Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
May 19, 2009, the Compensation Committee (the “Committee”) of the Board of
Directors of Advance Auto Parts, Inc. (the “Company”), approved an incentive
compensation program for the Company’s chief executive officer, president, chief
operating officer and chief financial officer under the Company’s Executive
Incentive Plan, effective April 26, 2009, for the last three quarters of the
Company’s 2009 fiscal year, which incorporates a new bonus metric to reward the
Company’s achievement of increased market share in the automotive
aftermarket industry. With the introduction of the market share
metric, in order for any executive to receive a bonus payment in an amount
greater than 100 percent of bonus at target level, the Company must demonstrate
growth in market share relative to its competitors for those
quarters. Growth in market share will be measured by an independent
third party survey source. If the Company does not experience
positive market share growth for the relevant period, the maximum bonus amount
that can be earned by each executive is 100 percent of the bonus
target.
In
addition to market share growth, the annual incentive bonus will reward growth
in sales and operating income in the relevant portion of 2009 over the relevant
portion of 2008. The bonus payment will be based on the Company
achieving specific sales and operating income goals. A description of
the remaining features of the bonus plan and measures is contained in the
Company’s 2009 Proxy Statement. The Committee is expected
to make downward adjustments as needed in order to avoid duplicate
awards that may result from this change related to achievement of specified
sales and operating income goals.
The
Company’s chief executive officer, president, chief operating officer, and chief
financial officer will be eligible for a bonus based on results expressed as a
percentage of the executive’s base salary, as follows:
Position
|
Bonus
Target
|
Bonus
Target Value
|
Maximum
Bonus Value
|
Chief
Executive Officer
|
200%
|
$ 1,400,000
|
$ 2,800,000
|
President
|
90%
|
$ 405,000
|
$ 810,000
|
Chief
Operating Officer
|
90%
|
$ 405,000
|
$ 810,000
|
Chief
Financial Officer
|
80%
|
$ 360,000
|
$ 720,000
|