Hahn Automotive Warehouse, Inc.
415 West Main Street, Rochester, New York 14608-1944
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on March 14, 1997
To Our Shareholders:
The Annual Meeting of Shareholders of Hahn Automotive
Warehouse, Inc. ("Company"), a New York corporation, will be held
at the Hyatt Regency Hotel, 125 East Main Street, Rochester, New
York 14604 on Friday, March 14, 1997, at 10:00 a.m. (Local Time),
for the following purposes:
(1) To elect four directors of the Company, each for a term
of two years;
(2) To consider and act upon a proposal to approve an
amendment to the Company's 1992 Stock Option Plan; and
(3) To transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of
business on January 24, 1997, as the record date for the
determination of shareholders entitled to notice of and to vote
at the Annual Meeting and at any continuation or adjournment
thereof. A Proxy Statement and proxy are enclosed. It is
important that all shares be represented at the Annual Meeting.
The Board of Directors extends a cordial invitation to all
shareholders to attend the Annual Meeting. If you are unable to
attend the meeting in person, you should sign, date and return
the enclosed proxy in the return envelope that has been provided.
You may revoke your proxy and vote in person if you decide to
attend the Annual Meeting.
By Order of the Board of Directors,
DANIEL J. CHESSIN,
Director, Executive Vice President
and Secretary
Rochester, New York
January 24, 1997
Hahn Automotive Warehouse, Inc.
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
MARCH 14, 1997
This Proxy Statement and the accompanying proxy are
furnished to the shareholders of Hahn Automotive Warehouse, Inc.
("Company"), a New York corporation, in connection with the
solicitation by and on behalf of the Board of Directors of the
Company, to be used at the Annual Meeting of Shareholders of the
Company, ("Annual Meeting"), which will be held on Friday, March
14, 1997, at 10:00 A.M. (Local Time) at the Hyatt Regency Hotel,
125 East Main Street, Rochester, New York 14604, to act upon (1)
the election of four directors, (2) to act upon a proposal to
amend the 1992 Stock Option Plan, and (3) such other business as
may properly come before the Annual Meeting. This Proxy
Statement and the proxy are being first mailed to shareholders on
or about January 27, 1997.
If the enclosed proxy is properly executed and returned
prior to the Annual Meeting, the shares represented thereby will
be voted in accordance with the directions contained therein. If
the proxy is signed and returned without choices having been
specified, the shares represented thereby will be voted FOR the
election of the four director nominees and for the amendment to
the 1992 Stock Option Plan described herein. The proxy may be
revoked by the person giving it at any time prior to its use by
filing with the Company's Secretary a written revocation, a duly
signed later dated proxy or by requesting return of the proxy at
the Annual Meeting and voting in person.
The Board of Directors has fixed the close of business on
January 24, 1997 as the record date for determining the holders
of the Company's Common Stock, par value $.01 per share, ("Common
Stock") entitled to notice of and to vote at the Annual Meeting
and at any continuation or adjournment thereof. At the close of
business on January 24, 1997, the Company had outstanding
4,562,513 shares of Common Stock, each of which is entitled to
one vote. The Common Stock is the Company's only class of voting
securities outstanding. A majority of the outstanding shares of
Common Stock (2,281,257 shares) present in person or by proxy
will constitute a quorum, which is required to transact business
at the Annual Meeting.
Four directors are to be elected at the Annual Meeting.
Directors are elected by a plurality of the shares present at the
meeting, in person or by proxy, at which a quorum of shares is
represented. This means that those nominees receiving the
largest number of votes cast are elected, up to the maximum
number of directors to be elected at the Annual Meeting. The
affirmative vote of the holders of a majority of the outstanding
common stock is required for approval of the proposal to amend
the 1992 Stock Option Plan.
Boxes and a procedure of circling the name of a nominee have
been provided on the enclosed Proxy card to withhold authority to
vote for one or more of the directors nominees or to withhold
authority to vote or abstain on the proposal to amend the 1992
Stock Option Plan. Abstentions are considered in determining the
number of votes required to attain a majority of the outstanding
Common Stock in connection with the proposal to amend the 1992
Stock Option Plan. Because this proposal requires the
affirmative vote of a majority of all outstanding Common Stock
entitled to vote for approval, an abstention on such proposal
will have the same legal effect as a vote against the proposal.
Votes withheld in connection with the election of one or more of
the nominees for director will not be counted as votes cast for
such persons. Abstentions and broker non-votes are counted as
present for purposes of determining the presence or absence of a
quorum, but have no impact on the election of directors, except
to the extent that the failure to vote for a particular nominee
may result in another nominee receiving a larger number of votes.
ELECTION OF DIRECTORS
(Proposal 1)
The Board of Directors of the Company consists of two
classes comprised of four members each. All members of one class
are elected at each annual shareholders meeting to hold office
for a full term of two years.
The Board of Directors has nominated Daniel J. Chessin, Ira
D. Jevotovsky, Stephen B. Ashley, and E. Philip Saunders for
election to the Board at the forthcoming Annual Meeting. If
elected, each such nominee will hold office until the annual
shareholders meeting to be held in 1999 and until a successor is
duly elected and qualified.
The Board of Directors recommends the election of all four
nominees and it is intended that the named proxies (unless
otherwise directed) will vote the enclosed proxy FOR the election
of these nominees. Although the Board of Directors believes that
all of the nominees will be available to serve, the proxies may
exercise discretionary authority to vote for substitutes proposed
by the Board of Directors of the Company. The proxies, however,
cannot vote for more than four nominees.
INFORMATION CONCERNING DIRECTORS AND NOMINEES FOR ELECTION
The name, principal occupation, business experience and age
of each director and nominee for director and his term of office
and period of previous service as a director of the Company are
set forth below. No person set forth below was selected as a
director or nominee pursuant to any arrangement or understanding
with any other person.
Term Expires in 1997; Nominated for Election for Term Expiring in
1999
Daniel J. Chessin has been Executive Vice President of the
Company since March 1995, and Secretary and a Director of the
Company since May 1992. Prior to that time, he held various
offices with the Company since beginning employment with the
Company in March 1988. From 1987 until he joined the Company in
1988, Mr. Chessin practiced law. Mr. Chessin is a member of the
Board of Governors of the Car Care Council. Mr. Chessin is 35
years of age.
Ira D. Jevotovsky has been Vice President-Human Resources
and a director of the Company since May 1992. From September
1989, when he joined the Company, to May 1992, he managed a
region of the Company's operations. From September 1983 through
September 1989, Mr. Jevotovsky was employed as a counselor and
therapist by Student Assistant Services in Ardsley, New York.
Mr. Jevotovsky is 41 years of age.
Stephen B. Ashley has been a director of the Company since
May 1992. Effective January 1, 1997, Mr. Ashley is Chairman and
Chief Executive Officer of the Ashley Group (related companies
focused on management, brokerage, financing and investment in
commercial and multifamily real estate). Mr. Ashley has served
as Chairman and Chief Executive Officer of both Sibley Mortgage
Corporation and Sibley Real Estate Services, Inc. from January
1991 to March 1996, at which time he resigned as Chief Executive
Officer of Sibley Mortgage Corporation. Prior to 1991 he served
as President and Chief Executive Officer of both corporations (or
their predecessors-in-interest) since 1975. He is also a
director of The Genesee Corporation (which operates a brewery),
the Federal National Mortgage Association, Inc. (Fannie Mae) and
Manning & Napier Fund, Inc. (an advisory firm to a family of
mutual funds). Mr. Ashley is 56 years of age.
E. Philip Saunders has been a director of the Company since
May 1992. Mr. Saunders has been Chairman and Chief Executive
Officer and a director of Sugar Creek Corp. and its subsidiaries,
W.W. Griffith Oil Co. (a petroleum distributor) and Sugar Creek
Stores, Inc. (a convenience store operator) since 1977 and 1982,
respectively. He has also been Chairman and Chief Executive
Officer of Travel Ports of America, Inc. (a truck stop chain
operator) since November 1987. Mr. Saunders previously served as
a director of Truckstops of America, Inc. and of Ryder Systems,
Inc. after that corporation acquired Truckstops of America, Inc.
and as a director of Richardsons Food Corporation (a distributor
of dessert toppings and condiments). Mr. Saunders is 59 years of
age.
Term Expires in 1998
Michael Futerman founded the Company in 1958. He has been
Chief Executive Officer of the Company since May 1992. Mr.
Futerman served as President of the Company from the time it was
incorporated through May 1992 and has been a director of the
Company since it was incorporated in 1958. Mr. Futerman has over
38 years experience in the automotive aftermarket business. Mr.
Futerman is 69 years of age.
Eli N. Futerman has been President of the Company since May
1992. Prior to that time, he held various offices with the
Company, including Vice President and Secretary, since beginning
employment with the Company in June 1980. Mr. Futerman has been
a director of the Company since September 1979. Mr. Futerman is
a member of the Board of Directors of Auto Value Associates,
Inc., the programmed distribution group of which the Company is a
member. Mr. Futerman is 38 years of age.
Gordon E. Forth has been a director of the Company since May
1992. Mr. Forth is a partner of Woods, Oviatt, Gilman, Sturman &
Clarke LLP, a law firm that he has been associated with since
August 1987. Mr. Forth is 35 years of age.
Robert I. Israel has been a director of the Company since
May 1992. Mr. Israel has been a Managing Director of Schroder
Wertheim & Co. Incorporated, (or its predecessor-in-interest) an
investment banking firm, since May 1991, with responsibility for
that firm's Energy Group. Prior to joining Schroder Wertheim &
Co. Incorporated, Mr. Israel was a Senior Vice President at
Dillon, Read & Co. Inc., which he joined in April 1984, where he
was primarily responsible for new business development in
corporate finance. From October 1987 until July 1991, Mr. Israel
served as a director of Hi-Lo Automotive, Inc. (an automotive
parts retailer). Mr. Israel is 47 years of age.
Family Relationships
Eli N. Futerman is the son of Michael Futerman. Both Daniel
J. Chessin and Ira D. Jevotovsky are sons-in-law of Michael
Futerman. There are no other family relationships between any of
the other directors or executive officers of the Company.
DIRECTORS MEETINGS AND BOARD COMMITTEES
The Board of Directors of the Company met four times during
the fiscal year ended September 30, 1996. No director attended
fewer than 75% of the aggregate of all meetings of the Board of
Directors and Board committees on which they served during fiscal
1996.
The standing committees of the Board of Directors consist of
the Executive, Compensation, Audit, Stock Option and Retirement
Committees. The Board of Directors does not have a nominating
committee.
The Executive Committee members are Messrs. Michael
Futerman, Eli N. Futerman and Robert I. Israel. The Executive
Committee may exercise all the powers and authority of the Board
of Directors in the management of the business and affairs of the
Company except as limited by law. The Executive Committee did
not hold any formal meetings during fiscal 1996.
The Compensation Committee is comprised of Messrs. Michael
Futerman, Eli N. Futerman and Robert I. Israel. The function of
the Compensation Committee is to make recommendations to the
Board with respect to the salaries and other compensation for the
executive officers and certain key employees of the Company and
its subsidiaries. The Compensation Committee held one meeting
during fiscal 1996.
The Audit Committee members include Messrs. Ashley, Forth
and Saunders. The Audit Committee is responsible for evaluating
and approving annually the services performed by the Company's
accountants as well as reviewing the Company's accounting
practices and internal controls. The Audit Committee recommends
to the Board the appointment of independent public accountants
and reviews with representatives of the independent public
accountants the scope of their examination, their fees, the
results of their examination and any problems identified by the
independent public accountants regarding internal controls,
together with their recommendations. The Audit Committee met on
two occasions during fiscal 1996.
The Stock Option Committee was established for the sole
purpose of administering the Company's 1992 Stock Option Plan,
including the granting of stock options thereunder. Messrs.
Israel, Forth and Saunders currently comprise this committee.
The Stock Option Committee held one meeting during fiscal 1996.
On November 8, 1996, the Board of Directors elected to assume
responsibilities for the administration of the 1992 Stock Option
Plan.
The Retirement Committee consists of Messrs. Michael
Futerman, Eli N. Futerman and Ira D. Jevotovsky. The Retirement
Committee is authorized to make decisions relating to the
Company's retirement plans.
The Company's non-employee directors are paid $1,000 for
each Board meeting and $500 for each committee meeting attended
and reimbursed for ordinary and necessary expenses incurred in
connection with such meetings. Pursuant to the Company's 1993
Stock Option Plan for Non-Employee Directors, Messrs. Ashley,
Forth, Israel and Saunders were each awarded on March 15, 1996
non-qualified stock options to purchase 1000 shares of Common
Stock at $8.50 per share. The exercise price for these options
is based on the closing price of the Common Stock on the date the
options were granted.
INFORMATION ABOUT EXECUTIVE OFFICERS
The following table sets forth certain information about the
Company's executive officers:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Michael Futerman 69 Director and Chief Executive Officer
Eli N. Futerman 38 Director and President
Daniel J. Chessin 35 Director, Executive Vice President
and Secretary
Ira D. Jevotovsky 41 Director and Vice President - Human
Resources
David M. Appelbaum 44 Vice President - Direct Distribution
David S. Beckerman 38 Vice President - Real Estate
Albert J. Van Erp 59 Vice President - Finance
Timothy Vergo 47 Vice President - Wholesale Operations
Wayne T. Yodzio 38 Vice President - Retail Operations
</TABLE>
David M. Appelbaum became Vice President - Direct
Distribution on September 30, 1994. Prior to joining the
Company, Mr. Appelbaum served as President of Meisenzahl Auto
Parts, Inc. and Regional Parts, Inc. since 1986 and 1979,
respectively; both companies engage in the direct distribution of
automotive aftermarket parts and were acquired by the Company on
September 30, 1994. Mr. Appelbaum is 44 years of age.
David S. Beckerman joined the Company as Vice President -
Real Estate in May 1994. Prior to his employment with the
Company, Mr. Beckerman was a partner of Beckerman and Beckerman,
a law firm where he practiced law since 1984. Mr. Beckerman is
38 years of age.
Albert J. Van Erp has been Vice President - Finance of the
Company since May 1992. From December 1985 to May 1992, he
served as Controller of the Company. Mr. Van Erp has over 30
years experience in corporate internal accounting. Mr. Van Erp
is 59 years of age.
Timothy Vergo has been Vice President - Wholesale Operations
of the Company since May 1992. From August 1981 to May 1992, he
served as Director of Operations of the Company. Mr. Vergo is 47
years of age.
Wayne T. Yodzio joined the Company in November 1995. Prior
to joining the Company, Mr. Yodzio was employed by ADAP, Inc. (a
specialty retailer of automotive parts and accessories) for 18
years. Mr. Yodzio started his automotive aftermarket career as a
counter salesman for ADAP, Inc. and held various executive
positions with that organization before becoming it's President
in 1989. Mr. Yodzio is 38 years of age.
See Election of Directors above for information concerning
the Company's other executive officers.
AMENDMENT TO 1992 STOCK OPTION PLAN
(Proposal 2)
General
The Company's 1992 Stock Option Plan was adopted by the
Company's Board of Directors and shareholders in June 1992 and
amended by the Company's Board of Directors and shareholders in
March 1994 (as amended, the "1992 Plan"). The primary purpose of
the 1992 Plan is to provide long-term incentives and rewards to
officers (including officers who may be directors) and other key
employees responsible for success and growth of the Company, to
attract and retain such persons on a competitive basis and to
associate the interests of such persons with those of the
Company. On November 8, 1996, the Board of Directors approved a
second amendment to the 1992 Plan, which, among other things,
increased the number of shares available for issuance pursuant to
the exercise of options granted thereunder to 750,000 shares and
extended the term of the 1992 Plan an additional five years
("Amendment"), subject to approval by the shareholders. A copy
of the Amendment is annexed hereto as Exhibit A. The material
features of the 1992 Plan, as currently in effect, are described
below.
Pursuant to the 1992 Plan, options may be granted to key
employees of the Company or any subsidiary in which the Company
owns more than 50% of the total combined voting power of all
classes of stock, up to the aggregate of 500,000 shares. As of
January 24, 1997, there were outstanding options to purchase
496,000 shares of Common Stock and no shares remained available
for future awards. As currently in effect, the 1992 Plan expires
on July 31, 1997. If approved, the Amendment would continue the
1992 Plan by increasing the total number of Common Stock shares
available and reserved for issuance to 750,000 shares and extend
the effectiveness of the 1992 Plan through and including July 31,
2002.
The Board of Directors believes it is in the best interest
of the Company and its shareholders to approve the Amendment to
allow the Company to continue to grant options under the 1992
Plan to secure for the Company the benefits of the additional
incentive inherent in the ownership of Common Stock by officers
and key employees of the Company and its subsidiaries and to help
the Company and its subsidiaries secure and retain the seniority
of such persons.
New Plan Benefits
On November 8, 1996, the Board of Directors awarded options
for the purchase of 89,250 shares to the Company's employees, of
which 50,604 shares in the aggregate are subject to shareholder
approval of the Amendment. The awards consisted of non-qualified
ten year options which vest ratably during the three years after
award. The options were granted with an exercise price of $8.00
per share, the last reported sale price of the Common Stock on
the option grant date. The following table sets forth the number
of option shares which are subject to shareholder approval of the
Amendment A for the named executive officers and to specified
groups and persons.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Name and Title Awards Granted
of Group (No. of Shares)
<S> <C>
Michael Futerman, Chief Executive Officer 0
Eli N. Futerman, President 0
David Appelbaum, Vice President-Direct Distribution 5,670
Timothy Vergo, Vice President-Wholesale Operations 5,670
Wayne T. Yodzio, Vice President-Retail
Operations 5,670
Executive Group 34,303
Non-Executive Director Group 0
Non-Executive Officer Employee Group 16,301
</TABLE>
Description of the 1992 Plan as Currently in Effect
The major features of the 1992 Plan, as currently in effect,
are summarized below.
The 1992 Plan provides for the granting of incentive options
as defined under Section 422(b) of the Internal Revenue Code, or
non-qualified stock options. A total of 500,000 shares of the
Company's Common Stock are reserved for issuance under the 1992
Plan. The 1992 Plan terminates on July 31, 1997 unless sooner
terminated by the Company's Board of Directors.
The 1992 Plan is administered by the Company's Stock Option
Committee or the Company's Board of Directors if it elects to
administer the 1992 Plan itself ("Committee" which term includes
the Stock Option Committee or the Board of Directors, as
applicable). The Committee determines which eligible individuals
receive option grants, whether the granted options will be
incentive stock options or non-qualified stock options, the
number of shares of Common Stock to be covered by the option and
the option's exercise price, which may not be less than 100% of
the fair market value of the Common Stock on the date of grant,
except that the exercise price for incentive stock options
granted to employees owning more than 10% of the combined voting
power of all classes of stock of the Company or its parent or
subsidiary at the date of grant (a "10% Holder") shall not be
less than 110% of the fair market value of the Common Stock at
the date of grant. The Committee also determines the duration of
the options, which may not exceed ten years from the date of
grant (except that the duration for incentive stock options
granted to a 10% Holder may not exceed five years).
All options granted under the 1992 Plan are exercisable
prior to their expiration in accordance with the vesting schedule
determined by the Committee. Unless varied by the Committee,
options will generally vest in ratable amounts each year over
three years from the date of grant. Options will generally
terminate three months after the termination of the option
holder's employment with the Company (or one year after such
termination because of death or disability). No shares of Common
Stock issued upon the exercise of any option granted under the
1992 Plan may be sold less than six months after the date the
option was granted unless otherwise authorized by the Committee.
The purchase price payable upon exercise of each option granted
under the 1992 Plan may be paid with cash, check, delivery of
shares of Common Stock owned by the holder thereof, surrender of
"in-the-money" exercisable options granted under the 1992 Plan or
any combination of the foregoing.
The Committee, in its discretion, may grant a new or reload
option to an option holder who uses already owned shares of the
Common Stock to pay the exercise price of an option. Subject to
certain limitations, the reload option gives each grantee the
right to purchase the same number of shares of Common Stock as
the grantee used to pay the exercise price of the options. A
reload option must have an exercise price equal to the fair
market value of the Common Stock on the date of the exercise of
the option for which payment is being made and have an expiration
date no later than the expiration date of the exercised option.
In the event of a "change in control" of the Company as
defined in the 1992 Plan, options outstanding at least one year
prior to the "change of control" shall become fully vested and
immediately exercisable and, to the extent permitted by law, an
option agreement may be amended by the Committee to free
restrictions on Common Stock acquired under an option.
Required Affirmative Vote
The vote of at least a majority of the outstanding shares of
Common Stock present is required to approve the proposal to amend
the 1992 Plan. If not approved, the proposed Amendment which is
subject to shareholder approval will not become effective and
conditional options granted on November 8, 1996 will become void.
COMPLIANCE WITH SECTION 16(a) OF SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires directors, officers and beneficial owners of
more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission reports of transactions in its
Common Stock. The Company believes that during fiscal 1996,
Section 16(a) filing requirements applicable to its executive
officers, directors and greater than 10% beneficial owners were
complied with by all such persons.
EXECUTIVE COMPENSATION
The summary compensation table below sets forth the
compensation paid or accrued for services rendered in all
capacities to the Company during the last three fiscal years to
the Company's Chief Executive Officer and each of the Company's
four other most highly compensated executive officers during
fiscal 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Name and Principal Fiscal Year <F1>Salary ($) Bonus ($))
Position
<S> <C> <C> <C>
Michael Futerman 1996 336,921 60,000
Chief Executive 1995 327,338 -
Officer
1994 317,200 90,000
Eli N. Futerman 1996 292,847 40,000
President 1995 284,425 -
1994 268,600 75,000
David M. Appelbaum 1996 128,561 61,907
Vice President - 1995 125,974 46,750
Direct Distribution 1994 - -
Timothy Vergo 1996 129,453 40,000
Vice President - 1995 119,404 30,000
Wholesale 1994 107,440 20,000
Operations
Wayne T. Yodzio 1996 109,135 156,000
Vice President -
Retail Operations
Annual Compensation Long-Term
Compensation
Securities All
Underlying Other
Options/SARs Compensation
Name and Principal <F2>(#) <F4>($)
Position
<S> <C> <C>
Michael Futerman - 53,283
Chief Executive - 52,861
Officer
- 51,486
Eli N. Futerman - 32,551
President 135,200 285,246
35,693 17,986
David M. Appelbaum 5,200 1,999
Vice President - 8,112 1,795
Direct Distribution
Timothy Vergo 5,200 2,094
Vice President 8,112 1,658
Warehouse 10,816 2,668
Operations
Wayne T. Yodzio 15,600 0
Vice President
Retail Operations
<FN>
<F1> Includes portion of salary deferred under the Company's
401(k) Profit Sharing and Savings Plan.
<F2> Options granted during fiscal 1996, fiscal 1995 and fiscal
1994 have been restated to reflect a 4% stock dividend approved
by the Board of Directors on March 15, 1995 and 1996, to holders
of record on April 10, 1995 and 1996, and distributed on May 1,
1995 and 1996, respectively.
<F3> Includes the aggregate value of the Company's matching
contribution during fiscal 1996 to the Company's 401(k) Profit
Sharing and Savings Plan. During the 1996 fiscal year, the
Company made matching contributions in the following amounts to
the accounts of the following executive officers: Michael
Futerman, $1,283; Eli N. Futerman, $1,252; David M. Appelbaum,
$799; Timothy Vergo, $1,011.
<F4> Includes premiums paid by the Company during fiscal 1996
on insurance policies on the lives of the executive officers
named in the table. The Company is the owner and beneficiary of
such insurance policies that were purchased in connection with
the non-qualified selective incentive plan provided by the
Company which provides for certain retirement or death benefits
to the officers or their designated beneficiaries. During fiscal
1996, the Company made premium payments in the following amounts
for such insurance policies on the lives of the following
executive officers: Eli N. Futerman, $2,206; David M. Appelbaum,
$1,200; and Timothy Vergo, $1,083.
<F5> Includes $52,000 that the Company accrued during fiscal 1996
under a deferred compensation agreement entered into by the Company
with Mr. Futerman in November 1992 which provides for the payment to
Mr. Futerman or his designees of 15 payments of $50,000 each after
his retirement from the Company.
<F6> Includes $29,093 of premiums paid by the Company during
fiscal 1996 on four insurance policies owned by, and on the life
of, Mr. Futerman, which have a total death benefit of
approximately $2,200,000 and under which Mr. Futerman has the
discretion to designate the beneficiary or beneficiaries.
</FN>
</TABLE>
OPTIONS GRANTS IN FISCAL 1996
The following table sets forth stock options granted during
1996 to the Company's Chief Executive Officer and the Company's
four other most highly compensated executive officers during such
fiscal year.
<TABLE>
<CAPTION>
Individual Grants Options/SAR
Grants in Last
Fiscal Year
(a) (b) (c) (d)
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees Exercise or
Granted in Fiscal Base Price
Name <F1>(#) Year <F2>($/sh)
<S> <C> <C> <C>
Michael Futerman - - -
Chief Executive
Officer
Eli N. Futerman - - -
President
David M. Appelbaum 5,200 8.70% 10.38
Vice President
Direct
Distribution
Timothy Vergo 5,200 8.70% 10.38
Vice President
Warehouse
Operations
Wayne T. Yodzio 15,600 26.00% 8
Vice President
Retail Operations
Potential
Realizable
Value at
Assumed
Annual
Rates of
Stock Price
Appreciation
Individual Grants for Option
Terms
<F4>($)
(a) (e)
Expiration
Name <F3> Date 5% ($) 10% ($)
<S> <C> <C> <C>
Michael Futerman - - -
Chief Executive
Officer
Eli N. Futerman - - -
President
David M. Appelbaum 11/29/05 33,945 86,024
Vice President
Direct
Distribution
Timothy Vergo 11/29/05 33,945 86,024
Vice President
Warehouse
Operations
Wayne T. Yodzio 11/8/05 78,485 198,899
Vice President
Retail Operations
<FN>
<F1> Each option shown in the table was granted under the
Company's 1992 Plan. Each option becomes exercisable in equal
ratable installments over three years, commencing one year after
the grant date. The options permit the exercise price to be
paid, in whole or in part, by cash, surrender to the Company of
already-owned Common Stock or "in-the-money" exercisable options
for the Common Stock. Under the option grants, the Company will
grant a reload option for the amount of shares of Common Stock so
surrendered, subject to sufficient shares being available under
the 1992 Plan.
<F2> The exercise price for grants to Messers. Appelbaum and
Vergo were $4.50 above the closing price of the Common Stock on
the date of the option grants. The exercise price for Mr. Yodzio
was $1.88 above market price on the grant date and was negotiated
in connection with his acceptance of employment at the Company.
<F3> These options were granted for a term of no greater than
10 years, subject to earlier termination upon the occurrence of
certain events related to termination of employment.
<F4> Under the Securities and Exchange Commission's rules and
regulations, companies are required to show hypothetical "option
spreads" that would result from assumed appreciation of the
underlying securities of awarded options during their respective
terms. The "option spread" shown is based on assumed annual
compound stock appreciation rates of 5% and 10%, respectively,
during the entire term of the options. The ultimate option
spread, however, will depend on the market value of the Common
Stock at a future date, which may or may not correspond to such
hypothetical appreciation.
</FN>
</TABLE>
OPTIONS EXERCISE IN FISCAL 1996
The following table sets forth stock options exercised by
the Company's Chief Executive Officer and the Company's four
other most highly compensated executive officers during fiscal
1996 and the number and value of all unexercised options at
September 30, 1996.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in the Last Fiscal Year
and Fiscal Year-End Option/SAR Values
Shares
Acquired on Value
Name Exercise (#) Realized ($)
<S> <C> <C>
Michael Futerman - -
Chief Executive
Officer
Eli N. Futerman - -
President
David M. Appelbaum - -
Vide President
Direct
Distribution
Timothy Vergo - -
Vice President
Warehouse
Operations
Wayne T. Yodzio - -
Vice President
Retail Operations
Number
of
Securities
Underlying
Unexercised
Options/
SARs at
Fiscal
Year-End
1996
Name Exercisable Unexercisable
<S> <C> <C>
Michael Futerman - -
Chief Executive
Officer
Eli N. Futerman 123,123 56,964
President
David M. Appelbaum 2,704 10,608
Vide President
Direct
Distribution
Timothy Vergo 15,323 14,213
Vice President
Warehouse
Operations
Wayne T. Yodzio 0 15,600
Vice President
Retail Operations
Value of Unexercised
In-The-Money Options/SARs
Fiscal Year End 1996
Name Exercisable <F1>Unexercisable
<S> <C> <C>
Michael Futerman - -
Chief Executive
Officer
Eli N. Futerman - -
President
David M. Appelbaum - -
Vide President
Direct
Distribution
Timothy Vergo - -
Vice President
Warehouse
Operations
Wayne T. Yodzio - -
Vice President
Retail Operations
<FN>
<F1> An "in-the-money" stock option is an option for which the
market price on September 30, 1996, of the Company's Common Stock
underlying the option exceeds the options exercise price. As of
September 30, 1996, the market price of the Company's Common
Stock was $8.00. The exercise price of the options disclosed in
the above table in all cases equalled or exceeded the market
price of the Company's Common Stock on that date.
</FN>
</TABLE>
REPORT ON EXECUTIVE MANAGEMENT COMPENSATION
The Company's goals for the compensation of its executive
management is to compensate fairly for a job well done and to
retain key employees while providing them with proper motivation
to maximize shareholder value. The Company's executive
compensation program consists of three principal elements: (1)
base salary, (2) annual bonuses, which reward for overall Company
performance and individual performance, and (3) options awarded
under the Company's 1992 Plan, which also reward and provide long-
term incentives that are intended to align the interests of
option recipients with those of shareholders.
The Compensation Committee annually recommends to the Board
of Directors the salary and bonuses to be paid to the Company's
Chief Executive Officer and other members of executive
management. The Compensation Committee's salary and bonus
recommendations for such persons are generally based on a
subjective assessment of the performance of the Company and the
executive management member under consideration as well as the
executive's particular experience and level of responsibility.
The Committee does not use any specific criteria for measurement
of corporate performance or weight in a formalized manner any of
the various factors which it considers. The Board members vote on
the Committee's recommendations (except with respect to salary
and bonuses proposed for them) in light of their own experiences
and familiarities with compensation practices. In fiscal 1996,
all recommendations of the Compensation Committee were approved
by the Board.
At the beginning of fiscal 1996, based on a recommendation
of the Compensation Committee, the Board of Directors approved a
performance-based bonus plan for the Company's Vice President -
Retail Operations, Wayne T. Yodzio, for the 1996 and 1997 fiscal
years. Under the bonus plan, Mr. Yodzio is entitled to an annual
bonus for each such fiscal year based on the improvement in the
AUTOWORKS retail division's operating income (loss) for the year.
During fiscal 1996, Mr. Yodzio earned $156,000 under this bonus
plan.
The Company's Stock Option Committee is responsible for
awarding options under and otherwise administering the Company's
1992 Plan. During fiscal 1996, the Stock Option Committee
awarded options under the 1992 Plan to executive management
members and certain key employees for the purchase of up to
83,504 (adjusted for the 4% 1996 stock dividend) shares of Common
Stock. On November 8, 1996, the Board of Directors elected to
assume these duties. The Stock Option Committee based the amount
of such awards on the subjective determination of the Committee
members as to the past contribution and potential contribution of
the option recipients to the Company's overall success, without
particular emphasis on either such component. In determining the
award of options during fiscal 1996, the Stock Option Committee
did not take into account options already held by option
recipients.
Section 162(m) of the Internal Revenue Code generally limits
the tax deductibility of annual compensation paid to certain
executive officers to $1 million, unless specified requirements
are met. The Compensation Committee has carefully considered the
impact of this provision in the Tax Law. At this time, it is the
Committee's intention to continue to compensate all officers
based on overall performance.
The Committee expects that most, if not all
compensation paid to officers will qualify as a tax deductible
expense. However, it is possible that at some point in the
future, circumstances may cause the Committee to authorize
compensation that is not deductible.
Respectfully submitted,
January 24, 1997 Michael Futerman* Eli N. Futerman*
Daniel J. Chessin Ira D. Jevotovsky
Stephen B. Ashley Gordon E. Forth+
Robert I. Israel*+ E. Philip Saunders+
* Compensation Committee Member + Stock Option Committee Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, the Compensation Committee was comprised
of Messrs. Michael Futerman, Eli N. Futerman and Mr. Robert I.
Israel, and the Stock Option Committee was comprised of Messrs.
Forth, Israel and Saunders. Mr. Michael Futerman is the Company's
Chief Executive Officer and Mr. Eli N. Futerman is the Company's
President. Mr. Forth is a Partner of Woods, Oviatt, Gilman,
Sturman & Clarke, LLP, which serves as the Company's principal
outside legal counsel.
PERFORMANCE GRAPH
The Performance Graph shown below compares the cumulative
total shareholder return on the Company's Common Stock, based on
the market price of the Common Stock, with the total return of
the CRSP Total Return Index for the NASDAQ Stock Market (U.S.
Companies) and the Motor Vehicle New Parts Supply and Wholesale
Industry peer group constructed by the Company. The comparison
of total return assumes that a fixed investment of $100 was
invested on January 20, 1993, in the Company's Common Stock and
in the foregoing index and peer group and further assumes the
reinvestment of dividends. The stock price performance shown on
the graph is not necessarily indicative of future price
performance.
<F1> COMPARISON OF CUMULATIVE TOTAL RETURN
Base
Period Return Return Return Return
Company/Index Name 1/20/93 Sep 93 Sep 94 Sep 95 Sep 96
Hahn Automotive Whs. 100 88.00 123.00 58.24 69.22
NASDAQ 100 109.26 109.54 150.81 178.97
PEER GROUP 100 130.41 139.03 158.49 177.41
<F1> The component issuers of the Motor Vehicle New Parts
Supply and Wholesale Industry Group shown above include: ICIS
Management Group (f/k/a Altier Sales Co., Inc.), Amalgamated
Automotive Industries, APS Holding Corp., Capital Industries,
Inc., Coast Distributor Systems, Inc., Custom Chrome, Inc.,
Genuine Auto Parts Company, Hahn Automotive Warehouse, Inc.,
Oakhurst Co. Inc. (f/k/a Oakhurst Capital Inc.) and Republic
Automotive Parts. The returns of the component issuers have been
weighted according to their respective market capitalizations as
of the beginning of each period for which a return is indicated.
Seaport Corporation ceased filing with the Securities and
Exchange Commission and has been excluded this year from the
Motor Vehicle New Supply and Wholesale Industry Group.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information
concerning each group or person known to the Company who
beneficially owned in excess of 5% of the Company's outstanding
Common Stock at December 31, 1996
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership <F5>Percent of Class
<S> <C> <C>
Michael and Sara Futerman
415 West Main Street
Rochester, NY 14608 <F1>2,135,258 46.8%
Eli N. Futerman
415 West Main Street
Rochester, NY 14608 <F2> 388,496 8.3%
JSC, Inc.
200 C Baynard Bldg.
3411 Silverside Road
Wilmington, DE 19810 <F3> 281,216 6.2%
David M. Appelbaum
415 West Main Street
Rochester, NY 14608 <F4> 246,181 5.4%
<FN>
<F1> Michael Futerman is the record owner of 1,962,219 shares
and Sara Futerman is the record owner of 173,039 shares. Mr. and
Mrs. Futerman disclaim beneficial ownership over all shares not
held of record by them in their respective names.
<F2> Includes 15,849 shares owned by members of Mr. Futerman's
immediate family and 135,020 shares which may be purchased by Mr.
Futerman pursuant to stock options that are currently exercisable
or become exercisable within 60 days from December 31, 1996. Mr.
Futerman disclaims beneficial ownership of shares not held of
record by him.
<F3> This information is based solely on a Schedule 13D dated
November 27, 1996, relating to the Common Stock filed by JSC,
Inc. with the Securities and Exchange Commission.
<F4> Includes 4,437 shares which may be purchased by Mr.
Appelbaum pursuant to stock options that are currently
exercisable or become exercisable within 60 days from December
31, 1996.
<F5> The percentages in this column have been calculated on the
basis of the 4,562,513 shares outstanding on December 31, 1995,
plus the number of shares of Common Stock deemed outstanding
pursuant to Securities and Exchange Commission Rule 13d-3(d)(1).
</FN>
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of
Common Stock beneficially owned at December 31, 1996 by each
director, each nominee for director, each executive officer named
in the summary Compensation Table and by all directors and
officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Director, Nominee or Group <F1>Beneficial Ownership <F8>of Class
<S>
Michael Futerman, <C> <C>
Chief Executive Officer and Director <F2>2,135,258 46.8
Eli N. Futerman,
President and Director <F3>388,496 8.3
Daniel J. Chessin,
Executive Vice President,
Secretary and Director <F4>117,778 2.6
Ira D. Jevotovsky,
Vice President-Human Resources
and Director <F5>89,866 2.0
Stephen B. Ashley, Director <F6>6,188 *
Gordon E. Forth, Director <F6>5,312 *
Robert I. Israel, Director <F6>18,624 *
E. Philip Saunders, Director <F6>4,688 *
David M. Appelbaum,
Vice President-Direct Distribution <F6>246,181 5.4
Timothy Vergo,
Vice President-Wholesale Operations <F6>20,661 *
Wayne T. Yodzio,
Vice President-Retail Operations <F6>5,200 *
All Directors and Executive Officers
of the Company as a Group (13 persons) <F7>3,064,716 62.8
*Indicates the number of shares constitutes less than 1% of the
outstanding Common Stock.
<FN>
<F1> Each director, nominee and executive officer in the above
table possesses sole voting and sole investment power with
respect to the shares shown to be owned by him except for such
shares as to which beneficial ownership is disclaimed in a
footnote.
<F2> Includes 173,039 shares owned of record by Mr. Futerman's
spouse. Mr. Futerman disclaims beneficial ownership over the
shares held by his spouse.
<F3> Includes 15,849 shares owned of record by members of Mr.
Futerman's immediate family and 135,020 shares which may be
purchased by Mr. Futerman pursuant to stock options that are
currently exercisable or become exercisable within 60 days from
December 31, 1996. Mr. Futerman disclaims beneficial ownership
over all shares owned by his immediate family members.
<F4> Includes 74,904 shares owned of record by members of Mr.
Chessin's immediate family and 35,428 shares which may be
purchased by Mr. Chessin pursuant to stock options that are
currently exercisable or become exercisable within 60 days of
December 31, 1996. Mr. Chessin disclaims beneficial ownership
over all shares owned by his immediate family members.
<F5> Includes 68,415 shares owned of record by members of Mr.
Jevotovsky's immediate family and 18,331 shares which may be
purchased by Mr. Jevotovsky pursuant to stock options that are
currently exercisable or become exercisable within 60 days of
December 31, 1996. Mr. Jevotovsky disclaims beneficial ownership
over all shares owned by his immediate family members.
<F6> Includes shares issuable upon exercise of stock options
presently exercisable or which become exercisable within 60 days
from December 31, 1996 as follows: Stephen B. Ashley, 4,688
shares; Gordon E. Forth 4,688 shares; Robert I. Israel 4,688
shares; E. Philip Saunders 4,688 shares; David M. Appelbaum 4,437
shares; Timothy Vergo 20,661 shares; and Wayne T. Yodzio 5,200
shares.
<F7> Includes 319,148 shares issuable upon exercise of stock
options presently exercisable or which become exercisable with 60
days from December 31, 1996.
<F8> The percentages in this column have been calculated on the
basis of the 4,562,513 shares outstanding on December 31, 1996,
plus the number of shares of Common Stock deemed outstanding
pursuant to Securities and Exchange Commission Rule 13d-3(d)(1).
</FN>
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of September 30, 1996, the Company leased from Michael
Futerman, Eli N. Futerman, Daniel J. Chessin and Ira D.
Jevotovsky and their wives or partnerships, corporations or
trusts in which such persons have interest, 12 of its 17
distribution center sites and 34 of its 82 Advantage Auto Stores
sites. (Michael Futerman is the Company's Chief Executive
Officer and director and a greater than 5% beneficial owner of
Common Stock; Eli N. Futerman is the Company's President, a
director and a greater than 5% beneficial owner of Common Stock;
Daniel J. Chessin is the Company's Executive Vice President,
Secretary and a director; Ira D. Jevotovsky is the Company's Vice
President-Human Resources and a director.) The approximate total
gross distribution center space under such leases was
approximately 353,300 square feet. The approximate aggregate
store space under such leases was 164,678 square feet. All such
leases provide for security deposits equal to one month's rent,
annual base rental increases equal to the annual increase in a
specified Consumer Price Index ("CPI") applied to the preceding
year's base rent, and for the Company to pay insurance, and real
property taxes and utilities and to perform all maintenance and
repairs. In fiscal 1996, the Company paid approximately
$1,914,000 as base rental for all distribution centers and store
properties under such related party leases. As of September 30,
1996, the total base rentals payable under all such distribution
center and store leases through the end of their respective terms
was approximately $5.3 million, subject to CPI-based increases
described above. Some of the aforementioned leases have been
capitalized. These rental figures are total rents for all such
leases, including amounts representing interest under those
leases which have been capitalized. The Company believes that
these related party distribution center and Advantage Auto Store
leases taken as a whole are no less favorable to the Company than
leases which could have been obtained from third parties dealing
at arm's length.
The Company leases certain computer equipment from Eli N.
Futerman. The aggregate rentals payable under this lease in
fiscal 1996 were approximately $90,000. Total rentals payable
through the end of the computer leases's term is $63,000.
As of September 30, 1996, the Company's wholly-owned
subsidiaries Meisenzahl Auto Parts, Inc. and Regional Parts, Inc.
(collectively, "Meisenzahl") leased two locations from David M.
Appelbaum. (Mr. Appelbaum is the Company's Vice President-Direct
Distribution.) The approximate total gross space under such
leases is approximately 45,000 square feet. Both leases require
the Company to pay insurance and real property taxes and
utilities and to perform all maintenance and repairs. As of
September 30, 1996, the total base rentals payable under both
leases through the end of their respective terms was
approximately $2.0 million or approximately $250,000 annually.
The Company believes that these leases taken as a whole are no
less favorable to Meisenzahl than leases which could have been
obtained from third parties dealing at arm's length.
Meisenzahl is liable under guarantees in favor of the holder
of first priority mortgages covering the property leased from Mr.
Appelbaum pursuant to which approximately $1.8 million in the
aggregate was outstanding as of September 30, 1996. Mr.
Appelbaum agreed to indemnify, defend and hold harmless the
Company from any losses which arise from or are related to such
guarantees.
By an Agreement dated August 14, 1995, the Company entered
into a split-dollar arrangement with a Trust established by Eli
N. Futerman of which Fleet Trust Company is the Trustee.
Pursuant to the Agreement, the Company pays a portion of the
annual premium on an insurance policy held in the Trust. The
policy is a single life policy payable upon the death of Mr.
Futerman. The face value of the policy is $1 million. Pursuant
to the terms of the Trust, Mr. Futerman's wife will receive the
proceeds of the policy (less reimbursement to the Company for
premiums) if she survives her husband. The amount of all
premiums paid by the Company constitutes indebtedness from the
Trust to the Company. Upon termination of the Agreement, the
Company is entitled to receive from the Trust the amount equal to
the premiums it has paid. The Company paid $14,008 of premiums
during the 1996 fiscal year in connection with this arrangement.
Mr. Futerman acquired this policy during fiscal year 1994.
By an Agreement dated January 18, 1996, the Company entered
into a split-dollar arrangement with a Trust established by
Daniel J. Chessin of which Fleet Trust Company is the Trustee.
Pursuant to the Agreement, the Company pays a portion of the
annual premium on an insurance policy held in the Trust. The
policy is a single life policy payable upon the death of Mr.
Chessin. The face value of the policy is $1 million. Pursuant
to the terms of the Trust, Mr. Chessin's wife will receive the
proceeds of the policy (less reimbursement to the Company for
premiums) if she survives her husband. The amount of all
premiums paid by the Company constitutes indebtedness from the
Trust to the Company. Upon termination of the Agreement, the
Company is entitled to receive from the Trust the amount equal to
the premiums it has paid. The Company paid $11,851 of premiums
during the 1996 fiscal year in connection with this agreement.
Mr. Chessin acquired this policy during fiscal year 1994.
In February 1996, Michael Futerman and Eli Futerman advanced
$2.5 million to the Company. The Company repaid $350,000 of this
debt and exchanged five-year subordinated notes for the demand
notes representing the $2,150,000 principal balance of this debt.
The Futermans' subordinated notes bear interest at the rate of
12% per annum. Interest is payable monthly. The notes are
redeemable at the option of the Company, in whole or part, at any
time, subject to subordination agreements with the Company's
banking syndicate. The notes are payable in 50 equal monthly
principal payments which commenced January 1, 1997, and continue
through and including February 1, 2001. In the event that the
Company's net income is $4,141,000 or greater in any fiscal year,
then the Company must make a principal prepayment on the notes in
equal to 19.186% of its net income in excess of such amount,
provided the Company is not in default under the credit facility
with its banking syndicate. The Futermans' notes are unsecured
and subordinate to all of the Company's indebtedness to its
banking syndicate.
Gordon E. Forth, a director of the Company, is a partner in
Woods, Oviatt, Gilman, Sturman & Clarke LLP, which serves as the
Company's principal outside counsel. Robert I. Israel, also a
director of the Company, is a Managing Director of Schroder
Wertheim & Co. Incorporated, which periodically provides
investment banking services to the Company.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P.
as the Company's independent auditors through fiscal year end
1997. Coopers & Lybrand L.L.P. audited the Company's financial
statements for the 1996 fiscal year and has performed such
services since 1988. Representatives of Coopers & Lybrand L.L.P.
are expected to be present at the Annual Meeting, and will have
an opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
OTHER BUSINESS
As of the date of this Proxy Statement, the Company's
management does not intend to present, and has not been informed
that any other person intends to present, any matter for action
at the Annual Meeting other than those described above. If any
other matters properly come before the meeting, it is intended
that the persons named in the enclosed proxy will vote the proxy
on such matters in accordance with their best judgment.
The cost of solicitation of proxies in connection with the
Annual Meeting will be paid by the Company. In addition to
solicitation by use of mails, some of the officers and regular
employees of the Company, without extra remuneration, may solicit
Proxies personally or by telephone, telegraph or cable. The
Company will reimburse any banks, brokers and other custodians,
nominees and fiduciaries for their expenses in forwarding proxy
and solicitation material to the beneficial owners of the Common
Stock held by them.
PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Shareholder proposals for inclusion in the proxy statement
and form of proxy for the next Annual Meeting of Shareholders
must be received by the Company at its executive offices on or
before November 15, 1997.
Daniel J. Chessin,
Director, Executive Vice President
and Secretary
Rochester, New York
January 24, 1997
EXHIBIT A
AMENDMENT NO. 2 TO
HAHN AUTOMOTIVE WAREHOUSE, INC.
1992 STOCK OPTION PLAN
Pursuant to Section 16 of the Hahn Automotive Warehouse 1992
Stock Option Plan, as amended by Amendment No. 1 (collectively,
the "Plan"), Hahn Automotive Warehouse, Inc. (the "Company")
hereby amends the Plan as follows:
1. Effective immediately, the first four sentences of
Section 3 of the Plan entitled "Administration of the Plan" is
deleted in their entirety and replaced with the following
sentences:
The Plan will be administered by the
Board of Directors or a committee appointed
by the Board of Directors (which shall serve
at the pleasure of the Board of Directors).
If the Board elects to appoint a committee,
the Board shall grant power to the committee
to authorize the issuance of the Company's
Company Stock pursuant to the options granted
under the Plan. As used herein, "Committee"
shall refer to either the Committee selected
by the Board or the Board if it elects to
administer the Plan. The Committee shall be
constituted to permit the Plan to comply with
Rule 16b-3.
2. Subject to approval by the Company's shareholders,
effective November 8, 1996, the first sentence of Section 4 of
the Plan entitled "Shares Subject to the Plan" is deleted in its
entirety and the following new sentence is substituted in its
place:
Subject to adjustment as provided
in Paragraph 15 herein, the Stock that may be
optioned or purchased under the Plan from
time to time will not exceed an aggregate of
750,000 shares and such shares may be
authorized, unissued shares or treasury
shares, reacquired shares or any combination
of the foregoing. The Company may repurchase
shares for this purpose.
3. Subject to approval by the Company's shareholders,
effective November 8, 1996, the second sentence of Section 16 is
deleted in its entirety and the following new sentence is
substituted in its place:
If not sooner terminated, the Plan will
terminate automatically on July 31, 2002.
Except as amended above, the Plan shall remain in full force
and effect according to its terms and provisions.
Done this 8th day of November, 1996.
Hahn Automotive Warehouse, Inc.
By://S Eli N. Futerman
Name: Eli N. Futerman
Title: President
