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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 10-Q
________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 11, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.

Commission file number 001-16797
________________________

AAP-20200711_G1.JPG
ADVANCE AUTO PARTS, INC.
(Exact name of registrant as specified in its charter)
________________________

Delaware 54-2049910
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

2635 East Millbrook Road, Raleigh, North Carolina 27604
(Address of principal executive offices) (Zip Code)
 
(540) 362-4911
(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Trading symbol Name of each exchange on which registered
Common Stock, $0.0001 par value AAP New York Stock Exchange
 
Not Applicable
(Former name, former address and former fiscal year, if changed since last report).

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Registration S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 13, 2020, the number of shares of the registrant’s common stock outstanding was 69,138,763 shares.


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NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about our strategic initiatives, operational plans and objectives, and future business and financial performance, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect our views based on historical results, current information and assumptions related to future developments. Except as may be required by law, we undertake no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, factors related to the timing and implementation of strategic initiatives, the highly competitive nature of our industry, demand for our products and services, complexities in our inventory and supply chain, challenges with transforming and growing our business and factors related to the current global pandemic. Please refer to “Item 1A. Risk Factors.” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as updated by our subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements.
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PART I.  FINANCIAL INFORMATION
 
ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data) (Unaudited)
  July 11, 2020 December 28, 2019
Assets
Current assets:    
Cash and cash equivalents $ 1,141,502  $ 418,665 
Receivables, net 742,346  689,469 
Inventories 4,358,489  4,432,168 
Other current assets 153,188  155,241 
Total current assets 6,395,525  5,695,543 
Property and equipment, net of accumulated depreciation of $2,096,439 and $2,037,849 1,436,485  1,433,213 
Operating lease right-of-use assets 2,367,527  2,365,325 
Goodwill 990,396  992,240 
Intangible assets, net 692,482  709,756 
Other assets 48,250  52,448 
  $ 11,930,665  $ 11,248,525 
Liabilities and Stockholders’ Equity    
Current liabilities:    
Accounts payable $ 3,310,073  $ 3,421,987 
Accrued expenses 659,642  535,863 
Other current liabilities 467,844  519,852 
Total current liabilities 4,437,559  4,477,702 
Long-term debt 1,240,340  747,320 
Noncurrent operating lease liabilities 2,041,400  2,017,159 
Deferred income taxes 338,086  334,013 
Other long-term liabilities 146,761  123,250 
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, nonvoting, $0.0001 par value —  — 
Common stock, voting, $0.0001 par value 8  8 
Additional paid-in capital 760,535  735,183 
Treasury stock, at cost (961,592) (924,389)
Accumulated other comprehensive loss (43,939) (34,569)
Retained earnings 3,971,507  3,772,848 
Total stockholders’ equity 3,726,519  3,549,081 
  $ 11,930,665  $ 11,248,525 



The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
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Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data) (Unaudited)
  Twelve Weeks Ended Twenty-Eight Weeks Ended
July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Net sales $ 2,501,380  $ 2,332,246  $ 5,199,262  $ 5,284,283 
Cost of sales, including purchasing and warehousing costs
1,404,666  1,322,808  2,929,815  2,970,233 
Gross profit 1,096,714  1,009,438  2,269,447  2,314,050 
Selling, general and administrative expenses
833,869  838,666  1,928,177  1,935,338 
Operating income 262,845  170,772  341,270  378,712 
Other, net:
Interest expense (13,422) (8,675) (25,665) (23,619)
Other income (expense), net 3,117  4,113  (2,872) 1,874 
Total other, net (10,305) (4,562) (28,537) (21,745)
Income before provision for income taxes
252,540  166,210  312,733  356,967 
Provision for income taxes 62,580  41,390  79,185  89,647 
Net income $ 189,960  $ 124,820  $ 233,548  $ 267,320 
Basic earnings per common share $ 2.75  $ 1.74  $ 3.38  $ 3.73 
Weighted average common shares outstanding 69,118  71,738  69,154  71,767 
Diluted earnings per common share $ 2.74  $ 1.73  $ 3.37  $ 3.71 
Weighted average common shares outstanding
69,294  72,008  69,350  72,063 


Condensed Consolidated Statements of Comprehensive Income
(In thousands) (Unaudited)
  Twelve Weeks Ended Twenty-Eight Weeks Ended
July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Net income $ 189,960  $ 124,820  $ 233,548  $ 267,320 
Other comprehensive income (loss):
Changes in net unrecognized other postretirement benefit (costs) income, net of tax of $26, $25, $3 and $8 (73) (69) (7) 26 
Currency translation adjustments 7,669  6,626  (9,363) 10,686 
Total other comprehensive income (loss) 7,596  6,557  (9,370) 10,712 
Comprehensive income $ 197,556  $ 131,377  $ 224,178  $ 278,032 



The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
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Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except per share data) (Unaudited)
Twelve Weeks Ended July 11, 2020
Common Stock Additional
Paid-in Capital 		Treasury Stock, at Cost Accumulated Other
Comprehensive Loss 		Retained Earnings Total
Stockholders’ Equity
Shares Amount
Balance, April 18, 2020 69,101  $ 8  $ 749,723  $ (960,150) $ (51,535) $ 3,798,983  $ 3,537,029 
Net income
—  —  —  —  —  189,960  189,960 
Total other comprehensive income
—  —  —  —  7,596  —  7,596 
Restricted stock units and deferred stock units vested
42  —  —  —  —  —  — 
Share-based compensation
—  —  10,029  —  —  —  10,029 
Stock issued under employee stock purchase plan
6  —  783  —  —  —  783 
Repurchases of common stock
(10) —  —  (1,442) —  —  (1,442)
Cash dividends declared ($0.25 per common share)
—  —  —  —  —  (17,436) (17,436)
Balance, July 11, 2020 69,139  $ 8  $ 760,535  $ (961,592) $ (43,939) $ 3,971,507  $ 3,726,519 
Twelve Weeks Ended July 13, 2019
Common Stock Additional
Paid-in Capital 		Treasury Stock, at Cost Accumulated Other
Comprehensive Loss 		Retained Earnings Total
Stockholders’ Equity
Shares Amount
Balance, April 20, 2019 71,737  $ 8  $ 706,360  $ (560,245) $ (40,038) $ 3,441,138  $ 3,547,223 
Net income
—  —  —  —  —  124,820  124,820 
Total other comprehensive loss
—  —  —  —  6,557  —  6,557 
Restricted stock units and deferred stock units vested
34  —  —  —  —  —  — 
Share-based compensation
—  —  8,441  —  —  —  8,441 
Stock issued under employee stock purchase plan
6  —  970  —  —  —  970 
Repurchases of common stock
(81) —  —  (12,347) —  —  (12,347)
Cash dividends declared ($0.06 per common share)
—  —  —  —  —  (4,338) (4,338)
Other
1  —  (24) —  —  —  (24)
Balance, July 13, 2019 71,697  $ 8  $ 715,747  $ (572,592) $ (33,481) $ 3,561,620  $ 3,671,302 



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Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except per share data) (Unaudited)
Twenty-Eight Weeks Ended July 11, 2020
  Common Stock Additional
Paid-in Capital 		Treasury Stock, at Cost Accumulated Other
Comprehensive Loss 		Retained Earnings Total
Stockholders’ Equity
  Shares Amount
Balance, December 28, 2019 69,232  $ 8  $ 735,183  $ (924,389) $ (34,569) $ 3,772,848  $ 3,549,081 
Net income
—  —  —  —  —  233,548  233,548 
Total other comprehensive loss
—  —  —  —  (9,370) —  (9,370)
Restricted stock units and deferred stock units vested
179  —  —  —  —  —  — 
Share-based compensation
—  —  23,838  —  —  —  23,838 
Stock issued under employee stock purchase plan
15  —  1,518  —  —  —  1,518 
Repurchases of common stock
(287) —  —  (37,203) —  —  (37,203)
Cash dividends declared ($0.50 per common share)
—  —  —  —  —  (34,889) (34,889)
Other
—  —  (4) —  —  —  (4)
Balance, July 11, 2020 69,139  $ 8  $ 760,535  $ (961,592) $ (43,939) $ 3,971,507  $ 3,726,519 
Twenty-Eight Weeks Ended July 13, 2019
  Common Stock Additional
Paid-in Capital 		Treasury Stock, at Cost Accumulated Other
Comprehensive Loss 		Retained Earnings Total
Stockholders’ Equity
  Shares Amount
Balance, December 29, 2018 72,460  $ 8  $ 694,797  $ (425,954) $ (44,193) $ 3,326,155  $ 3,550,813 
Net income
—  —  —  —  —  267,320  267,320 
Cumulative effect of accounting change from adoption of ASU 2016-02, net of tax (23,165) (23,165)
Total other comprehensive loss
—  —  —  —  10,712  10,712 
Restricted stock units and deferred stock units vested
145  —  —  —  —  —  — 
Share-based compensation
—  —  19,425  —  —  —  19,425 
Stock issued under employee stock purchase plan
11  —  1,648  —  —  —  1,648 
Repurchases of common stock
(921) —  —  (146,638) —  —  (146,638)
Cash dividends declared ($0.12 per common share)
—  —  —  —  —  (8,690) (8,690)
Other
2  —  (123) —  —  —  (123)
Balance, July 13, 2019 71,697  $ 8  $ 715,747  $ (572,592) $ (33,481) $ 3,561,620  $ 3,671,302 



The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

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Advance Auto Parts, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
  Twenty-Eight Weeks Ended
July 11, 2020 July 13, 2019
Cash flows from operating activities:    
Net income $ 233,548  $ 267,320 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 135,221  123,257 
Share-based compensation 23,838  19,425 
Loss and impairment of long-lived assets 1,801  2,297 
Provision for deferred income taxes 4,581  2,930 
Other 940  11,719 
Net change in:
Receivables, net (55,055) (85,941)
Inventories 67,894  (5,685)
Accounts payable (108,860) 142,002 
Accrued expenses 145,228  (21,272)
Other assets and liabilities, net (926) 36,109 
Net cash provided by operating activities 448,210  492,161 
Cash flows from investing activities:    
Purchases of property and equipment (140,105) (111,425)
Purchase of an indefinite-lived intangible asset (230) — 
Proceeds from sales of property and equipment 305  8,566 
Net cash used in investing activities (140,030) (102,859)
Cash flows from financing activities:    
Decrease in bank overdrafts —  (70,265)
Proceeds from borrowings on revolving credit facility 500,000  — 
Payment on revolving credit facility (500,000) — 
Proceeds from issuance of senior unsecured notes 498,240  — 
Redemption of senior unsecured notes —  (310,047)
Dividends paid (39,017) (13,028)
Proceeds from the issuance of common stock
1,518  1,648 
Repurchases of common stock (37,203) (146,638)
Other, net (5,815) (236)
Net cash provided by (used in) financing activities 417,723  (538,566)
Effect of exchange rate changes on cash (3,066) 456 
Net increase (decrease) in cash and cash equivalents 722,837  (148,808)
Cash and cash equivalents, beginning of period
418,665  896,527 
Cash and cash equivalents, end of period
$ 1,141,502  $ 747,719 
Non-cash transactions:
Accrued purchases of property and equipment $ 9,594  $ 30,068 



The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.
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Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


1. Nature of Operations and Basis of Presentation

Advance Auto Parts, Inc. and subsidiaries is a leading automotive aftermarket parts provider in North America, serving both professional installers (“Professional”), and “do-it-yourself” (“DIY”), customers. The accompanying condensed consolidated financial statements have been prepared by us and include the accounts of Advance Auto Parts, Inc., its wholly owned subsidiaries, Advance Stores Company, Incorporated (“Advance Stores”) and Neuse River Insurance Company, Inc., and their subsidiaries (collectively referred to as “Advance,” “we,” “us” or “our”).

As of July 11, 2020, we operated a total of 4,819 stores and 167 branches primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. In addition, as of July 11, 2020, we served 1,262 independently owned Carquest branded stores across the same geographic locations served by our stores and branches in addition to Mexico, the Bahamas, Turks and Caicos and the British Virgin Islands.

In March 2020, the World Health Organization categorized the COVID-19 outbreak as a pandemic (“the pandemic”). As a majority of our stores and facilities have remained open, we have taken additional measures to help protect the health and safety of our Team Members and customers. Such measures, among others, include the implementation of other labor-related benefits for Team Members and increased sanitation practices across Advance. Since the assumptions underpinning our long-term revenue and cash flow growth rates, operating models and business strategies have not been significantly impacted, there was no material impairment of our various assets during the twelve and twenty-eight weeks ended July 11, 2020.

The COVID-19 pandemic remains an evolving situation. If a period of decreased demand were to reoccur, it may lead to increased asset recovery and valuation risks in the future, such as impairment of goodwill, intangible assets and store and other assets. We will continue to assess the impact of the pandemic on our financial position. The extent to which the COVID-19 pandemic will impact our operations, liquidity, compliance with debt covenants or financial results in subsequent periods is uncertain, but such impact could be material.

The accounting policies followed in the presentation of interim financial results are consistent with those followed on an annual basis. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted based upon the Securities and Exchange Commission (“SEC”) interim reporting guidance. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for 2019 as filed with the SEC on February 18, 2020.

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the operating results to be expected for the full year. Our first quarter of the year contains sixteen weeks. Our second and third quarter of 2020 consist of twelve weeks, while our fourth quarter of 2020 contains thirteen weeks due to the 53-week fiscal year in 2020.

2. Significant Accounting Policies

Revenues

The following table summarizes disaggregated revenue from contracts with customers by product group:
Twelve Weeks Ended Twenty-Eight Weeks Ended
July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Percentage of Net sales, by product group:
Parts and batteries 66  % 67  % 66  % 66  %
Accessories and chemicals 22  21  21  21 
Engine maintenance 11  11  12  12 
Other 1  1  1  1 
Total 100  % 100  % 100  % 100  %
7
Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Recently Issued Accounting Pronouncements

During the sixteen weeks ended April 18, 2020, we adopted Financial Accounting Standard Board (“FASB”) Accounting Standards Update 2016-13 (“ASU 2016-13”), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which required us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaced the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements.

During the twelve weeks ended July 11, 2020, we early adopted the SEC’s, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities rules, which simplify the disclosure requirements related to the Company’s registered securities under Rule 3-10 of Regulation S-X. The final rule also allows for the simplified disclosure to be included within Management’s Discussion and Analysis of Financial Condition and Results of Operations.

3. Inventories

Inventories are stated at the lower of cost or market. We used the last in, first out (“LIFO”) method of accounting for approximately 88% and 89% of inventories as of July 11, 2020 and December 28, 2019. Under the LIFO method, our Cost of sales reflects the costs of the most recently purchased inventories, while the inventory carrying balance represents the costs for inventories purchased in the twenty-eight weeks ended July 11, 2020 and prior years. We recorded an increase to Cost of sales of $3.1 million and $16.5 million for the twelve weeks ended July 11, 2020 and July 13, 2019, an increase to Cost of sales of $11.9 million and $42.9 million for the twenty-eights weeks ended July 11, 2020 and July 13, 2019 to state inventories at LIFO.

An actual valuation of inventory under the LIFO method is performed by us at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on our estimates of expected inventory levels and costs at the end of the year.

Inventory balances were as follows:
(in thousands) July 11, 2020 December 28, 2019
Inventories at first in, first out (“FIFO”) $ 4,228,833  $ 4,290,565 
Adjustments to state inventories at LIFO 129,656  141,603 
Inventories at LIFO $ 4,358,489  $ 4,432,168 

4. Intangible Assets

Our definite-lived intangible assets include customer relationships and non-compete agreements. Amortization expense was $7.3 million for the twelve weeks ended July 11, 2020 and July 13, 2019 and $17.0 million for the twenty-eight weeks ended July 11, 2020 and July 13, 2019.

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Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

5. Receivables, net

Receivables consist of the following:
(in thousands) July 11, 2020 December 28, 2019
Trade $ 519,614  $ 422,403 
Vendor 202,031  249,009 
Other 31,177  32,306 
Total receivables 752,822  703,718 
Less: allowance for doubtful accounts (10,476) (14,249)
Receivables, net $ 742,346  $ 689,469 

6. Long-term Debt and Fair Value of Financial Instruments

Long-term debt consists of the following:
(in thousands) July 11, 2020 December 28, 2019
4.50% Senior Unsecured Notes due January 15, 2022 $ 299,581  $ 299,441 
4.50% Senior Unsecured Notes due December 1, 2023 448,095  447,879 
3.90% Senior Unsecured Notes due April 15, 2030 492,664  — 
Total long-term debt $ 1,240,340  $ 747,320 
Fair value of long-term debt $ 1,352,000  $ 795,000 

Fair Value of Financial Assets and Liabilities

The fair value of our senior unsecured notes was determined using Level 2 inputs based on quoted market prices. The carrying amounts of our cash and cash equivalents, receivables, accounts payable and accrued expenses approximate their fair values due to the relatively short-term nature of these instruments.

Senior Unsecured Notes

Our 4.50% senior unsecured notes due January 15, 2022 (the “2022 Notes”) were issued in January 2012 at 99.97% of the principal amount of $300.0 million. The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year. Our 4.50% senior unsecured notes due December 1, 2023 (the “2023 Notes”) were issued in December 2013 at 99.69% of the principal amount of $450.0 million. The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year.

On April 16, 2020, we issued $500.0 million aggregate principal amount of senior unsecured notes (the “Original Notes”). The Original Notes were issued at 99.65% of the principal amount of $500.0 million, are due April 15, 2030 and bear interest at 3.90% per year payable semi-annually in arrears on April 15 and October 15 of each year (collectively with the 2023 Notes and 2022 Notes, referred to as our “senior unsecured notes”).

During the twelve weeks ended July 11, 2020, the Company commenced an exchange offer to exchange the Original Notes in the aggregate principal amount of $500.0 million, which were not registered under the Securities Act of 1933, as amended (the “Securities Act”), for a like principal amount of 3.90% senior unsecured notes due 2030 (the “Exchange Notes”), which have been registered under the Securities Act. The Original Notes were substantially identical to the Exchange Notes, except that the Exchange Notes are registered under the Securities Act and are not subject to the transfer restrictions and certain registration rights agreement provisions applicable to the Original Notes. On July 28, 2020, the Original Notes were successfully exchanged for the Exchange Notes.
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Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


On August 17, 2020, we notified the trustee of our intent to redeem the $300 million aggregate principal of our 2022 Notes.

Bank Debt

During the twelve weeks ended July 11, 2020, we elected to repay the $500.0 million outstanding under our revolving credit facility that we borrowed during the first quarter of 2020. As of July 11, 2020, we had no outstanding borrowings, $1.0 billion of borrowing availability and no letters of credit outstanding under the unsecured revolving credit facility (the “2017 Credit Agreement”). As of December 28, 2019, we had no outstanding borrowings, $1.0 billion of borrowing availability and no letters of credit outstanding under our unsecured revolving credit facility.

As of July 11, 2020 and December 28, 2019, we had $100.1 million and $111.6 million of bilateral letters of credit issued separately from the 2017 Credit Agreement, none of which were drawn upon. These bilateral letters of credit generally have a term of one year or less and primarily serve as collateral for our self-insurance policies.

We were in compliance with financial covenants required by our debt arrangements as of July 11, 2020.

Debt Guarantees

We are a guarantor of loans made by banks to various independently owned Carquest-branded stores that are our customers totaling $54.3 million and $26.4 million as of July 11, 2020 and December 28, 2019. These loans are collateralized by security agreements on merchandise inventory and other assets of the borrowers. The approximate value of the inventory collateralized by these agreements is $65.7 million and $50.3 million as of July 11, 2020 and December 28, 2019. We believe that the likelihood of performance under these guarantees is remote.

7. Leases

Substantially all of our leases are for facilities and vehicles. The initial term for facilities are typically 5 years to 10 years, with renewal options at 5 year intervals, with the exercise of lease renewal options at our sole discretion. Our vehicle and equipment leases are typically 3 years to 5 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease liabilities consist of the following:
(in thousands) July 11, 2020 December 28, 2019
Total operating lease liabilities $ 2,472,467  $ 2,495,141 
Less: Current portion of operating lease liabilities (431,067) (477,982)
Noncurrent operating lease liabilities $ 2,041,400  $ 2,017,159 

The current portion of operating lease liabilities is included in Other current liabilities in the accompanying condensed consolidated balance sheets.

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Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Total lease cost is included in Cost of sales and selling, general and administrative expenses (“SG&A”) in the accompanying condensed consolidated statements of operations and is recorded net of immaterial sublease income. Total lease cost is comprised of the following:
Twelve Weeks Ended Twenty-Eight Weeks Ended
(in thousands) July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Operating lease cost $ 119,707  $ 124,765  $ 281,512  $ 284,811 
Variable lease cost 30,856  32,856  74,392  82,546 
Total lease cost $ 150,563  $ 157,621  $ 355,904  $ 367,357 

The future maturity of lease liabilities are as follows:
(in thousands) July 11, 2020
Remainder of 2020 $ 262,725 
2021 503,068 
2022 424,431 
2023 387,012 
2024 308,440 
Thereafter 973,223 
Total lease payments 2,858,899 
Less: Imputed interest (386,432)
Total operating lease liabilities $ 2,472,467 

As of July 11, 2020, our operating lease payments include $86.2 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $56.9 million of legally binding minimum lease payments for leases signed, but not yet commenced.

The weighted-average remaining lease term and weighted-average discount rate for our operating leases are 7.1 years and 3.9% as of July 11, 2020. We calculated the weighted-average discount rates using incremental borrowing rates, which equal the rates of interest that we would pay to borrow funds on a fully collateralized basis over a similar term.

Other information relating to our lease liabilities is as follows:
Twenty-Eight Weeks Ended
(in thousands) July 11, 2020 July 13, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 305,079  $ 278,323 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ 219,954  $ 201,856 

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Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

8. Warranty Liabilities

The following table presents changes in our warranty reserves:
Twenty-Eight Weeks Ended Fifty-Two Weeks Ended
(in thousands) July 11, 2020 December 28, 2019
Warranty reserve, beginning of period $ 36,820  $ 45,280 
Additions to warranty reserves 9,341  34,117 
Reduction and utilization of reserve (20,445) (42,577)
Warranty reserve, end of period $ 25,716  $ 36,820 
  
9. Share Repurchase Program

On November 8, 2019, our Board of Directors authorized a $700.0 million share repurchase program. This new authorization was in addition to the $400.0 million share repurchase program that was authorized by our Board of Directors in August 2019. Our share repurchase program permits the repurchase of our common stock on the open market and in privately negotiated transactions from time to time.

During the twelve weeks ended July 11, 2020, we purchased no shares of our common stock under the share repurchase program. During the twelve weeks ended July 13, 2019, we purchased 0.1 million shares of our common stock under the share repurchase program at an aggregate cost of $10.9 million, or an average price of $151.58 per share. During the twenty-eight weeks ended July 11, 2020 and July 13, 2019, we repurchased 0.2 million and 0.9 million shares of our common stock under our share repurchase program. The shares repurchased in connection with our share repurchase program during the twenty-eight weeks ended July 11, 2020 and July 13, 2019 were at an aggregate cost of $29.0 million and $138.1 million, or an average price of $128.36 and $158.98 per share. We had $861.7 million remaining under our share repurchase program as of July 11, 2020.

10. Earnings per Share

The computation of basic and diluted earnings per share are as follows:  
  Twelve Weeks Ended Twenty-Eight Weeks Ended
(in thousands, except per share data) July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Numerator
Net income applicable to common shares $ 189,960  $ 124,820  $ 233,548  $ 267,320 
Denominator
Basic weighted average common shares 69,118  71,738  69,154  71,767 
Dilutive impact of share-based awards 176  270  196  296 
Diluted weighted average common shares (1)
69,294  72,008  69,350  72,063 
Basic earnings per common share $ 2.75  $ 1.74  $ 3.38  $ 3.73 
Diluted earnings per common share $ 2.74  $ 1.73  $ 3.37  $ 3.71 

(1)For the twelve and twenty-eight weeks ended July 11, 2020, 159 thousand and 326 thousand restricted stock units (“RSUs”) were excluded from the diluted calculation as their inclusion would have been anti-dilutive. For the twelve and twenty-eight weeks ended July 13, 2019, these anti-dilutive RSUs were insignificant.

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Advance Auto Parts, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

11. Share-Based Compensation

During the twenty-eight weeks ended July 11, 2020, we granted 284 thousand time-based RSUs, 74 thousand performance-based RSUs and 37 thousand market-based RSUs. The general terms of the time-based, performance-based and market-based RSUs are similar to awards previously granted by us.

The weighted average fair values of the time-based, performance-based and market-based RSUs granted during the twenty-eight weeks ended July 11, 2020 were $134.04, $130.03 and $145.04 per share. For time-based and performance-based RSUs, the fair value of each award was determined based on the market price of our stock on the date of grant adjusted for expected dividends during the vesting period, as applicable. The fair value of each market-based RSU was determined using a Monte Carlo simulation model.

Total income tax benefit related to share-based compensation expense for the twelve and twenty-eight weeks ended July 11, 2020 was $2.5 million and $6.0 million Total income tax benefit related to share-based compensation expense for the twelve and twenty-eight weeks ended July 13, 2019 was $2.3 million and $5.0 million As of July 11, 2020, there was $84.6 million of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted average period of 1.7 years.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 28, 2019 (filed with the SEC on February 18, 2020), which we refer to as our 2019 Form 10-K, and our condensed consolidated financial statements and the notes to those statements that appear elsewhere in this report.

Impact of COVID-19 on Our Business

During the COVID-19 pandemic we are prioritizing protecting the health and safety of our Team Members and customers; working to drive financial performance by preserving our cash position, scrutinizing planned spending and prioritizing various initiatives; and working to help ensure that when the current period of crisis passes, our team will emerge even stronger.

In response to the COVID-19 pandemic, we have continued to take additional measures to help ensure the health and safety of our Team Members and customers. Such measures include retro-fitting our stores with plexiglass care shields, the continuation of certain labor-related benefits for Team Members, social distancing practices, sanitation practices, the use of health check screenings and offering contactless delivery.

Government imposed restrictions and stay at home orders related to the pandemic occurred during our first quarter of 2020. These contributed to negative impacts to demand, primarily during the last six weeks of the sixteen weeks ended April 18, 2020. While the majority of our stores remained opened during this time, we adjusted our store operating hours to better align our variable operating cost, such as labor-related and utility expenses, with the lower demand. As a result, at the beginning of the second quarter of 2020, we began prioritizing certain strategic projects and deferring certain marketing costs. However, as the second quarter of 2020 progressed, we experienced a significant improvement in demand, particularly in our DIY Omnichannel business, that we believe was largely attributable to higher overall industry demand driven by external factors such as government stimulus, an increase in unemployment benefits and other factors that may have contributed to an increase in DIY automotive projects. In addition to these external factors, we believe the execution of prioritized internal initiatives, including the introduction of our new marketing campaign and continued progress on our supply chain optimization efforts, including the implementation of a new pricing platform, contributed to the improvement in demand. As cash flow improved during the twelve weeks ended July 11, 2020, we elected to repay the $500.0 million outstanding under our revolving credit facility that we borrowed during the first quarter of 2020.

Despite the increase in Net sales during the twelve weeks ended July 11, 2020, the COVID-19 pandemic remains an evolving situation. We continue to actively monitor developments that may cause us to take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our Team Members, customers, suppliers and stockholders.

Management Overview

Net sales increased 7.3% in the second quarter of 2020 as compared to the same period in the prior year, primarily driven by an increase in comparable store sales resulting from growth in our DIY Omnichannel business. We experienced our strongest sales growth in our Gulf Coast, Central and Appalachia regions, as well as increased sales in several product categories.

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We generated diluted earnings per share (“diluted EPS”) of $2.74 during our second quarter of 2020 compared to $1.73 for the comparable period of 2019. When adjusted for the following non-operational items, our adjusted diluted earnings per share (“Adjusted EPS”) for the twelve weeks ended July 11, 2020 and July 13, 2019 were $2.92 and $2.00.

Twelve Weeks Ended Twenty-Eight Weeks Ended
July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Transformation expenses $ 0.11  $ 0.20  $ 0.30  $ 0.35 
General Parts International, Inc. (“GPI”) amortization of acquired intangible assets 0.07  0.07  0.16  0.15 
Other adjustments —  —  —  0.25 

Refer to “Reconciliation of Non-GAAP Financial Measures” for further details of our comparable adjustments and the usefulness of such measures to investors.

Summary of Second Quarter Financial Results

A high-level summary of our financial results for the second quarter of 2020 includes:
 
•Net sales during the second quarter of 2020 were $2.5 billion, an increase of 7.3% as compared to the second quarter of 2019, primarily driven by an increase in comparable store sales of 7.5%, primarily driven by growth in our DIY Omnichannel business.
•Gross profit margin for the second quarter of 2020 was 43.8% of Net sales, an increase of 56 basis points as compared to the second quarter of 2019. This increase was primarily due to favorable channel mix, including growth in our DIY Omnichannel business, and supply chain efficiencies, partially offset by an increase in inventory related costs.
•SG&A expenses for the second quarter of 2020 were 33.3% of Net sales, a favorable impact of 262 basis points as compared to the second quarter of 2019, which was primarily due to a decrease in labor-related costs and suspension of travel due to the COIVD-19 pandemic. These improvements were partially offset by investments in marketing expenses associated with the launch of our new marketing campaign, as well as the promotion of the DieHard® brand, and an increase in supply costs incurred in response to the COVID-19 pandemic.

Business and Risks Update

We continue to make progress on the various elements of our strategic business plan, which is focused on improving the customer experience and driving consistent execution for both Professional and DIY customers. To achieve these improvements, we have undertaken planned strategic initiatives to help build a foundation for long-term success across the organization, which include:

•Development of a demand-based assortment, leveraging purchase and search history from our common catalog, versus our existing push-down supply approach.
•Advancement towards optimizing our footprint by market, including consolidating our Worldpac and Autopart International businesses, to drive share, repurpose our in-market store and asset base and streamline our distribution network.
•The launch of our new marketing campaigns, which focus on our customers and how we serve them every day with care and speed and the launch of the iconic DieHard® brand.
•Progress in the development of a more efficient end-to-end supply chain to deliver our broad assortment.
•Continued enhancement of ‘Advance Same Day’ Curbside Pick Up, ‘Advance Same Day’ Home Delivery and our mobile application and eCommerce performance.

Industry Update

Operating within the automotive aftermarket industry, we are influenced by a number of general macroeconomic factors, many of which are similar to those affecting the overall retail industry. For a complete discussion of these factors, refer to our 2019 Form 10-K, as updated by our subsequent filings with the SEC, including our Form 10-Q filed for the quarterly period ended April 18, 2020, and the “Impact of COVID-19 on Our Business” section included within this Form 10-Q.

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Stores and Branches

Key factors in selecting sites and market locations in which we operate include population, demographics, traffic count, vehicle profile, number and strength of competitors’ stores and the cost of real estate. During the twenty-eight weeks ended July 11, 2020, four stores and branches were opened and 55 were closed or consolidated, resulting in a total of 4,986 stores and branches as of July 11, 2020, compared to a total of 5,037 stores and branches as of December 28, 2019.

Results of Operations

Twelve Weeks Ended $ Increase/(Decrease) Basis Points
(in millions) July 11, 2020 July 13, 2019
Net sales $ 2,501.4  100.0  % $ 2,332.2  100.0  % $ 169.2  — 
Cost of sales
1,404.7  56.2  1,322.8  56.7  81.9  (56)
Gross profit 1,096.7  43.8  1,009.4  43.3  87.3  56 
SG&A 833.9  33.3  838.7  36.0  (4.8) (262)
Operating income 262.8  10.5  170.8  7.3  92.0  319 
Interest expense (13.4) (0.5) (8.7) (0.4) (4.7) (16)
Other (expense) income, net 3.1  0.1  4.1  0.2  (1.0) (5)
Provision for income taxes 62.6  2.5  41.4  1.8  21.2  73 
Net income $ 190.0  7.6  % $ 124.8  5.4  % $ 65.2  224 

Twenty-Eight Weeks Ended $ Increase/(Decrease) Basis Points
(in millions) July 11, 2020 July 13, 2019
Net sales $ 5,199.3  100.0  % $ 5,284.3  100.0  % $ (85.0) — 
Cost of sales
2,929.8  56.4  2,970.2  56.2  (40.4) 14 
Gross profit 2,269.4  43.6  2,314.1  43.8  (44.7) (14)
SG&A 1,928.2  37.1  1,935.3  36.6  (7.1) (46)
Operating income 341.3  6.6  378.7  7.2  (37.4) (60)
Interest expense (25.7) (0.5) (23.6) (0.4) (2.1) (5)
Other (expense) income, net (2.9) (0.1) 1.9  0.0  (4.8) (9)
Provision for income taxes 79.2  1.5  89.6  1.7  (10.4) (17)
Net income $ 233.5  4.5  % $ 267.3  5.1  % $ (33.8) (57)
Note: Table amounts may not foot due to rounding.

Net Sales

Net sales increased 7.3% during the second quarter of 2020 compared to the same period of 2019, primarily driven by an increase in comparable store sales resulting from growth in our DIY Omnichannel business. We experienced our strongest sales growth in our Gulf Coast, Central and Appalachia regions, as well as increased sales in several product categories, including accessories and chemicals.

For the twenty-eight weeks ended July 11, 2020, Net sales decreased 1.6% compared to the same period of 2019, primarily driven by a 1.8% decrease in comparable store sales resulting from less overall demand caused principally by the COVID-19 pandemic, particularly in the six weeks ended April 18, 2020, partially offset by an increase in demand in the twelve weeks ended July 11, 2020 resulting from the factors discussed above.

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We calculate comparable store sales based on the change in store or branch sales starting once a location has been open for 13 complete accounting periods (approximately one year) and by including e-commerce sales. Sales to independently owned Carquest stores are excluded from our comparable store sales. Acquired stores are included in our comparable store sales once the stores have completed 13 complete accounting periods following the acquisition date. We include sales from relocated stores in comparable store sales from the original date of opening.

Gross Profit

Gross profit for the twelve weeks ended July 11, 2020 was $1,096.7 million, or 43.8%, of Net sales, as compared to $1,009.4 million, or 43.3%, of Net sales for the twelve weeks ended July 13, 2019. This increase in Gross profit as a percentage of Net sales was primarily due to improvements in channel mix and supply chain efficiencies, partially offset by an increase in inventory related costs.

Gross profit for the twenty-eight weeks ended July 11, 2020 was $2,269.4 million, or 43.6% of Net sales, as compared to $2,314.1 million, or 43.8%, of Net sales for the twenty-eight weeks ended July 13, 2019. This decrease in Gross profit as a percentage of Net Sales was primarily due to supply chain deleverage, unfavorable product mix and higher tariff costs, partially offset by the factors discussed above.

As a result of changes in our LIFO reserve, an expense of $3.1 million and $16.5 million was included in the twelve weeks ended July 11, 2020 and July 13, 2019. For the twenty-eight weeks ended July 11, 2020 and July 13, 2019 the expense was $11.9 million and $42.9 million.

Selling, general and administrative expenses

SG&A expenses for the twelve weeks ended July 11, 2020 were $833.9 million, or 33.3% of Net sales, as compared to $838.7 million, or 36.0% of Net sales, for the twelve weeks ended July 13, 2019. This decrease in SG&A expenses as a percentage of Net sales was primarily due to a decrease in labor-related costs, suspension of travel due to the COVID-19 pandemic and a reduction in insurance and claims expenses. These improvements were partially offset by investments in marketing expenses associated with the launch of our new marketing campaign, as well as the promotion of the DieHard® brand, an increase in costs incurred in response to the COVID-19 pandemic and an increase in support contracts related to information technology solutions.

SG&A for the twenty-eight weeks ended July 11, 2020 was $1,928.2 million, or 37.1% of Net sales, as compared to $1,935.3 million, or 36.6% of Net sales, for the twenty-eight weeks ended July 13, 2019. This increase in SG&A as a percentage of Net sales was primarily due to an increase in costs incurred in response to the COVID-19 pandemic and investments in marketing expenses associated with the launch of our new marketing campaign, as well as the promotion of the DieHard® brand. These unfavorable variances were partially offset by a reduction professional services costs incurred as certain transformation-related projects have been postponed in an effort to preserve our financial flexibility in response to the COVID-19 pandemic.

Provision for income taxes

Our Provision for income taxes for the twelve weeks ended July 11, 2020 was $62.6 million, as compared to $41.4 million for the twelve weeks ended July 13, 2019. Our effective tax rate was 24.8% and 24.9% for the twelve weeks ended July 11, 2020 and July 13, 2019.

Our Provision for income taxes for the twenty-eight weeks ended July 11, 2020 was $79.2 million, as compared to $89.6 million for the twenty-eight weeks ended July 13, 2019. Our effective tax rate was 25.3% and 25.1% for the twenty-eight weeks ended July 11, 2020 and July 13, 2019.

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Reconciliation of Non-GAAP Financial Measures

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes certain financial measures not derived in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Non-GAAP financial measures, including Adjusted net income and Adjusted EPS, should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. We have presented these non-GAAP financial measures as we believe that the presentation of our financial results that exclude (1) transformation expenses under our strategic business plan; (2) non-cash amortization related to the acquired GPI intangible assets; and (3) other non-recurring adjustments are useful and indicative of our base operations because the expenses vary from period to period in terms of size, nature and significance and/or relate to the integration of GPI and store closure and consolidation activity in excess of historical levels. These measures assist in comparing our current operating results with past periods and with the operational performance of other companies in our industry. The disclosure of these measures allows investors to evaluate our performance using the same measures management uses in developing internal budgets and forecasts and in evaluating management’s compensation. Included below is a description of the expenses we have determined are not normal, recurring cash operating expenses necessary to operate our business and the rationale for why providing these measures is useful to investors as a supplement to the GAAP measures.

Transformation Expenses — Costs incurred in connection with our business plan that focuses on specific transformative activities that relate to the integration and streamlining of our operating structure across the enterprise, that we do not view to be normal cash operating expenses. These expenses will include, but not be limited to the following:
•Restructuring costs - Costs primarily relating to the early termination of lease obligations, asset impairment charges, other facility closure costs and Team Member severance in connection with our 2018 Store Rationalization plan and 2017 Store and Supply Chain Rationalization plan.
•Third-party professional services - Costs primarily relating to services rendered by vendors for assisting us with the development of various information technology and supply chain projects in connection with our enterprise integration initiatives.
•Other significant costs - Costs primarily relating to accelerated depreciation of various legacy information technology and supply chain systems in connection with our enterprise integration initiatives and temporary off-site workspace for project teams who are primarily working on the development of specific transformative activities that relate to the integration and streamlining of our operating structure across the enterprise.

GPI Amortization of Acquired Intangible Assets — As part of our acquisition of GPI, we obtained various intangible assets, including customer relationships, non-compete contracts and favorable leases agreements, which we expect to be subject to amortization through 2025.

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We have included a reconciliation of this information to the most comparable GAAP measures in the following table:

Twelve Weeks Ended Twenty-Eight Weeks Ended
(in thousands, except per share data) July 11, 2020 July 13, 2019 July 11, 2020 July 13, 2019
Net income (GAAP) $ 189,960  $ 124,820  $ 233,548  $ 267,320 
Cost of sales adjustments:
Transformation expenses:
Restructuring costs —  —  —  281 
Other significant costs 295  —  1,548  — 
Other adjustment (1)
—  —  —  13,010 
SG&A adjustments:
GPI amortization of acquired intangible assets
6,319  6,336  14,762  14,795 
Transformation expenses:
Restructuring costs 5,577  4,963  9,641  10,513 
Third-party professional services 1,281  12,461  4,264  19,316 
Other significant costs 2,962  1,892  12,122  3,418 
Other income adjustment (2)
—  —  —  10,756 
Provision for income taxes on adjustments (3)
(4,109) (6,413) (10,585) (18,022)
Adjusted net income (Non-GAAP) $ 202,285  $ 144,059  $ 265,300  $ 321,387 
Diluted earnings per share (GAAP) $ 2.74  $ 1.73  $ 3.37  $ 3.71 
Adjustments, net of tax 0.18  0.27  0.46  0.75 
Adjusted EPS (Non-GAAP) $ 2.92  $ 2.00  $ 3.83  $ 4.46 

(1)During the sixteen weeks ended April 20, 2019, we made an out-of-period correction, which increased Cost of sales by $13.0 million, related to received not invoiced inventory.
(2)During the sixteen weeks ended April 20, 2019, we incurred charges relating to a make-whole provision and debt issuance costs of $10.1 million and $0.7 million resulting from the early redemption of our 2020 senior unsecured notes.
(3)The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective non-GAAP adjustments.


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Liquidity and Capital Resources

Overview

Our primary cash requirements necessary to maintain our current operations include payroll and benefits, inventory purchases, contractual obligations, capital expenditures, payment of income taxes, funding of initiatives under our strategic business plan and other operational priorities. Historically, we have used available funds to repay borrowings under our credit facility, to periodically repurchase shares of our common stock under our stock repurchase program, to pay our quarterly cash dividends and for acquisitions; however, given uncertainties related to the COVID-19 pandemic, our future uses of cash may differ if our relative priorities, including the weight we place on the preservation of cash and liquidity change. Typically, we have funded our cash requirements primarily through cash generated from operations, supplemented by borrowings under our credit facilities and notes offerings as needed. We believe funds generated from our expected results of operations, available cash and cash equivalents, and available borrowings under our credit facility will be sufficient to fund our obligations for the next year.

Share Repurchase Program

On November 8, 2019, our Board of Directors authorized a $700.0 million share repurchase program as an addition to the previous $400.0 million share repurchase program that was authorized by our Board of Directors in August 2019.

During the twelve weeks ended July 11, 2020, we purchased no shares of our common stock under the share repurchase program. During the twelve weeks ended July 13, 2019, we purchased 0.1 million shares of our common stock under the share repurchase program at an aggregate cost of $10.9 million, or an average price of $151.58 per share. During the twenty-eight weeks ended July 11, 2020 and July 13, 2019, we repurchased 0.2 million and 0.9 million shares of our common stock under our share repurchase program. The shares repurchased in connection with our share repurchase program during the twenty-eight weeks ended July 11, 2020 and July 13, 2019 were at an aggregate cost of $29.0 million and $138.1 million, or an average price of $128.36 and $158.98 per share. As previously disclosed, we temporarily discontinued the use of our share repurchase program in the first quarter of 2020. Based on current liquidity and overall financial position, we have lifted this temporary suspension as of August 12, 2020.

Analysis of Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities:
Twenty-Eight Weeks Ended
(in thousands) July 11, 2020 July 13, 2019
Cash flows provided by operating activities $ 448,210  $ 492,161 
Cash flows used in investing activities (140,030) (102,859)
Cash flows provided by (used in) financing activities 417,723  (538,566)
Effect of exchange rate changes on cash (3,066) 456 
Net increase (decrease) in Cash and cash equivalents
$ 722,837  $ (148,808)

Operating Activities

For the twenty-eight weeks ended July 11, 2020, net cash provided by operating activities decreased by $44.0 million to $448.2 million compared to the comparable period of 2019. The net decrease in operating cash flows compared to the prior year was primarily driven by a decrease in Net income, largely due to the impact of the COVID-19 pandemic in the six weeks ended April 18, 2020, and decreases in overall working capital, including a decrease in Accounts Payable, partially offset by an increase in Accrued expenses and Inventories.
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Investing Activities

For the twenty-eight weeks ended July 11, 2020, net cash used in investing activities increased by $37.2 million to $140.0 million compared to the comparable period of 2019. Cash used in investing activities for the twenty-eight weeks ended July 11, 2020 consisted primarily of purchases of property and equipment, which was $28.7 million higher than the comparable period of 2019, primarily driven by investments made in supply chain and e-commerce, as well as information technology as we remain focused on the complete back office integration throughout the enterprise.

Financing Activities

For the twenty-eight weeks ended July 11, 2020, net cash provided by financing activities was $417.7 million, an increase of $956.3 million as compared to the twenty-eight weeks ended July 13, 2019. This increase was primarily a result of issuing $500.0 million of senior unsecured notes during the twenty-eight weeks ended July 11, 2020.

Our Board of Directors has declared a quarterly cash dividend since 2006. Any payments of dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, cash flows, capital requirements and other factors deemed relevant by our Board of Directors. On August 11, 2020, our Board of Directors declared a quarterly cash dividend of $0.25 per share to be paid on October 2, 2020 to all common shareholders of record as of September 18, 2020.

Long-Term Debt

As of July 11, 2020, we had a credit rating from Standard & Poor’s of BBB- and from Moody’s Investor Service of Baa2. The current outlooks by Standard & Poor’s and Moody’s are both stable. The current pricing grid used to determine our borrowing rate under our revolving credit facility is based on our credit ratings. If these credit ratings decline, our interest rate on outstanding balances may increase and our access to additional financing on favorable terms may be limited. In addition, it could reduce the attractiveness of certain vendor payment programs whereby third-party institutions finance arrangements to our vendors based on our credit rating, which could result in increased working capital requirements. Conversely, if these credit ratings improve, our interest rate may decrease.

On April 16, 2020, we issued senior unsecured notes at 99.65% of the principal amount of $500.0 million, which are due April 15, 2030 and bear interest at 3.90% per year payable semi-annually in arrears on April 15 and October 15 of each year. On July 28, 2020, these senior unsecured notes were exchanged for notes that are registered under the Securities Act and substantially identical to the original senior unsecured notes.

During the twenty-eight weeks ended July 11, 2020, we borrowed and repaid $500.0 million under our unsecured revolving credit facility, with a borrowing availability of $1.0 billion under such facility as of July 11, 2020.

On August 17, 2020, we notified the trustee of our intent to redeem the $300 million aggregate principal of our 2022 Notes.

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with GAAP. Our discussion and analysis of the financial condition and results of operations are based on these financial statements. The preparation of these financial statements requires the application of accounting policies in addition to certain estimates and judgments by our management. Our estimates and judgments are based on currently available information, historical results and other assumptions we believe are reasonable. Actual results could differ materially from these estimates.

During the twenty-eight weeks ended July 11, 2020, there were no changes to the critical accounting policies discussed in our 2019 Form 10-K. For a complete discussion of our critical accounting policies, refer to the 2019 Form 10-K.

Supplemental Guarantor Financial Information

The following is a description of the terms and conditions of the guarantees with respect to all senior unsecured notes for which Advance Auto Parts, Inc. (“Issuer”) is an issuer or provides full and unconditional guarantee.

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Certain 100% wholly owned domestic subsidiaries of the Issuer, including our Material Subsidiaries (as defined in the 2017 Credit Agreement) serve as guarantors (“Guarantor Subsidiaries”) of our senior unsecured notes. The subsidiary guarantees related to our senior unsecured notes are full and unconditional and joint and several, and there are no restrictions on the ability of the Issuer to obtain funds from its Guarantor Subsidiaries. Certain of our wholly owned subsidiaries, including all of our foreign subsidiaries and captive insurance subsidiary, do not serve as guarantors of our senior unsecured notes (“Non-Guarantor Subsidiaries”).

The following tables presents summarized financial information for the Issuer and Guarantor Subsidiaries on a combined basis after after elimination of (i) intercompany transactions and balances among the Issuer and the Guarantor Subsidiaries and (ii) equity in earnings from and investments in any subsidiaries that are a Non-Guarantor Subsidiary.

Summarized Financial Information

Balance Sheets
Issuer and Guarantor Subsidiaries
(in millions) July 11, 2020 December 28, 2019
Assets
Current assets (1)
$ 6,026.0  $ 5,329.9 
Non-current assets (2)
5,389.8  5,403.6 
Liabilities and equity
Current liabilities $ 4,217.9  $ 4,264.3 
Intercompany payables, net due to Non-Guarantor Subsidiaries 374.2  342.8 
Other non-current liabilities 3,656.7  3,128.2 
(1)Current assets includes $4,176.1 million and $4,234.2 million of Inventories as of July 11, 2020 and December 28, 2019.
(2)Non-current assets includes $1,598.8 million and $1,613.8 million of Goodwill and Intangible assets, net as of July 11, 2020 and December 28, 2019.

Statements of Operations
Issuer and Guarantor Subsidiaries
Twenty-Eight
Weeks Ended 		Fifty-Two
Weeks Ended
(in millions) July 11, 2020 December 28, 2019
Net sales $ 5,014.5  $ 9,342.2 
Gross profit 2,194.8  4,089.8 
Operating income 312.0  605.5 
Income before provision for income taxes 289.6  569.0 
Net income 233.5  486.9 


ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our exposure to market risk since December 28, 2019. Refer to Item 7A. Quantitative and Qualitative Disclosures about Market Risk in our 2019 Form 10-K.

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ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are our controls and other procedures that are designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Internal controls over financial reporting, no matter how well designed, have inherent limitations, including the possibility of human error and the override of controls. Therefore, even those systems determined to be effective can provide only “reasonable assurance” with respect to the reliability of financial reporting and financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness may vary over time.

Our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures as of July 11, 2020. Based on this evaluation, our principal executive officer and our principal financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our quarter ended July 11, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As a result of the COVID-19 pandemic that commenced during the first quarter of 2020, during the second quarter of 2020 certain of our Team Members continued to work remotely and certain stores and distribution centers continued to operate with limited Team Members on-site. We have not identified any material changes in our internal control over financial reporting as a result of these changes to the working environment. We are continually monitoring and assessing the COVID-19 situation to determine any potential impacts on the design and operating effectiveness of our internal controls over financial reporting.
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PART II.  OTHER INFORMATION
 
ITEM 1.LEGAL PROCEEDINGS

On February 6, 2018, a putative class action on behalf of purchasers of our securities who purchased or otherwise acquired their securities between November 14, 2016 and August 15, 2017, inclusive (the “Class Period”), was commenced against us and certain of our current and former officers in the U.S. District Court for the District of Delaware. The plaintiff alleges that the defendants failed to disclose material adverse facts about our financial well-being, business relationships, and prospects during the alleged Class Period in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On February 7, 2020 the court granted in part and denied in part our motion to dismiss. The surviving claims will now be subject to discovery. In addition, derivative complaints purportedly on behalf of the Company were filed against us as nominal defendant and certain of our current and former officers and directors related to similar allegations for the Class Period on April 29, 2020 in the U.S. District Court for the District of Delaware and August 13, 2020 in the Delaware Court of Chancery. We strongly dispute the allegations of the complaints and intend to defend the cases vigorously.

ITEM 1A. RISK FACTORS

Please refer to “Item 1a. Risk Factors.” found in our 2019 Form 10-K filed for the year ended December 28, 2019, as updated by our subsequent filings with the SEC, including our Form 10-Q filed for the quarterly period ended April 18, 2020, for risks that, if were to occur, could materially adversely affect our business, financial condition, results of operations, cash flows and future prospects, which could in turn materially affect the price of our common stock.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth the information with respect to repurchases of our common stock for the quarter ended July 11, 2020: 
Total Number of Shares Purchased (1)
Average Price Paid per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (in thousands)
April 19, 2020 to May 16, 2020 —  $ —  —  $ 861,747 
May 17, 2020 to June 13, 2020 10,468  137.69  —  861,747 
June 14, 2020 to July 11, 2020 —  —  —  861,747 
Total 10,468  $ 137.69  —  $ 861,747 

(1)The aggregate cost of repurchasing shares in connection with the net settlement of shares issued as a result of the vesting of restricted stock units was $1.4 million, or an average price of $137.69 per share, during the twelve weeks ended July 11, 2020.
(2)On November 8, 2019, our Board of Directors authorized a $700.0 million share repurchase program. This new authorization was in addition to the $400.0 million share repurchase program that was authorized by our Board of Directors in August 2019.

ITEM 5.OTHER INFORMATION

Effective August 12, 2020, the Company’s Board of Directors (the “Board”) amended the Company’s Amended and Restated By-Laws to include additional language related to the ability to conduct meetings by means of remote communication and adjourn meetings, remove a provision regarding partially paid stock, remove language regarding director actions by written consent being filed with the Company’s minutes and implementing certain administrative and technical changes. A clean copy of the Amended and Restated By-Laws, as amended, is filed as Exhibit 3.2 to this Quarterly Report on Form 10-Q, and a redline copy of the Amended and Restated By-Laws is filed as Exhibit 3.3 to this Quarterly Report on Form 10-Q.
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ITEM 6.EXHIBITS 
    Incorporated by Reference Filed
Exhibit No. Exhibit Description Form Exhibit Filing Date Herewith
3.1
10-Q 3.1 8/14/2018
3.2
X
3.3
X
4.1
8-K 4.1 4/17/2020
4.2
8-K 4.2 4/17/2020
4.3
X
X
      X
      X
      X
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104.1 Cover Page Interactive Data file (Embedded within Inline XBRL Documents and Included in Exhibit 101.)

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SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ADVANCE AUTO PARTS, INC.
Date: August 18, 2020 /s/ Andrew E. Page
Andrew E. Page
Senior Vice President, Controller and Chief Accounting Officer

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Exhibit 3.2


















AMENDED AND RESTATED
BY-LAWS
OF
ADVANCE AUTO PARTS,
INC.


















Effective August 12, 2020




TABLE OF CONTENTS
Page
I. OFFICES 1 
Section 1.01 Registered Office 1 
Section 1.02 Other Offices 1 
II. STOCKHOLDERS 1 
Section 2.01 Place of Meetings 1 
Section 2.02 Annual Meetings 1 
Section 2.03 Special Meetings 1 
Section 2.04 Notice of Stockholder Business and Nomination 2 
Section 2.05 Submission of Questionnaire, Representation and Agreement 6 
Section 2.06 Notice of Meetings 7 
Section 2.07 Waiver of Notice 7 
Section 2.08 Quorum 7 
Section 2.09 Adjourned Meetings 7 
Section 2.10 Voting 8 
Section 2.11 Proxies 9 
Section 2.12 Fixing Date for Determination of Stockholders of Record 9 
Section 2.13 Action by Written Consent of Stockholders 10 
Section 2.14 Stockholder List 10 
Section 2.15 Voting Procedures and Inspectors of Elections 10 
Section 2.16 Proxy Access 11 
III. BOARD OF DIRECTORS 19 
Section 3.01 General Powers; Organization 19 
Section 3.02 Number, Qualification and Term of Office 20 
Section 3.03 Resignation and Removal; Vacancies 20 
Section 3.04 Regular Meetings 20 
Section 3.05 Special Meetings 20 
Section 3.06 Notice of Special Meetings 20 
Section 3.07 Waiver of Notice 20 
Section 3.08 Quorum 21 
Section 3.09 Committees of Directors 21 



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TABLE OF CONTENTS
(continued)
Page
Section 3.10 Lead Director 21 
Section 3.11 Conference Communications 22 
Section 3.12 Action by Written Consent of Directors 22 
Section 3.13 Compensation 22 
IV. OFFICERS 22 
Section 4.01 Number 22 
Section 4.02 Election, Term of Office and Qualifications 22 
Section 4.03 Compensation 22 
Section 4.04 Registration and Removal; Vacancies 22 
Section 4.05 Chief Executive Officer 23 
Section 4.06 Chair of the Board 23 
Section 4.07 President 23 
Section 4.08 Vice Presidents 23 
Section 4.09 Secretary 23 
Section 4.10 Treasurer 23 
Section 4.11 Authority and Other Duties 23 
V. INDEMNIFICATION 24 
Section 5.01 Indemnification 24 
Section 5.02 Insurance 25 
Section 5.03 Expenses Payable in Advance 25 
VI. STOCK 25 
Section 6.01 Certificates for Stock 25 
Section 6.02 Issuance of Stock 26 
Section 6.04 Registered Stockholders 26 
Section 6.05 Transfer of Stock 26 
Section 6.06 Lost, Stolen or Destroyed Certificates 27 
Section 6.07 Facsimile Signatures 27 
VII. MISCELLANEOUS 27 
Section 7.01 Dividends 27 
Section 7.02 Interested Directors and Officers 27 


ii

TABLE OF CONTENTS
(continued)
Page
Section 7.03 Voting Securities Held by the Corporation 28 
Section 7.04 Execution of Instruments 28 
Section 7.05 Advances 28 
Section 7.06 Fiscal Year 28 
Section 7.07 Corporate Seal 28 
Section 7.08 Form of Records 29 
Section 7.09 Power to Amend 29 

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I.Offices.
Section 1.01Registered Office. The registered office of the Corporation shall be fixed in the Certificate of Incorporation.

Section 1.02Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require.

II.Stockholders.

Section 2.01Place of Meetings. Meetings of stockholders may be held at such place, if any, either within or without the State of Delaware, or by means of remote communication, as may be designated by the Board of Directors, the Chief Executive Officer of the Corporation or the Chair of the Board of Directors.

Section 2.02Annual Meetings. An annual meeting of stockholders shall be held in each calendar year for the election of directors on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the annual meeting, provided that such business is properly brought before the meeting.

Section 2.03Special Meetings.

(a)  A special meeting of stockholders, for any purpose or purposes, may be called only by the Chief Executive Officer, the Chair of the Board of Directors, the Board of Directors, by stockholders following receipt by the Secretary of the Corporation of a written request for a special meeting from record holders owning at least ten percent (10%), in the aggregate, of the outstanding common stock of the Corporation (the “Special Meeting Request”), and may not be called by any other person or persons. Business transacted at any special meeting shall be limited to the purposes stated in the notice of the meeting sent by the Corporation subject to the nomination procedures for directors set forth in Section 2.04(b) of these By-Laws.

(b)  A special meeting called by the Secretary of the Corporation shall be held at such date, time and place, if any, within or without the State of Delaware, as may be fixed by the Board; provided however, that the date of any such special meeting shall not be more than 90 days after the Special Meeting Request is received by the Secretary of the Corporation (or 120 days after the Special Meeting Request is received by the Secretary of the Corporation if an item of business included in such Special Meeting Request includes a nomination of a person for election to the Board of Directors) unless a later date is required in order to allow the Corporation to file the information required under Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Notwithstanding the foregoing, the Secretary of the Corporation shall not be required to call a special meeting if the Special Meeting Request (i) is received by the Secretary of the Corporation during the 90-day period before the first anniversary of the immediately preceding year’s annual meeting of stockholders or (ii) includes an item of business substantially the same as or substantially similar to such action (all “Similar Item”) that was presented at any meeting of stockholders held within ninety (90) days prior to receipt by the Corporation of such Special Meeting Request. For
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purposes of this Section 2.03(b), election or removal of directors shall be deemed to be a Similar Item with respect to all actions involving the removal of directors, or, solely when the number of nominees for the Board of Directors exceeds the number of directors to be elected, the nomination or election of directors or the filling of vacancies on the Board of Directors.

Section 2.04Notice of Stockholder Business and Nominations.

(a)   Annual Meetings of Shareholders.

         (1) Nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (A) pursuant to the Corporation’s notice of meeting (or a supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors, (C) properly brought before the meeting by a stockholder of the Corporation who (i) was a stockholder of record at the time of giving of notice provided for in Section 2.04 of these By-Laws and at the time of the annual meeting, (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in Section 2.04 of these By-Laws as to such business or nomination or (D) with respect to a qualifying nomination at an annual meeting of stockholders held in or after 2018 of a Stockholder Nominee (as defined in Section 2.16 of these By-Laws) by an Eligible Stockholder (as defined in Section 2.16(d) of these By-Laws) and/or Nominating Stockholder (as defined in Section 2.16(e)(5) of these By-Laws) in accordance with Section 2.16 of these By-Laws (each such nomination a “Proxy Access Nomination”). Clauses (C) and (D) of this Section 2.04(a)(i) shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Corporation’s notice of meeting) before an annual meeting of stockholders.

         (2) Without qualification, for any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.04(a)(1)(C), or with respect to a Proxy Access Nomination, Section 2.16 of these By-Laws, the stockholder must have given timely notice thereof in writing to the Secretary and such other business must otherwise be a proper matter for stockholder action.

(A) To be timely under clause (C) of Section 2.04(a)(1) of this By-Law, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 150th day and not later than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 150th day prior to the date of such annual meeting and not later than the close of business on the later of the 120th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 130 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.
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(B) To be in proper form, a stockholder’s notice (whether given pursuant to Section 2.04(a)(2) or Section 2.04(b) of these By-Laws) to the Secretary must set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, the following information together with a representation as to the accuracy of the information:

(i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any,

(ii) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and/or of record by such stockholder and such beneficial owner, if any,

(iii) a description of any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation,

(iv) a description of any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation,

(v) a description of any short interest in any security of the Corporation (for purposes of these By-Laws a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security),

(vi) a description of any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation,

(vii) a description of any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner

(viii) a description of any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any,
3


(ix) a description of any arrangements, rights, or other interests described in Sections 2.04(a)(2)(B)(i)- (viii) of these By-Laws held by members of such stockholder’s immediate family sharing the same household, and

(x) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
Such information shall be provided as of the date of the notice, and such information, as well as any other information reasonably requested by the Corporation after the date of the notice, shall be supplemented by such stockholder not later than 10 days after the record date for the meeting to disclose such ownership as of the record date.
(C) If the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, set forth:

(i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business, and

(ii) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder.

(D) Set forth, as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board of Directors:

(i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and

(ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant.
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(E) With respect to each nominee for election or reelection to the Board of Directors, such stockholder shall include a completed and signed questionnaire, representation and agreement required by Section 2.05 of these By-Laws. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

(3) Notwithstanding anything in Section 2.04(a)(2)(A) of these By-Laws to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 130 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by Section 2.04 of these By-Laws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

(b)   Special Meetings of Stockholders.

         (1) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (A) by or at the direction of the Board of Directors or (B) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (i) is a stockholder of record at the time of giving of notice provided for in this By-Law and at the time of the special meeting, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in Section 2.04 of these By-Laws as to such nomination. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 2.04(a) of this By-Law with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 2.05 of these By-Laws) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 150th day prior to the date of such special meeting and not later than the close of business on the later of the 120th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 130 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. For the avoidance of doubt, Proxy Access Nominations may not be made at any special meeting of stockholders.
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(c)   General.

         (1) Only such persons who are nominated in accordance with the procedures set forth in Section 2.04 or Section 2.16 of these By-Laws shall be eligible to be elected as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this By-Law (it being understood that Proxy Access Nomination pursuant to Section 2.16 may not be made at a special meeting of stockholders). Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the Chair of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these By-Laws and, if any proposed nomination or business is not in compliance with Section 2.04 or Section 2.16, as applicable, of these By-Laws, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.   


         (2) For purposes of these By-Laws, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.


         (3) Notwithstanding the foregoing provisions of Section 2.04 of these By-Laws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in Section 2.04 of these By-Laws; provided, however, that any references in these By-Laws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.04(a)(1)(C), Section 2.04(b) or Section 2.16 of these By-Laws. Nothing in these By-Laws shall be deemed to affect any rights (A) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these By-Laws.

         (4) The Chair of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination or business proposal was not made in accordance with the procedures prescribed by these By-Laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded or that such proposed business shall not be transacted.

Section 2.05Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee by a stockholder for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 2.04 of these By-Laws or, in the case of a Proxy Access Nomination brought under Section 216 of these By-Laws, in accordance with the timing, notice and other provisions of Section 2.16 of these By-Laws) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a
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written representation and agreement (in the form provided by the Secretary upon written request) that such person:

(a)   is not and will not become a party to:

         (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation, or

         (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law,

(b)   is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and

(c)   in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.


Section 2.06Notice of Meetings. A written notice stating the place, if any, date, hour of the meeting and means of remote communication, if any, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of such meeting to each stockholder of record of the Corporation entitled to vote at such meeting, in accordance with Section 232 of the Delaware General Corporation Law.

Section 2.07Waiver of Notice. Notice of any meeting of stockholders may be waived either before or after such meeting in a writing signed by the person or persons entitled to the notice. Attendance of a person at a meeting also shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2.08Quorum. At each meeting of stockholders, except where otherwise provided by law or the Certificate of Incorporation or these By-Laws, the holders of a majority of the outstanding capital stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. If a quorum is once present at the meeting, the stockholders may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.09Adjourned Meetings. In the absence of a quorum or for any other reason, the Chair of the meeting may adjourn the meeting from time to time. The stockholders
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present at any meeting may, by majority vote, adjourn the meeting from time to time to a later day or hour or to another place, if any. The stockholders entitled to vote at any meeting at which a quorum is not present in person or represented by proxy may so adjourn the meeting until a quorum shall be present or represented. If any adjournment is for more than 30 days, or if after adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Otherwise, notice of any adjourned meeting need not be given if the time and place, if any, thereof and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken. At an adjourned meeting at which a quorum is present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally convened.

Section 2.01Voting.

(a)   Except as otherwise provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall have one vote for each share of stock having voting power upon the matter in question that is held by such stockholder and registered in the stockholder’s name on the books of the Corporation as of the applicable record date. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

(b)   The vote upon any election or question before a meeting, other than the election of directors, need not be by written ballot, and need not be conducted by inspectors, unless otherwise determined by the Board of Directors or the officer presiding at the meeting or otherwise provided in Section 2.15. All such elections and questions at a meeting shall be decided by a majority vote of the shares entitled to vote on the subject matter, the holders of which are present in person or represented by proxy at the meeting at the time of the vote, except where otherwise required by the laws of Delaware, the Certificate of Incorporation or these By-Laws.

(c)   Each director to be elected by stockholders shall be elected by the vote of the majority of the votes cast at any meeting for the election of directors at which a quorum is present, provided that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at such meeting and entitled to vote on the election of directors. For purposes of this Section 2.10(c), a majority of votes cast shall mean that the number of shares voted “for” a director’s election exceeds fifty percent (50%) of the number of votes cast with respect to that director’s election. For purposes of this Section 2.10(c), votes cast shall include votes to withhold authority in each case and exclude abstentions and broker non-votes.

(d)   If a director has resigned and his or her resignation is accepted by the Board of Directors, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting
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vacancy pursuant to the provisions of Section 3.03 or may decrease the size of the Board of Directors pursuant to the provisions of Section 3.02.

Section 2.11Proxies.

(a)   Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him or her by proxy by an instrument executed in writing, provided that no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing with the Secretary of the Corporation an instrument in writing revoking the proxy or another duly executed proxy bearing a later date. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.

(b)   A stockholder may sign or authorize the written authorization by telegram, facsimile or other means of electronic transmission setting forth or submitted with information sufficient to determine that the stockholder authorized such transmission. If it is determined that such telegrams, facsimiles or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information upon which they relied. Any copy, facsimile, telecommunication or other reproduction of the original writing or transmission may be used in lieu of the original, provided that it is a complete reproduction of the entire original.

(c)   If any written authorization designates two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one, shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide.

Section 2.12Fixing Date for Determination of Stockholders of Record.

(a)   For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date not more than 60 nor less than 10 days before the date of any such meeting. If no record date is fixed, the record date for such purpose shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b)   For the purpose of determining the stockholders entitled to receive any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action not specified elsewhere in this Section 2.12, the Board of Directors may fix a record date not more than 60 days before any such action. If no record date is so fixed, the record date for such
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purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

(c)   In no event shall any record date fixed by the Board of Directors pursuant to this Section 2.12 precede the date upon which the resolution fixing the record date is adopted by the Board of Directors.

Section 2.13Action by Written Consent of Stockholders. Subject to the rights of the holders of any series of preferred stock with respect to such series of preferred stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such stockholders and may not be effected by any consent in writing by such stockholders.

Section 2.14Stockholder List. The officer who has charge of the stock ledger shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days before the meeting, either on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting, or, during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection by any stockholder during the whole time thereof as provided by applicable law. Upon the willful neglect or refusal of the directors to produce such a list at any meeting for the election of directors, they shall be ineligible for election to any office at such meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

Section 2.15Voting Procedures and Inspectors of Elections. The following provisions shall apply at such time as the Corporation shall have a class of voting stock that is (1) listed on a national securities exchange, (2) authorized for quotation on an inter-dealer quotation system of a registered national securities association, or (3) held of record by more than 2,000 stockholders.

(a)   The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.
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(b)   The inspectors shall: (1) ascertain the number of shares outstanding and the voting power of each; (2) determine the shares represented at a meeting and the validity of proxies and ballots; (3) count all votes and ballots; (4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (5) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.

(c)   The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls.

(d)   In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with an appointment of proxy by electronic transmission, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to clause (b)(5) of this Section shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.

Section 2.16Proxy Access. Subject to the terms and conditions set forth in these By-Laws, the Corporation shall include in its proxy materials for an annual meeting of stockholders held in or after 2018 the name, together with the Required Information (as defined in paragraph (a)(5) below), of one or more person(s) properly nominated for election (the “Stockholder Nominee”) to the Board of Directors by a qualifying stockholder or group of stockholders that satisfy the requirements of this Section 2.16, including qualifying as an Eligible Stockholder (as defined in paragraph (a)(4) below), and that expressly elects at the time of providing the written notice required by this Section 2.16 (a “Proxy Access Notice”) to have its nominee included in the Corporation’s proxy materials pursuant to this Section 2.16.

(a)   For purposes of this Section 2.16:

(1) “Voting Stock” shall mean outstanding shares of capital stock of the Corporation entitled to vote generally for the election of directors;   

(2) “Constituent Holder” shall mean any stockholder, collective investment fund included within a Qualifying Fund (as defined in paragraph (d) below) or beneficial holder whose stock ownership is counted for purposes of qualifying as holding the Proxy Access Request Required Shares (as defined in paragraph (d) below) or qualifying as an Eligible Stockholder (as defined in paragraph (d) below);


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(3)“Affiliate” and “associate” shall have the meanings ascribed thereto in Rule 405 under the Exchange Act; provided, however, that the term “partner” as used in the definition of “associate” shall not include any limited partner that is not involved in the management of the relevant partnership;

(4)A stockholder (and any Constituent Holders) shall be deemed to “own” only those outstanding shares of Voting Stock as to which the stockholder or any Constituent Holder possesses both (a) the full voting and investment rights pertaining to the shares and (b) the full economic interest in (including the opportunity for profit and risk of loss on) such shares. The number of shares calculated in accordance with the foregoing clauses (a) and (b) shall be deemed not to include (and to the extent any of the following arrangements have been entered into by affiliates of the stockholder (or of any Constituent Holder), shall be reduced by) any shares (x) sold by such stockholder (or any of its Affiliates) or such Constituent Holder (or any of its Affiliates) in any transaction that has not been settled or closed, including any short sale, (y) borrowed by such stockholder (or any of its Affiliates) or such Constituent Holder (or any of its Affiliates) for any purposes or purchased by such stockholder (or any of its Affiliates) or such Constituent Holder (or any of its Affiliates) pursuant to an agreement to resell or (z) subject to any short interest in a security (for purposes of these By-Laws a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security) or Derivative Instrument, which interest or instrument has, or is intended to have, or if exercised by either party thereto would have, the purpose or effect of (i) reducing in any manner, to any extent or at any time in the future, such stockholder’s (or Affiliate’s) or such Constituent Holder’s (or affiliate’s) full right to vote or direct the voting of any such shares, and/or (ii) hedging, offsetting or altering to any degree gain or loss arising from the full economic ownership of such shares by such stockholder (or affiliate) or such Constituent Holder (or Affiliate), other than any such arrangements solely involving an exchange listed multi-industry market index fund in which Voting Stock represents at the time of entry into such arrangement less than ten percent (10%) of the proportionate value of such index. A stockholder or Constituent Holder shall “own” shares held in the name of a nominee or other intermediary so long as the stockholder or Constituent Holder retains the right to instruct how the shares are voted with respect to the election of directors and the right to direct the disposition thereof and possesses the full economic interest in the shares. A stockholder’s ownership or Constituent Holder’s ownership of shares shall be deemed to continue during any period in which such stockholder or Constituent Holder has loaned such shares in the ordinary course of its business or delegated any voting power over such shares by means of a proxy, power of attorney or other instrument or arrangement which, in either case of such loan or delegation, is recallable and/or revocable at any time by the stockholder or Constituent Holder, as applicable, and, in the case of loaned shares, on not more than five business days’ notice. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings; and

(5)The “Required Information” that the Corporation will include in its proxy statement is (a) the information concerning the Stockholder Nominee and the Eligible Stockholder(s) and Nominating Stockholder(s) that the Corporation determines is required to be disclosed in the Corporation’s proxy statement by the regulations promulgated under the Exchange Act; and (b) if the Eligible Stockholder and/or Nominating Stockholder so elects, a
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Statement (as defined in paragraph (f) below). The Corporation shall also include the name of the Stockholder Nominee in its proxy card. For the avoidance of doubt, and any other provision of these By-Laws notwithstanding, the Corporation may, in its sole discretion, solicit against, and include in the proxy statement its own statements or other information relating to, any Eligible Stockholder, Nominating Stockholder and/or Stockholder Nominee, including any information provided to the Corporation with respect to the foregoing.

(b)To be timely, a stockholder’s Proxy Access Notice must be delivered to the Secretary of the Corporation at its principal executive offices not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the date that the Corporation mailed its proxy statement for the preceding year’s annual meeting of stockholders; provided, however, that in the event the annual meeting of stockholders is not scheduled to be held within a period that commences 30 days before and ends 60 days after the first anniversary date of the previous year’s annual meeting of stockholders (such meeting date referred to herein as an “Outside Meeting Date”), the Proxy Access Notice must be so delivered to, and received by, the Secretary of the Corporation no earlier than 180 days and no later than the 10th day following the date such Outside Meeting Date is first publicly announced or disclosed. In no event shall any adjournment or postponement of an annual meeting, or the Public Announcement thereof, commence a new time period or extend any time period for giving of a Proxy Access Notice.

(c)The number of Stockholder Nominees (including Stockholder Nominees that were submitted by any Eligible Stockholder and/or Nominating Stockholder for inclusion in the Corporation’s proxy materials pursuant to this Section 2.16 but either are subsequently withdrawn or that the Board of Directors decides to nominate as Board of Directors’ nominees) appearing in the Corporation’s proxy materials with respect to an annual meeting of stockholders shall be the greater of (x) two and (y) the largest whole number that does not exceed twenty percent (20%) of the number of directors in office as of the last day on which a Proxy Access Notice may be delivered in accordance with the procedures set forth in this Section 2.16 (such greater number, the “Permitted Number”); provided, however, that the Permitted Number shall be reduced by:

(1)  the number of directors in office or director candidates that, in either case, will be included in the Corporation’s proxy materials with respect to such annual meeting as an unopposed (by the Corporation) nominee pursuant to an agreement, arrangement or other understanding with a stockholder or group of stockholders (other than any such agreement, arrangement or understanding entered into in connection with an acquisition of Voting Stock, by such stockholder or group of stockholders, from the Corporation), other than any such director referred to in this clause (1) who at the time of such annual meeting will have served as a director continuously, as a nominee of the Board of Directors, for at least two (2) annual terms; and

(2)  the number of directors in office that will be included in the Corporation’s proxy materials with respect to such annual meeting for whom access to the Corporation’s proxy materials was previously provided pursuant to this Section 2.16, other than any such director referred to in this clause (2) who at the time of such annual meeting will have
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served as a director continuously, as a nominee of the Board of Directors, for at least two (2) annual terms;

provided, further, that in the event the Board of Directors resolves to reduce the size of the Board of Directors effective on or prior to the date of the annual meeting of stockholders, the Permitted Number shall be calculated based on the number of directors in office as so reduced. Any Eligible Stockholder or Nominating Stockholder, as applicable, submitting more than one Stockholder Nominee for inclusion in the Corporation’s proxy statement pursuant to this Section 2.16 shall (i) rank such Stockholder Nominees based on the order that such person desires such Stockholder Nominees to be selected for inclusion in the Corporation’s proxy statement in the event that the number of Stockholder Nominees submitted pursuant to this Section 2.16 exceeds the Permitted Number and (ii) explicitly specify and include the respective rankings referred to in the foregoing clause (i) in the Proxy Access Notice delivered to the Corporation with respect to all Stockholder Nominees submitted pursuant thereto. In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 2.16 exceeds the Permitted Number, each Eligible Stockholder will have its highest ranking Stockholder Nominee (as ranked pursuant to the preceding sentence) who meets the requirements of this Section 2.16 selected for inclusion in the Corporation’s proxy materials until the Permitted Number is reached, going in order of the amount (largest to smallest) of shares of Voting Stock each Eligible Stockholder disclosed as owned in its Proxy Access Notice submitted to the Corporation (with the understanding that an Eligible Stockholder may not ultimately have any of its Stockholder Nominees included if the Permitted Number has previously been reached). If the Permitted Number is not reached after each Eligible Stockholder or Nominating Stockholder, as applicable, has had one Stockholder Nominee selected, this selection process will continue as many times as necessary, following the same order each time, until the Permitted Number is reached. After reaching the Permitted Number of Stockholder Nominees, if any Stockholder Nominee who satisfies the eligibility requirements in this Section 2.16 thereafter withdraws, has his or her nomination withdrawn or is thereafter not submitted for director election, no other nominee or nominees shall be required to be substituted for such Stockholder Nominee and included in the Corporation’s proxy statement or otherwise submitted for director election pursuant to this Section 2.16.
(d) An “Eligible Stockholder” is one or more stockholders of record or of beneficial ownership who own and have owned, or are acting on behalf of one (1) or more beneficial owners who own and have owned (in each case as defined above), in each case continuously for at least three (3) years as of both the date that the Proxy Access Notice is received by the Corporation pursuant to this Section 2.16, and as of the record date for determining stockholders eligible to vote at the annual meeting of stockholders, at least three percent (3%) of the aggregate voting power of the Voting Stock (the “Proxy Access Request Required Shares”), and who continue to own the Proxy Access Request Required Shares at all times between the date such Proxy Access Notice is received by the Corporation and the date of the applicable annual meeting of stockholders, provided that the aggregate number of stockholders, and, if and to the extent that a stockholder is acting on behalf of one or more beneficial owners, of such beneficial owners, whose stock ownership is counted for the purpose of satisfying the foregoing ownership requirement shall not exceed twenty (20). Two (2) or more collective investment funds that are (i) a group of funds under common management and investment control, (ii) a group of funds under common management and funded primarily by
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the same employer, or (iii) a “family of investment companies” or a “group of investment companies” each as defined in the Investment Company Act of 1940, as amended (each a “Qualifying Fund”) shall be treated as one stockholder for the purpose of determining the aggregate number of stockholders in this paragraph (d) provided that each fund included within a Qualifying Fund otherwise meets the requirements set forth in this Section 2.16 and provides information, together with the Proxy Access Notice documentation satisfactory to the Board or its designee, acting in good faith, that demonstrates it is a Qualifying Fund. No shares may be attributed to more than one group constituting an Eligible Stockholder under this Section 2.16 (and, for the avoidance of doubt, no stockholder may be a member of more than one group constituting an Eligible Stockholder). A record holder acting on behalf of one or more beneficial owners will not be counted separately as a stockholder with respect to the shares owned by beneficial owners on whose behalf such record holder has been directed in writing to act, but each such beneficial owner will be counted separately, subject to the other provisions of this paragraph (d), for purposes of determining the number of stockholders whose holdings may be considered as part of an Eligible Stockholder’s holdings. For the avoidance of doubt, Proxy Access Request Required Shares will qualify as such if and only if the beneficial owner of such shares as of the date of the Proxy Access Notice has itself individually beneficially owned such shares continuously for the three-year (3-year) period ending on that date and through the other applicable dates referred to above (in addition to all other applicable requirements being met).

(e) No later than the final date when a Proxy Access Notice pursuant to this Section 2.16 may be timely delivered to the Corporation, an Eligible Stockholder (including each Constituent Holder) must provide the following information in writing to the Secretary of the Corporation:

(1) the name and address of, and number of shares of Voting Stock owned by, such person;

(2) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the requisite three-year (3-year) holding period) verifying that, as of a date within seven days prior to the date the Proxy Access Notice is delivered to the Corporation, such Eligible Stockholder (and each Constituent Holder) owns, and has owned continuously for the preceding three years, the Proxy Access Request Required Shares, and such person’s agreement to provide:

(A) within five days after the record date for the annual meeting of stockholders, written statements from the record holder and intermediaries verifying such person’s continuous ownership of the Proxy Access Request Required Shares through the record date, together with any additional information reasonably requested to verify such person’s ownership of the Proxy Access Request Required Shares; and

(B) immediate notice if the Eligible Stockholder ceases to own any of the Proxy Access Request Required Shares prior to the date of the applicable annual meeting of stockholders;

(C) the information, representations and agreements contemplated by Section 2.05 of these By-Laws;
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(D) a representation that such person:

(i) has not nominated and will not nominate for election to the Board of Directors at the annual meeting of stockholders any person other than the Stockholder Nominee(s) being nominated pursuant to this Section 2.16;

(ii) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) promulgated under the Exchange Act in support of the election of any individual as a director at the annual meeting of stockholders other than its Stockholder Nominee(s) or a nominee of the Board of Directors;

(iii) will not distribute to any stockholder any form of proxy for the annual meeting of stockholders other than the form distributed by the Corporation; and

(iv) will provide facts, statements and other information in all communications with the Corporation and its stockholders that are and will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and will otherwise comply with all applicable laws, rules and regulations in connection with any actions taken pursuant to this Section 2.16;

(E) in the case of a nomination by an Eligible Stockholder comprised of a group of stockholders that together is such an Eligible Stockholder, the designation by all group members (including Constituent Holders), as evidenced by a written agreement provided to the Corporation signed by all group members (including Constituent Holders), of one group member that is authorized to act on behalf of all members of the nominating stockholder group with respect to the nomination and matters related thereto, including withdrawal of the nomination (the “Nominating Stockholder”) (for the avoidance of doubt, in the event of a nomination by a Nominating Stockholder that includes more than one Eligible Stockholder (including each Constituent Holder), any and all requirements and obligations for an Eligible Stockholder (including each Constituent Holder) that are set forth in this Section 2.16 shall apply to each such Eligible Stockholder; provided, however that, in such case, the Proxy Access Request Required Shares provision shall apply to the Eligible Stockholder comprised of a group of such stockholders that together comprises such an Eligible Stockholder);

(F) an undertaking that such person agrees to:

(i) assume all liability stemming from, and indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of any legal or regulatory violation arising out of the Eligible Stockholder’s and/or Nominating Stockholder’s communications with the stockholders
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of the Corporation or out of the information that the Eligible Stockholder and/or Nominating Stockholder provided to the Corporation; and

(ii) file with the Securities and Exchange Commission any solicitation by the Eligible Stockholder and/or Nominating Stockholder of stockholders of the Corporation relating to the annual meeting of stockholders at which the Stockholder Nominee will be nominated and provide to the Corporation copies of any solicitation or other communication with the Corporation’s stockholders relating to the annual meeting of stockholders that is exempt from filing with the Securities and Exchange Commission; and

(G) a completed copy of the Schedule 14N (or any successor form) relating to the Stockholder Nominee that has been or will be filed with the Securities and Exchange Commission as required by Rule 14a-18 under the Exchange Act.

In order to be considered timely, any information required by this Section 2.16 to be provided to the Corporation must be supplemented (by delivery to the Secretary of the Corporation) (1) no later than five days following the record date for the applicable annual meeting of stockholders, to disclose the foregoing information as of such record date, and (2) no later than the eighth day before the annual meeting of stockholders, to disclose the foregoing information as of the date that is 10 days prior to such annual meeting of stockholders. For the avoidance of doubt, the requirement to update and supplement such information shall not permit any Eligible Stockholder or other person to change or add any proposed Stockholder Nominee or be deemed to cure any defects or limit the remedies (including without limitation under these By-Laws) available to the Corporation relating to any defect.

(f) The Eligible Stockholder or Nominating Stockholder, as applicable, may provide to the Secretary of the Corporation, at the time the information required by this Section 2.16 is originally provided, a written statement for inclusion in the Corporation’s proxy statement for the annual meeting of stockholders, not to exceed five hundred (500) words, in support of the candidacy of such Eligible Stockholder’s or Nominating Stockholder’s, as applicable, Stockholder Nominee (the “Statement”). Notwithstanding anything to the contrary contained in this Section 2.16, the Corporation may omit from its proxy materials any information or Statement that it, in good faith, believes is materially false or misleading, omits to state any material fact, or would violate any applicable law or regulation.

(g) No later than the final date when a Proxy Access Notice pursuant to this Section 2.16 may be timely delivered to the Corporation, each Stockholder Nominee must deliver to the Secretary at the principal executive offices of the Corporation the completed and signed questionnaire, representation, agreement required by Sections 2.05 of these By-Laws and:

(1) provide an executed agreement, in a form deemed satisfactory by the Board of Directors or its designee (which form shall be provided by the Corporation reasonably promptly upon written request of a stockholder), that such Stockholder Nominee consents to being named in the Corporation’s proxy statement and form of proxy card (and will not agree to be named in any other person’s proxy statement or form of proxy card) as a nominee and to serving as a director of the Corporation if elected;
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(2) complete, sign and submit all other questionnaires required of the Corporation’s directors generally; and

(3) provide such additional information as necessary to permit the Board of Directors to determine if any of the matters contemplated by paragraph (i) below apply to such Stockholder Nominee or if such nominee has any direct or indirect relationship with the Corporation or is or has previously been subject to any event specified in Item 401(f) of Regulation S-K (or successor rule) of the Securities and Exchange Commission or Rule 506(d) of Regulation D under the Securities Act of 1933, as amended.

In the event that any information or communications provided by the Eligible Stockholder (or any Constituent Holder), the Nominating Stockholder or the Stockholder Nominee to the Corporation or its stockholders ceases to be true and correct in all material respects or omits a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Stockholder, the Nominating Stockholder or Stockholder Nominee, as the case may be, shall promptly notify the Secretary of the Corporation of any defect in such previously provided information and of the information that is required to correct any such defect; it being understood for the avoidance of doubt that providing any such notification shall not be deemed to cure any such defect or limit the remedies (including, without limitation, under these By-Laws) available to the Corporation relating to any such defect.

(h) For the avoidance of doubt, any Stockholder Nominee who is included in the Corporation’s proxy statement for a particular annual meeting of stockholders, but subsequently is determined not to satisfy the eligibility requirements of this Section 2.16 or any other provision of the By-Laws, Certificate of Incorporation, or other applicable regulation any time before the annual meeting of stockholders, will not be eligible for election at such annual meeting.

(i) The Corporation shall not be required to include, pursuant to this Section 2.16, a Stockholder Nominee in its proxy materials for any annual meeting of stockholders, or, if the proxy statement already has been filed, to allow the nomination of a Stockholder Nominee, notwithstanding that proxies in respect of such vote may have been received by the Corporation:

(1) who is not independent under the listing standards of the principal U.S. exchange upon which the common stock of the Corporation is listed (or other listing standards applicable to the Corporation), any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing independence of the Corporation’s directors, in each case, as determined by the Board of Directors;

(2) whose service as a member of the Board of Directors would violate or cause the Corporation to be in violation of these By-Laws, the Certificate of Incorporation, the rules and listing standards of the principal U.S. exchange upon which the common stock of the Corporation is traded (or other such rules and listing standards applicable to the Corporation), or any applicable law, rule or regulation;
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(3) if the Eligible Stockholder (or any Constituent Holder), Nominating Stockholder or applicable Stockholder Nominee otherwise breaches or fails to comply in any material respect with its obligations pursuant to this Section 2.16 or any agreement, representation or undertaking required by this Section;

(4) if the Eligible Stockholder ceases to be an Eligible Stockholder for any reason, including but not limited to, not owning the Proxy Access Request Required Shares through the date of the applicable annual meeting;

(5) who is or has been, within the past three (3) years, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914; or

(6) if the Corporation receives one or more stockholder notices nominating director candidates pursuant to Section 2.04(a) (but not this Section 2.16) of these By-Laws.

For the purposes of this paragraph (i), clauses (1), (2) and (5) and, to the extent related to a breach or failure by the Stockholder Nominee, clause (3) will result in the exclusion from the proxy materials pursuant to this Section 2.16 of the specific Stockholder Nominee to whom the ineligibility applies, or, if the proxy statement already has been filed, the ineligibility of such Stockholder Nominee to be nominated; provided, however, that clause (4) and, to the extent related to a breach or failure by an Eligible Stockholder (or any Constituent Holder), clause (3) will result in the Voting Stock owned by such Eligible Stockholder (or Constituent Holder) or Nominating Stockholder being excluded from the Proxy Access Request Required Shares (and, if as a result the Proxy Access Notice shall no longer have been filed by an Eligible Stockholder or Nominating Stockholder, as applicable, the exclusion from the proxy materials pursuant to this Section 2.16 of all of the applicable stockholder’s Stockholder Nominees from the applicable annual meeting of stockholders or, if the proxy statement has already been filed, the ineligibility of all of such stockholder’s Stockholder Nominees to be nominated).

(j) Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders but either (i) withdraws from or becomes ineligible or unavailable for election at any such annual meeting; or (ii) is not elected to the Board of Directors and does not receive at least twenty-five percent (25%) of the votes cast in favor of the Stockholder Nominee’s election, will be ineligible to be a Stockholder Nominee pursuant to this Section 2.16 for the next two (2) annual meetings of stockholders

III.   Board of Directors.

Section 3.01 General Powers; Organization. The business of the Corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by the Delaware General Corporation Law or by the Certificate of Incorporation or these By-Laws directed or required to be exercised or done by the stockholders. The Board of Directors may annually elect a Chair of the Board from among its members who shall preside at its meetings. The Secretary shall act as secretary of the meeting, but in his or her absence the chair of the meeting may
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appoint any person to act as secretary of the meeting. Any meeting of the Board of Directors may be held within or without the State of Delaware.

Section 3.02Number, Qualification and Term of Office. The number of directors constituting the Board of Directors shall be fixed from time to time by resolution of the Board of Directors, but shall be not less than seven (7) nor more than twelve (12). Except as otherwise provided in the Certificate of Incorporation and except as provided in Section 3.03 of these By-Laws, the directors shall be elected at the annual meeting of the stockholders and each director elected shall hold office until his or her successor is duly elected and qualified or until the director’s earlier resignation, retirement or removal. Directors need not be stockholders.

Section 3.03Resignation and Removal; Vacancies.

(a) Any director may resign at any time upon giving written notice to the Secretary of the Corporation, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. Directors may be removed only in accordance with the applicable provisions of the Delaware General Corporation Law and any applicable provisions of the Certificate of Incorporation.

(b) Vacancies (whether existing or to take effect at a future date), and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class, may only be filled by a majority of the directors then in office (including those who have resigned from the Board effective as of a future date), in their sole discretion and whether or not constituting less than a quorum, and the directors so chosen shall hold office until the next election of directors and until their successors are duly elected and qualified, or until their earlier resignation, retirement or removal.

Section 3.04Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as may be designated from time to time by the Board of Directors.

Section 3.05Special Meetings. Special meetings of the Board of Directors may be called from time to time by the Chair of the Board of Directors, if any, or the Chief Executive Officer, and upon request by any two directors, shall be called by the Chair of the Board of Directors or the Chief Executive Officer.

Section 3.06Notice of Special Meetings. Notice of each special meeting of the Board of Directors stating the place, date and hour of the meeting shall be given to each director by mail not less than 48 hours, or personally or by telephone, telegram, facsimile or other electronic transmission not less than 48 hours, before the date and hour of the meeting.

Section 3.07Waiver of Notice. Notice of any meeting of the Board of Directors may be waived either before or after such meeting in a writing signed by each director or directors to whom the notice was not duly given. Attendance of a director at a meeting also shall constitute a waiver of notice of such meeting, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
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Section 3.08Quorum. Unless otherwise specifically provided by the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors a majority of the total number of directors shall constitute a quorum for the transaction of business, and the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.09Committees of Directors.

(a)The Board of Directors may, by resolution adopted by a majority of the total number of directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation and to have such name as may be determined by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

(b)Subject to subsection (c) of this Section 3.09 and to the Delaware General Corporation Law, any committee may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation to the extent provided in the resolution designating the committee, and may authorize the corporate seal, if any, to be affixed to all papers that may require it.

(c)No committee shall have the power or authority to amend the Certificate of Incorporation of the Corporation (except as permitted by the Delaware General Corporation Law), to adopt an agreement of merger or consolidation under Section 251 or 252 of the Delaware General Corporation Law, to recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, to recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or to amend the By-Laws of the Corporation; and, unless the resolution establishing the committee or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law.

(d)Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. Unless the Board of Directors otherwise provides, each committee may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to these By-Laws.

Section 3.10Lead Director. The Board of Directors may, by resolution adopted by a majority of the total number of directors, designate a director to be a Lead Director. The Lead Director shall have the powers and duties as determined by the Board of Directors.
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Section 3.11Conference Communications. Directors may participate in any meeting of the Board of Directors, or of any duly constituted committee thereof, by means of a conference telephone or other comparable communications equipment which all persons participating in the meeting can hear and communicate with each other. For the purpose of establishing a quorum and taking any action at the meeting, such directors participating pursuant to this Section 3.11 shall be deemed present in person at the meeting.

Section 3.12Action by Written Consent of Directors. Any action required or permitted to be taken at a meeting of the Board of Directors or any committee thereof may be taken without a meeting if all directors or committee members consent thereto in writing, manually or by electronic transmission.

Section 3.13Compensation. The Board of Directors shall have the authority to fix the compensation of directors.

IV.   Officers.

Section 4.01Number. The Board of Directors shall elect a Chief Executive Officer, a President and a Secretary, and it may, if it so determines, elect a Chair of the Board from among its members. The Board of Directors may also choose a Treasurer, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers or any other officers or agents as the Board of Directors may designate. Any person may hold two or more offices.

Section 4.02Election, Term of Office and Qualifications. The Board of Directors shall elect the officers of the corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties not inconsistent with these By-Laws as shall be determined from time to time by the Board of Directors. All officers of the Corporation shall hold their offices until their respective successors are elected and qualified, or until their respective offices are eliminated by vote of the Board of Directors, or until their earlier resignation, retirement or removal. Officers may be, but need not be, directors.

Section 4.03Compensation. The salaries of the officers of the Corporation shall be fixed from time to time by the Board of Directors or a committee thereof or by the Chief Executive Officer if authorized by the Board of Directors or a committee thereof.

Section 4.04Registration and Removal; Vacancies.

(a) Any officer may resign at any time upon written notice to the Corporation. Any such resignation, however, shall be without prejudice to any contract rights of the Corporation as to such officer.

(b) Any officer may be removed from office, with or without cause, by a vote of the Board of Directors. Any such removal, however, shall be without prejudice to any contract rights of such officer as to the Corporation.

(c) Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.
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Section 4.05Chief Executive Officer. If the Board of Directors has not otherwise designated a Chief Executive Officer, the Board of Directors may designate the Chair, if any, or the President as the Chief Executive Officer of the Corporation. The Chief Executive Officer shall have the general powers and duties of management and supervision usually vested in and imposed upon the Chief Executive Officer of a corporation. During the absence or disability of the President, the Chief Executive Officer shall exercise all the powers and discharge all the duties of the President.

Section 4.06Chair of the Board. The Chair, if one is elected, shall preside at all meetings of the Board of Directors, except in the event that it is appropriate for the Lead Director to preside. The Chair shall preside at all meetings of the stockholders. During the absence or disability of the Chair, the Chief Executive Officer shall preside at meetings of the stockholders. During the absence or disability of the Chief Executive Officer and the President, the Chair shall exercise all the powers and discharge all the duties of the Chief Executive Officer.

Section 4.07President. The President, subject to the control of the Board of Directors and the Chief Executive Officer of the Corporation, shall have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors and directives of the Chief Executive Officer are carried into effect. During the absence or disability of the Chief Executive Officer, the President shall exercise all the powers and discharge all the duties of the Chief Executive Officer.

Section 4.08Vice Presidents. During the absence or disability of the Chief Executive Officer and the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors or, in the absence of any designation, in the order they were first elected as Vice Presidents) shall perform the duties and have the authority of the President.

Section 4.09Secretary. The Secretary (or in the absence of the Secretary, any Assistant Secretary or other person appointed by the Chair to serve as Acting Secretary) shall keep the minutes of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose. The Secretary shall maintain the stock ledger and prepare the stockholder list as required by these By-Laws. The Secretary shall duly give notice of all meetings of the stockholders, the Board of Directors and committees of the Board, if any.

Section 4.10Treasurer. The Treasurer, if any, shall keep accurate accounts of all moneys of the Corporation received or disbursed. He or she shall deposit all moneys, drafts and checks in the name of and to the credit of the Corporation in such banks and depositories as the Board of Directors shall from time to time designate. The Treasurer shall have power to endorse for deposit all notes, checks and drafts received by the Corporation. The Treasurer shall render to the Board of Directors or the Chief Executive Officer of the Corporation, whenever required, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation.

Section 4.11Authority and Other Duties. All officers of the Corporation shall be subject to the supervision and direction of the Board of Directors and, in addition to the foregoing authority and duties, all officers of the Corporation shall respectively have such
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authority and perform such other duties in the management of the business of the Corporation as may be designated from time to time by the Board of Directors. Unless expressly prohibited by a resolution adopted by the Board of Directors, an officer elected or appointed by the Board may, without the approval of the Board, delegate some or all of the duties and powers of his or her office to other persons.
V.   Indemnification.

Section 5.01Indemnification. The Corporation shall indemnify its officers and directors, and former officers and directors, for such expenses and liabilities, in such manner, under such circumstances, and to such extent, as required or permitted by the Delaware General Corporation Law, as amended from time to time. The determination of whether any such person is eligible for indemnification under this Section 5.01 shall be made (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders; provided, however, that if a Change in Control (as defined below) has occurred and the person seeking indemnification so requests, a determination of whether such person is eligible for indemnification under this Section 5.01 shall be made in a written opinion rendered by independent legal counsel chosen by the person seeking indemnification and not reasonably objected to by the Board of Directors, and such determination shall be binding on the Corporation. The fees and expenses of such independent counsel shall be paid by the Corporation. For such purpose, (X) “independent legal counsel” shall mean legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or has performed services for the Corporation or the person seeking indemnification within the previous three years; and (Y) a “Change in Control” shall be deemed to have occurred if:

(a)a majority of the directors of the Corporation shall be persons other than persons (A) who were directors of the Corporation on the date this Section was adopted, (B) for whose election proxies shall have been solicited by the Board of Directors or (C) who are then serving as directors appointed by the Board of Directors-to fill vacancies on the Board of Directors caused by newly-created directorships or the death or resignation (but not removal) of a director;

(b)thirty percent (30%) or more of the outstanding shares of voting stock of the Corporation is acquired or beneficially owned (as defined in Rule 13d-3 under the Exchange Act, or any successor rule thereto) by any person (other than the Corporation, a subsidiary of the Corporation or the person seeking indemnification) or group of persons, not including the person seeking indemnification, acting in concert;

(c)the stockholders of the Corporation approve a definitive agreement or plan to (A) merge or consolidate the Corporation with or into another corporation (other than (1) a merger or consolidation with a subsidiary of the Corporation or (2) a merger in which the Corporation is the surviving corporation and no outstanding voting stock of the Corporation (other than fractional shares) held by stockholders immediately before the merger is converted into cash, securities, or other property), (B) sell or otherwise dispose of all or substantially all of the assets of the Corporation (in one transaction or a series of transactions) or (C) liquidate or
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dissolve the Corporation, unless a majority of the voting stock (or the voting equity interest) of the surviving corporation or of any corporation (or other entity) acquiring all or substantially all of the assets of the Corporation (in the case of a merger, consolidation or disposition of assets) is, immediately following the merger, consolidation or disposition of assets, beneficially owned by the person seeking indemnification or a group of persons, including the person seeking indemnification, acting in concert; or

(d)the Corporation enters into an agreement in principle or a definitive agreement relating to an event described in clause (i), (ii) or (iii) above which ultimately results in an event described therein, or a tender or exchange offer or proxy contest is commenced which ultimately results in an event described therein.

Section 5.02Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, trustee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, against any liability or expense asserted against or incurred by such person in or arising from that capacity, or arising out of his or her status as such, whether or not the Corporation would otherwise have the power or the obligation to indemnify the person against such liability or expense. The Corporation shall not be obligated under these By-Laws to make any payment in connection with any claim made against any person if and to the extent that such person has actually received payment therefore under any insurance policy or policies.

Section 5.03Expenses Payable in Advance. Expenses (including attorneys’ fees and expenses) incurred by a director or officer, or a former director or officer, in defending, investigating, preparing to defend, or being or preparing to be a witness in, a threatened or pending action, suit, proceeding or claim against him or her, whether civil or criminal, shall be paid by the Corporation in advance of the final disposition of such action, suit, proceeding or claim upon receipt by the Corporation of a request therefore and an undertaking by or on behalf of the director or officer, or former director or officer, to repay such amounts if it ultimately shall be determined that he or she is not entitled to be indemnified by the Corporation.

        VI.   Stock.

Section 6.01Certificates for Stock.

(a)The shares of stock of the Corporation shall be either certificated or uncertificated.

(b)Every holder of duly issued certificated shares of stock in the Corporation shall be entitled to a certificate, to be in such form as shall be prescribed by the Board of Directors, certifying the number of shares owned by him or her. The certificates for such shares shall he numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chair, the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and the seal of the Corporation, if any, shall be affixed thereto.
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(c)A certificate representing shares of stock issued by the Corporation shall, if the Corporation is authorized to issue shares of more than one class or series, set forth upon the face or back of the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge, a full statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class or series of stock and the qualifications, limitations or restrictions of such preferences and/or rights of each class or series authorized to be issued.

(d)The Board of Directors may provide by resolution that some or all shares of any or all classes and series of the stock of the Corporation will be uncertificated. Any such resolution shall not apply to shares represented by a certificate until the certificate is surrendered to the Corporation.

Section 6.02Issuance of Stock. The Board of Directors is authorized to cause to be issued stock of the Corporation up to the full amount authorized by the Certificate of Incorporation in such amounts and for such consideration as may be determined by the Board of Directors. No shares shall be allotted except in consideration of cash, labor, personal or real property (or leases thereof), or a combination of the foregoing, or of an amount transferred from surplus to stated capital upon a stock dividend. At the time of such allotment of stock, the Board of Directors shall state its determination of the fair value to the Corporation in monetary terms of any consideration other than cash for which shares are allotted. The amount of consideration to be received in cash or otherwise shall not be less than the par value of the shares so allotted. Stock so issued shall be fully paid and nonassessable. Treasury shares may be disposed of by the Corporation for such consideration as may be fixed by the Board of Directors, or by the stockholders if the Certificate of Incorporation so provides.

Section 6.03Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

Section 6.04Transfer of Stock. Transfers of stock on the books of the Corporation may be authorized only by the stockholder named in the certificate, the stockholder’s legal representative or the stockholder’s duly authorized attorney-in-fact and upon surrender of the certificate or the certificates for such stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. No new certificate or certificates shall be issued in exchange for any existing certificate until such certificate shall have been so canceled, except in cases provided for in Section 6.06.

Section 6.05Lost, Stolen or Destroyed Certificates. Any stockholder claiming a certificate for stock to be lost, stolen or destroyed shall make an affidavit of that fact in such
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form as the Corporation may require and shall, if the Corporation so requires, give the Corporation a bond of indemnity in form, in an amount, and with one or more sureties satisfactory to the Corporation, to indemnify the Corporation against any claims which may be made against it on account of the alleged loss, theft or destruction of the certificate or issuance of such new certificate. A new certificate may then be issued for the lost, stolen or destroyed certificate.

Section 6.06Facsimile Signatures. Any or all of the signatures of the officers or agents of the Corporation on any stock certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on any such certificate shall cease to be such officer, transfer agent or registrar before such certificate is issued, it nevertheless may be issued by the Corporation as though the person who signed such certificate or whose facsimile signature or signatures had been placed thereon were such officer, transfer agent or registrar at the date of issue.

VII.          Miscellaneous.

Section 7.01Dividends.

(a) Subject to any restrictions contained in the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of the Corporation’s capital stock from the Corporation’s surplus, or if there be none, out of its net profits for the current fiscal year and/or the preceding fiscal year. Dividends may be paid in cash, in property or in shares of capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

(b) If the dividend is to be paid in shares of the theretofore unissued capital stock of the Corporation, the Board of Directors shall, by resolution, direct that there be designated as capital in respect of such shares an amount which is not less than the aggregate par value of par value shares being declared as a dividend and, in the case of shares without par value being declared as a dividend, such amount as shall be determined by the Board of Directors; provided, however, that no such designation as capital shall be necessary if shares are being distributed by the Corporation pursuant to a split-up or division of its stock.

Section 7.02Interested Directors and Officers. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for that reason, or solely because an interested director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or her vote is counted for such purpose, if, (a) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a
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quorum; (b) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
Section 7.03Voting Securities Held by the Corporation. Unless otherwise ordered by the Board of Directors, powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chair, Chief Executive Officer, President, Executive Vice President or the Chief Financial Officer and any such officer may, in the name of and on behalf of the Corporation, take all such action as such officer may deem advisable to vote in person or by proxy at any meeting of security holders of other corporations in which the Corporation may hold securities, and at any such meeting such officer shall possess and may exercise any and all rights and powers incident to the ownership of such securities that the Corporation might have possessed and exercised if it had been present. The Board of Directors may from time to time confer like powers upon any other person or persons.
Section 7.04Execution of Instruments.
(a) All deeds, mortgages, notes, bonds, checks, contracts and other instruments pertaining to the business and affairs of the Corporation shall be signed on behalf of the Corporation by the Chair, Chief Executive Officer, President, Executive Vice President, Chief Financial Officer or any Vice President, or by such other person or persons as may be designated from time to time by the Board of Directors.
(b) If a document must be executed by persons holding different offices or functions and one person holds such offices or exercises such functions, that person may execute the document in more than one capacity if the document indicates each such capacity.
Section 7.05Advances. The Corporation may, without a vote of the directors, advance money to its directors, officers or employees to cover expenses that can reasonably be incurred by them in the performance of their duties and for which they would be anticipated to be entitled to reimbursement in the absence of an advance.
Section 7.06Fiscal Year. The fiscal year end of the Corporation shall be the Saturday which occurs nearest the last day of December or such other date as may be fixed from time to time by resolution of the Board of Directors.
Section 7.07Corporate Seal. The corporate seal, if one is adopted by the Board of Directors, shall be circular in form and shall have inscribed thereon the name of the Corporation, the word “Delaware” and the words “Corporate Seal.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise placed on any document requiring it.
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Section 7.08Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be maintained on any information storage device, method, or one or more electronic networks or databases; provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
Section 7.09Power to Amend. These By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the stockholders or by the Board of Directors, if such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any annual meeting of the stockholders or of the Board of Directors, or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal these By-Laws is conferred upon the Board of Directors by the Certificate of Incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal these By-Laws except as otherwise provided in these By-Laws or the Certificate of Incorporation.
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Exhibit 3.3


















AMENDED AND RESTATED
BY-LAWS
OF
ADVANCE AUTO PARTS,
INC.


















Effective May 24, 2017 August 12, 2020




TABLE OF CONTENTS
Page
I. OFFICES 1 
Section 1.01 Registered Office 1 
Section 1.02 Other Offices 1 
II. STOCKHOLDERS 1 
Section 2.01 Place of Meetings 1 
Section 2.02 Annual Meetings 1 
Section 2.03 Special Meetings 1 
Section 2.04 Notice of Stockholder Business and Nomination 2 
Section 2.05 Submission of Questionnaire, Representation and Agreement 6 
Section 2.06 Notice of Meetings 7 
Section 2.07 Waiver of Notice 7 
Section 2.08 Quorum 7 
Section 2.09 Adjourned Meetings 8 
Section 2.10 Voting 8 
Section 2.11 Proxies 9 
Section 2.12 Fixing Date for Determination of Stockholders of Record 9 
Section 2.13 Action by Written Consent of Stockholders 10 
Section 2.14 Stockholder List 10 
Section 2.15 Voting Procedures and Inspectors of Elections 11 
Section 2.16 Proxy Access 12 
III. BOARD OF DIRECTORS 20 
Section 3.01 General Powers; Organization 20 
Section 3.02 Number, Qualification and Term of Office 20 
Section 3.03 Resignation and Removal; Vacancies 20 
Section 3.04 Regular Meetings 21 
Section 3.05 Special Meetings 21 
Section 3.06 Notice of Special Meetings 21 
Section 3.07 Waiver of Notice 21 
Section 3.08 Quorum 21 
Section 3.09 Committees of Directors 21 



i

TABLE OF CONTENTS
(continued)
Page
Section 3.10 Lead Director 22 
Section 3.11 Conference Communications 22 
Section 3.12 Action by Written Consent of Directors 22 
Section 3.13 Compensation 22 
IV. OFFICERS 22 
Section 4.01 Number 22 
Section 4.02 Election, Term of Office and Qualifications 22 
Section 4.03 Compensation 23 
Section 4.04 Registration and Removal; Vacancies 23 
Section 4.05 Chief Executive Officer 23 
Section 4.06 Chair of the Board 23 
Section 4.07 President 23 
Section 4.08 Vice Presidents 23 
Section 4.09 Secretary 24 
Section 4.10 Treasurer 24 
Section 4.11 Authority and Other Duties 24 
V. INDEMNIFICATION 24 
Section 5.01 Indemnification 24 
Section 5.02 Insurance 25 
Section 5.03 Expenses Payable in Advance 25 
VI. STOCK 26 
Section 6.01 Certificates for Stock 26 
Section 6.02 Issuance of Stock 26 
Section 6.03 Partly Paid Stock 26 
Section 6.04 Registered Stockholders 27 
Section 6.05 Transfer of Stock 27 
Section 6.06 Lost, Stolen or Destroyed Certificates 27 
Section 6.07 Facsimile Signatures 27 
VII. MISCELLANEOUS 28 
Section 7.01 Dividends 28 
Section 7.02 Interested Directors and Officers 28 


ii

TABLE OF CONTENTS
(continued)
Page
Section 7.03 Voting Securities Held by the Corporation 28 
Section 7.04 Execution of Instruments 29 
Section 7.05 Advances 29 
Section 7.06 Fiscal Year 29 
Section 7.07 Corporate Seal 29 
Section 7.08 Form of Records 29 
Section 7.09 Power to Amend 29 

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I.Offices.
Section 1.01Registered Office. The registered office of the Corporation shall maintain a registered office and registered agent within the State of Delaware at such place as may be designated from time to time by the Board of Directors of the Corporation be fixed in the Certificate of Incorporation.

Section 1.02Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require.

II.Stockholders.

Section 2.01Place of Meetings. Meetings of stockholders may be held at such place, if any, either within or without the State of Delaware, or by means of remote communication, as the principal executive office of the Corporation or at such other place as may be designated by the Board of Directors, the Chief Executive Officer of the Corporation or the Chair of the Board of Directors.

Section 2.02Annual Meetings. An annual meeting of stockholders shall be held in each calendar year for the election of directors on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the annual meeting, provided that such business is properly brought before the meeting.

Section 2.03Special Meetings.

(a)  A special meeting of stockholders, for any purpose or purposes, may be called only by the Chief Executive Officer, the Chair of the Board of Directors, the Board of Directors, by stockholders following receipt by the Secretary of the Corporation of a written request for a special meeting from record holders owning at least ten percent (10%), in the aggregate, of the outstanding common stock of the Corporation (the “Special Meeting Request”), and may not be called by any other person or persons. Business transacted at any special meeting shall be limited to the purposes stated in the notice of the meeting sent by the Corporation subject to the nomination procedures for directors set forth in Section 2.04(b) of these By-Laws.

(b)  A special meeting called by the Secretary of the Corporation shall be held at such date, time and place, if any, within or without the State of Delaware, as may be fixed by the Board; provided however, that the date of any such special meeting shall not be more than 90 days after the Special Meeting Request is received by the Secretary of the Corporation (or 120 days after the Special Meeting Request is received by the Secretary of the Corporation if an item of business included in such Special Meeting Request includes a nomination of a person for election to the Board of Directors) unless a later date is required in order to allow the Corporation to file the information required under Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Notwithstanding the foregoing, the Secretary of the Corporation shall not be required to call a special meeting if the Special Meeting Request (i) is received by the Secretary of the Corporation during the 90-day period before the first anniversary of the immediately preceding year’s annual meeting of
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stockholders or (ii) includes an item of business substantially the same as or substantially similar to such action (all “Similar Item”) that was presented at any meeting of stockholders held within ninety (90) days prior to receipt by the Corporation of such Special Meeting Request. For
purposes of this Section 2.03(b), election or removal of directors shall be deemed to be a Similar Item with respect to all actions involving the removal of directors, or, solely when the number of nominees for the Board of Directors exceeds the number of directors to be elected, the nomination or election of directors or the filling of vacancies on the Board of Directors.

Section 2.04Notice of Stockholder Business and Nominations.

(a)   Annual Meetings of Shareholders.

         (1) Nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (A) pursuant to the Corporation’s notice of meeting (or a supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors, (C) properly brought before the meeting by a stockholder of the Corporation who (i) was a stockholder of record at the time of giving of notice provided for in Section 2.04 of these By-Laws and at the time of the annual meeting, (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in Section 2.04 of these By-Laws as to such business or nomination or (D) with respect to a qualifying nomination at an annual meeting of stockholders held in or after 2018 of a Stockholder Nominee (as defined in Section 2.16 of these By-Laws) by an Eligible Stockholder (as defined in Section 2.16(d) of these By-Laws) and/or Nominating Stockholder (as defined in Section 2.16(e)(5) of these By-Laws) in accordance with Section 2.16 of these By-Laws (each such nomination a “Proxy Access Nomination”). Clauses (C) and (D) of this Section 2.04(a)(i) shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Corporation’s notice of meeting) before an annual meeting of stockholders.

         (2) Without qualification, for any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.04(a)(1)(C), or with respect to a Proxy Access Nomination, Section 2.16 of these By-Laws, the stockholder must have given timely notice thereof in writing to the Secretary and such other business must otherwise be a proper matter for stockholder action.

(A) To be timely under clause (C) of Section 2.04(a)(1) of this By-Law, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 150th day and not later than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 150th day prior to the date of such annual meeting and not later than the close of business on the later of the 120th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 130 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the
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Corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.

(B) To be in proper form, a stockholder’s notice (whether given pursuant to Section 2.04(a)(2) or Section 2.04(b) of these By-Laws) to the Secretary must set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, the following information together with a representation as to the accuracy of the information:

(i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any,

(ii) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and/or of record by such stockholder and such beneficial owner, if any,

(iii) a description of any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation,

(iv) a description of any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation,

(v) a description of any short interest in any security of the Corporation (for purposes of these By-Laws a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security),

(vi) a description of any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation,

(vii) a description of any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner
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(viii) a description of any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any,

(ix) a description of any arrangements, rights, or other interests described in Sections 2.04(a)(2)(B)(i)- (viii) of these By-Laws held by members of such stockholder’s immediate family sharing the same household, and

(x) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
Such information shall be provided as of the date of the notice, and such information, as well as any other information reasonably requested by the Corporation after the date of the notice, shall be supplemented by such stockholder not later than 10 days after the record date for the meeting to disclose such ownership as of the record date.
(C) If the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, set forth:

(i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business, and

(ii) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder.

(D) Set forth, as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board of Directors:

(i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and

(ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule Item 404 promulgated
4

under of Regulations S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nominaiton is made, if any, or any affiliate or associate thereof or person action in concert threwith; were the "registrant" for purposes of such rule and the nominee were a director or executive officer of such registrant.

(E) With respect to each nominee for election or reelection to the Board of Directors, such stockholder shall include a completed and signed questionnaire, representation and agreement required by Section 2.05 of these By-Laws. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

(3) Notwithstanding anything in Section 2.04(a)(2)(A) of these By-Laws to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 130 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by Section 2.04 of these By-Laws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

(b)   Special Meetings of Stockholders.

         (1) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (A) by or at the direction of the Board of Directors or (B) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (i) is a stockholder of record at the time of giving of notice provided for in this By-Law and at the time of the special meeting, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in Section 2.04 of these By-Laws as to such nomination. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 2.04(a) of this By-Law with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 2.05 of these By-Laws) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 150th day prior to the date of such special meeting and not later than the close of business on the later of the 120th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 130 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of
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Directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. For the avoidance of doubt, Proxy Access Nominations may not be made at any special meeting of stockholders.

(c)   General.

         (1) Only such persons who are nominated in accordance with the procedures set forth in Section 2.04 or Section 2.16 of these By-Laws shall be eligible to be serve be elected as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this By-Law (it being understood that Proxy Access Nomination pursuant to Section 2.16 may not be made at a special meeting of stockholders). Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the Chair of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these By-Laws and, if any proposed nomination or business is not in compliance with Section 2.04 or Section 2.16, as applicable, of these By-Laws, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.   

         (2) For purposes of these By-Laws, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

         (3) Notwithstanding the foregoing provisions of Section 2.04 of these By-Laws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in Section 2.04 of these By-Laws; provided, however, that any references in these By-Laws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.04(a)(1)(C), Section 2.04(b) or Section 2.16 of these By-Laws. Nothing in these By-Laws shall be deemed to affect any rights (A) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these By-Laws.

         (4) The Chair of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination or business proposal was not made in accordance with the procedures prescribed by these By-Laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded or that such proposed business shall not be transacted.

Section 2.05Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee by a stockholder for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 2.04 of these By-Laws or, in the case of a Proxy Access Nomination
6

brought under Section 216 of these By-Laws, in accordance with the timing, notice and other provisions of Section 2.16 of these By-Laws) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person:

(a)   is not and will not become a party to:

         (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation, or

         (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law,

(b)   is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and

(c)   in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.


Section 2.06Notice of Meetings. A written notice stating the place, if any, date, and hour of the meeting and means of remote communication, if any, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of such meeting to each stockholder of record of the Corporation entitled to vote at such meeting, in accordance with Section 232 of the Delaware General Corporation Law. Such notice shall be personally delivered or mailed and, if mailed, shall be deemed to be given when deposited in the mail, postage prepaid, addressed to the stockholder’s mailing address shown upon the records of the Corporation.

Section 2.07Waiver of Notice. Notice of any meeting of stockholders may be waived either before or after such meeting in a writing signed by the person or persons entitled to the notice. Attendance of a person at a meeting also shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2.08Quorum. At each meeting of stockholders, except where otherwise provided by law or the Certificate of Incorporation or these By-Laws, the holders of a majority
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of the outstanding capital stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. If a quorum is once present at the meeting, the stockholders may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.09Adjourned Meetings. In the absence of a quorum or for any other reason, tThe Chair of the meeting may adjourn the meeting from time to time. The stockholders present at any meeting may, by majority vote, adjourn the meeting from time to time to a later day or hour or to another place, if any. The stockholders entitled to vote at any meeting at which a quorum is not present in person or represented by proxy may so adjourn the meeting until a quorum shall be present or represented. If any adjournment is for more than 30 days, or if after adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Otherwise, notice of any adjourned meeting need not be given if the time and place, if any, thereof and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken. At an adjourned meeting at which a quorum is present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally convened.

Section 2.10Voting.

(a)   Except as otherwise provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall have one vote for each share of stock having voting power upon the matter in question that is held by such stockholder and registered in the stockholder’s name on the books of the Corporation as of the applicable record date. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

(b)   The vote upon any election or question before a meeting, other than the election of directors, need not be by written ballot, and need not be conducted by inspectors, unless otherwise determined by the Board of Directors or the officer presiding at the meeting or otherwise provided in Section 2.15. All such elections and questions at a meeting shall be decided by a majority vote of the shares entitled to vote on the subject matter, the holders of which are present in person or represented by proxy at the meeting at the time of the vote, except where otherwise required by the laws of Delaware, the Certificate of Incorporation or these By-Laws.

(c)   Each director to be elected by stockholders shall be elected by the vote of the majority of the votes cast at any meeting for the election of directors at which a quorum is present, provided that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at such meeting and entitled to vote on the election of directors. For purposes of this Section 2.10(c), a majority of votes cast shall mean that the number of shares voted “for” a
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director’s election exceeds fifty percent (50%) of the number of votes cast with respect to that director’s election. For purposes of this Section 2.10(c), votes cast shall include votes to withhold authority in each case and exclude abstentions and broker non-votes.

(d)   If a director has resigned and his or her resignation is accepted by the Board of Directors, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting
vacancy pursuant to the provisions of Section 3.03 or may decrease the size of the Board of Directors pursuant to the provisions of Section 3.02.

Section 2.11Proxies.

(a)   Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him or her by proxy by an instrument executed in writing, provided that no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing with the Secretary of the Corporation an instrument in writing revoking the proxy or another duly executed proxy bearing a later date. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.

(b)   A stockholder may sign or authorize the written authorization by telegram, facsimile or other means of electronic transmission setting forth or submitted with information sufficient to determine that the stockholder authorized such transmission. If it is determined that such telegrams, facsimiles or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information upon which they relied. Any copy, facsimile, telecommunication or other reproduction of the original writing or transmission may be used in lieu of the original, provided that it is a complete reproduction of the entire original.

(c)   If any written authorization designates two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one, shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide.

Section 2.12Fixing Date for Determination of Stockholders of Record.

(a)   For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date not more than 60 nor less than 10 days before the date of any such meeting. If no record date is fixed, the record date for such purpose shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
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(b) For the purpose of determining the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date not more than 10 days after the date upon which the resolution fixing the record date for such written action is adopted by the Board of Directors. If no record date is fixed and prior action of the Board of Directors with respect to the subject of such written action is not required by the Delaware General Corporation Law, the record date for such purpose shall be at the close of business on the first day on which a written consent signed by a stockholder is delivered to the Corporation by delivery to the registered office of the Corporation in Delaware (which shall be by hand or by certified or registered mail, return receipt requested), to the principal place of business of the Corporation, or to the officer or agent of the Corporation having custody of the Corporation’s minutes of stockholders’ meetings and proceedings. If no record date is fixed and prior action of the Board of Directors with respect to the subject of such written action is required by the Delaware General Corporation Law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c)(b)  For the purpose of determining the stockholders entitled to receive any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action not specified elsewhere in this Section 2.12, the Board of Directors may fix a record date not more than 60 days before any such action. If no record date is so fixed, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

(d)(c)   In no event shall any record date fixed by the Board of Directors pursuant to this Section 2.12 precede the date upon which the resolution fixing the record date is adopted by the Board of Directors.

Section 2.13Action by Written Consent of Stockholders. Subject to the rights of the holders of any series of preferred stock with respect to such series of preferred stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such stockholders and may not be effected by any consent in writing by such stockholders.

Section 2.14Stockholder List. The officer who has charge of the stock ledger shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days before the meeting, either on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting, at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, during ordinary business hours, at the principal place of business of the Corporationif not so specified, at the place where the meeting is to be held. If the meeting is to be held at a place,Tthe list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is held
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solely by means of remote communication, the list shall also be open for inspection by any stockholder during the whole time thereof as provided by applicable law. Upon the willful neglect or refusal of the directors to produce such a list at any meeting for the election of directors, they shall be ineligible for election to any office at such meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

Section 2.15Voting Procedures and Inspectors of Elections. The following provisions shall apply at such time as the Corporation shall have a class of voting stock that is (1) listed on a national securities exchange, (2) authorized for quotation on an inter-dealer quotation system of a registered national securities association, or (3) held of record by more than 2,000 stockholders.

(a)   The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.

(b)   The inspectors shall: (1) ascertain the number of shares outstanding and the voting power of each; (2) determine the shares represented at a meeting and the validity of proxies and ballots; (3) count all votes and ballots; (4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (5) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.

(c)   The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls.

(d)   In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with an appointment of proxy by electronic transmission, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to clause (b)(5) of this Section shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information
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was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.

Section 2.16Proxy Access. Subject to the terms and conditions set forth in these By-Laws, the Corporation shall include in its proxy materials for an annual meeting of stockholders held in or after 2018 the name, together with the Required Information (as defined in paragraph (a)(5) below), of one or more person(s) properly nominated for election (the “Stockholder Nominee”) to the Board of Directors by a qualifying stockholder or group of stockholders that satisfy the requirements of this Section 2.16, including qualifying as an Eligible Stockholder (as defined in paragraph (a)(4) below), and that expressly elects at the time of providing the written notice required by this Section 2.16 (a “Proxy Access Notice”) to have its nominee included in the Corporation’s proxy materials pursuant to this Section 2.16.

(a)   For purposes of this Section 2.16:

(1) “Voting Stock” shall mean outstanding shares of capital stock of the Corporation entitled to vote generally for the election of directors;   

(2) “Constituent Holder” shall mean any stockholder, collective investment fund included within a Qualifying Fund (as defined in paragraph (d) below) or beneficial holder whose stock ownership is counted for purposes of qualifying as holding the Proxy Access Request Required Shares (as defined in paragraph (d) below) or qualifying as an Eligible Stockholder (as defined in paragraph (d) below);


(3)“Affiliate” and “associate” shall have the meanings ascribed thereto in Rule 405 under the Exchange Act; provided, however, that the term “partner” as used in the definition of “associate” shall not include any limited partner that is not involved in the management of the relevant partnership;

(4)A stockholder (and any Constituent Holders) shall be deemed to “own” only those outstanding shares of Voting Stock as to which the stockholder or any Constituent Holder possesses both (a) the full voting and investment rights pertaining to the shares and (b) the full economic interest in (including the opportunity for profit and risk of loss on) such shares. The number of shares calculated in accordance with the foregoing clauses (a) and (b) shall be deemed not to include (and to the extent any of the following arrangements have been entered into by affiliates of the stockholder (or of any Constituent Holder), shall be reduced by) any shares (x) sold by such stockholder (or any of its Affiliates) or such Constituent Holder (or any of its Affiliates) in any transaction that has not been settled or closed, including any short sale, (y) borrowed by such stockholder (or any of its Affiliates) or such Constituent Holder (or any of its Affiliates) for any purposes or purchased by such stockholder (or any of its Affiliates) or such Constituent Holder (or any of its Affiliates) pursuant to an agreement to resell or (z) subject to any short interest in a security (for purposes of these By-Laws a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security) or Derivative Instrument, which interest or instrument has, or is intended to have, or if exercised by either party thereto would have, the purpose or effect of (i) reducing in any manner, to any extent or at
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any time in the future, such stockholder’s (or Affiliate’s) or such Constituent Holder’s (or affiliate’s) full right to vote or direct the voting of any such shares, and/or (ii) hedging, offsetting or altering to any degree gain or loss arising from the full economic ownership of such shares by such stockholder (or affiliate) or such Constituent Holder (or Affiliate), other than any such arrangements solely involving an exchange listed multi-industry market index fund in which Voting Stock represents at the time of entry into such arrangement less than ten percent (10%) of the proportionate value of such index. A stockholder or Constituent Holder shall “own” shares held in the name of a nominee or other intermediary so long as the stockholder or Constituent Holder retains the right to instruct how the shares are voted with respect to the election of directors and the right to direct the disposition thereof and possesses the full economic interest in the shares. A stockholder’s ownership or Constituent Holder’s ownership of shares shall be deemed to continue during any period in which such stockholder or Constituent Holder has loaned such shares in the ordinary course of its business or delegated any voting power over such shares by means of a proxy, power of attorney or other instrument or arrangement which, in either case of such loan or delegation, is recallable and/or revocable at any time by the stockholder or Constituent Holder, as applicable, and, in the case of loaned shares, on not more than five business days’ notice. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings; and

(5)The “Required Information” that the Corporation will include in its proxy statement is (a) the information concerning the Stockholder Nominee and the Eligible Stockholder(s) and Nominating Stockholder(s) that the Corporation determines is required to be disclosed in the Corporation’s proxy statement by the regulations promulgated under the Exchange Act; and (b) if the Eligible Stockholder and/or Nominating Stockholder so elects, a
Statement (as defined in paragraph (f) below). The Corporation shall also include the name of the Stockholder Nominee in its proxy card. For the avoidance of doubt, and any other provision of these By-Laws notwithstanding, the Corporation may, in its sole discretion, solicit against, and include in the proxy statement its own statements or other information relating to, any Eligible Stockholder, Nominating Stockholder and/or Stockholder Nominee, including any information provided to the Corporation with respect to the foregoing.

(b)To be timely, a stockholder’s Proxy Access Notice must be delivered to the Secretary of the Corporation at its principal executive offices not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the date that the Corporation mailed its proxy statement for the preceding year’s annual meeting of stockholders; provided, however, that in the event the annual meeting of stockholders is not scheduled to be held within a period that commences 30 days before and ends 60 days after the first anniversary date of the previous year’s annual meeting of stockholders (such meeting date referred to herein as an “Outside Meeting Date”), the Proxy Access Notice must be so delivered to, and received by, the Secretary of the Corporation no earlier than 180 days and no later than the 10th day following the date such Outside Meeting Date is first publicly announced or disclosed. In no event shall any adjournment or postponement of an annual meeting, or the Public Announcement thereof, commence a new time period or extend any time period for giving of a Proxy Access Notice.

(c)The number of Stockholder Nominees (including Stockholder Nominees that were submitted by any Eligible Stockholder and/or Nominating Stockholder for inclusion in
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the Corporation’s proxy materials pursuant to this Section 2.16 but either are subsequently withdrawn or that the Board of Directors decides to nominate as Board of Directors’ nominees) appearing in the Corporation’s proxy materials with respect to an annual meeting of stockholders shall be the greater of (x) two and (y) the largest whole number that does not exceed twenty percent (20%) of the number of directors in office as of the last day on which a Proxy Access Notice may be delivered in accordance with the procedures set forth in this Section 2.16 (such greater number, the “Permitted Number”); provided, however, that the Permitted Number shall be reduced by:

(1)  the number of directors in office or director candidates that, in either case, will be included in the Corporation’s proxy materials with respect to such annual meeting as an unopposed (by the Corporation) nominee pursuant to an agreement, arrangement or other understanding with a stockholder or group of stockholders (other than any such agreement, arrangement or understanding entered into in connection with an acquisition of Voting Stock, by such stockholder or group of stockholders, from the Corporation), other than any such director referred to in this clause (1) who at the time of such annual meeting will have served as a director continuously, as a nominee of the Board of Directors, for at least two (2) annual terms; and

(2)  the number of directors in office that will be included in the Corporation’s proxy materials with respect to such annual meeting for whom access to the Corporation’s proxy materials was previously provided pursuant to this Section 2.16, other than any such director referred to in this clause (2) who at the time of such annual meeting will have
served as a director continuously, as a nominee of the Board of Directors, for at least two (2) annual terms;

provided, further, that in the event the Board of Directors resolves to reduce the size of the Board of Directors effective on or prior to the date of the annual meeting of stockholders, the Permitted Number shall be calculated based on the number of directors in office as so reduced. Any Eligible Stockholder or Nominating Stockholder, as applicable, submitting more than one Stockholder Nominee for inclusion in the Corporation’s proxy statement pursuant to this Section 2.16 shall (i) rank such Stockholder Nominees based on the order that such person desires such Stockholder Nominees to be selected for inclusion in the Corporation’s proxy statement in the event that the number of Stockholder Nominees submitted pursuant to this Section 2.16 exceeds the Permitted Number and (ii) explicitly specify and include the respective rankings referred to in the foregoing clause (i) in the Proxy Access Notice delivered to the Corporation with respect to all Stockholder Nominees submitted pursuant thereto. In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 2.16 exceeds the Permitted Number, each Eligible Stockholder will have its highest ranking Stockholder Nominee (as ranked pursuant to the preceding sentence) who meets the requirements of this Section 2.16 selected for inclusion in the Corporation’s proxy materials until the Permitted Number is reached, going in order of the amount (largest to smallest) of shares of Voting Stock each Eligible Stockholder disclosed as owned in its Proxy Access Notice submitted to the Corporation (with the understanding that an Eligible Stockholder may not ultimately have any of its Stockholder Nominees included if the Permitted Number has previously been reached). If the Permitted Number is not reached after each Eligible Stockholder or Nominating Stockholder, as applicable, has had one Stockholder Nominee selected, this selection process will continue as
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many times as necessary, following the same order each time, until the Permitted Number is reached. After reaching the Permitted Number of Stockholder Nominees, if any Stockholder Nominee who satisfies the eligibility requirements in this Section 2.16 thereafter withdraws, has his or her nomination withdrawn or is thereafter not submitted for director election, no other nominee or nominees shall be required to be substituted for such Stockholder Nominee and included in the Corporation’s proxy statement or otherwise submitted for director election pursuant to this Section 2.16.
(d) An “Eligible Stockholder” is one or more stockholders of record or of beneficial ownership who own and have owned, or are acting on behalf of one (1) or more beneficial owners who own and have owned (in each case as defined above), in each case continuously for at least three (3) years as of both the date that the Proxy Access Notice is received by the Corporation pursuant to this Section 2.16, and as of the record date for determining stockholders eligible to vote at the annual meeting of stockholders, at least three percent (3%) of the aggregate voting power of the Voting Stock (the “Proxy Access Request Required Shares”), and who continue to own the Proxy Access Request Required Shares at all times between the date such Proxy Access Notice is received by the Corporation and the date of the applicable annual meeting of stockholders, provided that the aggregate number of stockholders, and, if and to the extent that a stockholder is acting on behalf of one or more beneficial owners, of such beneficial owners, whose stock ownership is counted for the purpose of satisfying the foregoing ownership requirement shall not exceed twenty (20). Two (2) or more collective investment funds that are (i) a group of funds under common management and investment control, (ii) a group of funds under common management and funded primarily by
the same employer, or (iii) a “family of investment companies” or a “group of investment companies” each as defined in the Investment Company Act of 1940, as amended (each a “Qualifying Fund”) shall be treated as one stockholder for the purpose of determining the aggregate number of stockholders in this paragraph (d) provided that each fund included within a Qualifying Fund otherwise meets the requirements set forth in this Section 2.16 and provides information, together with the Proxy Access Notice documentation satisfactory to the Board or its designee, acting in good faith, that demonstrates it is a Qualifying Fund. No shares may be attributed to more than one group constituting an Eligible Stockholder under this Section 2.16 (and, for the avoidance of doubt, no stockholder may be a member of more than one group constituting an Eligible Stockholder). A record holder acting on behalf of one or more beneficial owners will not be counted separately as a stockholder with respect to the shares owned by beneficial owners on whose behalf such record holder has been directed in writing to act, but each such beneficial owner will be counted separately, subject to the other provisions of this paragraph (d), for purposes of determining the number of stockholders whose holdings may be considered as part of an Eligible Stockholder’s holdings. For the avoidance of doubt, Proxy Access Request Required Shares will qualify as such if and only if the beneficial owner of such shares as of the date of the Proxy Access Notice has itself individually beneficially owned such shares continuously for the three-year (3-year) period ending on that date and through the other applicable dates referred to above (in addition to all other applicable requirements being met).

(e) No later than the final date when a Proxy Access Notice pursuant to this Section 2.16 may be timely delivered to the Corporation, an Eligible Stockholder (including each Constituent Holder) must provide the following information in writing to the Secretary of the Corporation:
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(1) the name and address of, and number of shares of Voting Stock owned by, such person;

(2) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the requisite three-year (3-year) holding period) verifying that, as of a date within seven days prior to the date the Proxy Access Notice is delivered to the Corporation, such Eligible Stockholder (and each Constituent Holder) owns, and has owned continuously for the preceding three years, the Proxy Access Request Required Shares, and such person’s agreement to provide:

(A) within five days after the record date for the annual meeting of stockholders, written statements from the record holder and intermediaries verifying such person’s continuous ownership of the Proxy Access Request Required Shares through the record date, together with any additional information reasonably requested to verify such person’s ownership of the Proxy Access Request Required Shares; and

(B) immediate notice if the Eligible Stockholder ceases to own any of the Proxy Access Request Required Shares prior to the date of the applicable annual meeting of stockholders;

(C) the information, representations and agreements contemplated by Section 2.05 of these By-Laws;

(D) a representation that such person:

(i) has not nominated and will not nominate for election to the Board of Directors at the annual meeting of stockholders any person other than the Stockholder Nominee(s) being nominated pursuant to this Section 2.16;

(ii) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) promulgated under the Exchange Act in support of the election of any individual as a director at the annual meeting of stockholders other than its Stockholder Nominee(s) or a nominee of the Board of Directors;

(iii) will not distribute to any stockholder any form of proxy for the annual meeting of stockholders other than the form distributed by the Corporation; and

(iv) will provide facts, statements and other information in all communications with the Corporation and its stockholders that are and will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and will otherwise comply with all applicable laws, rules and regulations in connection with any actions taken pursuant to this Section 2.16;

(E) in the case of a nomination by an Eligible Stockholder comprised of a group of stockholders that together is such an Eligible Stockholder, the
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designation by all group members (including Constituent Holders), as evidenced by a written agreement provided to the Corporation signed by all group members (including Constituent Holders), of one group member that is authorized to act on behalf of all members of the nominating stockholder group with respect to the nomination and matters related thereto, including withdrawal of the nomination (the “Nominating Stockholder”) (for the avoidance of doubt, in the event of a nomination by a Nominating Stockholder that includes more than one Eligible Stockholder (including each Constituent Holder), any and all requirements and obligations for an Eligible Stockholder (including each Constituent Holder) that are set forth in this Section 2.16 shall apply to each such Eligible Stockholder; provided, however that, in such case, the Proxy Access Request Required Shares provision shall apply to the Eligible Stockholder comprised of a group of such stockholders that together comprises such an Eligible Stockholder);

(F) an undertaking that such person agrees to:

(i) assume all liability stemming from, and indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Corporation or any of its directors, officers or employees arising out of any legal or regulatory violation arising out of the Eligible Stockholder’s and/or Nominating Stockholder’s communications with the stockholders
of the Corporation or out of the information that the Eligible Stockholder and/or Nominating Stockholder provided to the Corporation; and

(ii) file with the Securities and Exchange Commission any solicitation by the Eligible Stockholder and/or Nominating Stockholder of stockholders of the Corporation relating to the annual meeting of stockholders at which the Stockholder Nominee will be nominated and provide to the Corporation copies of any solicitation or other communication with the Corporation’s stockholders relating to the annual meeting of stockholders that is exempt from filing with the Securities and Exchange Commission; and

(G) a completed copy of the Schedule 14N (or any successor form) relating to the Stockholder Nominee that has been or will be filed with the Securities and Exchange Commission as required by Rule 14a-18 under the Exchange Act.

In order to be considered timely, any information required by this Section 2.16 to be provided to the Corporation must be supplemented (by delivery to the Secretary of the Corporation) (1) no later than five days following the record date for the applicable annual meeting of stockholders, to disclose the foregoing information as of such record date, and (2) no later than the eighth day before the annual meeting of stockholders, to disclose the foregoing information as of the date that is 10 days prior to such annual meeting of stockholders. For the avoidance of doubt, the requirement to update and supplement such information shall not permit any Eligible Stockholder or other person to change or add any proposed Stockholder Nominee or be deemed to cure any defects or limit the remedies (including without limitation under these By-Laws) available to the Corporation relating to any defect.
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(f) The Eligible Stockholder or Nominating Stockholder, as applicable, may provide to the Secretary of the Corporation, at the time the information required by this Section 2.16 is originally provided, a written statement for inclusion in the Corporation’s proxy statement for the annual meeting of stockholders, not to exceed five hundred (500) words, in support of the candidacy of such Eligible Stockholder’s or Nominating Stockholder’s, as applicable, Stockholder Nominee (the “Statement”). Notwithstanding anything to the contrary contained in this Section 2.16, the Corporation may omit from its proxy materials any information or Statement that it, in good faith, believes is materially false or misleading, omits to state any material fact, or would violate any applicable law or regulation.

(g) No later than the final date when a Proxy Access Notice pursuant to this Section 2.16 may be timely delivered to the Corporation, each Stockholder Nominee must deliver to the Secretary at the principal executive offices of the Corporation the completed and signed questionnaire, representation, agreement required by Sections 2.05 of these By-Laws and:

(1) provide an executed agreement, in a form deemed satisfactory by the Board of Directors or its designee (which form shall be provided by the Corporation reasonably promptly upon written request of a stockholder), that such Stockholder Nominee consents to being named in the Corporation’s proxy statement and form of proxy card (and will not agree to be named in any other person’s proxy statement or form of proxy card) as a nominee and to serving as a director of the Corporation if elected;

(2) complete, sign and submit all other questionnaires required of the Corporation’s directors generally; and

(3) provide such additional information as necessary to permit the Board of Directors to determine if any of the matters contemplated by paragraph (i) below apply to such Stockholder Nominee or if such nominee has any direct or indirect relationship with the Corporation or is or has previously been subject to any event specified in Item 401(f) of Regulation S-K (or successor rule) of the Securities and Exchange Commission or Rule 506(d) of Regulation D under the Securities Act of 1933, as amended.

In the event that any information or communications provided by the Eligible Stockholder (or any Constituent Holder), the Nominating Stockholder or the Stockholder Nominee to the Corporation or its stockholders ceases to be true and correct in all material respects or omits a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Stockholder, the Nominating Stockholder or Stockholder Nominee, as the case may be, shall promptly notify the Secretary of the Corporation of any defect in such previously provided information and of the information that is required to correct any such defect; it being understood for the avoidance of doubt that providing any such notification shall not be deemed to cure any such defect or limit the remedies (including, without limitation, under these By-Laws) available to the Corporation relating to any such defect.

(h) For the avoidance of doubt, any Stockholder Nominee who is included in the Corporation’s proxy statement for a particular annual meeting of stockholders, but subsequently is determined not to satisfy the eligibility requirements of this Section 2.16 or any other provision of the By-Laws, Certificate of Incorporation, or other applicable regulation any
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time before the annual meeting of stockholders, will not be eligible for election at such annual meeting.

(i) The Corporation shall not be required to include, pursuant to this Section 2.16, a Stockholder Nominee in its proxy materials for any annual meeting of stockholders, or, if the proxy statement already has been filed, to allow the nomination of a Stockholder Nominee, notwithstanding that proxies in respect of such vote may have been received by the Corporation:

(1) who is not independent under the listing standards of the principal U.S. exchange upon which the common stock of the Corporation is listed (or other listing standards applicable to the Corporation), any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing independence of the Corporation’s directors, in each case, as determined by the Board of Directors;

(2) whose service as a member of the Board of Directors would violate or cause the Corporation to be in violation of these By-Laws, the Certificate of Incorporation, the rules and listing standards of the principal U.S. exchange upon which the common stock of the Corporation is traded (or other such rules and listing standards applicable to the Corporation), or any applicable law, rule or regulation;

(3) if the Eligible Stockholder (or any Constituent Holder), Nominating Stockholder or applicable Stockholder Nominee otherwise breaches or fails to comply in any material respect with its obligations pursuant to this Section 2.16 or any agreement, representation or undertaking required by this Section;

(4) if the Eligible Stockholder ceases to be an Eligible Stockholder for any reason, including but not limited to, not owning the Proxy Access Request Required Shares through the date of the applicable annual meeting;

(5) who is or has been, within the past three (3) years, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914; or

(6) if the Corporation receives one or more stockholder notices nominating director candidates pursuant to Section 2.04(a) (but not this Section 2.16) of these By-Laws.

For the purposes of this paragraph (i), clauses (1), (2) and (5) and, to the extent related to a breach or failure by the Stockholder Nominee, clause (3) will result in the exclusion from the proxy materials pursuant to this Section 2.16 of the specific Stockholder Nominee to whom the ineligibility applies, or, if the proxy statement already has been filed, the ineligibility of such Stockholder Nominee to be nominated; provided, however, that clause (4) and, to the extent related to a breach or failure by an Eligible Stockholder (or any Constituent Holder), clause (3) will result in the Voting Stock owned by such Eligible Stockholder (or Constituent Holder) or Nominating Stockholder being excluded from the Proxy Access Request Required Shares (and, if as a result the Proxy Access Notice shall no longer have been filed by an Eligible Stockholder or Nominating Stockholder, as applicable, the exclusion from the proxy materials pursuant to this Section 2.16 of all of the applicable stockholder’s Stockholder Nominees from the applicable
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annual meeting of stockholders or, if the proxy statement has already been filed, the ineligibility of all of such stockholder’s Stockholder Nominees to be nominated).

(j) Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders but either (i) withdraws from or becomes ineligible or unavailable for election at any such annual meeting; or (ii) is not elected to the Board of Directors and does not receive at least twenty-five percent (25%) of the votes cast in favor of the Stockholder Nominee’s election, will be ineligible to be a Stockholder Nominee pursuant to this Section 2.16 for the next two (2) annual meetings of stockholders

III.   Board of Directors.

Section 3.01 General Powers; Organization. The business of the Corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by the Delaware General Corporation Law or by the Certificate of Incorporation or these By-Laws directed or required to be exercised or done by the stockholders. The Board of Directors may annually elect a Chair of the Board from among its members who shall preside at its meetings. The Secretary shall act as secretary of the meeting, but in his or her absence the chair of the meeting may appoint any person to act as secretary of the meeting. Any meeting of the Board of Directors may be held within or without the State of Delaware.

Section 3.02Number, Qualification and Term of Office. The number of directors constituting the Board of Directors shall be fixed from time to time by resolution of the Board of Directors, but shall be not less than seven (7) nor more than twelve (12). Except as otherwise provided in the Certificate of Incorporation and except as provided in Section 3.03 of these By-Laws, the directors shall be elected at the annual meeting of the stockholders and each director elected shall hold office until his or her successor is duly elected and qualified or until the director’s earlier resignation, retirement or removal. Directors need not be stockholders.

Section 3.03Resignation and Removal; Vacancies.

(a) Any director may resign at any time upon giving written notice to the Secretary of the Corporation, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. Directors may be removed only in accordance with the applicable provisions of the Delaware General Corporation Law and any applicable provisions of the Certificate of Incorporation.

(b) Vacancies (whether existing or to take effect at a future date), and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class, may only be filled by a majority of the directors then in office (including those who have resigned from the Board effective as of a future date), in their sole discretion and whether or not constituting less than a quorum, and the directors so chosen shall hold office until the next election of directors and until their successors are duly elected and qualified, or until their earlier resignation, retirement or removal.
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Section 3.04Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as may be designated from time to time by the Board of Directors.

Section 3.05Special Meetings. Special meetings of the Board of Directors may be called from time to time by the Chair of the Board of Directors, if any, or the Chief Executive Officer, and upon request by any two directors, shall be called by the Chair of the Board of Directors or the Chief Executive Officer.

Section 3.06Notice of Special Meetings. Notice of each special meeting of the Board of Directors stating the place, date and hour of the meeting shall be given to each director by mail not less than 48 hours, or personally or by telephone, telegram, facsimile or other electronic transmission not less than 48 hours, before the date and hour of the meeting.

Section 3.07Waiver of Notice. Notice of any meeting of the Board of Directors may be waived either before or after such meeting in a writing signed by each director or directors to whom the notice was not duly given. Attendance of a director at a meeting also shall constitute a waiver of notice of such meeting, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 3.08Quorum. Unless otherwise specifically provided by the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors a majority of the total number of directors shall constitute a quorum for the transaction of business, and the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.09Committees of Directors.

(a)The Board of Directors may, by resolution adopted by a majority of the total number of directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation and to have such name as may be determined by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

(b)Subject to subsection (c) of this Section 3.09 and to the Delaware General Corporation Law, any committee may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation to the extent provided in the resolution designating the committee, and may authorize the corporate seal, if any, to be affixed to all papers that may require it.

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(c)No committee shall have the power or authority to amend the Certificate of Incorporation of the Corporation (except as permitted by the Delaware General Corporation Law), to adopt an agreement of merger or consolidation under Section 251 or 252 of the Delaware General Corporation Law, to recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, to recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or to amend the By-Laws of the Corporation; and, unless the resolution establishing the committee or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law.

(d)Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required. Unless the Board of Directors otherwise provides, each committee may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to these By-Laws.

Section 3.10Lead Director. The Board of Directors may, by resolution adopted by a majority of the total number of directors, designate a director to be a Lead Director. The Lead Director shall have the powers and duties as determined by the Board of Directors.

Section 3.11Conference Communications. Directors may participate in any meeting of the Board of Directors, or of any duly constituted committee thereof, by means of a conference telephone or other comparable communications equipment which all persons participating in the meeting can hear and communicate with each other. For the purpose of establishing a quorum and taking any action at the meeting, such directors participating pursuant to this Section 3.11 shall be deemed present in person at the meeting.

Section 3.12Action by Written Consent of Directors. Any action required or permitted to be taken at a meeting of the Board of Directors or any committee thereof may be taken without a meeting if all directors or committee members consent thereto in writing, manually or by electronic transmission, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or the committee.

Section 3.13Compensation. The Board of Directors shall have the authority to fix the compensation of directors.

IV.   Officers.

Section 4.01Number. The Board of Directors shall elect a Chief Executive Officer, a President and a Secretary, and it may, if it so determines, elect a Chair of the Board from among its members. The Board of Directors may also choose a Treasurer, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers or any other officers or agents as the Board of Directors may designate. Any person may hold two or more offices.

Section 4.02Election, Term of Office and Qualifications. The Board of Directors shall elect the officers of the corporation, who shall hold their offices for such terms
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and shall exercise such powers and perform such duties not inconsistent with these By-Laws as shall be determined from time to time by the Board of Directors. All officers of the Corporation shall hold their offices until their respective successors are elected and qualified, or until their respective offices are eliminated by vote of the Board of Directors, or until their earlier resignation, retirement or removal. Officers may be, but need not be, directors.

Section 4.03Compensation. The salaries of the officers of the Corporation shall be fixed from time to time by the Board of Directors or a committee thereof or by the Chief Executive Officer if authorized by the Board of Directors or a committee thereof.

Section 4.04Registration and Removal; Vacancies.

(a) Any officer may resign at any time upon written notice to the Corporation. Any such resignation, however, shall be without prejudice to any contract rights of the Corporation as to such officer.

(b) Any officer may be removed from office, with or without cause, by a vote of the Board of Directors. Any such removal, however, shall be without prejudice to any contract rights of such officer as to the Corporation.

(c) Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.

Section 4.05Chief Executive Officer. If the Board of Directors has not otherwise designated a Chief Executive Officer, the Board of Directors may designate the Chair, if any, or the President as the Chief Executive Officer of the Corporation. The Chief Executive Officer shall have the general powers and duties of management and supervision usually vested in and imposed upon the Chief Executive Officer of a corporation. During the absence or disability of the President, the Chief Executive Officer shall exercise all the powers and discharge all the duties of the President.

Section 4.06Chair of the Board. The Chair, if one is elected, shall preside at all meetings of the Board of Directors, except in the event that it is appropriate for the Lead Director to preside. The Chair shall preside at all meetings of the stockholders. During the absence or disability of the Chair, the Chief Executive Officer shall preside at meetings of the stockholders. During the absence or disability of the Chief Executive Officer and the President, the Chair shall exercise all the powers and discharge all the duties of the Chief Executive Officer.

Section 4.07President. The President, subject to the control of the Board of Directors and the Chief Executive Officer of the Corporation, shall have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors and directives of the Chief Executive Officer are carried into effect. During the absence or disability of the Chief Executive Officer, the President shall exercise all the powers and discharge all the duties of the Chief Executive Officer.

Section 4.08Vice Presidents. During the absence or disability of the Chief Executive Officer and the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors or, in the
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absence of any designation, in the order they were first elected as Vice Presidents) shall perform the duties and have the authority of the President.

Section 4.09Secretary. The Secretary (or in the absence of the Secretary, any Assistant Secretary or other person appointed by the Chair to serve as Acting Secretary) shall keep the minutes of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose. The Secretary shall maintain the stock ledger and prepare the stockholder list as required by these By-Laws. The Secretary shall duly give notice of all meetings of the stockholders, the Board of Directors and committees of the Board, if any.

Section 4.10Treasurer. The Treasurer, if any, shall keep accurate accounts of all moneys of the Corporation received or disbursed. He or she shall deposit all moneys, drafts and checks in the name of and to the credit of the Corporation in such banks and depositories as the Board of Directors shall from time to time designate. The Treasurer shall have power to endorse for deposit all notes, checks and drafts received by the Corporation. The Treasurer shall render to the Board of Directors or the Chief Executive Officer of the Corporation, whenever required, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation.

Section 4.11Authority and Other Duties. All officers of the Corporation shall be subject to the supervision and direction of the Board of Directors and, in addition to the foregoing authority and duties, all officers of the Corporation shall respectively have such
authority and perform such other duties in the management of the business of the Corporation as may be designated from time to time by the Board of Directors. Unless expressly prohibited by a resolution adopted by the Board of Directors, an officer elected or appointed by the Board may, without the approval of the Board, delegate some or all of the duties and powers of his or her office to other persons.

V.   Indemnification.

Section 5.01Indemnification. The Corporation shall indemnify its officers and directors, and former officers and directors, for such expenses and liabilities, in such manner, under such circumstances, and to such extent, as required or permitted by the Delaware General Corporation Law, as amended from time to time. The determination of whether any such person is eligible for indemnification under this Section 5.01 shall be made (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders; provided, however, that if a Change in Control (as defined below) has occurred and the person seeking indemnification so requests, a determination of whether such person is eligible for indemnification under this Section 5.01 shall be made in a written opinion rendered by independent legal counsel chosen by the person seeking indemnification and not reasonably objected to by the Board of Directors, and such determination shall be binding on the Corporation. The fees and expenses of such independent counsel shall be paid by the Corporation. For such purpose, (X) “independent legal counsel” shall mean legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or has performed services for the Corporation or the person seeking
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indemnification within the previous three years; and (Y) a “Change in Control” shall be deemed to have occurred if:

(a)a majority of the directors of the Corporation shall be persons other than persons (A) who were directors of the Corporation on the date this Section was adopted, (B) for whose election proxies shall have been solicited by the Board of Directors or (C) who are then serving as directors appointed by the Board of Directors-to fill vacancies on the Board of Directors caused by newly-created directorships or the death or resignation (but not removal) of a director;

(b)thirty percent (30%) or more of the outstanding shares of voting stock of the Corporation is acquired or beneficially owned (as defined in Rule 13d-3 under the Exchange Act, or any successor rule thereto) by any person (other than the Corporation, a subsidiary of the Corporation or the person seeking indemnification) or group of persons, not including the person seeking indemnification, acting in concert;

(c)the stockholders of the Corporation approve a definitive agreement or plan to (A) merge or consolidate the Corporation with or into another corporation (other than (1) a merger or consolidation with a subsidiary of the Corporation or (2) a merger in which the Corporation is the surviving corporation and no outstanding voting stock of the Corporation (other than fractional shares) held by stockholders immediately before the merger is converted into cash, securities, or other property), (B) sell or otherwise dispose of all or substantially all of the assets of the Corporation (in one transaction or a series of transactions) or (C) liquidate or
dissolve the Corporation, unless a majority of the voting stock (or the voting equity interest) of the surviving corporation or of any corporation (or other entity) acquiring all or substantially all of the assets of the Corporation (in the case of a merger, consolidation or disposition of assets) is, immediately following the merger, consolidation or disposition of assets, beneficially owned by the person seeking indemnification or a group of persons, including the person seeking indemnification, acting in concert; or

(d)the Corporation enters into an agreement in principle or a definitive agreement relating to an event described in clause (i), (ii) or (iii) above which ultimately results in an event described therein, or a tender or exchange offer or proxy contest is commenced which ultimately results in an event described therein.

Section 5.02Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, trustee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, against any liability or expense asserted against or incurred by such person in or arising from that capacity, or arising out of his or her status as such, whether or not the Corporation would otherwise have the power or the obligation to indemnify the person against such liability or expense. The Corporation shall not be obligated under these By-Laws to make any payment in connection with any claim made against any person if and to the extent that such person has actually received payment therefore under any insurance policy or policies.
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Section 5.03Expenses Payable in Advance. Expenses (including attorneys’ fees and expenses) incurred by a director or officer, or a former director or officer, in defending, investigating, preparing to defend, or being or preparing to be a witness in, a threatened or pending action, suit, proceeding or claim against him or her, whether civil or criminal, shall be paid by the Corporation in advance of the final disposition of such action, suit, proceeding or claim upon receipt by the Corporation of a request therefore and an undertaking by or on behalf of the director or officer, or former director or officer, to repay such amounts if it ultimately shall be determined that he or she is not entitled to be indemnified by the Corporation.

        VI.   Stock.

Section 6.01Certificates for Stock.

(a)The shares of stock of the Corporation shall be either certificated or uncertificated.

(b)Every holder of duly issued certificated shares of stock in the Corporation shall be entitled to a certificate, to be in such form as shall be prescribed by the Board of Directors, certifying the number of shares owned by him or her. The certificates for such shares shall he numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chair, the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and the seal of the Corporation, if any, shall be affixed thereto.


(c)A certificate representing shares of stock issued by the Corporation shall, if the Corporation is authorized to issue shares of more than one class or series, set forth upon the face or back of the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge, a full statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class or series of stock and the qualifications, limitations or restrictions of such preferences and/or rights of each class or series authorized to be issued.

(d)The Board of Directors may provide by resolution that some or all shares of any or all classes and series of the stock of the Corporation will be uncertificated. Any such resolution shall not apply to shares represented by a certificate until the certificate is surrendered to the Corporation.

Section 6.02Issuance of Stock. The Board of Directors is authorized to cause to be issued stock of the Corporation up to the full amount authorized by the Certificate of Incorporation in such amounts and for such consideration as may be determined by the Board of Directors. No shares shall be allotted except in consideration of cash, labor, personal or real property (or leases thereof), or a combination of the foregoing, or of an amount transferred from surplus to stated capital upon a stock dividend. At the time of such allotment of stock, the Board of Directors shall state its determination of the fair value to the Corporation in monetary terms of any consideration other than cash for which shares are allotted. The amount of consideration to be received in cash or otherwise shall not be less than the par value of the shares so allotted. Stock so issued shall be fully paid and nonassessable. Treasury shares may be disposed of by the
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Corporation for such consideration as may be fixed by the Board of Directors, or by the stockholders if the Certificate of Incorporation so provides.

Section 6.03Partly Paid Stock. The Corporation may issue the whole or any part of its stock as partly paid and subject to call for the remainder of the consideration to be paid therefore. The total amount of the consideration to be paid for any partly paid stock and the amount paid thereon shall be stated upon the face or back of each certificate issued to represent any such partly paid stock (or, in the case of uncertificated stock, on the books and records of the Corporation), the total amount of the consideration to be paid therefore and the amount paid thereon shall be stated. The Board of Directors may, from time to time, demand payment in respect of each share of stock not fully paid, of such sum of money as the necessities of the business may, in the judgment of the Board of Directors, require, not exceeding in the whole the balance remaining unpaid on such stock, and such sum so demanded shall be paid to the Corporation at such times and by such installments as the directors shall direct.

Section 6.04 Section 6.03 Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

Section 6.05 Section 6.04 Transfer of Stock. Transfers of stock on the books of the Corporation may be authorized only by the stockholder named in the certificate, the stockholder’s legal representative or the stockholder’s duly authorized attorney-in-fact and upon surrender of the certificate or the certificates for such stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. No new certificate or certificates shall be issued in exchange for any existing certificate until such certificate shall have been so canceled, except in cases provided for in Section 6.06.

Section 6.06 Section 6.05 Lost, Stolen or Destroyed Certificates. Any stockholder claiming a certificate for stock to be lost, stolen or destroyed shall make an affidavit of that fact in such form as the Corporation may require and shall, if the Corporation so requires, give the Corporation a bond of indemnity in form, in an amount, and with one or more sureties satisfactory to the Corporation, to indemnify the Corporation against any claims which may be made against it on account of the alleged loss, theft or destruction of the certificate or issuance of such new certificate. A new certificate may then be issued for the lost, stolen or destroyed certificate.

Section 6.07 Section 6.06 Facsimile Signatures. Any or all of the signatures of the officers or agents of the Corporation on any stock certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on any such certificate shall cease to be such officer, transfer agent or registrar before
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such certificate is issued, it nevertheless may be issued by the Corporation as though the person who signed such certificate or whose facsimile signature or signatures had been placed thereon were such officer, transfer agent or registrar at the date of issue.

VII.          Miscellaneous.

Section 7.01Dividends.

(a) Subject to any restrictions contained in the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of the Corporation’s capital stock from the Corporation’s surplus, or if there be none, out of its net profits for the current fiscal year and/or the preceding fiscal year. Dividends may be paid in cash, in property or in shares of capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

(b) If the dividend is to be paid in shares of the theretofore unissued capital stock of the Corporation, the Board of Directors shall, by resolution, direct that there be designated as capital in respect of such shares an amount which is not less than the aggregate par value of par value shares being declared as a dividend and, in the case of shares without par value being declared as a dividend, such amount as shall be determined by the Board of Directors; provided, however, that no such designation as capital shall be necessary if shares are being distributed by the Corporation pursuant to a split-up or division of its stock.

Section 7.02Interested Directors and Officers. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for that reason, or solely because an interested director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or her vote is counted for such purpose, if, (a) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a
quorum; (b) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

Section 7.03Voting Securities Held by the Corporation. Unless otherwise ordered by the Board of Directors, powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed
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in the name of and on behalf of the Corporation by the Chair, Chief Executive Officer, President, Executive Vice President or the Chief Financial Officer and any such officer may, in the name of and on behalf of the Corporation, take all such action as such officer may deem advisable to vote in person or by proxy at any meeting of security holders of other corporations in which the Corporation may hold securities, and at any such meeting such officer shall possess and may exercise any and all rights and powers incident to the ownership of such securities that the Corporation might have possessed and exercised if it had been present. The Board of Directors may from time to time confer like powers upon any other person or persons.
Section 7.04Execution of Instruments.
(a) All deeds, mortgages, notes, bonds, checks, contracts and other instruments pertaining to the business and affairs of the Corporation shall be signed on behalf of the Corporation by the Chair, Chief Executive Officer, President, Executive Vice President, Chief Financial Officer or any Vice President, or by such other person or persons as may be designated from time to time by the Board of Directors.
(b) If a document must be executed by persons holding different offices or functions and one person holds such offices or exercises such functions, that person may execute the document in more than one capacity if the document indicates each such capacity.
Section 7.05Advances. The Corporation may, without a vote of the directors, advance money to its directors, officers or employees to cover expenses that can reasonably be incurred by them in the performance of their duties and for which they would be anticipated to be entitled to reimbursement in the absence of an advance.
Section 7.06Fiscal Year. The fiscal year end of the Corporation shall be the Saturday which occurs nearest the last day of December or such other date as may be fixed from time to time by resolution of the Board of Directors.
Section 7.07Corporate Seal. The corporate seal, if one is adopted by the Board of Directors, shall be circular in form and shall have inscribed thereon the name of the Corporation, the word “Delaware” and the words “Corporate Seal.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise placed on any document requiring it.
Section 7.08Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or maintained on any other information storage device, method, or one or more electronic networks or databases; provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

Section 7.09Power to Amend. These By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the stockholders or by the Board of Directors, if such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any annual meeting of the stockholders or of the Board of Directors, or at any special meeting of the
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stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal these By-Laws is conferred upon the Board of Directors by the Certificate of Incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal these By-Laws except as otherwise provided in these By-Laws or the Certificate of Incorporation.
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Exhibit 4.3

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES ACT OF 1934
        The following description sets forth certain material terms and provisions of the securities of Advance Auto Parts, Inc. that are registered under Section 12 of the Securities Exchange Act of 1934, as amended. In this description, the words “Company,” “we,” “us,” “our” and “AAP” refer only to Advance Auto Parts, Inc. and not to any of its subsidiaries.
DESCRIPTION OF COMMON STOCK
The following description of the general terms and provisions of the shares of our Common Stock, par value $0.0001 per share (“Common Stock”), is only a summary and is qualified in its entirety by reference to our Restated Certificate of Incorporation (our “Charter”), our Amended and Restated Bylaws (our “Bylaws”) and applicable provisions of the Delaware General Corporation Law (the “DGCL”).
Authorized Capital Stock
Our authorized capital stock consists of 200,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”).
Common Stock
Holders of Common Stock are entitled to one vote per share on all matters to be voted on by the stockholders of AAP. An election of directors by our stockholders shall be determined by a majority of the votes cast by the stockholders entitled to vote on the election, provided that if the number of nominees exceeds the number of directors to be elected, directors shall be elected by a plurality of the shares represented and entitled to vote. Stockholders are entitled to any dividends that may be declared by our board of directors. Holders of Common Stock do not have cumulative voting rights. Upon our dissolution, liquidation or winding up, holders of Common Stock are entitled to share ratably in our net assets after payment or provision for all liabilities and preferential liquidation rights of Preferred Stock then outstanding. Holders of Common Stock have no preemptive rights to purchase shares of Common Stock. The issued and outstanding shares of Common Stock are not subject to any redemption or sinking fund provisions and are not convertible into any other shares of our capital stock. The rights, preferences and privileges of holders of Common Stock are subject to those of the holders of any shares of Preferred Stock that we may issue in the future.
Transfer Agent and Registrar
Computershare is the transfer agent and registrar for our Common Stock.
Stock Exchange Listing
Our Common Stock is traded on the New York Stock Exchange under the symbol “AAP.”
Certain Provisions of Our Charter and Bylaws
Authorized but Unissued Stock. Our Charter authorizes the issuance of a significant number of shares of Common Stock and Preferred Stock. The existence of authorized but unissued shares of capital stock could render more difficult or discourage an attempt to obtain control of us by means of a tender offer, takeover attempt or otherwise. Additionally, Preferred Stock could be issued by our Board of Directors to increase the number of outstanding shares or otherwise make a takeover or change in control more difficult and expensive.





Advance Notice of Proposals and Nominations and Proxy Access. Our Bylaws provide that stockholders must provide timely written notice to bring business before an annual meeting of stockholders or to nominate candidates for election as directors at an annual meeting of stockholders. Generally, the advance notice provisions require that stockholder proposals be provided to us between 120 and 150 days before the anniversary of our last annual meeting and director nominations be provided to us between 120 and 150 days before the anniversary of the mailing of our proxy statement for our last annual meeting in order to be properly brought before a stockholder meeting. Our Bylaws also specify the form and content of a stockholder’s notice. Our bylaws generally provide a stockholder or group of stockholders holding three percent or more of the outstanding Common Stock for three years to nominate candidates for up to 20% of the Board of Directors.
Special Meetings and Written Consent. A special meeting of the stockholders may only be called by our Board of Directors, the Chairman of our Board of Directors, the Chief Executive Officer or stockholders following receipt by the Secretary of the Corporation of a written request for a special meeting from record holders owning at least ten percent in the aggregate of the outstanding Common Stock. Stockholders are not permitted under AAP’s Restated Certificate of Incorporation or Bylaws to act by written consent in lieu of a meeting.
Potential Anti-Takeover Effects of Delaware Law
Our Company is governed by the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in “business combination” transactions with any “interested stockholder” for a period of three years following the time that the stockholder became an interested stockholder, unless:
•prior to the time the stockholder became an interested stockholder, the corporation’s board of directors approved either the applicable business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

•upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the voting stock owned by the interested stockholder) shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which the employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•at or subsequent to the time that the stockholder became an interested stockholder, the business combination is approved by the corporation’s board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder.

A “business combination” is defined to include, among other things and in general and subject to exceptions, a merger of the corporation with the interested stockholder; a sale of 10% or more of the market value of the corporation’s consolidated assets to the interested stockholder; certain transactions that result in the issuance of the corporation’s stock to the interested stockholder; a transaction that has the effect of increasing the proportionate share of the corporation’s stock owned by the interested stockholder; and any receipt by the interested stockholder of loans, guarantees or other financial benefits provided by the corporation. An “interested stockholder” is defined to include, in general and subject to exceptions, a person that (1) owns 15% or more of the outstanding voting stock of the corporation or (2) is an “affiliate” or “associate” (as defined in Section 203) of the corporation and was the owner of 15% or more of the corporation’s outstanding voting stock at any time within the prior three-year period.
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DESCRIPTION OF DEBT SECURITIES
The following description of AAP’s 4.50% senior notes due 2022 (the “2022 Notes”), 4.50% senior notes due 2023 (the “2023 Notes”) and 3.90% senior notes due 2030 (the “2030 Notes,” and together with the 2022 Notes and the 2023 Notes, the “Notes”) is a summary and does not purport to be complete.
The description of the 2022 Notes and the 2023 Notes is qualified in its entirety by reference to an indenture, dated as of April 29, 2010 (as amended or supplement, the “2022/2023 Notes Indenture”), among AAP, as issuer, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee. In addition, the description of the 2030 Notes is qualified in its entirety by reference to an indenture, dated as of April 16, 2020 (the “2030 Notes Indenture,” and together with the 2022/2030 Notes Indenture, the “Indentures”), among AAP, as issuer, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee.
AAP has an automatic shelf registration statement on Form S-3 (File No.: 333-192526), which was filed with the SEC on November 25, 2013, covering the issuance of the 2022 Notes and the 2023 Notes. In addition, AAP has a registration statement on Form S-4 (File No.: 333-239145), which was filed with the Securities and Exchange Commission (the “SEC”) on June 12, 2020 and deemed effective by the SEC on June 24, 2020, covering the issuance of the 2030 Notes.
The Notes
The 2022 Notes and the 2023 Notes were issued under the 2022/2023 Notes Indenture and the 2030 Notes were issued under the 2030 Indenture, which each provide that debt securities may be issued under the applicable Indenture from time to time in one or more series. Neither Indenture limits the amount of debt securities that AAP may issue under such Indenture. AAP may, without the consent of the holders of any series of Notes, issue additional notes (“Additional Notes”) of a series having the same terms as the Notes of such series, except for the public offering price and the issue date and, if applicable, the initial interest accrual date and the initial interest payment date. Any Additional Notes of a series, together with the Notes of such series, will constitute a single series of Notes and will vote together as one class on all matters with respect to such series of Notes; provided, however, that any Additional Notes that are not fungible with existing Notes of such series for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing Notes of such series.
The 2022 Notes. AAP issued $300.0 million aggregate principal amount of senior unsecured notes on January 11, 2012. The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year to the holders of record at the close of business on the immediately preceding January 1 and July 1. As of July 11, 2020, $299.6 million aggregate principal amount of the 2022 Notes remain outstanding.
The 2023 Notes. AAP issued $450.0 million aggregate principal amount of senior unsecured notes on November 27, 2013. The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year to the holders of record at the close of business on the immediately preceding May 15 and November 15. As of July 11, 2020, $448.1 million aggregate principal amount of the 2023 Notes remain outstanding.
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The 2030 Notes. AAP issued $500.0 million aggregate principal amount of senior unsecured notes on April 16, 2020 in a private placement. During the twelve weeks ended July 11, 2020, $499.9 million of such notes were exchanged for the equivalent amount of registered 2030 Notes. The 2030 Notes bear interest at a rate of 3.90% per year payable semi-annually in arrears on April 15 and October 15 of each year to the holders of record at the close of business on the immediately preceding April 1 and October 1. As of July 11, 2020, $492.7 million aggregate principal amount of the 2030 Notes remain outstanding.
Subsidiary Guarantees
The Notes are guaranteed by certain of our domestic subsidiaries. Our obligations under the Notes will be fully and unconditionally guaranteed, jointly and severally, on an unsubordinated unsecured basis by each of our subsidiaries that incurs or guarantees the applicable Credit Facilities or any other of our or any of our subsidiaries’ Credit Facility Debt or any Capital Markets Debt. Each subsidiary guarantee will rank equally in right of payment with all existing and future liabilities of the applicable subsidiary guarantor that are not subordinated. Each subsidiary guarantee will effectively rank junior to any secured indebtedness of its respective subsidiary guarantor to the extent of the value of the assets securing such indebtedness. Under the terms of the guarantees, holders of the Notes will not be required to exercise their remedies against us before they proceed directly against the subsidiary guarantors.
For purposes of the guarantee provisions of the Indentures, the following terms are defined as follows:
“Capital Markets Debt” means any debt for borrowed money that (i) is in the form of, or represented by, bonds, notes, debentures or other securities (other than promissory notes or similar evidences of debt under a credit agreement) and (ii) has an aggregate principal amount outstanding of (A) at least $25.0 million, at any time that any Existing Notes remain outstanding or (B) at least $75.0 million at any time that no Existing Notes remain outstanding.
“Credit Facility” means, (i) with respect to the 2022 Notes and the 2023 Notes, means (A) the Credit Agreement dated May 27, 2011, among AAP, Advance Stores Company, Incorporated, the lenders referred to therein and JPMorgan Chase Bank, N.A., as administrative agent, as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and (B) the credit agreement contemplated by the commitment letter entered into in connection with the Acquisition, to be among AAP, Advance Stores Company, Incorporated, the lenders referred to therein and J.P. Morgan Chase Bank, N.A., as administrative agent, as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, or any other credit agreement entered into by AAP from time to time and, (ii) with respect to the 2030 Notes, means the credit agreement, dated as of January 31, 2017, among us, Advance Stores Company, Incorporated, the lenders referred to therein and Bank of America, N.A., as administrative agent, as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
“Credit Facility Debt” means any debt for borrowed money that (i) is incurred pursuant to a credit agreement, including pursuant to the applicable Credit Facilities or other agreement providing for revolving credit loans, term loans or other debt entered into between us or any of our subsidiaries and any lender or group of lenders and (ii) has an aggregate principal amount outstanding or committed of (A) at least $25.0 million, at any time that any Existing Notes remain outstanding or (B) at least $75.0 million at any time that no Existing Notes remain outstanding.



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 “subsidiary guarantor” means each of our subsidiaries that is or becomes a guarantor under the applicable Indenture.
Under the applicable Indenture, the respective holders of the Notes will be deemed to have consented to the release of the guarantee of the Notes provided by a subsidiary guarantor, without any action required on the part of the trustee or any holder of the Notes, upon such subsidiary guarantor ceasing to guarantee or be an obligor with respect to the applicable Credit Facilities or any other Credit Facility Debt and Capital Markets Debt of us or any subsidiary. Accordingly, if the lenders under the applicable Credit Facilities release a subsidiary guarantor from its guarantee of, or obligations as a borrower under, the applicable Credit Facilities, or if the applicable Credit Facilities are terminated in full, the obligations of our subsidiaries to guarantee the Notes will immediately terminate, unless our subsidiaries incur or guarantee obligations under any other Credit Facility Debt or Capital Markets Debt. We will give prompt written notice to the trustee of the automatic release of any subsidiary guarantor. If any of our subsidiaries incur or guarantee obligations under any Credit Facility Debt or Capital Markets Debt while the Notes are outstanding, then such subsidiaries will be required to guarantee the Notes.
In addition, a subsidiary guarantor will be released and relieved from all its obligations under its subsidiary guarantee in the following circumstances, each of which is permitted by the Indenture:
•upon the sale or other disposition (including by way of consolidation or merger), in one transaction or a series of related transactions, of a majority of the total voting power of the capital stock or other interests of such subsidiary guarantor (other than to us or any of our affiliates); or

•upon the sale or disposition of all or substantially all the property of such subsidiary guarantor (other than to any of our affiliates other than another subsidiary guarantor);

provided, however, that, in each case, after giving effect to such transaction, such subsidiary is no longer liable for any guarantee or other obligations in respect of any of our or our subsidiaries’ Credit Facility Debt or Capital Markets Debt.
The subsidiary guarantee of a subsidiary guarantor also will be released if we exercise our legal defeasance or our covenant defeasance option as described under “-Defeasance” or if our obligations under the Indentures are discharged as described under “-Discharge of the Indenture.” At our written instruction, the trustee will execute and deliver any documents, instructions or instruments evidencing any such release.
Ranking
The Notes are:
•our unsubordinated unsecured obligations,
•effectively subordinated to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness,
•structurally subordinated to any indebtedness of any of our subsidiaries that do not guarantee the Notes,
•equal in ranking (“pari passu“) with all our existing and future unsubordinated indebtedness, and
•senior in right of payment to all our existing and future subordinated indebtedness.
With respect to each subsidiary guarantor, the subsidiary guarantee will be:
•an unsubordinated unsecured obligation of such subsidiary guarantor,
•effectively subordinated to any secured indebtedness of such subsidiary guarantor to the extent of the value of the assets securing such indebtedness,
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•structurally subordinated to any indebtedness of any subsidiaries of such subsidiary guarantor that do not guarantee the Notes,
•pari passu with such subsidiary guarantor’s existing and future unsubordinated indebtedness, and
•senior in right of payment to such subsidiary guarantor’s existing and future subordinated indebtedness.

Payment on the Notes
The trustee, through its corporate trust office in New York City, will act as our paying agent (the “paying agent”) and security registrar in respect of the notes. The current location of such corporate trust office is 150 East 42nd Street, 40th Floor, New York, New York 10017. So long as the notes are issued in the form of global certificates, payments of principal, interest and premium, if any, will be made by us through the paying agent to DTC.
The Company will pay principal and interest on any note in definitive registered form (without a coupon) by check mailed to the address of the person entitled thereto as it appears in the note register (or upon written notice from such person given at least 15 days before the payment date, by wire transfer in immediately available funds if such person is entitled to interest on an aggregate principal amount of notes in excess of $2.0 million).
Optional Redemption
Prior to the Par Call Date, the Notes will be redeemable in whole or in part at any time and from time to time, at our option, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed that would have been made if such Notes matured on the Par Call Date (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 40 basis points (with respect to the 2022 Notes), 30 basis points (with respect to the 2023 Notes) and 50 basis points plus accrued interest thereon to but excluding the redemption date (with respect to the 2030 Notes).
On or after the Par Call Date, the Notes will be redeemable in whole or in part at any time and from time to time, at our option, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus, with respect to the 2030 Notes, accrued interest thereon to but excluding the redemption date.
“Comparable Treasury Issue” means the U.S. Treasury security selected by us as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.
“Comparable Treasury Price” means, with respect to any redemption date, (i) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if we obtain fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
“Par Call Date” means, (i) with respect to the 2022 Notes, October 15, 2021 (three months prior to the maturity date of the 2022 Notes, (ii) with respect to the 2023 Notes, September 1, 2023 (three months
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prior to the maturity date of the 2023 Notes) and, (iii) with respect to the 2030 Notes, January 15, 2030 (three months prior to the maturity date of the 2030 Notes).
“Reference Treasury Dealers” means, (i) with respect to the 2022 Notes and the 2023 Notes, each of J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated and their respective successors, and any other primary Treasury dealer we select and, (ii) with respect to the 2030 Notes, each of BofA Securities, Inc. and J.P. Morgan Securities LLC and their respective successors, and any other primary Treasury dealer we select. If any of the foregoing ceases to be a primary U.S. government securities dealer in New York City, we must substitute another primary Treasury dealer.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee at 5:00 p.m., New York City time, on the third business day preceding such redemption date.
“Treasury Rate” means, with respect to any redemption date: (a) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining life (as defined below), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month), or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third business day preceding the date fixed for redemption.
Selection and Notice
We will mail a notice of redemption to each holder of Notes to be redeemed by first-class mail or delivered electronically (in the case of book-entry) at least 30 and not more than 60 days prior to the date fixed for redemption. Any notice to holders of Notes of such a redemption shall include the appropriate calculation of the redemption price, but does not need to include the redemption price itself. The actual redemption price, calculated as described above, must be set forth in an officer’s or officers’ certificate (as described in the applicable Indenture) delivered to the trustee no later than one business day prior to the redemption date. Unless we default on payment of the redemption price, as of the redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption. If fewer than all of the Notes are to be redeemed, the trustee will select, at least 30 days and not more than 60 days prior to the redemption date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously redeemed (i) if the Notes are listed on any securities exchange, in accordance with the requirements of such exchange, or (ii) if the Notes are not so listed, by such method as the trustee deems fair and appropriate in accordance with DTC procedures. Notes of $2,000 principal amount or less will not be redeemed in part.
Certain Covenants
Limitation on Liens
The Indentures provide that we will not, and will not permit any of our subsidiaries to, create, incur, issue, assume or guarantee any debt secured by a Lien (other than Permitted Liens) upon any property or
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assets (other than deposit accounts, inventory, accounts receivable or the proceeds thereof), without making effective provision to secure all of the Notes, equally and ratably with any and all other debt secured thereby, so long as any of such other debt shall be so secured.
Limitation on Sale and Leaseback Transactions
The Indentures provide that we will not, and will not permit any subsidiary to, enter into any arrangement with any person providing for the leasing by us or any subsidiary of any property or assets that has been or is to be sold or transferred by us or such subsidiary to such person, with the intention of taking back a lease of such property or assets (a “Sale and Leaseback Transaction”) unless either:
        (1) within 12 months after the receipt of the proceeds of the sale or transfer, we or any subsidiary apply an amount equal to the greater of the net proceeds of the sale or transfer or the fair value of such property or assets (as determined in good faith by our board of directors as of any date within 90 days prior to the date of such sale or transfer) to the prepayment or retirement (other than any mandatory prepayment or retirement) of Senior Funded Debt; or
        (2) we or such subsidiary would be entitled, at the effective date of the sale or transfer, to incur debt secured by a Lien on such property or assets in an amount at least equal to the Attributable Debt in respect of the Sale and Leaseback Transaction, without equally and ratably securing the Notes pursuant to the covenant described under “-Limitation on Liens.”
The foregoing restriction in the paragraph above will not apply to any Sale and Leaseback Transaction (i) for a term of not more than three years including renewals; (ii) between us and a subsidiary or between subsidiaries; provided that the lessor is us or a wholly-owned subsidiary, or (iii) entered into within 270 days after the later of the acquisition or completion of construction of the subject property or assets.
Merger, Consolidation or Sale of Assets
The Indentures provide that we shall not merge, consolidate or amalgamate with or into any other person (other than a merger of a wholly-owned subsidiary into AAP) or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of our property in any one transaction or series of related transactions unless:
        (1) AAP shall be the surviving person or the surviving person (if other than AAP) formed by such merger, consolidation or amalgamation or to which such sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia;
        (2) the surviving person (if other than AAP) expressly assumes, by supplemental indenture in form satisfactory to the trustee, executed and delivered to the trustee by such surviving person, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of the Indentures and, if applicable, the registration rights agreement to be performed by us;
        (3) immediately before and immediately after giving effect to such transaction or series of related transactions, no default or event of default shall have occurred and be continuing; and
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(4) we shall deliver, or cause to be delivered, to the trustee, an officer’s certificate and an opinion of counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply with this covenant and that all conditions precedent in the applicable Indenture relating to such transaction have been complied with.
For the purposes of this covenant, the sale, transfer, assignment, lease, conveyance or other disposition of all the property of one or more of our subsidiaries, which property, if held by us instead of such subsidiaries, would constitute all or substantially all of our property on a consolidated basis, shall be deemed to be the transfer of all or substantially all of our property.
The Indentures provides that, unless the subsidiary guarantee of the applicable subsidiary guarantor is permitted to be released in connection with such transaction as described above under “-Subsidiary Guarantees,” such subsidiary guarantor shall not merge, consolidate or amalgamate with or into any other person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all its property in any one transaction or series of related transactions unless:
        (1) such subsidiary guarantor shall be the surviving person or the surviving person (if other than such subsidiary guarantor) formed by such merger, consolidation or amalgamation or to which such sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation, limited partnership or limited liability company organized and existing under the laws of the United States of America, any state thereof or the District of Columbia;
        (2) the surviving person (if other than such subsidiary guarantor) expressly assumes, by supplemental indenture in form satisfactory to the trustee, executed and delivered to the trustee by such surviving person, such subsidiary guarantor’s guarantee of the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of the applicable Indenture and, if applicable, the registration rights agreement to be performed by such subsidiary guarantor;
        (3) immediately before and immediately after giving effect to such transaction or series of related transactions, no default or event of default shall have occurred and be continuing; and
        (4) we shall deliver, or cause to be delivered, to the trustee, an officer’s certificate and an opinion of counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply with this covenant and that all conditions precedent in the applicable Indenture relating to such transaction have been complied with.
Certain Definitions
The following terms used in “-Certain Covenants” are defined as follows. Reference is made to the Indentures for the full definition of all such terms as well as any other capitalized terms used herein for which no definition is provided.
“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value discounted at the rate of interest implicit in the terms of the lease (as determined in good faith by us) of the obligations of the lessee under such lease for net rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at our option, be extended).
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“Consolidated Net Tangible Assets” means the aggregate amount of our assets (less applicable reserves and other properly deductible items) and our consolidated subsidiaries’ assets after deducting therefrom (a) all current liabilities (excluding the sum of any debt for money borrowed having a maturity of less than twelve months from the date of our most recent consolidated balance sheet but which by its terms is renewable or extendable beyond twelve months from such date at the option of the borrower and, without duplication, any current installments thereof payable within such twelve month period) and (b) all goodwill, trade names, patents, unamortized debt discount and expense and other like intangibles, all as set forth on our most recent consolidated balance sheet and computed in accordance with GAAP.
“Funded Debt” means debt which matures more than one year from the date of creation, or which is extendable or renewable at the sole option of the obligor so that it may become payable more than one year from such date or which is classified, in accordance with United States generally accepted accounting principles, as long-term debt on the consolidated balance sheet for the most-recently ended fiscal quarter (or if incurred subsequent to the date of such balance sheet, would have been so classified) of the person for which the determination is being made. Funded Debt does not include (1) obligations created pursuant to leases, (2) any debt or portion thereof maturing by its terms within one year from the time of any computation of the amount of outstanding Funded Debt unless such debt shall be extendable or renewable at the sole option of the obligor in such manner that it may become payable more than one year from such time, or (3) any debt for which money in the amount necessary for the payment or redemption of such debt is deposited in trust either at or before the maturity date thereof.
“Lien” means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, security interest, lien, encumbrance or other security arrangement of any kind or nature on or with respect to such property or assets.
“Permitted Liens” means:
        (1) Liens (other than Liens created or imposed under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), for taxes, assessments or governmental charges or levies not yet subject to penalties for non-timely payment or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property or assets subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof);
        (2) statutory Liens of landlords and Liens of mechanics, materialmen, warehousemen, carriers and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business; provided that any such Liens which are material secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established;
        (3) Liens (other than Liens created or imposed under ERISA) incurred or deposits made by us and our subsidiaries in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, laws or regulations, or to secure the performance of tenders, statutory obligations, bids, leases, trade or government contracts, surety, indemnification, appeal, performance and return-of-money bonds, letters of credit, bankers acceptances and other similar obligations (exclusive of obligations for the payment of borrowed money), or as security for customs or import duties and related amounts;
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        (4) Liens in connection with attachments or judgments (including judgment or appeal bonds), provided that the judgments secured shall, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall have been discharged within 30 days after the expiration of any such stay;
        (5) Liens securing indebtedness (including capital leases) incurred to finance the purchase price or cost of construction of property or assets (or additions, repairs, alterations or improvements thereto), provided that such Liens and the indebtedness secured thereby are incurred within twelve months of the later of acquisition or completion of construction (or addition, repair, alteration or improvement) and full operation thereof;
        (6) Liens securing industrial revenue bonds, pollution control bonds or similar types of tax-exempt bonds;
        (7) Liens arising from deposits with, or the giving of any form of security to, any governmental agency required as a condition to the transaction of business or exercise of any privilege, franchise or license;
        (8) encumbrances, covenants, conditions, restrictions, easements, reservations and rights of way or zoning, building code or other restrictions, (including defects or irregularities in title and similar encumbrances) as to the use of real property, or Liens incidental to conduct of the business or to the ownership of our or our subsidiaries’ properties not securing debt that do not in the aggregate materially impair the use of said properties in the operation of our business, including our subsidiaries, taken as a whole;
        (9) leases, licenses, subleases or sublicenses granted to others not interfering in any material respect with our business, including our subsidiaries, taken as a whole;
        (10) Liens on property or assets at the time such property or assets is acquired by us or any of our subsidiaries;
        (11) Liens on property or assets of any person at the time such person becomes one of our subsidiaries;
        (12) Liens on receivables from customers sold to third parties pursuant to credit arrangements in the ordinary course of business;
        (13) Liens existing on the date of the applicable Indenture or any extensions, amendments, renewals, refinancings, replacements or other modifications thereto;
        (14) Liens on any property or assets created, assumed or otherwise brought into existence in contemplation of the sale or other disposition of the underlying property or assets, whether directly or indirectly, by way of share disposition or otherwise;
        (15) Liens securing debt of one of our subsidiaries owed to us or to another one of our subsidiaries;
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        (16) Liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision thereof, to secure partial, progress, advance or other payments;
        (17) Liens to secure debt of joint ventures in which we or any of our subsidiaries has an interest, to the extent such Liens are on property or assets of, or equity interests in, such joint ventures;
        (18) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution;
        (19) Liens arising from financing statement filings regarding operating leases;
        (20) Liens in favor of customs and revenue authorities to secure custom duties in connection with the importation of goods;
        (21) Liens securing the financing of insurance premiums payable on insurance policies; provided, that, such Liens shall only encumber unearned premiums with respect to such insurance, interests in any state guarantee fund relating to such insurance and subject and subordinate to the rights and interests of any loss payee, loss payments which shall reduce such unearned premiums;
        (22) Liens securing cash management obligations (that do not constitute indebtedness) in the ordinary course of business;
        (23) Liens on any property or assets of our foreign subsidiaries securing debt of such subsidiaries (but not of our or any of our domestic subsidiaries’ debt);
        (24) Liens securing indebtedness in an aggregate principal amount at any time outstanding not exceeding $250.0 million in respect of any arrangement under which we or any subsidiary transfers, once or on a revolving basis, without recourse (except for indemnities and representations customary for securitization transactions and except for the retention of risk in an amount and form required by applicable laws and regulations or as is customary for a similar type of transaction) involving one or more “true sale” transactions, accounts receivable or interests therein and related assets customarily transferred in connection with securitization transactions (a) to a trust, partnership, corporation, limited liability company or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of Indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers; and
        (25) other Liens on our property or assets and the property or assets of our subsidiaries securing debt in an aggregate principal amount (together with the aggregate amount of all Attributable Debt in respect of Sale and Leaseback Transactions entered into in reliance on this clause) not to exceed, as of any date of incurrence of such debt pursuant to this clause and after giving effect to such incurrence and the application of the proceeds therefrom, the greater of (1) $375.0 million and (2) 15% of our Consolidated Net Tangible Assets.
“Senior Funded Debt” means all Funded Debt of ours or our subsidiaries (except Funded Debt, the payment of which is subordinated to the payment of the Notes).
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Events of Default
Each of the following constitutes an event of default with respect to the Notes:
(1)a default in payment of the principal amount or redemption price with respect to any Note when such amount becomes due and payable;

(2)our failure to pay interest on any Note within 30 days of when such amount becomes due and payable;

(3)our failure to comply with any of our covenants or agreements in the applicable Indenture or the Notes (other than a failure that is subject to the foregoing clause (1) or (2)) and our failure to cure (or obtain a waiver of) such default and such failure continues for 60 days after written notice is given to us as provided below;

(4)a default under any debt for money borrowed by us or any subsidiary that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25.0 million at any time that any Existing Notes remain outstanding, or $75.0 million at any time that no Existing Notes remain outstanding, or its foreign currency equivalent at the time without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by us of notice of the default by the trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding (the “cross acceleration provision”);

(5)certain events of bankruptcy, insolvency or reorganization affecting us, any subsidiary guarantor or any subsidiary that would be a significant subsidiary of AAP within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (a “Significant Subsidiary”) (the “bankruptcy provisions”); and

(6)except as permitted by the Indenture, any subsidiary guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any subsidiary guarantor, or any person acting on its behalf, shall deny or disaffirm its obligation under the subsidiary guarantee.

A default under clause (3) is not an event of default until the trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding notify us of the default and we do not cure such default within the time specified after receipt of such notice. Such notice must specify the default, demand that it be remedied and state that such notice is a “Notice of Default.”
We will deliver to the trustee, within 30 days after the occurrence thereof, written notice in the form of an officer’s or officers’ certificate (as described in the applicable Indenture) of any event that with the giving of notice or the lapse of time or both would become an event of default, its status and what action we are taking or propose to take with respect thereto.
If an event of default (other than an event of default resulting from certain events involving bankruptcy, insolvency or reorganization with respect to us or any subsidiary guarantor) shall have occurred and be continuing, the trustee or the registered holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare, by notice to us in writing (and to the trustee, if given by holders of such Notes) specifying the event of default, to be immediately due and payable the principal amount of all the Notes then outstanding, plus accrued but unpaid interest to the date of acceleration. In case an event of default resulting from certain events of bankruptcy, insolvency or reorganization with respect to us or any subsidiary guarantor shall occur, such amount with respect to all the Notes shall be due and payable
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immediately without any declaration or other act on the part of the trustee or the holders of the Notes. After any such acceleration, but before a judgment or decree based on acceleration is obtained by the trustee, the registered holders of a majority in aggregate principal amount of the Notes then outstanding may, under certain circumstances, rescind and annul such acceleration and waive such event of default if all events of default, other than the nonpayment of accelerated principal, premium or interest, have been cured or waived as provided in the Indenture.
Subject to the provisions of the applicable Indenture relating to the duties of the trustee, in case an event of default shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under the applicable Indenture at the request or direction of any of the holders of the Notes, unless such holders shall have offered to the trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense. Subject to such provisions for the indemnification of the trustee, the holders of a majority in aggregate principal amount of the Notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the Notes.
No holder of Notes will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any remedy thereunder, unless:
(1)such holder has previously given to the trustee written notice of a continuing event of default,
(2)the registered holders of at least 25% in aggregate principal amount of the Notes then outstanding have made a written request and offered indemnity or security to the trustee reasonably satisfactory to it to institute such proceeding as trustee, and
(3)the trustee shall not have received from the registered holders of a majority in aggregate principal amount of the Notes then outstanding a written direction inconsistent with such request and shall have failed to institute such proceeding within 60 days.

However, such limitations do not apply to a suit instituted by a holder of any Note for enforcement of payment of the principal of, and premium, if any, or interest on, such Note on or after the respective due dates expressed in such Note.
The Indentures provides that, if a default with respect to the applicable Notes occurs and is continuing and is known to the trustee, the trustee must mail to each holder of such Notes notice of the default within 90 days after it occurs. The trustee may withhold the notice if and so long as it in good faith determines that withholding notice is in the interest of the holders of such Notes.
The Indentures require us, in each case, to furnish to the trustee, within 120 days after the end of each fiscal year, a written statement of an officer regarding compliance with such Indenture. Within 30 days after the occurrence of any default or event of default, we are required to deliver to the trustee written notice in the form of an officers certificate a statement specifying its status and what actions we are taking or propose to take with respect thereto.
Legal Defeasance and Covenant Defeasance
We may terminate at any time all our obligations with respect to the Notes, which we refer to as “legal defeasance,” except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes. We may also terminate at any
14



time our obligations with respect to the Notes under other covenants described in the Indentures, and the operation of the cross acceleration provision and the bankruptcy provisions with respect to Significant Subsidiaries and subsidiary guarantors, which we refer to as “covenant defeasance.” We may exercise the legal defeasance option notwithstanding our prior exercise of the covenant defeasance option.

Modification and Waiver
Modifications and amendments of the Indentures as it relates to the applicable Notes may be made by us, the subsidiary guarantors and the trustee with the consent of the holders of at least a majority in aggregate principal amount of the outstanding Notes affected by such modification or amendment.
No such modification or amendment may, without the consent of the holder of each outstanding Note affected thereby:
•reduce the percentage of principal amount of Notes the holders of which must consent to an amendment, modification, supplement or waiver;

•reduce the rate of or extend the time of payment for interest on any Note;

•reduce the principal amount or extend the stated maturity of any Note;

•reduce the redemption price of any Note or add redemption provisions to any Note;

•make any Note payable in money other than that stated in the applicable Indenture or the Note;

•other than in accordance with the provisions of Indentures, eliminate any existing subsidiary guarantee of the Notes;

•impair the right to receive, and to institute suit for the enforcement of, any payment with respect to the Notes; or

•make any change to the amendment and waiver provisions of the Notes.
Without the consent of any holder, we, the subsidiary guarantors and the trustee may amend the Indentures to, among other things, cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor of our or any subsidiary guarantor’s obligations under the Indentures as permitted thereunder, to provide for the issuance of additional notes in accordance with the limitations set forth in the Indenture, to add guarantees with respect to the Notes or to make any other change that does not adversely affect the rights of any holder in any material respect.
The holders of at least a majority in principal amount of the outstanding Notes affected may waive compliance by us with certain restrictive provisions of the Indenture. The holders of at least a majority in principal amount of the outstanding Notes may waive any past default under the Indentures, except a default in the payment of principal or interest and certain covenants and provisions of such Indenture which cannot be amended without the consent of the holder of each outstanding Note.
Discharge
When (i) we deliver to the trustee all outstanding Notes (other than Notes replaced because of mutilation, loss, destruction or wrongful taking) for cancellation or (ii) all outstanding Notes have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption as described above, and we irrevocably deposit with the trustee funds sufficient to pay at maturity or upon redemption all outstanding Notes, including interest thereon, and if in either case we pay all other sums related to the Notes payable under the Indentures by us, then the Indentures will, subject to certain surviving provisions,
15



cease to be of further effect. The trustee shall acknowledge satisfaction and discharge of the Indentures with respect to the Notes on our demand accompanied by an officer’s or officers’ certificate (as described in the applicable Indenture) and an opinion of counsel.
Governing Law
The Indentures, the Notes and the subsidiary guarantees will be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.
Regarding the Trustee
The Indentures provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically set forth in the Indentures. During the existence of an event of default, the will exercise such rights and powers vested in it under the Indentures and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.

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Exhibit 22.1

List of the Issuer and its Guarantor Subsidiaries

As of June 30, 2020, the following subsidiaries of Advance Auto Parts, Inc. (the “Issuer”) guarantee the 4.50% senior unsecured notes due January 14, 2022 (the “2022 Notes”), the 4.50% senior unsecured notes due December 1, 2023 (the “2023 Notes”) and the 3.90% senior unsecured notes due April 15, 2030 (the “2030 Notes”), each issued by the Issuer:
Entity Jurisdiction of
Incorporation or
Organization 		2022 Notes 2023 Notes 2030 Notes
Advance Auto Parts, Inc. Delaware Issuer Issuer Issuer
AAP Financial Services, Inc. Virginia Guarantor Guarantor Guarantor
Advance Auto Business Support, LLC Virginia Guarantor Guarantor Guarantor
Advance Auto Innovations, LLC Virginia Guarantor Guarantor Guarantor
Advance e-Service Solutions, Inc. Virginia Guarantor Guarantor Guarantor
Advance Patriot, Inc. Delaware Guarantor Guarantor Guarantor
Advance Stores Company, Incorporated Virginia Guarantor Guarantor Guarantor
Advance Trucking Corporation Virginia Guarantor Guarantor Guarantor
Autopart International, Inc. Massachusetts Guarantor Guarantor Guarantor
B.W.P. Distributors, Inc. New York Guarantor Guarantor Guarantor
Crossroads Global Trading Corp. Virginia Guarantor Guarantor Guarantor
Discount Auto Parts, LLC Virginia Guarantor Guarantor Guarantor
Driverside, Inc. Delaware Guarantor Guarantor Guarantor
E-Advance, LLC Virginia Guarantor Guarantor Guarantor
General Parts Distribution LLC North Carolina Guarantor Guarantor Guarantor
General Parts International, Inc. North Carolina Guarantor Guarantor Guarantor
General Parts, Inc. North Carolina Guarantor Guarantor Guarantor
Golden State Supply LLC Nevada Guarantor Guarantor Guarantor
GPI Technologies LLC Delaware Guarantor Guarantor Guarantor
Lee Holdings NC, Inc. Delaware Guarantor Guarantor Guarantor
MotoLogic, Inc. Delaware Guarantor Guarantor Guarantor
Straus-Frank Enterprises, LLC Texas Guarantor Guarantor Guarantor
Western Auto of Puerto Rico, Inc. Delaware Guarantor Guarantor Guarantor
Western Auto of St. Thomas, Inc. Delaware Guarantor Guarantor Guarantor
WORLDPAC Puerto Rico, LLC Delaware Guarantor Guarantor Guarantor
WORLDPAC, Inc. Delaware Guarantor Guarantor Guarantor
Worldwide Auto Parts, Inc. California Guarantor Guarantor Guarantor



Exhibit 31.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas R. Greco, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Advance Auto Parts, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 18, 2020



/s/ Thomas R. Greco
Thomas R. Greco
President and Chief Executive Officer and Director



Exhibit 31.2
 
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey W. Shepherd, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Advance Auto Parts, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 18, 2020



/s/ Jeffrey W. Shepherd
Jeffrey W. Shepherd
Executive Vice President, Chief Financial Officer



Exhibit 32.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas R. Greco, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and 18 U.S.C. Section 1350, that, to my knowledge, the Quarterly Report on Form 10-Q of Advance Auto Parts, Inc. for the quarterly period ended July 11, 2020 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in such Report fairly presents in all material respects the financial condition and results of operations of the Company. The foregoing certification is being furnished to the Securities and Exchange Commission as part of the accompanying Report.

 
Date: August 18, 2020
By: 
/s/ Thomas R. Greco
Name: Thomas R. Greco
Title: President and Chief Executive Officer and Director


I, Jeffrey W. Shepherd, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and 18 U.S.C. Section 1350, that, to my knowledge, the Quarterly Report on Form 10-Q of Advance Auto Parts, Inc. for the quarterly period ended July 11, 2020 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in such Report fairly presents in all material respects the financial condition and results of operations of the Company. The foregoing certification is being furnished to the Securities and Exchange Commission as part of the accompanying Report.


Date: August 18, 2020
By: 
/s/ Jeffrey W. Shepherd
Name: Jeffrey W. Shepherd
Title: Executive Vice President, Chief Financial Officer