<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------------
For The Quarter Ended March 31, 1994 Commission File Number 1-5690
-------------- --------
GENUINE PARTS COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-0254510
- - ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2999 CIRCLE 75 PARKWAY, ATLANTA, GEORGIA 30339
- - ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 953-1700
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes * No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
124,496,011
------------------------
(Shares of Common Stock)
1
<PAGE> 2
FORM 10-Q
PART 1 - Financial Information
Item 1 - Financial Statements
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
------
Mar. 31, Dec. 31,
1994 1993
--------- ----------
(Unaudited)
(dollars in thousands)
<S> <C> <C>
CURRENT ASSETS
- - --------------
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 150,117 $ 123,231
Short-term investments . . . . . . . . . . . . . . . . . . 57,962 64,599
Trade accounts and notes receivable, less allowance
for doubtful accounts (1994-$4,066; 1993-$1,582) . . . . 487,818 428,911
Inventories - at lower of cost (substantially last-in,
first-out method) or market. . . . . . . . . . . . . . . 870,751 879,154
Prepaid and other current items . . . . . . . . . . . . . . 13,672 10,299
---------- ----------
TOTAL CURRENT ASSETS . . . . . . . . . 1,580,320 1,506,194
Investments and other assets. . . . . . . . . . . . . . . . 132,932 133,364
Total property, plant and equipment, less allowance
for depreciation (1994-$188,224; 1993-$185,101). . . . . 234,351 231,198
---------- ----------
$1,947,603 $1,870,756
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
- - -------------------
Accounts payable. . . . . . . . . . . . . . . . . . . . . . $ 276,648 $ 258,949
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . 43,354 11,688
Other current liabilities . . . . . . . . . . . . . . . . . 78,271 82,835
---------- ----------
TOTAL CURRENT LIABILITIES. . . . . . . 398,273 353,472
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . 13,148 12,265
Deferred income taxes . . . . . . . . . . . . . . . . . . . 37,980 37,980
Minority interests in subsidiaries. . . . . . . . . . . . . 22,574 21,776
SHAREHOLDERS' EQUITY
- - --------------------
Stated capital:
Preferred stock, par value - $1 per share
Authorized - 10,000,000 shares - None Issued . . . . . -0- -0-
Common stock, par value - $1 per share
Authorized - 150,000,000 shares
Issued - 1994: 124,496,011; 1993: 124,282,289. . . . . 124,496 124,282
Additional paid-in capital. . . . . . . . . . . . . . . . . 3,598 2,566
Retained earnings . . . . . . . . . . . . . . . . . . . . . 1,347,534 1,318,415
---------- ----------
TOTAL SHAREHOLDERS' EQUITY . . . . . . 1,475,628 1,445,263
---------- ----------
$1,947,603 $1,870,756
========== ==========
</TABLE>
See notes to consolidated condensed financial statements.
2
<PAGE> 3
FORM 10-Q
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1994 1993
---- ----
(000 omitted except per share data)
<S> <C> <C>
Net Sales . . . . . . . . . . . . . . . . . . . . . . . $1,162,075 $1,037,914
Cost of goods sold. . . . . . . . . . . . . . . . . . . 815,618 727,493
---------- ----------
346,457 310,421
Selling, administrative & other expenses. . . . . . . . 243,356 219,614
---------- ----------
Income before income taxes and cumulative
effect of changes in accounting principles 103,101 90,807
Income taxes. . . . . . . . . . . . . . . . . . . . . . 40,210 34,416
---------- ----------
Income before cumulative effect of changes
in accounting principles . . . . . . . . . . . . 62,891 56,391
Cumulative effect of changes in accounting
principles, net of tax - Note B. . . . . . . . . -- (1,055)
---------- ----------
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . $ 62,891 $ 55,336
========== ==========
Average common shares outstanding . . . . . . . . . . . 124,469 124,179
========== ==========
Net income per common share . . . . . . . . . . . . . . $ .51 $ .45
========== ==========
Dividends declared per common share . . . . . . . . . . $ .2875 $ .265
========== ==========
****************************************************************************************************************
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE> 4
FORM 10-Q
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
PART I (Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended Mar. 31,
--------------
(000 omitted)
1994 1993
---- ----
<S> <C> <C>
Cash Provided By:
- - -----------------
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 62,891 $ 55,336
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . 9,073 8,464
Other . . . . . . . . . . . . . . . . . . . . . . . . 798 646
Changes in operating assets and liabilities:
Trade accounts receivable (58,907) (43,821)
Merchandise inventories 8,403 (2,478)
Trade accounts payable 17,699 6,130
Income taxes payable 31,666 14,798
Other operating assets and liabilities (10,575) (6,091)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . 61,048 32,984
INVESTING ACTIVITIES:
Purchases of short-term investments, net
of proceeds from sale and maturity 6,637 (66,956)
Purchase of property, plant and equipment (12,651) (12,174)
Other investing activities 2,876 (401)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . (3,138) (79,531)
FINANCING ACTIVITIES:
Dividends paid (32,933) (31,098)
Other financing activities 1,909 1,065
-------- --------
NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . (31,024) (30,033)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . 26,886 (76,580)
-------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . 123,231 168,019
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . $150,117 $ 91,439
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE> 5
FORM 10-Q
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with the instructions to Form 10-Q and therefore do
not include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of
management, all adjustments necessary to a fair statement of the operations of
the interim period have been made. These adjustments are of a normal recurring
nature. The results of operations for the three months ended March 31, 1994,
are not necessarily indicative of results for the entire year.
Note B - Accounting Changes
During the quarter ended March 31, 1993, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" which requires the projected
future costs of providing postretirement benefits, such as health care and life
insurance, be recognized as an expense as employees render service instead of
when benefits are paid. The Company has applied the new rules using the
cumulative effect method, resulting in a charge of $5,055,000 (net of income
taxes of $3,095,000).
Also during the quarter ended March 31, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". The
cumulative effect as of January 1, 1993, of adopting Statement 109 increased
net income by $4,000,000. As permitted by the Statement, prior year financial
statements have not been restated to reflect the impact of the change in
accounting method.
The adoption of Statements 106 and 109 did not have a material impact on the
Company's financial statements or its results of operations.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The Company reported record sales and earnings in the first quarter of 1994.
Sales for the quarter were $1.16 billion, up 12% over the same period in 1993.
Net income in the quarter advanced 14% to $62.9 million. On a per-share basis,
net income for the quarter was $.51 versus $.45 in the same quarter of the
prior year.
During the quarter, all three industry segments registered sound growth. Sales
for the Automotive Parts Group increased 10%, reflecting the strength of NAPA
programs in the marketplace. The Industrial Parts Group increased 11%, as
industrial production and factory utilization improved. The Office Products
Group increased 19%, reflecting innovative marketing programs and an
outstanding level of service. Each of the three segments should continue to
show progress and provide steady sales growth in the future. The Company
continues to believe that its sales growth in all three segments outpaces
industry growth. Cost of goods sold decreased slightly as a percentage of net
sales over the same quarter the prior year. Selling, administrative and other
expenses increased 11% for the quarter and the percentage to net sales
decreased slightly due to expense controls.
5
<PAGE> 6
FORM 10-Q
The first quarter results for 1993 included the net effect of adoption of FAS
106, "Employers' Accounting for Postretirement Benefits Other Than Pension", of
a charge of $5,055,000 (net of income taxes of $3,095,000) and an increase in
net income of $4,000,000 for the adoption of FAS 109, "Accounting for Income
Taxes". The adoption of FAS 106 and 109 did not have a material impact on the
Company's financial statements or its results of operations.
The ratio of current assets to current liabilities remains very good at 3.97/1,
and the Company's cash position is excellent.
PART II
Item 4.
Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.10 * Restricted Stock Agreement dated March 31, 1994
between the Company and Larry L. Prince.
Exhibit 10.11 * Restricted Stock Agreement dated March 31, 1994
between the Company and Thomas C. Gallagher.
* Indicates executive compensation plans and arrangements.
(b) No reports on Form 8-K were filed by the registrant during the quarter
ended March 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Genuine Parts Company
-------------------------------
(Registrant)
Date May 6, 1994 /s/ Jerry Nix
-------------------- ---------------------------------
Senior Vice President - Finance
/s/ George Kalafut
--------------------------------------
Executive Vice President - Finance and
Administration (Principal Financial
and Accounting Officer)
6
<PAGE> 1
EXHIBIT 10.10
GENUINE PARTS COMPANY
1992 STOCK OPTION AND INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
Grantee: Larry Prince
Number of Shares: 100,000
Date: March 31, 1994
1. Agreement to Award Restricted Stock. Subject to the
satisfaction of the conditions specified in Section 2 hereof, Genuine Parts
Company (the "Company") hereby agrees to award to Larry Prince ("Grantee"),
under its 1992 Stock Option and Incentive Plan ("Plan"), up to a maximum of One
Hundred Thousand (100,000) shares of its Common Stock, such shares to be
awarded to Grantee as Restricted Stock pursuant to the terms of the Plan and
this Restricted Stock Agreement (this "Agreement"). The Plan is incorporated
herein by reference and made a part of this Agreement, and any term used in
this Agreement and not defined herein shall have the meaning set forth in the
Plan. Grantee shall have no rights as a shareholder of Company with respect to
any of the shares of Common Stock subject hereto prior to the awarding of such
shares pursuant to Section 2 below.
2. Conditions for Award of Restricted Stock.
(a) A maximum of 50,000 shares of Restricted Stock will be
awarded to Grantee if the Company's Common Stock achieves specified target
prices (the "Stock Price Targets"). The Company will be deemed to have
achieved a Stock Price Target, and shares of Restricted Stock will be awarded
to the Grantee, on the date on which the average Fair Market Value (as defined
in the Plan) of the Common Stock over a period of twenty consecutive trading
days (days on which shares of Company Common Stock are actually traded on the
New York
<PAGE> 2
Stock Exchange) first equals or exceeds the Stock Price Target (the "Stock
Price Award Dates").
The Grantee will be awarded the following number of shares of Restricted
Stock on the Stock Price Award Dates upon the Company's achievement of the
following Stock Price Targets:
<TABLE>
<CAPTION>
STOCK PRICE TARGET ($) SHARES OF RESTRICTED STOCK AWARDED
---------------------- ----------------------------------
<S> <C>
41.25 10,000
48.125 10,000
55.00 10,000
61.875 10,000
68.75 10,000
</TABLE>
(b) A maximum of 50,000 shares of Restricted Stock will be
awarded to Grantee if the Company achieves certain earnings per share targets
(the "EPS Targets"). The Company's earnings per share ("EPS") shall be deemed
to be the Company's "net income per common share" as reported in the Company's
annual audited consolidated financial statements. The determination of whether
the Company has achieved the EPS Targets, and the award of shares of Restricted
Stock to the Grantee based thereon, shall be made immediately upon the
conclusion of the annual audit closing conference with the Company's
independent auditor's if such auditors have provided to Company management at
that conference an unqualified opinion on the Company's fiscal year end audited
consolidated financial statements (the "EPS Award Dates").
The Grantee will be awarded the following number of shares of
Restricted Stock on the EPS Award Dates upon the Company's achievement during
fiscal years 1994, 1995, 1996, 1997 and 1998 of the following EPS Targets:
- 2 -
<PAGE> 3
FOR FISCAL YEAR 1994:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
EARNINGS PER SHARE RESTRICTED STOCK AWARDED
------------------ ------------------------
<S> <C>
Greater than or equal to $2.29 (1993 EPS plus 10%) 10,000
Greater than or equal to $2.27 (1993 EPS plus 9%) but less than 9,000
$2.29
Greater than or equal to $2.25 (1993 EPS plus 8%) but less than 8,000
$2.27
Less than $2.25 0
</TABLE>
FOR EACH OF FISCAL YEAR 1995, 1996, 1997 AND 1998:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
EARNINGS PER SHARE RESTRICTED STOCK AWARDED
------------------ ------------------------
<S> <C>
Greater than or equal to the prior fiscal year EPS plus 10% 10,000
Greater than or equal to the prior fiscal year EPS plus 9%, but 9,000
less than the prior fiscal year EPS plus 10%
Greater than or equal to the prior fiscal year EPS plus 8%, but 8,000
less than the prior fiscal year EPS plus 9%
Less than the prior fiscal year EPS plus 8% 0
</TABLE>
(c) For the purposes of determining the Company's EPS and
the EPS Targets hereunder, actual figures shall be rounded up or down, as
appropriate, to the second decimal place (with $0.005 to be rounded up to
$0.01).
(d) All Stock Price Targets and EPS Targets, and the number
of shares of Restricted Stock to be awarded hereunder, shall be adjusted to
reflect any adjustment of shares of Common Stock as described in Section 1.5 of
the Plan.
- 3 -
<PAGE> 4
3. Restricted Period. Subject to the provisions of Section 9 and 10 of
this Agreement, the Restricted Period with respect to the shares of Restricted
Stock awarded to the Grantee under Section 2 shall commence on the respective
Award Dates for such shares and shall terminate at 5:00 p.m., Eastern Standard
Time, on March 31, 2004, the tenth anniversary of the date of this Agreement.
4. Issuance of Shares. The Company shall issue a certificate for an
appropriate number of shares of Common Stock awarded to the Grantee as
Restricted Stock pursuant to Section 2 of this Agreement on the relevant Award
Date. The Company shall issue a separate certificate for each award of shares
of Restricted Stock under Section 2. Each certificate issued for shares
awarded to the Grantee under this Agreement shall be registered in the name of
the Grantee and shall be deposited with the Company or its designee in an
escrow account, together with stock powers or other instruments of transfer to
be provided and appropriately endorsed in blank by the Grantee as of the
relevant Award Date. Each such certificate shall bear a legend in
substantially the following form:
This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture and
restrictions against transfer) contained in the Genuine Parts
Company 1992 Stock Option and Incentive Plan and a Restricted
Stock Agreement between the registered owner of the shares
represented hereby and Genuine Parts Company. Release from such
terms and conditions shall be made only in accordance with the
provisions of such Plan and Agreement, copies of which are on
file in the office of the Secretary of Genuine Parts Company.
5. Release of Shares. Subject to the provisions of Sections 9 and 10
of this Agreement, the Company, provided that the Grantee remains in the
employment of the Company or a Subsidiary during the entirety of the applicable
Restricted Period, shall release from escrow and deliver to the Grantee or the
legal representative of the Grantee, as appropriate, free of the legend
described in Section 4 above, the certificate evidencing shares of Restricted
Stock
- 4 -
<PAGE> 5
awarded under Section 2 as promptly as practicable following the date the
Restricted Period expires with respect to such Restricted Stock.
6. Restrictions on Transfer of Shares. Restricted Shares awarded under
the Plan, and the right to vote such shares and to receive dividends thereon,
may not, except as otherwise provided in the Plan, be sold, assigned,
transferred, exchanged, pledged or otherwise encumbered during the Restricted
Period applicable to such shares, and no such sale, assignment, transfer,
exchange, pledge or encumbrance, whether made or created by voluntary act of
the Grantee or of any agent of such Grantee or by operation of law, shall be
recognized by, or be binding upon, or shall in any manner affect the rights of,
the Company or any agent or any custodian holding certificates for such shares
during the applicable Restricted Period.
7. Rights of Grantee During Restricted Periods. Except as otherwise
provided in the Plan, the Grantee shall, during the applicable Restricted
Periods, have all of the other rights of a common shareholder with respect to
Restriced Shares awarded to the Grantee under Section 2 including, without
limitation, the right to receive cash dividends, if any, as may be declared on
such shares from time to time, and the right to vote (in person or by proxy)
such shares at any meeting of shareholders of the Company. Any shares of
Common Stock issued to Grantee as a dividend with respect to Restricted Stock
awarded hereunder shall have the same status and bear the same legend as the
Restricted Stock and shall be held in escrow, if the relevant Restricted Stock
is held in escrow, unless otherwise determined by the Committee.
8. Termination of Employment. Subject to Section 10 of this Agreement,
upon the termination of Grantee's employment with the Company ("Termination"),
other than in connection with a Change in Control or Grantee's Retirement,
Disability or death (as such terms are defined in Section 9(b) hereof), (i) all
of Grantee's rights to future awards of Restricted Stock upon achievement of
Stock Price Targets or EPS Targets on Award Dates subsequent to
- 5 -
<PAGE> 6
the date of Termination shall terminate without the payment of any
consideration by the Company, (ii) all shares of Restricted Stock theretofore
awarded to the Grantee for which the Restricted Period has not terminated prior
to such Termination shall be forfeited by the Grantee to the Company without
the payment of any consideration by the Company, and (iii) all unissued shares
of Common Stock reserved for issuance to Grantee pursuant to Section 14 hereof
shall be released from such reservation. In such event, neither the Grantee
nor any successors, heirs, assigns, or personal representatives of the Grantee
shall thereafter have any further rights or interest in such shares, and the
Grantee's name shall thereupon be deleted from the list of the Company's
shareholders with respect to such shares.
9. Change of Control, Retirement, Disability or Death.
(a) Upon a Change in Control, the Retirement or Disability
of the Grantee, or the Grantee's death while in the employment of the Company
or a Subsidiary, (i) all of Grantee's rights to future awards of Restricted
Stock upon achievement of Stock Price Targets or EPS Targets on Award Dates
subsequent to the date of Termination shall terminate without the payment of
any consideration by the Company, and (ii) the Restricted Period to which any
shares of Restricted Stock awarded to the Grantee under Section 2 are subject
shall expire as of the date of the Change in Control or Grantee's Retirement,
Disability or death. In such event, the Company shall release from escrow and
deliver to the Grantee or the legal representative of the Grantee, as
appropriate, the certificate(s) representing the relevant Restricted Stock free
of restrictive legend in accordance with Section 5 hereof.
(b) For the purposes of this Agreement, the following terms
shall have the following meanings: (i) a Change in Control shall have the
meaning specified in Section 1.5(b) of the Plan; (ii) "Retirement" shall mean
normal retirement as defined in the Company's Pension Plan or in any
modification thereof or successor thereto; and (iii) "Disability" shall have
the meaning specified in the Company's Long Term Disability Plan or in any
modification thereof or successor thereto.
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<PAGE> 7
10. Committee Acceleration Power. Notwithstanding any other provisions
of the Plan or this Agreement, the Committee shall be authorized in its
discretion, based upon its review and evaluation of the performance of the
Company and its Subsidiaries, to accelerate the release to the Grantee of
Restricted Stock subject to this Agreement upon such terms and conditions as
the Committee may deem advisable.
11. Federal Income Tax Matters. The Grantee, upon award of the shares
of Restricted Stock under Section 2, shall be authorized to make an election to
be taxed upon such award under Section 83(b) of the Code. To effect such
election, the Grantee may file an appropriate election with the Internal
Revenue Service within thirty (30) days after such awards of the Restricted
Stock hereunder and otherwise in accordance with applicable Treasury
Regulations.
The Grantee recognizes that, pursuant to Section 4.3 of the Plan, the
Company may require the Grantee to remit to the Company an amount sufficient to
satisfy any federal, state or local withholding tax liability in connection
with the agreement to award, award of, or release from escrow of the shares of
Restricted Stock granted hereunder.
12. Continued Employment Not Presumed. Neither (i) the Plan, (ii) the
agreement to award, award or vesting of Restricted Stock under this Agreement
nor (iii) this Agreement, shall give Grantee a right to continued employment by
the Company or its Subsidiaries or affect the right of the Company and its
Subsidiaries to terminate the employment of Grantee with or without cause.
13. Grantee's Covenant. The Grantee hereby agrees to use his or her
best efforts to provide services to the Company in a workmanlike manner and to
promote the Company's interests.
- 7 -
<PAGE> 8
14. Reservation of Shares. As of the date of this Agreement, the
Company shall reserve for issuance 100,000 shares of its Common Stock to be
issued pursuant to the terms of this Agreement. If the Grantee's rights with
respect to the unissued of Restricted Stock subject to this Agreement terminate
pursuant to Section 8 or Section 9 hereof, then such unissued shares of Common
Stock shall no longer be reserved for issuance pursuant to this Agreement.
15. Plan Controls. In the event of any actual or alleged conflict
between the provisions of the Plan and the provisions of this Agreement, the
provisions of the Plan shall be controlling and determinative.
16. Successors. This Agreement shall be binding upon any successor of
the Company, in accordance with the terms of this Agreement and the Plan.
- 8 -
<PAGE> 9
IN WITNESS WHEREOF, Genuine Parts Company, acting by and through its
duly authorized officers, has caused this Restricted Stock Agreement to be
executed, and the Grantee has executed this Restricted Stock Agreement, all as
of the day and year first above written.
GENUINE PARTS COMPANY
By:/s/ George W. Kalafut
---------------------
Title: Executive Vice President Finance
ATTEST:
/s/ Brainard T. Webb, Jr.
- - -------------------------
Title: Secretary
[CORPORATE SEAL]
GRANTEE
/s/ Larry Prince
------------------------
Larry Prince
- 9 -
<PAGE> 1
EXHIBIT 10.11
GENUINE PARTS COMPANY
1992 STOCK OPTION AND INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
Grantee: Tom Gallagher
Number of Shares: 50,000
Date: March 31, 1994
1. Agreement to Award Restricted Stock. Subject to the
satisfaction of the conditions specified in Section 2 hereof, Genuine Parts
Company (the "Company") hereby agrees to award to Tom Gallagher ("Grantee"),
under its 1992 Stock Option and Incentive Plan ("Plan"), up to a maximum of
Fifty Thousand (50,000) shares of its Common Stock, such shares to be awarded
to Grantee as Restricted Stock pursuant to the terms of the Plan and this
Restricted Stock Agreement (this "Agreement"). The Plan is incorporated herein
by reference and made a part of this Agreement, and any term used in this
Agreement and not defined herein shall have the meaning set forth in the Plan.
Grantee shall have no rights as a shareholder of Company with respect to any of
the shares of Common Stock subject hereto prior to the awarding of such shares
pursuant to Section 2 below.
2. Conditions for Award of Restricted Stock.
(a) A maximum of 25,000 shares of Restricted Stock will be
awarded to Grantee if the Company's Common Stock achieves specified target
prices (the "Stock Price Targets"). The Company will be deemed to have
achieved a Stock Price Target, and shares of Restricted Stock will be awarded
to the Grantee, on the date on which the average Fair Market Value (as defined
in the Plan) of the Common Stock over a period of twenty consecutive trading
days (days on which shares of Company Common Stock are actually traded on the
New York
<PAGE> 2
Stock Exchange) first equals or exceeds the Stock Price Target (the "Stock
Price Award Dates").
The Grantee will be awarded the following number of shares of Restricted
Stock on the Stock Price Award Dates upon the Company's achievement of the
following Stock Price Targets:
<TABLE>
<CAPTION>
STOCK PRICE TARGET ($) SHARES OF RESTRICTED STOCK AWARDED
---------------------- ----------------------------------
<S> <C>
41.25 5,000
48.125 5,000
55.00 5,000
61.875 5,000
68.75 5,000
</TABLE>
(b) A maximum of 25,000 shares of Restricted Stock will be
awarded to Grantee if the Company achieves certain earnings per share targets
(the "EPS Targets"). The Company's earnings per share ("EPS") shall be deemed
to be the Company's "net income per common share" as reported in the Company's
annual audited consolidated financial statements. The determination of whether
the Company has achieved the EPS Targets, and the award of shares of Restricted
Stock to the Grantee based thereon, shall be made immediately upon the
conclusion of the annual audit closing conference with the Company's
independent auditor's if such auditors have provided to Company management at
that conference an unqualified opinion on the Company's fiscal year end audited
consolidated financial statements (the "EPS Award Dates").
The Grantee will be awarded the following number of shares of
Restricted Stock on the EPS Award Dates upon the Company's achievement during
fiscal years 1994, 1995, 1996, 1997 and 1998 of the following EPS Targets:
- 2 -
<PAGE> 3
FOR FISCAL YEAR 1994:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
EARNINGS PER SHARE RESTRICTED STOCK AWARDED
------------------ ------------------------
<S> <C>
Greater than or equal to $2.29 (1993 EPS plus 10%) 5,000
Greater than or equal to $2.27 (1993 EPS plus 9%) but less than 4,500
$2.29
Greater than or equal to $2.25 (1993 EPS plus 8%) but less than 4,000
$2.27
Less than $2.25 0
</TABLE>
FOR EACH OF FISCAL YEAR 1995, 1996, 1997 AND 1998:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
EARNINGS PER SHARE RESTRICTED STOCK AWARDED
------------------ ------------------------
<S> <C>
Greater than or equal to the prior fiscal year EPS plus 10% 5,000
Greater than or equal to the prior fiscal year EPS plus 9%, but 4,500
less than the prior fiscal year EPS plus 10%
Greater than or equal to the prior fiscal year EPS plus 8%, but 4,000
less than the prior fiscal year EPS plus 9%
Less than the prior fiscal year EPS plus 8% 0
</TABLE>
(c) For the purposes of determining the Company's EPS and
the EPS Targets hereunder, actual figures shall be rounded up or down, as
appropriate, to the second decimal place (with $0.005 to be rounded up to
$0.01).
(d) All Stock Price Targets and EPS Targets, and the number
of shares of Restricted Stock to be awarded hereunder, shall be adjusted to
reflect any adjustment of shares of Common Stock as described in Section 1.5 of
the Plan.
- 3 -
<PAGE> 4
3. Restricted Period. Subject to the provisions of Section 9 and 10 of
this Agreement, the Restricted Period with respect to the shares of Restricted
Stock awarded to the Grantee under Section 2 shall commence on the respective
Award Dates for such shares and shall terminate at 5:00 p.m., Eastern Standard
Time, on March 31, 2004, the tenth anniversary of the date of this Agreement.
4. Issuance of Shares. The Company shall issue a certificate for an
appropriate number of shares of Common Stock awarded to the Grantee as
Restricted Stock pursuant to Section 2 of this Agreement on the relevant Award
Date. The Company shall issue a separate certificate for each award of shares
of Restricted Stock under Section 2. Each certificate issued for shares
awarded to the Grantee under this Agreement shall be registered in the name of
the Grantee and shall be deposited with the Company or its designee in an
escrow account, together with stock powers or other instruments of transfer to
be provided and appropriately endorsed in blank by the Grantee as of the
relevant Award Date. Each such certificate shall bear a legend in
substantially the following form:
This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture and
restrictions against transfer) contained in the Genuine Parts
Company 1992 Stock Option and Incentive Plan and a Restricted
Stock Agreement between the registered owner of the shares
represented hereby and Genuine Parts Company. Release from such
terms and conditions shall be made only in accordance with the
provisions of such Plan and Agreement, copies of which are on
file in the office of the Secretary of Genuine Parts Company.
5. Release of Shares. Subject to the provisions of Sections 9 and 10
of this Agreement, the Company, provided that the Grantee remains in the
employment of the Company or a Subsidiary during the entirety of the applicable
Restricted Period, shall release from escrow and deliver to the Grantee or the
legal representative of the Grantee, as appropriate, free of the legend
described in Section 4 above, the certificate evidencing shares of Restricted
Stock
- 4 -
<PAGE> 5
awarded under Section 2 as promptly as practicable following the date the
Restricted Period expires with respect to such Restricted Stock.
6. Restrictions on Transfer of Shares. Restricted Shares awarded under
the Plan, and the right to vote such shares and to receive dividends thereon,
may not, except as otherwise provided in the Plan, be sold, assigned,
transferred, exchanged, pledged or otherwise encumbered during the Restricted
Period applicable to such shares, and no such sale, assignment, transfer,
exchange, pledge or encumbrance, whether made or created by voluntary act of
the Grantee or of any agent of such Grantee or by operation of law, shall be
recognized by, or be binding upon, or shall in any manner affect the rights of,
the Company or any agent or any custodian holding certificates for such shares
during the applicable Restricted Period.
7. Rights of Grantee During Restricted Periods. Except as otherwise
provided in the Plan, the Grantee shall, during the applicable Restricted
Periods, have all of the other rights of a common shareholder with respect to
Restriced Shares awarded to the Grantee under Section 2 including, without
limitation, the right to receive cash dividends, if any, as may be declared on
such shares from time to time, and the right to vote (in person or by proxy)
such shares at any meeting of shareholders of the Company. Any shares of
Common Stock issued to Grantee as a dividend with respect to Restricted Stock
awarded hereunder shall have the same status and bear the same legend as the
Restricted Stock and shall be held in escrow, if the relevant Restricted Stock
is held in escrow, unless otherwise determined by the Committee.
8. Termination of Employment. Subject to Section 10 of this Agreement,
upon the termination of Grantee's employment with the Company ("Termination"),
other than in connection with a Change in Control or Grantee's Retirement,
Disability or death (as such terms are defined in Section 9(b) hereof), (i) all
of Grantee's rights to future awards of Restricted Stock upon achievement of
Stock Price Targets or EPS Targets on Award Dates subsequent to
- 5 -
<PAGE> 6
the date of Termination shall terminate without the payment of any
consideration by the Company, (ii) all shares of Restricted Stock theretofore
awarded to the Grantee for which the Restricted Period has not terminated prior
to such Termination shall be forfeited by the Grantee to the Company without
the payment of any consideration by the Company, and (iii) all unissued shares
of Common Stock reserved for issuance to Grantee pursuant to Section 14 hereof
shall be released from such reservation. In such event, neither the Grantee
nor any successors, heirs, assigns, or personal representatives of the Grantee
shall thereafter have any further rights or interest in such shares, and the
Grantee's name shall thereupon be deleted from the list of the Company's
shareholders with respect to such shares.
9. Change of Control, Retirement, Disability or Death.
(a) Upon a Change in Control, the Retirement or Disability
of the Grantee, or the Grantee's death while in the employment of the Company
or a Subsidiary, (i) all of Grantee's rights to future awards of Restricted
Stock upon achievement of Stock Price Targets or EPS Targets on Award Dates
subsequent to the date of Termination shall terminate without the payment of
any consideration by the Company, and (ii) the Restricted Period to which any
shares of Restricted Stock awarded to the Grantee under Section 2 are subject
shall expire as of the date of the Change in Control or Grantee's Retirement,
Disability or death. In such event, the Company shall release from escrow and
deliver to the Grantee or the legal representative of the Grantee, as
appropriate, the certificate(s) representing the relevant Restricted Stock free
of restrictive legend in accordance with Section 5 hereof.
(b) For the purposes of this Agreement, the following terms
shall have the following meanings: (i) a Change in Control shall have the
meaning specified in Section 1.5(b) of the Plan; (ii) "Retirement" shall mean
normal retirement as defined in the Company's Pension Plan or in any
modification thereof or successor thereto; and (iii) "Disability" shall have
the meaning specified in the Company's Long Term Disability Plan or in any
modification thereof or successor thereto.
- 6 -
<PAGE> 7
10. Committee Acceleration Power. Notwithstanding any other provisions
of the Plan or this Agreement, the Committee shall be authorized in its
discretion, based upon its review and evaluation of the performance of the
Company and its Subsidiaries, to accelerate the release to the Grantee of
Restricted Stock subject to this Agreement upon such terms and conditions as
the Committee may deem advisable.
11. Federal Income Tax Matters. The Grantee, upon award of the shares
of Restricted Stock under Section 2, shall be authorized to make an election to
be taxed upon such award under Section 83(b) of the Code. To effect such
election, the Grantee may file an appropriate election with the Internal
Revenue Service within thirty (30) days after such awards of the Restricted
Stock hereunder and otherwise in accordance with applicable Treasury
Regulations.
The Grantee recognizes that, pursuant to Section 4.3 of the Plan, the
Company may require the Grantee to remit to the Company an amount sufficient to
satisfy any federal, state or local withholding tax liability in connection
with the agreement to award, award of, or release from escrow of the shares of
Restricted Stock granted hereunder.
12. Continued Employment Not Presumed. Neither (i) the Plan, (ii) the
agreement to award, award or vesting of Restricted Stock under this Agreement
nor (iii) this Agreement, shall give Grantee a right to continued employment by
the Company or its Subsidiaries or affect the right of the Company and its
Subsidiaries to terminate the employment of Grantee with or without cause.
13. Grantee's Covenant. The Grantee hereby agrees to use his or her
best efforts to provide services to the Company in a workmanlike manner and to
promote the Company's interests.
- 7 -
<PAGE> 8
14. Reservation of Shares. As of the date of this Agreement, the
Company shall reserve for issuance 50,000 shares of its Common Stock to be
issued pursuant to the terms of this Agreement. If the Grantee's rights with
respect to the unissued of Restricted Stock subject to this Agreement terminate
pursuant to Section 8 or Section 9 hereof, then such unissued shares of Common
Stock shall no longer be reserved for issuance pursuant to this Agreement.
15. Plan Controls. In the event of any actual or alleged conflict
between the provisions of the Plan and the provisions of this Agreement, the
provisions of the Plan shall be controlling and determinative.
16. Successors. This Agreement shall be binding upon any successor of
the Company, in accordance with the terms of this Agreement and the Plan.
- 8 -
<PAGE> 9
IN WITNESS WHEREOF, Genuine Parts Company, acting by and through its
duly authorized officers, has caused this Restricted Stock Agreement to be
executed, and the Grantee has executed this Restricted Stock Agreement, all as
of the day and year first above written.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
---------------------
Title: Executive Vice President Finance
ATTEST:
/s/ Brainard T. Webb, Jr.
- - -------------------------
Title: Secretary
[CORPORATE SEAL]
GRANTEE
/s/ Tom Gallagher
-------------------------
Tom Gallagher
- 9 -
