Major CSK Auto Shareholder Wants Sellout Proposal at Next Board Meeting

In an amended 13D filing this morning on CSK Auto Corp. (CAO), 9.3% holder Karsch Capital Management disclosed that they sent a second letter to the Board requesting that the company include in its proxy materials for the next annual meeting a proposal that the company immediately hire an investment banking firm to pursue a sale.

Karsch said: "We hope that the Board has already decided to take the steps to solicit offers for the sale of the Company upon the availability of its restated financial statements, but if not, we urge the Board to include our proposal in the Company's proxy materials for the next meeting of stockholders."

A Copy of the Letter:

To The Board of Directors of CSK Auto Corporation ("CSK Auto" or the "Company"):

Karsch Capital Management, LP(1), as a holder of 9.3% of the outstanding common stock of CSK Auto's common stock, has attached a formal proposal that we believe, subject to the bolded text below, should be considered by stockholders at the Company's next stockholders meeting and included in the proxy materials to be disseminated by the Company. Essentially, we propose that the Company put itself up for sale immediately after the Company completes the restatement of its financial statements and becomes current with SEC reporting obligations. For confirmation of ownership, we enclose a copy of our Schedule 13D filed with the Securities and Exchange Commission on October 10, 2006, as amended.

We want to emphasize that this letter is not being written to antagonize the Board. Our October 9, 2006 letter states our views and they have not changed. We believe that the views of the Company's most important constituency -- its stockholders -- be obtained concerning the Company's future and alternatives to maximizing stockholder value. Moreover, given the provisions of CSK Auto's by-laws regarding advanced notice of stockholder proposals, we wanted to give the Company early notification of our proposal.

Since we have not spoken to any members of management or the Board of Directors after sending our letter of October 9, 2006, we do not know the Board's current views. However, if the board has already decided, or decides, to put the Company up for sale, there would be no need to have this proposal included in the next proxy.

We hope that the Board has already decided to take the steps to solicit offers for the sale of the Company upon the availability of its restated financial statements, but if not, we urge the Board to include our proposal in the Company's proxy materials for the next meeting of stockholders.

We have not held our shares of CSK Auto common stock for at least one year as required by Rule 14a-8 under the Securities Exchange Act of 1934 to qualify to have our proposal included in the Company's proxy materials. Our intent is to continue ownership of the shares through the date of the Company's next annual or special meeting of stockholders. However, since the Company has not held an annual meeting for nearly 16 months, we reserve the right to change our intent or position if the Company fails to restate its financial statements and hold its annual meeting within reasonable time.

We are also aware of the provisions of the Company's bylaws that require stockholder proposals to be submitted to the Company "no later than the close of business on the 120th day prior to the upcoming annual meeting." This advanced notice provision may not be an issue depending on the date you plan to schedule the Company's next annual meeting of stockholders. However, because the Company has not held an annual meeting of stockholders since June 16, 2005, we believe that pursuant to Rule 14a-8(e)(2), stockholders have reasonable time to submit proposals and that submitting this proposal at this time provides the Company with reasonable notice. In any event, we request that the Board overlook any procedural issues and elicit the views of the Company's stockholders with respect to the future of the Company by including our proposal in the Company's proxy materials for its next annual meeting of stockholders. Given the magnitude of our financial stake in the Company and the reasonableness of our request, we expect that the Board would make this decision.

If the Board feels that it cannot overlook the requirements of Rule 14a-8 and chooses not to include our proposal, we urge the Board to include any similar proposal(s) if submitted by stockholder(s) who meet the requirements of Rule14a-8.

Sincerely,

Michael Karsch