Pep Boys 2006 Annual Report Download - page 35

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29
meaningful voice in a takeover context.
Additionally:
ƔOur directors also served on boards rated D by The Corporate Library
http://www.thecorporatelibrarv.com/, an independent investment research firm:
1) Mr. White Playtex (PYX) D-rated
2) Mr. Hotz Universal Health (UHS) D-rated
ƔThree directors held less than 628 shares each:
Mr. White
Ms. Atkins
Mr. Williams
The above status shows there is room for improvement and reinforces the reason to take one step forward now and
vote yes:
Subject Poison Pills to a Shareholder Vote
Yes on 3.”
PEP BOYS’ STATEMENT IN OPPOSITION TO THE FOREGOING SHAREHOLDER PROPOSAL
The Board of Directors originally adopted our Shareholder Rights Plan in December 1987, renewed and updated
it in December 1997 and amended it further in August 2006 to protect and maximize the value of every
shareholder’s investment in Pep Boys.
The Board of Directors maintains a special committee of independent Directors which annually evaluates our
Shareholder Rights Plan. To assist in its evaluation, the Committee consults with outside counsel and our primary
investment bankers and makes recommendations to the full Board concerning the maintenance, amendment or
redemption of the Shareholder Rights Plan.
Following this year’s evaluation and recognizing that the shareholders have previously voted in favor of the
recommendation that Pep Boys should not maintain our current Shareholder Rights Plan, the Board of Directors has
determined to allow the Shareholder Rights Plan to expire, in accordance with its terms, on December 31, 2007.
By allowing the Shareholder Rights Plan to expire in due course, rather than immediately redeeming the plan
(which would serve to extinguish the plan only a few months earlier than its scheduled expiration), the Company
will avoid the redemption expense of approximately $500,000.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
“AGAINST”
THE FOREGOING SHAREHOLDER PROPOSAL
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and 10% Holders
to file initial reports of ownership and reports of changes in ownership of Pep Boys Stock. Based solely upon a
review of copies of such reports, we believe that during fiscal 2006, our directors, executive officers and 10%
Holders complied with all applicable Section 16(a) filing requirements.