Hahn Automotive Warehouse, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on March 15, 2000
To Our Shareholders:
The Annual Meeting of Shareholders of Hahn Automotive
Warehouse, Inc. ("Company"), a New York corporation, will be held
at the Company's executive offices located at 415 West Main
Street, Rochester, New York 14608 on Wednesday, March 15, 2000,
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; and
(2) 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 26, 2000, 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,
<PAGE 1>
Daniel J. Chessin
Executive Vice President
and Secretary
Rochester, New York
January 26, 2000
Hahn Automotive Warehouse, Inc.
PROXY STATEMENT for
ANNUAL MEETING OF SHAREHOLDERS
MARCH 15, 2000
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 Wednesday,
March 15, 2000, at 10:00 a.m. (Local Time) at the Company's
executive offices, 415 West Main Street, Rochester, New York
14608, to act upon (1) the election of four directors and (2)
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 26, 2000.
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. 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 26, 2000 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 26, 2000, the Company had outstanding
4,745,014 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 (2,372,508 shares) present in person or by proxy
will constitute a quorum, which is required to transact business
at the Annual Meeting.
<PAGE 2>
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.
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 director nominees. 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)
Pursuant to the Company's By-Laws, the Board of Directors
has fixed the size of the Board of Directors at eight directors.
The Board of Directors consists of two classes. All members of
one class are elected at each annual shareholders meeting to hold
office for a full term of two years.
On August 23, 1999, Michael Futerman, a director since
December 1958 and founder of the Company, passed away. Mr.
Futerman's term as a director would have expired at the 2000
annual shareholder's meeting. In January, 2000, the Board of
Directors elected Nathan Lewinger to the Board of Directors to
fill the vacancy created by Mr. Futerman's death.
The terms of office of directors Eli N. Futerman, William A.
Buckingham, Robert I. Israel and Nathan Lewinger all expire at
the Annual Meeting. Mr. Israel will not stand for reelection as
a director at the Annual Meeting. The Board of Directors has
nominated Messrs. Futerman, Buckingham, Lewinger and Gordon E.
Forth for election to the Board at the Annual Meeting. If
elected, each such nominee will hold office until the annual
shareholders meeting to be held in 2002.
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 if any nominee becomes
unavailable for any reason. The proxies, however, cannot vote
for more than four nominees.
<PAGE 3>
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.
Nominated for Election for Term Expiring in 2002
Eli N. Futerman has been President of the Company since May,
1992. In January, 1999 he assumed the additional responsibility
of Chief Executive Officer. 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. From
November, 1993, and from November, 1995, Mr. Futerman has served
as the President and as the Chief Executive Officer respectively,
of the Company's wholly owned subsidiary, Autoworks, Inc., which
filed for protection under Chapter 11 of the Bankruptcy Code
("Bankruptcy Proceeding") and is currently a debtor in the
pending Bankruptcy Proceeding. Since its inception in May, 1999,
Mr. Futerman has been the President of the Company's internet e-
commerce auto parts business, iAutoparts, Inc. Mr. Futerman has
been a director of the Company since September, 1979. Mr.
Futerman is a member of the Board of Directors and Treasurer of
Aftermarket Auto Parts Alliance, Inc., formerly Auto Value
Associates, Inc., the programmed distribution group of which the
Company is a member. Mr. Futerman is 41 years of age.
William A. Buckingham has been a Director of the Company
since November, 1997 and is currently a consultant in the private
sector. From 1990 to 1997 he held several positions in the
banking industry which included Executive Vice President of First
Empire State Corporation and M&T Bank where he was responsible
for that Company's Retail Banking Division. From 1973 to 1990,
Mr. Buckingham held several positions with the Manufacturers
Hanover Trust Company where he was Executive Vice President with
responsibility for branch operations and consumer and small
business lending, and President and Chief Executive Officer of
Manufacturers Hanover, N.A. Mr. Buckingham currently serves as
Chairman of the Board of Trustees at the Rochester Institute of
Technology and as a Director of its for-profit RIT Research
Corporation subsidiary. Mr. Buckingham also serves as Vice
Chairman of the Directors Advisory Council of M&T Bank and as a
Director and member of the Management Continuity Committee of The
Genesee Corporation (which engages in malt beverage production,
dry food processing, equipment leasing and real estate
investments). Mr. Buckingham is 57 years of age.
<PAGE 4>
Nathan Lewinger is a private investor whose investments
include real estate and high tech companies. From 1976 until
1988, Mr. Lewinger served as President of Pennant Products Inc.
(a manufacturer of bakery ingredients) until Pennant Products was
sold in 1988 to Unilever Corporation. From 1988 to 1990 Mr.
Lewinger served as President of the Bakery Division of Van Den
Burgh Foods (a division of Unilever) and from 1990 to 1993, he
was a consultant to Unilever Corporation. He currently serves on
the Board of EKMS, an intellectual property consulting firm in
Cambridge, Massachusetts. Mr. Lewinger is 55 years of age.
Gordon E. Forth served as a director of the Company from
May, 1992, to June, 1997. Mr. Forth is a partner of Woods,
Oviatt, Gilman, Sturman & Clarke LLP, a Rochester, New York based
law firm, where he has practiced law since 1987. Mr. Forth also
serves as corporate secretary for Zapata Corporation, a holding
company and Zap.Com Corporation, an internet advertising and e-
commerce networking company. Woods, Oviatt provides legal
services to the Company. Mr. Forth is 38 years of age.
Term Expires in 2001
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 November, 1993, Mr. Chessin served
as Vice President and as Executive Vice President of the
Company's wholly owned subsidiary, Autoworks, Inc., which is
currently a debtor in the pending Bankruptcy Proceeding. Since
May, 1999, Mr. Chessin has been Secretary of the Company's
internet e-commerce auto parts business, iAutoparts, Inc. Prior
to joining the Company, Mr. Chessin was engaged in the private
practice of law. Mr. Chessin is a member of the Board of
Governors of the Car Care Council (a national association for
automobile maintenance awareness). Mr. Chessin is 38 years of
age.
Stephen B. Ashley has been a Director of the Company since
May, 1992. Mr. Ashley is Chairman and Chief Executive Officer of
the Ashley Group (related companies focused on management,
brokerage, financing and investment in commercial and multi-
family real-estate). Mr. Ashley 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 engages in malt beverage
production, dry food processing, equipment leasing and real
<PAGE 5>
estate investments), the Federal National Mortgage Association,
Inc. (Fannie Mae), and the Exeter Fund, Inc. and Manning and
Napier Insurance Fund, Inc. (both of which are advisory firms to
a family of mutual funds). Mr. Ashley is 59 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 of Sugar Creek Corp. and its subsidiaries, W.W. Griffith
Oil Co. (a petroleum distributor) and Sugar Creek Stores, Inc. (a
convenience chain store operation) since 1977 and 1982,
respectively. He has also been Chairman and Chief Executive
Officer of Travel Ports of America, Inc. (a truck stop chain
operation) since November, 1987. Mr. Saunders previously served
as a director of Truckstops of America, Inc. (a regional chain of
truck stops) and of Ryder Systems, Inc. (which engages mainly in
the rental of vehicles) after that corporation acquired
Truckstops of America, Inc., and as a director of Richardson Food
Corporation (a distributor of dessert toppings and condiments).
Mr. Saunders is 62 years of age.
Family Relationships
Eli N. Futerman is the brother-in-law of Daniel J. Chessin.
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 three times during
the fiscal year ended September 30, 1999. All directors except
E. Philip Saunders attended 75% or more of the aggregate of all
meetings of the Board of Directors and Board committees on which
they served during Fiscal 1999.
The standing committees of the Board of Directors consist of
the Executive, Compensation, Audit and Retirement Committees.
The Board of Directors does not have a nominating committee.
Until August 23, 1999, the Executive Committee consisted of
Messrs. Michael Futerman, Eli N. Futerman and Robert I. Israel.
Following Mr. Michael Futerman's death, on that date, Eli N.
Futerman and Robert I. Israel continued as the only committee
members. The vacancy created by Mr. Futerman's death has not yet
been filled. 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 1999.
<PAGE 6>
Until August 23, 1999, the Compensation Committee was
comprised of Messrs. Michael Futerman, Eli N. Futerman, William
A. Buckingham and Robert I. Israel. Following Mr. Futerman's
death, on that date, Eli N. Futerman, William A. Buckingham and
Robert I. Israel continued as members of the committee. The
vacancy created by Mr. Futerman's death has not yet been filled.
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 1999.
The Audit Committee members include Messrs. Ashley,
Buckingham and Saunders. The Audit Committee is responsible for
evaluating and approving annually the services performed by the
Company's independent public 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 four occasions during Fiscal 1999.
On November 8, 1996, the Board of Directors elected to
assume responsibilities for the administration of the 1992 Stock
Option Plan. A standing committee no longer exists for this
function.
Until August 23, 1999, the Retirement Committee consisted of
Messrs. Michael Futerman and Eli N. Futerman. Following Mr.
Michael Futerman's death, Eli N. Futerman continued as the only
committee member. The vacancy created by Mr. Futerman's death,
on that date, has not yet been filled. The Retirement Committee
is authorized to make decisions relating to the Company's
retirement plans. The Retirement Committee did not meet in
Fiscal 1999.
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, the Company grants
to the non-employee directors, annually, non-qualified stock
options to purchase 1,000 shares of Common Stock. In addition,
under the Plan, each newly elected non-employee director is
granted options for the purchase of 3,000 shares. The exercise
price for options granted to the non-employee directors is set at
the closing market price on the date the options are granted.
INFORMATION ABOUT EXECUTIVE OFFICERS
<PAGE 7>
The following table sets forth certain information about the
Company's executive officers:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Michael Futerman 71 Director and Chairman of the
Board, deceased
Eli N. Futerman 41 Director, Chief Executive Officer
and President
Daniel J. Chessin 38 Director, Executive Vice President
and Secretary
Peter J. Adamski 46 Vice President -
Finance and Chief
Financial Officer
David M. Appelbaum 47 Vice President - Direct
Distribution
Daniel R. McDonald 49 Vice President - General Counsel
Albert J. Van Erp 62 Vice President - Controller
Timothy Vergo 50 Vice President - Wholesale
Operations
</TABLE>
Peter J. Adamski has been Vice President - Finance and Chief
Financial Officer since August, 1998. Prior to joining the
Company, Mr. Adamski was employed by Bausch & Lomb from 1995 to
1998 as a Director in Corporate Business Development and
Strategic Global Sourcing. From 1979 to 1995 Mr. Adamski was
employed by Johnson & Johnson, (a health care products
manufacturer) in various finance and merger & acquisition
positions and during the last 10 years served as a Controller of
the McNeil Division. Mr. Adamski has also worked for Arthur
Andersen & Co. as an auditor and is a licensed Certified Public
Accountant. Mr. Adamski is 46 years of age.
David M. Appelbaum became Vice President - Direct
Distribution in September, 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 engaged in the direct distribution of automotive
aftermarket parts and were acquired by the Company on September
30, 1994. Mr. Appelbaum is 47 years of age.
Daniel R. McDonald joined the Company as Vice President -
General Counsel in July, 1997. Prior to joining the Company, Mr.
McDonald was Associate General Counsel of First Federal Savings
and Loan Association of Rochester, which was headquartered in
Rochester, New York. Before joining First Federal in April,
1993, Mr. McDonald was engaged in private law practice. Mr.
McDonald has also served as Vice-President and Deputy General
Counsel of Goldome FSB and was previously a partner in the
Buffalo law firm of Jaeckle, Fleischmann & Mugel. Mr. McDonald
is 49 years of age.
<PAGE 8>
Albert J. Van Erp has been Vice President - Controller of
the Company since August, 1998. From May, 1992 until August,
1998 he served as Vice President - Finance. From December, 1985
to May, 1992, he served as Controller of the Company. Mr. Van
Erp has over 35 years experience in corporate internal
accounting. Mr. Van Erp is 62 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
50 years of age.
See Election of Directors above for information concerning
the Company's other executive officers.
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 (the "Commission") and NASDAQ
reports of transactions in its Common Stock. Directors, Officers
and greater than 10% stockholders are required by the Commission
to furnish the Company with copies of all Section 16(a) forms
they file. Based upon a review of the copies of such forms
furnished to the Company and written representations that no
further forms were required, the Company believes that during
Fiscal 1999, 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 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Name and Principal Fiscal Salary Bonus
Position Year ($) <F2> ($)
<S> <C> <C> <C>
Michael Futerman, 1999 283,259 -----
Chairman of the Board of 1998 362,468 -----
Directors and Chief 1997 353,824 -----
Executive Officer <F1>
<PAGE 9>
Eli N. Futerman, 1999 318,663 -----
Chief Executive Officer 1998 315,189 -----
and President 1997 307,693 -----
Daniel J. Chessin, 1999 176,642 -----
Executive Vice President 1998 171,490 -----
1997 128,197 -----
Peter J. Adamski, 1999 147,107 -----
Vice President - Finance 1998 10,388 -----
and Chief Financial Officer
Timothy Vergo, 1999 142,189
Vice President - Wholesale 1998 139,131
Operations 1997 135,899 36,000
David M. Appelbaum, 1999 141,672
Vice President - Direct 1998 138,081
Distribution 1997 134,873 43,678
<FN>
<F1> Michael Futerman passed away on August 23, 1999. He had been
Chief Executive Officer until December 31, 1998, at which time
Eli N. Futerman became Chief Executive Officer on January 1,
1999. After resigning as Chief Executive Officer, Mr. Futerman
served as Chairman of the Board until his death.
<F2> Includes portion of salary deferred under the Company's
401(k) Profit Sharing and Savings Plan.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term Compensation
Securities
Underlying All Other
Name and Principal Fiscal Options/SARs Compensations
Position Year (#) <F3> ($) <F4> <F5>
<S> <C> <C> <C>
Michael Futerman, 1999 ----- -----
Chairman of the Board of 1998 ----- 53,500 <F6>
Directors and Chief 1997 ----- 53,425 <F6>
Executive Officer
<PAGE 10>
Eli N. Futerman, 1999 ----- 32,799 <F7>
Chief Executive Officer 1998 ----- 32,745 <F7>
and President 1997 ----- 32,665 <F7>
Daniel J. Chessin, 1999 2,990
Executive Vice President 1998 3,006
1997 12,400 2,890
Peter J. Adamski, 1999 25,000 -----
Vice President - Finance 1998 ----- -----
and Chief Financial Officer
Timothy Vergo, 1999 ----- 2,353
Vice President - Wholesale 1998 10,000 2,336
Operations 1997 10,400 2,306
David M. Appelbaum, 1999 ----- 2,578
Vice President - Direct 1998 10,000 1,700
Distribution 1997 10,400 1,671
<FN>
<F3> Options granted during Fiscal 1997 have been adjusted to
reflect a 4% stock dividend.
<F4> Includes the aggregate value of the Company's matching
contribution during Fiscal 1999 to the Company's 401(k) Profit
Sharing and Savings Plan. During the 1999 Fiscal Year, the
Company made matching contributions in the following amounts to
the accounts of the following executive officers: Eli N.
Futerman, $1,500; Daniel J. Chessin, $1,470; Timothy Vergo,
$1,270; and David M. Appelbaum, $1,378.
<F5> Includes premiums paid by the Company during Fiscal 1999 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 1999, 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;
Daniel J. Chessin, $1,520; and Timothy Vergo, $1,083.
<F6> Includes $52,000 that the Company accrued 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 designee of 60 quarterly payments of $12,500 each
after his retirement from the Company.
<PAGE 11>
<F7> Includes $29,093 of premiums paid by the Company during
Fiscal 1999 on four insurance policies owned by, and on the life
of, Mr. Futerman, which have a total death benefit of
approximately $2,525,000 and under which Mr. Futerman has the
discretion to designate the beneficiary or beneficiaries.
</FN>
</TABLE>
OPTIONS GRANTS IN FISCAL 1999
The following table sets forth stock options granted during
Fiscal 1999 to the Company's Chief Executive Officer and the
Company's four other most highly compensated executive officers
during such fiscal year.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees Base Price
Name Granted (#) <F1> in Fiscal Year ($/sh) <F2>
<C> <S> <S> <S>
Michael Futerman, ----- ----- -----
Chairman of the Board
of Directors, deceased
Eli N. Futerman, ----- ----- -----
Chief Executive
Officer and President
Daniel J. Chessin, ----- ----- -----
Executive Vice
President
Peter J. Adamski, Vice 25,000 100% 3.50
President - Finance
and Chief Executive
Officer
Timothy Vergo, Vice ----- ----- -----
President - Wholesale
Operations
David M. Appelbaum, ----- ----- -----
Vice President -
Direct Distribution
<PAGE 12>
<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 the options granted to Mr. Adamski
were at the closing price of the Common Stock on the date of the
option grant.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Option/SAR Potential Realizable Value at
Grants in Assumed Annual Rates of Stock
Last Fiscal Price Appreciation for
Individual Grants Year Options Terms ($) <F4>
Expiration
Name Date 5% ($) 10% ($)
<C> <S> <S> <S>
Michael Futerman, ----- ----- -----
Chairman of the Board
of Directors, deceased
Eli N. Futerman, ----- ----- -----
Chief Executive Officer
and President
Daniel J. Chessin, ----- ----- -----
Executive Vice
President
Peter J. Adamski, Vice 11/23/08 <F3> 55,028 139,452
President - Finance
and Chief Financial
Officer
Timothy Vergo, Vice ----- ----- -----
President - Wholesale
Operations
<PAGE 13>
David M. Appelbaum, ----- ----- -----
Vice President -
Direct Distribution
<FN>
<F3> These options were granted for a term of 10 years, subject
to earlier termination upon the occurrence of certain events
related to termination of employment.
<F4> Under the Securities and Exchange Commission's rules and
regulations, companies are required to show hypothetical "option
spread" that would result from assumed appreciation of the
underlying securities of awarded options during their respective
terms. The "option spread" shown is based on assumed annual
compound stock appreciation rates of 5% and 10%, respectively,
during the entire term of the options. The ultimate option
spread, however, will depend on the market value of the Common
Stock at a future date, which may or may not correspond to such
hypothetical appreciation.
</FN>
</TABLE>
OPTION EXERCISES IN FISCAL 1999
The following table sets forth stock options exercised by
the Company's Chief Executive Officer and the Company's four
other most highly compensated executive officers during Fiscal
1999, and the number and value of all unexercised options at
September 30, 1999.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in the Last Fiscal Year and
Fiscal Year-End Option/SAR Values
Shares Number of Securities
Acquired Underlying Unexercised
on Value Options/SARs at
Exercise Realized Fiscal Year-End 1999
Name (#) ($) Exercisable Unexercisable
<S> <C> <C> <C> <C>
Michael Futerman, ----- ----- ----- -----
Chairman of the
Board of
Directors
<PAGE 14>
Eli N. Futerman, ----- ----- 46,683 -----
Chief Executive
Officer and
President
Daniel J.
Chessin, ----- ----- 56,992 4,160
Executive Vice
President
Peter J. Adamski, ----- ----- ----- 25,000
Vice President -
Finance and Chief
Financial Officer
Timothy Vergo, ----- ----- 44,317 6,800
Vice President -
Wholesale
Operations
David M.
Appelbaum, ----- ----- 27,444 6,800
Vice President -
Direct
Distribution
</TABLE>
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in the Last Fiscal Year and
Fiscal Year-End Option/SAR Value
Value of Unexercised
In-The-Money Options/SARs
Fiscal Year-End 1999
Name Exercisable Unexercisable <F1>
<S> <C> <C>
Michael Futerman, ----- -----
Chairman of the Board of
Directors
Eli N. Futerman, ----- -----
Chief Executive Officer
and President
Daniel J. Chessin, ----- -----
Executive Vice President
<PAGE 15>
Peter J. Adamski, ----- -----
Vice President - Finance
and Chief Financial
Officer
Timothy Vergo, ----- -----
Vice President -
Wholesale Operations
David M. Appelbaum, ----- -----
Vice President -
Direct Distribution
<FN>
<F1> An "in-the-money" stock option is an option for which the
market price on September 30, 1999, of the Company's Common Stock
underlying the option exceeds the options exercise price. As of
September 30, 1999, the market price of the Company's Common
Stock was $1.25. The exercise price of the options disclosed in
the above table 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 are 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 Stock Option 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. In Fiscal 1998, the Company engaged an outside
consulting firm, Claymore Partners, Ltd., to recommend a
performance based annual incentive compensation plan. The
Committee adopted the plan and has used it as the basis for
making annual bonus recommendations to the Board. Under the
plan, executives are awarded bonuses if certain financial
criteria are met. These financial criteria require the Company to
achieve certain levels of quarterly and annual free cash flow and
working capital account balances and ratios. The financial
criteria are not weighted. Individual goals are related to the
<PAGE 16>
functions managed by the executive and the key financial
indicators in their respective operations. None of these
financial criteria were achieved in Fiscal 1999 and no bonuses
were awarded or paid for that fiscal year. The Board members
vote on the Committee's recommendations (except with respect to
salary and bonuses proposed for them beyond the annual incentive
compensation plan) in light of their own experiences and
familiarities with compensation practices. In Fiscal 1999, all
recommendations of the Compensation Committee were approved by
the Board.
The Board of Directors is responsible for, and has the
discretion to, award options under and otherwise administer the
Company's 1992 Plan. During Fiscal 1999, the Board of Directors
did not award options under the 1992 Plan to executive management
members, except for 25,000 options for shares which were granted
to Peter J. Adamski, the Company's Vice President - Finance and
Chief Financial Officer, to fulfill a condition of his
employment. The Board of Directors bases the amount of such
awards on the subjective determination of the members as to the
past contribution and potential contribution of the option
recipients as well as the Company's overall success, without
particular emphasis on either such component.
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 Committee does not believe that this provision will
have an affect on the Company at this time given the current
compensation practices. Thus, 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 under Section 162 (m).
Respectfully submitted,
January 26, 2000 Eli N. Futerman* Daniel J. Chessin
Stephen B. Ashley William A. Buckingham*
Robert I. Israel* E. Philip Saunders
* Compensation Committee Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1999, the Compensation Committee was comprised
of Messrs. Michael Futerman, (until he passed away on August 23,
1999) Eli N. Futerman, William A. Buckingham and Mr. Robert I.
Israel. Mr. Michael Futerman was the Company's Chairman of the
Board of Directors and Mr. Eli N. Futerman is the Company's Chief
Executive Officer and President. Mr. Robert I. Israel is a
Managing Director of the Investment Banking firm which has, in
the past, provided investment banking services to the Company.
<PAGE 17>
PERFORMANCE TABLE
The Performance Table 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 on 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 September 30, 1994, in the Company's Common Stock and
in the foregoing index and peer group and further assumes the
reivestment of dividends. The stock price performance shown on
the table is not necessarily indicative of future price
performance.
<TABLE>
<CAPTION>
Comparison of Cumulative Total Return <F1>
TOTAL SHAREHOLDERS RETURN
Return Return Return Return Return Return
9/94 9/95 9/96 9/97 9/98 9/99
<S> <C> <C> <C> <C> <C> <C>
Hahn Automotive
Warehouse, Inc. 100.00 47.00 60.00 48.00 39.00 9.00
Peer Group 100.00 116.00 130.00 139.00 142.00 130.00
NASDAQ 100.00 138.00 164.00 225.00 229.00 372.00
<FN>
<F1> The component issuers of the Motor Vehicle New Parts Supply
and Wholesale Industry Group shown above include: Coast
Distributor Systems, Inc., Genuine Auto Parts Company, Hahn
Automotive Warehouse, Inc. and Oakhurst Co., Inc. (f/k/a Oakhurst
Capital Inc.). 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.
</FN>
</TABLE>
<PAGE 18>
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, 1999.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership Class <F1>
<S> <C> <C>
Eli N. Futerman
415 West Main Street
Rochester, NY 14608 2,348,183 <F2> 49.0%
David M. Appelbaum
415 West Main Street
Rochester, NY 14608 269,785 <F3> 5.6%
<FN>
<F1> The percentages in this column have been calculated on the
basis of the 4,745,014 shares outstanding on December 31, 1999,
plus the number of shares of Common Stock deemed outstanding
pursuant to Securities and Exchange Commission Rule 13d-3(d)(1).
<F2> Includes 16,482 shares owned by Mr. Futerman's immediate
family and 46,683 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, 1999. Also
includes 2,037,886 shares over which Mr. Futerman has voting and
investment control as the executor of Michael Futerman's Estate
and trustee of the Michael Futerman Living Trust. Under Michael
Futerman's will and Living Trust, the shares are to be
distributed to a marital trust under the Living Trust, for the
benefit of Michael Futerman's wife, Sara Futerman. After
distribution, Eli N. Futerman will continue to have voting and
investment control over these shares as trustee of the marital
trust. Mr. Futerman disclaims beneficial ownership of shares not
held of record by him, individually, as executor or as trustee.
<F3> Includes 30,911 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, 1999.
</FN>
</TABLE>
<PAGE 19>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common
Stock beneficially owned at December 31, 1999 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.
Amount and Nature
Director, Nominee of Beneficial Percent of
or Group Ownership <F1> Class <F6>
Eli N. Futerman, 2,348,183 <F2> 49.0
Chief Executive Officer,
President and Director
Daniel J. Chessin, 146,794 <F3> 3.1
Executive Vice President,
Secretary and Director
Stephen B. Ashley, 9,001 <F4> *
Director
William A. Buckingham, 4,000 <F4> *
Director
Robert I. Israel, 21,893 <F4> *
Director
E. Philip Saunders, 7,400 <F4> *
Director
Peter J. Adamski, 8,333 <F4> *
Vice President - Finance,
and Chief Financial Officer
David M. Appelbaum, 269,785 <F4> 5.6
Vice President -
Direct Distribution
Timothy Vergo, 47,784 <F4> *
Vice President -
Wholesale Operations
All Directors and Executive
Officers of the Company as
a Group (11 persons) 2,906,690 <F5> 58.0
*Indicates the number of shares constitutes less than 1% of the
outstanding Common Stock.
<PAGE 20>
[FN]
<F1> Each director, nominee and executive officer in the above
table possesses sole voting and sole investment power with
respect to the shares owned by him except for such shares as to
which beneficial ownership is disclaimed in a footnote.
<F2> See Security Ownership of Certain Beneficial Owners, Note 2.
<F3> Includes 77,899 shares owned of record by members of Mr.
Chessin's immediate family and 61,152 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, 1999. Mr. Chessin disclaims beneficial ownership
over all shares owned by his immediate family members.
<F4> Includes shares issuable upon exercise of stock options
presently exercisable or which become exercisable within 60 days
from December 31, 1999 as follows: Stephen B. Ashley, 7,400
shares; William A. Buckingham, 2,000 shares; Robert I. Israel,
7,400 shares; E. Philip Saunders, 7,400 shares; Peter J.
Adamski, 8,333 shares; David M. Appelbaum, 30,911 shares; Timothy
Vergo, 47,784 shares.
<F5> Includes 262,580 shares issuable upon exercise of stock
options presently exercisable or which become exercisable within
60 days of December 31, 1999.
<F6> The percentages in this column have been calculated on the
basis of the 4,745,014 shares outstanding on December 31, 1999,
plus the number of shares of Common Stock deemed outstanding
pursuant to Securities and Exchange Commission Rule 13d-3(d)(1).
</FN>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of September 30, 1999, the Company leased from Michael
Futerman's estate, Eli N. Futerman, Daniel J. Chessin and Ira D.
Jevotovsky, a former director, and their wives or partnerships,
corporations or trusts in which such persons have interest, 15 of
its 22 distribution center sites and 34 of its 79 Advantage Auto
Stores sites. (Michael Futerman, deceased, was the Company's
Chairman of the Board of Directors and a greater than 5%
beneficial owner of Common Stock; Eli N. Futerman is the
Company's Chief Executive Officer and 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.) The approximate total gross distribution center
space under such leases was 370,360 square feet. The approximate
aggregate store space under such leases was 189,308 square feet.
<PAGE 21>
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, real property taxes, utilities and to perform all
maintenance and repairs. In Fiscal 1999, the Company paid
approximately $1,784,000 as base rental for all distribution
centers and store properties under such related party leases. As
of September 30, 1999, the total base rentals payable under all
such distribution center and store leases through the end of
their respective terms was approximately $8.8 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.
Effective September 30, 1998, the Company's wholly-owned
subsidiary Meisenzahl Auto Parts, Inc. ("Meisenzahl"), merged
into the Company and now operates as a division. The Company
leases two locations from David M. Appelbaum and a third location
from a partnership comprised of David M. Appelbaum and an
unaffiliated third party. (Mr. Appelbaum is the Company's Vice
President-Direct Distribution.) The total gross space under such
leases is approximately 54,400 square feet. The leases require
the Company to pay insurance, real property taxes, utilities and
to perform all maintenance and repairs. As of September 30,
1999, the total base rentals payable under these leases through
the end of their respective terms was approximately $1.6 million
or approximately $320,000 annually.
As a result of the Meisenzahl merger, the Company is liable
under guarantees in favor of the holder of first priority
mortgages covering the property leased from Mr. Appelbaum
pursuant to which approximately $1.6 million in the aggregate was
outstanding as of September 30, 1999. 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 Manufacturers and Traders 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 1999 fiscal year in connection with this arrangement.
<PAGE 22>
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 1999 fiscal year in connection with this agreement.
Mr. Chessin acquired this policy during fiscal year 1994.
In February, 1996, Michael Futerman, since deceased, and Eli
N. Futerman advanced $2.5 million to the Company. The Company
repaid $350,000 of this debt and exchanged five-year subordinated
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 a subordination agreement with the
Company's lender, Fleet Capital Corporation. During Fiscal 1999,
Michael Futerman and Eli N. Futerman deferred principal payments
due from the Company under the subordinated notes in the original
amount of $2,150,000. As a result, in Fiscal 1999, the Company
made interest only payments on the subordinated notes. 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 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 Fleet Capital Corporation. The
notes are unsecured and subordinate to all of the Company's
indebtedness to Fleet Capital Corporation.
On or about December 3, 1998, FCA Associates, a partnership
consisting of Eli N. Futerman, Daniel J. Chessin and David M.
Appelbaum, entered into a purchase and sale agreement with a
third party for the purchase of three (3) properties located in
Rochester, New York and the Towns of Gates, New York and
Farmington, New York. The Company is a tenant with direct
distribution facilities at all three (3) locations. The closing
of the transaction took place on January 15, 1999 and the Company
leases were assigned from the third party to FCA Associates. The
total gross space under such leases is approximately 24,500
square feet. The leases require the Company to pay for liability
insurance, real property taxes, utilities and to perform all
<PAGE 23>
interior maintenance and repairs. The Company closed its
Merchants Road direct distribution facility on or about October
1, 1999 and ended its occupancy and terminated the lease on or
about December 31, 1999. As of September 30, 1999, the total
base rentals payable under the leases for Gates, New York and
Farmington, New York, until the end of their terms, which will
end October 31, 2001, will be approximately $200,000 or $96,000
annually.
Gordon E. Forth, a nominee for director of the Company, is a
partner in Woods, Oviatt, Gilman, Sturman & Clarke LLP, which
serves as the Company's principal outside counsel.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has not, as of the date hereof,
selected independent auditors for the fiscal year ending
September 30, 2000. PricewaterhouseCoopers LLP audited the
Company's financial statements for the 1999 fiscal year and has
performed such services since 1988. Representatives of
PricewaterhouseCoopers LLP 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, e-mail 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, 2000.
<PAGE 24>
Daniel J. Chessin,
Executive Vice President
and Secretary
Rochester, New York
January 26, 2000
PROXY
HAHN AUTOMOTIVE WAREHOUSE, INC.
THE PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF
DIRECTORS
The undersigned hereby appoints ELI N. FUTERMAN and DANIEL J.
CHESSIN, or any one of them, with full power of substitution,
attorneys and proxies to represent the undersigned at the Annual
Meeting of Stockholders of the Company to be held on March 15,
2000, and at any continuation or adjournment thereof, with all
the power which the undersigned would possess if personally
present to vote all shares of Common Stock of Hahn Automotive
Warehouse, Inc. ("Company") held of record by the undersigned on
January 26, 2000 and which the undersigned may be entitled to
vote at said meeting.
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed at right
[ ] WITHHOLD all nominees
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, CIRCLE SUCH NOMINEE'S NAME. YOUR PROXY WILL BE
VOTED FOR REMAINDER.)
Nominees:
Eli N. Futerman
William A. Buckingham
Nathan Lewinger
Gordon E. Forth
2. In their discretion upon such matters incident to the conduct
of the Annual Meeting and upon such other business as may
properly come before the Annual Meeting and any adjournment
or continuation thereof which the Company's Board of
Directors does not know, a reasonable time prior to the
solicitation, will be presented at the Annual Meeting.
<PAGE 25>
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
IF NOT OTHERWISE MARKED, THE SHARES REPRESENTED BY THIS PROXY
SHALL BE VOTED "FOR" THE FOUR NOMINEES.
SIGNATURE DATE
SIGNATURE DATE
IF HELD JOINTLY
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. When
shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or guardian, please
give your fill title as such. If a corporation, please sign in
full corporate name by the president or other authorized officer.
If a partnership, please sign in partnership name by authorized
person.
<PAGE 26>
