officer shall not, during his employment with the Company
and for one year thereafter, unless the Officer is terminated by the Company without
Cause, directly or indirectly, engage in (as a principal, partner, director, officer, agent,
employee, consultant or otherwise) or be financially interested in any business operating
within the United States of America, if (i) such business? primary business is the retail
and/or commercial sale of automotive parts, accessories, tires and/or automotive
repair/maintenance services including, without limitation, the entities (including their
franchisees and affiliates) listed on Schedule 2(b)(i) hereto, or (ii) such business is a
general retailer which generates revenues from the retail and/or commercial sale of
automotive parts, accessories, tires and/or automotive repair/maintenance services in an
aggregate amount in excess of $1 billion, including, without limitation, the entities
(including their franchisees and affiliates) listed on Schedule 2(b)(ii) hereto. However,
nothing contained in this Section 2b shall prevent the Officer from holding for investment
up to two percent (2%) of any class of equity securities of a company whose securities are
traded on a national or foreign securities exchange.
c. Officer acknowledges that the restrictions contained in this Section
2, in view of the nature of the business in which the Company is engaged, are reasonable
and necessary in order to protect the legitimate interests of the Company, and that any
violation thereof would result in irreparable injuries to the Company, and the Officer
therefore acknowledges that, in the event of his violation of any of these restrictions, the
Company shall be entitled to obtain from any court of competent jurisdiction preliminary
and permanent injunctive relief (without the posting of any bond) as well as damages and
an equitable accounting of all earnings, profits and other benefits arising from such a
violation, which rights shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled.
d. If the Officer violates any of the restrictions contained in this
Section 2, the restrictive period shall be extended from the time of the commencement of
any such violation until such time as such violation shall be cured by the Officer to the
satisfaction of the Company.
e. The invalidity or unenforceability of any provision or provisions of
this Section 2 shall not affect the validity or enforceability of any other provision or
provisions of this Section 2, which shall remain in full force and effect. If any provision
of this Section 2 is held to be invalid, void or unenforceable in any jurisdiction, any court
or arbitrator so holding shall substitute a valid, enforceable provision that preserves, to the
maximum lawful extent, the terms and intent of this Agreement and shall correspondingly
modify the Company?s obligations under Section 1. If any of the provisions of, or
covenants contained in, this Section 2 are hereafter construed to be invalid or
unenforceable in any jurisdiction, the same shall not affect the remainder of the provisions
or the enforceability thereof in any other jurisdiction, which shall be given full effect,
without regard to the invalidity or unenforceability in such other jurisdiction. Any such
holding shall affect such provision of this Section 2, solely as to that jurisdiction, without
rendering that or any other provisions of this Section 2 invalid, illegal, or unenforceable in
any other jurisdiction. If any covenant contained in this Section 2 should be deemed
invalid, illegal or unenforceable because its scope is considered excessive, such covenant
will be modified so that the scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable and a
corresponding reduction in the scope of the Company?s obligations under Section 1 shall
also be made.
3. Miscellaneous.
a. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors.
b. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania without reference to principles of
conflict of laws. The parties hereto agree that exclusive jurisdiction of any dispute
regarding this Agreement shall be the state or federal courts located in Philadelphia,
Pennsylvania. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
IN CONNECTION WITH ANY PROCEEDING OVER ANY DISPUTE ARISING
UNDER THIS AGREEMENT.
c. This Agreement, together with the Change of Control Agreement,
constitutes the entire agreement among the parties pertaining to the subject matter hereto,
and supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, including the Original Agreement.
4. Section 409A of the Internal Revenue Code.
a. Interpretation. This Agreement shall be interpreted to avoid any
penalty sanctions under section 409A of the Code. Accordingly, all provisions herein, or
incorporated by reference, shall be construed and interpreted to comply with Section
409A of the Code, to the extent applicable, and, if necessary, any such provision shall be
deemed amended to comply with section 409A of the Code and regulations thereunder.
If any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under section 409A of the Code, then such benefit or
payment shall be provided in full at the earliest time thereafter when such sanctions will
not be imposed. All payments to be made upon a termination of employment under this
Agreement may only be made upon a ?separation from service? under Section 409A of
the Code. In no event may the Officer, directly or indirectly, designate the calendar year
of payment.
b. Payment Delay. To the maximum extent permitted under section
409A of the Code, the cash severance payment payable under this Agreement is intended
to comply with the ?short-term deferral exception? under Treas. Reg. section 1.409A-
1(b)(4); provided, however, any amount payable to the Officer during the six (6) month
period following the Officer?s termination date that does not qualify within such
exception and is deemed as deferred compensation subject to the requirements of section
409A of the Code, then such amount shall hereinafter be referred to as the ?Excess
Amount.? If at the time of the Officer?s termination of employment, the Company?s (or
any entity required to be aggregated with the Company under section 409A of the Code)
stock is publicly-traded on an established securities market or otherwise and the Officer is
a ?specified employee? (as defined in section 409A of the Code and determined in the
sole discretion of the Company (or any successor thereto) in accordance with the
Company?s (or any successor thereto) ?specified employee? determination policy), then
the Company shall postpone the commencement of the payment of the portion of the
Excess Amount that is payable within the six (6) month period following the Officer?s
termination date with the Company (or any successor thereto) for six (6) months
following the Officer?s termination date with the Company (or any successor thereto).
The delayed Excess Amount shall be paid in a lump sum to the Officer within ten (10)
days following the date that is six (6) months following the Officer?s termination date
with the Company (or any successor thereto). If the Officer dies during such six (6)
month period and prior to the payment of the portion of the Excess Amount that is
required to be delayed on account of section 409A of the Code, such Excess Amount
shall be paid to the personal representative of the Officer?s estate within sixty (60) days
after the Officer?s death.
IN WITNESS WHEREOF, the Officer has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, all as of the
Effective Date.
THE PEP BOYS ? MANNY, MOE & XXXX
By:
OFFICER
___________________________________
Name:
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