<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE PEP BOYS - MANNY, MOE & JACK
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
THE PEP BOYS -- MANNY, MOE & JACK
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
________________
To the Shareholders of The Pep Boys - Manny, Moe & Jack:
The 2000 Annual Meeting of Shareholders of The Pep Boys Manny, Moe & Jack
will be held at the Radisson Valley Forge Hotel, 1160 First Avenue, King of
Prussia, Pennsylvania, on Wednesday, May 31, 2000, at 9:00 a.m. for the
following purposes:
1. To elect two Directors to hold office as specified in the proxy statement.
2. To approve the appointment of independent auditors.
3. To transact such other business, including action on a shareholder
proposal, as may properly come before the meeting.
The close of business on Friday, April 7, 2000 has been fixed as the
record date for the meeting. Only shareholders of record as of that date will be
entitled to notice of and to vote at said meeting and any adjournment or
postponement thereof.
The accompanying form of proxy is solicited by the Board of Directors of
the Company. Reference is made to the attached proxy statement for further
information with respect to the business to be transacted at the meeting.
The Board of Directors urges you to date, sign and return promptly the
accompanying form of proxy to give voting instructions with respect to your
shares of Common Stock. You are cordially invited to attend the meeting in
person. The return of the accompanying form of proxy will not affect your right
to vote in person if you do attend the meeting.
Frederick A. Stampone
Senior Vice President -
Chief Administrative Officer & Secretary
April 27, 2000
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
____________
PROXY STATEMENT
____________
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Pep Boys - Manny, Moe & Jack (the
"Company") for use at the Company's Annual Meeting of Shareholders (the
"meeting") to be held on Wednesday, May 31, 2000 at 9:00 a.m. at the Radisson
Valley Forge Hotel, 1160 First Avenue, King of Prussia, Pennsylvania, for the
purposes set forth in the foregoing Notice. This proxy statement, the foregoing
Notice and the enclosed proxy are being sent to shareholders on or about April
27, 2000.
The Company does not intend to bring any matters before the meeting except
those indicated in the Notice and does not know of any matter which anyone else
proposes to present for action at the meeting. If any other matters properly
come before the meeting, however, the persons named in the accompanying form of
proxy, or their duly constituted substitutes acting at the meeting, will be
deemed authorized to vote or otherwise to act thereon in accordance with their
judgment on such matters. Discretionary authority to cumulate votes is also
being solicited.
If the enclosed proxy is properly executed and returned prior to voting at the
meeting, the shares represented thereby will be voted in accordance with the
instructions marked thereon. In the absence of instructions, the shares will be
voted "For" the nominees of the Board of Directors in the election of directors,
subject to the discretion of the proxies to cumulate the votes in accordance
with their judgment, "For" the proposal to approve the appointment of
independent auditors, and "Against" the shareholder proposal regarding the sale
of the Company to the highest bidder. Any proxy may be revoked at any time
prior to its exercise by notifying the Secretary of the Company in writing, by
delivering a duly authorized proxy bearing a later date, or by attending the
meeting and voting in person.
According to state law and the Company's By-laws, the presence of a quorum is
required to transact business at the meeting. A quorum is defined as the
presence, either in person or by proxy, of a majority of the votes that all
shareholders are entitled to cast on a particular matter. Proxies marked
"Abstain" will be included in determining a quorum. On routine matters, brokers
who hold customer shares in "street name" but have not timely received voting
instructions from such customers have discretion to vote such shares.
Accordingly, the presence of such votes at the meeting will be included in
determining a quorum. The shareholder proposal, however, is considered a non-
routine matter by the New York Stock Exchange and, therefore, brokers who have
not timely received voting instructions from their customers do not have
discretion to vote those shares on such matter ("broker non-votes").
Accordingly, broker non-votes will not be included in determining a quorum with
respect to the shareholder proposal.
According to state law and the Company's By-laws, proposals must be approved
by the affirmative vote of a majority of the votes cast at the meeting.
Abstentions are not considered votes cast and therefore will have no effect on
the outcome of the proposals.
<PAGE>
OUTSTANDING SHARES, VOTING RIGHTS
AND SHAREHOLDINGS OF CERTAIN PERSONS
Outstanding Shares and Voting Rights
The Company's Common Stock is the only class of voting securities outstanding.
At the close of business on Friday, April 7, 2000, the record date for the
meeting, there were 53,189,369 shares of Common Stock outstanding. Of these
shares, 2,195,270 were held by the trustee under The Pep Boys - Manny, Moe &
Jack Flexitrust, a flexible employee benefits trust established on April 29,
1994 to fund a portion of the Company's obligations arising from various
employee compensation and benefit plans. Under the terms of the Flexitrust, all
shares held for participating employees by the trustee will be voted as directed
by written instructions from the participating employees, and shares for which
no instructions are received will be voted in the same proportion as the shares
for which instructions are received. The record holders of Common Stock on the
record date will be entitled to vote cumulatively in the election of directors
and to one vote per share on all other matters voted upon at the meeting.
Cumulative voting entitles each shareholder to a number of votes equal to the
number of shares owned by the shareholder on the record date multiplied by the
number of directors to be elected, and the shareholder may cast all of his votes
for one nominee for director or allocate the votes among all the nominees.
Share Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to shares of
the Company's Common Stock beneficially owned at the close of business on April
7, 2000 by each holder of 5% or more of the outstanding Common Stock, by each
director and nominee for director of the Company, by the Company's Chief
Executive Officer and four other most highly compensated executive officers
(collectively, the "named executive officers") and by all executive officers and
directors of the Company as a group. In accordance with Rule 13d-3 of the
Securities Exchange Act of 1934, shares are deemed to be "beneficially owned" by
a person, whether or not he has any economic interest in the shares, if he has
or shares the power to vote or dispose of the shares.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Name of Ownership of Percent
Beneficial Owner Common Stock of Class
---------------- ---------------- --------
<S> <C> <C>
FMR Corp................................................. 3,776,245 /(1)/ 7.1%
82 Devonshire Street, Boston, MA 02109
The Prudential Insurance Company of America............. 3,125,848 /(2)/ 5.9%
751 Broad Street, Newark, NJ 07102
Capital Group International, Inc........................ 2,885,100 /(1)/ 5.4%
11100 Santa Monica Blvd., Los Angeles, CA 90025
Flippin, Bruce & Porter, Inc............................ 2,857,795 /(3)/ 5.4%
800 Main Street, Suite 200, Lynchburg, VA 24505
Lester Rosenfeld......................................... 1,120,811 /(4)/
896,378 /(4a)/
---------
2,017,189 3.8%
Benjamin Strauss......................................... 832,312 /(5)/
994,310 /(5a)/
---------
1,826,622 3.4%
Mitchell G. Leibovitz.................................... 1,617,099 /(6)/
55,000 /(6a)/
---------
1,672,099 3.1%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Name of Ownership of Percent
Beneficial Owner Common Stock of Class
---------------- ------------ --------
<S> <C> <C>
Michael J. Holden............................................ 268,355/(7)/
55,000/(6a)/
---------
323,355 +
Mark L. Page................................................. 239,260/(8)/
Bernard J. Korman............................................ 176,039/(9)/ +
Lennox K. Black.............................................. 127,239/(10)/ +
Frederick A. Stampone........................................ 81,317/(11)/ +
Robert E. Brann.............................................. 34,000/(8)/ +
Myles H. Tanenbaum........................................... 24,712/(12)/ +
J. Richard Leaman, Jr........................................ 23,437/(13)/ +
Malcolmn D. Pryor............................................ 9,831/(14)/ +
Executive Officers and Directors as a Group (13 Persons)..... 6,569,100/(15)/ 12.0%
</TABLE>
___________________
+ Represents less than 1%.
(1) Based upon information disclosed in a Schedule 13-G dated February 14,
2000.
(2) Based upon information disclosed in a Schedule 13-G dated February 7,
2000.
(3) Based upon information disclosed in a Schedule 13-G dated February 4,
2000.
(4) This includes 50,976 shares owned by Mr. Rosenfeld's spouse, 45,000 shares
owned by a trust in which Mr. Rosenfeld has a beneficial interest, 30,300
shares owned by two trusts in which Mr. Rosenfeld and his spouse have
beneficial interests and 14,539 shares issuable pursuant to non-qualified
stock options exercisable within 60 days.
(4a) This includes 451,900 shares owned by The Emanuel Rosenfeld Foundation, a
non-profit charitable foundation of which Mr. Rosenfeld is a co-trustee,
352,962 shares owned by various trusts of which Mr. Rosenfeld and his
spouse are co-trustees and 91,516 shares owned by various trusts of which
Mr. Rosenfeld's spouse is a co-trustee.
(5) This includes 1,931 shares owned by Mr. Strauss' spouse, 66,384 shares
owned by a trust in which Mr. Strauss has a beneficial interest, 37,729
shares owned in custody or trust for the benefit of Mr. Strauss' minor
child and 12,935 shares issuable pursuant to non-qualified stock options
exercisable within 60 days.
(5a) These shares are owned by The Strauss Foundation, a non-profit charitable
foundation, of which Mr. Strauss is a co-trustee.
(6) This includes 58,131 shares owned by two trusts which benefit Mr.
Leibovitz' children of which Mr. Leibovitz' spouse is a co-trustee, 45,623
shares owned by Mr. Leibovitz' spouse, 49,204 shares owned by Mr.
Leibovitz's children, 100,000 shares owned by an irrevocable Grantor
Retained Annuity Trust for the benefit of Mr. Leibovitz for which Mr.
Leibovitz' spouse acts as trustee and 1,050,000 shares issuable pursuant
to incentive and non-qualified stock options exercisable within 60 days.
Mr. Leibovitz disclaims beneficial ownership in stock held by Mr.
Leibovitz' spouse and his children.
(6a) These shares are owned by a trust for the Company's defined benefit
pension plan, of which Messrs. Leibovitz and Holden were co-trustees as of
the record date. Messrs. Leibovitz and Holden disclaim beneficial
ownership in such stock.
(7) This includes 213,000 shares issuable pursuant to incentive and non-
qualified stock options exercisable within 60 days. Mr. Holden resigned
from the Company for personal reasons effective April 14, 2000. Any of the
213,000 stock options which remain unexercised after June 13, 2000 will be
canceled in accordance with their terms.
(8) This represents shares issuable pursuant to incentive and non-qualified
stock options exercisable within 60 days.
(9) This includes 17,039 shares issuable pursuant to non-qualified stock
options exercisable within 60 days.
(10) This includes 200 shares owned by Mr. Black's spouse and 17,039 shares
issuable pursuant to non-qualified stock options exercisable within 60
days. Mr. Black disclaims beneficial ownership in stock held by Mr.
Black's spouse.
(11) This includes 33 shares owned by Mr. Stampone's minor child and 71,000
shares issuable pursuant to incentive and non-qualified stock options
exercisable within 60 days.
(12) This includes 9,712 shares issuable pursuant to non-qualified stock
options exercisable within 60 days.
(13) This includes 21,437 shares issuable pursuant to non-qualified stock
options exercisable within 60 days.
(14) This includes 530 shares owned by Mr. Pryor's spouse, 500 shares owned by
Mr. Pryor's minor children and 8,801 shares issuable pursuant to non-
qualified stock options exercisable within 60 days. Mr. Pryor disclaims
beneficial ownership in stock held by Mr. Pryor's spouse and minor
children.
(15) This includes 1,777,762 shares issuable pursuant to incentive and non-
qualified stock options exercisable within 60 days granted to all
directors and executive officers (the named executive officers and George
Babich, Jr., who was appointed Senior Vice President - Finance, Chief
Financial Officer & Treasurer effective March 28, 2000). Totals do not add
in order to avoid double counting of positions as co-trustee.
3
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election
At the meeting, the shareholders will elect two directors to hold office,
subject to the provisions of the Company's By-laws, until the Annual Meeting of
Shareholders in 2001 and until their respective successors shall have been duly
elected and qualified. On March 28, 2000, the Board of Directors approved an
amendment to the Company's By-laws to declassify the Board of Directors. Prior
to the amendment, the Board of Directors was divided into three classes serving
staggered three-year terms, the term of one class of directors to expire each
year. The terms of the two present Class II directors expire at the meeting;
the terms of the three present Class I directors expire at the 2001 Annual
Meeting of Shareholders; and the terms of the three present Class III directors
expire at the 2002 Annual Meeting of Shareholders. As amended, the By-laws now
provide for each current director to serve the remainder of the term to which he
was elected and all newly elected and re-elected directors to serve a one-year
term. Unless contrary instructions are given, the persons named in the enclosed
proxy or their substitutes will vote for the election of the nominees named
below, reserving the right to cumulate votes according to their judgment. The
Board of Directors believes that all of the nominees are willing to serve as
directors. However, if any nominee at the time of election is unable to serve
or is otherwise unavailable for election, and as a result other nominees are
designated by the Board of Directors, the persons named in the enclosed proxy or
their substitutes intend to vote for the election of such designated nominees.
The two nominees for director receiving a plurality of the votes cast will be
elected.
The nominees for election as directors to serve until the Annual Meeting of
Shareholders in 2001 and the directors whose terms of office continue after the
meeting, together with certain information about them, are as follows:
<TABLE>
<CAPTION>
Has Been
a Director Term Present Position
Name Age Since Expires With Company
---- --- ----- ------- ------------
<S> <C> <C> <C> <C>
Nominees
Bernard J. Korman................................. 68 1983 2000 Director
J. Richard Leaman, Jr............................. 65 1991 2000 Director
Class I Directors
Benjamin Strauss.................................. 63 1970 2001 Director
Myles H. Tanenbaum................................ 69 1990 2001 Director
Malcolmn D. Pryor................................. 53 1994 2001 Director
Class III Directors
Mitchell G. Leibovitz............................. 54 1985 2002 Director, Chairman,
CEO and President
Lester Rosenfeld.................................. 74 1959 2002 Director
Lennox K. Black................................... 70 1987 2002 Director
</TABLE>
Occupations and Other Directorships Held by Directors and Nominees
Bernard J. Korman is Chairman of the Board of Philadelphia Health Care
Trust, a private foundation, and of NutraMax Products, Inc., a public consumer
healthcare products company. Until October 1995, Mr. Korman was President, Chief
Executive Officer and a director of MEDIQ Incorporated. Mr. Korman is also a
director of The New America High Income Fund, Inc., Omega Healthcare Investors,
Inc., Omega Worldwide, Inc. and Kranzco Realty Trust.
J. Richard Leaman, Jr. is President of JRL Consulting Company. Until May
1995, Mr. Leaman was President and Chief Executive Officer of S.D. Warren
Company, which manufactures and distributes coated and uncoated
4
<PAGE>
printing and publishing papers. From 1991 until December 1994, Mr. Leaman was
Vice Chairman of the Board of Scott Paper Company. Mr. Leaman is also a director
of Church & Dwight Co., Inc. and Ranpak Corp.
Benjamin Strauss is a director of The Strauss Foundation. He was an
executive officer of the Company for many years until his retirement on February
1, 1992 and served as a part-time consultant to the Company for five years
thereafter.
Myles H. Tanenbaum is Chairman of the Board of Arbor Enterprises, owner and
operator of a chain of shared office suites. Until December 1997, Mr. Tanenbaum
was President, Chief Executive Officer and a director of Arbor Property Trust, a
New York Stock Exchange listed real estate investment trust. Mr. Tanenbaum is
also a trustee of Universal Health Realty Income Trust, a New York Stock
Exchange listed real estate investment trust.
Malcolmn D. Pryor is Chairman of the Board of Pryor, Counts & Co., Inc., an
investment banking firm headquartered in Philadelphia with offices in numerous
cities in the United States. Until February 1998, Mr. Pryor was a director of
PCS Development Corp.
Mitchell G. Leibovitz has been an executive officer of the Company for more
than the last five years.
Lester Rosenfeld is retired. He was employed as an executive officer of the
Company until December 31, 1981, and served as a part-time consultant to the
Company for 10 years thereafter.
Lennox K. Black is Chairman of the Board and Interim Chief Executive
Officer of Teleflex Incorporated, a diversified technical company active in
aerospace, automotive, medical and industrial markets, the stock of which is
traded on the New York Stock Exchange. Mr. Black is also Chairman of the Board
of Penn Virginia Corporation, and is a director of ImageMax, Inc. Until October
1999, Mr. Black was a director of Quaker Chemical Corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
NOMINATED DIRECTORS.
Meetings and Committees of the Board of Directors
The Board of Directors held five regularly scheduled meetings during the
last fiscal year.
The Board of Directors has an Audit Committee, a Compensation Committee and
a Nominating Committee.
The directors who are members of the Audit Committee are Messrs. Leaman
(chairman), Pryor, and Tanenbaum. The Audit Committee, which held four meetings
during the last fiscal year, reviews the audited financial statements of the
Company and makes recommendations to the full Board on matters concerning the
Company's audits.
The directors who are members of the Compensation Committee are Messrs.
Korman (chairman), Black and Tanenbaum. The Compensation Committee, which held
three meetings during the last fiscal year, recommends the compensation for all
officers of the Company.
The directors who are members of the Nominating Committee are Messrs. Black
(chairman), Korman and Tanenbaum. The Nominating Committee, which held one
meeting during the last fiscal year, makes recommendations to the full Board
concerning the qualifications and selection of candidates for election to the
Board. The Committee will consider nominees recommended by shareholders. Such
recommendations should be sent in writing to the Secretary of the Company, 3111
West Allegheny Avenue, Philadelphia, PA 19132, stating in detail the
qualifications of such persons for nomination. In addition to the foregoing, a
shareholder may nominate one or more persons for election as a director at a
meeting of the shareholders if the shareholder gives timely notice of such
intention in writing to the President of the Company in accordance with the
Company's By-laws. To be timely, the shareholder's notice must be delivered
personally to the Company, or mailed to and received by the Company, at the
principal executive offices of the Company, addressed to the attention of the
President, not less than 50 days nor more than 75 days prior to such meeting;
provided, however, that in the event that less than 65
5
<PAGE>
days' notice or prior public disclosure (including but not limited to the
mailing of the meeting notice) of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received not later
than the close of business on the 10th day following the day on which such
public disclosure was made. In addition, the shareholder's notice must set forth
the names and addresses of the shareholder making the nomination and of the
proposed nominees, a representation that said shareholder intends to appear in
person or by proxy at the meeting to nominate the proposed nominees, the
proposed nominees' principal occupation(s) and employment for the past 5 years,
the written consent of each proposed nominee to serve as a director of the
Company if so elected, a description of any other directorships held by the
proposed nominees, and a description of all arrangements or understandings
between each nominee and any other person or persons (such other person or
persons to be named in the notice) pursuant to which the nomination or
nominations are to be made or pursuant to which votes are to be cast or other
actions taken at any meeting of the Company's shareholders. The presiding
officer of the meeting may declare invalid any nomination not made in compliance
with the foregoing procedure.
In the last fiscal year, each director attended at least 75% of the meetings
held by the Board of Directors and at least 75% of the meetings held by each of
the committee(s) on which such director served.
Compensation of Directors
In fiscal year 1999, the Company modernized its non-management director
compensation structure in order to establish a more appropriate correlation
between directors' responsibilities and their compensation and to ensure that
the Company is able to maintain its current directors and attract new directors
as needed.
Each non-management director currently receives an annual director's fee of
$25,000, plus $2,500 for each Board committee on which such director serves.
Under a deferred compensation plan, directors' fees may be deferred in whole or
in part at the election of the director. Compensation so deferred may be deemed
to be invested in shares of Common Stock determined by reference to the market
price on the date the same is deemed invested, if so designated by the director.
Amounts deemed invested in shares are credited with dividends; other amounts
accrue interest at the prime rate charged by the Company's principal lender.
The Company's 1999 Stock Incentive Plan (the "1999 Plan") provides for an
automatic grant to non-management directors upon their first election to the
Board (or when first serving as a non-management director) and on each fourth
anniversary thereafter of: (i) options to purchase 2,500 shares of Common Stock,
(ii) options to purchase an additional 5,000 shares for each committee of the
Board on which such non-management director serves or is to serve, and (iii)
options to purchase an additional 2,500 shares for each chairmanship of a
committee of the Board which such non-management director holds or is to hold.
Options granted to non-management directors are priced at fair market value on
the date of grant and are exercisable in cumulative installments, with one-fifth
of the options being immediately exercisable and an additional one-fifth of the
options becoming exercisable on each of the next four anniversary dates.
The 1999 Plan is administered by the Compensation Committee of the Board of
Directors, which is composed of three non-management directors (the
"Committee"). The Committee is authorized to interpret and implement the 1999
Plan and the documents entered into pursuant to the 1999 Plan, and to make all
determinations necessary or advisable in administering the 1999 Plan.
On August 31, 1999 the Committee recommended, and the Board approved, the
initial grant of options under the 1999 Plan to each non-management director
then serving on the Board in accordance with the automatic grant formula
described above.
Benjamin Strauss, an executive officer of the Company for many years, entered
into a consulting and retirement agreement as of February 2, 1992 pursuant to
which Mr. Strauss received certain retirement benefits in fiscal year 1999 and
will continue to receive such benefits during the ten year period ending with
fiscal year 2001. Benefits given to Mr. Strauss are in addition to the fees and
options to which Mr. Strauss is entitled as a non-management director of the
Company.
6
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of the
Common Stock to file initial reports of ownership and reports of changes in
ownership of the Common Stock. To the Company's knowledge, based solely upon a
review of copies of such reports furnished to the Company, during fiscal year
1999, its directors, executive officers and greater than ten percent
shareholders complied with all applicable Section 16(a) filing requirements.
EXECUTIVE COMPENSATION
The following table sets forth, for each of the Company's last three fiscal
years, the cash compensation paid or accrued by the Company, as well as certain
other compensation paid or accrued for those years, to the Company's Chief
Executive Officer and each of the other named executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
-------------------- ------------
Awards
------
Securities All Other
Name and Fiscal Underlying Compensation
Principal Position Year Salary ($) Bonus ($) Options (#) ($)(a)
- ------------------------------------- ------------- ---------------- --------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
Mitchell G. Leibovitz................ 1999 825,000 -- 500,000 125,090/(b)/
Chief Executive Officer and 1998 825,000 -- 500,000 126,498/(b)/
President 1997 812,020 -- -- 126,448/(b)/
Michael J. Holden.................... 1999 370,000 25,160 75,000 7,319
Executive Vice President/(c)/ 1998 366,539 -- 125,000 8,076
1997 346,539 -- 25,000 7,625
Mark L. Page......................... 1999 280,500 19,244 25,000 1,546
Senior Vice President - 1998 266,539 -- 100,000 1,873
Store Operations 1997 245,673 -- 25,700 1,814
Robert E. Brann...................... 1999 256,153 17,680 25,000 47,722/(e)/
Senior Vice President - 1998 96,924/(d)/ -- 50,000 39,014/(e)/
Merchandising 1997 -- -- -- --
Frederick A. Stampone................ 1999 243,000 16,524 25,000 5,582
Senior Vice President - 1998 243,474 -- 100,000 5,835
Chief Administrative Officer 1997 229,339 -- -- 5,578
</TABLE>
(a) All Other Compensation for fiscal year 1999 includes the following: (1) the
amount (if any) contributed by the Company to each named executive officer's
account in the Company's 401(k) Savings Plan, as follows: Mr. Leibovitz --
$4,800; Mr. Holden -- $4,800; Mr. Brann -- $1,800; and Mr. Stampone $4,800;
and (2) the cost of group term life insurance premiums in excess of $50,000
of coverage provided by the Company on behalf of each named executive
officer, as follows: Mr. Leibovitz -- $4,064; Mr. Holden -- $2,519; Mr.
Page -- $1,546; Mr. Brann -- $2,413; and Mr. Stampone -- $782.
(b) Included in this amount is $116,226 in net premiums for a split-dollar life
insurance policy on behalf of Mr. Leibovitz, which will be repaid to the
Company upon surrender of the policy during Mr. Leibovitz' lifetime or upon
his death.
(c) Mr. Holden resigned from the Company for personal reasons effective April
14, 2000.
(d) Mr. Brann's employment with the Company commenced on August 31, 1998.
(e) Included in the amounts in this column is $82,259 for a relocation bonus
and for reimbursement of certain moving and temporary living
expenses.
7
<PAGE>
Employment and Change in Control Agreements
During fiscal year 1998, the Company entered into an employment agreement with
Mr. Leibovitz, the Company's Chief Executive Officer and Chairman of the Board
of Directors, which provides that the Company will continue to employ Mr.
Leibovitz for not less than a three-year period ending on June 3, 2001. The
agreement automatically renews for successive 3-year periods unless either party
terminates it at least three months before expiration. During the term of the
agreement, Mr. Leibovitz shall be entitled to receive a base salary in an amount
not less than his base salary for fiscal year 1998, benefits comparable to those
available to him prior to the agreement becoming effective, and a position with
authority, status, duties and responsibilities consistent with those of the
Chief Executive Officer and Chairman of the Board of a publicly traded
corporation. In addition, upon a "change in control" of the Company, Mr.
Leibovitz shall be entitled to receive an amount equal to three times his base
salary and target bonus for the fiscal year during which the change in control
occurs.
During fiscal years 1998 and 1999, the Company entered into agreements with
the other named executive officers of the Company, which generally become
effective upon a "change in control" of the Company. The agreements will become
effective for a term of two years with respect to each executive. During the
term of each agreement, the executive would be entitled to compensation at a
rate not less than his compensation immediately prior to the change in control
becoming effective, including both base compensation and certain incentive
compensation, benefits comparable to those available prior to the change in
control, and a position with authority, status and responsibilities comparable
in all material respects to those held previously. If the executive's position
is changed after the agreement becomes effective, he has the right to terminate
the agreement and receive a lump sum payment equal to the compensation to which
he is entitled for the remaining term of the agreement, and he and his family
are to receive the benefits to which he is entitled for the remaining term of
the agreement or a payment equal to the value of those benefits.
To the extent that any change in control payment to the Company's Chief
Executive Officer or any of the other named executive officers, pursuant to the
foregoing employment or change in control agreements, would subject the named
executive officer to an excise tax imposed by Section 4999 of the Internal
Revenue Code (a parachute payment excise tax), the Company is obligated to pay
such named executive officer an additional payment to cover any such excise tax.
In addition, a trust agreement has been established to better assure the named
executive officers of payment under the foregoing employment and change in
control agreements if a change in control of the Company should occur.
Certain Relationships and Related Transactions
During fiscal years 1997 and 1999, the Company made advances to Mr. Page,
Senior Vice President - Store Operations, aggregating $140,000 and $40,000,
respectively. Mr. Page delivered promissory notes to the Company on account of
such indebtedness. The 1997 note provides for principal repayment, if not paid
earlier, on December 18, 2002, and for interest payments during the term of the
note at the rate of 5.2% per annum. The 1999 note provides for principal
repayment, if not paid earlier, on July 12, 2004, and for interest payments
during the term of the note at the rate of 5.63% per annum. As of April 7,
2000, the amounts of indebtedness outstanding under the notes were $140,000 and
$40,000, respectively.
8
<PAGE>
Stock Option Grants
The following table sets forth information concerning the grant of stock
options under the 1999 Plan and its predecessor, the Company's 1990 Stock
Incentive Plan, to the Company's Chief Executive Officer and each of the other
named executive officers during fiscal year 1999.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
-----------------
Number of % of Total Potential Realized Value
Securities Options at Assumed Annual Rates
Underlying Granted to Exercise or of Stock Price Appreciation
Options Employees in Base Price Expiration for Option Term
-----------------------------
Name Granted (#)(a) Fiscal Year (b) ($/Sh) Date 5% ($) 10% ($)
---- ---------- -------------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Mitchell G. Leibovitz.... 500,000 33.6 15.6875 8/19/09 4,932,892 12,500,917
Michael J. Holden........ 75,000 5.0 18.6250 6/02/09 878,487 2,226,259
Mark L. Page............. 25,000 1.7 18.6250 6/02/09 292,829 742,086
Robert E. Brann.......... 25,000 1.7 18.6250 6/02/09 292,829 742,086
Frederick A. Stampone.... 25,000 1.7 15.6875 8/19/09 246,645 625,046
</TABLE>
__________
(a) The options were granted at a price equal to fair market value on the date
of grant and provide that 20% are exercisable immediately and an additional
20% are exercisable on each of the next four anniversaries of the date of
grant.
(b) In fiscal year 1999, options to purchase 1,488,450 shares of Common Stock
were granted to 2,056 individuals, including store and service department
managers and their supervisors.
Stock Option Exercises and Holdings
The following table sets forth information related to options exercised during
fiscal year 1999 by the Company's Chief Executive Officer and each of the other
named executive officers, and the number and value of options held by such
individuals on January 29, 2000.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options at
Acquired Value Fiscal Year-End (#) Fiscal Year-End ($)(a)
------------------------------- ------------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- --------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell G. Leibovitz.... 350,000 697,063 (b) 950,000 700,000 -- --
Michael J. Holden (c).... -- -- 185,000 140,000 -- --
Mark L. Page............. -- -- 207,260 85,140 -- --
Robert E. Brann.......... -- -- 25,000 50,000 -- --
Frederick A. Stampone.... 50,000 162,688 (d) 70,000 80,000 -- --
</TABLE>
_______________
(a) Based on the New York Stock Exchange Composite closing price as published
in the Wall Street Journal for the last business day of the fiscal year
($7.375).
(b) This amount represents the pre-tax proceeds from the exercise of 350,000
non-qualified stock options that were to expire on September 2, 1999. In
order to effectuate the exercise and satisfy the related tax liability, Mr.
Leibovitz sold 320,000 shares and retained the 30,000 shares that remained.
(c) Mr. Holden resigned from the Company for personal reasons effective April
14, 2000. Any of his stock options which remain unexercised after June
13, 2000 will be canceled in accordance with their terms.
(d) This amount represents the pre-tax proceeds from the exercise of 50,000
non-qualified stock options that were to expire on September 2, 1999. In
order to effectuate the exercise and satisfy the related tax liability, Mr.
Stampone sold 45,000 shares and retained the 5,000 shares that remained.
9
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Bernard J. Korman (chairman), Lennox K.
Black, and Myles H. Tanenbaum. There are no relationships of a nature required
to be disclosed herein.
Report of Compensation Committee of the Board of Directors on Executive
Compensation
The Compensation Committee (the "Committee") is comprised of three non-
management directors of the Company. The Committee reviews and recommends to
the Board of Directors compensation for the Chief Executive Officer and the
other executive officers of the Company. Individual performance is evaluated
based on the specific responsibilities of the executive and the value of the
services provided, the executive's management skills and experience and the
individual's contribution to the overall performance and profitability of the
Company. At the present time, executive compensation consists of base salary,
bonus compensation under the Company's Incentive Bonus Plan ("Bonus Plan") and
stock options under the 1999 Plan. In addition, a portion of the stock options
granted to the officers during fiscal year 1999 were granted under the 1990
Plan. The fiscal year 1999 base salaries, bonus awards and stock option grants
for the Company's Chief Executive Officer and each of the other named executive
officers set forth on page 7 were reviewed and approved at meetings of the
Committee held during fiscal years 1998, 1999 and 2000.
Base salaries are reviewed annually to properly reflect the experience,
performance and scope of responsibility of the executives and to ensure that the
salaries are at levels which are appropriate to attract and retain high quality
individuals. The Chief Executive Officer did not receive a salary increase in
fiscal years 1999 or 2000. The increases in the base salaries of the other
named executive officers in fiscal years 1999 and 2000 were based on subjective
determinations taking into account the criteria described above.
The Bonus Plan is administered by the Committee, which has the power and
authority to take all actions and make all determinations which it deems
necessary or desirable to effectuate, administer or interpret the Bonus Plan,
including the power and authority to extend, amend, modify or terminate the
Bonus Plan at any time and to change award periods and determine the time or
times for payment of bonuses. The Committee establishes the bonus targets and
performance goals, and establishes any other measures which may be necessary to
meet the objectives of the Bonus Plan. On March 31, 1998, after consideration
of an executive compensation study completed by Towers Perrin in March 1998, the
Committee recommended, and the full Board of Directors approved, changes to the
Bonus Plan for fiscal year 1998 and future years which established five
categories of business criteria used to set performance goals for the Chief
Executive Officer and the other executive officers under the Bonus Plan. These
categories are: (1) earnings before interest and taxes; (2) net sales; (3) cash
flow; (4) return on capital; and (5) customer satisfaction. For each fiscal
year, the Committee selects one or more of these business criteria to measure
the Company's performance for purposes of the Bonus Plan, and sets the target
performance level for each criterion so chosen and the weighting of each such
criterion versus the other criteria. The entire bonus payment under the Bonus
Plan to the Company's Chief Executive Officer, and a portion of each bonus
payment under the Bonus Plan to each of the other executive officers, is
attributable to the Company's performance and varies from year to year based
upon the Company's actual performance relative to the Company's performance
targets being used for the fiscal year. The balance of each bonus payment under
the Bonus Plan to each such other executive officer of the Company is
attributable to the officer's individual performance and varies from year to
year based upon a subjective determination of the officer's actual performance
relative to the officer's individual or "small team" performance goals being
used for the fiscal year. As a result of the Company's satisfaction of certain
cash flow criteria established under the Bonus Plan, the Committee recommended,
and the full Board of Directors approved, fiscal year 1999 bonus payments to
each of the named executive officers, other than the Chief Executive Officer.
Compensation through stock options, which directly aligns the interests of
management with those of shareholders, is a very significant part of the
Company's executive compensation. The Company's practice is to make periodic
grants of stock options to its executives. In making grants of stock options,
the Committee considers both the performance of the executive and the time since
the most recent grant. The intention is to provide a long-term incentive
opportunity equal to the median of the broad industry and specialty retail
databases. The 1999 Plan provides for the grant of non-qualified and incentive
stock options at exercise prices equal to the fair market value
10
<PAGE>
on the date of grant. Options granted to the executive officers are generally
exercisable for ten years, absent earlier termination of employment, and provide
for deferred vesting over four years, with one-fifth vesting on the date of
grant and an additional one-fifth vesting on each of the next four anniversaries
of the grant. The provisions of the 1999 Plan provide executive officers of the
Company with a significant interest in long-term growth in the price of the
Company's Common Stock. In order to reflect increases in the named executive
officers' duties and responsibilities, the Committee recommended, and the full
Board of Directors approved, fiscal year 1999 stock option grants to each of the
named executive officers.
A combination of base salary, bonus awards and stock option grants reflects
the short and long term goals of the Company and aligns executive financial
rewards with those of the Company's shareholders. The Company's philosophy is
that overall compensation should be significantly related to the Company's
performance in terms of earnings and increases in the Company's value as
reflected by its stock price. Under most circumstances, the Company expects
that compensation payable to the Company's executive officers should meet the
conditions required for full deductibility under Section 162(m) of the Internal
Revenue Code. However, the Company believes that in order to effectively
compete with other similarly situated companies in the acquisition and retention
of top executive talent, the Company must have the flexibility to pay
compensation that is not fully deductible under Section 162(m). All
compensation earned by the named executive officers for fiscal year 1999 was
fully deductible. The 1999 Plan is structured with the intention that
compensation payable pursuant thereto qualifies as "performance based"
compensation which is not subject to the $1 million deductibility limit under
Section 162(m). Notwithstanding the Company's general policy, the Committee
retains the authority to authorize payments that may not be deductible under
Section 162(m) if it believes that such payments are in the best interests of
the Company and its shareholders.
This report is submitted by the Compensation Committee:
Bernard J. Korman
Lennox K. Black
Myles H. Tanenbaum
11
<PAGE>
Performance Graph
The following graph compares the cumulative total return on the Company's
shares over the past five fiscal years with the cumulative total return on
shares of companies in: (1) the Standard & Poor's SmallCap 600 Index (the "600
Index"); (2) an industry peer group (the "600 Peer Group") comprised of the
following companies currently in the 600 Index: J. Baker, Bombay Company, Books-
A-Million, Casey's General Stores, Cost Plus, Discount Auto Parts, Footstar,
Group 1 Automotive, Hancock Fabrics, Jo-Ann Stores, Linens N Things, Michael's
Stores, O'Reilly Automotive, Pier 1 Imports, The Sports Authority and Zale
Corp.; (3) the Standard & Poor's 500 Index (the "500 Index"); and (4) an
industry peer group (the "500 Peer Group") comprised of the Company and those
companies which currently comprise the Standard & Poor's Retail Specialty Index:
AutoZone, Bed, Bath & Beyond, Office Depot, Staples and Toys R Us. Since the
Company has moved from the 500 Index to the 600 Index, in future years the
Company expects to compare the cumulative total return on the Company's shares
with the cumulative total return on shares of companies in the 600 Index and 600
Peer Group instead of the 500 Index and 500 Peer Group.
Comparison of Five-Year Cumulative Total Return Among
the Company, the 600 Index, the 600 Peer Group, the 500 Index
and the 500 Peer Group
CHART APPEARS HERE
<TABLE>
<CAPTION>
___________________________________________________________________________
Jan 1995 Jan 1996 Jan 1997 Jan 1998 Jan 1999 Jan 2000
<S> <C> <C> <C> <C> <C>
_________________________________________________________________________________________________
PEP BOYS $100 $ 89 $ 99 $ 69 $ 50 $ 23
600 INDEX $100 $132 $163 $197 $196 $133
600 PEER GROUP $100 $ 64 $ 73 $ 99 $100 $ 69
500 INDEX $100 $139 $175 $222 $295 $295
500 PEER GROUP $100 $ 77 $ 93 $ 99 $ 82 $ 55
_________________________________________________________________________________________________
</TABLE>
Source: Standard & Poor's Compustat
12
<PAGE>
Pension and Other Benefit Plans
The Company has a qualified defined benefit pension plan for all employees
hired prior to February 2, 1992. Future benefit accruals on behalf of all
employees were frozen as of December 31, 1996.
The following table sets forth information concerning the amount of benefits
available at normal retirement age under this plan, which are not subject to
deduction for Social Security or other offset amounts, accrued to the Company's
Chief Executive Officer and each of the other named executive officers eligible
to participate under this plan. The amount of annual benefits available is
based on the employee's compensation level over the last five years and the
number of years of participation in the plan. The maximum annual benefit is
$20,000.
Annualized
Name Benefit($)
---- ----------
Mitchell G. Leibovitz......................................... 20,000
Michael J. Holden............................................. 20,000
Mark L. Page.................................................. 19,162
Frederick A. Stampone......................................... 20,000
The Company also has an executive supplemental pension plan, which is an
unfunded deferred compensation plan for eligible employees who are key employees
designated by the Board of Directors. All current executive officers of the
Company are covered by this plan. The executive supplemental pension plan
provides retirement and death benefits, which are not subject to deduction for
Social Security or other offset amounts. The employees covered by this plan
have a vested interest after five years as a participant in the plan. Death
benefits under the plan are in the annual amount of 50% of the base salary of
the eligible employee on the date of his death and are payable for 15 years or
until his normal retirement date, whichever is later. The plan also provides
for the lump sum distribution of the present value of the accrued benefits of an
eligible employee following a termination of employment in connection with a
"change in control" of the Company. A "change in control" shall be deemed to
have taken place if: (i) any person, including a "group" as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, becomes (other than as
a result of a purchase from the Company) the beneficial owner of shares of the
Company having 20% or more of the total number of votes that may be cast for the
election of directors of the Company (excluding shares of the Company owned by
such person prior to the date of the executive supplemental pension plan), and
such beneficial ownership continues for five consecutive days, or (ii) within a
period of two consecutive years, as the result of, or in connection with, any
cash tender or exchange offer (other than by the Company), merger or other
business combination, sale of assets or contested election or any combination of
the foregoing transactions, the persons who were directors of the Company prior
to such event shall cease for any reason to constitute at least a majority of
the Board of Directors of the Company or any successor. A trust agreement has
been established to better assure executive officers of payment of these
benefits if such events occur.
The executive supplemental pension is based upon the highest average
compensation of the executive officer for a five year period, except in the case
of the Company's Chief Executive Officer, in which event it is based on the
highest average compensation for a three year period. For fiscal years prior to
1995, base salary only is included in such determination; for fiscal year 1995
and thereafter, both base salary and the executive officer's bonus is included.
13
<PAGE>
The following chart shows, based on the highest average salary for the
appropriate time period, including bonus where applicable, the approximate
aggregate annuity under both pension plans, commencing at the employee's normal
retirement date (age 65) and payable for the longer of ten years or life:
Pension Plan Table
<TABLE>
<CAPTION>
Estimated Annual Retirement Income ($)
Years of Service
----------------
Average Included 25 and
Compensation 5 10 15 20 over
- -- -- -- ----
<S> <C> <C> <C> <C> <C>
200,000 ..................................... 20,000 40,000 60,000 80,000 100,000
400,000 ..................................... 40,000 80,000 120,000 160,000 200,000
600,000 ..................................... 60,000 120,000 180,000 240,000 300,000
800,000 ..................................... 80,000 160,000 240,000 320,000 400,000
1,000,000 ..................................... 100,000 200,000 300,000 400,000 500,000
1,200,000 ..................................... 120,000 240,000 360,000 480,000 600,000
1,400,000 ..................................... 140,000 280,000 420,000 560,000 700,000
1,600,000 ..................................... 160,000 320,000 480,000 640,000 800,000
</TABLE>
The credited years of service under the pension plans for the Company's Chief
Executive Officer and the other named executive officers, in the order in which
they are named on the Summary Compensation Table, are 21, 20, 24, 1 and 17,
respectively.
PROPOSAL TO APPROVE THE APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval by the shareholders, the Board of Directors, upon the
recommendation of the Audit Committee, has selected the firm of Deloitte &
Touche LLP, which served as the Company's independent auditors for the last
fiscal year, to serve as the Company's independent auditors with respect to the
consolidated financial statements of the Company and its subsidiaries for the
current fiscal year. If the shareholders do not approve this selection by the
affirmative vote of a majority of the votes cast at the meeting, other
independent auditors will be considered by the Board upon the recommendation of
the Audit Committee.
A representative of Deloitte & Touche LLP is expected to be present at the
meeting and will have the opportunity to make a statement if he or she desires
to do so. The representative is also expected to be available to respond to
appropriate questions of shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
SHAREHOLDER PROPOSAL
William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, beneficial
owner of 1,200 shares of Common Stock, notified the Company that he intends to
introduce the following resolution at the meeting:
"RESOLVED that the shareholders of The Pep Boys - Manny, Moe & Jack
Corporation urge The Pep Boys - Manny, Moe & Jack Board of Directors to
arrange for the prompt sale of The Pep Boys - Manny, Moe & Jack to the
highest bidder."
In support of this proposal, Mr. Steiner stated the following:
"The purpose of the Maximize Value Resolution is to give all The Pep
Boys - Manny, Moe, & Jack shareholders the opportunity to send a message to
the The Pep Boys - Manny, Moe & Jack Board that they support the prompt sale
of The Pep Boys - Manny, Moe & Jack to the highest bidder. A strong and or
14
<PAGE>
majority vote by the shareholders would indicate to the board the displeasure
felt by the shareholders of the shareholder returns over many years and the
drastic action that should be taken. Even if it is approved by the majority
of the The Pep Boys - Manny, Moe & Jack shares represented and entitled to
vote at the annual meeting, the Maximize Value Resolution will not be binding
on the The Pep Boys - Manny, Moe & Jack Board. The proponent however believes
that if this resolution receives substantial support from the shareholders,
the board may choose to carry out the request set forth in the resolution:
The prompt auction of The Pep Boys - Manny, Moe & Jack should be
accomplished by any appropriate process the board chooses to adopt including
a sale to the highest bidder whether in cash, stock, or a combination of
both. It is expected that the board will uphold its fiduciary duties to the
utmost during the process.
The proponent further believes that if the resolution is adopted, the
management and the board will interpret such adoption as a message from the
company's stockholders that it is no longer acceptable for the board to
continue with its current management plan and strategies.
I urge your support, vote for this resolution."
STATEMENT OF THE COMPANY IN OPPOSITION TO SHAREHOLDER PROPOSAL
Mr. Steiner's resolution is identical to the one introduced on his behalf at
the 1999 Annual Meeting of Shareholders. Over 95% of the shareholders who
voted on last year's resolution voted against it.
During fiscal year 1999, the Company continued the program begun in fiscal
year 1998 to re-deploy its assets and shift its operating model in order to
enhance and maximize shareholder value. The Board of Directors believes that a
"prompt sale of [the Company] to the highest bidder" would not properly
recognize the value of these initiatives and future prospects of the Company
and, therefore, would not be in the best interest of the Company, its
shareholders and employees.
The repositioning of the Company's business to coincide with the growth
categories of the automotive aftermarket has resulted in continued strength in
service and tires, as well as significant growth in the Company's commercial
delivery program. Unfortunately, below budget "do-it-yourself" sales had a
negative impact on the Company's earnings in fiscal year 1999. Despite industry-
wide weakness in the do-it-yourself category, the Board believes that the
Company's non-franchised, all-brands service capability and supply chain will
continue to provide the Company with unique growth opportunities. As a result,
the Board remains convinced that the steps that are being taken to reposition
the Company will enable the Company to maximize its strategic advantages and
enhance shareholder value in the technologically advancing automotive
aftermarket.
If approved by the shareholders, the proposal would serve merely as a
recommendation to the Board to take the necessary steps to sell the Company to
the highest bidder. The Board does not believe that taking steps to sell the
Company to the highest bidder is in the best interest of the Company or its
shareholders. Since most bidders may be unable to properly value the initiatives
and the future prospects of the Company, the management and resources of the
Company are better utilized by focusing on the Company's long-term objectives,
which include enhancement of shareholder value.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST" THE FOREGOING
SHAREHOLDER PROPOSAL.
15
<PAGE>
COST OF SOLICITATION OF PROXIES
The accompanying form of proxy will be voted as specified at the meeting.
The expense of the solicitation of the proxies, including the cost of
preparing and distributing material, the handling and tabulation of proxies
received and charges of brokerage houses and other institutions in forwarding
such documents to beneficial owners, will be paid by the Company. In addition
to the mailing of the proxy material, said solicitation may be made in person or
by telephone or telegraph by directors, officers or regular employees of the
Company or other persons who may be engaged to perform soliciting activities.
PROPOSALS OF SHAREHOLDERS
All proposals which any shareholder of the Company desires to present at the
next annual meeting and to have included in the next Board of Directors' Proxy
Statement and form of proxy relating to that meeting must be received by
Frederick A. Stampone, Senior Vice President - Chief Administrative Officer &
Secretary of the Company, at the address of the Company appearing on the first
page of the Proxy Statement, no later than December 28, 2000.
In addition to the foregoing, the Company's By-laws provide that a shareholder
may be entitled to present an item of business at a meeting of the shareholders
if the shareholder gives timely notice of such intention in writing to the
President of the Company. To be timely, the shareholder's notice must be
delivered to, or mailed and received by, the Company, addressed to the attention
of the President, at the principal executive offices of the Company not less
than 50 days nor more than 75 days prior to such meeting; provided, however,
that in the event that less than 65 days' notice or prior public disclosure
(including but not limited to the mailing of the meeting notice) of the date of
the meeting is given or made to shareholders, notice by the shareholder to be
timely must be received by the Company not later than the close of business on
the 10th day following the day on which such public disclosure was made. The
shareholder's notice must set forth a general description of each item of
business proposed to be brought before the meeting, the name and address of the
shareholder proposing to bring such item of business before the meeting and a
representation that the shareholder intends to appear in person or by proxy at
the meeting. The presiding officer of the meeting may refuse to consider any
business that shall be brought before any meeting of shareholders of the Company
other than as provided herein.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THE PROXY
STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K (INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES
THERETO) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR ITS MOST
RECENT FISCAL YEAR. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO FREDERICK A.
STAMPONE, SENIOR VICE PRESIDENT CHIEF ADMINISTRATIVE OFFICER & SECRETARY, AT THE
ADDRESS OF THE COMPANY APPEARING ON THE FIRST PAGE OF THIS PROXY STATEMENT.
16
<PAGE>
During fiscal 2000, Pep Boys will continue to send quarterly earnings releases
only to those shareholders who request them. If you would like to receive such
information for fiscal year 2000, please complete the information below, affix
postage and return to us by June 12, 2000.
PLEASE TYPE OR PRINT CLEARLY
Name ______________________________ Fax Number _______________________________
Address ___________________________ E-Mail Address ___________________________
City ____________________ State _____________________ Zip ____________________
Would you prefer that the information be: (please circle one)
Mailed Faxed E-mailed
We will try to accommodate your preference.
<PAGE>
Please
affix
Postage
Investor Relations
The Pep Boys--Manny, Moe & Jack
3111 West Allegheny Avenue
Philadelphia, PA 19132
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK
ANNUAL MEETING OF STOCKHOLDERS - TO BE HELD JUNE 3, 1998
THE BOARD OF DIRECTORS SOLICITS THIS PROXY
The undersigned hereby appoint(s) Mitchell G. Leibovitz, Michael J. Holden,
and each of them, attorney, agent and proxy of the undersigned, with full power
of substitution, to vote all shares of common stock of The Pep Boys -- Manny,
Moe & Jack that the undersigned would be entitled to vote if personally present
at the 1998 Annual Meeting of Stockholders of the Company, and at any
postponement or adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR
DIRECTOR LISTED ON THE REVERSE SIDE, FOR PROPOSAL NUMBER 2, AND ACCORDING TO
THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
- --------------------------------------------------------------------------------
[X] Please mark your vote as in this example.
The Board of Directors recommends a vote "FOR" Item 1.
FOR all WITHHOLD AUTHORITY
1. Election of Directors. nominees for all nominees
[_] [_]
Nominees: Bernard J. Korman J. Richard Leaman, Jr.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below)
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Item 2.
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" Item 3.
3. Shareholder proposal to recommend to the Board that it take the steps
necessary to sell the Company to the highest bidder.
FOR AGAINST ABSTAIN
[_] [_] [_]
Signature(s): ___________ Date: _______ Signature(s): ____________ Date: _______
NOTE: Please date and sign exactly as your name appears on the form and mail
the proxy promptly. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as such. If shares are
held jointly, each joint owner should sign.
