Pep Boys 2010 Annual Report Download - page 44

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38
PEP BOYS’ STATEMENT IN OPPOSITION TO THE FOREGOING SAHREHOLDER PROPOSAL
The Board of Directors recognizes its accountability to shareholders and supports the right of shareholders to call
special meetings. However, the Board also recognizes that special shareholder meetings are significant undertakings
that require considerable expense and management attention. Accordingly, our Bylaws permit the holders of 15% of
the common stock to call special meetings. The Board believes that this 15% threshold provides an appropriate
balance between ensuring the Board's accountability to a majority of shareholders and enabling the Board and
management to operate the Company effectively.
Allowing 10% of the outstanding common stock to call a special meeting, as contemplated by the proposal, could
allow a small minority of shareholders, who may not be focused on the long-term interests of all stockholders, to
exert undue influence by causing the Company to hold one or more special meetings outside of the traditional annual
meeting cycle, even if those shareholders are advocating an issue that is not supported by a majority of the
Company's stockholders.
Moreover, the Board's governance practices and policies demonstrate its commitment to being accountable to the
Company's investors.
• Declassified Board – All Directors Elected Annually
• Majority Voting in Uncontested Elections of Directors
• Separated Roles of Chairman of the Board and Chief Executive Officer
• No Shareholder Rights (Poison Pill) Plan
Accordingly, the Board of Directors believes that the proposal should be evaluated in the context of the
Company's overall corporate governance.
For these reasons we believe that this proposal is unnecessary, that it would divert Company resources and
deliver no benefit to shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"AGAINST"
THE SHAREHOLDER PROPOSAL REGARDING LOWERING THE THRESHOLD
REQUIRED TO CALL A SPECIAL MEETING OF SHAREHOLDERS