<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
---------
For the Fiscal Year Ended: Commission File No. 1-5690
December 31, 1994
GENUINE PARTS COMPANY
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(Exact name of Registrant as specified in its Charter)
GEORGIA 58-0254510
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(State of Incorporation) (IRS Employer Identification No.)
2999 Circle 75 Parkway 30339
Atlanta, Georgia (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (404) 953-1700.
Securities registered pursuant to Section 12(b) of the Act and the Exchange on
which such securities are registered:
COMMON STOCK, PAR VALUE, $1 PER SHARE NEW YORK STOCK EXCHANGE
- ------------------------------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act: None
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 X . NO .
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the Registrant's Common Stock (based upon the
closing sales price reported by the New York Stock Exchange and published in
The Wall Street Journal on February 10, 1995) held by non-affiliates as of
February 10, 1995 was approximately $ 4,317,450,279.00.
The number of shares outstanding of Registrant's Common Stock, as of February
10, 1995: 122,635,533.
Documents Incorporated by Reference:
-Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 1994, are incorporated by reference into Parts I and II.
-Portions of the definitive proxy statement for the Annual Meeting of
Shareholders to be held on April 17, 1995 are incorporated by
reference into Part III.
<PAGE> 2
PART I. ITEM I. BUSINESS.
Genuine Parts Company, a Georgia corporation incorporated on May 7,
1928, is a service organization engaged in the distribution of automotive
replacement parts, industrial replacement parts and office products. In 1994,
business was conducted throughout most of the United States and in western
Canada from more than 1200 operations. As used in this report, the "Company"
refers to Genuine Parts Company and its subsidiaries, except as otherwise
indicated by the context; and the terms "automotive parts" and "industrial
parts" refer to replacement parts in each respective category.
Recent Developments. Effective January 1, 1995, the Company combined its Des
Moines and DeWitt, Iowa, automotive operations, with the surviving operation
being the NAPA Des Moines Distribution Center.
Industry Segment Data. The following table sets forth the net sales, operating
profit and identifiable assets for the fiscal years 1994, 1993 and 1992
attributable to each of the Company's groups of products which the Company
believes indicate segments of its business. Sales to unaffiliated customers
are the same as net sales. The figures have been restated to give effect to
the acquisition of Berry Bearing Company and affiliates on January 29, 1993,
which was accounted for as a pooling of interests.
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
NET SALES (in thousands)
---------
<S> <C> <C> <C>
Automotive Parts $ 2,693,961 $ 2,485,267 $ 2,318,761
Industrial Parts 1,317,495 1,153,371 1,082,428
Office Products 846,959 745,656 615,562
--------- --------- ---------
TOTAL NET SALES $ 4,858,415 $ 4,384,294 $ 4,016,751
========= ========= =========
OPERATING PROFIT
----------------
Automotive Parts $ 304,164 $ 282,791 $ 262,422
Industrial Parts 111,822 96,727 87,493
Office Products 78,206 65,938 50,967
--------- --------- ---------
TOTAL OPERATING PROFIT 494,192 445,456 400,882
Interest Expense (1,321) (1,584) (1,871)
Corporate Expense (22,854) (20,405) (17,577)
Equity in Income 7,224 4,452 2,513
Minority Interests (2,373) (2,090) (1,537)
--------- --------- ---------
INCOME BEFORE
INCOME TAXES $ 474,868 $ 425,829 $ 382,410
========= ========= =========
IDENTIFIABLE ASSETS
-------------------
Automotive Parts $ 1,223,416 $ 1,152,148 $ 1,040,191
Industrial Parts 404,647 370,633 354,547
Office Products 308,817 283,479 228,802
--------- --------- ---------
TOTAL IDENTIFIABLE ASSETS 1,936,880 1,806,260 1,623,540
Corporate Assets 5,950 6,731 27,333
Equity Investments 86,641 57,765 56,430
--------- --------- ---------
TOTAL ASSETS $ 2,029,471 $ 1,870,756 $ 1,707,303
========= ========= =========
</TABLE>
For additional information regarding industry data, see Page 27 of
Annual Report to Shareholders for 1994.
The majority of the Company's revenue, profitability and identifiable
assets are attributable to the Company's operations in the United States.
Revenue, profitability and identifiable assets in Canada and Mexico are not
material. For additional information regarding foreign operations, see "Note 1
of Notes to Consolidated Financial Statements" on Page 23 of Annual Report to
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Shareholders for 1994.
Competition - General. The distribution business, which includes all segments
of the Company's business, is highly competitive with the principal methods of
competition being product quality, sufficiency of inventory, price and the
ability to give the customer prompt and dependable service. The Company
anticipates no decline in competition in any of its business segments in the
foreseeable future.
Employees. As of December 31, 1994, the Company employed approximately 21,285
persons.
AUTOMOTIVE PARTS GROUP.
The Automotive Parts Group, the largest division of the Company,
distributes automotive replacement parts and accessory items. The Company is
the largest member of the National Automotive Parts Association ("NAPA"), a
voluntary trade association formed in 1925 to provide nationwide distribution
of automotive parts. In addition to the more than 150,000 part numbers that
are available, the Company, in conjunction with NAPA, offers complete
inventory, accounting, cataloging, marketing, training and other programs in
the automotive aftermarket.
During 1994, the Company's Automotive Parts Group included NAPA
automotive parts distribution centers and automotive parts stores ("auto parts
stores" or "NAPA Auto Parts stores") owned in the United States by Genuine
Parts Company and Davis & Wilmar, Inc., a wholly owned subsidiary; automotive
parts distribution centers and auto parts stores in western Canada owned and
operated by UAP/NAPA Automotive Western Partnership ("UAP/NAPA"), a general
partnership in which a wholly owned subsidiary of Genuine Parts Company owns a
49% interest; auto parts stores in Alaska owned and operated by Parts,
Incorporated, a wholly owned subsidiary of Genuine Parts Company; auto parts
stores in the United States operated by corporations in which Genuine Parts
Company owned a 51% interest; distribution centers owned by Balkamp, Inc., a
majority-owned subsidiary; rebuilding plants owned by the Company and operated
by its Rayloc division; and since October 1, 1994, automotive parts
distribution centers in Mexico, owned and operated by Grupo Auto Todo, S.A. de
C.V. ("Auto Todo"), a joint venture company in which a wholly owned subsidiary
of Genuine Parts Company owns a 49% interest.
On December 31, 1994, Davis & Wilmar, Inc. and Parts, Incorporated
were merged into Genuine Parts Company and their existence as separate wholly
owned subsidiaries ceased.
The Company's NAPA automotive parts distribution centers distribute
replacement parts (other than body parts) for substantially all motor vehicle
makes and models in service in the United States, including imported vehicles,
trucks, buses, motorcycles, recreational vehicles and farm vehicles. In
addition, the Company distributes small engines and replacement parts for farm
equipment and heavy duty equipment. The Company's inventories also include
accessory items for such vehicles and equipment, and supply items used by a
wide variety of customers in the automotive aftermarket, such as repair shops,
service stations, fleet operators, automobile and truck dealers, leasing
companies, bus and truck lines, mass merchandisers, farms, industrial concerns
and individuals who perform their own maintenance and parts installation.
Although the Company's domestic automotive operations purchase from more than
150 different suppliers, approximately 81% of 1994 automotive inventories were
purchased from 25 major suppliers. Since 1931, the Company has had return
privileges with most of its suppliers which has protected the Company from
inventory obsolescence.
Distribution System. In 1994, Genuine Parts Company and its Davis & Wilmar,
Inc. subsidiary, operated 65 domestic NAPA automotive parts distribution
centers located in 37 states and 722 domestic company-owned NAPA Auto Parts
stores located in 41 states. In addition, at December 31, 1994, Genuine Parts
Company owned a 51% interest in 49 corporations which operated 65 auto parts
stores in 28 states.
In Canada, Genuine Parts Company Ltd., a wholly-owned subsidiary, owns
a 49% interest in UAP/NAPA which operated 9 automotive parts distribution
centers
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and 125 auto parts stores located in the provinces of Alberta, British
Columbia, Manitoba and Saskatchewan and in the Yukon Territories. In addition,
the Company has an approximate 23% interest in UAP Inc., a publicly traded
Canadian corporation, that owns the other 51% interest in UAP/NAPA and further
engages in the distribution of automotive parts primarily in eastern Canada.
In Mexico, Auto Todo owns and operates 8 distribution centers. Auto Todo is
not licensed to and does not use the NAPA(R) name in Mexico. The Company's
investments in UAP/NAPA, UAP Inc. and Auto Todo are accounted for by the equity
method of accounting.
The Company's distribution centers serve approximately 5,100
independently owned NAPA Auto Parts stores located throughout the market areas
served. NAPA Auto Parts stores, in turn, sell to a wide variety of customers
in the automotive aftermarket. Collectively, these auto parts stores account
for approximately 37% of the Company's total sales with no auto parts store or
group of auto parts stores with individual or common ownership accounting for
more than .37% of the Company's total sales.
Products. Distribution centers carry approximately 150,000 different parts and
related supply items. Each item is cataloged and numbered for identification
and accessibility. Significant inventories are carried to provide for fast and
frequent deliveries to customers. Most orders are filled and shipped the same
day as received. The majority of sales are on terms which require payment
within 30 days of the statement date. The Company does not manufacture any of
the products it distributes. The majority of products are distributed under
the NAPA(R) name, a mark licensed to the Company by the National Automotive
Parts Association.
Related Operations. A majority-owned subsidiary of Genuine Parts Company,
Balkamp, Inc.("Balkamp"), distributes a wide variety of replacement parts and
accessory items for passenger cars, heavy duty vehicles, motorcycles and farm
equipment. In addition, Balkamp distributes service items such as testing
equipment, lubricating equipment, gauges, cleaning supplies, chemicals and
supply items used by repair shops, fleets, farms and institutions. Balkamp
packages many of the approximately 20,000 part numbers which constitute the
"Balkamp" line of products which are distributed to the members of the National
Automotive Parts Association ("NAPA"). These products are categorized in 150
different product groups purchased from more than 600 suppliers. All Balkamp
items are cataloged separately to provide single source convenience for NAPA
customers. BALKAMP(R), a federally registered trademark owned by the National
Automotive Parts Association and licensed to Balkamp, is important to the sales
and marketing promotions of the Balkamp organization. Balkamp has three
distribution centers located in Indianapolis, Indiana, Greenwood, Mississippi,
and West Jordan, Utah.
The Company, through its Rayloc division, also operates six plants
where certain small automotive parts are rebuilt. These products are
distributed to the members of NAPA under the name Rayloc(R). Rayloc(R) is a
mark licensed to the Company by the National Automotive Parts Association.
Segment Data. In the year ended December 31, 1994, sales from the Automotive
Parts Group approximated 56% of the Company's net sales as compared to 57% in
1993 and 58% in 1992.
Service to NAPA Auto Parts Stores. The Company believes that the quality and
the range of services provided to its auto parts customers constitute a
significant part of its automotive parts distribution system. Such services
include fast and frequent delivery, obsolescence protection, parts cataloging
(including the use of computerized NAPA Auto Parts catalogues) and stock
adjustment through a continuing parts classification system which allows auto
parts customers to return certain merchandise on a scheduled basis. The
Company offers its NAPA Auto Parts store customers various management aids,
marketing aids and service on topics such as inventory control, cost analysis,
accounting procedures, group insurance and retirement benefit plans, marketing
conferences and seminars, sales and advertising manuals and training programs.
Point of sale/inventory management is available through TAMS(R) (Total
Automotive Management Systems), a computer system designed and developed by the
Company for the NAPA Auto Parts
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store.
In association with NAPA, the Company has developed and refined an
inventory classification system to determine optimum distribution center and
auto parts store inventory levels for automotive parts stocking based on
automotive registrations, usage rates, production figures, technological
advances and other similar factors. This system, which undergoes continuous
analytical review, is an integral part of the Company's inventory control
procedures and comprises an important feature of the inventory management
services which the Company makes available to its NAPA Auto Parts store
customers. Over the last 10 years, losses to the Company from obsolescence
have been insignificant, and the Company attributes this to the successful
operation of its classification system.
Competition. In the distribution of automotive parts, the Company competes
with automobile manufacturers (some of which sell replacement parts for
vehicles built by other manufacturers as well as those which they build
themselves), automobile dealers, warehouse clubs and large automotive parts
retail chains. In addition, the Company competes with the distributing outlets
of parts manufacturers, oil companies, mass merchandisers, including the
national retail chains, and with other parts distributors and jobbers.
NAPA. The Company is a member of the National Automotive Parts Association, a
voluntary association formed in 1925 to provide nationwide distribution of
automotive replacement parts. NAPA, which neither buys nor sells automotive
parts, functions as a trade association whose members currently operate 73
distribution centers located throughout the United States, 64 of which are
owned and operated by the Company. NAPA develops marketing concepts and
programs which may be used by its members. It is not involved in the chain of
distribution.
Among the automotive lines which each NAPA member purchases and
distributes are certain lines designated, cataloged, advertised and promoted as
"NAPA" lines. The members are not required to purchase any specific quantity
of parts so designated and may, and do, purchase competitive lines from other
supply sources.
The Company and the other NAPA members use the federally registered
trademark NAPA(R) as part of the trade name of their distribution centers and
jobbing stores. The Company contributes to the Association's national
advertising which is designed to increase public recognition of the "NAPA" name
and to promote "NAPA" product lines.
The Company is a party, together with other members of NAPA and NAPA
itself, to a consent decree entered by the Federal District Court in Detroit,
Michigan, on May 4, 1954. The consent decree enjoins certain practices under
the federal antitrust laws, including the use of exclusive agreements with
manufacturers of automotive parts, allocation or division of territories among
several NAPA members, fixing of prices or terms of sale for such parts among
such members, and agreements to adhere to any uniform policy in selecting parts
customers or determining the number and location of, or arrangements with, auto
parts customers.
INDUSTRIAL PARTS GROUP
The Industrial Parts Group distributes industrial replacement parts
and related supplies. This Group distributes industrial bearings and fluid
transmission equipment, including hydraulic and pneumatic products, material
handling components, agricultural and irrigation equipment and their related
supplies.
In 1994, the Company distributed industrial parts in the United States
through Motion Industries, Inc. ("Motion"), headquartered in Birmingham,
Alabama, and Berry Bearing Company ("Berry Bearing") and its affiliates (the
"Berry Companies"), headquartered in Chicago, Illinois. At December 31, 1994,
the Berry Companies were merged into Berry Bearing. Motion and Berry Bearing
are wholly owned subsidiaries of the Genuine Parts Company. In Canada,
industrial parts are distributed by Oliver Industrial Supply Ltd., a wholly
owned subsidiary of Genuine Parts Holdings Ltd., headquartered in Lethbridge,
Alberta. Genuine Parts Holdings Ltd. is a wholly-owned subsidiary of the
Company.
As of December 31, 1994, the Group served more than 150,000 customers in
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all types of industries located throughout the United States, and in Canada,
principally in the Provinces of Alberta, Manitoba and Saskatchewan.
Distribution System. In the United States, the Industrial Parts Group operates
5 distribution centers, two re-distribution centers, 10 service centers for
fluid power and special hose applications and over 310 branches. Distribution
centers stock and distribute more than 200,000 different items purchased from
over 250 different suppliers. The Group's re-distribution centers serve as
collection points for excess inventory collected from its branches for
re-distribution to those branches which need the inventory. Approximately 50%
of 1994 total industrial purchases were made from 15 major suppliers. Sales
are generated from the Group's branches located in 38 states, each of which has
warehouse facilities, which stock significant amounts of inventory
representative of the lines of products used by customers in the respective
market area served.
In Canada, Oliver Industrial Supply Ltd. ("Oliver") operates an
industrial parts and agricultural supply distribution center for its seven
branches serving the industrial and agricultural markets of Alberta, British
Columbia, Manitoba and Saskatchewan in western Canada. In addition to
industrial parts and agricultural supplies, Oliver distributes irrigation
systems and related supplies.
Products. The Industrial Parts Group distributes a wide variety of products to
its customers, primarily industrial concerns, to maintain and operate plants,
machinery and equipment. Products include such items as hoses, belts,
bearings, pulleys, pumps, valves, chains, gears, sprockets, speed reducers and
electric motors. The nature of this Group's business demands the maintenance
of large inventories and the ability to provide prompt and demanding delivery
requirements. Virtually all of the products distributed are installed by the
customer. Most orders are filled immediately from existing stock and
deliveries are normally made within 24 hours of receipt of order. The majority
of all sales are on open account.
Related Information. Non-exclusive distributor agreements are in effect with
most of the Group's suppliers. The terms of these agreements vary; however, it
has been the experience of the Group that the custom of the trade is to treat
such agreements as continuing until breached by one party, or until terminated
by mutual consent.
Segment Data. In the year ended December 31, 1994, sales from the Company's
Industrial Parts Group approximated 27% of the Company's net sales as compared
to 26% in 1993 and 27% in 1992.
Competition. The Industrial Parts Group competes with other distributors
specializing in the distribution of such items, as well as with general line
distributors. To a lesser extent, the Group competes with manufacturers that
sell directly to the customer.
OFFICE PRODUCTS GROUP
The Office Products Group, through S. P. Richards Company ("S.P.
Richards"), a wholly owned subsidiary of Genuine Parts Company headquartered in
Atlanta, Georgia, is engaged in the wholesale distribution of a broad line of
office products which are used in the daily operation of businesses, schools,
offices and institutions. Office products fall into the general categories of
computer supplies, office machines, general office supplies, and office
furniture sold primarily under the Lesker Furniture name.
Computer supplies include diskettes, printer supplies, printout paper
and printout binders. Office furniture includes desks, credenzas, chairs,
chair mats, partitions, files and computer furniture. Office machines include
telephones, answering machines, calculators, typewriters, shredders and
copiers. General office supplies include copier supplies, desk accessories,
business forms, accounting supplies, binders, report covers, writing
instruments, note
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pads, envelopes, secretarial supplies, mailroom supplies, filing supplies,
art/drafting supplies and audio visual supplies.
S. P. Richards distributes more than 18,000 items to over 7,000
office supply dealers from 41 distribution centers located in 28 states. The
newest distribution center opened in Middletown, New York in March, 1994.
Approximately 62% of 1994 total office products purchases were made from 14
major suppliers.
S. P. Richards sells to qualified resellers of office products.
Customers are offered comprehensive marketing programs which include flyers,
other promotional material and personalized product catalogs. The marketing
programs are supported by all S. P. Richards' distribution centers which
stock all cataloged products and have the capability to provide overnight
delivery.
While many recognized brand-name items are carried in inventory, S.P.
Richards also markets items produced for it under its own SPARCO(R) brand name,
as well as its NATURE SAVER(R) brand of recycled products.
Segment Data. In the year ended December 31, 1994, sales from the Company's
Office Products Group approximated 17% of the Company's net sales as compared
to 17% in 1993 and 15% in 1992.
Competition. In the distribution of office supplies to retail dealers, S. P.
Richards competes with many other wholesale distributors as well as with
manufacturers of office products and large national retail chains.
* * * * * * * *
Executive Officers of the Company. The table below sets forth the name and age
of each person deemed to be an executive officer of the Company as of February
20, 1995, the position or office held by each and the period during which each
has served as such. Each executive officer is elected by the Board of
Directors and serves at the pleasure of the Board of Directors until his
successor has been elected and has qualified, or until his earlier death,
resignation, removal, retirement or disqualification.
<TABLE>
<CAPTION>
Year First
Assumed
Name Age Position of Office Position
- ---- --- ------------------ ----------
<S> <C> <C> <C>
Larry L. Prince 56 Chairman of the Board of Directors
and Chief Executive Officer 1990/1989
Thomas C. Gallagher 47 President and Chief Operating Officer 1990
George W. Kalafut 61 Executive Vice President-Finance and
Administration * 1991
John J. Scalley 64 Executive Vice President 1986
Keith M. Bealmear 48 Group Vice President 1994
Robert J. Breci 59 Group Vice President 1987
Albert T. Donnon, Jr 47 Group Vice President 1993
Louis W. Rice, Jr 68 Senior Vice President-Personnel 1981
</TABLE>
* Also serves as the Company's Principal Financial Officer.
All executive officers have been employed by and have served as officers
of the Company for at least the last five years.
ITEM 2. PROPERTIES.
The Company's headquarters are located in one of two adjacent office
buildings owned by Genuine Parts Company in Atlanta, Georgia.
The Company's Automotive Parts Group currently operates 64 NAPA
Distribution Centers in the United States distributed among nine geographic
divisions. More than 90% of the distribution center properties are owned by
the Company. At December 31, 1994, the Company owned 722 NAPA Auto Parts
stores located in 41
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states, and Genuine Parts Company owned a 51% interest in 65 auto parts store
stores located in 28 states. Other than NAPA Auto Parts stores located within
Company owned distribution centers, most of the auto parts stores were operated
in leased facilities. In addition, UAP/NAPA, in which Genuine Parts Company
owns a minority interest, operated 125 auto parts stores in Western Canada.
The Company's Automotive Parts Group also operates three Balkamp distribution
centers, six Rayloc rebuilding plants, two transfer and shipping facilities and
a Rayloc warehouse.
The Company's Industrial Parts Group, operating through Motion and
Berry Bearing, operates 5 distribution centers, 2 re-distribution centers, 10
service centers and over 310 branches. Approximately 80% of these branches are
operated in leased facilities. In addition, the Industrial Parts Group
operates an industrial parts and agricultural supply distribution center in
Western Canada for its 7 branches of which approximately 85% are operated in
leased facilities.
The Company's Office Products Group operates 41 distribution centers in
the United States distributed among the Group's six geographic divisions.
Approximately 75% of these distribution centers are operated in leased
facilities.
For additional information regarding rental expense on leased
properties, see "Note 5 of Notes to Consolidated Financial Statements" on Page
24 of Annual Report to Shareholders for 1994.
ITEM 3. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK-
HOLDER MATTERS.
Information required by this item is set forth under the
heading "Market and Dividend Information" on Page 18 of Annual Report to
Shareholders for the year ended December 31, 1994, and is incorporated herein
by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Information required by this item is set forth under the
heading "Selected Financial Data" on Page 18 of Annual Report to Shareholders
for the year ended December 31, 1994, and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Information required by this item is set forth under the
heading "Management's Discussion and Analysis" on Page 26 of Annual Report to
Shareholders for the year ended December 31, 1994, and is incorporated herein
by reference.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required by this item is set forth in the
consolidated financial statements on Pages 20 through 25 and Page 27, in
"Report of Independent Auditors" on Page 19, and under the heading "Quarterly
Results of Operations" on Page 27, of the Annual Report to Shareholders for the
year ended December 31, 1994, and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information required by this item is set forth on Pages 1
through 4, and Page 17 of the definitive proxy statement for the Company's
Annual Meeting to be held on April 17, 1995, and is incorporated herein by
reference. Certain information about Executive Officers of the Company is
included in Item 1 of Part I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by this item is set forth on Pages 4 and
5, and on Pages 7 through 17 of the definitive proxy statement for the
Company's Annual Meeting to be held on April 17, 1995, and is incorporated
herein by reference. In no event shall the information contained in the
definitive proxy statement for the Company's 1995 Annual Meeting on Pages 9
through 11 under the heading "Compensation and Stock Option Committee Report on
Executive Compensation" or on Pages 16 and 17 under the heading "Performance
Graph" be incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is set forth on Pages 5 and 6
of the definitive proxy statement for the Company's Annual Meeting to be held
on April 17, 1995, and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is set forth on Page 17 of
the definitive proxy statement for the Company's Annual Meeting to be held on
April 17, 1995, and is incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 10-K.
(a) (1) and (2) The response to this portion of Item 14 is
submitted as a separate section of this report.
(3) The following Exhibits are filed as part of this
report in Item 14(c):
Exhibit 3.1 Restated Articles of Incorporation of the
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Company, dated as of April 18, 1988, and
as amended April 17, 1989 and amendments
to the Restated Articles of
Incorporation of the Company, dated as
of November 20, 1989 and April 18, 1994.
Exhibit 3.2 By-laws of the Company, as amended.
(Incorporated herein by reference from
the Company's Annual Report on Form
10-K, dated March 5, 1993).
Exhibit 4.1 Shareholder Protection Rights Agreement,
dated as of November 20, 1989, between
the Company and Trust Company Bank, as
Rights Agent. (Incorporated herein by
reference from the Company's Report on
Form 8-K, dated November 20, 1989).
Exhibit 10.1 * Incentive Stock Option Plan.
(Incorporated herein by reference from
the Company's Annual Meeting Proxy
Statement, dated March 12, 1982).
Exhibit 10.2 * 1988 Stock Option Plan. (Incorporated
herein by reference from the Company's
Annual Meeting Proxy Statement,
dated March 9, 1988).
Exhibit 10.3 * Form of Amendment to Deferred
Compensation Agreement, adopted
February 13, 1989, between the Company
and certain executive officers of the
Company. (Incorporated herein by
reference from the Company's Annual
Report on Form 10-K, dated March 15,
1989).
Exhibit 10.4 * Form of Agreement adopted February 13,
1989, between the Company and certain
executive officers of the Company
providing for a supplemental employee
benefit upon a change in control of the
Company. (Incorporated herein by
reference from the Company's Annual
Report on Form 10-K, dated March 15,
1989).
Exhibit 10.5 * Genuine Parts Company Supplemental
Retirement Plan, effective January 1,
1991. (Incorporated herein by reference
from the Company's Annual Report on
Form 10-K, dated March 8, 1991).
Exhibit 10.6 * 1992 Stock Option and Incentive Plan,
effective April 20, 1992.
(Incorporated herein by reference from
the Company's Annual Meeting Proxy
Statement, dated March 6, 1992).
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Exhibit 10.7 * The Genuine Parts Company Restated
Tax-Deferred Savings Plan, effective
January 1, 1993.
Exhibit 10.8 * Restricted Stock Agreement dated March
31, 1994, between the Company and Larry
L. Prince. (Incorporated herein by
reference from the Company's Form 10-Q,
dated May 6, 1994).
Exhibit 10.9 * Restricted Stock Agreement dated March
31, 1994, between the Company and
Thomas C. Gallagher. (Incorporated
herein by reference from the Company's
Form 10-Q, dated May 6, 1994).
Exhibit 10.10 * Amendment No. 2 to the Genuine Parts
Company Supplemental Retirement Plan,
effective January 1, 1995.
Exhibit 10.11 * Genuine Partnership Plan, as amended and
restated January 1, 1994.
Exhibit 10.12 * Genuine Parts Company Pension Plan, as
amended and restated effective January
1, 1989.
* Indicates executive compensation plans and arrangements
Exhibit 13 The following sections and pages of the
1994 Annual Report to Shareholders:
- Selected Financial Data on Page 18
- Market and Dividend Information on
Page 18
- Report of Independent Auditors on
Page 19
- Consolidated Financial Statements and
Notes to Consolidated Financial
Statements on Pages 20 - 25
- Management's Discussion and Analysis
on Page 26
- Industry Data Information on Page 27
- Quarterly Results of Operations on
Page 27
Exhibit 21 Subsidiaries of the Company
Exhibit 23 Consent of Independent Auditors
Exhibit 27 Financial Data Schedule (for SEC
purposes only)
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the Registrant
during the last quarter of the fiscal year.
(c) Exhibits. The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) Financial Statement Schedules. The response to this portion of Item
-11-
<PAGE> 12
14 is submitted as a separate section of this report.
SIGNATURES.
Pursuant to the requirements of Section 13 or 15(d) 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
/s/ Larry L. Prince 3/3/95 /s/ George W. Kalafut 3/3/95
- ------------------------------------- ------------------------------------
Larry L. Prince (Date) George W. Kalafut (Date)
Chairman of the Board Executive Vice President -
and Chief Executive Officer Finance and Administration and
Principal Financial and Accounting
Officer
-12-
<PAGE> 13
Pursuant to the requirements of the Securities and Exchange Act of
1934, this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C>
- ------------------------------------- ------------------------------------
James R. Courim (Date) William A. Parker (Date)
Director Director
/s/Bradley Currey, Jr. 2/20/95 /s/Larry L. Prince 2/20/95
- ------------------------------------- ------------------------------------
Bradley Currey, Jr (Date) Larry L. Prince (Date)
Director Director
Chairman of the Board and
Chief Executive Officer
/s/Jean Douville 2/20/95 /s/John J. Scalley 2/20/95
- ------------------------------------- -----------------------------------
Jean Douville (Date) John J. Scalley (Date)
Director Director
Chairman of the Board and Executive Vice President
Chief Executive Officer UAP INC.
/s/John B. Ellis 2/20/95 /s/Alana S. Shepherd 2/20/95
- ------------------------------------- -----------------------------------
John B. Ellis (Date) Alana S. Shepherd (Date)
Director Director
/s/Thomas C. Gallagher 2/20/95 /s/Lawrence G. Steiner 2/20/95
- ------------------------------------- -----------------------------------
Thomas C. Gallagher (Date) Lawrence G. Steiner (Date)
Director Director
President and Chief Operating Officer
/s/E. Reginald Hancock 2/20/95 /s/James B. Williams 2/20/95
- ------------------------------------- -----------------------------------
E. Reginald Hancock (Date) James B. Williams (Date)
Director Director
/s/Gardner E. Larned 2/20/95
- -------------------------------------
Gardner E. Larned (Date)
Director
</TABLE>
-13-
<PAGE> 14
Annual Report on Form 10-K
Item 14(a)(1) and (2), (c) and (d)
List of Financial Statements
Certain Exhibits
Year ended December 31, 1994
Genuine Parts Company
Atlanta, Georgia
<PAGE> 15
Form 10-K - Item 14(a)(1) and (2)
Genuine Parts Company and Subsidiaries
Index of Financial Statements
The following consolidated financial statements of Genuine Parts Company and
subsidiaries, included in the annual report of the registrant to its
shareholders for the year ended December 31, 1994, are incorporated by
reference in Item 8:
Consolidated balance sheets - December 31, 1994 and 1993
Consolidated statements of income - Years ended December 31, 1994,
1993 and 1992
Consolidated statements of shareholders' equity - Years ended December
31, 1994, 1993 and 1992
Consolidated statements of cash flows - Years ended December 31, 1994,
1993 and 1992
Notes to consolidated financial statements - December 31, 1994
All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
<PAGE> 16
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(3)
LIST OF EXHIBITS
The following Exhibits are filed as a part of this Report:
3.1 Restated Articles of Incorporation of the Company, dated as of April
18, 1988, and as amended April 17, 1989 and amendments to the Restated
Articles of Incorporation of the Company, dated as of November 20,
1989 and April 18, 1994.
10.9* The Genuine Parts Company Restated Tax-Deferred Savings Plan,
effective January 1, 1993
10.10* Amendment No. 2 to the Genuine Parts Company Supplemental Retirement
Plan, effective January 1, 1995.
10.11* Genuine Partnership Plan, as amended and restated January 1, 1994.
10.12* Genuine Parts Company Pension Plan, as amended and restated effective
January 1, 1989.
13 The following Sections and Pages of Annual Report to Shareholders for
1994:
- Selected Financial Data on Page 18
- Common Stock Market and Dividend Information
on Page 18
- Report of Independent Auditors on Page 19
- Consolidated Financial Statements and Notes to
Consolidated Financial Statements on Pages 20-25
- Management's Discussion and Analysis of Financial
Condition and Results of Operations on Page 26
- Industry Data Information on Page 27
- Quarterly Results of Operations on Page 27
21 Subsidiaries of the Company
23 Consent of Independent Auditors
27 Financial Data Schedule (for SEC use only)
The following Exhibits are incorporated by reference as set forth in Item
14 on pages 9 through 11 of this Form 10-K:
- 3.2 By-laws of the Company, as amended.
- 4.1 Shareholder Protection Rights Agreement, dated as
of November 20, 1989, between the Company and Trust
Company Bank, as Rights Agent.
- 10.1* Incentive Stock Option Plan.
- 10.2* 1988 Stock Option Plan.
- 10.3* Form of Amendment to Deferred Compensation Agreement adopted
February 13, 1989, between the Company and certain executive
officers of the Company.
- 10.4* Form of Agreement adopted February 13, 1989, between
the Company and certain executive officers of the
Company providing for a supplemental employee benefit
upon a change in control of the Company.
- 10.5* Genuine Parts Company Supplemental Retirement Plan,
effective January 1, 1991.
- 10.6* 1992 Stock Option and Incentive Plan, effective
April 20, 1992.
- 10.7* Restricted Stock Agreement dated March 31, 1994, between the
Company and Larry L. Prince.
- 10.8* Restricted Stock Agreement dated March 31, 1994, between the
Company and Thomas C. Gallagher.
* Indicates executive compensation plans and arrangements
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF AMENDMENT
OF
GENUINE PARTS COMPANY
1.
The name of the corporation is Genuine Parts Company (the
"Corporation").
2.
The Restated Articles of Incorporation of the Corporation, as
previously amended, are hereby further amended by deleting Paragraph A of
Article Four in its entirety and replacing it with the following:
"A. The total number of shares of capital stock which the
corporation shall have authority to issue is Four Hundred Sixty Million
(460,000,000), of which Four Hundred Fifty Million (450,000,000)
shares shall be common stock of the par value of $1 per share
(hereinafter called the "common stock") and Ten Million (10,000,000)
shares shall be preferred stock of the par value of $1 per share
(hereinafter called the "preferred stock")."
3.
The foregoing Amendment was adopted by the shareholders of the
Corporation on April 18, 1994 in accordance with the provisions of Code Section
14-2-1003.
IN WITNESS WHEREOF, the undersigned has caused these Articles
of Amendment to be executed this 18th day of April, 1994.
GENUINE PARTS COMPANY
By: /s/ Larry L. Prince
-------------------------------------
Larry L. Prince, Chairman of the
Board and Chief Executive Officer
ATTEST:
/s/ Brainard T. Webb, Jr.
- ---------------------------------
Brainard T. Webb, Jr., Secretary
[Corporate Seal]
<PAGE> 2
ARTICLES OF AMENDMENT OF
GENUINE PARTS COMPANY
IN ACCORDANCE WITH SECTION 14-2-602(d)
OF THE GEORGIA BUSINESS CORPORATION CODE
Pursuant to Section 14-2-602(d) of the Georgia Business Corporation Code,
Genuine Parts Company, a Georgia corporation (the "Corporation") delivers these
Articles of Amendment relating to the establishment, as authorized by its
Amended and Restated Articles of Incorporation, of the Series A Junior
Participating Preferred Stock of the Corporation to the Secretary of State of
Georgia for filing.
I.
The name of the Corporation is Genuine Parts Company.
II.
A copy of the resolution of the Board of Directors of the Corporation
establishing and designating the Series A Junior Participating Preferred Stock
of the Corporation, and fixing and determining the relative rights and
preferences thereof, is attached hereto as Exhibit A.
III.
The resolution attached hereto as Exhibit A was adopted on November 20,
1989.
IV.
The resolution attached hereto as Exhibit A was duly adopted by the Board
of Directors of the Corporation.
IN WITNESS WHEREOF, Genuine Parts Company has caused these Articles of
Amendment to be executed and its corporate seal to be affixed and has caused
its seal and the execution hereof to be attested, all by its duly authorized
officers, this 20th day of November, 1989.
GENUINE PARTS COMPANY
(CORPORATE SEAL)
Attest: By: /s/ Edward M. Jones
------------------------
Edward M. Jones
Vice Chairman of the Board
By: /s/ Brainard T. Webb, Jr.
-----------------------------
Brainard T. Webb, Jr. (SEAL)
Secretary CERTIFICATE
THIS DOCUMENT RECEIVED
AND FILED IN THE OFFICE
OF THE SECRETARY OF STATE
BY: /s/ T. McAlister
-----------------------
DATE: 11-20-89
---------------------
TRANSACTION# 89324633,637
--------------
CHARTER# 8505042
------------------
<PAGE> 3
EXHIBIT A
RESOLUTION ADOPTED AT A MEETING
OF BOARD OF DIRECTORS OF
GENUINE PARTS COMPANY
HELD ON NOVEMBER 20, 1989
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by Article Four of its Amended and Restated
Articles of Incorporation, and in accordance with the provisions of Section
14-2-602 of the Georgia Business Corporation Code, the Board of Directors does
hereby create, authorize and provide for the issuance of a series of preferred
stock, par value $1.00 per share, of the Corporation, having the following
voting powers, designation, preferences and relative, participating, optional
and other special rights, and qualifications, limitations and restrictions in
addition to those set forth in such Article Four:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 2,000,000. Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A Junior
Participating Preferred Stock to a number less than the sum of (i) the quotient
obtained by dividing (1) the number of shares of common stock, par value $1.00
per share, of the Corporation (the "Common Stock") then outstanding plus the
number of shares of Common Stock reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into shares of
Common Stock, by (2) 100, and (ii) the number of shares of Series A Junior
Participating Preferred Stock then outstanding plus the number of shares of
Series A Junior Participating Preferred Stock reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into shares of
Series A Junior Participating Preferred Stock.
Section 2. Dividend and Distributions. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of Preferred
Stock (or any similar stock) ranking prior and superior to the shares of Series
A Junior Participating Preferred Stock with respect to dividends, each holder
of one one-hundredth (1/100) of a share (a "Unit") of Series A Junior
Participating Preferred Stock, in preference to the holders of Common Stock of
the Corporation, and of any other junior stock, shall be entitled to receive,
when as and if declared by the Board of Directors out of funds legally
available for that purpose (i) quarterly dividends payable in cash on the first
day of January, April, July and October in each year (each such date being a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of such Unit of
A-1
<PAGE> 4
Series A Junior Participating Preferred Stock, in an amount per Unit (rounded
to the nearest cent) equal to the greater of (a) $0.01 or (b) subject to the
provision for adjustment hereinafter set forth, the aggregate per share amount
of all cash dividends declared on shares of Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of a Unit of Series A
Junior Participating Preferred Stock, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable in kind) on
each Quarterly Dividend Payment Date in an amount per Unit equal to the
aggregate per share amount of all non-cash dividends or other distributions
(other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock, by reclassification or otherwise)
declared on shares of Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or with respect to the first Quarterly Dividend Payment
Date, since the first issuance of a Unit of Series A Junior Participating
Preferred Stock. In the event that the Corporation shall at any time after
November 30, 1989 (the "Rights Declaration Date") (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock (ii)
subdivide outstanding shares of Common Stock or (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the amount to which the holder of a Unit of Series A Junior Participating
Preferred Stock was entitled immediately prior to such event pursuant to the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
of Units of Series A Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or distribution on
the shares of Common Stock (other than a dividend payable in shares of Common
Stock); provided, however, that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date,
a dividend of $0.01 per Unit on the Series A Junior Participating Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative
on each outstanding Unit of Series A Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issuance of such
Unit of Series A Junior Participating Preferred Stock, unless the date of
issuance of such Unit is prior to the record date for the first Quarterly
Dividend Payment Date, in which case, dividends on such unit shall begin to
accrue from the date of issuance of such Unit, or unless the date of issuance
is a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Units of Series A Junior Participating
A-2
<PAGE> 5
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on Units
of Series A Junior Participating Preferred Stock in an amount less than the
aggregate amount of all such dividends at the time accrued and payable on such
Units shall be allocated pro rata on a unit-by-unit basis among all Units of
Series A Junior Participating Preferred Stock at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
Units of Series A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Units of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each Unit of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to one vote on all matters submitted to
a vote of the shareholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the number of votes per Unit to which holders of Units of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding immediately
after such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of Units of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation.
(C) (i) If at any time dividends on any Units of Series
A Junior Participating Preferred Stock shall be in arrears in an amount equal
to six quarterly dividends thereon, then during the period (a "default period")
from the occurrence of such event until such time as all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all Units of Series A Junior Participating
Preferred Stock then outstanding shall have been declared and paid or set apart
for payment, all holders of Units of Series A Junior Participating Preferred
Stock, voting separately as a class, shall have the right to elect two
Directors.
A-3
<PAGE> 6
(ii) During any default period, such voting rights of the holders of
Units of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of shareholders, and thereafter at annual
meetings of shareholders, provided that neither such voting rights nor any
right of the holders of Units of Series A Junior Participating Preferred Stock
to increase, in certain cases, the authorized number of Directors may be
exercised at any meeting unless one-third of the outstanding Units of Series A
Junior Participating Preferred Stock shall be present at such meeting in person
or by proxy. The absence of a quorum of the holders of the Common Stock shall
not affect the exercise by the holders of Units of Series A Junior
Participating Preferred Stock of such rights. At any meeting at which the
holders of Units of Series A Junior Participating Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting separately as a class, to elect Directors to fill
up to two vacancies in the Board of Directors, if any such vacancies may then
exist, or, if such right is exercised at an annual meeting, to elect two
directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Series A Junior
Participating Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by them of the
required number. After the holders of Units of Series A Junior Participating
Preferred Stock shall have exercised their right to elect Directors during any
default period, the number of Directors shall not be increased or decreased
except as approved by a vote of the holders of Units of Series A Junior
Participating Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to the Series A Junior Participating
Preferred Stock.
(iii) Unless the holders of Series A Junior Participating Preferred
Stock shall, during any existing default period, have previously exercised
their right to elect Directors, the Board of Directors may order, or any
shareholder or shareholders owning in the aggregate not less than 25% of the
total number of Units of Series A Junior Participating Preferred Stock
outstanding may request in writing, the calling of a special meeting of the
holders of Units of Series A Junior Participating Preferred Stock, which
meeting shall thereupon be called by the Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which holders of Units of Series A
Junior Participating Preferred Stock are entitled to vote pursuant to this
paragraph (C)(iii) shall be given to each holder of record of this notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than ten days and not later
than 60 days after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any shareholder or shareholders owning in the aggregate
not less than 25% of the total number of outstanding Units of Series A Junior
Participating Preferred Stock.
A-4
<PAGE> 7
(iv) During any default period, the holders of shares of Common Stock
and Units of Series A Junior Participating Preferred Stock, and other classes
or series of stock of the Corporation, if applicable, shall continue to be
entitled to elect all the Directors until the holders of Units of Series A
Junior Participating Preferred Stock shall have exercised their right to elect
two Directors voting as a separate class, after the exercise of which right (x)
the Directors so elected by the holders of Units of Series A Junior
Participating Preferred Stock continue in office until their successors shall
have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of capital
stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of capital stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Units of Series A Junior Participating Preferred Stock as a
separate class to elect Directors shall cease, (y) the term of any Directors
elected by the holders of Units of Series A Junior Participating Preferred
Stock as a separate class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the Articles of Incorporation or
bylaws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Articles of
Incorporation or bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining Directors.
(vi) The provisions of this paragraph (C) shall govern the election of
Directors by holders of Units of Series A Junior Participating Preferred Stock
during any default period notwithstanding any provisions of the Articles of
Incorporation to the contrary.
(D) Except as set forth herein, holders of Units of Series A
Junior Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Shares of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions. (A) Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Junior
Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on outstanding Units of Series A Junior Participating
Preferred Stock shall have been paid in full, the Corporation shall not:
A-5
<PAGE> 8
(i) declare or pay dividends on, or make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of junior stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of parity stock, except dividends paid
ratably on Units of Series A Junior Participating Preferred Stock and
shares of all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any parity stock, provided, however, that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any junior
stock; or
(iv) purchase or otherwise acquire for consideration any Units
of Series A Junior Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such Units.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any Units of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
automatically upon the acquisition thereof. All such Units shall, upon their
cancellation, become authorized but unissued shares (with each Unit being equal
to one-hundredth of a share) of preferred stock and may be reissued as part of
a new series of preferred stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Junior Participating
Preferred Stock shall have received, subject to adjustment as hereinafter
provided in paragraph (B), the greater of either (a) $.01 per Unit plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not earned or declared, to the date of such payment, or (b) the amount per
Unit equal to the aggregate per share amount to be distributed to holders of
shares of parity stock, unless simultaneously therewith
A-6
<PAGE> 9
distributions are made ratably on Units of Series A Junior Participating
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of Units of Series A Junior Participating
Preferred Stock are entitled under clause (i)(a) of this sentence and to which
the holders of shares of such parity stock are entitled, in each case upon such
liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, or (ii) subdivide outstanding
shares of Common Stock, or (iii) combine outstanding shares of Common Stock
into a smaller number of shares, then in each such case the aggregate amount to
which holders of Units of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event pursuant to clause (i)(b) of paragraph
(A) of this Section 6 shall be adjusted by multiplying such amount by a
fraction the number of which shall be the number of shares of Common Stock that
are outstanding immediately after such event and the denominator of which shall
be the number of shares of Common Stock that were outstanding immediately prior
to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination, statutory share exchange or
other transaction in which the shares of Common Stock are exchanged for or
converted into other stock or securities, cash and/or any other property, then
in any such case Units of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged for or converted into an amount per Unit
(subject to the provision for adjustment hereinafter set forth) equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is converted or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide
outstanding shares of Common Stock, or (iii) combine outstanding Common Stock
into a smaller number of shares, then in each such case the amount set forth in
the immediately preceding sentence with respect to the exchange or conversion
of Units of Series A Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. Redemption. The Units of Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Units of Series A Junior Participating
Preferred Stock shall rank junior, as to the payment of dividends and the
distribution of assets, to all series of the Corporation's preferred stock that
hereafter may be issued, unless the terms of any such series shall provide
otherwise.
A-7
<PAGE> 10
Section 10. Amendment. The Articles of Incorporation, including,
without limitation, this resolution, shall not hereafter be amended, either
directly or indirectly, or through merger, statutory share exchange or
consolidation with another corporation, in any manner that would alter or
change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more the outstanding Units of
Series A Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. The Series A Junior Participating
Preferred Stock may be issued in Units or other fractions of a share, which
Units or fractions shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series
A Junior Participating Preferred Stock.
A-8
<PAGE> 11
(SEAL)
CERTIFICATE
THIS DOCUMENT RECEIVED
AND FILED IN THE OFFICE
OF THE SECRETARY OF STATE
BY: /s/ Sandra Show
----------------------
DATE: 4/18/89
--------------------
TRANSACTION# 89110087
------------
CHARTER# 8505042
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ARTICLES OF AMENDMENT
OF
GENUINE PARTS COMPANY
ONE
The name of the Corporation is Genuine Parts Company.
TWO
A new Article Nine to the Articles of Incorporation is hereby added as follows:
ARTICLE NINE
Classification of the Board of Directors
9.1 Number of Directors. The number of directors of the
corporation shall be not less than nine or more than fifteen. The exact number
of directors shall be determined within such minimum and maximum by resolution
of the shareholders from time to time adopted by the affirmative vote of the
majority of the shares represented at a meeting of shareholders and entitled to
vote on the subject matter; provided, however, if the Georgia Business
Corporation Code hereafter is amended to provide that the exact number within
such minimum and maximum may be fixed or changed from time to time by the Board
of Directors of the corporation, then thereafter the exact number within such
minimum and maximum shall be fixed or changed from time to time solely by a
resolution adopted by an affirmative vote of at least two-thirds (2/3) of the
total number of directors then in office. It is anticipated that the Georgia
Business Corporation Code will be amended effective July 1, 1989 to so provide
that the exact number of such directors within such minimum and maximum may be
fixed from time to time by the Board of Directors; therefore, effective
immediately upon the effective date of such anticipated amendment, this Article
9.1 shall be deemed amended to provide that the exact number of directors
within the minimum and maximum shall be fixed or changed from time to time
solely by a resolution adopted by an affirmative vote of at least two-thirds
(2/3) of the total number of directors then in office.
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9.2 Classification, Terms and Election of Directors. The
directors shall be divided into three classes, designated Class I, Class II and
Class III. Each class shall consist, as nearly as may be possible, of
one-third of the total number of directors constituting the entire Board of
Directors. At the 1989 Annual Meeting of Shareholders, Class I directors shall
be elected for a one-year term, Class II directors for a two-year term and
Class III directors for a three-year term. At each succeeding annual meeting
of shareholders, commencing in 1990, successors to the class of directors
whose term expires at the annual meeting shall be elected or reelected for a
three-year term. Except as provided in Article 9.4, a director shall be
elected by the affirmative vote of a majority of the shares of the class of
stock represented at the annual meeting of shareholders for which the director
stands for election and entitled to elect such director.
If the number of directors is changed, any increase or decrease shall
be apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible. In no case shall a decrease in the
number of directors have the effect of shortening the term of an incumbent
director. If the number of directors is increased, and any newly created
directorships are filled by the Board, there shall be no classification of
additional directors elected by the Board until the next meeting of the
shareholders called for the purpose of electing directors.
Each director shall serve until his successor is elected and qualified
or until his earlier resignation, retirement, disqualification, removal from
office or death.
9.3 Removal. The entire Board of Directors or any individual
director may be removed from office with or without cause by the affirmative
vote of the holders of at least two-thirds (2/3) of the outstanding shares of
Voting Stock (as defined in Article Six), excluding from the number of shares
deemed to be outstanding at the time of such vote and from such vote on the
removal action, all outstanding shares of Voting Stock held by a Related Person
(as defined in Article Six) on the record date for the meeting at which such
action is submitted to the shareholders for their approval.
If the Georgia Business Corporation Code hereafter is amended to
provide that these amended and Restated Articles
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of Incorporation may be further amended to provide that a director may be
removed only for cause, then thereafter the reference above to removal from
office "with or without cause" shall be amended to refer to removal from office
"only for cause". It is anticipated that the Georgia Business Corporation Code
will be amended effective July 1, 1989 to provide that, unless the shareholders
have so specified in a corporation's articles of incorporation or bylaws, if
the directors have staggered terms, they may be removed only for cause;
therefore, effective immediately upon the effective date of such anticipated
amendment, this Article 9.3 shall be deemed amended to provide that a director
may be removed from office only for cause and only by the affirmative vote of
the holders of at least two-thirds (2/3) of the outstanding shares of Voting
Stock, excluding shares of Voting Stock held by a Related Person.
Removal action may be taken at any shareholders' meeting with respect
to which notice of such purpose has been given, and a removed director's
successor may be elected at the same meeting to serve the unexpired term.
9.4 Vacancies. A vacancy occurring on the Board of Directors,
however occurring, whether by increase in the number of directors, death,
resignation, retirement, disqualification, removal from office or otherwise,
may be filled, until the next election of directors by the shareholders, by the
affirmative vote of at least two-thirds (2/3) of the total number of directors
then remaining in office, though they constitute less than a quorum of the
Board of Directors.
9.5 Election of Directors by Holders of Preferred Stock.
Notwithstanding any of the foregoing provisions in this Article Nine, whenever
the holders of any one or more classes of preferred stock or series thereof
issued by the corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of shareholders, the
number of such directors, and the election, term of office, filling of
vacancies and other features of each such directorship, shall be governed by
the terms of these Amended and Restated Articles of Incorporation and any
Preferred Stock Designation (as defined in Article Six) applicable thereto, and
such directors so elected shall not be divided into classes pursuant to this
Article Nine.
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9.6 Amendment or Repeal. Notwithstanding any other provisions of
these Amended and Restated Articles of Incorporation or the Bylaws of the
corporation or any provision of any law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the
holders of any particular class or series or Voting Stock required by law,
these Amended and Restated Articles of Incorporation or any Preferred Stock
Designation, the provisions set forth in this Article Nine may not be
repealed or amended in any respect unless such action is approved by the
affirmative vote of the holders of not less than two-thirds (2/3) of the
outstanding shares of the Voting Stock of the corporation, excluding
shares held by a Related Person on the record date for the meeting at
which such action is submitted to the shareholders for their consideration.
THREE
The foregoing Amendment was adopted by the shareholders of the
Corporation on April 17, 1989.
FOUR
The affirmative vote of the holders of 38,697,249 shares of the
outstanding common stock was required to adopt the foregoing Amendment. On
April 17, 1989, the date of submission of the foregoing Amendment to the
shareholders, 77,394,497 shares of common stock were outstanding and entitled
to vote thereon. The foregoing Amendment was adopted by the affirmative vote
of the holders of 40,324,501 shares of the common stock of Genuine Parts
Company.
IN WITNESS WHEREOF, the undersigned has caused these
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Articles of Amendment to be duly executed this 17th day of April, 1989.
By: /s/ Wilton D. Looney
-------------------------
Wilton D. Looney
Chairman of the Board
Attest:
/s/ Brainard T. Webb, Jr.
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Brainard T. Webb, Jr.
Secretary
(CORPORATE SEAL)
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AMENDED AND RESTATED
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ARTICLES OF INCORPORATION
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OF
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GENUINE PARTS COMPANY
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ARTICLE ONE
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Name
----
The name of the corporation is "Genuine Parts Company."
ARTICLE TWO
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Governing Law
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The corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
ARTICLE THREE
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Purpose
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The corporation is organized as a corporation for profit for any
lawful purpose not specifically prohibited to corporations under the
applicable laws of the State of Georgia, including but not limited to the
buying, selling, importing or exporting, manufacturing, machining, assembling,
rebuilding and repairing gears, transmissions, pistons, rings, axles, brakes,
and other parts and accessories, contrivances, devices, machinery and
equipment for automobiles, trucks, motorcycles, motor boats, aircraft, ships,
engines, and other vehicles, and machinery, devices and equipment for the
repair of same, and all goods, materials, wares and merchandise which may in
anyways appertain thereto or which may be used in connection with the
foregoing articles, and generally to conduct a parts, accessory, machine shop
and automotive business in all its branches as manufacturer, wholesaler,
warehouseman, distributor, jobber, broker, importer, agent, retailer, or
otherwise and shall be authorized in connection therewith to engage in any
lawful business, act or activity.
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ARTICLE FOUR
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Authorized Shares
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A. The total number of shares of capital stock which the corporation
shall have authority to issue is One Hundred Sixty Million (160,000,000), of
which One Hundred Fifty Million (150,000,000) shall be common stock of the par
value of $1 per share (hereinafter called the "common stock") and Ten Million
(10,000,000) shall be preferred stock of the par value of $1 per share
(hereinafter called the "preferred stock").
B. The preferred stock may be issued from time to time by the
corporation in one or more series, with such voting powers, full or limited,
or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue of such stock adopted by the
board of directors of the corporation pursuant to authority to do so which is
hereby vested in the board of directors. Each such series of preferred stock
shall be distinctly designated. Except in respect of the particulars fixed by
the board of directors for each series as permitted hereby, all shares of
preferred stock so designated by the board of directors shall be alike in
every particular, except that shares of any one series issued at different
times may differ as to the dates from which dividends thereon shall be
cumulative. The voting rights, if any, of each such series and the
preferences and relative, participating, optional and other special rights of
each such series and the qualifications, limitations and restrictions thereof,
if any, may differ from those of any and all other series at any time
outstanding; and the board of directors of the corporation is hereby expressly
granted authority to fix, by resolutions duly adopted prior to the issuance of
any shares of a particular series of preferred stock so designated by the
board of directors, the voting powers of stock of such series, if any, and the
designations, preferences and relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof,
if any, for such series, including without limitation the following:
(1) The distinctive designation of and the number of shares of
preferred stock which shall constitute such series; provided that such
number may be increased (except where otherwise provided by the board
of directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the board of
directors;
(2) The rate and time at which, and the terms and conditions
upon which, dividends, if any, on preferred stock of such series shall
be paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other series of preferred
stock or any other class of stock of the corporation and whether such
dividends shall be cumulative or non-cumulative.
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(3) The right, if any, of the holders of preferred stock of
such series to convert the same into, or exchange the same for, shares
of any other class of stock or any series of any class of stock of the
corporation and the terms and conditions of such conversion or
exchange;
(4) Whether or not preferred stock of such series shall be
subject to redemption, and the redemption price or prices and the time
or times at which, and the terms and conditions upon which, preferred
stock of such series may be redeemed;
(5) The rights, if any, of the holders of preferred stock of
such series upon the voluntary or involuntary liquidation of the
corporation;
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the preferred stock of such
series; and
(7) The voting powers, if any, of the holders of such series
of preferred stock which may, without limiting the generality of
the foregoing, include the right, voting as a series by itself or
together with any other series of the preferred stock as a class,
(i) to vote more or less than one vote per share on any or all matters
voted upon by the shareholders and (ii) to elect one or more directors
of the corporation if there has been a default in the payment of
dividends on any one or more series of the preferred stock or under
other circumstances and upon such other conditions as the board of
directors may fix.
C. Except as otherwise provided in these Amended and Restated Articles
of Incorporation, the board of directors shall have authority to authorize the
issuance, from time to time, without any vote or other action by the
shareholders, of any or all shares of stock of the corporation of any class or
series at any time authorized, and any securities convertible into or
exchangeable for any such shares, and any options, rights or warrants to
purchase or acquire any such shares, in each case to such persons and on such
terms (including as a dividend or distribution on or with respect to, or in
connection with a split or combination of, the outstanding shares of stock of
the same or any other class or series) as the board of directors from time to
time in its discretion lawfully may determine; provided, that the consideration
for the issuance of shares of stock of the corporation (unless issued as such a
dividend or distribution or in connection with such a split or combination)
shall not be less than the par value of such shares. Shares so issued shall be
fully paid stock, and the holders of such stock shall not be liable to any
further call or assessments thereon.
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ARTICLE FIVE
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Preemptive Rights
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None of the holders of shares of any class of stock of the corporation
shall be entitled as a matter of right to purchase, subscribe for or otherwise
acquire any new or additional shares of stock of the corporation of any class
now or hereafter authorized, or any options or warrants to purchase, subscribe
for or otherwise acquire any new or additional shares of stock of the
corporation of any class now or hereafter authorized, or any shares, evidences
of indebtedness, or any other securities convertible into or carrying options
or warrants to purchase, subscribe for or otherwise acquire any new or
additional shares.
ARTICLE SIX
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Business Combinations
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The shareholders vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this Article Six.
(A) Notwithstanding any other provisions of these Amended and Restated
Articles of Incorporation or any provision of law which might otherwise permit
a lesser vote or no vote and in addition to any affirmative vote required of
the holders of any particular class or series of "Voting Stock" (as hereinafter
defined) by law, these Amended and Restated Articles of Incorporation or any
Preferred Stock Designation (as hereinafter defined), the affirmative vote of
the holders of not less than two-thirds (2/3) of the outstanding shares of
Voting Stock of the corporation, which shall include the affirmative vote of at
least fifty percent (50%) of the outstanding shares of Voting Stock held by
shareholders other than the "Related Person" (as hereinafter defined), shall be
required for the approval or authorization of any Business Combination;
provided, however, that the two-thirds (2/3) and fifty percent (50%) voting
requirements shall not be required, and such Business Combination shall require
only such affirmative vote as is required by law and any other provision of
these Amended and Restated Articles of Incorporation if:
(1) The Business Combination was approved by the Board of
Directors of the corporation either
(a) prior to the date that such Related Person became
the Beneficial Owner (as hereinafter defined) of ten percent
(10%) or more of the outstanding shares of the Voting Stock of
the corporation; or
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(b) after such date, but only so long as such Related
Person has sought and obtained the approval of the Board of
Directors; provided, however, that such approval shall only be
effective if at least two thirds (2/3) of the directors are
Continuing Directors (as hereinafter defined); or
(2) All of the following conditions are satisfied:
(a) the Business Combination involves a merger or
consolidation of the corporation and the consideration to be
received per share by holders of Voting Stock in such Business
Combination shall be either cash, or if the Related Person
shall have acquired the majority of its holdings of the
corporation's Voting Stock for a form of consideration other
than cash, in the same form of consideration as the Related
Person acquired such majority; and
(b) the cash or Fair Market Value (as hereinafter
defined) of the property, securities or Other Consideration to
be Received (as hereinafter defined) per share by holders of
common stock of the corporation shall have a Fair Market Value
(as adjusted for stock splits, stock dividends,
reclassifications of shares into a lesser number of shares and
similar events) which is not less than the greater of (i) the
highest per share price (including brokerage commissions,
soliciting dealers' fees and transfer taxes) paid by such
Related Person in acquiring any of its holdings of the
corporation's common stock or (ii) an amount which bears the
same or greater percentage relationship to the Fair Market
Value of the corporation's common stock on the date of the
first public announcement of such Business Combination as the
highest per share price determined in (b)(i) above bears to
the Fair Market Value of the corporation's common stock on the
date on which the Related Person first became a Related
Person; or (iii) the earnings per share of common stock of the
corporation for the four consecutive quarters immediately
preceding the Announcement Date, multiplied by the higher of
the then price earnings multiple (if any) of such Related
Shareholder or the highest price earnings multiple of the
corporation during the two years immediately preceding the
Announcement Date; and
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(c) if applicable, the cash or Fair Market Value of
the property, securities or Other Consideration to be Received
per share by holders of shares of any class of outstanding
Voting Stock, other than common stock, shall have a Fair
Market Value (as adjusted for stock splits,stock dividends,
reclassifications of shares into a lesser number of shares and
similar events) which is not less than the greatest of (i) the
highest per share price (including brokerage commissions,
soliciting dealers' fees and transfer taxes) paid by such
Related Person in acquiring any of its holdings of such class
of Voting Stock during the two year period immediately prior
to the date of the first public announcement of such Business
Combination; or (ii) if applicable, an amount which bears the
same or greater percentage relationship to the Fair Market
Value of such class of Voting Stock on the date of the first
public announcement of such Business Combination as the
highest per share price determined in (c)(i) above bears to
the Fair Market Value of such Voting Stock on the date on
which the Related Person first became a Related Person;
or (iii) if applicable, the highest preferential amount per
share to which holders of such class of Voting Stock would be
entitled in the event of voluntary or involuntary liquidation
of the corporation; and
(d) after such Related Person has become a Related
Person and prior to the consummation of such Business
Combination, (i) there shall have been (aa) no failure
to declare and pay at the regular date therefor any quarterly
dividends (whether or not cumulative) on any outstanding
preferred stock, and (bb) no reduction in the annual rate of
dividends paid on common stock (after giving effect to any
reclassification, including any reverse stock split,
recapitalization, reorganization or similar transaction
which has the effect of enlarging or reducing the number of
outstanding shares of common stock) unless such reduction has
been approved by the Board of Directors, at least two-thirds
(2/3) of the members of which are Continuing Directors, (ii)
such Related Person shall not have become the "Beneficial
Owner" of any additional shares of Voting Stock of the
corporation, except as part of the transaction which resulted
in such Related Person becoming a Related Person or upon
conversion of convertible securities acquired by it prior to
becoming a Related Person or as a result of a pro rata stock
dividend or stock split, and (iii) such Related Person shall
not have received the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances,
guarantees, pledges
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or other financial assistance or tax credits or other tax
advantages provided by the corporation or any Subsidiary (as
hereinafter defined); and
(e) a proxy statement describing the proposed
Business Combination and complying with the requirements of
the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, rules and regulations), whether or not the
corporation is then subject to such requirements, shall be
mailed at least thirty (30) days prior to the consummation of
such Business Combination to the public shareholders of the
corporation for the purpose of soliciting shareholders
approval of such Business Combination and shall contain at the
front thereof in a prominent place (i) any recommendations as
to the advisability (or inadvisability) of the Business
Combination which the Continuing Directors, if any, may choose
to state, and (ii) the opinion of a reputable national
investment banking firm as to the fairness (or not) of such
Business Combination from the financial point of view of the
remaining public shareholders of the corporation (such
investment banking firm to be engaged solely on behalf of the
remaining public shareholders, to be paid a reasonable fee for
their services by the corporation upon receipt of such
opinion, to be one of the so-called major bracket investment
banking firms which has not previously been associated with
such Related Person, and, if there are at the time any such
directors, to be selected by a majority of the Continuing
Directors).
(B) For Purposes of this Article Six:
(1) the term "Business Combination" shall mean
(a) any merger or consolidation of the corporation or
any Subsidiary with or into a Related Person or any merger
or consolidation of a Related Person with or into the
corporation or any Subsidiary,
(b) any sale, lease, exchange, transfer or other
disposition (in either one transaction or in a series of
related transactions) including, without limitation, the
mortgage of or the use of any other security device
relating to all or any Substantial Part (as hereinafter
defined) of the assets of the corporation (including,
without limitation, any voting securities of any
Subsidiary) or of any Subsidiary to a Related Person,
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(c) any sale, lease, exchange, mortgage,
pledge,transfer or other disposition (in either one
transaction or a series of related transactions) of all or
any Substantial Part of the assets of a Related Person to
the corporation or any Subsidiary,
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the corporation if, as of
the record date for the determination of shareholders
entitled to vote with respect thereto, any person is a
Related Person,
(e) the issuance of or transfer by the corporation or
any Subsidiary (in one transaction or in a series of
related transactions) of any securities of the corporation
or any Subsidiary to a Related Person,
(f) the acquisition by the corporation or any
Subsidiary of any securities of a Related Person,
(g) any reclassification of securities (including any
reverse stock split), recapitalization or reorganization
of the corporation or any merger or consolidation of the
corporation with any of its Subsidiaries or any similar
transaction (whether or not into or otherwise involving a
Related Person) which has the effect, directly or
indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity securities of
the corporation or any Subsidiary which is, directly or
indirectly, owned by any Related Person,
(h) any loan or other extension of credit by the
corporation or any Subsidiary to a Related Person or any
guarantees by the corporation or any Subsidiary of any
loan or other extension of credit by any person to a
Related Person; or
(i) any transaction or related series of transactions
having, directly or indirectly, the same effect as any of
the foregoing.
(2) The term "person" shall mean any individual, firm,
group, corporation or other entity (as such terms are used on March
21, 1986 in Rule 13d of the Securities Exchange Act of 1934, as
amended).
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(3) The term "Related Person" shall mean
(a) any person (other than the corporation, any
Subsidiary or any employee benefit plan of the corporation
or any Subsidiary) who or which, as of the record date for
the determination of shareholders entitled to notice and
to vote on such Business Combination or, if there is no
record date,immediately prior to the consummation of any
such transaction, together with its "Affiliates"
and "Associates" (as such terms are defined on March
21, 1986 in Rule 12b-2 of the Securities Exchange Act of
1934, as amended) is the "Beneficial Owner" (as defined on
March 21, 1986, as amended) of ten percent (10%) or more of
the outstanding shares of Voting Stock of the corporation.
(b) any Affiliate or Associate of such person
described in the foregoing subparagraph 3(a) of this
Section (B),
(c) any Affiliate of the corporation which at any
time within the two year period immediately prior to the
date in question was the Beneficial Owner, directly or
indirectly, of ten percent (10%) or more of the
outstanding Voting Stock of the corporation or
(d) any person who is an assignee of or has
otherwise succeeded to any shares of Voting Stock which
were at any time within the two-year period immediately
prior to the date in question, beneficially owned by any
Related Person, if such assignment or succession shall
have occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933. Without limitation,
any person that has the right to acquire any shares of
Voting Stock of the corporation pursuant to any agreement,
or upon exercise of conversion rights, warrants, or
options, or otherwise, shall be deemed a Beneficial Owner
of such shares for purposes of determining whether such
person or group, individually or together with its
Affiliates and Associates, is a Related Person, but the
number of shares deemed to be outstanding pursuant to this
paragraph (3) of Section (B) shall not include any other
shares of Voting Stock which may be issuable pursuant to
any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or
otherwise
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(4) The term "Substantial Part" shall mean more than ten
percent (10%) of the total consolidated assets of the corporation in
question as of the end of the most recent fiscal year ending prior to
the time the determination is being made.
(5) The term "Subsidiary" shall mean any corporation of
which a majority of any class of equity security is owned, directly or
indirectly, by the corporation; provided, however, that for the
purposes of the definition of a Related Person set forth in Paragraph
(3) of this Section (B), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is
owned, directly or indirectly, by the corporation.
(6) For the purposes of subparagraphs 2(b) and 2(c) of
Section (A), the term "Other Consideration to be Received" shall
include, without limitation, common stock and, if applicable, shares
of any other class of outstanding Voting Stock, retained by its
existing public shareholders in the event of a Business Combination
with such Related Person in which the corporation is the surviving
corporation.
(7) The term "Continuing Director" shall mean any person
who
(a) is not affiliated with a Related Person and who
was a member of the corporation's Board of Directors prior
to the time the Related Person became a Related Person, or
(b) any successor to a Continuing Director who is not
affiliated with a Related Person and who was recommended
for election (before such person's initial election as a
Director) as a Continuing Director by a majority of the
Board of Directors if at least two-thirds (2/3) of the
directors were Continuing Directors.
(8) The term "Fair Market Value" shall mean:
(a) in the case of stock, the highest closing sale
price during the thirty (30) day period immediately
preceding the date in question of a share of such stock on
the Composite Tape for New York Stock Exchange Listed
Stocks, or, if such stock is not
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listed on such Exchange, on the principal United States
securities exchange registered under the Securities
Exchange Act of 1934 on which such stock is listed or, if
such stock is not listed on any such exchange the highest
closing bid quotation with respect to a share of such
stock during the thirty (30) day period preceding the date
in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system
then in use or, if no such quotations are available, the
fair market value on the date in question of a share of
such stock as determined by the Board of Directors if at
least two-thirds (2/3) of the directors are Continuing
Directors; and
(b) in the case of property other than cash or stock,
the fair market value of such property on the date in
question as determined by the Board of Directors if at
least two-thirds (2/3) of the directors are Continuing
Directors.
(9) The term "Voting Stock" shall mean all outstanding
shares of capital stock of the corporation entitled to vote generally
in the election of directors of the corporation considered for the
purposes of this Article Six as one class (it being understood that,
for purposes of this Article Six, each share of the Voting Stock shall
have the number of votes granted to it pursuant to Article Four of
these Amended and Restated Articles of Incorporation or any
designation of the rights, powers and preferences of any class or
series of preferred stock made pursuant to said Article Four [a
"Preferred Stock Designation"]). Each reference in this Article Six to
a percentage of shares of Voting Stock shall refer to the percentage
of the votes entitled to be cast by such shares.
(10) In the event any paragraph (or portions thereof) this
Article Six shall be found to be invalid, prohibited or unenforceable
for any reason, the remaining provisions (or portions thereof) of this
Article Six shall be deemed to remain in full force and effect and
shall be construed as if such invalid, prohibited or unenforceable
provisions had been stricken herefrom or otherwise rendered
inapplicable, it being the intent of the corporation and its
shareholders that each remaining provision (or portion thereof) of
this Article Six remain to the fullest extent permitted by law,
applicable and enforceable as to all shareholders, including Related
Persons, notwithstanding any such finding.
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(C) Notwithstanding any other provisions of these Amended
and Restated Articles of Incorporation or the Bylaws of the
corporation or any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the
holders of any particular class or series or Voting Stock required by
law, these Amended and Restated Articles of Incorporation or any
Preferred Stock Designation, the provisions set forth in this Article
Six may not be repealed or amended in any respect unless such action
is approved by the affirmative vote of the holders of not less than
two-thirds (2/3) of the outstanding shares of the Voting Stock of the
corporation; provided, however, that if there is a Related Person on
the record date for the meeting at which such action is submitted to
the shareholders for their consideration, such two-thirds (2/3) vote
must include the affirmative vote of at least fifty percent (50%) of
the outstanding shares of Voting Stock held by shareholders other than
the Related Person.
(D) A majority of the Board of Directors, if at least
two-thirds (2/3) are Continuing Directors, shall have the power and
duty to determine, on the basis of information known to them after
reasonable inquiry, all facts necessary to determine compliance with
this Article Six, including, without limitation.
(1) whether a person is a Related Person,
(2) the number of shares of Voting Stock beneficially
owned by any person,
(3) whether a person is an Affiliate or Associate of
another, and
(4) whether the applicable conditions set forth in
Paragraph (2) of Section (B) have been met with
respect to any Business Combination.
(E) Nothing contained in this Article Six shall be
construed to relieve any Related Person from any fiduciary obligation
imposed by law.
ARTICLE SEVEN
-------------
Period of Duration
------------------
The corporation shall have perpetual duration.
- 12 -
<PAGE> 28
ARTICLE EIGHT
-------------
Limitation of Personal Liability of Directors
---------------------------------------------
8.1 A director of the corporation shall not be personally liable to
the Corporation or its shareholders for monetary damages for breach of duty of
care or other duty as a director, except for liability (i) for any
appropriation, in violation of his duties, of any business opportunity of the
Corporation; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) of the types set
forth in Section 14-2-154 of the Georgia Business Corporation Code; or (iv) for
any transaction from which the director derived an improper personal benefit.
The provisions of this article shall not apply with respect to acts or
omissions occurring prior to the effective date of this article.
8.2 Any repeal or modification of the provisions of this article by
the shareholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation with respect to any act or omission occurring prior to the
effective date of such repeal or modification.
8.3 If the Georgia Business Corporation Code hereafter is amended to
authorize the further elimination or limitation of the liability of
directors,then the liability of a director of the Corporation, in addition to
the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Georgia Business Corporation
Code. Specifically, and not in limitation of the foregoing sentence, it is
anticipated that the Georgia Business Corporation Code will be amended in 1989
so as, among other things, to permit elimination of the reference to a lack of
'good faith' in clause (ii) of Article 8.1 above; therefore, effective
immediately upon the effective date, if any, of such anticipated
amendment, clause (ii) of Article 8.1 above shall be deemed amended to read
exactly as the corresponding provision of the Georgia Business Corporation
Code, as so amended.
8.4 In the event that any of the provisions of this article (including
any provision within a single sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the remaining
provisions are severable and shall remain enforceable to the fullest extent
permitted by law.
These Amended and Restated Articles of Incorporation purport
merely to restate those provisions in the Restated Articles of Incorporation
now in effect and not being amended hereby.
- 13 -
<PAGE> 29
This amendment and restatement was authorized by the holders of the
common stock of the corporation, the only class of stock then outstanding, at
its Annual Meeting held on April 19, 1988. Of the _________ shares of common
stock outstanding and entitled to vote, _________ shares were voted in favor of
the restatement. The vote of a majority of the shares of common stock was
required to adopt the restatement.
These Amended and Restated Articles of Incorporation supersede the
Articles of Incorporation as adopted on May 7, 1928 and as amended and restated
on April 21, 1987 and as theretofore amended.
IN WITNESS WHEREOF, Genuine Parts Company has caused these Amended and
Restated Articles of Incorporation to be executed and its corporate seal
affixed and has caused the foregoing to be attested, all by its duly authorized
officers on this 18st day of April, 1988.
GENUINE PARTS COMPANY
By: /s/ Wilton Looney
------------------------------
Wilton Looney
Chief Executive Officer
Attest:
/s/ Brainard T. Webb, Jr.
- ---------------------------------
Brainard T. Webb, Jr.
Secretary
[CORPORATE SEAL]
- 14 -
<PAGE> 1
EXHIBIT 10.9
THE GENUINE PARTS COMPANY
TAX-DEFERRED SAVINGS PLAN
ARTICLE 1
ESTABLISHMENT OF PLAN
1.01 Background of Plan. Genuine Parts Company hereby establishes,
effective as of January 1, 1993, a deferred compensation plan known as
The Genuine Parts Company Tax-Deferred Savings Plan. The purpose of
the Plan is to help the Company retain employees of outstanding
ability.
1.02 Status of Plan. The Plan is intended to be a nonqualified, unfunded
plan of deferred compensation under the Internal Revenue Code of 1986,
as amended. Also, because the only persons who may participate in
this Plan are members of a select group of management or highly
compensated employees, this Plan of deferred compensation is not
subject to Parts 2, 3 and 4 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974.
1.03 Establishment of Trust. The Company has established a trust to fund
benefits provided under the terms of the Plan ("Trust"). It is
intended that the transfer of assets into the Trust will not generate
taxable income (for federal income tax purposes) to the Participants
until such assets are actually distributed or otherwise made available
to the Participants.
ARTICLE 2
DEFINITIONS
Certain terms of this Plan have defined meanings which are set forth in
this Article and which shall govern unless the context in which they are
used clearly indicates that some other meaning is intended.
Account. The bookkeeping account to which Bonuses which are deferred by
a Participant shall be recorded and in which income or loss shall be
credited in accordance with the Plan.
Beneficiary. Any person or persons designated by a Participant, in
accordance with procedures established by the Committee, to receive
benefits hereunder in the event of the Participant's death. If any
Participant shall fail to designate a Beneficiary or shall designate a
Beneficiary who shall fail to survive the Participant, the Beneficiary
shall be the Participant's Beneficiary under the Genuine Partnership
Plan or any successor plan to the Genuine Partnership Plan.
<PAGE> 2
Bonus. A Participant's bonus determined in the Company's discretion and
paid as part of a Company bonus program for executives and other key
employees. The term bonus does not include extraordinary payments to a
Participant and does not include a Participant's wages or salary unless
the Executive Committee designates such payments as a Bonus for purposes
of this Plan. Any such designation must be made in advance of the
Participant earning such payment.
Committee. The Executive Committee or its designee that will administer
and interpret the terms of the Plan.
Company. Genuine Parts Company and its corporate successors.
Effective Date. January 1, 1993.
Election Form. A form substantially the same as the form attached to
this Plan as Exhibit A.
Executive Committee. The Executive Committee of the Board of Directors
of the Company.
Key Employee. Any full-time employee of the Company designated as a Key
Employee by the Executive Committee.
Participant. Any Key Employee who is participating in this Plan.
Plan. The Genuine Parts Company Tax-Deferred Savings Plan as set forth
in this document together with any subsequent amendments hereto.
Termination of Service. A Key Employee who has ceased to serve as an
employee of the Company for any reason.
ARTICLE 3
PARTICIPATION
3.01 Participation.
(a) In General. The only persons who may participate in this Plan
are Key Employees of the Company who are designated as such by
the Executive Committee. Upon becoming eligible to participate,
a Key Employee must complete an Election Form. The Key
Employee's participation shall commence on the date specified in
this Article 3. Even though a Key Employee may be a Participant
in this Plan, the Participant shall not be entitled to any
benefit hereunder unless such Participant has properly
- 2 -
<PAGE> 3
completed an Election Form and deferred the receipt of his or
her Bonus pursuant to the Plan.
(b) Completion of Election Form. A Key Employee may participate in
the Plan after delivering a properly completed and signed
Election Form to the Committee. The Election Form shall be
signed and delivered to the Committee prior to the first day of
the calendar year with respect to which the Bonus will be
earned. The Key Employee's participation in the Plan will be
effective as of the first day of the calendar year which
commences after the Committee's receipt of the Key Employee's
Election Form.
(c) Election After Plan is Approved. Notwithstanding paragraph (b),
any Election Form which is delivered to the Committee within
thirty days of the Company's approval of the Plan and prior to
the end of the calendar year in which such approval is given
shall be valid and shall apply to the Bonus which would
ordinarily be paid to the Participant in the following calendar
year. However, such bonus deferral shall be limited to the
amount or percentage set forth in Section 4.01.
(d) Voluntary Termination of Election Form. A Participant may
terminate his or her Election Form at any time. If a
Participant terminates his or her Election Form, however, the
Participant may not execute a new Election Form to defer his or
her Bonus for the remainder of the calendar year in which the
Participant's Election Form is terminated. However, effective
as of the first day of the following calendar year or the first
day of any subsequent calendar year, the Participant may execute
a new Election Form and thereby defer the receipt of any future
Bonus attributable to the Participant's employment. Such
Election Form shall be effective only for Bonus applicable to
the Participant's employment after the first day of the calendar
year following the Committee's receipt of the Participant's
Election Form.
(e) Continuation of Election Form. A Participant shall have the
right to modify the dollar amount or percentage of his or her
Bonus which is deferred under the Plan prior to the commencement
of each calendar year. If the Participant fails to execute a
new Election Form prior to the commencement of the new calendar
year, the Participant's Election Form in effect during the
previous calendar year shall continue in effect during the new
calendar year.
(f) Automatic Termination of Election Form. The Participant's
Election Form will automatically terminate at the earliest of
(i) the Participant's Termination of Service, (ii) the date the
Executive Committee determines that the Participant is no longer
a Key Employee under the Plan, or (iii) the termination of the
Plan.
- 3 -
<PAGE> 4
(g) Nothing contained in the Plan shall be deemed to give any Key
Employee the right to be retained as an employee of the Company.
ARTICLE 4
PLAN BENEFITS
4.01 Deferred Bonus. A Key Employee may elect to defer any dollar amount
or percentage of his or her Bonus in accordance with the terms of the
Plan and the Election Form. However, for the Bonuses paid in 1994, a
Key Employee may elect to defer a maximum of $10,000 or 25% of the Key
Employee's Bonus, whichever is greater. For bookkeeping purposes, the
amount of the Bonus which the Key Employee elects to defer pursuant to
this Plan shall be transferred to and held in individual Accounts.
4.02 Investment. The Committee shall direct the instrument of all
Accounts. As of the last day of each calendar year and on such other
dates selected by the Committee, the Committee shall credit each
Participant's Account with earnings, losses and changes in fair market
value experienced by the investment alternative selected by the
Committee.
4.03 Form of Payment.
(a) Payment Election. Payment of Plan benefits shall commence on
the date the Participant selects on the Election Form. Any date
selected by the Participant must be at least two calendar years
following the date the Bonus would ordinarily be paid. In no
event, however, shall a Participant's Account commence to be
distributed later than the first regular business day of the
fourth month following the Participant's Termination of Service.
For example, if a Participant has a Termination of Service on
January 12, payment of plan benefits would commence on May 1
(the fourth month following January 12).
(b) Optional Forms of Payment. The amount of the Participant's
Account shall be paid to the Participant either in a lump sum or
in a number of approximately equal annual installments
designated by the Participant on the Election Form. Such annual
installments may be for 5 years, 10 years or 15 years. If a
Participant elects to receive a distribution of his or her
Account in installments, the Committee may purchase an annuity
from an insurance company which annuity will pay the Participant
the desired annual installments. If the Committee purchases an
annuity contract, the Key Employee will have no further rights
to receive payments from the Company or the Plan with respect to
the amounts subject to the annuity. If the Committee does not
purchase an annuity contract, the amount of the Account
remaining unpaid shall continue to receive allocations of income
as
- 4 -
<PAGE> 5
provided in Section 4.02. If the Participant fails to designate
a payment method in the Election Form, the Participant's Account
shall be distributed in a lump sum.
(c) Multiple Elections. A Participant may elect a different payment
commencement date for each Bonus deferred under this Plan. In
addition, a Participant may elect a different payment form for
each Bonus deferred under this Plan. The Committee shall
establish sub-accounts within a Participant's Account (to the
extent necessary) to identify the portion of a Participant's
Account that will be distributed as of the dates and in the form
the Participant designates in the Election Form. A Participant
may not modify or otherwise revoke the benefit commencement date
and payment form designated on an Election Form after the
Participant delivers such Election Form to the Committee.
(d) Acceleration of Payment. If a Participant elects an installment
distribution and the annual installment payment elected by the
Participant would result in an annual payment of less than
$3,000, the Committee shall accelerate payment of the
Participant's benefits over a lesser number of whole years (but
in increments of 5 or 10 years) so that the annual amount paid
is at least $3,000. If payment of the Participant's benefits
over a 5 year period will not provide annual payments of at
least $3,000, the Participant's Account shall be paid in a lump
sum.
(e) Payment to Beneficiary. Upon the Participant's death, all
unpaid amounts held in the Participant's Account shall be paid
to the Participant's beneficiary in the same benefit payment
form the Participant elected on the Election Form and in
accordance with the payment distribution rules set forth in this
Plan. Such payment will be commence to be paid on the first
business day of the fourth month following the Participant's
death.
4.04 Financial Hardship. The Committee may, in its sole discretion,
accelerate the making of payment to a Participant of an amount
reasonably necessary to handle a severe financial hardship of a sudden
and unexpected nature due to causes not within the control of the
Participant. Such payment may be made even if the Participant has not
incurred a Termination of Service. All financial hardship
distributions shall be made in a lump sum. Such payments will be made
on a first-in, first-out basis so that the oldest Bonus deferred under
the Plan shall be deemed distributed first in a financial hardship.
4.05 Payment to Minors and Incapacitated Persons. In the event that any
amount is payable to a minor or to any person who, in the judgment of
the Committee, is incapable of making proper disposition thereof, such
payment shall be made for the benefit of such minor or such person in
any of the following ways as the Committee, in its sole discretion,
shall determine:
- 5 -
<PAGE> 6
(a) By payment to the legal representative of such minor or such
person;
(b) By payment directly to such minor or such person;
(c) By payment in discharge of bills incurred by or for the benefit
of such minor or such person. The Committee shall make such
payments without the necessary intervention of any guardian or
like fiduciary, and without any obligation to require bond or to
see to the further application of such payment. Any payment so
made shall be in complete discharge of the Plan's obligation to
the Participant and his or her Beneficiaries.
4.06 Application for Benefits. The Committee may require a Participant or
Beneficiary to complete and file certain forms as a condition
precedent to receiving the payment of benefits. The Committee may
rely upon all such information given to it, including the
Participant's current mailing address. It is the responsibility of
all persons interested in receiving a distribution pursuant to the
Plan to keep the Committee informed of their current mailing
addresses.
4.07 Designation of Beneficiary. Each Participant from time to time may
designate any person or persons (who may be designated contingently or
successively and who may be an entity other than a natural person) as
his or her Beneficiary or Beneficiaries to whom the Participant's
Account is to be paid if the Participant dies before receipt of all
such benefits. Each Beneficiary designation shall be on the form
prescribed by the Committee and will be effective only when filed with
the Committee during the Participant's lifetime. Each Beneficiary
designation filed with the Committee will cancel all Beneficiary
designations previously filed with the Committee. The revocation of a
Beneficiary designation, no matter how effected, shall not require the
consent of any designated Beneficiary.
ARTICLE 5
FUNDING OF PLAN
5.01 The benefits provided by this Plan shall be paid from the general
assets of the Company or as otherwise directed by the Company. To the
extent that any Participant acquires the right to receive payments
under the Plan (from whatever source), such right shall be no greater
than that of an unsecured general creditor of the Company.
Participants and their Beneficiaries shall not have any preference or
security interest in the assets of the Company other than as a general
unsecured creditor.
- 6 -
<PAGE> 7
ARTICLE 6
ADMINISTRATION OF THE PLAN
6.01 The Committee shall have complete control of the administration of the
Plan with all powers necessary to enable it to properly carry out the
provisions of the Plan. In addition to all implied powers and
responsibilities necessary to carry out the objectives of the Plan,
the Committee shall have the following specific powers and
responsibilities:
(1) To construe the Plan and to determine all questions
arising in the administration, interpretation and operation of the
Plan;
(2) To determine the benefits of the Plan to which any
Participant, Beneficiary or other person may be entitled;
(3) To keep records of all acts and determinations of the
Committee, and to keep all such records, books of accounts, data and
other documents as may be necessary for the proper administration of
the Plan;
(4) To prepare and distribute to all Participants and
Beneficiaries information concerning the Plan and their rights under
the Plan;
(5) To do all things necessary to operate and administer
the Plan in accordance with its provisions.
ARTICLE 7
AMENDMENT AND TERMINATION
7.01 The Executive Committee reserves the right to modify, alter, amend, or
terminate the Plan, at any time and from time to time, without notice,
to any extent deemed advisable; provided, however, that no such
amendment or termination shall (without the written consent of the
Participant, if living, and if not, the Participant's Beneficiary)
adversely affect any benefit under the Plan which has accrued with
respect to the Participant or Beneficiary as of the date of such
amendment or termination regardless of whether such benefit is in pay
status. Notwithstanding the foregoing, no amendment, modification,
alteration, or termination of this Plan may be given effect with
respect to any Participant without the consent of such Participant if
such amendment, modification, alteration, or termination is adopted
during the six-month period prior to a Change of Control or during the
two-year period following a Change of Control.
- 7 -
<PAGE> 8
ARTICLE 8
CHANGE IN CONTROL
8.01 Change of Control.
(a) Notwithstanding any other provisions in this Plan, in the
event there is a Change of Control of the Company as defined
in subsection (c) of this Section 8.01, any Participant whose
employment is terminated on account of such Change of Control,
shall receive an immediate lump sum payment of the
Participant's Account balance. For purposes of this Section
8.01(a), a Participant's employment shall be considered to
have "terminated on account of such Change of Control" only if
the Participant's employment with the Employer is terminated
without cause during the 24 month period following the Change
of Control.
(b) Notwithstanding any other provisions in this Plan, in the
event there is a change of control of the Company as defined
in subsection (c) of this Section 8.01, any Participant who
has commenced receiving installment distributions from the
Company (other than from an annuity contract purchased from an
insurance company) shall immediately receive a lump sum
payment in an amount equal to the unpaid balance of the
Participant's Account.
(c) A Change of Control of the Company shall mean a change of
control of a nature that would require to be reported in
response to item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"). In addition, whether or not required to be
reported thereunder, a Change of Control shall be deemed to
have occurred at such time as (i) any "person" (as that term
is used in Section 13(d)(2) of the Exchange Act) is or becomes
the beneficial owner (as defined in rule 13(d)-3 of the
Exchange Act) directly or indirectly of securities
representing 20% or more of the combined voting power for
election of directors of the then outstanding securities of
the Company or any successor of the Company (ii) during any
period of two consecutive years or less individuals who at the
beginning of such period constituted the board of directors of
the Company cease, for any reason, to constitute at least a
majority of the board of directors, unless the election or
nomination for election of each new director was approved by a
vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period;
(iii) the shareholders of the Company approve any merger or
consolidation as a result of which the capital stock of the
Company shall be changed, converted or exchanged (other than a
merger with a wholly-owned subsidiary of the Company) or any
liquidation of the Company or any sales or other disposition
of 50% or more of the assets or earning power of the Company;
or (iv) the shareholders of the Company
- 8 -
<PAGE> 9
approve any merger or consolidation to which the Company is a
party as a result of which the persons who were shareholders
of the Company immediately prior to the effective date of the
merger or consolidation shall have beneficial ownership of
less than 50% of the combined voting power for election of
directors of the surviving corporation following the effective
date of such merger or consolidation. Notwithstanding any
provisions in this subparagraph (c), in the event the Company
and a Participant agree prior to any event which would
otherwise constitute a Change of control, that such event
shall not constitute a Change of Control, then for purposes of
this Plan there shall be no such Change of Control upon that
event.
ARTICLE 9
MISCELLANEOUS
9.01 Headings. The headings and sub-headings in this Plan have been
inserted for convenience of reference only and are to be ignored in
any construction of the provisions hereof.
9.02 Spendthrift Clause. None of the benefits, payments, proceeds or
distribution under this Plan shall be subject to the claim of any
creditor of any Participant or Beneficiary, or to any legal process by
any creditor of such Participant or Beneficiary, and none of them
shall have any right to alienate, commute, anticipate or assign any of
the benefits, payments, proceeds or distributions under this Plan
except to the extent expressly provided herein to the contrary.
9.03 Merger. The Plan shall not be automatically terminated by the
Company's acquisition by, merger into, or sale of substantially all of
its assets to any other organization, but the Plan shall be continued
thereafter by such successor organization. All rights to amend,
modify, suspend or terminate the Plan shall be transferred to the
successor organization, effective as of the date of the combination or
sale.
9.04 Release. Any payment to Participant or Beneficiary, or to their legal
representatives, in accordance with the provisions of this Plan, shall
to the extent thereof be in full satisfaction of all claims hereunder
against the Committee and the Company, any of whom may require such
Participant, Beneficiary, or legal representative, as a condition
precedent to such payment, to execute a receipt and release therefor
in such form as shall be determined by the Committee, or the Company,
as the case may be.
9.05 Governing Law. The Plan shall be governed by the laws of the State of
Georgia.
9.06 Costs of Collection; Interest. In the event the Participant collects
any part or all of the payments due under this Plan by or through a
lawyer or lawyers, the Company
- 9 -
<PAGE> 10
will pay all costs of collection, including reasonable legal fees
incurred by the Participant. In addition, the Company shall pay to
the Participant interest on all or any part of the payments that are
not paid when due at a rate equal to the Prime Rate as announced by
Trust Company Bank or its successors from time to time.
9.07 Successors and Assigns. This Plan shall be binding upon the
successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the Company has caused this Plan to be duly
executed and its seal to be hereunto affixed on the date indicated below, but
effective as of January 1, 1993.
GENUINE PARTS COMPANY
By: /s/ Frank M. Howard
-------------------
Title: Treasurer
----------------
Date: December 1, 1994
-----------------
[CORPORATE SEAL]
Attest:
/s/ Brainard T. Webb, Jr.
- -----------------------------
- 10 -
<PAGE> 1
EXHIBIT 10.10
AMENDMENT NO. 2
TO THE GENUINE PARTS COMPANY
SUPPLEMENTAL RETIREMENT PLAN
WHEREAS, the Executive Committee of the Board of Directors of Genuine
Parts Company desires to amend the Genuine Parts Company Supplemental
Retirement Plan (the "Plan") as follows:
NOW, THEREFORE, BE IT RESOLVED, that the following Amendments be
adopted:
1.
Article Two is hereby deleted and a new Article Two is substituted
therefor as follows:
"ARTICLE TWO - PARTICIPATION
2.01 Eligibility.
Except as provided in Section 2.02, any employee of the Employer ("Key
Employee") whose annual, regular Earnings are expected to be equal to
or greater than the compensation limits of Code Section 401(a)(17)
($150,000 in 1994) shall participate in this Plan.. Upon becoming
eligible to participate, a Key Employee must complete and execute a
Joinder Agreement in a form satisfactory to the Compensation and Stock
Option Committee of the Board of Directors of Genuine Parts Company
(the "Committee"). Even though a Key Employee may be a Participant in
this Plan, he shall not be entitled to any benefit hereunder unless
and until his benefits under the Pension Plan are reduced due to the
application of either Section 401(a)(17) or Section 415 of the Code.
2.02 Additional Rules on Eligibility.
(a) The Committee may increase the Earnings limitation (see
Section 2.01) that a Key Employee must receive to become
eligible to continue or commence his or her participation in
the Plan.
(b) A Key Employee shall not accrue a benefit for any year in
which the Key Employee's annual, regular Earnings is expected
to be less than the compensation limits of Code Section
401(a)(17) or, if greater, the Earnings limit established by
the Committee pursuant to paragraph (a) above. Nevertheless,
the Key Employee shall continue to participate in the Plan
and shall again accrue a benefit under this Plan during the
<PAGE> 2
calendar year in which the Key Employee's Earnings exceed the
Earnings limit established in Section 2.01 or 2.02(a),
whichever is greater.
(c) The Committee may prohibit any Key Employee from
participating in the Plan during a calendar year and
subsequent calendar years by notifying such Key Employee
during the first calendar year that his or her participation
shall cease under the Plan.
2.03 Definition of Earnings.
For purposes of this Plan, the term "Earnings" shall (except as
modified below) have the same meaning given such term in the Pension
Plan. Unlike the Pension Plan, however, Earnings shall include
salary, bonus or other compensation that the Company would otherwise
have been paid to a Key Employee but for the Key Employee's election
to defer the receipt of such salary, bonus or other compensation
pursuant to a Company sponsored deferred compensation program
("Deferred Compensation"). A Key Employee's Deferred Compensation
shall not be included in Earnings in the year such Deferred
Compensation is paid to the Key Employee."
2.
Section 3.01 is hereby deleted and a new Section 3.01 is substituted
therefor as follows:
"3.01 Calculation of Supplement.
(a) Each Participant who terminates active employment with the
Employer on or after his Normal or Delayed Retirement Date by
reason of retirement or voluntary or involuntary termination
shall, except as provided in Section 6.05, be entitled to a
monthly supplemental retirement income ("Supplemental
Retirement Income") equal to (1) minus (2), where
(1) equals the monthly Normal or Delayed Retirement
Income which Participant would be entitled to receive
under the Pension Plan beginning on the Benefit
Commencement Date (as defined in Section 3.02) if the
benefit limitations of Code Sections 401(a)(17) and
415 as reflected in the Pension Plan were not in
effect (measured in the form of a single life annuity
payable in monthly installments for the Participant's
life) and if the definition of Earnings under this
Plan were used to compute the Participant's Normal or
Delayed Retirement Income under the Pension Plan;
(2) equals the monthly Normal or Delayed Retirement
Income which Participant is actually entitled to
receive under the Pension Plan
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<PAGE> 3
Beginning on the Benefit Commencement Date measured
in the form of a single life annuity payable in
monthly installments for the Participant's life.
(b) Except as provided in Sections 3.01(c), 4.01 and 5.01, no
payment of any kind shall be made under this Plan to any
Participant who terminates active employment with the Employer
prior to his Normal Retirement Date. For example, in the
absence of a change in control and assuming Section 3.01(c) is
not applicable, no payment shall be made to a Participant who
resigns his employment prior to his Normal Retirement Date
even though such Participant is eligible for Early Retirement
under the Pension Plan.
(c) The Committee may, in its sole discretion, determine that a
Participant who terminates his or her employment on or after
attaining age 55 and completing fifteen years of Credited
Service ("Early Retirement Date") but prior to his or her
Normal Retirement Date shall be eligible for benefits under
this Plan. Such benefit shall be determined using the formula
set forth in Section 3.01(a) above but by calculating the
Participant's Supplemental Retirement Income as of his or her
termination of employment and by applying the reduction set
forth in the Pension Plan to reflect the early payment of
benefits prior to the Participant's Normal Retirement Date.
(d) In computing a Key Employee's benefit under this Plan, the
Committee shall assume the Participant did not accrue a
benefit under the Pension Plan (and did not receive any
Earnings) during any calendar year in which the Key Employee
did not accrue a benefit under this Plan (see Section 2.02)."
3.
Section 3.02 is hereby amended by deleting the phrase "Section 3.01"
where it appears in such Section and replacing it with the phrase "Section
3.01(a)."
4.
Section 4.01 is hereby deleted and a new Section 4.01 is substituted
therefor as follows:
"4.01 Death of Participant Before Supplemental Income Payments Commence.
(a) Participants Prior to January 1 1995.
(1) This Section 4.01(a) shall apply only to Key
Employees who became Participants in this Plan prior
to January 1, 1995.
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<PAGE> 4
(2) If a Participant (married or unmarried at the time of
his death) dies before Supplemental Retirement Income
commences hereunder and while he remains employed by
the Employer, then the Participant's Beneficiary
shall be entitled to receive a survivor benefit which
is the Actuarial Equivalent of the Participant's
Supplemental Retirement Income accrued to the date of
his death under Section 3.01. For such purpose, the
Participant's Beneficiary shall be the same as his or
her Beneficiary designated under the Pension Plan.
(b) Participants On or After January 1, 1995.
(1) This Section 4.01(b) shall apply only to Key
Employees who became Participants in this Plan on or
after January 1, 1995.
(2) If a Participant (married or unmarried at the time of
his death) dies before Supplemental Retirement Income
commences hereunder and while he remains employed by
the Employer, then the Committee may, in its sole
discretion, determine that a Participant's
Beneficiary shall be entitled to receive a survivor
benefit which is the Actuarial Equivalent of the
Participant's Supplemental Retirement Income accrued
to the date of his death under Section 3.01. For
such purpose, the Participant's Beneficiary shall be
the same as his or her Beneficiary designated under
the Pension Plan.
(c) Form of Survivor Benefit. For purposes of paragraphs (a) and
(b) above, the survivor benefit shall be a benefit payable for
the life of the Beneficiary which commences on the first day
of the month following the Participant's death, and ending on
the first day of the month coinciding with or immediately
following the Beneficiary's death."
5.
Section 4.02 is hereby amended by adding the following sentence to the
end thereof as follows:
"No death benefits shall be paid to the Participant's
Beneficiary."
6.
Section 5.01(a) is hereby deleted and a new Section 5.01(a) is
substituted therefor as follows:
"(a) Notwithstanding any other provisions in this Agreement, in the
event there is a Change of Control of Genuine Parts as defined
in subsection (c) of this Section 5.01, any Participant whose
employment is terminated on account
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<PAGE> 5
of such Change of Control, and who has seven (7) or more years
of Credited Service for vesting purposes (and without regard
to such Participant's service for benefit accrual purposes)
under the Pension Plan, shall be entitled to receive an
immediate lump sum payment in an amount which is the Actuarial
Equivalent single sum value of the monthly Supplemental
Retirement Income accrued by the Participant as of the date of
his termination calculated pursuant to the formula set forth
in Section 3.01(a) and assuming payments began on the
Participant's Normal Retirement Date; provided, however, that
for this purpose, Actuarial Equivalence shall be determined
using an interest assumption of 6%. For purposes of this
Section 5.01(a), a Participant's employment shall be
considered to have "terminated on account of such Change of
Control" only if the Participant's employment with the
Employer is terminated without cause during the 24 month
period following the Change of Control."
6.
Section 6.05 is amended by deleting the phrase "Spouse or Beneficiary"
wherever it appears in such Section and replacing it with the phrase
"Beneficiary or Contingent Annuitant."
7.
Section 6.08 is hereby deleted and a new Section 6.08 is substituted
therefor as follows:
"6.08 Right to Amend and Terminate.
The Committee reserves the right to modify, alter, amend, or terminate
the Plan, at any time and from time to time, without notice, to any
extent deemed advisable; provided, however, that no such amendment or
termination shall (without the written consent of the Participant, if
living, and if not, the individual to whom survivor benefits are paid
(i.e., either the Beneficiary or the Contingent Annuitant as the case
may be)) adversely affect any benefit under the Plan which has accrued
with respect to the Participant as of the date of such amendment or
termination regardless of whether such benefit is vested or in pay
status. Notwithstanding the foregoing, no amendment, modification,
alteration, or termination of this Plan may be given effect with
respect to any Participant, Beneficiary or Contingent Annuitant
without the consent of such Participant (if living, and if not, the
individual to whom survivor benefits are paid) if such amendment,
modification, alteration, or termination is adopted during the
six-month period prior to a Change of Control or during the two-year
period following a Change of Control."
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<PAGE> 6
8.
This Amendment shall be effective as of January 1, 1995.
9.
Except as amended herein, the Plan shall continue in full force and
effect.
IN WITNESS WHEREOF, Genuine Parts Company has caused this Amendment to
be executed by its duly authorized officer.
GENUINE PARTS COMPANY
By: /s/ Frank M. Howard
-----------------------------
Title: Treasurer
-----------------------------
Date: December 1, 1994
-----------------------------
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<PAGE> 1
EXHBIT 10.11
GENUINE PARTNERSHIP PLAN
(Amended and Restated Effective January 1, 1994)
<PAGE> 2
GENUINE PARTNERSHIP PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1994)
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 -- INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Establishment of Plan; Background . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.04 Plan Governs Distribution of Benefits . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 -- DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act or ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliated Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Stock Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Credited Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employer Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employer Matching Contribution Account . . . . . . . . . . . . . . . . . . . . . . 6
Employer Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Family Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fund 6
</TABLE>
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Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Investment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Non-highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . 8
Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Permanent Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Plan Administrator or Administrator . . . . . . . . . . . . . . . . . . . . . . . 8
Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pre-Tax Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Prior Employer Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Qualified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Qualified Nonelective Contribution . . . . . . . . . . . . . . . . . . . . . . . . 9
Qualified Nonelective Contribution Account . . . . . . . . . . . . . . . . . . . . 9
Qualifying Employer Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Rollover Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Treasury Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust or Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Other Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3 -- PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.01 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.02 Year of Eligibility Service . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.03 Participation and Rehire . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.04 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.05 Not Contract for Employment . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 4 -- PRE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.01 Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.02 Elections Regarding Pre-Tax Contributions . . . . . . . . . . . . . . . . . . 15
4.03 Change in Employee Contribution Percentage or Suspension of Contributions . . 15
4.04 Deadline for Contributions and Allocation of Pre-Tax Contributions . . . . . 16
4.05 Rollover Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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<TABLE>
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ARTICLE 5 -- EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.01 Employer Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . 18
5.02 Qualified Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . 18
5.03 Form and Timing of Contributions . . . . . . . . . . . . . . . . . . . . . . 19
5.04 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 6 -- ACCOUNTS AND ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.01 Participant Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.02 Allocation of Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.03 Allocation of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.04 Adjustment Attributable to Plan Loans . . . . . . . . . . . . . . . . . . . . 22
6.05 Plan Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.06 Investment Funds and Elections . . . . . . . . . . . . . . . . . . . . . . . 22
6.07 Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 7 -- VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.01 Termination Date On or After Age 65 . . . . . . . . . . . . . . . . . . . . 24
7.02 Permanent Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.03 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.04 Other Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.05 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 8 -- DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.01 Commencement of Distribution . . . . . . . . . . . . . . . . . . . . . . . . 27
8.02 Method of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.03 Payment to Minors and Incapacitated Persons . . . . . . . . . . . . . . . . . 28
8.04 Application for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.05 Special Distribution Rules . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.06 Distributions Pursuant to Qualified Domestic Relations Orders . . . . . . . . 30
8.07 Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.08 Participant Withdrawals After Age 59-1/2 . . . . . . . . . . . . . . . . . . 31
ARTICLE 9 -- HARDSHIP WITHDRAWALS; LOANS . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.01 Hardship Withdrawal of Account . . . . . . . . . . . . . . . . . . . . . . . 33
9.02 Definition of Hardship . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.03 Maximum Hardship Distribution . . . . . . . . . . . . . . . . . . . . . . . . 33
9.04 Procedure to Request Hardship . . . . . . . . . . . . . . . . . . . . . . . . 35
9.05 Authority to Establish Loan Program . . . . . . . . . . . . . . . . . . . . . 35
9.06 Eligibility for Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.07 Loan Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.08 Maximum Number of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.09 Assignment of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.10 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.11 Term of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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<TABLE>
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9.12 Level Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.13 Directed Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.14 Other Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.15 Distribution of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 10 -- ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.01 Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.02 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.03 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.04 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.05 Standard of Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.06 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.07 Indemnification of Committee . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 11 -- AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.01 Right to Amend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.02 Termination or Discontinuance of Contributions . . . . . . . . . . . . . . . 44
11.03 IRS Approval of Termination . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 12 -- SPECIAL DISCRIMINATION RULES . . . . . . . . . . . . . . . . . . . . . . . . 46
12.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.02 $7,000 Limit on Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . 49
12.03 Average Actual Deferral Percentage . . . . . . . . . . . . . . . . . . . . . 51
12.04 Special Rules For Determining Average Actual Deferral Percentage . . . . . . 52
12.05 Distribution of Excess ADP Deferrals . . . . . . . . . . . . . . . . . . . . 52
12.06 Average Actual Contribution Percentage . . . . . . . . . . . . . . . . . . . 54
12.07 Special Rules For Determining Average Actual Contribution Percentages . . . 55
12.08 Distribution of Employer Matching Contributions . . . . . . . . . . . . . . 55
12.09 Combined ACP and ADP Test . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.10 Order of Applying Certain Sections of Article . . . . . . . . . . . . . . . 58
12.11 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 13 -- HIGHLY COMPENSATED EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . 59
13.01 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
13.02 Highly Compensated Employees . . . . . . . . . . . . . . . . . . . . . . . . 59
13.03 Former Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . 59
13.04 Family Aggregation Rules . . . . . . . . . . . . . . . . . . . . . . . . . . 60
13.05 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
13.06 Other Methods Permissible . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 14 -- MAXIMUM BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
14.01 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
</TABLE>
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14.02 Combined Plan Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . 64
14.03 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
14.04 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 15 -- TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
15.01 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
15.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
15.03 Minimum Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
15.04 Combined Plan Limitation For Top Heavy Years . . . . . . . . . . . . . . . . 69
ARTICLE 16 -- MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
16.01 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
16.02 Action by Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
16.03 Spendthrift Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
16.04 Distributions Upon Special Occurrences . . . . . . . . . . . . . . . . . . . 70
16.05 Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
16.06 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
16.07 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . 71
16.08 Agent for Service of Process . . . . . . . . . . . . . . . . . . . . . . . . 71
16.09 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
16.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
16.11 Adoption of the Plan by an Affiliated Sponsor . . . . . . . . . . . . . . . 72
16.12 Protected Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
16.13 Location of Participant or Beneficiary Unknown . . . . . . . . . . . . . . . 74
</TABLE>
- v -
<PAGE> 7
GENUINE PARTNERSHIP PLAN
(Amended and Restated Effective January 1, 1994)
ARTICLE 1
INTRODUCTION
1.01 Establishment of Plan; Background.
(a) Effective July 1, 1988, Genuine Parts Company adopted and
established the Genuine Partnership Plan ("Prior Plan").
The Prior Plan was at all times maintained as a plan meeting
the requirements of Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986, as amended, and of the
Employee Retirement Income Security Act of 1974.
(b) Effective January 1, 1994, the Prior Plan is continued in an
amended and restated form as set forth in its entirety in
this document (the "Plan").
1.02 Effective Date
This Plan shall be effective as of January 1, 1994. Notwithstanding
this general effective date, certain provisions of this Plan (as set
forth in this document) shall have effective dates earlier than
January 1, 1994.
1.03 Purpose.
This Plan is intended to provide a cash or deferred arrangement under
Code Sections 401(a) and 401(k). Under the Plan, Participants can
direct that a specified percentage of the amount that otherwise would
have been paid to them as Compensation be contributed by the Employer
to the Plan. The benefits described in the Plan are provided for the
exclusive benefit of the Participants and their Beneficiaries.
1.04 Plan Governs Distribution of Benefits
The distribution of benefits for all Participants (whether employed
by the Employer before or after the Effective Date) shall be governed
by the provisions of this Plan. Nevertheless, early retirement
benefits, retirement-type subsidies, or optional forms of benefit
protected under Code Section 411(d)(6) ("Protected Benefits") shall
not be reduced or eliminated with respect to benefits accrued under
such Protected Benefits unless such reduction or elimination is
permitted under the Code, Treasury Regulations, authority issued by
the Internal Revenue Service or judicial authority.
<PAGE> 8
ARTICLE 2
DEFINITIONS
Certain terms of this Plan have defined meanings which are set forth in this
Article and which shall govern unless the context in which they are used
clearly indicates that some other meaning is intended.
Account shall mean the Account established and maintained by the Committee or
Trustee for each Participant or their Beneficiaries to which shall be allocated
each Participant's interest in the Fund. Each Account shall be comprised of
the sub-accounts described in Section 6.01.
Act or ERISA shall mean Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as the same may be amended from time to time.
Adjustment shall mean, for any Valuation Date, the aggregate earnings, realized
or unrealized appreciation, losses, expenses, and realized or unrealized
depreciation of the Fund since the immediately preceding Valuation Date. The
determination of the adjustment shall be made by the Trustee and shall be final
and binding.
Affiliate shall mean the Company and any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Company; any trade or business which is under common control (as
defined in Code Section 414(c)) with the Company; any organization which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Company; and any other entity required to be aggregated with the
Company pursuant to regulations under Code Section 414(o).
Affiliated Sponsor shall mean any corporation and any other entity that is
designated by the Committee as an Affiliated Sponsor under the Plan. See
Section 16.11 for provisions relating to an Affiliated Sponsor's adoption of
the Plan. All Affiliated Sponsors, groups of employees designated as
participating in the Plan by such Affiliated Sponsors (if not all employees),
and the effective date of each company's designation as an Affiliated Sponsor
shall be specified in Schedule A.
Authorized Absence shall mean any temporary layoff or any absence authorized by
the Employer under the Employer's standard personnel practices provided that
all persons under similar circumstances must be treated alike in the granting
of such Authorized Leaves of Absence and provided further that the Participant
returns within the period of authorized absence. An absence due to service in
the Armed Forces of the United States shall be considered an Authorized Absence
to the extent required by federal law.
Beneficiary. For unmarried Participants, any individual(s), trust(s),
estate(s), partnership(s), corporation(s) or other entity or entities
designated by the Participant in
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<PAGE> 9
accordance with procedures established by the Committee to receive any
distribution to which the Participant is entitled under the Plan in the event
of the Participant's death. The Committee may require certification by a
Participant in any form it deems appropriate of the Participant's marital
status prior to accepting or honoring any Beneficiary designation. Any
Beneficiary designation shall be void if the Participant revokes the
designation or marries. Any Beneficiary designation shall be void to the
extent it conflicts with the terms of a qualified domestic relations order.
If an unmarried Participant fails to designate a Beneficiary or if the
designated Beneficiary fails to survive the Participant and the Participant has
not designated a contingent Beneficiary, the Beneficiary shall be the surviving
descendants of the Participant (who shall take per stirpes) and if there are no
surviving descendants, the Beneficiary shall be the Participant's estate. For
the purposes of the foregoing sentence, the term "descendants" shall include
any persons adopted by a Participant or by any of his descendants.
A married Participant's Beneficiary shall be his Spouse unless the Participant
has designated a non-Spouse Beneficiary (or Beneficiaries) with the written
consent of his Spouse given in the presence of a notary public on a form
provided by the Committee, or unless the terms of a qualified domestic
relations order require payment to a non-Spouse Beneficiary. A married
Participant's designation of a non-Spouse Beneficiary in accordance with the
preceding sentence shall remain valid until revoked by the Participant or until
the Participant marries a Spouse who has not consented to a designation in
accordance with the preceding sentence.
For the purposes of this Section, revocation of prior Beneficiary designations
will occur when a Participant (i) files a valid designation with the Committee;
or (ii) files a signed statement with the Committee evidencing his intent to
revoke any prior designations.
Board shall mean the Board of Directors of the Company.
Break in Service shall occur if the Employee ceases to be employed by the
Employer and does not resume Employment for seven or more consecutive years.
Code shall mean the Internal Revenue Code of l986, as amended. A reference to
a specific provision of the Code shall include such provision and any
applicable Treasury Regulation pertaining thereto.
Committee shall mean the Committee appointed by the Board under Article 10 to
administer the Plan. This term is interchangeable with "Plan Administrator."
Company shall mean Genuine Parts Company and its successors and assigns which
adopt this Plan.
Company Stock shall mean the common stock of the Company.
- 3 -
<PAGE> 10
Company Stock Fund shall mean the portion of a Participant's Account and each
subaccount which is invested in Company Stock.
Compensation shall mean, effective January 1, 1989, the gross annual earnings
reported on a Participant's Form W-2 (box 10 or its comparable location as
provided on Form W-2 in future years) as required by Code Section Section
6041(d) and 6051(a)(3). In addition, Compensation shall include Pre-Tax
Contributions under this Plan and salary reduction pre-tax contributions to a
Section 125 Plan maintained by the Employer. Compensation shall be determined
by ignoring any income exclusions under Code Section 3401(a) based on the
nature or location of employment. In addition, Compensation shall be
determined by ignoring reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation (and for
this purpose benefits under a stock option plan is "deferred compensation") and
welfare benefits (and for this purpose, worker's compensation payments of any
type and severance pay of any type shall be considered "welfare benefits," but
sick pay, short term disability and vacation pay are not considered "welfare
benefits"). Compensation shall not include amounts in excess of the
limitations set forth in Code Section 401(a)(17) ($150,000 in 1994). See also
Section 13.04 for additional rules regarding aggregation of Compensation for
certain Family Members.
Credited Service shall mean the number of years of service as an Employee of
the Employer (with proportionate allowance for fractional years) both before
and after the Effective Date, measured in accordance with the following rules:
(a) Credited Service for Employment Prior to January 1, 1988.
An Employee who was employed on the day preceding the
effective date of the Prior Plan (July 1, 1988) shall
receive Credited Service under this Plan for all years of
Credited Service earned under and pursuant to the Genuine
Parts Company Pension Plan prior to January 1, 1988.
Credited Service so determined shall be the Participant's
Credited Service under this Plan for all service prior to
January 1, 1988. If an Employee was not employed by the
Employer on June 30, 1988, such Employee shall not receive
Credited Service under this Plan for his Employment prior to
January 1, 1988.
(b) Credited Service for Employment On or After January 1, 1988.
On or after January 1, 1988, an Employee shall receive
Credited Service for the elapsed time of his Employment
beginning on the date of the Employee's first Hour of
Service on or after January 1, 1988 and ending on his
Termination Date. If an Employee has a Termination Date and
is subsequently rehired, such Employee shall again receive
Credited Service (subject to the Break in Service rules set
forth below) beginning on the date of the Employee's first
Hour of Service on or after his reemployment and ending on
his subsequent Termination Date.
- 4 -
<PAGE> 11
(c) Break in Service. Credited Service shall not include any
period of Employment which precedes a Break in Service if as
of the first day of the Break in Service, the Employee is
not vested in any portion of his Account.
(d) Employment with Affiliated Sponsors; Predecessor Businesses.
Credited Service shall not include any period of employment
with any Affiliated Sponsor prior to its designation as an
Affiliated Sponsor or any period of employment with a
predecessor business prior to its acquisition by Employer
except to the extent provided in Schedules A or B.
(f) Military Service. Credited Service shall not include any
period of service in the military; except to the extent such
service is required to be credited under applicable federal
law.
(g) Employment with Affiliates. An Employee's service with an
Affiliate shall be considered Employment with the Employer.
Distribution shall mean payment by the Trustee to or for the benefit of a
Participant, Spouse, Beneficiary or other person entitled to benefits as
provided in this Plan.
Effective Date shall mean January 1, 1994.
Eligible Employee shall mean, except for those Employees identified in the
following sentence, all Employees employed by the Employer. The following
Employees shall not be considered Eligible Employees: (i) any employee
included in a collective bargaining unit for which a labor organization is
recognized as collective bargaining agent unless such employee has been
designated by the Committee as an "Eligible Employee" for the purposes of this
Plan, (ii) any Employee who is a nonresident alien and who does not receive
earned income from the Employer which constitutes income from sources within
the United States, or (iii) any "leased employee," within the meaning of Code
Section 414(n)(2), with respect to the Employer.
Employee shall mean any person employed by or on Authorized Absence from the
Employer, and any person who is a "leased employee" within the meaning of Code
Section 414(n)(2) with respect to the Employer. However, if such "leased
employees" constitute less than 20 percent of the Employer's combined
non-highly compensated work force, within the meaning of Code Section
414(n)(1)(C)(ii), the term "Employee" shall not include "leased employees"
covered by a plan described in Code Section 414(n)(5).
Employer shall mean the Company and any Affiliated Sponsor. All Affiliated
Sponsors are listed on Schedule A.
Employer Contribution shall mean Employer Matching Contributions and Qualified
Nonelective Contributions. Employer Contributions may be made without regard
to
- 5 -
<PAGE> 12
current or accumulated earnings and profits for the taxable year or years
ending with or within the Plan Year.
Employer Matching Contribution Account shall mean the portion of a
Participant's total Account attributable to Employer Matching Contributions,
and the total of the Adjustments which have been credited to or deducted from a
Participant's Account with respect to Employer Matching Contributions.
Employer Matching Contribution shall have that meaning as defined in Section
5.01.
Employment shall mean the active service of an Employee with the Employer.
Employment with an Affiliated Sponsor prior to its designation as an Affiliated
Sponsor and employment with a predecessor business prior to its acquisition by
Employer shall be counted as employment with the Employer only to the extent
provided in Schedules A or B.
Entry Date shall mean the first business day of any calendar month.
Family Member shall have that meaning as defined in Section 13.04(b).
Fiduciary shall mean any party named as a Fiduciary in Section 10.01. Any
party shall be considered a Fiduciary of the Plan only to the extent of the
powers and duties specifically allocated to such party under the Plan.
Fund shall mean the money and other properties held and administered by the
Trustee in accordance with the Plan and Trust Agreement. If the Committee so
directs, multiple trust funds may be established under this Plan, which
together shall comprise the Fund hereunder.
Highly Compensated Employee shall have that meaning as defined in Article 13.
Hour of Service shall mean:
(a) Each hour for which an Employee is paid, or entitled to
payment, for performance of duties for an Employer or
Employers.
(b) Each hour for which an Employee is paid, or entitled to
payment, by an Employer or Employers, on account of a period
of time during which no duties are performed (irrespective
of whether the employment relationship is terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or Authorized
Absence; provided that in no event, shall an Employee
receive credit for more than 501 Hours of Service for any
single continuous period of non-working time. However, no
Hours of Service shall be granted for any direct or indirect
payment or for any entitlement to payment if (i) such
payment is
- 6 -
<PAGE> 13
made or due under a plan maintained solely for the purpose
of complying with applicable worker's compensation laws,
unemployment laws or disability insurance laws or (ii) such
payment is intended to reimburse an employee for his or her
medical or medically related expenses.
(c) Each hour for which an Employee is on an Authorized Leave
of Absence by reason of: (i) the pregnancy of the
Employee, (ii) birth of a child of the Employee, (iii)
placement of a child with the Employee in connection with
the adoption of the child by the Employee, or (iv) caring
for a child referred to in paragraphs (i) through (iii)
immediately following birth or placement. Hours credited
under this paragraph shall be credited at the rate of 10
hours per day, 45 hours per week but shall not, in the
aggregate, exceed the number of hours required to prevent
the Employee from incurring a Break in Service under Code
Section 410(a)(5) (a maximum of 501 hours) during the first
computation period in which a Break in Service would
otherwise occur.
(d) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer or
Employers. These hours shall be credited to the Employee
for the computation period or period to which the award or
agreement pertains, rather than the computation period in
which the award, agreement, or payment is made.
(e) In lieu of the foregoing, an Employee who is not compensated
on an hourly basis (such as salary, commission or piecework
employees) shall be credited with 45 Hours of Service for
each week (or 10 Hours of Service for each day) in which
such Employee would be credited with Hours of Service in
hourly pay. However, this method of computing Hours of
Service may not be used for any Employee whose Hours of
Service is required to be counted and recorded by any
Federal law, such as the Fair Labor Standards Act. Any such
method must yield an equivalency of at least 1,000 hours per
computation period.
The following rules shall apply in determining whether an Employee completes an
"Hour of Service":
1. The same hours shall not be credited under subparagraphs
(a), (b) or (c) above, as the case may be, and subparagraph
(d) above; nor shall the same hours credited under
subparagraphs (a) through (d) above be credited under
subparagraph (e) above;.
2. The rules relating to determining hours of service for
reasons other than the performance of duties and for
crediting Hours of Service to particular periods of
employment shall be those rules stated in Department of
Labor
- 7 -
<PAGE> 14
regulations Title 29, Chapter XXV, subchapter C, part 2530,
Sections 200b2(b) and 200b2(c), respectively.
Investment Fund shall mean the separate funds under the Trust Fund which are
distinguished by their investment objectives. The term "Investment Fund" does
not include a Participant's Common Stock Fund.
Non-highly Compensated Employee shall mean an Employee of the Employer who is
neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
Participant shall mean an Employee who becomes eligible to participate in the
Plan as provided in Article 3.
Permanent Disability shall mean a physical or mental condition of a Participant
resulting from bodily injury, disease, or mental disorder which (i) for a
Participant who is not in active Employment on or after January 1, 1993,
entitles the Participant to Social Security disability benefits or (ii) for a
Participant who is in active Employment on or after January 1, 1993, results in
the Participant receiving long term disability benefits under The Genuine Parts
Company Long Term Disability Plan. A Participant's Permanent Disability will
end on the date the Participant is no longer receiving disability benefits (i)
under Social Security for a Participant who is not in active Employment on or
after January 1, 1993, or (ii) under The Genuine parts Company Long Term
Disability Plan for a Participant who is in active Employment on or after
January 1, 1993.
Plan shall mean the Genuine Partnership Plan as set forth in this document
together with any subsequent amendments hereto.
Plan Administrator or Administrator shall mean the Committee appointed by the
Board pursuant to Article 10 to administer the Plan. All references in the
Plan to the Administrator shall be deemed to apply to the Committee and vice
versa. The Committee so appointed is hereby designated as the "Administrator"
of the Plan within the meaning of Section 3(16) of the Act and as the agent for
service of legal process for purposes of Section 102(b) of the Act.
Plan Year shall be the calendar year.
Pre-Tax Contributions shall mean contributions made to the Plan during the Plan
Year by the Employer, at the election of the Participant, in lieu of cash
compensation and that are made pursuant to a salary reduction agreement. Such
contributions are nonforfeitable when made and distributable only as specified
in Article 8 below.
Pre-Tax Contribution Account shall mean the portion of a Participant's Account
attributable to Pre-Tax Contributions, and the total of the Adjustments which
have been
- 8 -
<PAGE> 15
credited to or deducted from a Participant's Account with respect to Pre-Tax
Contributions.
Prior Plan. See Section 1.01.
Prior Employer Account shall mean the portion of a Participant's Account
attributable to assets transferred directly from the trustee of another
Qualified Plan to the Trustee of this Plan and which are not separately
allocated to an existing Account under this Plan. Sub-accounts may be
established as necessary to separately account for pre-tax contributions,
after-tax contributions, etc. Any restrictions or special rules applicable to
the Prior Employer Account (including optional forms of benefit that are
protected under Code Section 411(d)(6)) shall be set forth in Schedule C.
Qualified as used in "qualified plan" or "qualified trust" shall mean a plan
and trust which are entitled to the tax benefits provided respectively by
Sections 401 and 501 of the Code, and related provisions of the Code.
Qualified Nonelective Contribution shall have that meaning as defined in
Section 5.02.
Qualified Nonelective Contribution Account shall mean the portion of a
Participant's Account attributable to Qualified Nonelective Contributions, and
the total of the Adjustments which have been credited to or deducted from a
Participant's Account with respect to Qualified Nonelective Contributions.
Qualifying Employer Securities shall have that meaning as defined in Section
407(d)(5) of the Act.
Rollover Account. The portion of a Participant's Account attributable to
Rollover Contributions or the total of the Adjustments attributable to such
Rollover Contributions.
Rollover Contribution See Section 4.05.
Spouse shall mean the person who was married to the Participant (in a civil or
religious ceremony recognized under the laws of the state where the marriage
was contracted) immediately prior to the date on which payments to the
Participant from the Plan begin. If the Participant dies prior to the
commencement of benefits, Spouse shall mean a person who is married to a
Participant (as defined in the immediately preceding sentence) on the date of
the Participant's death. A Participant shall not be considered married to
another person as a result of any common law marriage whether or not such
common law marriage is recognized by applicable state law.
Termination Date shall mean the first to occur of the following events:
(a) Voluntary resignation from service of the Employer; or
- 9 -
<PAGE> 16
(b) Discharge from the service of the Employer by the Employer; or
(c) Termination on or after attaining age 65 (normal retirement
date); or
(d) Death; or
(e) Permanent Disability; or
(f) The first anniversary of the date the Employee ceases
Employment for any reason not described above, e.g., vacation,
holiday, sickness, disability (but not a Permanent Disability
resulting in a Distribution from the Plan), leave of absence,
or layoff.
If, however, an Employee terminates his Employment on account of an event
described in paragraphs (a) - (c) above and the Employee performs an Hour of
Service within twelve months following such Termination Date (or such lesser
period as provided in Treasury Regulation Section 1.410(a)-7(d)(iii)(B)), the
Employee shall be considered as having been in active Employment during such
period of absence. An Employee on Authorized Absence will not have a
Termination Date earlier than the end of such Authorized Absence.
Treasury Regulation means regulations pertaining to certain Sections of the
Code as issued by the Secretary of the Treasury.
Trust or Trust Agreement shall refer to the Fund established pursuant to one or
more agreements of trust entered into between the Employer and one or more
trustees (sometimes referred to as sub-trusts), which governs the creation and
maintenance of the Fund, and all amendments thereto which may hereafter be
made. It is expressly intended that (if the Committee so directs) multiple
sub-trusts may be established under this Plan, which together shall comprise
the Trust Fund hereunder and that all of the sub-trusts shall be considered to
be a single trust fund for purposes of Section 1.414(1)- 1(b)(1) of the
Treasury Regulations. The term Trust Fund shall also be deemed to include any
fund existing pursuant to any deposit administration or group annuity contract
between the Company and/or the Trustee and an Insurer. Each trust agreement or
contract with an Insurer established pursuant to this Plan shall be listed on
Schedule D.
Trustee shall mean any institution or individual(s) who shall accept the
appointment of the Committee to serve as Trustee pursuant to the Plan.
Valuation Date. It is intended that the assets of the Plan will be invested in
daily valued investment funds. Accordingly, the term "Valuation Date" shall
mean each day of the calendar year during which the Trustee determines the fair
market value of the assets held in the Investment Funds.
- 10 -
<PAGE> 17
Other Rules. A defined term, such as "Termination," will normally govern the
definitions of derivatives therefrom, such as "Terminate," even though such
derivatives are not specifically defined and even if they are or are not
initially capitalized. The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. Singular and plural nouns and pronouns shall be
interchangeable as the factual context may allow or require. The words
"hereof," "herein," "hereunder" and other similar compounds of the word "here"
shall mean and refer to the entire Plan and not to any particular provision or
Section.
- 11 -
<PAGE> 18
ARTICLE 3
PARTICIPATION
3.01 Participation
(a) Each Eligible Employee who is a Participant in the Prior
Plan on the day preceding the Effective Date of this Plan
shall be a Participant in this Plan on the Effective Date
(provided he is employed on the Effective Date).
(b) An Eligible Employee who is not described in subsection (a)
above shall become a Participant in the Plan on the Entry
Date next following the later of (i) the date on which the
Employee has both completed one Year of Eligibility Service
and attained age 21 or (ii) the date the Employee becomes a
member of the class of Eligible Employees. See Section 3.04
below for special rules that apply to new Employees
following an acquisition.
(c) If an Eligible Employee either (i) is not employed or (ii)
is no longer an Eligible Employee on the earliest Entry Date
on or after which such Employee satisfied the requirements
described above, but returns to work or again becomes an
Eligible Employee before incurring a Break in Service, such
Eligible Employee shall commence participation on the date
such Employee returns to work or again becomes an Eligible
Employee. If the Employee returns to work or again becomes
an Eligible Employee after a Break in Service, such Employee
must again satisfy the requirements of Section 3.01(b).
(d) An Eligible Employee who becomes eligible to participate in
this Plan will be asked to follow certain procedures to
enroll in the Plan, and pursuant to which he will designate
Beneficiaries and may elect to make Pre-Tax Contributions.
3.02 Year of Eligibility Service
(a) 1,000 Hour Rule. A Year of Eligibility Service is
determined under the 1,000 Hours of Service method.
Accordingly, an Employee shall receive one Year of
Eligibility Service upon completing a twelve consecutive
month period of Employment during which the Employee earns
at least 1,000 Hours of Service. The initial twelve month
period shall be the twelve consecutive month period
commencing on the Employee's date of hire or rehire. If the
Employee fails to complete 1,000 Hours of Service during
- 12 -
<PAGE> 19
this 12 month period, the Employee shall receive a Year of
Eligibility Service upon completing at least 1,000 Hours of
Service during a Plan Year (commencing with the Plan Year
during which the Employee's first anniversary of his date of
hire occurs).
(b) Break in Service. For purposes of this Article 3, an
Employee shall not receive credit for any Hours of Service
during any period of Employment which precedes a Break in
Service if, at the time of the Break in Service, the
Employee had never been a Participant in the Plan.
(c) Authorized Absence. A period during which an Employee is on
Authorized Absence shall not count towards the Employee's
Break in Service if such Employee resumes Employment
immediately after the end of such Authorized Absence.
3.03 Participation and Rehire.
(a) Status as a Participant. A Participant's participation in
the Plan shall continue until the Participant's Termination
Date. On or after his Termination Date, the Employee shall
be known as a Former Participant and his benefits shall
thereafter be governed by the provisions of Article 8. The
individual's status as a Former Participant shall cease as
of the date the individual ceases to have any balance in his
Account. If a Participant ceases to be an Eligible Employee
but does not have a Termination Date, then such person shall
continue to be known as a "Participant," but shall not be
eligible to make Pre-Tax Contributions and shall not be
eligible to receive Employer Contributions.
(b) Rehire of Person who was a Participant in this Plan. An
Eligible Employee who was a Participant in this Plan at the
time of his Termination Date and who is subsequently rehired
by an Employer, shall be eligible to immediately participate
in this Plan on the date of his rehire or, if later, on the
date he becomes an Eligible Employee.
3.04 Acquisitions.
If a group of persons becomes employed by an Employer (or any of its
subsidiaries or divisions) as a result of an acquisition of another
employer, the Committee shall determine whether and to what extent
employment with such prior employer shall be treated as Years of
Eligibility Service, the applicable Entry Date (or special entry
date) for such acquired employees, and any other terms and conditions
which apply to eligibility to participate in this Plan. Such terms
and conditions shall be set forth in Schedule A or Schedule B to this
Plan by action of the Committee. Except to the extent required by
law, employees of an acquired business which is not identified in
Schedule A or Schedule B shall not receive credit under this Plan for
their prior employment with the acquired business.
- 13 -
<PAGE> 20
3.05 Not Contract for Employment.
Participation in the Plan shall not give any Employee the right to be
retained in the Employer's employ, nor shall any Employee, upon
dismissal from or voluntary termination of his employment, have any
right or interest in the Fund, except as herein provided.
- 14 -
<PAGE> 21
ARTICLE 4
PRE-TAX CONTRIBUTIONS
4.01 Pre-Tax Contributions.
Effective on the Participant's initial Entry Date, a Participant may
elect to make Pre-Tax Contributions to the Plan. If a Participant
fails to elect to make Pre-Tax Contributions at that time, a
Participant may elect to make Pre-Tax Contributions to the Plan
effective as of the first day of any subsequent month (except during
periods of suspension -- see Section 4.03). A Participant's Pre-Tax
Contributions to the Plan shall be made by means of payroll deduction.
A Participant may contribute as a Pre-Tax Contribution any whole
percentage from 1% to 16% of his Compensation during any Plan Year.
4.02 Elections Regarding Pre-Tax Contributions.
(a) Procedure for Making Elections. Elections by a Participant
to make Pre-Tax Contributions to the Plan shall be made in
writing on a form prescribed by the Committee and by
designating on such form the percentage of Compensation that
will be contributed as a Pre-Tax Contribution during each
pay period. The election to make Pre-Tax Contributions
shall be effective no earlier than the first day of the
Participant's normal pay period beginning at least 30 days
after the Employer receives such election form (or such
smaller number of days as determined by the Committee on a
nondiscriminatory basis).
(b) Treatment as 401(k) Contributions. It is expressly intended
that, to the extent allowable by law, Pre-Tax Contributions
shall not be included in the gross income of the Participant
for income tax purposes and shall be deemed contributions
under a cash or deferred arrangement pursuant to Code
Section 401(k).
(c) Additional Limitations of Pre-Tax Contributions. Pre-Tax
Contributions shall be subject to the limitations described in
Section 12.02 (maximum dollar contribution limit), Section
12.03 (ADP non-discrimination test) and Article 14 (Code
Section 415 limit).
4.03 Change in Employee Contribution Percentage or Suspension of
Contributions.
(a) Change of Contribution Percentage. A Participant may
increase or decrease the percentage of his Compensation
contributed as a Pre-Tax Contribution only on January 1 or
July 1 of each Plan Year by delivery of written notice to
the Committee. In order to be effective, the Participant
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<PAGE> 22
must notify the Committee at least 30 days prior to the date
that the increase or decrease will become effective (or such
lesser number of days as determined by the Committee on a
nondiscriminatory basis).
(b) Suspension of Contributions. A Participant may suspend his
Pre-Tax Contributions at any time by properly completing a
form prescribed by the Committee. The suspension of Pre-Tax
Contributions will be effective on the first day of the
Participant's normal payroll period that begins 30 days
after the Participant delivers the completed form to the
Committee. A Participant may resume making Pre-Tax
Contributions on the first day of any month which is at
least six months after the effective date of such suspension
of contributions and only after informing the Committee in
writing at least 30 days prior to the date on which the
Pre-Tax Contributions are to resume. The Committee, on a
nondiscriminatory basis, may prescribe a lesser number of
days on which the suspension or resumption of Pre-Tax
Contributions is to be effective. A Participant's Pre-Tax
Contributions shall automatically be suspended beginning on
the first payroll period that commences after the
Participant is not in receipt of Compensation, the
Participant's layoff or the Participant's Authorized Absence
without pay.
(c) Other Rules.
(1) See Section 9.03 for circumstances under which a
Participant's Pre-Tax Contributions could be
suspended for a period of at least 12 months after
such Participant receives a hardship distribution.
(2) In order to satisfy the provisions of Article 12 and
Article 14, the Committee may from time to time
either temporarily suspend the Pre-Tax Contributions
of Highly Compensated Employees or reduce the maximum
permissible Pre-Tax Contribution that may be made to
the Plan by Highly Compensated Employees.
(3) Any reduction, increase, or suspension of Pre-Tax
Contributions described in this Article 4.03 shall be
made in such manner as the Committee may prescribe
from time to time consistent with the provisions of
this Article.
4.04 Deadline for Contributions and Allocation of Pre-Tax Contributions.
Pre-Tax Contributions shall be deducted by the Employer from the
Participant's Compensation and paid to the Trustee as promptly as
possible after the end of each regular pay period but in no event
later than 90 days after such Pre-Tax Contributions have been retained
by the Employer.
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<PAGE> 23
4.05 Rollover Contribution
(a) Without regard to any limitation on contributions set forth
in this Article, a Participant shall be permitted, if the
Committee consents (based on non-discriminatory criteria),
to transfer to the Trustee during any Plan Year additional
property acceptable to the Trustee, provided such property:
(1) was received by the Participant from a Qualified Plan
maintained by a previous employer of the Participant
and qualifies as a rollover contribution within the
meaning of Code Section 402(a)(5) or
(2) was received by the Participant from an individual
retirement account or individual retirement annuity
and qualifies as a rollover contribution within the
meaning of Code Section 408(d)(3)(A)(ii).
Under either (1) or (2) above, a Participant may make a
Rollover Contribution only if the Employer acquired the
assets or stock of the Participant's previous employer and
the Rollover Contribution originated from the Qualified
retirement plan of such previous employer.
(b) Such property shall be held by the Trustee in the Employee's
Rollover Account. All such amounts so held shall at all
times be fully vested and nonforfeitable. Such amounts
shall be distributed to the Employee upon Termination Date
in the manner provided in Article 8.
(c) See Section 8.07 regarding the right of a Participant to
request a trustee to trustee transfer of the Participant's
Account in lieu of a distribution of such Account.
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<PAGE> 24
ARTICLE 5
EMPLOYER CONTRIBUTIONS
5.01 Employer Matching Contribution.
(a) Eligibility to Receive Matching Contribution. The Employer
shall contribute to the Employer Matching Contribution
Account of each Participant who is employed on the last day
of a calendar month and who made a Pre- Tax Contribution
during such calendar month.
(b) Amount of Employer Matching Contribution. The Employer
Matching Contribution shall equal the lesser of 20% of the
Participant's Pre-Tax Contributions made during the calendar
month or 20% of the Participant's first 6% of Compensation
for such month (1.2% of Compensation).
(c) Employment on Last Day of Month. For purposes of allocating
an Employer Matching Contribution, any Participant who
either has a Termination Date on or after attaining age 65
or has a Termination Date on account of death or Permanent
Disability shall be deemed to be employed on the last day of
the month in which such Termination of Employment occurred.
In addition, certain Participants who have a Termination
Date during the Plan Year may be treated as being employed
for purposes of receiving an Employer Matching Contribution
if such treatment is necessary to enable the Plan to satisfy
the requirements of Code Sections 410(b), 401(a)(26) or
401(a)(4).
(d) Qualifying Employer Securities. The Employer Matching
Contributions are intended to be comprised primarily of
Qualifying Employer Securities (i.e., Common Stock). It is
hereby expressly provided that the Plan may acquire and hold
Qualifying Employer Securities.
5.02 Qualified Nonelective Contributions.
In the sole discretion of the Employer, an additional Employer
Contribution may be made to the Plan which shall be known as a
"Qualified Nonelective Contribution." Such contribution shall be made
in order to satisfy the requirements of Article 12, and shall be
allocated to the Qualified Nonelective Contribution Accounts of those
Non-highly Compensated Employees selected by the Committee at the time
such Qualified Nonelective Contribution is made, or as soon thereafter
as possible.
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<PAGE> 25
5.03 Form and Timing of Contributions.
(a) Employer Contributions shall be made in cash or in
Qualifying Employer Securities. Employer Matching
Contributions shall be delivered to the Trustee on or before
the date prescribed by the Code for filing the Employer's
federal income tax return, including authorized extensions.
Qualified Nonelective Contributions shall be delivered to
the Trustee on or before the last day of the twelfth month
following the close of the Plan Year to which the
contribution relates.
(b) Except as provided in this Section 5.03, all Employer
Contributions shall be irrevocable, shall never inure to the
benefit of any Employer, shall be held for the exclusive
purpose of providing benefits to Participants and their
Beneficiaries (and contingently for defraying reasonable
expenses of administering the Plan), and shall be held and
distributed by the Trustees only in accordance with this
Plan.
(c) Upon an Employer's request and to the extent permitted by
the Code and other applicable laws and regulations
thereunder, a contribution which was made by a mistake in
fact, or conditioned upon the initial qualification of the
Plan under Code Section 401(a) or upon the deductibility of
the contribution under Section 404 of the Code shall be
returned to the Employer within one year after the payment
of the contribution, the denial of the Plan's initial
qualification, or the disallowance of the deduction (to the
extent disallowed) whichever is applicable. All
contributions to this Plan are expressly conditioned on the
deductibility of such contributions under Code Section 404.
5.04 Forfeitures.
Forfeitures shall first be applied to restore amounts previously
forfeited pursuant to Section 7.05(c). Next, forfeitures shall be
used to pay expenses of the Plan which may be paid by the Plan in
accordance with the provisions of ERISA. Thereafter any remaining
forfeitures shall be allocated equally on a per capita basis among
the Employer Matching Contribution Accounts of all Participants who
are (i) actively employed on the last day of the calendar month in
which the forfeiture occurred and (ii) who made an Elective Deferral
during such calendar month or during any prior month of the Plan
Year. See Section 7.05 to determine when a forfeiture of a
Participant's Account occurs.
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<PAGE> 26
ARTICLE 6
ACCOUNTS AND ALLOCATIONS
6.01 Participant Accounts.
(a) Individual Account Plan. This Plan is an "individual
account plan," as that term is used in ERISA. A separate
Account shall be maintained for each Participant, former
Participant or Beneficiary, so long as he has an interest in
the Trust Fund.
(b) Sub-Accounts. Each Account shall be divided (as
appropriate) into the following parts and sub-parts:
(1) The Pre-Tax Contribution Account, which shall
reflect Pre-Tax Contributions contributed to this
Plan and any Adjustments thereto.
(2) The Employer Matching Contribution Account, which
shall reflect Employer Matching Contributions
contributed to this Plan and any Adjustments
thereto.
(3) The Prior Employer Account, which shall reflect
assets transferred to this Plan directly from a
trustee of another Qualified Plan to the Trustee of
this Plan (and Adjustments thereto). The Prior
Employer Account shall be further divided into such
additional sub-portions as the Committee deems
necessary or appropriate to maintain, including
assets contributed to the Qualified Plan as pre-tax
contributions, after-tax contributions, employer
matching contributions, rollover contributions, etc.
To the extent deemed appropriate, portions or
sub-portions of this Account may be allocated to and
held in other Accounts. For example, pre-tax
contributions transferred to this Plan from another
Qualified Plan, may be allocated to and held as part
of the Pre-Tax Contribution Account.
(4) The Rollover Account, which shall reflect the value
of all investments derived from the Participant's
Rollover Contributions under this Plan and any
Adjustments thereto.
(5) The Qualified Nonelective Contribution Account,
which shall reflect Qualified Nonelective
Contributions contributed to this Plan and any
Adjustments thereto.
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<PAGE> 27
In addition, the Committee may divide such sub-accounts into
such additional sub-portions as the Committee deems to be
necessary or advisable under the circumstances or to
establish other accounts or sub-accounts as needed.
(c) Value of Account as of Valuation Date. As of each Valuation
Date, each Participant's Account shall equal:
(1) his total Account as determined on the immediately
preceding Valuation Date, plus
(2) his Pre-Tax Contributions added to his Account since
the immediately preceding Valuation Date, plus
(3) his Employer Contributions added to his Account
since the immediately preceding Valuation Date, plus
(4) his Rollover Contributions or amounts transferred to
this Plan from the trustee of another Qualified plan
and which were added to his Account since the
immediately preceding Valuation Date, minus
(5) his Distributions, if any, since the immediately
preceding Valuation Date, plus or minus
(6) his allocable share of Adjustments.
6.02 Allocation of Adjustments.
The Adjustment for each Investment Fund shall be calculated as of each
Valuation Date. The Adjustment for a given Investment Fund shall be
allocated to each Account invested in such Investment Fund in the
proportion that each such Account bears to the total of all such
Accounts. Such Valuation shall occur prior to the allocation of
Employer Contributions, Pre-Tax Contributions, Rollover Contributions
and transfers to this Plan from the trustee of another Qualified plan
but after taking into account all Distributions since the prior
Valuation Date.
6.03 Allocation of Dividends
Any cash or stock dividend received on shares of Company Stock
allocated to a Participant's Common Stock Fund shall be allocated to
such Participant's Common Stock Fund.
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<PAGE> 28
6.04 Adjustment Attributable to Plan Loans.
The Adjustment that is allocable to the Participant's directed
investment of his loan shall be the interest payments made by the
Participant with respect to such loan since the immediately preceding
Valuation Date.
6.05 Plan Expenses.
The Committee may direct that expenses attributable to general Plan
administration be allocated among the Accounts of all Participants
(other than the Company Stock Fund) in proportion to their Account
balances.
6.06 Investment Funds and Elections
(a) Election of Investment Funds. Each Participant shall
direct, following such procedures as may be specified by the
Committee, to have his Pre-Tax Contribution Account, Prior
Employer Contribution Account, Rollover Account and
Qualified Nonelective Contribution Account allocated or
reallocated among the Investment Funds.
(b) Account Balance as of December 31, 1993. Prior to the
Effective Date, a Participant's Account (other than his
Matching Employer Contribution Account) was invested in a
fixed income fund. Each Plan Year, beginning on or after
the Effective Date, a Participant may direct the Committee
to transfer up to 25% of his pre-1994 Account that was
invested in the fixed income fund to any of the other
available Investment Funds.
(b) Initial Investment Direction. A Participant's initial
investment election must allocate his entire Account in 50%
increments among the Investment Funds, as of the date of the
directive, and all subsequent contributions to each
sub-account for so long as the election remains in effect.
An Employee who fails to make a proper investment election
by the deadline established by the Committee for such
purpose, shall be deemed to have elected to allocate 100% of
his Account in the Investment Fund which, in the opinion of
the Committee, best preserves the principal amount of the
Participant's Account.
(c) Subsequent Elections. Investment elections will remain in
effect until changed by a new election. New elections may
be made in 50% increments by a Participant once each
calendar quarter. New elections may change future
allocations to the Participant's Account, may reallocate
between the Investment Funds any amounts previously credited
to the Participant's Account, or may leave the allocation of
such prior amounts unchanged.
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<PAGE> 29
(d) Investment Options. The Committee shall select such
Investment Funds as are deemed appropriate and shall notify
affected Participants of such Investment Funds. The
Committee may modify, eliminate or select new Investment
Funds from time to time and shall notify affected
Participants of such changes and solicit new investment
elections, if appropriate.
(e) Company Stock Fund. A Participant's Employer Matching
Contribution Account shall consist primarily of Company
Stock. Company Stock shall be held in the Participant's
Common Stock Fund. Participants may not direct the
investment of their Company Stock Fund and may not direct
the Trustee to transfer other contributions (e.g., Pre- Tax
Contributions, etc.) to the Common Stock Fund.
6.07 Errors.
Where an error or omission is discovered in any Participant's Account,
the Committee shall make appropriate corrective adjustments as of the
end of the Plan Year in which the error or omission is discovered. If
it is not practical to correct the error retroactively, then the
Committee shall take such action in its sole discretion as may be
necessary to make such corrective adjustments, provided that any such
actions shall treat similarly situated Participants alike and shall
not discriminate in favor of Highly Compensated Employees.
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<PAGE> 30
ARTICLE 7.
VESTING
7.01 Termination Date On or After Age 65.
A Participant who has a Termination Date on or after attaining age 65
shall be 100% vested in his Account. Such Account will be distributed
on the date and in the form specified in Article 8.
7.02 Permanent Disability.
A Participant who has a Termination Date on account of Permanent
Disability shall become 100% vested in his Account as of the date of
such Permanent Disability and shall be entitled to a Distribution of
his Account on the date and in the form specified in Article 8.
7.03 Death.
A Participant who has a Termination Date on account of death shall
become 100% vested in his Account. The Participant's Beneficiary
shall receive a Distribution of such Account on the date and in the
form specified in Article 8.
7.04 Other Termination Date.
(a) In General. For any reason other than a Termination Date on
or after age 65, Permanent Disability or death, the
Participant shall be entitled to the vested portion of his
Account, which shall be distributed on the date and in the
form specified in Article 8.
(b) 100% Vesting in Certain Sub-Accounts. A Participant shall
always be one hundred percent (100%) vested in his Pre- Tax
Contribution Account, Qualified Nonelective Contribution
Account, and Rollover Account.
(c) Three Year Vesting For Certain Sub-Accounts. Any Participant
who has three or more Years of Credited Service shall be 100%
vested in his Employer Matching Contribution Account. If a
Participant has less than three Years of Credited Service at
the time he has a Termination Date, the Participant shall
forfeit all amounts held in his Employer Matching Contribution
Account.
(d) Prior Employer Account. See Schedule C for the vesting
provisions applicable to a Participant's Prior Employer
Account.
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<PAGE> 31
(e) Forfeiture. That portion of the Participant's Account which
is not vested upon the Participant's Termination Date shall be
forfeited in accordance with Section 7.05.
7.05 Forfeitures.
(a) No Distribution of Account Prior to Break in Service. A
Participant who has a Termination Date but who does not
receive a Distribution of his vested Account prior to
incurring a Break in Service shall, upon incurring the Break
in Service, forfeit the non-vested portion of his Account. If
the terminated Participant resumes Employment with the
Employer prior to incurring a Break in Service, then the
Participant's entire Account, unreduced by any forfeiture,
shall become his beginning Account on the date he resumes
participation in the Plan.
(b) Distribution of Vested Account Prior to Break in Service. A
Participant who has a Termination Date and receives a
Distribution of his entire vested Account prior to incurring a
Break in Service, shall, upon such Distribution, forfeit the
non-vested portion of his Account. A Participant who is not
vested in his Account shall be deemed to have received a
Distribution of his entire vested account upon his Termination
Date and the Participant's non- vested Account shall be
immediately forfeited.
(c) Repayment of Account; Restoration of Non-Vested Account.
Except as provided below, a Participant who is re-hired by the
Employer shall have the right to repay to the Plan the portion
of the Participant's Account which was previously distributed
to him. In the event the Participant repays the entire
Distribution he received from the Plan, the Employer shall
restore the non-vested portion of the Participant's Account.
A Participant's Account shall first be restored, to the extent
possible, out of forfeitures under the Plan in the Plan Year
in which he was reemployed. To the extent such forfeitures
are insufficient to restore the Participant's Account,
restoration shall be made from Employer Contributions. A
Participant who was deemed to have received a Distribution of
his vested Account (see subsection (b) above) shall be deemed
to have repaid such vested Account if such Participant is
rehired before incurring a Break in Service.
(d) Restrictions of Repayment Account. Notwithstanding anything
to the contrary in this Plan, a Participant shall not have the
right to repay to the Plan the portion of his Account which
was previously distributed to him after any of the following
events: (i) the Participant incurs a Break in Service before
returning to Employment, (ii) the Participant fails to repay
the prior Distribution within five years after the Participant
is re-employed by the Employer, or (iii) the Participant
received a Distribution of his entire Account balance at the
time of such earlier Distribution.
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<PAGE> 32
(e) Allocation of Forfeitures. See Section 5.04 for the
allocation of forfeitures.
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<PAGE> 33
ARTICLE 8
DISTRIBUTIONS
8.01 Commencement of Distribution.
(a) Termination of Employment. If a Participant has a Termination
Date other than on account of death, the Participant's Account
will commence to be distributed no later than 60 days
following the end of the Plan Year in which such Participant
requests a Distribution of his Account. Such request shall be
made on a form provided by the Committee. See Section 8.01(c)
for circumstances where the Participant's consent to a
Distribution is not required.
(b) Death. If a Participant has a Termination Date on account of
death, the Participant's Account shall be distributed within
90 days after the Participant's death unless the particular
facts and circumstances require a longer waiting period.
However, if the Spouse is the Participant's Beneficiary, the
Spouse may delay the distribution of the Participant's Account
until the latest date possible under Section 8.05 (relating to
mandatory distributions upon attaining age 70-1/2).
(c) Consent of Participant. A Participant's consent to a
Distribution of his Account shall not be required in the
circumstances described below, and the Committee shall direct
the Trustee to distribute the Participant's Account as
provided below:
(i) Account Less Than $3,500. If the Participant's
vested Account balance is less than or equal to
$3,500 at the time of the Distribution, such Account
will be distributed in a lump sum no later than 60
days after the end of the Plan Year in which such
Termination Date occurred.
(ii) Age 70-1/2. If a distribution is required under
Section 8.05 (relating to mandatory distributions for
Participants age 70-1/2), the Participant's Account
will be distributed as provided in such Section.
(iii) Termination Date On or After Age 65. If a
Participant has incurred a Termination Date and is
age 65 or older, the Plan shall begin distribution of
the Participant's Account no later than 60 days
following the end of the Plan Year in which the
Participant attains age 65 or, if later, within 60
days following the end of the Plan Year in which the
Participant has a Termination Date.
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<PAGE> 34
(d) Hardship Withdrawals. Hardship withdrawals (see Article 9)
shall commence no later than ninety (90) days after such
request is approved by the Committee.
(e) Committee Direction to Trustee. The Committee shall issue
directions to the Trustee concerning the recipient and the
distribution date of benefits which are to be paid from the
Trust pursuant to the Plan.
(f) Committee Guidelines. The Committee may establish for
administrative purposes, uniform and nondiscriminatory
guidelines concerning the commencement of benefits.
8.02 Method of Distribution.
(a) Lump Sum Payment. Distribution of the Participant's Account
will be made in a lump sum cash amount. However, see Schedule
C for other optional distribution forms that may be applicable
to the Participant's Prior Employer Account.
(b) Form of Payment. Distributions shall be in cash. However, if
the value of the vested Qualifying Employer Securities that
are allocated to the Participant's Account equals or exceeds
$1,000, the Participant shall have the option of receiving
whole shares of such Qualifying Employer Securities in lieu of
cash. Fractional shares, if any, shall be paid in cash.
Notwithstanding the foregoing, any in-service withdrawals
shall be paid in cash.
8.03 Payment to Minors and Incapacitated Persons.
In the event that any amount is payable to a minor or to any person
who, in the judgment of the Committee, is incapable of making proper
disposition thereof, such payment shall be made for the benefit of
such minor or such person in any of the following ways as the
Committee, in its sole discretion, shall determine:
(a) By payment to the legal representative of such minor or such
person;
(b) By payment directly to such minor or such person;
(c) By payment in discharge of bills incurred by or for the
benefit of such minor or such person. The Trustee shall make
such payments as directed by the Committee without the
necessary intervention of any guardian or like fiduciary, and
without any obligation to require bond or to see to the
further application of such payment. Any payment so made
shall be in
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<PAGE> 35
complete discharge of the Plan's obligation to the Participant
and his Beneficiaries.
8.04 Application for Benefits.
The Committee may require a Participant or Beneficiary to complete and
file with the Committee certain forms as a condition precedent to the
payment of benefits. The Committee may rely upon all such information
given to it, including the Participant's current mailing address. It
is the responsibility of all persons interested in distributions from
the Trust Fund to keep the Committee informed of their current mailing
addresses.
8.05 Special Distribution Rules.
(a) To the extent that the distribution rules described in this
Section provide a limitation upon distribution rules stated
elsewhere in this Plan, the distribution rules stated in this
Section shall take precedence over such conflicting rules.
However, under no circumstances shall the rules stated in this
Section be deemed to provide distribution rights to
Participants or their Beneficiaries which are more expansive
or greater than the distribution rights stated elsewhere in
this Plan. For example, if the only distribution method
permitted under the Plan is a lump sum, then distributions
under this Section 8.05 may only be made in a lump sum. In
addition, if the Plan requires distributions to commence at
age 65 for Participants who have terminated Employment,
distributions must commence at age 65 and may not be delayed
to age 70-1/2.
(b) In no event may the distribution of a Participant's Account
commence later than April 1 following the calendar year in
which the Participant attains age 70-1/2 (the "required
beginning date"). However, if a Participant attained age
70-1/2 prior to January 1, 1988 and is not a 5% owner of an
Employer (as defined in Code Section 401(a)(9) and the
Treasury Regulations thereunder), such Participant's Account
shall commence to be distributed no later than April 1
following the calendar year in which incurs his Termination
Date. Notwithstanding the preceding distribution
requirements, a distribution on behalf of any Participant may
be made in accordance with a benefit payment election executed
before January 1, 1984 in a manner that satisfies the
requirements of the transitional rule of Section 242(b)(2) of
the Tax Equity and Fiscal Responsibility Act of 1982.
(c) The entire account balance of each Participant shall be
distributed, beginning not later than the required beginning
date, in a single lump sum. The initial distribution shall be
based on the Participant's account balance as of the December
31 preceding the required beginning date. During the calendar
year which begins after the required beginning date (and in
each
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<PAGE> 36
calendar year thereafter), the Participant's entire account
balance shall be distributed in a single lump sum based on the
value of such account balance as of the first day of such
calendar year.
(d) If a Participant dies before distribution of the Participant's
Account has begun in accordance with paragraph (c) above, the
Participant's entire vested Account must be distributed in a
lump sum within 90 days of the Participant's death unless the
Participant's Account is payable to or for the benefit of his
Spouse. If the Beneficiary is the Participant's Spouse, the
Spouse may delay a lump sum distribution of the Participant's
Account until the date on which the Participant would have
attained age 70-1/2.
(e) Notwithstanding anything to the contrary herein, distributions
under the Plan will comply with Treasury Regulations issued
under Code Section 401(a)(9) and any other provisions
reflecting Code Section 401(a)(9) as prescribed by the
Commissioner of the Internal Revenue Service.
8.06 Distributions Pursuant to Qualified Domestic Relations Orders.
Notwithstanding anything to the contrary in this Plan, a "qualified
domestic relations order", as defined in Code Section 414(p), may
provide that any amount to be distributed to an alternate payee may be
distributed immediately even though the Participant is not yet
entitled to a distribution under the Plan. The intent of this Section
is to provide for the distribution of benefits to an alternate payee
as permitted by Treasury Regulation 1.401(a)-13(g)(3).
8.07 Direct Rollovers.
(a) In General. This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
Distributee's election under this Section, a Distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the Distributee in a direct rollover.
(b) Definitions.
Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include (i) any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a
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<PAGE> 37
specified period of ten years or more; (ii) any distribution
to the extent such distribution is required under Section
401(a)(9) of the Code; and (iii) the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account
or individual retirement annuity.
Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is an alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
Direct Rollover. A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
(c) Waiver of 30-day Notice. If a distribution is one to which
Sections 401(a)(11) and 417 of the Internal Revenue Code do
not apply, such distribution may commence less than 30 days
after the notice required under section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
8.08 Participant Withdrawals After Age 59-1/2.
At any time after a Participant attains age 59-1/2, the Participant
may elect to withdraw a part or all of his vested
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Account (including any earnings thereon). In no event shall a
Participant be permitted to repay the amount of his or her in-service
withdrawal. If the Participant withdraws only a portion of his
vested Account, the Committee shall determine (in a nondiscriminatory
manner) the source of the Accounts and Investment Funds from which
the withdrawal shall be made.
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ARTICLE 9
HARDSHIP WITHDRAWALS; LOANS
9.01 Hardship Withdrawal of Account.
(a) In General. Any Participant may request the Committee to
distribute to him part or all of his vested Account (other
than amounts held in the Participant's Qualified Nonelective
Contribution Account, amounts used as collateral for a
Participant loan and certain earnings on the Participant's
Account as provided below). The Committee shall determine (in
a nondiscriminatory manner) the source of the Accounts (other
than the Accounts and amounts identified above) and Investment
Funds from which the withdrawal shall be made.
(b) No Distribution of Earnings. Income or gain that is allocated
to the Participant's Pre-Tax Contribution Account may not be
distributed in a hardship withdrawal.
9.02 Definition of Hardship.
Hardship shall mean an immediate and heavy financial need experienced
by reason of:
(a) Expenses of any accident to or sickness of such Participant,
his Spouse or his dependents or expenses necessary to provide
medical care for such Participant, his Spouse or his
dependents;
(b) Purchase of a primary residence for such Participant;
(c) Payment of tuition and related educational fees for the next
twelve months of post-secondary education for the Participant,
his Spouse, children or dependents;
(d) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the Participant's
principal residence; or
(e) Other financial hardships as permitted by Treasury Regulations
or other regulatory or judicial authority and approved by the
Committee.
9.03 Maximum Hardship Distribution.
A hardship distribution cannot exceed the amount required to meet the
immediate financial need created by the hardship (after taking into
account applicable federal,
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state, or local income taxes and penalties) and not reasonably
available from other resources of the Participant. In order to ensure
compliance with this requirement, the Committee may require the
Participant to satisfy any or all of the provisions described below in
(a), (b), or (c) below as a condition precedent to the Participant
receiving a hardship distribution:
(a) No Other Sources Available. Certification by the Participant
on a form provided by the Committee for such purpose that the
financial need cannot be relieved (1) through reimbursement or
payment by insurance; (2) by reasonable liquidation of the
Participant's assets; (3) by ceasing Pre-Tax Contributions
under the Plan; (4) by other in- service distributions
(including loans) under the Plan and under any other plan
maintained by the Employer; or (5) by borrowing from
commercial lenders on reasonable commercial terms.
(b) Receipt of all Distributions Available; Suspension of Future
Contributions. Receipt by the Participant of all
distributions that he is eligible to receive (including loans)
under this Plan and under any other plan maintained by the
Employer.
In addition, the Participant must agree to the following
limitations and restrictions:
(1) The Participant's Pre-Tax Contributions shall
automatically be suspended beginning on the first
payroll period that commences after such Participant
requests and receives a hardship distribution. Such
Participant may resume making Pre-Tax Contributions
only on the first day of a calendar month which is at
least 12 months after the effective date of such
suspension and only after informing the Committee in
writing at least 30 days (or such lesser time as
specified by the Committee) prior to the date on
which the Pre-Tax Contributions are to resume.
(2) The maximum Pre-Tax Contribution the Participant may
make for the calendar year following his hardship
distribution shall be reduced by the amount of
Pre-Tax Contributions made by the Participant during
the calendar year in which he received his hardship
distribution.
(3) The Participant shall be prohibited under a legally
enforceable agreement from making an employee
contribution to any other plan maintained by the
Employer for at least 12 months after the receipt of
the hardship distribution. For this purpose, the
phrase "any other plan" includes all qualified and
nonqualified plans of deferred compensation, stock
option plans and stock purchase plans. It does
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<PAGE> 41
not include a health or welfare plan including one
that is part of a section 125 cafeteria plan.
(c) Other. Any other condition or method approved by the Internal
Revenue Service.
9.04 Procedure to Request Hardship.
The request to receive a hardship distribution shall be made on such
forms and following such procedures as the Committee may prescribe
from time to time. Under no circumstances shall the Committee permit
a Participant to repay to the Plan the amount of any withdrawal by a
Participant under this Section.
9.05 Authority to Establish Loan Program.
The Committee is authorized and directed to administer the loan
program.
9.06 Eligibility for Loans.
Loans shall be available to all Participants on a reasonably
equivalent basis. For the purposes of receiving a loan, the term
"Participant" shall include any Former Participant who is a "party in
interest" as defined in Section 3(14) of ERISA.
9.07 Loan Amount.
(a) Minimum Loan. No loan of less than $1,000 will be made.
(b) Maximum Loan. A loan to any Participant (determined
immediately after the origination of the loan) shall not
exceed the lesser of:
(1) Fifty percent (50%) of the Participant's vested balance
in his Account as of the Valuation Date with respect to
which the loan is processed; or
(2) $50,000, reduced by the excess (if any) of (A) the
highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the
date on which such loan was made, over (B) the
outstanding loan balance of loans from the Plan on the
date on which the loan was made.
9.08 Maximum Number of Loans.
No more than one loan may be made outstanding to any Participant at
any time.
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9.09 Assignment of Account.
Each loan shall be supported by the Participant's promissory note for
the amount of the loan, including interest, payable to the order of
the Trustee. In addition, each loan shall be supported by an
assignment of the Participant's right, title and interest in and to
his Account equal to the amount of the loan and shall be supported by
any other reasonable security required by the Trustee.
9.10 Interest.
Interest shall be charged on any such loan at a rate established from
time to time by the Trustee provided such rate is equivalent to a rate
that would be charged by a commercial lender for a similar loan.
9.11 Term of Loan.
The maximum repayment term of any loan is five years unless the loan
is used to acquire any dwelling unit which within a reasonable time
after the loan is made is to be used as the principal residence of the
Participant. The maximum repayment term for a loan used to acquire a
dwelling unit shall be a reasonable time, as determined by the
Committee, that may exceed five years but shall not exceed fifteen
years. Except for Former Participants described in Section 9.06, the
term of the loan may not extend beyond the Participant's Termination
Date. The Committee may, in its discretion, establish a shorter
repayment term than the maximum repayment term otherwise permitted
under the Plan.
9.12 Level Amortization.
Each loan shall provide for level amortization with payments to be
made at such regular intervals as the Committee determines in its
discretion, but not less frequently than once every three months over
the term of the loan. Loans to Participants in active Employment
shall be repaid through payroll deductions and the Participant shall
be required to authorize such payroll deduction as a condition to
receiving the loan.
9.13 Directed Investment.
A Participant who requests a loan shall be deemed to have directed the
Committee to invest assets held in his Account by the amount of the
loan, and until such loan is repaid, such loan shall be considered a
directed investment of the Participant's Account hereunder. The Plan
monies which are used to fund the Participant loan shall be withdrawn
from the Participant's Account in the following order (and principal
and interest loan repayments shall be added back to such Accounts in
the same order):
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<PAGE> 43
(a) the Pre-Tax Contribution Account;
(b) the Rollover Account;
(c) the Qualified Nonelective Contribution Account;
(d) the Prior Employer Account; and
(e) the Employer Matching Contribution Account.
Within each such Account the monies which are used to fund the
Participant loan shall be withdrawn on a pro rata basis according to
the value of the Investment Funds in which such Account was invested.
Principal and interest payments on the loan will be allocated to the
Participant's Investment Funds according to the Participant's
investment election at the time of the payment. However, if the
Participant does not have an investment election in place at the time
of repayment, the principal and interest payments will be allocated to
the Participant's Investment Funds on a pro rata basis based on the
Participant's investment election in place at the time the loan was
made. If a loan is made out of the Participant's Employer Matching
Contribution Account, repayment of principal and interest attributable
to such Account shall be allocated to the Participant's Common Stock
Fund.
9.14 Other Requirements.
The Committee may establish such additional guidelines and rules as it
deems necessary. Such guidelines and rules shall be set forth in the
loan application and the terms specified in such loan application are
hereby incorporated by reference in the Plan. The Committee may amend
or modify the loan application as it deems necessary to carry out the
provisions of this Article Nine.
9.15 Distribution of Loan.
Loan proceeds will be distributed as soon as practicable after the
loan is approved and after the Participant completes all documentation
necessary to make such loan.
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ARTICLE 10
ADMINISTRATION OF THE PLAN
10.01 Named Fiduciaries.
The following parties are named as Fiduciaries of the Plan and shall
have the authority to control and manage the operation and
administration of the Plan:
(i) The Company;
(ii) The Board;
(iii) The Trustee;
(iv) The Committee.
The Fiduciaries named above shall have only the powers and duties
expressly allocated to them in the Plan and in the Trust Agreement
and shall have no other powers and duties in respect of the Plan;
provided, however, that if a power or responsibility is not expressly
allocated to a specific named fiduciary, the power or responsibility
shall be that of the Company. No Fiduciary shall have any liability
for, or responsibility to inquire into, the acts and omissions of any
other Fiduciary in the exercise of powers or the discharge of
responsibilities assigned to such other Fiduciary under this Plan or
the Trust Agreement.
10.02 Board of Directors.
(a) The Board shall have the following powers and duties with
respect to the Plan:
(1) to appoint and remove the members of the Committee
as provided herein; and
(2) to terminate the Plan in whole or in part pursuant
to the procedures provided hereunder.
(b) The Compensation and Stock Option Committee of the Board
shall have the power to amend any or all of the provisions
of the Plan. (However, see 10.04(c) for certain amendment
powers granted to the Committee).
(c) The Board shall have no other responsibilities with respect
to the Plan.
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<PAGE> 45
10.03 Trustee.
The Trustee shall exercise all of the powers and duties assigned to
the Trustee as set forth in the Trust Agreement. The Trustee shall
have no other responsibilities with respect to the Plan.
10.04 Committee.
(a) A Committee of one or more individuals shall be appointed by
and serve at the pleasure of the Board to administer the
Plan. Any Participant, officer, or director of the Employer
shall be eligible to be appointed a member of the Committee
and all members shall serve as such without compensation.
Upon termination of his employment with the Employer, or
upon ceasing to be an officer or director, if not an
employee, he shall cease to be a member of the Committee.
The Board shall have the right to remove any member of the
Committee at any time, with or without cause. A member may
resign at any time by written notice to the Committee and
the Board. If a vacancy in the Committee should occur, a
successor shall be appointed by the Board. The Committee
shall by written notice keep the Trustee notified of current
membership of the Committee, its officers and agents. The
Committee shall furnish the Trustee a certified signature
card for each member of the Committee and for all purposes
hereunder the Trustee shall be conclusively entitled to rely
upon such certified signatures.
(b) The Board shall appoint a Chairman and a Secretary from
among the members of the Committee. All resolutions,
determinations and other actions shall be by a majority vote
of all members of the Committee. The Committee may appoint
such agents, who need not be members of the Committee, as it
deems necessary for the effective performance of its duties,
and may delegate to such agents such powers and duties,
whether ministerial or discretionary, as the Committee deems
expedient or appropriate. The compensation of such agents
shall be fixed by the Committee; provided, however, that in
no event shall compensation be paid if such payment violates
the provisions of Section 408 of the Act and is not exempted
from such prohibitions by Section 408 of the Act.
(c) The Committee shall have complete control of the
administration of the Plan with all powers necessary to
enable it to properly carry out the provisions of the Plan.
In addition to all implied powers and responsibilities
necessary to carry out the objectives of the Plan and to
comply with the requirements of the Act, the Committee shall
have the following specific powers and responsibilities:
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<PAGE> 46
(1) To construe the Plan and Trust Agreement and to
determine all questions arising in the
administration, interpretation and operation of the
Plan;
(2) To decide all questions relating to the eligibility
of Employees to participate in the benefits of the
Plan and Trust Agreement;
(3) To determine the benefits of the Plan to which any
Participant, Beneficiary or other person may be
entitled;
(4) To keep records of all acts and determinations of
the Committee, and to keep all such records, books
of accounts, data and other documents as may be
necessary for the proper administration of the Plan;
(5) To prepare and distribute to all Plan Participants
and Beneficiaries information concerning the Plan
and their rights under the Plan, including, but not
limited to, all information which is required to be
distributed by the Act, the regulations thereunder,
or by any other applicable law;
(6) To file with the Secretary of Labor such reports and
additional documents as may be required by the Act
and regulations issued thereunder, including, but
not limited to, summary plan description,
modifications and changes, annual reports, terminal
reports and supplementary reports;
(7) To file with the Secretary of the Treasury all
reports and information required to be filed by the
Internal Revenue Code, the Act and regulations
issued under each;
(8) To do all things necessary to operate and administer
the Plan in accordance with its provisions and in
compliance with applicable provisions of federal
law;
(9) To amend certain portions of this Plan as
specifically delegated to the Committee in this Plan
(e.g., any Schedule authorizing Affiliated Sponsors
to participate in the Plan, etc.), to amend the Plan
to comply with changes in law recommended by legal
counsel that are necessary to maintain the tax
qualified status of the Plan and to make other
amendments to the Plan that do not materially
increase the costs associated with the plan.
(10) to appoint and remove the Trustee(s); and
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<PAGE> 47
(11) to adopt procedures for providing adequate notice in
writing to any Participant or Beneficiary whose
claim for benefits under the Plan is denied, which
notice shall set forth the specific reasons for such
denial (written in a manner calculated to be
understood by the Participant or Beneficiary); and
to provide a procedure for affording a reasonable
opportunity to any Participant or Beneficiary whose
claim for benefits has been denied, a full and fair
review by the Committee of the decision denying the
claim;
(d) To enable the Committee to perform its functions, the
Employer shall supply full and timely information of all
matters relating to the compensation and length of service
of all Participants, their retirement, death or other cause
of termination of employment, and such other pertinent facts
as the Committee may require. The Committee shall advise
the Trustee of such facts and issue to the Trustee such
instructions as may be required by the Trustee in the
administration of the Plan. The Committee and the Employer
shall be entitled to rely upon all certificates and reports
made by a Certified Public Accountant selected or approved
by the Employer. The Committee, the Employer and its
officers and the Trustee, shall be fully protected in
respect of any action suffered by them in good faith in
reliance upon the advice or opinion of any accountant or
attorney, and all action so taken or suffered shall be
conclusive upon each of them and upon all other persons
interested in the Plan.
10.05 Standard of Fiduciary Duty.
Any Fiduciary, or any person designated by a Fiduciary to carry out
fiduciary responsibilities with respect to the Plan, shall discharge
his duties solely in the interests of the Participants and
Beneficiaries for the exclusive purpose of providing them with
benefits and defraying the reasonable expenses of administering the
Plan. Any Fiduciary shall discharge his duties with the care, skill,
prudence and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matter
would use in the conduct of an enterprise of a like character and
with like aims. Any Fiduciary shall discharge his duties in
accordance with the documents and instruments governing the Plan
insofar as such documents and instruments are consistent with the
provisions of the Act. Notwithstanding any other provisions of the
Plan, no Fiduciary shall be authorized to engage in any transaction
which is prohibited by Sections 408 and 2003(a) of the Act or Section
4975 of the Code in the performance of its duties hereunder.
10.06 Claims Procedure.
Any Participant, Former Participant, Beneficiary, or Spouse or
authorized representative thereof (hereinafter referred to as
"Claimant"), may file a claim for
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<PAGE> 48
benefits under the Plan by submitting to the Committee a written
statement describing the nature of the claim and requesting a
determination of its validity under the terms of the Plan. Within
sixty (60) days after the date such claim is received by the
Committee, it shall issue a ruling with respect to the claim.
If special circumstances require an extension of time for processing,
the Committee shall send the Claimant written notice of the extension
prior to the termination of the 60-day period. In no case, however,
shall the extension of time delay the Committee's decision on such
appeal request beyond one hundred twenty (120) days following receipt
of the actual request.
If the claim is wholly or partially denied, written notice shall be
furnished to the Claimant, which notice shall set forth in a manner
calculated to be understood by the Claimant:
(1) The specific reason or reasons for denial;
(2) Specific reference to pertinent Plan provisions on which the
denial is based;
(3) A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is
necessary; and
(4) An explanation of the claims review procedures.
Any Claimant whose claim for benefits has been denied, may appeal
such denial by resubmitting to the Committee a written statement
requesting a further review of the decision within sixty (60) days of
the date the Claimant receives notice of such denial. Such statement
shall set forth the reasons supporting the claim, the reasons such
claim should not have been denied, and any other issues or comments
which the Claimant deems appropriate with respect to the claim.
If the Claimant shall request in writing, the Committee shall make
copies of the Plan documents pertinent to his claim available for
examination of the Claimant.
Within sixty (60) days after the request for further review is
received, the Committee shall review its determination of benefits
and the reasons therefor and notify the Claimant in writing of its
final decision.
If special circumstances require an extension of time for processing,
the Committee shall send the Claimant written notice of the extension
prior to the termination of the 60-day period. In no case, however,
shall the extension of time delay the Committee's decision on such
appeal request beyond one hundred twenty (120) days following receipt
of the actual request.
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<PAGE> 49
Such written notice shall include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, with
specific references to the pertinent Plan provisions on which the
decision is based.
10.07 Indemnification of Committee. To the extent permitted under the Act,
the Plan shall indemnify the Board and the Committee against any cost
or liability which they may incur in the course of administering the
Plan and executing the duties assigned pursuant to the Plan. The
Employer shall indemnify the Committee and the members of the Board
against any personal liability or cost not provided for in the
preceding sentence which they may incur as a result of any act or
omission in relation to the Plan or its Participants. The Employer
may purchase fiduciary liability insurance to insure its obligation
under this Section.
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ARTICLE 11
AMENDMENT AND TERMINATION
11.01 Right to Amend
The Company intends for the Plan to be permanent so long as the
corporation exists; however, (through action of the Committee) it
reserves the right to modify, alter, or amend this Plan or the Trust
Agreement, from time to time, to any extent that it may deem
advisable, including, but not limited to any amendment deemed
necessary to insure the continued qualification of the Plan under
Sections 40l(a) and 401(k) of the Code or to insure compliance with
the Act; provided, however, that the Committee shall not have the
authority to amend this Plan in any manner which will:
(a) Permit any part of the Fund (other than such part as is
required to pay taxes and administrative expenses) to be
used for or diverted to purposes other than for the
exclusive benefit of the Participants or their
Beneficiaries;
(b) Cause or permit any portion of the funds to revert to or
become the property of the Employer;
(c) Change the duties, liabilities, or responsibilities of the
Trustee without its prior written consent.
See Section 16.11 regarding the power of an Affiliated Sponsor to
amend or terminate the Plan.
11.02 Termination or Discontinuance of Contributions
The Company shall have the right at any time to terminate this Plan
(hereinafter referred to as "Plan Termination"). Upon Plan
Termination, the Committee shall direct the Trustee with reference to
the disposition of the Fund, after payment of any expenses properly
chargeable against the Fund. The Trustee shall distribute all
amounts held in Trust to the Participants and others entitled to
Distributions in proportion to the Accounts of such Participants and
other Distributees as of the date of such Termination. In the event
that this Plan is partially terminated, then the provisions of this
Section 11.02 shall apply, but solely with respect to the Employees
affected by the partial termination. The termination of sponsorship
of the Plan by any Affiliated Sponsor shall not affect the
sponsorship of the Plan by the Company or any other Affiliated
Sponsor.
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<PAGE> 51
11.03 IRS Approval of Termination.
Notwithstanding Section 11.02, the Trustee shall not be required to
make any Distribution from this Plan in the event of complete or
partial termination until the authorized officials of the Internal
Revenue Service shall have determined that there will be no liability
against the Trustee by reason of such Distribution.
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<PAGE> 52
ARTICLE 12
SPECIAL DISCRIMINATION RULES
12.01 Definitions.
Actual Contribution Percentage or ACP shall mean the ratio (expressed
as a percentage) of (i) the sum of the Employer Matching Contributions
on behalf of the Participant for the Plan Year and, to the extent
permitted in Treasury Regulations and elected by the Employer, the
Participant's Qualified Elective Deferrals and Qualified Nonelective
Contributions to (ii) the Participant's Compensation for the Plan
Year. The Employer, on an annual basis, may elect to include or not
to include Qualified Elective Deferrals and Qualified Nonelective
Contributions in computing the ACP for a Plan Year. An Employer may
elect on an annual basis to count a Participant's Employer Matching
Contribution toward satisfying the required minimum contribution under
Section 15.03 (minimum contribution for Non-Key Employees in a
top-heavy plan) in lieu of including such contributions in the ACP.
If a Participant (as defined below) does not receive an allocation of
Employer Contributions for a Plan Year, such Participant's ACP for the
Plan Year shall be zero.
Actual Deferral Percentage or ADP shall mean the ratio (expressed as a
percentage) of (i) the sum of Pre-Tax Contributions on behalf of a
Participant for the Plan Year (excluding any Excess Deferrals by a
Non-highly Compensated Employee) and, to the extent permitted in
Treasury Regulations and elected by the Employer, the Participant's
Qualified Nonelective Contributions to (ii) the Participant's
Compensation for the Plan Year. The Employer, on an annual basis, may
elect to include or not to include Qualified Nonelective Contributions
in computing the ADP for a Plan Year. In the case of a Participant
(as defined below) who does not make a Pre-Tax Contribution for a Plan
Year and is not allocated a Qualified Nonelective Contribution for
such Plan Year, such Participant's ADP for the Plan Year shall be
zero.
Average Actual Contribution Percentage shall mean the average
(expressed as a percentage) of the Actual Contribution Percentages of
the Participants in a group. The percentage shall be rounded to the
nearest one-hundredth of one percent (four decimal places).
Average Actual Deferral Percentage shall mean the average (expressed
as a percentage) of the Actual Deferral Percentages of the
Participants in a group. The percentage shall be rounded to the
nearest one-hundredth of one percent (four decimal places).
Combined ADP and ACP Test shall have the meaning as defined in Section
12.09.
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<PAGE> 53
Compensation for purposes of this Article 12 shall be that definition
selected by the Committee that satisfies the requirements of Code
Section Section 414(s) and 401(a)(17). Such definition may change
from year to year but must apply uniformly among all Eligible
Employees being tested under the Plan for a given Plan Year and among
all Employees being tested under any other plan that is aggregated
with this Plan during the Plan Year. If the Committee fails to select
a definition of Compensation for purposes of this Article 12,
Compensation (for purposes of Article 12) shall have the same meaning
as defined in Article 2.
Employer Matching Contributions. For purposes of this Article 12, an
Employer Matching Contribution for a particular Plan Year includes
only those contributions that are (i) allocated to the Participant's
Account under the Plan as of any date within such Plan Year, (ii)
contributed to the Trust no later than the end of the 12-month period
following the close of such Plan Year, and (iii) made on account of
such Participant's Pre-Tax Contributions for the Plan Year.
Excess Deferrals shall have that meaning as defined in Section 12.02.
Excess ACP Contributions shall have that meaning as defined in Section
12.08.
Excess ADP Deferrals shall have that meaning as defined in Section
12.05.
Family Member. See Article 13.
Highly Compensated Employee. See Article 13.
Maximum Combined Percentage shall have the meaning as defined in
Section 12.09(c).
Non-highly Compensated Employee. See Article 13.
Participant. For purposes of this Article 12, a Participant shall mean
any Eligible Employee who (i) is eligible to receive an allocation of
an Employer Matching Contribution, even if no Employer Matching
Contribution is allocated due to the Eligible Employee's failure to
make a required Pre-Tax Contribution, (ii) is eligible to make a
Pre-Tax Contribution, including an Eligible Employee whose right to
make Pre-Tax Contribution has been suspended because of an election
not to participate or a hardship distribution, and (iii) is unable to
receive an Employer Matching Contribution or make a Pre-Tax
Contribution because his Compensation is less than a stated amount.
Pre-Tax Contributions. For purposes of this Article 12, a Pre-Tax
Contribution is taken into account only if the contribution (i) is
allocated to the Participant's Account under the terms of the Plan as
of any date within the Plan Year, and (ii)
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<PAGE> 54
relates to Compensation that would have been received by the
Participant during the Plan Year or within 2-1/2 months after the Plan
Year but for the deferral election. A Pre-Tax Contribution is
considered to be allocated as of a date within a Plan Year only if the
allocation is not contingent on participation in the Plan or
performance of service after the Plan Year to which the Pre-Tax
Contribution relates.
Qualified Elective Deferral shall mean Pre-Tax Contributions
designated by the Committee as Qualified Elective Deferrals in order
to meet the ACP testing requirements of Section 12.06. In addition,
the following requirements must be satisfied:
(1) The aggregate of all Pre-Tax Contributions for the Plan Year
(including the Qualified Elective Deferrals) must satisfy the
ADP testing requirements set forth in Section 12.03(a).
(2) The aggregate of all Pre-Tax Contributions for the Plan Year
(excluding the Qualified Elective Deferrals) must satisfy the
ADP testing requirements set forth in Section 12.03(a).
(3) Qualified Elective Deferrals must satisfy all other provisions
of this Plan applicable to Pre-Tax Contributions and shall
remain part of the Participant's Pre-Tax Contribution Account.
(4) Except as provided by this definition, Qualified Elective
Deferrals shall be excluded in determining whether any other
contribution or benefit satisfies the nondiscrimination
requirements of Code Section Section 401(a)(4) and 401(k)(3).
Qualified Nonelective Contribution shall mean an Employer contribution
designated by the Committee as a Qualified Nonelective Contribution in
order to meet the ADP testing requirements of Section 12.03 or the ACP
testing requirements of Section 12.06. In addition, the following
requirements must be satisfied:
(1) The Qualified Nonelective Contribution, whether or not used to
satisfy the requirements of Sections 12.03 or 12.06, must meet
the requirements of Code Section 401(a)(4).
(2) Qualified Nonelective Contributions which are taken into
account in order to meet the requirements of Section 12.03 or
12.06 (as applicable) shall not be counted in determining
whether the testing requirements of any of such other Sections
are met.
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<PAGE> 55
(3) The Qualified Nonelective Contributions shall be subject to
all provisions of this Plan applicable to Pre-Tax
Contributions (except that Qualified Nonelective Contributions
cannot be distributed in a hardship distribution).
(4) Except as provided in this paragraph, the Qualified
Nonelective Contributions shall be excluded in determining
whether any other contribution or benefit satisfies the
nondiscrimination requirements of Code Section Section
401(a)(4) and 401(k)(3).
12.02 $7,000 Limit on Pre-Tax Contributions.
(a) Notwithstanding any other provision of the Plan to the contrary,
the aggregate of a Participant's Pre-Tax Contributions during a
calendar year may not exceed $7,000 (or such greater amount as
established by the Secretary of the Treasury pursuant to Code
Section 402(g)(5)). Any Pre-Tax Contributions in excess of the
foregoing limit ("Excess Deferral"), plus any income and minus
any loss allocable thereto, may be distributed to the applicable
Participant no later than April 15 following the calendar year
in which the Pre-Tax Contributions were made.
(b) Any Participant who has an Excess Deferral during a calendar
year may receive a distribution of the Excess Deferral during
such calendar year plus any income or minus any loss allocable
thereto, provided (1) the Participant requests (or is deemed to
request) the distribution of the Excess Deferral, (2) the
distribution occurs after the date the Excess Deferral arose,
and (3) the Committee designates the distribution as a
distribution of an Excess Deferral.
(c) If a Participant makes a Pre-Tax Contribution under this Plan
and in the same calendar year makes a contribution to a Code
Section 401(k) plan containing a cash or deferred arrangement
(other than this Plan), a Code Section 408(k) plan (simplified
employee pension plan) or a Code Section 403(b) plan (tax
sheltered annuity) and, after the return of any Excess Deferral
pursuant to Section 12.02(a) and (b) the aggregate of all such
Pre-Tax Contributions and contributions exceed the limitations
contained in Code Section 402(g), then such Participant may
request that the Committee return all or a portion of the
Participant's Pre-Tax Contributions for the calendar year plus
any income and minus any loss allocable thereto. The amount by
which such Pre-Tax Contributions and contributions exceed the
Code Section 402(g) limitations will also be known as an
Excess Deferral.
(d) Any request for a return of Excess Deferrals arising out of
contributions to a plan described in Section 12.02(c) above
which is maintained by an entity other than the Employer must:
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(1) be made in writing;
(2) be submitted to the Committee not later than the
March 1 following the Plan Year in which the Excess
Deferral arose;
(3) specify the amount of the Excess Deferral; and,
(4) contain a statement that if the Excess Deferral is
not distributed, it will, when added to amounts
deferred under other plans or arrangements described
in Section Section 401(k), 408(k),or 403(b) of the
Code, exceed the limit imposed on the Participant by
Section 402(g) of the Code for the year in which the
Excess Deferral occurred.
In the event an Excess Deferral arises out of contributions to
a plan (including this Plan) described in Section 12.02(c)
above which is maintained by the Employer, the Participant
making the Excess Deferral shall be deemed to have requested
a return of the Excess Deferral.
(e) Pre-Tax Contributions may only be returned to the extent
necessary to eliminate a Participant's Excess Deferral.
Excess Deferrals shall be treated as annual additions under
the Plan. In no event shall the returned Excess Deferrals for
a particular calendar year exceed the Participant's
aggregate Pre-Tax Contributions for such calendar year.
(f) The income or loss allocable to a Pre-Tax Contribution that is
returned to a Participant pursuant to Section 12.02(a) or (c)
shall be determined by multiplying the income or loss
allocable to the Participant's Account for the calendar year
in which the Excess Deferral arose by a fraction. The
numerator of the fraction is the Excess Deferral. The
denominator of the fraction is the value of the Participant's
Account balance on the last day of the calendar year in which
the Excess Deferral arose reduced by any income allocated to
the Participant's Account for such calendar year and increased
by any loss allocated to the Participant's Account for such
calendar year.
(g) The income or loss allocable to an Excess Deferral that is
returned to a Participant pursuant to Section 12.02(b) shall
be determined using any reasonable method adopted by the Plan
to measure income earned or loss incurred during the Plan Year
or any other method authorized by the Internal Revenue Service
to compute the income earned or loss incurred for the period
commencing on January 1 of the calendar year in which the
Pre-Tax Contribution was made and ending on the date the
Excess Deferral was distributed.
(h) Any Employer Matching Contribution allocable to an Excess
Deferral that is returned to a Participant pursuant to this
Section 12.02 shall be forfeited
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<PAGE> 57
notwithstanding the provisions of Article 7 (vesting). For
this purpose, however, the Pre-Tax Contributions that are
returned to the Participant as an Excess Deferral shall be
deemed to be first those Pre-Tax Contributions for which no
Employer Matching Contribution was made and second those
Pre-Tax Contributions for which an Employer Matching
Contribution was made. Accordingly, if the Pre-Tax
Contributions that are returned to the Participant as Excess
Deferrals were not matched, no Employer Matching Contribution
will be forfeited.
12.03 Average Actual Deferral Percentage.
(a) The Average Actual Deferral Percentage for Highly Compensated
Employees for each Plan Year and the Average Actual Deferral
Percentage for Non-highly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
(1) The Average Actual Deferral Percentage for
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Actual
Deferral Percentage for Participants who are
Non-highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(2) The excess of the Average Actual Deferral Percentage
for Participants who are Highly Compensated Employees
for the Plan Year over the Average Actual Deferral
Percentage for Participants who are Non-highly
Compensated Employees for the Plan Year is not more
than two percentage points, and the Average Actual
Deferral Percentage for Participants who are Highly
Compensated Employees is not more than the Average
Actual Deferral Percentage for Participants who are
Non-highly Compensated Employees multiplied by two.
(b) The permitted disparity between the Average Actual Deferral
Percentage for Highly Compensated Employees and the Average
Actual Deferral Percentage for Non-Highly Compensated
Employees may be further reduced as required by Section 12.09.
(c) If at the end of the Plan Year, the Plan does not comply with
the provisions of Section 12.03(a), the Employer may do any or
all of the following, except as otherwise provided in the Code
or Treasury Regulations:
(1) Distribute Pre-Tax Contributions to certain Highly
Compensated Employees as provided in Section 12.05;
or
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<PAGE> 58
(2) Make a Qualified Nonelective Contribution on behalf
of any or all of the Non-highly Compensated Employees
and aggregate such contributions with the Non-highly
Compensated Employees' Pre-Tax Contributions
Deferrals as provided in Section 12.01 (definition of
ADP).
12.04 Special Rules For Determining Average Actual Deferral Percentage.
(a) The Actual Deferral Percentage for any Highly Compensated
Employee for the Plan Year who is eligible to have Pre- Tax
Contributions allocated to his Account under two or more
arrangements described in Section 401(k) of the Code that are
maintained by an Employer or its Affiliates shall be
determined as if such Pre-Tax Contributions were made under a
single arrangement.
(b) If two or more plans maintained by the Employer or its
Affiliates are treated as one plan for purposes of the
nondiscrimination requirements of Code Section 401(a)(4) or
the coverage requirements of Code Section 410(b) (other than
for purposes of the average benefits test), all Pre-Tax
Contributions that are made pursuant to those plans shall be
treated as having been made pursuant to one plan.
(c) For purposes of determining the ADP of a Highly Compensated
Employee who is either a 5% or more owner of an Employer or
one of the ten highest paid Highly Compensated Employees
during the Plan Year, the Pre-Tax Contributions and
Compensation of such Participant shall include the Pre-Tax
Contributions and Compensation of his Family Members. Any
person who is a Family Member shall not be treated as a
separate Employee in determining the Average Actual Deferral
Percentage for either Non-highly Compensated Employees or for
Highly Compensated Employees.
(d) The determination and treatment of the Pre-Tax Contributions
and Actual Deferral Percentage of any Participant shall be in
accordance with such other requirements as may be prescribed
from time to time in Treasury Regulations.
12.05 Distribution of Excess ADP Deferrals.
(a) Pre-Tax Contributions exceeding the limitations of Section
12.03(a) ("Excess ADP Deferrals") and any income or loss
allocable to such Excess ADP Deferral shall be designated by
the Committee as Excess ADP Deferrals and shall be distributed
to Highly Compensated Employees whose Accounts were credited
with Excess ADP Deferrals in the preceding Plan Year. In
determining the amount of Excess ADP Deferrals for each
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<PAGE> 59
Highly Compensated Employee, the Committee shall reduce the
ADP for each Highly Compensated Employee as follows:
(1) The ADP for the Highly Compensated Employee(s) with
the highest ADP will be reduced until equal to the
second highest ADPs under the Plan; then
(2) The ADP for the two (or more) Highly Compensated
Employees with the highest ADPs under the Plan will
be reduced until equal to the third highest ADP level
under the Plan; then
(3) The steps described in (1) and (2) shall be repeated
with respect to the third and successive highest ADP
levels under the Plan until the Plan complies with
one or both of the ADP tests described in Section
12.03(a).
(b) To the extent administratively possible, the Committee shall
distribute all Excess ADP Deferrals and any income or loss
allocable thereto prior to 2-1/2 months following the end of
the Plan Year in which the Excess ADP Deferrals arose. In any
event, however, the Excess ADP Deferrals and any income or
loss allocable thereto shall be distributed prior to the end
of the Plan Year following the Plan Year in which the Excess
ADP Deferrals arose. Excess ADP Deferrals shall be treated as
annual additions under the Plan.
(c) The income or loss allocable to Excess ADP Deferrals shall be
determined by multiplying the income or loss allocable to the
Participant's Account for the Plan Year in which the Excess
ADP Deferrals arose by a fraction. The numerator of the
fraction is the Excess ADP Deferral. The denominator of the
fraction is the value of the Participant's Account balance on
the last day of the Plan Year in which the Excess ADP
Deferrals arose reduced by any income allocated to the
Participant's Account for such Plan Year and increased by any
loss allocated to the Participant's Account for the Plan Year.
(d) If an Excess Deferral has been distributed to the Participant
pursuant to Section 12.02(a) or (b) for any taxable year of a
Participant, then any Excess ADP Deferral allocable to such
Participant for the same Plan Year in which such taxable year
ends shall be reduced by the amount of such Excess Deferral.
(e) Distribution of Excess ADP Deferrals to Participants described
in Section 12.04(c) shall be made in accordance with the
provisions of Treasury Regulation Section
1.401(k)-1(f)(5)(ii) or any successor Treasury Regulation
thereto.
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<PAGE> 60
(f) Any Employer Matching Contribution allocable to an Excess ADP
Deferral that is returned to the Participant pursuant to this
Section 12.05 shall be forfeited notwithstanding the
provisions of Article 7 (vesting). For this purpose, however,
the Pre-Tax Contributions that are returned to the Participant
shall be deemed to be first those Pre-Tax Contributions for
which no Employer Matching Contribution was made and second
those Pre-Tax Contributions for which an Employer Matching
Contribution was made. Accordingly, unmatched Pre-Tax
Contributions shall be returned as an Excess ADP Deferral
before matched Pre-Tax Contributions.
12.06 Average Actual Contribution Percentage.
(a) The Average Actual Contribution Percentage for Highly
Compensated Employees for each Plan Year and the Average
Actual Contribution Percentage for Non-highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
(1) The Average Actual Contribution Percentage for
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Actual
Contribution Percentage for Participants who are
Non-highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(2) The excess of the Average Actual Contribution
Percentage for Participants who are Highly
Compensated Employees for the Plan Year over the
Average Actual Contribution Percentage for
Participants who are Non- highly Compensated
Employees for the Plan Year is not more than two
percentage points, and the Average Actual
Contribution Percentage for Participants who are
Highly Compensated Employees is not more than the
Average Actual Contribution Percentage for
Participants who are Non-highly Compensated Employees
multiplied by two.
(b) If at the end of the Plan Year, the Plan does not comply with
the provisions of Section 12.06(a), the Employer may do any or
all of the following in order to comply with such provision as
applicable (except as otherwise provided in the Code or in
Treasury Regulations):
(1) Aggregate Qualified Elective Deferrals with the
Employer Matching Contributions of Non-highly
Compensated Employees as provided in Section 12.01
(definition of ACP).
(2) Distribute Employer Matching Contributions to certain
Highly Compensated Employees as provided in Section
12.08.
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<PAGE> 61
(3) Make a Qualified Nonelective Contribution on behalf
of any or all of the Non-highly Compensated Employees
and aggregate such contributions with the Non-highly
Compensated Employees' Employer Matching
Contributions as provided in Section 12.01
(definition of ACP).
12.07 Special Rules For Determining Average Actual Contribution Percentages.
(a) The Actual Contribution Percentage for any Highly Compensated
Employee for the Plan Year who is eligible to have Employer
Matching Contributions allocated to his Account under two or
more arrangements described in Section Section 401(a) or
401(m) of the Code that are maintained by an Employer or its
Affiliates shall be determined as if such contributions were
made under a single arrangement.
(b) If two or more plans maintained by the Employer or its
Affiliates are treated as one plan for purposes of the
nondiscrimination requirements of Code Section 401(a)(4) or
the coverage requirements of Code Section 410(b) (other than
for purposes of the average benefits test), all Employer
Matching Contributions that are made pursuant to those plans
shall be treated as having been made pursuant to one plan.
(c) For purposes of determining the Actual Contribution Percentage
of a Highly Compensated Employee who is a 5% or more owner of
an Employer or one of the ten highest paid Highly Compensated
Employees during the Plan Year, the Employer Matching
Contributions and Compensation of such Participant shall
include all Employer Matching Contributions and Compensation
of Family Members. Family Members shall not be treated as
separate Employees for purposes of determining the Average
Actual Contribution Percentage for either Non-highly
Compensated Employees or for Highly Compensated Employees.
(d) The determination and treatment of the Actual Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
12.08 Distribution of Employer Matching Contributions.
(a) Employer Matching Contributions exceeding the limitations of
Section 12.06(a) ("Excess ACP Contributions") and any income
or loss allocable to such Excess ACP Contribution may be
designated by the Committee as Excess ACP Contributions and
may be distributed in the Plan Year following the Plan Year in
which the Excess ACP Contributions arose to those Highly
Compensated Employees whose Accounts were credited with
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<PAGE> 62
Excess ACP Contributions in the preceding Plan Year. The
amount of Excess ACP Contributions to be distributed to a
Highly Compensated Employee shall be determined using the
procedure described in Section 12.05(a).
(b) To the extent administratively possible, the Committee shall
distribute all Excess ACP Contributions and any income or loss
allocable thereto prior to 2-1/2 months following the end of
the Plan Year in which the Excess ACP Contributions arose. In
any event, however, the Excess ACP Contributions and any
income or loss allocable thereto shall be distributed prior to
the end of the Plan Year following the Plan Year in which the
Excess ACP Contributions arose.
(c) The income or loss allocable to Excess ACP Contributions shall
be determined by multiplying the income or loss allocable to
the Participant's Account for the Plan Year in which the
Excess ACP Contribution arose by a fraction. The numerator of
the fraction is the Excess ACP Contributions. The denominator
of the fraction is the value of the Participant's Account on
the last day of the Plan Year reduced by any income allocated
to the Participant's Account by such Plan Year and increased
by any loss allocated to the Participant's Account for the
Plan Year.
(d) Amounts distributed to Highly Compensated Employees under this
Section 12.08 shall be treated as annual additions with
respect to the Employee who received such amount.
(e) Distribution of Excess ACP Contributions to Participants
described in Section 12.08(c) shall be made in accordance with
the provisions of Treasury Regulation Section
1.401(m)-1(e)(2)(iii) or any successor Treasury Regulations
thereto.
12.09 Combined ACP and ADP Test.
(a) The Plan must satisfy the Combined ACP and ADP Test described
in this Section 12.09 only if (1) the Average Actual Deferral
Percentage of the Highly Compensated Employees exceeds 125% of
the Average Actual Deferral Percentage of the Non-highly
Compensated Employees and (2) the Average Actual Contribution
Percentage of the Highly Compensated Employees exceeds 125% of
the Average Actual Contribution Percentage of the Non-highly
Compensated Employees.
(b) The Combined ACP and ADP Test is satisfied if the sum of the
Highly Compensated Employees' Average Actual Deferral
Percentage and Average Actual Contribution Percentage is equal
to or less than the Maximum Combined Percentage defined in
paragraph (c) below.
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<PAGE> 63
(c) The Maximum Combined Percentage shall be determined by
adjusting the Non-highly Compensated Employees' Average Actual
Deferral Percentage and Average Actual Contribution Percentage
in the following manner:
(1) The greater of the two percentages shall be
multiplied by 1.25; and
(2) The lesser of the two percentages shall be increased
by two percentage points; however, in no event shall
such adjusted percentage exceed twice the original
percentage.
The sum of (1) and (2) shall be the Maximum Combined
Percentage.
Notwithstanding the foregoing, the Maximum Combined Percentage
shall be determined in the following manner if such
calculation results in a higher Maximum Combined Percentage
than the formula specified above:
(1) The lesser of the Average Actual Deferral Percentage
and Average Actual Contribution Percentage of the
Non-Highly Compensated Employees shall be multiplied
by 1.25; and
(2) The greater of such two percentages shall be
increased by two percentage points; however, in no
event shall such percentage exceed twice the original
percentage.
(d) In the event the Plan does not satisfy the Combined ADP and
ACP Test, the Highly Compensated Employees' Average Actual
Contribution Percentage shall be decreased by either
distributing Employer Matching Contributions to certain Highly
Compensated Employees by using the procedures described in
Section 12.08 or by making a Qualified Nonelective
Contribution as provided in Section 12.06(b)(3) until the sum
of such percentage and the Highly Compensated Employees'
Average Actual Deferral Percentage equals the Maximum Combined
Percentage.
(e) If Employer Matching Contributions are distributed to certain
Highly Compensated Employees in order to satisfy the Combined
ADP and ACP Test, income or loss allocable to such Employer
Matching Contributions shall also be distributed.
(f) To the extent administratively possible, the Committee shall
distribute the Employer Matching Contributions (if applicable)
and allocable income or loss prior to 2-1/2 months following
the end of the Plan Year for which the Combined ADP and ACP
Test is computed. In any event, however, such Employer
Matching Contributions (if applicable) and allocable income or
loss shall be distributed by the end of the Plan Year
following the Plan Year
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<PAGE> 64
for which the Combined ADP and ACP Test is computed. Employer
Matching Contributions that are distributed pursuant to this
Section 12.09 shall be treated as annual additions under the
Plan.
(g) The income or loss allocable to returned Employer Matching
Contributions shall be determined using the same procedures as
Section 12.05(c).
12.10 Order of Applying Certain Sections of Article.
In applying the provisions of this Article 12, the determination and
distribution of Excess Deferrals shall be made first, the
determination and elimination of Excess ACP Deferrals shall be made
second, the determination and elimination of Excess ADP Contributions
shall be made third and finally the determination and any necessary
adjustment related to the Combined ADP and ACP Test shall be made.
12.11 Effective Date. The provisions of this Article 12 shall be effective
July 1, 1988.
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<PAGE> 65
ARTICLE 13
HIGHLY COMPENSATED EMPLOYEES
13.01 In General.
For the purposes of this Plan, the term "Highly Compensated Employee"
is any active Employee described in Section 13.02 below and any Former
Employee described in Section 13.03 below. Various definitions used
in this Article are contained in Section 13.05. A Non-Highly
Compensated Employee is an Employee who is neither a Highly
Compensated Employee nor a Family Member of a Highly Compensated
Employee. This Article 13 shall be effective July 1, 1988.
13.02 Highly Compensated Employees.
(a) An Employee is a Highly Compensated Employee if during the
Determination Year the Employee:
(1) is a 5 Percent Owner;
(2) receives Compensation in excess of $75,000;
(3) receives Compensation in excess of $50,000 and is a
member of the Top Paid Group; or
(4) is an Includable Officer.
The dollar amounts described above shall be increased annually
as provided in Code Section 414(q)(1).
(b) Calendar Year Election. The Employer hereby elects the
calendar year calculation election described in Temporary
Regulation Section 1.414(q)-1T, Q&A-14(b) or any successor
regulation thereto. Because the Plan uses the calendar year
as its Plan Year, there is no separate Look Back Year
calculation. This election is binding on all other qualified
retirement Plans maintained by the Employer until the election
is withdrawn.
13.03 Former Highly Compensated Employee.
A Former Employee is a Highly Compensated Employee if (applying the
rules of Section 13.02(a) or (b)) the Former Employee was a Highly
Compensated Employee during a Separation Year or during any
Determination Year ending on or after the Former Employee's 55th
birthday. With respect to a Former Employee
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<PAGE> 66
whose Separation Year was prior to January 1, 1987, such Former
Employee will be treated as a Highly Compensated Employee only if the
Former Employee was a 5% Owner or received Compensation in excess of
$50,000 during (i) the Former Employee's Separation Year (or the year
preceding such Separation Year); or (ii) any year ending on or after
such Former Employee's 55th birthday (or the last year ending before
such Former Employee's 55th birthday).
13.04 Family Aggregation Rules.
(a) For purposes of this Article 13, an Employee who is, for a
given Determination Year or Look Back Year, either (i) a 5
Percent Owner, or (ii) a Highly Compensated Employee who is
one of the ten most highly compensated Employees ranked on the
basis of Compensation paid during such year, shall be
aggregated with such Employee's Family Members.
(b) For purposes of this Section 13.04, the term "Family Member"
means, with respect to an Employee described in Section
13.04(a), a person who is, on any day during the given
Determination Year or Look Back Year:
(1) his spouse; or
(2) his lineal ascendant or descendant; or
(3) the spouse of his lineal ascendant or descendant.
(c) The determination of Employees and Family Members who must be
aggregated for purposes of this Article 13 shall be made in
accordance with Temporary Regulation Section 1.414(q)-1T,
Q&A-11 and Q&A-12.
(d) For purposes of applying the limits of Code Section
401(a)(17) (i.e., the $150,000 limit on compensation, as
adjusted) with respect to Compensation under Articles 12
(401(k)/401(m) tests) and 14 (Section 415 limits), the
Compensation for any Employee described in Section 13.04(a)
and for any Family Member who is such Employee's spouse or
lineal descendant under age 19, shall be aggregated. In such
event, the deemed Compensation for each such Employee shall be
an amount equal to the Section 401(a)(17) limit for the Plan
Year (as adjusted) multiplied by a fraction, the numerator of
which is the Employee's actual Compensation for the Plan Year,
and the denominator of which is the aggregate Compensation of
the Employee and the aggregated Family Member for the Plan
Year. The same procedure shall then be used to determine the
deemed Compensation of the aggregated Family Member.
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<PAGE> 67
13.05 Definitions.
The following special definitions shall apply to this Article 13:
Compensation for purposes of this Article 13 shall mean the gross
annual earnings reported on the Participant's IRS Form W-2 (box 10
or its comparable location as provided on Form W-2 in future years) as
required by Code Section Section 6041(d) and 6051(a)(3). In
addition, Compensation shall include compensation which is not
includable in the Participant's IRS Form W-2 (Box 10) by reason of
Code Section 402(a)(8) (employee pre-tax contributions under a Code
Section 401(k) plan) or Code Section 125 (salary deferrals under a
cafeteria plan). Compensation shall not include amounts paid or
reimbursed by the Employer for moving expenses if, at the time of the
payment of such moving expenses, it is reasonable to believe that the
moving expenses will be deductible by the Participant under Code
Section 217. Compensation shall be determined by ignoring any income
exclusions under Code Section 3401(a) based on the nature or location
of employment. In no event shall Compensation in excess of the
limitations under Code Section 401(a)(17) (e.g., $150,000 in 1994) be
taken into account for any Employee.
Determination Year shall mean the Plan Year for which the ACP and the
ADP are computed.
Employer for purposes of this Article 13 shall mean the Company and its
Affiliates.
5 Percent Owner shall mean any Employee who owns or is deemed to own
(within the meaning of Code Section 318), more than five percent of
the value of the outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting power of the
Employer.
Former Employee shall mean an Employee (i) who has incurred a
Severance from Service or (ii) who remains employed by the Employer
but who has not performed services for the Employer during the
Determination Year (e.g., an Employee on Authorized Absence).
Includable Officer shall mean any officer of the Employer who, during
the applicable year, receives Compensation in excess of 50% of the
dollar limitations under Code Section 415(b)(1)(A)(as adjusted by the
Secretary of the Treasury for cost of living increases). The Employer
shall be deemed to have a minimum of 3 officers or, if greater, a
number equal to 10 percent of all Employees. However, no more than 50
officers shall be considered Includable Officers under this Article
13. If the Employer does not have any Includable Officers because no
officer receives Compensation in excess of the dollar limitations of
Code Section 415(b)(1)(A), the Employer's highest paid officer shall
be considered an Includable Officer.
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<PAGE> 68
Look Back Year shall mean the Plan Year preceding the Determination
Year, or if the Employer elects, the calendar year ending with or
within the determination year.
Separation Year shall mean any of the following years:
(1) An Employee who incurs a Termination of Employment shall have
a Separation Year in the Determination Year in which such
Termination of Employment occurs;
(2) An Employee who remains employed by the Employer but who
temporarily ceases to perform services for the Employer (e.g.,
an Employee on Authorized Absence) shall have a Separation
Year in the calendar year in which he last performs services
for the Employer;
(3) An Employee who remains employed by the Employer but whose
Compensation for a calendar year is less than 50% of the
Employee's average annual Compensation for the immediately
preceding three calendar years (or the Employee's total years
of employment, if less) shall have a Separation Year in such
calendar year. However, such Separation Year shall be ignored
if the Employee remains employed by the Employer and the
Employee's Compensation returns to a level comparable to the
Employee's Compensation immediately prior to such Separation
Year.
Top Paid Group shall mean the top 20% of all Employees ranked on the
basis of Compensation received from the Employer during the applicable
year. The number of Employees in the Top Paid Group shall be
determined by ignoring Employees who are non-resident aliens and
Employees who do not perform services for the Employer during the
applicable year. The Employer elects to compute the Top Paid Group
without the age and service exclusion provided in applicable Treasury
Regulations.
13.06 Other Methods Permissible.
To the extent permitted by the Code, judicial decisions, Treasury
Regulations and IRS pronouncements, the Committee may (without further
amendment to this Plan) take such other steps and actions or adopt
such other methods or procedures (in addition to those methods and
procedures described in this Article 13) to determine and identify
Highly Compensated Employees (including adopting alternative
definitions of Compensation which satisfy Code Section 414(q)(7) and
are uniformly applied).
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<PAGE> 69
ARTICLE 14.
MAXIMUM BENEFITS
14.01 General Rule.
(a) Notwithstanding any other provision of this Plan, for any Plan
Year, the Annual Additions to a Participant's Account, when
combined with the Annual Additions to the Participant's
Account under all other Qualified individual account plans
maintained by the Employer or its Affiliates shall not exceed
the lesser of (i) $30,000 or (ii) twenty-five percent (25%) of
the Participant's Compensation for such Plan Year (the
"maximum permissible amount").
(b) The Employer hereby elects that the Limitation Year for
purposes of Code Section 415 shall be the Plan Year.
(c) For purposes of determining the limit on Annual Additions
under paragraph (a) of this Section, the dollar limit
described therein, to wit, $30,000, shall be increased for
each Plan Year to the extent permitted by law.
(d) If the amount to be allocated to a Participant's Account
exceeds the maximum permissible amount (and for this purpose
Employer Contributions shall be deemed to be allocated after
Pre-Tax Contributions), the excess will be disposed of as
follows. First, if the Participant's Annual Additions exceed
the maximum permissible amount as a result of (i) a reasonable
error in estimating the Participant's Compensation, (ii) a
reasonable error in estimating the amount of Pre-Tax
Contributions that the Participant could make under Code
Section 415 or (iii) other facts and circumstances that the
Internal Revenue Service finds justifiable, the Committee may
direct the Trustee to return to the Participant his Pre-Tax
Contributions for such Plan Year to the extent necessary to
reduce the excess amount. Such returned Pre-Tax Contributions
shall be ignored in performing the discrimination tests of
Article 12. Second, any excess annual additions still
remaining after the return of Pre-Tax Contributions shall be
reallocated as determined by the Committee among the
Participants whose accounts have not exceeded the limit in the
same proportion that the Compensation of each such Participant
bears to the Compensation of all such Participants. If such
reallocation would result in an addition to another
Participant's Account which exceeds the permitted limit, that
excess shall likewise be reallocated among the Participants
whose Accounts do not exceed the limit. However, if the
allocation or reallocation of the excess amounts pursuant to
these provisions causes the limitations of Section 415 of the
Code to be exceeded with respect to each Participant for the
- 63 -
<PAGE> 70
limitation year, then any such excess shall be held
unallocated in a 415 Suspense Account. If the 415 Suspense
Account is in existence at any time during a limitation year,
other than the limitation year described in the preceding
sentence, all amounts in the 415 Suspense Account shall be
allocated and reallocated to Participants' Accounts (subject
to the limitations of Code Section 415) before any
Contributions which would constitute annual additions may be
made to the Plan for that limitation year.
(e) If the Participant is covered under another qualified defined
contribution plan maintained by an Employer during any
limitation year, the annual additions which may be credited to
a Participant's account under this Plan for any such
limitation year shall not exceed the maximum permissible
amount reduced by the annual additions credited to a
Participant's account under all such plans for the same
limitation year. If a Participant's annual additions under
this Plan and such other plans would result in an excess
amount for a limitation year, the excess amount will be deemed
to consist of the annual additions last allocated (and for
this purpose, Employer Contributions shall be deemed to be
allocated after Pre-Tax Contributions). If an excess amount
is allocated to a Participant on an allocation date of this
Plan which coincides with an allocation date of another plan,
the excess amount attributed to this Plan will be the product
of
(i) the total excess amount as of such date, times
(ii) the ratio of (A) the annual additions allocated to
the Participant for the limitation year as of such
date under this Plan to (B) the total annual
additions allocated to the Participant for the
limitation year as of such date under this and all
the other qualified defined contribution plans
maintained by the Employer.
Any excess amount attributed to this Plan will be disposed in the
manner described in this Section 14.01 above.
14.02 Combined Plan Limitation.
If the Employer or its Affiliates maintains, or at any time
maintained, a Qualified defined benefit plan covering any Participant
in this Plan, the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction shall not exceed 1.0
in any limitation year and the annual benefit otherwise payable to the
Participant under such defined benefit plan shall be frozen or reduced
to the extent necessary so that the sum of such fractions shall not
exceed 1.0.
14.03 Definitions. For the purposes of this Article 14, the following
definitions shall apply:
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<PAGE> 71
(a) "Annual Addition" shall mean the sum of:
(1) Employee Contributions;
(2) Employer Contributions;
(3) Forfeitures; and
(4) Amounts described in Code Section Section
415(l)(1) and 419A(d)(2).
Annual Additions shall not include any amounts credited to the
Participant's Account resulting from Rollover Contributions.
(b) "Affiliates" shall have that meaning contained in Article 2
except that for purposes of determining who is an Affiliate
the phrase "more than 50 percent" shall be substituted for the
phrase "at least 80 percent" each place it appears in Code
Section 1563(a)(1).
(c) "Compensation" shall have the same meaning as defined in
Article 12 except that Compensation for purposes of Article 14
shall not include Pre-Tax Contributions under this Plan and
shall not include salary deferrals under a Code Section 125
Cafeteria Plan.
(d) "Defined Benefit Fraction" means a fraction, the numerator of
which is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether or not
terminated) maintained by the Employer or its Affiliates, and
the denominator of which is the lesser of (i) 125 percent of
the dollar limitation in effect for the limitation year under
Section 415(b)(1)(A) of the Code or (ii) 140 percent of the
Highest Average Compensation. Notwithstanding the foregoing,
if the Participant was a Participant as of the first day of
the first Limitation Year beginning after December 31, 1986,
in one or more defined benefit plans maintained by the
Employer or its Affiliates which were in existence on May 6,
1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the end of the last
limitation year beginning before January 1, 1987, but
determined without regard to any changes in the terms and
conditions of the Plan occurring after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Section 415 for all limitation years beginning before
January 1, 1987.
(e) "Defined Contribution Fraction" means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer or its
Affiliates for the current and all prior limitation years, and
- 65 -
<PAGE> 72
the denominator of which is the sum of the Maximum Aggregate
Amounts for the current and all prior limitation years of
service with the Employer or its Affiliates (regardless of
whether a defined contribution plan was maintained by the
Employer or its Affiliates). The Maximum Aggregate Amount in
any limitation year is the lesser of (i) 125 percent of the
dollar limitation in effect under Section 415(c)(1)(A) of the
Code; or (ii) 35 percent of the Participant's compensation for
such year. If the Employee was a Participant as of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Employer or its Affiliates which were in existence on May
6, 1986, the numerator of this fraction will be adjusted if
the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (i)
the excess of the sum of the fractions over 1.0 times and (ii)
the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be
computed as of the end of the limitation year beginning before
January 1, 1987, and disregarding any changes in the terms and
conditions of the plans made after May 5, 1986, but using the
Section 415 limitation applicable to the first Limitation
Year beginning on or after January 1, 1987. The annual
addition for any Limitation Year beginning before January 1,
1987 shall not be recomputed to treat employee contributions
as annual additions.
(f) "Highest Average Compensation" means the average compensation
for the three consecutive years of service with the employer
that produces the highest average.
(g) "Projected Annual Benefit" means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to which
the Participant would be entitled under the terms of the plan
assuming (i) the Participant will continue employment until
normal retirement age under the plan (or current age, if
later), and (ii) the Participant's compensation for the
current limitation year and all other relevant factors used to
determine benefits under the plan will remain constant for all
future limitation years.
14.04 Effective Date. The provisions of this Article 14 shall be effective
January 1, 1987.
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<PAGE> 73
ARTICLE 15.
TOP HEAVY RULES
15.01 General.
The provisions of this Article of the Plan shall become effective in
any Plan Year in which the Plan is determined to be Top Heavy and
shall supersede any conflicting provision of this Plan.
15.02 Definitions.
(a) Top Heavy. The Plan shall be Top Heavy for the Plan Year if,
as of the Valuation Date which coincides with or immediately
precedes the Determination Date, the value of the Participant
Accounts of Key Employees exceeds 60% of the value of all
Participant Accounts. If the Employer maintains more than one
plan, all plans in which any Key Employee participates and all
plans which enable this Plan to satisfy the
anti-discrimination requirements of Code Section Section
401(a)(4) and 410 must be combined with this Plan ("Required
Aggregation Group") for the purposes of applying the 60% test
described in the preceding sentence. Plans maintained by the
Employer which are not in the required aggregation group may
be combined at the Employer's election with this Plan for the
purposes of determining Top Heavy status if the combined plan
satisfies the requirements of Code Section 401(a)(4) and 410
("Permissive Aggregation Group"). In determining the value
of Participant Accounts, all distributions made during the
five-year period ending on the Determination Date shall be
included and any unallocated Employer Contributions or
forfeitures attributable to the Plan Year in which the
Determination Date falls shall also be included. The Account
of (i) any Employee who at one time was a Key Employee but who
is not a Key Employee for any of the five Plan Years ending on
the Determination Date; and (ii) any Employee who has not
performed services for the Employer or a related employer
maintaining a plan in the aggregation group for the five Plan
Years ending on the Determination Date, shall be disregarded
in determining Top Heavy status.
If the Employer maintains a defined benefit plan during the
Plan Year which is subject to aggregation with this Plan, the
60% test shall be applied after calculating the present value
of the Participants' accrued benefits under the defined
benefit plan in accordance with the rules set forth in that
plan and combining the present value of such accrued benefits
with the Participant's account balances under this Plan.
- 67 -
<PAGE> 74
Effective January 1, 1987, solely for the purpose of
determining if the Plan, or any other plan included in the
Required Aggregation Group, is Top-Heavy, a Non-Key Employee's
accrued benefit in a defined benefit plan shall be determined
under (i) the method, if any, that uniformly applies for
accrual purposes under all plans maintained by the Affiliates,
or (ii) if there is no such method, as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Code Section 411(b)(1)(C).
(b) Key Employee. Any employee of the Employer who, during the
Plan Year or the four preceding Plan Years was an officer
receiving Compensation in excess of 50% of the limit described
in Code Section 415(b)(1)(A), one of the ten employees of the
Employer owning the largest interests in the Employer and
receiving Compensation equal to or greater than the dollar
limit described in Code Section 415(c)(1)(A), a greater than
5% owner of the Employer, a greater than 1% owner of the
Employer receiving Compensation in excess of $150,000, or the
Beneficiary of a Key Employee. The Code Section 415(b)(1)(A)
and 415(c)(1)(A) limits referred to in the preceding sentence
shall be the specified dollar limit plus any increases
reflecting cost of living adjustments specified by the
Secretary of the Treasury.
(c) Determination Date. The last day of the Plan Year immediately
preceding the Plan Year for which Top Heavy status is
determined. For the first Plan Year, the Determination Date
shall be the last day of the first Plan Year.
(d) Non-Key Employee. Any Participant who is not a Key Employee.
(e) Employer. The term "Employer" shall include any Affiliate of
such Employer.
(f) Compensation. The term "Compensation" shall have that meaning
as defined in Article 14.
15.03 Minimum Benefit.
(a) Except as provided below, the Employer Contributions allocated
on behalf of any Non-Key Employee who is employed by the
Employer on the Determination Date shall not be less than the
lesser of (i) 3% of such Non-Key Employee's Compensation or
(ii) the largest percentage of Employer Contributions and
Pre-Tax Contributions, as a percentage of the Key Employee's
Compensation, allocated on behalf of any Key Employee for such
Plan Year. Pre-Tax Contributions allocated to the Accounts of
Non-Key Employees and Employer Matching Contributions
allocated to the Accounts of Non-Key Employees that are used
to satisfy the provisions of
- 68 -
<PAGE> 75
Article 12 shall not be considered in determining whether a
Non-Key Employee has received the minimum contribution
required by this Section 15.03.
(b) The minimum allocation is determined without regard to any
Social Security contribution and shall be made even though,
under other Plan provisions, the Non-Key Employee would have
received a lesser allocation or no allocation for the Plan
Year because of the Non-Key Employee's failure to complete
1,000 Hours of Service, his failure to make mandatory employee
contributions, or his earning compensation less than a stated
amount.
(c) If the Employer maintains a defined benefit plan in addition
to this Plan, the minimum contribution and benefit
requirements for both plans in a Top Heavy Plan Year may be
satisfied by an allocation of Employer Contributions to the
Account of each Non-Key Employee in the amount of 5% of the
Non-Key Employee's compensation.
15.04 Combined Plan Limitation For Top Heavy Years.
In any Plan Year during which more than 90% of the Participant Account
balances are attributable to Key Employees, 100% or an equivalent
factor shall be substituted for 125% or an equivalent factor in the
combined plan fraction denominators set forth in the Section of this
Plan which limits maximum benefits pursuant to Section 415 of the
Code. In any Plan Year during which more than 60% but not more than
90% of the Participant Account balances are attributable to Key
Employees, 100% or an equivalent factor shall be substituted for 125%
or an equivalent factor in the combined plan fraction denominators
unless the Account of each Non-Key Employee participating in the Plan
receives an allocation which satisfies Section 15.03 above, except
that for this purpose the figure "4%" shall be substituted for "3%"
where it appears in Section 15.03(a) and the figure "7.5%" shall be
substituted for "5%" where it appears in Section 15.03(c).
- 69 -
<PAGE> 76
ARTICLE 16
MISCELLANEOUS
16.01 Headings.
The headings and sub-headings in this Plan have been inserted for
convenience of reference only and are to be ignored in any
construction of the provisions hereof.
16.02 Action by Employer.
Any action by an Employer under this Plan shall be by resolution of
its Board of Directors, or by any person or persons duly authorized
by resolution of said Board to take such action.
16.03 Spendthrift Clause.
Except as otherwise required by a "qualified domestic relations
order" as defined in Code Section 414(p), none of the benefits,
payments, proceeds or distributions under this Plan shall be subject
to the claim of any creditor of any Participant or Beneficiary, or to
any legal process by any creditor of such Participant or Beneficiary,
and none of them shall have any right to alienate, commute,
anticipate or assign any of the benefits, payments, proceeds or
distributions under this Plan except for the extent expressly
provided herein to the contrary. If any Participant shall attempt to
dispose of the benefits provided for him hereunder, or to dispose of
the right to receive such benefits, or in the event there should be
an effort to see such benefits or the right to receive such benefits
by attachment, execution or other legal or equitable process, such
right to benefits shall pass and be transferred, at the discretion of
the Plan Administrator, to such one or more as may be appointed by
the Plan Administrator from among the Beneficiaries, if any
theretofore designated by the Participant, or from the spouse,
children or other dependents of the Participant, in such shares as
the Committee may appoint. Any appointment so made by the Committee
may be revoked by it at any time and further appointment made by it
which may include the Participant.
16.04 Distributions Upon Special Occurrences.
(a) Subject to Section 11.03, Pre-Tax Contributions and any
income attributable thereto, shall be distributed to
Participants or their Beneficiaries as soon as
administratively feasible after the termination of the Plan,
provided that neither the Employer nor its Affiliates
maintain a successor plan.
(b) Pre-Tax Contributions and any income attributable thereto
shall be distributed to Participants as soon as
administratively feasible after the
- 70 -
<PAGE> 77
sale, to an entity that is not an Affiliate, of
substantially all of the assets used by the Employer in the
trade or business in which the Participant is employed.
(c) After the sale of an incorporated Affiliate's interest in a
subsidiary to an entity that is not an Affiliate, Pre-Tax
Contributions and any income attributable thereto of a
Participant who continues to work for such subsidiary shall
be distributed as soon as administratively feasible.
(d) The provisions of this Section 16.04 including the
definitions of terms such as "successor plan" and
"substantially all of the assets" shall be governed by
Treasury Regulation Section 1.401(k)-1(d)(1)(iii) or any
successor Treasury Regulation thereto.
16.05 Discrimination.
The Employer, the Committee, the Trustee and all other persons
involved in the administration and operation of the Plan shall
administer and operate the Plan and Trust in a uniform and consistent
manner with respect to all Participants similarly situated and shall
not permit discrimination in favor of Highly Compensated Employees.
16.06 Release.
Any payment to a Participant or Beneficiary, or to their legal
representatives, in accordance with the provisions of this Plan,
shall to the extent thereof be in full satisfaction of all claims
hereunder against the Trustee, Plan Administrator, Committee and the
Employer, any of whom may require such Participant, Beneficiary, or
legal representative, as a condition precedent to such payment, to
execute a receipt and release therefor in such form as shall be
determined by the Trustee, the Committee, or the Employer, as the
case may be.
16.07 Compliance with Applicable Laws.
The Company, through the Plan Administrator, shall interpret and
administer the Plan in such manner that the Plan and Trust shall
remain in compliance with the Code, with the Act, and all other
applicable laws, regulations, and rulings.
16.08 Agent for Service of Process.
The agent for service of process of this Plan shall be the person
listed from time to time in the current records of the Secretary of
State of Georgia as the agent for the service of process for the
Company.
- 71 -
<PAGE> 78
16.09 Merger.
In the event of any merger or consolidation of the Plan with any
other Plan, or the transfer of assets or liabilities by the Plan to
another Plan, each Participant must receive (assuming that the Plan
would terminate) the benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the
benefit such Participant would have been entitled to receive
immediately before the merger, consolidation, or transfer (assuming
that the Plan had then terminated), provided such merger,
consolidation, or transfer took place after the date of enactment of
the Act.
16.10 Governing Law.
The Plan shall be governed by the laws of the State of Georgia to the
extent that such laws are not preempted by Federal law.
16.11 Adoption of the Plan by an Affiliated Sponsor..
(a) The Committee shall determine which employers shall become
Affiliated Sponsors within the terms of the Plan. In order
for the Committee to designate an Employer as an Affiliated
Sponsor, the Committee must approve the addition of the
Affiliated Sponsor's identity to Schedule A (which approval
may be retroactive to an earlier effective date). The
Committee may also specify such terms and conditions
pertaining to the adoption of the Plan by the Affiliated
Sponsor as the Committee deems appropriate. With the
Committee's consent, an Affiliated Sponsor may limit
participation in the Plan to certain of its Employees.
(b) The Plan of the Affiliated Sponsor and of the Company shall be
considered a single plan for purposes of Treasury Regulations
Section 1.414(1)-1(b)(1). All assets contributed to the Plan
by the Affiliated Sponsor shall be held in a single fund
together with the assets contributed by the Company (and with
the assets of any other Affiliated Sponsors); and so long as
the Affiliated Sponsor continues to be designated as such, all
assets held in such fund shall be available to pay benefits to
all Participants and Beneficiaries covered by the Plan
irrespective of whether such Employees are employed by the
Company or by the Affiliated Sponsor. Nothing contained
herein shall be construed to prohibit the separate accounting
of assets contributed by the Company and the Affiliated
Sponsors for purposes of cost allocation if directed by the
Committee or the holding of Plan assets in more than one Trust
Fund with more than one Trustee.
(c) So long as the Affiliated Sponsor's designation as such
remains in effect, the Affiliated Sponsor shall be bound by,
and subject to all provisions of the Plan and the Trust
Agreement. The exclusive authority to amend the
- 72 -
<PAGE> 79
Plan and the Trust Agreement shall be vested in the Committee
and no Affiliated Sponsor shall have any right to amend the
Plan or the Trust Agreement. Any amendment to the Plan or the
Trust Agreement adopted by the Committee shall be binding upon
every Affiliated Sponsor without further action by such
Affiliated Sponsor.
(d) Each Affiliated Sponsor shall be solely responsible for making
an Employer Contribution with respect to its Employees and
solely responsible for making any contribution required by
Article 15. Furthermore, if an Affiliated Sponsor determines
to make a Qualified Nonelective Contribution on behalf of its
Employees, such Affiliated Sponsor shall be solely responsible
for making such contribution. Neither the Company nor any
other Affiliated Sponsor is obligated to make an Employer
Matching Contribution or Qualified Nonelective Contribution on
behalf of the Employees of a different Affiliated Sponsor.
(e) The Company and each Affiliated Sponsor which is an Affiliate
will be tested on a combined basis to determine whether the
Company and such Affiliated Sponsors satisfy the Average
Actual Deferral Percentage Test described in Section 12.03 and
the Average Actual Contribution Percentage test described in
Section 12.06. An Affiliated Sponsor which is not an
Affiliate shall be tested separately from the Company and
those Affiliated Sponsors that are Affiliates for purposes of
the ADP test and ACP test described in Article 12.
(f) No Affiliated Sponsor other than the Company shall have the
right to terminate the Plan. However, any Affiliated Sponsor
may withdraw from the Plan by action of its board of directors
provided such action is communicated in writing to the
Committee. The withdrawal of an Affiliated Sponsor shall be
effective as of the last day of the Plan Year following
receipt of the notice of withdrawal (unless the Committee
consents to a different effective date). In addition, the
Committee may terminate the designation of an Affiliated
Sponsor to be effective on such date as the Committee
specifies. Any such Affiliated Sponsor which ceases to be an
Affiliated Sponsor shall be liable for all cost accrued
through the effective date of its withdrawal or termination
and any contributions owing as a result of Pre-Tax
Contributions by its Employees or any other contribution as
provided in paragraphs (d) and (e). In the event of the
withdrawal or termination of an Affiliated Sponsor as provided
in this paragraph, such Affiliated Sponsor shall have no right
to direct that assets of the Plan be transferred to a
successor plan for its Employees unless such a transfer is
approved by the Committee in its sole discretion.
- 73 -
<PAGE> 80
16.12 Protected Benefits.
Early retirement benefits, retirement-type subsidies, or optional
forms of benefits protected under Code Section 411(d)(6) ("Protected
Benefits") shall not be reduced or eliminated with respect to benefits
accrued under such Protected Benefits unless such reduction or
elimination is permitted under the Code authority issued by the
Internal Revenue Service, or judicial authority.
16.13 Location of Participant or Beneficiary Unknown.
In the event that all or any portion of the distribution payable to a
Participant or his Beneficiary shall remain unpaid solely by reason of
the Committee's inability to ascertain the whereabouts of such
Participant or Beneficiary, the amount unpaid shall be forfeited.
However, such forfeiture shall not occur until five (5) years after
the amount first became payable. The Committee shall make a diligent
effort to locate the Participant or Beneficiary including the mailing
of a registered letter, return receipt requested, to the last known
address of such Participant or Beneficiary. In the event a
Participant or Beneficiary is located subsequent to his benefit being
forfeited, such benefit shall be restored and distributed.
IN WITNESS WHEREOF, the Company has caused this Plan to be duly
executed and its seal to be hereunto affixed on the date indicated below, but
effective as of January 1, 1994.
GENUINE PARTS COMPANY
By: /s/ Frank M. Howard
---------------------------------------
Title: Treasurer
------------------------------------
Date: December 1, 1994
-------------------------------------
- 74 -
<PAGE> 81
SCHEDULE A
Affiliated Sponsors
Designated Under Section 16.11
I. General Rule - No Past Service Credit. Unless otherwise identified
below, an employee will not receive Credited Service and Years of Eligibility
Service under this Plan for his or her prior employment with the Affiliated
Sponsor. Instead (unless otherwise required by law), Hours of Service worked
for an Affiliated Sponsor prior to the Designation Date shall be ignored.
II. Definition of Past Service Credit. If Employees of an Affiliated
Sponsor are granted past service credit (as noted below), such Employees who
are employed by the Affiliated Sponsor on the Designation Date shall receive
Credited Service and Years of Eligibility Service under this Plan beginning
with their employment commencement date with the Affiliated Sponsor, but
subject to all of the rules concerning crediting of service and Breaks in
Service set forth in this Plan.
<TABLE>
<CAPTION>
Designation
Name Date Special Notes
---- ----------- -------------
<S> <C> <C> <C>
1. S.P. Richards July 1, 1988 Past Service Credit Granted
Company
2. Balkamp, Inc. July 1, 1988 Past Service Credit Granted.
3. NAPA, Inc. July 1, 1988 Past Service Credit Granted.
4. Motion (See Note Below) Past Service Credit Granted
Industries, Inc.
</TABLE>
Special Note on Motion Industries, Inc.
On or about January 1, 1984, Genuine Parts Company acquired Motion Industries,
Inc. ("Motion"). Employees of Motion whose initial date of hire was on or
after January 1, 1984, became participants in the Genuine Parts Company Pension
Plan after satisfying the age and service requirements under such Plan.
Employees of Motion whose initial date of hire was prior to January 1, 1984,
elected either to (1) continue their participation in the Motion Industries,
Inc. Profit Sharing Plan or (2) to participate in the Genuine Parts Company
Pension Plan. Effective January 1, 1990, the Motion Profit Sharing Plan was
terminated. Employees of Motion who participated in the Motion Profit Sharing
Plan on
<PAGE> 82
December 31, 1989, and who were employed by Motion on January 1, 1990, became
eligible to participate in the Genuine Parts Company Pension Plan effective as
of January 1, 1990.
Employees of Motion who participated in the Genuine Parts Company Pension Plan
on July 1, 1988, began their participation under the Genuine Partnership Plan
on July 1, 1988. Employees who first became eligible to participate in the
Genuine Parts Company Pension Plan on January 1, 1990, commenced participation
in the Genuine Partnership Plan on January 1, 1990.
In either case, employees of Motion who began participation in the Genuine
Partnership Plan on July 1, 1988, or January 1, 1990, received credit for
vesting purposes under the Genuine Partnership Plan for their years of
employment with Motion.
Please note that employees hired by Motion on or after January 1, 1984, became
eligible to participate in the Genuine Parts Company Pension Plan and Genuine
Partnership Plan in accordance with the same rules applicable to all employees
of Genuine Parts Company. The staggered entry dates of July 1, 1988, and
January 1, 1990, apply to those employees who worked for Motion prior to
January 1, 1984.
<PAGE> 83
SCHEDULE B
Credit for Service with Predecessor Employers
I. General Rule - No Past Service. Unless otherwise identified in Part II
below, an Employee will not receive Credited Service or Years of Eligibility
Service under this Plan for any purpose. Instead (unless otherwise required by
law) Hours of Service worked for a predecessor employer prior to the
Designation Date shall be ignored.
II. Definition of Past Service Credit. If Employees who were previously
employed by a predecessor employer are granted past service credit (as noted
below), such Employees who are employed by an Employer on the Designation Date
shall receive Credited Service and Years of Eligibility Service under this Plan
beginning with the employment commencement date with the predecessor employer,
but subject to all of the rules concerning crediting of service and Breaks in
Service set forth in this Plan.
<TABLE>
<CAPTION>
Extent of Credit for Service
Name Designation Date with Predecessor Company
---- ---------------- ----------------------------
<S> <C> <C> <C>
1. Odell Hardware Company 7/1/88 Past Service Credit Granted
("Odell")
2. Clark Siviter 7/1/88 Past Service Credit Granted
3. Brooks-Noble Parts 7/1/88 Past Service Credit Granted
& Machine Co., Inc.
4. General Automotive Parts 7/1/88 Past Service Credit Granted
Company and its subsidiaries
("General Automotive")
5. Standard Units Parts 7/1/88 Past Service Credit Granted
Corporation including
its subsidiary Manco,
Inc. ("Standard Units
Parts")
6. NAPA Des Moines 7/1/88 Past Service Credit Granted
Warehouse ("Des Moines")
</TABLE>
III. Participants employed by the following predecessor employers shall not
receive Past Service Credit as of the date the predecessor employer was
acquired by or merged into Genuine Parts Company. However, after an employee
of such predecessor employer
<PAGE> 84
becomes a Participant in the Plan by satisfying the requirements of Section
3.01, such Participant shall receive Credited Service for all employment with
such predecessor employer. Such Credited Service may be forfeited or
disregarded in accordance with the definition of Credited Service set forth in
Article II. Furthermore, no Credited Service shall be granted for employment
with a predecessor employer if the granting of such Credited Service will
adversely impact the tax qualified status of the Plan.
[None as of the Effective Date]
Name Employment Date
---- ---------------
<PAGE> 85
SCHEDULE C
Prior Employer Accounts
<PAGE> 1
EXHIBIT 10.12
GENUINE PARTS COMPANY
PENSION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1989
UNLESS OTHERWISE SPECIFIED HEREIN)
<PAGE> 2
GENUINE PARTS COMPANY
PENSION PLAN
TABLE OF CONTENTS
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ARTICLE I - INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 History of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 New Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.04 Accrued Benefits Under This Plan and Under Prior Plan . . . . . . . . . . . . . . 2
1.05 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.02 Act or ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.03 Actuarial Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.04 Actuary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.05 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.06 Alternate Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.07 Annuity Starting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.08 Anticipated Social Security Benefit . . . . . . . . . . . . . . . . . . . . . . . 5
2.09 Authorized Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10 Average Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.13 Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.14 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.15 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.16 Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.17 Cost of Living Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.18 Credited Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.19 Delayed Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.20 Disability Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.21 Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.22 Earliest Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.23 Early Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.24 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.25(a) Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.25(b) Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.26 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.27 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.28 Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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2.29 Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.30 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.31 Hours of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.32 Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.33 Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.34 Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.35 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.36 Participating Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.37 Pension Committee or Committee . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.38 Permanent Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.39 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.40 Plan Administrator or Administrator . . . . . . . . . . . . . . . . . . . . . . . 14
2.41 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.42 Predecessor Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.43 Pre-Retirement Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.44 Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.45 Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.46 Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.47 Safekeeping Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.48 Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.49 Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.50 Treasury Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.51 Trust or Trust Agreement or Trust Fund or Fund . . . . . . . . . . . . . . . . . 16
2.52 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.53 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III - PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV - RETIREMENT DATES AND BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.01 Normal Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.02 Early Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.03 Permanent Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.04 Delayed Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.05 Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.06 Suspension of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.07 Reduction of Benefit in Certain Cases . . . . . . . . . . . . . . . . . . . . . . 26
4.08 Increase in Benefits for Retired Participants . . . . . . . . . . . . . . . . . . 28
4.09 Minimum Benefit of Prior Plans . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.10 Grandfathered Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V - DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.01 Pre-Retirement Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.02 Alternate Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.03 Death After Normal Retirement Date but Prior to Delayed Retirement Date . . . . . 34
5.04 Death On or After the Annuity Starting Date . . . . . . . . . . . . . . . . . . . 35
5.05 Purchase of Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI - OPTIONAL FORMS OF RETIREMENT INCOME . . . . . . . . . . . . . . . . . . . . . . . 37
6.01 Automatic Forms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.02 Optional Forms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.03 Special Distribution Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.04 Small Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.05 Application For Commencement of Benefits . . . . . . . . . . . . . . . . . . . . 41
6.06 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.07 Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII - METHOD OF FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.01 Establishment of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.02 Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.03 Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.04 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VIII - ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.01 Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.02 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.03 Trustee(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.04 Safekeeping Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.05 Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.06 Pension Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.07 Standard of Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.08 Indemnification of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.09 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.10 Appointment of Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX - AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.01 Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.02 Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.03 Restriction on Certain Benefits and Distributions . . . . . . . . . . . . . . . . 55
9.04 Adoption of the Plan by a Participating Employer . . . . . . . . . . . . . . . . 56
ARTICLE X - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.01 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.02 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.03 Spendthrift Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.04 Legally Incompetent, Minors . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.05 Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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10.06 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.07 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . 60
10.08 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE XI - SPECIAL PROVISIONS REGARDING SAFEKEEPING TRUST . . . . . . . . . . . . . . . . . . 61
ARTICLE XII - TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.01 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.03 Minimum Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.04 Form of Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.05 Nonforfeitability of Employer Top-Heavy Contribution . . . . . . . . . . . . . . 64
12.06 Minimum Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.07 Combined Plan Limitation For Top Heavy Years . . . . . . . . . . . . . . . . . . 65
ARTICLE XIII - MAXIMUM BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
13.01 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
13.02 Combined Plan Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
13.03 Grandfather Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
13.04 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XIV - HIGHLY COMPENSATED EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.01 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.02 Highly Compensated Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.03 Former Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . 70
14.04 Family Aggregation Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
14.05 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
14.06 Other Methods Permissible . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
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GENUINE PARTS COMPANY
PENSION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1989)
ARTICLE I
INTRODUCTION
1.01 History of the Plan. Prior to January 1, 1984, the Company
maintained the Predecessor Plans covering different groups of its
employees. Effective January 1, 1984, the Predecessor Plans were
merged together in accordance with Code Section 414(l) to form the
Genuine Parts Company Pension Plan (the "Prior Plan"). The Prior
Plan assumed all liabilities for retirement benefits accrued prior
to January 1, 1984 under the merged plans. The Prior Plan was
maintained as a plan meeting the requirements of qualification
under Code Section 401(a).
1.02 New Plan. Effective January 1, 1989, the Prior Plan is continued
in an amended and restated form as set forth in its entirety in
this document for the purpose of complying with the provisions of
the Employee Retirement Income Security Act of 1974 as amended and
maintaining qualification under Section 401(a) of the Internal
Revenue Code of 1986, as amended. S.P. Richards Company, Balkamp,
Inc., NAPA, Inc. and Motion Industries, Inc. will also adopt this
document as Participating Employers
1.03 Effective Date. The Plan shall be effective January 1, 1989 except
as described below or as otherwise provided herein:
(a) Section 2.03 relating to the actuarial assumptions used in
the Plan shall be effective January 1, 1987;
(b) Section 2.08 relating to a Participant's Anticipated Social
Security Benefits shall be effective January 1, 1987, but
only for those Employees who accrue an Hour of Service on
or after that date;
(c) Sections 2.18(g), 4.04, and 4.06 relating to the accrual of
benefits beyond age 65 shall be effective January 1, 1988,
but only for those Employees who accrue an Hour of Service
on or after that date;
(d) Section 2.21, the definition of Earnings, shall be
effective July 1, 1988;
(e) Section 2.34, the definition of Normal Retirement Age,
shall be effective January 1, 1988;
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(f) Article III which permits Employees who are hired on or
after their 60th birthday to participate in the Plan shall
be effective January 1, 1988, but only for those Employees
who accrue an Hour of Service on or after that date;
(g) Section 6.07 relating to Direct Rollovers shall be
effective January 1, 1993;
(h) Article XIII relating to maximum benefit levels shall be
effective January 1, 1987; and,
(i) Article XIV, defining a Highly Compensated Employee, is
effective January 1, 1987.
1.04 Accrued Benefits Under This Plan and Under Prior Plan. Only
Participants who earn an Hour of Service after the Effective Date
shall have their Accrued Benefit determined under the provisions of
this Plan. All other Participants shall have their Accrued Benefit
determined in accordance with the terms and provisions of the Prior
Plan. However, all Participants who have an Accrued Benefit under
the Plan or Prior Plan shall receive a distribution of their
Accrued Benefit in accordance with this Plan.
1.05 Purpose. The purpose of this Plan (and the Trust Agreement) is to
reward the loyal and efficient services of the Employees and to
stimulate in them an interest in the successful operation of the
Company's business by providing the benefits of a qualified
retirement plan. This Plan shall be maintained for the exclusive
benefit of the Participants and their Beneficiaries and shall be
administered and interpreted in accordance with such purpose.
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ARTICLE II
DEFINITIONS
2.01 Accrued Benefit.
(a) In General. For purposes of this Plan, the term
"Accrued Benefit" shall mean the Participant's
Projected Retirement Income multiplied by a fraction.
The numerator of the fraction is the Participant's
actual years of Credited Service. The denominator of
the fraction is the Participant's projected years of
Credited Service assuming the Participant had
terminated his Employment on his Normal Retirement
Date. The Projected Retirement Income of a Participant
with fifteen or more years of Credited Service is the
Participant's Retirement Income as determined in
Section 4.01(b) assuming the Participant terminated his
Employment on his Normal Retirement Date and based on
his Average Earnings as of his termination of
Employment. The Projected Retirement Income of a
Participant with less than fifteen years of Credited
Service is the Participant's Retirement Income as
determined in Section 4.01(c) assuming the Participant
terminated his Employment on his Normal Retirement Date
and based on his Average Earnings as of his termination
of Employment.
(b) $200,000 Earnings Limit. Effective January 1, 1989,
the Plan must limit Earnings during a Plan Year
(including Plan Years before and after January 1, 1989)
to $200,000, adjusted annually by the Cost of Living
Factor (see Plan Section 2.21). Notwithstanding the
$200,000 limit, a Participant's Accrued Benefit shall
not be less than the Participant's Accrued Benefit as
of December 31, 1988 (determined without regard to the
new $200,000 limit).
(c) $150,000 Earnings Limit. Effective January 1, 1994,
the Plan must limit Earnings during a Plan Year
(including Plan Years before and after January 1, 1994)
to $150,000, adjusted annually by the Cost of Living
Factor (see Plan Section 2.21). Notwithstanding the
$150,000 limit, a Participant's Accrued Benefit shall
not be less than the greater of:
(1) the Participant's Accrued Benefit as of December
31, 1993, (determined without regard to the new
$150,000 limit but after application of the
$200,000 limit of paragraph (b)) plus the
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Participant's Accrued Benefit earned after
December 31, 1993 (determined with the $150,000
limit); or,
(2) the Participant's Accrued Benefit for all years of
Credited Service both before and after December
31, 1993 (determined with the $150,000 limit).
2.02 Act or ERISA shall mean Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as the same may be amended
from time to time.
2.03 Actuarial Equivalent shall mean a benefit of equivalent value
computed in accordance with the actuarial assumptions described
below. These actuarial assumptions shall be effective as of
January 1, 1987.
(a) The UP 1984 Mortality Table without any adjustments.
(b) An effective annual interest rate of 8%, except that for
purposes of calculating single sum values, the rate shall
be determined under 2.03(c) below.
(c) For purposes of computing single sum values, the interest
rate shall be the interest rate which would be applied by
the Pension Benefit Guaranty Corporation for purposes of
determining the present value of the Participant's benefits
under the Plan if the Plan had terminated on January 1 of
the applicable Plan Year with insufficient assets to
provide benefits guaranteed by the Pension Benefit Guaranty
Corporation on that date.
2.04 Actuary shall mean an Actuary selected by the Company (or a firm of
Actuaries) who is enrolled under Subtitle C of Title III of the
Act.
2.05 Affiliate shall mean the Company and any corporation which is a
member of a controlled group of corporations (as defined in Code
Section 414(b)) which includes the Company; any trade or business
which is under common control (as defined in Code Section 414(c))
with the Company; any organization which is a member of an
affiliated service group (as defined in Code Section 414(m)) which
includes the Company; and any other entity required to be
aggregated with the Company pursuant to regulations under Code
Section 414(o).
2.06 Alternate Death Benefit shall have that meaning as defined in
Section 5.02.
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2.07 Annuity Starting Date shall mean the earliest of the following
dates:
(i) For Participants who terminate their Employment and
commence to receive Retirement Income under Section 4.01,
the Participants' Normal Retirement Date;
(ii) For Participants who terminate their Employment and
commence to receive Retirement Income under Section 4.02,
the Participants' Early Retirement Date;
(iii) For Participants who are Permanently Disabled and
commence to receive Retirement Income under Schedule D, the
Participant's Disability Retirement Date as defined in
Schedule D;
(iv) For Participants who terminate their Employment and
commence to receive Retirement Income under Section 4.04,
the Participants' Delayed Retirement Date; and
(v) For Participants who terminate their Employment with
less than 15 years of Credited Service and are therefore
entitled to a Retirement Income under Section 4.05, the
Participants' Normal Retirement Date.
2.08 Anticipated Social Security Benefit shall mean the estimated
monthly primary insurance amount which is or will become payable to
a Participant at the Participant's Social Security Retirement Age
(as defined in Code Section 415(b)(8)), based on the Social
Security Act in effect on the date of determination of the benefit,
without taking into account any undetermined future automatic
adjustments in (i) benefits and (ii) the contribution and benefit
base, and on uniform rules adopted by the Committee, assuming:
(a) that his Earnings at date of determination of his benefit
under the Plan remains in effect thereafter to his Social
Security Retirement Age; and
(b) the earnings test for purposes of determining eligibility
for the Social Security benefit shall not apply.
The Anticipated Social Security Benefit shall become fixed as of
the Participant's Retirement, or, if earlier, the date on which his
Employment terminates (most recent date of termination for a
reemployed employee).
In determining a Participant's Anticipated Social Security Benefit,
the Committee shall estimate the Participant's compensation for all
years prior to the
- 5 -
<PAGE> 11
Participant's Termination Date. The Participant's estimated
compensation shall be determined by applying a salary scale (six
percent (6%) per annum), projected backwards, to the Participant's
Earnings at the time of the Participant's Termination Date.
Each Participant shall have the right to have his Anticipated
Social Security Benefit computed on the basis of the Participant's
actual salary history instead of using the Participant's estimated
compensation. If the Participant supplies his actual salary
history within a reasonable period of time following the
Participant's Termination Date or, if later, following the date the
Participant receives notice of his right to supply actual salary
history, the Participant's Retirement Income will be adjusted based
on the Participant's actual salary history.
After the Participant's Termination Date, the Plan Administrator
shall notify the Participant of his right to supply actual salary
history and the financial consequences of failing to provide such
salary history. Such notice shall state that actual salary history
can be obtained from the Social Security Administration. In
addition, the Plan Administrator shall provide written notice to
each Participant of the right to supply actual salary history at
the time a summary plan description is provided to the Participant.
This Section 2.08 shall be effective January 1, 1987 but only for
those Participants with an Hour of Service on or after that date.
2.09 Authorized Absence shall mean any temporary layoff or any absence
authorized by the Employer under the Employer's standard personnel
practices provided that all persons under similar circumstances
must be treated alike in the granting of such Authorized Leaves of
Absence and provided further that the Participant returns within
the period of authorized absence. An absence due to service in the
Armed Forces of the United States shall be considered an Authorized
Absence to the extent required by federal law. Employees on
Authorized Absence will be deemed to be in active Employment for
purposes of Credited Service (but not for other purposes such as
eligibility for the Alternate Death Benefit).
2.10 Average Earnings shall mean the average of the Participant's
monthly Earnings for the highest five (5) calendar years of
Employment out of the last complete ten (10) calendar years of
Employment (or during total Employment if less) immediately
preceding the Participant's Termination of Employment. Average
Earnings shall be determined by dividing the total Earnings
received by the Participant during the appropriate five (5)
calendar year period by the number of months for which he received
Earnings in such period. If the Participant's
- 6 -
<PAGE> 12
Earnings in the calendar year in which the Participant terminates
Employment will increase the Participant's Average Earnings, such
Earnings shall be counted as part of the Participant's 10 complete
calendar years of Employment.
2.11 Beneficiary shall have the following meaning:
(a) Unmarried Participants, may designate any individual(s),
trust(s), estate(s), partnership(s), corporation(s) or
other entity or entities as Beneficiaries in accordance
with procedures established by the Committee to receive any
distribution to which the Participant is entitled under the
Plan in the event of the Participant's death. The
Committee may require certification by a Participant in any
form it deems appropriate of the Participant's marital
status prior to accepting or honoring any Beneficiary
designation. Any Beneficiary designation by an unmarried
Participant shall be void if the Participant revokes the
designation or marries. Any Beneficiary designation by an
unmarried Participant shall also be void to the extent that
it conflicts with the terms of a qualified domestic
relations order.
If an unmarried Participant fails to designate a
Beneficiary or if the designated Beneficiary fails to
survive the Participant and the Participant has not
designated a contingent Beneficiary, the Beneficiary shall
be the surviving descendants of the Participant (who shall
take per stirpes) and if there are no surviving
descendants, the Beneficiary shall be the Participant's
estate. For the purposes of the foregoing sentence, the
term "descendants" shall include any persons adopted by a
Participant or by any of his descendants.
(b) A married Participant's Beneficiary shall be his Spouse
unless the Participant has designated a non-Spouse
Beneficiary (or Beneficiaries) with the written consent of
his Spouse given in the presence of a notary public on a
form provided by the Committee, or unless the terms of a
qualified domestic relations order require payment to a
non-Spouse Beneficiary. A married Participant's
designation of a non-Spouse Beneficiary in accordance with
the preceding sentence shall remain valid until revoked by
the Participant or until the Participant marries a Spouse
who has not consented to a designation in accordance with
the preceding sentence.
For the purposes of this Section, revocation of prior
Beneficiary designations will occur when a Participant; (i)
files a valid designation with the Committee, or (ii) files
a signed statement with the Committee evidencing his intent
to revoke any prior designations.
- 7 -
<PAGE> 13
2.12 Board shall mean the Board of Directors of the Company.
2.13 Break in Service shall occur if the Employee ceases to be employed
by the Employer and does not resume employment for seven or more
consecutive years.
2.14 Code shall mean the Internal Revenue Code of 1986, as amended. A
reference to a specific provision of the Code shall include such
provision and any applicable Treasury Regulation pertaining
thereto.
2.15 Company shall mean Genuine Parts Company and its successors or
assigns who adopt this Plan.
2.16 Contributions shall mean the Employer contributions to the Fund
made in accordance with Article VII.
2.17 Cost of Living Factor shall mean the cost of living factor
prescribed by the Secretary of the Treasury under section 415(d) of
the Code for years beginning after December 31, 1987, as applied to
such items and in such manner as the Secretary may provide.
2.18 Credited Service shall mean the number of years of service as an
Employee of Employer (with proportionate allowance for fractional
years) both before and after the Effective Date which shall be
measured in accordance with the following rules:
(a) Except as provided below, an Employee shall receive
Credited Service for the elapsed time of his Employment
from the date on which the Employee first performs an Hour
of Service for the Employer to his Termination Date. If an
Employee has a Termination Date and is subsequently
rehired, such Employee shall again receive Credited Service
(subject to the Break in Service rules set forth below)
beginning on the date of the Employee's first Hour of
Service on or after his reemployment and ending on his
subsequent Termination Date.
(b) Credited Service shall not include any period of Employment
which precedes a Break in Service if as of the first day of
the Break in Service,
- 8 -
<PAGE> 14
the Employee is not entitled to a nonforfeitable Retirement
Income under Section 4.05.
(c) Credited Service shall not include any period of service as
an Employee of Employer during which an Employee is a
member of a collective bargaining unit whose Employees are
covered by a retirement or pension plan to which Employer
contributes (other than this Plan) except to the extent
provided in 4.07.
(d) Credited Service shall not include any period of Employment
with a Participating Employer prior to its designation as a
Participating Employer or any period of employment with a
predecessor business prior to its acquisition by Employer
except to the extent provided in Schedules A and B.
(e) An Employee's service with an Affiliate shall be considered
Employment with the Employer; provided, however, that any
benefit payable under this Plan shall be reduced on an
Actuarial Equivalent basis by 100% of the value of any
benefits received or payable from any qualified employee
benefit plan maintained by such Affiliate.
(f) Credited Service shall not include any period of service in
the military; except to the extent such service is required
to be credited under applicable federal law.
(g) Credited Service shall not be reduced or discontinued
merely because the Participant attains his Normal
Retirement Age. This provision is effective January 1,
1988 for each Employee who earns an Hour of Service on or
after that date.
(h) Prior to January 1, 1988, Employees who were hired on or
after their 60th birthday were not eligible to participate
in the Plan. Any such Employee who accrues an Hour of
Service on or after January 1, 1988 shall, subject to the
rules set forth in this Section 2.18, receive Credited
Service for their entire period of Employment.
2.19 Delayed Retirement Date shall mean for a Participant who continues
his Employment beyond his Normal Retirement Date, the first day of
the month coincident with or immediately following such
Participant's termination of Employment.
2.20 Disability Retirement Date. See Schedule D.
- 9 -
<PAGE> 15
2.21 Earnings shall be determined in accordance with the following
rules:
(a) Except as provided below, Earnings means the Participant's
total compensation including wages, salaries, and other
amounts received for personal services actually rendered in
the course of Employment (including commissions, overtime
and bonuses). However, Earnings shall NOT include
reimbursements or other expense allowances, fringe benefits
(cash and non cash), moving expenses, deferred compensation
and welfare benefits. Earnings SHALL include any
compensation which is not includible in the Participant's
gross income by reason of Code Section 402(a)(8) (Employee
pre-tax contributions to the Genuine Partnership Plan),
Code Section 125 (Employee salary deferrals under the
Genuine Parts Company Section 125 Plan), and Code Sections
402(h), 457(b) and 414(h)(2) (none of which currently apply
to the Company).
(b) Effective for January 1, 1989, the Plan shall not take into
account more than $200,000 in Earnings for any Plan Year
(including Plan Years prior to January 1, 1989). The
$200,000 limit will be adjusted annually by the Cost of
Living Factor. However, any increase in the $200,000 limit
shall apply only to Earnings taken into account for the
Plan Year in which the increase is effective and shall not
apply retroactively. In no event will the $200,000 limit
described above reduce a Participant's Accrued Benefit as
of December 31, 1988.
(c) Effective for January 1, 1994, the Plan shall not take into
account more than $150,000 in Earnings for any Plan Year
(including Plan Years prior to January 1, 1994). The
$150,000 limit will be adjusted annually by the Cost of
Living Factor. However, any increase in the $150,000 limit
shall apply only to Earnings taken into account for the
Plan Year in which the increase is effective and shall not
apply retroactively. In no event will the $150,000 limit
described above reduce a Participant's Accrued Benefit as
of December 31, 1993.
2.22 Earliest Retirement Age shall mean the Participant's Normal
Retirement Date. However, if the Participant has 15 or more years
of Credited Service, the Participant's Earliest Retirement Age
shall be the first day of the month coincident with or immediately
following the date the Participant attains (or would have attained)
his Early Retirement Date.
2.23 Early Retirement Date shall mean the first day of the month
coincident with or immediately following the day on which the
Participant (i) completes fifteen (15)
- 10 -
<PAGE> 16
years of Credited Service and has attained age fifty-five (55) and
(ii) actually terminates his Employment.
2.24 Effective Date shall mean January 1, 1989.
2.25 (a) Eligible Employee shall mean, except for those Employees
identified in the following sentence, all Employees employed by the
Employer. The following Employees shall not be considered Eligible
Employees: (i) any employee included in a collective bargaining unit
for which a labor organization is recognized as collective bargaining
agent unless such employee has been designated by the Committee as an
"Eligible Employee" for the purposes of this Plan, (ii) any Employee
who is a nonresident alien and who does not receive earned income from
the Employer which constitutes income from sources within the United
States, or (iii) any "leased employee," within the meaning of Code
Section 414(n)(2), with respect to the Employer.
(b) Employee shall mean any person employed by or on Authorized
Absence from the Employer, and any person who is a "leased employee"
within the meaning of Code Section 414(n)(2) with respect to the
Employer. However, if such "leased employees" constitute less than 20
percent of the Employer's combined non-highly compensated work force,
within the meaning of Code Section 414(n)(1)(C)(ii), the term
"Employee" shall not include "leased employees" covered by a plan
described in Code Section 414(n)(5).
2.26 Employer shall mean the Company and any Participating Employer.
All Participating Employers are listed on Schedule A.
2.27 Employment shall mean the active service of an Employee with the
Employer. Employment with a Participating Employer prior to its
designation as a Participating Employer and employment with a
predecessor business prior to its acquisition by Employer shall be
counted as employment with the Employer only to the extent provided
Schedules A or B.
2.28 Fiduciary shall mean a party named as a Fiduciary in Section 8.01.
Any party shall be considered a fiduciary of the Plan only to the
extent of the powers and duties specifically allocated to such
party under the Plan.
2.29 Fund shall mean the money and other properties held and
administered by the Trustee in accordance with the Plan and Trust
Agreement. It is expressly
- 11 -
<PAGE> 17
intended that multiple trust funds may be established under this
Plan, which together shall comprise the Fund hereunder. See
Section 2.51 and Schedule C.
2.30 Highly Compensated Employee. See Article XIV.
2.31 Hours of Service shall mean:
(a) Each hour for which an Employee is paid, or entitled to
payment, for performance of duties for an Employer or
Employers.
(b) Each hour for which an Employee is paid, or entitled to
payment, by an Employer or Employers, on account of a
period of time during which no duties are performed
(irrespective of whether the employment relationship is
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty,
or an Authorized Absence; provided that in no event, shall
an Employee receive credit for more than 501 Hours of
Service for any single continuous period of non-working
time. However, no Hours of Service shall be granted for
any direct or indirect payment or for any entitlement to
payment if (i) such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable worker's compensation laws, unemployment laws or
disability insurance laws or (ii) such payment is intended
to reimburse an employee for his or her medical or
medically related expenses.
(c) Each hour for which an Employee is on an Authorized Absence
by reason of: (i) the pregnancy of the Employee, (ii)
birth of a child of the Employee, (iii) placement of a
child with the Employee in connection with the adoption of
the child by the Employee, or (iv) caring for a child
referred to in paragraphs (i) through (iii) immediately
following birth or placement. Hours credited under this
paragraph shall be credited at the rate of 10 hours per
day, 45 hours per week but shall not, in the aggregate,
exceed the number of hours required to prevent the Employee
from incurring a Break in Service under Code Section
410(a)(5) (a maximum of 501 hours) during the first
computation period in which a Break in Service would
otherwise occur.
(d) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer or
Employers.
(e) In lieu of the foregoing, an Employee who is not
compensated on an hourly basis (such as salary, commission
or piecework Employees) shall be credited with 45 Hours of
Service for each week (or ten Hours of
- 12 -
<PAGE> 18
Service for each day) in which such Employee would be
credited with Hours of Service if hourly paid. However,
this method of computing Hours of Service may not be used
for any Employee whose Hours of Service is required to be
counted and recorded by any Federal Law, such as the Fair
Labor Standards Act. Any such method must yield an
equivalency of at least 1,000 hours per computation period.
The following rules shall apply in determination of whether an
Employee completes an "Hour of Service":
1. The same hours shall not be credited under
subparagraphs (a), (b) or (c) above, as the case
may be, and subparagraph (d) above; nor shall the
same hours credited under subparagraphs (a)
through (d) above be credited under subparagraph
(e) above;
2. The rules relating to determining Hours of Service
for reasons other than the performance of duties
and for crediting Hours of Service to particular
periods of employment shall be those rules stated
in Department of Labor Regulations Title 29,
Chapter XXV, Subchapter C, part 2530, Sections
200b2(b) and 200b2(c), respectively.
2.32 Insurer shall mean a legal reserve life insurance company which
issues a policy of life insurance or a group annuity contract under
the Plan.
2.33 Normal Retirement Age shall mean the Participant's 65th birthday
or, if later, the fifth anniversary of the date the Participant
commenced participation in the Plan.
2.34 Normal Retirement Date shall mean the first day of the month
coincident with or next following the Participant's Normal
Retirement Age.
2.35 Participant shall mean an Employee who becomes eligible to
participate in the Plan as provided in Article III.
2.36 Participating Employer shall mean any corporation and any other
entity that is designated by the Committee as a Participating
Employer under the Plan. See Section 9.04 for provisions relating
to a Participating Employer's adoption of this Plan. All
Participating Employers, groups of employees designated as
participating in the Plan by such Participating Employers (if not
all employees), and the effective date of each Company's
designation as a Participating Employer shall be specified in
Schedule A.
- 13 -
<PAGE> 19
2.37 Pension Committee or Committee shall mean the committee of persons
appointed by the Board to administer the Plan in accordance with
the terms of Article VIII.
2.38 Permanent Disability shall mean a physical or mental condition of a
Participant resulting from bodily injury, disease, or mental
disorder which (i) for a Participant who is not in active
Employment on or after January 1, 1993, entitles the Participant to
Social Security disability benefits or (ii) for a Participant who
is in active Employment on or after January 1, 1993, results in the
Participant receiving long term disability benefits under The
Genuine Parts Company Long Term Disability Plan. A Participant's
Permanent Disability will end on the date the Participant is no
longer receiving disability benefits (i) under Social Security for
a Participant who is not in active Employment on or after January
1, 1993, or (ii) under The Genuine Parts Company Long Term
Disability Plan for a Participant who is in active Employment on or
after January 1, 1993.
2.39 Plan shall mean the Genuine Parts Company Pension Plan as set forth
in this document together with any subsequent amendments hereto.
2.40 Plan Administrator or Administrator shall mean the committee of
persons appointed by the Board pursuant to Article VIII to
administer the Plan. The committee of such persons shall also be
known as the Pension Committee and all references in the Plan to
the Plan Administrator shall be deemed to apply to the Pension
Committee and vice versa. The committee of such persons is hereby
designated as the "Administrator" of the Plan within the meaning of
Section 3(16) of the Act and as the agent for the service of legal
process for the purposes of Section 102(b) of the Act.
2.41 Plan Year shall be the calendar year.
2.42 Predecessor Plans shall mean the following qualified defined
benefit plans established prior to January 1, 1984 for employees of
the Company:
<TABLE>
<CAPTION>
Name of Plan Effective Date
------------ --------------
<S> <C>
Genuine Parts Company Pension Plan 01/01/74
S. P. Richards Company Pension Plan 01/01/56
General Automotive Parts Pension Plan 01/01/64
(which does not include union
employees covered under the plan
of Union Automotive Association of
St. Louis, Inc. or any successor
thereto)
</TABLE>
- 14 -
<PAGE> 20
<TABLE>
<S> <C>
Pension Plan for the Employees of 01/01/65
Standard Unit Parts Corporation
(including Manco, Inc., an
associate employer)
Retirement Plan for Employees of 01/01/63
Balkamp, Inc. (which includes
NAPA Headquarters employees)
Restated NAPA Des Moines Warehouse 08/13/74
</TABLE>
2.43 Pre-Retirement Survivor Annuity shall have that meaning as defined
in Section 5.01.
2.44 Prior Plan shall mean the Genuine Parts Company Plan as in effect
on the day preceding the Effective Date.
2.45 Retirement shall mean the date the Participant actually ceases
Employment for Early Retirement, Normal Retirement, Delayed
Retirement or (prior to January 1, 1993) Disability Retirement,
whichever is applicable.
2.46 Retirement Income shall mean any amount payable to or on behalf of
a Participant, Beneficiary or Spouse in accordance with the
provisions of the Plan.
2.47 Safekeeping Trust shall have the meaning described in Section
11.01.
2.48 Spouse shall mean, as of any applicable date, a person who:
(a) was married to a Participant in a religious or civil
ceremony recognized under the laws of the state where the
marriage was contracted;
(b) was married to the Participant on the Participant's Annuity
Starting Date; and
(c) for purposes of Article V (Death Benefits) was married to
the Participant throughout the one-year period ending on
the Participant's death.
A Participant shall not be considered married to another person as
a result of any common law marriage whether or not such common law
marriage is recognized by applicable state law. The Participant's
Spouse as of the Participant's Annuity Starting Date shall continue
to be the Participant's Spouse for purposes of this Plan (unless
otherwise provided in a qualified domestic relations order)
notwithstanding the subsequent death or divorce of such Spouse and
the remarriage of the Participant.
- 15 -
<PAGE> 21
2.49 Termination Date shall mean the first to occur of the following
events:
(a) Voluntary resignation from service of the Employer; or
(b) Discharge from the service of the Employer by the Employer;
or
(c) Retirement; or
(d) Death; or
(e) Permanent Disability; or
(f) The first anniversary of the date the Employee ceases
Employment for any reason not described above (e.g.,
vacation, holiday, sickness, disability (but not disability
retirement described in Schedule D), leave of absence, or
layoff).
If, however, an Employee terminates his Employment on account of an
event described in paragraphs (a) - (c) above and the Employee
performs an Hour of Service within twelve months following such
termination of Employment (or such lesser period as provided in
Treasury Regulation Section 1.410(a)-7(d)(iii)(B)), the Employee
shall be considered as having been in active Employment during such
period of absence. An Employee on Authorized Absence will not have
a Termination Date earlier than the end of such Authorized Absence.
2.50 Treasury Regulations shall mean regulations pertaining to certain
Sections of the Code as issued by the Secretary of the Treasury.
2.51 Trust or Trust Agreement or Trust Fund or Fund shall refer to the
Fund established pursuant to one or more agreements of trust
entered into between the Employer and one or more trustees
(sometimes referred to as sub-trusts), which governs the creation
and maintenance of the Fund, and all amendments thereto which may
hereafter be made. References to Trust and Trust Agreement shall
include the Safekeeping Trust described in Section 11.01. It is
expressly intended that multiple sub-trusts may be established
under this Plan, which together shall comprise the Trust Fund
hereunder and that all of the sub-trusts shall be considered to be
a single trust fund for purposes of Section 1.414(1)-1(b)(1) of
the Treasury Regulations. The term Trust Fund shall also be deemed
to include any fund existing pursuant to any deposit administration
or group annuity contract between the Company and/or the Trustee
and an Insurer. Each trust agreement or contract with an Insurer
established pursuant to this Plan shall be listed on Schedule C.
- 16 -
<PAGE> 22
2.52 Trustee shall mean any institution or individual(s) who shall
accept the appointment of the Committee to serve as Trustee
pursuant to the Plan.
2.53 Defined Terms. A defined term, such as "Retirement," will normally
govern the definitions of derivatives therefrom, such as "Retire,"
even though such derivatives are not specifically defined and even
if they are or are not initially capitalized. The masculine
gender, where appearing in the Plan, shall be deemed to include the
feminine gender, unless the context clearly indicates to the
contrary. Singular and plural nouns and pronouns shall be
interchangeable as the factual context may allow or require. The
words "hereof," "herein," "hereunder" and other similar compounds
of the word "here" shall mean and refer to the entire Plan and not
to any particular provision or Section.
- 17 -
<PAGE> 23
ARTICLE III
PARTICIPATION
3.01 Each Employee who was a Participant under the Prior Plan on the day
prior to the Effective Date and who is employed by an Employer on
the Effective Date shall participate in this Plan on the Effective
Date.
3.02 After the Effective Date each Employee shall participate in the
Plan on the first day (assuming the Participant is still an
Employee on such date) to occur after such Employee attains age 21
and completes an eligibility computation period in which such
Employee has 1,000 Hours of Service.
An Employee's first eligibility computation period shall be the 12
consecutive months following the commencement of his Employment.
If the Employee fails to complete 1,000 Hours of Service during his
first eligibility computation period, then his second eligibility
computation period shall be the Plan Year which commences on the
January 1 following his initial date of hire. If an Employee shall
fail to complete 1,000 Hours of Service during his second
eligibility computation period, then each successive Plan Year
shall be the eligibility computation period.
3.03 A Participant shall participate in the Plan for so long as the
Participant remains an Employee. If a Participant ceases to be an
Employee and is later rehired, he shall resume participation in the
Plan as of the date of rehire.
3.04 Notwithstanding any other provision of the Plan, no Employee shall
participate in the Plan during any period in which such Employee is
a member of a collective bargaining unit whose Employees are
covered by a retirement or pension plan to which Employer
contributes (other than this Plan). If any Employee shall cease to
be a member of such a collective bargaining unit and shall remain
in the employ of Employer, then such Employee shall become a
Participant in this Plan as of the first day of the month
coinciding with or next following the earliest date on which such
Employee has attained the age of 21 and completed a twelve month
period of Employment during which such Employee has not less than
1,000 Hours of Service, and for such purpose all actual Employment
of Employee shall be counted including employment during the period
in which such Employee was a member of such bargaining unit. See
Section 4.07 concerning reduction in benefits in certain cases in
which Employment is counted as provided in the preceding sentence.
3.05 Participation in the Plan shall not give any Employee the right to
be retained in the Employer's employ, nor shall any Employee, upon
dismissal from or voluntary termination of his Employment, have any
right or interest in the Fund, except as herein provided.
- 18 -
<PAGE> 24
ARTICLE IV
RETIREMENT DATES AND BENEFITS
4.01 Normal Retirement.
(a) A Participant who retires on his Normal Retirement Date is
entitled to receive an annual Retirement Income beginning
on his Normal Retirement Date payable in monthly
installments in the form described in Article VI. A
Participant who has attained Normal Retirement Age shall
become 100% vested in his Accrued Benefit.
(b) The monthly Retirement Income payable to a Participant who
retires on his Normal Retirement Date with 15 or more years
of Credited Service and who elects to receive his benefit
in the form of a Life Annuity Option shall be the greater
of (A) and (B) where:
(A) is 30% of the Participant's Average Earnings; and
(B) is the applicable percentage of the Participant's
Average Earnings on his Normal Retirement Date
less 50% of the Participant's monthly Anticipated
Social Security Benefit. The applicable
percentage of the Participant's Average Earnings
shall be determined by the following table:
- 19 -
<PAGE> 25
<TABLE>
<CAPTION>
Participant's Years Participant's Years
of Credited Service of Credited Service
as of Normal Percentage of as of Normal Percentage of
Retirement Date Average Earnings Retirement Date Average Earnings
------------------- ---------------- ------------------- ----------------
<S> <C> <C> <C>
15....................40.0% 31.....................48.0%
16....................40.5% 32.....................48.5%
17....................41.0% 33.....................49.0%
18....................41.5% 34.....................49.5%
19....................42.0% 35.....................50.0%
20....................42.5% 36.....................50.5%
21....................43.0% 37.....................51.0%
22....................43.5% 38.....................51.5%
23....................44.0% 39.....................52.0%
24....................44.5% 40.....................52.5%
25....................45.0% 41.....................53.0%
26....................45.5% 42.....................53.5%
27....................46.0% 43.....................54.0%
28....................46.5% 44.....................54.5%
29....................47.0% 45 or more.............55.0%
30....................47.5%
</TABLE>
(c) Any Participant who retires on his Normal Retirement Date
with less than 15 years of Credited Service and who elects
the Life Annuity Option shall be entitled to a monthly
Retirement Income equal to 30% of the Participant's Average
Earnings multiplied by a fraction. The numerator of the
fraction is the Participant's months of Credited Service as
of his Normal Retirement Date, but not in excess of 180.
The denominator of the fraction is 180.
4.02 Early Retirement.
(a) Each Participant who has attained age 55 and who has
completed at least 15 years of Credited Service may elect
early retirement. A Participant who takes early retirement
shall receive a monthly Retirement Income in the form
described in Article VI beginning on his Early Retirement
Date.
(b) The monthly Retirement Income payable to a Participant who
elects to begin receiving his Retirement Income prior to
his Normal Retirement Date shall be determined in the same
manner as his monthly Retirement Income would be determined
under Section 4.01, except that his Average Earnings and
Credited Service shall be calculated as of his Early
Retirement Date. Furthermore the Retirement Income
computed above shall be reduced by one-half of one percent
(.005) for each complete
- 20 -
<PAGE> 26
month that the Participant's Early Retirement Date precedes
his Normal Retirement Date.
(c) The Committee may from time to time provide in its sole
discretion that Participants who meet specified age and
service requirements (or other applicable requirements
established by the Committee) will be permitted to retire
during specified periods and will receive a retirement
benefit based on additional years of Credited Service,
without the reduction described in paragraph (b) above or
based on other factors and adjustments as determined by the
Committee. The Committee's decision will be described in
Schedule E to this Plan. All such special retirements will
be communicated to the affected Participants but shall have
no effect to the extent such adjustments or other factors
result in a retirement benefit that adversely affects the
qualified status of the Plan under Code Section 401(a)(4).
4.03 Permanent Disability.
(a) This Section 4.03 shall apply to any Participant who is in
active Employment on or after January 1, 1993. Any
Participant who is not in active Employment with an Employer
on or after January 1, 1993, (including any Participant who is
not in active Employment on such date but who has a
Termination Date before, on, or after January 1, 1993) and who
becomes Permanently Disabled is governed by Schedule D and not
this Section 4.03.
(b) A Participant who prior to his cessation of active Employment:
(i) completes one year of Credited Service and (ii) becomes
Permanently Disabled shall be entitled to the provisions of
this Section 4.03. If a Participant has not completed one
year of Credited Service prior to his cessation of active
Employment, the Participant shall not be entitled to a
Retirement Income under this Plan. If the Participant becomes
Permanently Disabled after his cessation of active Employment,
the Participant's Retirement Income, if any, shall be
determined in accordance with Sections 4.01, 4.02 or 4.05.
(c) The monthly Retirement Income payable to a Participant who is
Permanently Disabled shall be determined in the same manner as
his monthly Retirement Income would be determined under
Section 4.01 assuming the Participant continued to earn
Credited Service during his Period of Disability and assuming
the Participant's Average Earnings as of the date of his
Permanent Disability remained unchanged. A Participant's
"Period of Disability" shall commence on the date he became
Permanently Disabled and shall end on his Normal Retirement
Date or, if earlier, the date benefits commence under Section
4.02.
- 21 -
<PAGE> 27
(d) If a Participant has earned at least 15 years of Credited
Service (including the Participant's years of Credited Service
earned during his Period of Disability) and the Participant
has attained age 55, the Participant may elect to receive
Disability Retirement benefits prior to his Normal Retirement
Date. If the Participant receives benefits prior to his
Normal Retirement Date, his Retirement Income shall be
computed as provided in Section 4.02 including a reduction of
the Participant's Retirement Income for each complete month
that the Participant's Early Retirement Date precedes his
Normal Retirement Date.
(e) If the Participant ceases to be Permanently Disabled prior to
the commencement of benefits under this Plan, the Participant
shall nevertheless receive Credited Service for his Period of
Disability (which ends on the date the Participant's Permanent
Disability ceases).
(f) If a Participant described in paragraph (b) dies prior to the
commencement of benefits under this Plan and while he is
Permanently Disabled, the Participant's Spouse shall be
entitled to a Spouse's Benefit pursuant to Article V based
upon the Participant's Credited Service that the Participant
would have had if the Participant had remained in active
Employment until his death and based on the Participant's
Average Earnings in effect prior to his Permanently
Disability.
4.04 Delayed Retirement.
(a) After the Effective Date, any Participant who attains his
Normal Retirement Age may remain in the active employ of the
Employer beyond his Normal Retirement Age, provided,
however, that an Employee may not remain in the active
employ of the Employer if the Employer can, under the terms
of the Age Discrimination in Employment Act, require the
Employee to retire at his Normal Retirement Age and the
Employer wishes the Employee to do so.
(b) A Participant who retires on his Delayed Retirement Date is
entitled to receive a Retirement Income beginning on his
Delayed Retirement Date payable in monthly installments.
(c) The monthly Retirement Income payable at a Participant's
Delayed Retirement Date will be paid in the form described
in Article VI. Such Retirement Income shall be the greater
of the following amounts:
(i) The Retirement Income payable to the Participant
determined in the same manner as his Normal Retirement
Income would be determined
- 22 -
<PAGE> 28
under Section 4.01, but using the Participant's Average
Earnings and Credited Service as of his Delayed
Retirement Date, or
(ii) The Retirement Income the Participant would have
received assuming the Participant had retired on his
Normal Retirement Date actuarially increased from the
Participant's Normal Retirement Date to the
Participant's Delayed Retirement Date. For this
purpose, the Participant's Delayed Retirement Date
shall be deemed to be such Participant's birthday which
is coincident with or immediately preceding the
Participant's actual Delayed Retirement Date.
(d) The Retirement Income computed under Section 4.04(c) shall
be reduced by the Actuarial Equivalent of any Retirement
Income previously paid to the Participant under Section 6.03
(mandatory distributions after age 70-1/2) to the extent
permitted by Code Section 411(b)(1)(H)(iii).
(e) This Section 4.04, which permits the accrual of Credited
Service for employment after Normal Retirement Age shall be
effective as of January 1, 1988 for any Employee who accrues
one or more Hours of Service on or after January 1, 1988.
4.05 Termination of Employment.
(a) A Participant who terminates Employment with the Employer
prior to his Retirement and prior to the completion of three
years of Credited Service shall not be entitled to receive
any Retirement Income under the Plan.
(b) A Participant with at least three years of Credited Service
who terminates his Employment for any reason other than his
Retirement or death shall be entitled to the monthly
Retirement Income described below payable in accordance with
Article VI commencing on his Normal Retirement Date
(provided he is then alive).
(c) The monthly Retirement Income payable to a Participant
described in Section 4.05(b) or to any Participant who makes
the election described in Section 4.02(c) shall equal the
product of (1) and (2), where:
(1) is such Participant's Accrued Benefit as of his
Termination Date; and
(2) is the applicable percentage based on completed years
of Credited Service in accordance with the following
table:
- 23 -
<PAGE> 29
<TABLE>
<CAPTION>
Complete Years
of Credited Service Percent of Monthly
at Termination Date Benefit Payable
------------------- ------------------
<S> <C>
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
</TABLE>
(d) Upon attaining age 55, a Participant who has completed at
least 15 years of Credited Service as of his Termination
Date may elect to receive a monthly Retirement Income
commencing on his Early Retirement Date or on the first day
of any month after his Early Retirement Date but in no
event later than his Normal Retirement Date, whichever the
Participant elects. Such Retirement Income shall be
computed in the same manner his Retirement Income would be
determined under Section 4.02 (including the reduction for
each complete month that the commencement of such benefits
precedes the Participant's Normal Retirement Date). An
election to receive benefits under this paragraph shall be
in writing on such form as the Committee may prescribe and
shall be delivered to the Committee not later than 60 days
prior to the date such Participant desires payments to
commence in accordance with this paragraph.
(e) If a Participant terminates his Employment on account of
death, any benefit payable to the Participant's Beneficiary
shall be determined in accordance with Article V.
4.06 Suspension of Benefits.
(a) This Section 4.06 shall apply to any Participant who has a
Termination Date under the provisions of this Plan, (ii)
was receiving or was entitled to receive Retirement Income
hereunder and returns to Employment with Employer, and
(iii) is anticipated to receive Credited Service hereunder
after his reemployment. Such Participant shall be subject
to the following provisions:
(1) The Participant shall not be entitled to receive
(if payments were being made) during such period
of reemployment any Retirement Income to which the
Participant might otherwise be entitled to receive
under this Plan; provided, however, that
Retirement Income will not be suspended if it is
anticipated that the
- 24 -
<PAGE> 30
Participant will not normally accrue 1000 Hours of
Service during a Plan Year after reemployment;
(2) The Participant shall be treated like any other
Participant who terminated Employment and was
rehired (ignoring the fact that he may have
retired and was receiving Retirement Income) and
for all purposes under the Plan shall be given
credit for Credited Service earned after
reemployment and prior to his subsequent
Termination Date. The period during which he was
retired or was not employed by the Employer shall
not be included as Credited Service.
(3) If the Participant dies during the time of his
reemployment and such Employee had previously
received Retirement Income, then any death benefit
payable to the Participant's Beneficiary shall be
determined under the form of payment previously
elected by the Participant pursuant to Article VI,
after recomputing the Participant's Retirement
Income as described in subparagraph (4) below. If
the Participant had not previously received
Retirement Income, then any death benefit shall be
determined under Article V of the Plan (after
recomputing the Participant's Credited Service and
Earnings before and after his reemployment). The
death benefits so determined shall be reduced by
the Actuarial Equivalent value of any Retirement
Income previously received by the Participant.
(4) The Retirement Income payable on the Participant's
subsequent termination of Employment shall be made
under the form of payment in effect (if any) prior
to his reemployment and shall equal the greater of
(i) or (ii) below. However, a Participant's
Accrued Benefit earned after his Normal Retirement
Age shall not be offset by more than the amounts
permissible under Proposed Treasury Regulation
Section 1.411(b)-2(b)(4) or any successor
regulation thereto.
(i) The Retirement Income payable to the
Participant determined in accordance with
Article IV based upon his Average Earnings
before his prior termination of Employment
and after his rehire (to the extent
permitted under the definition of Average
Earnings) and by aggregating his Credited
Service before his prior termination of
Employment with his Credited Service after
his rehire. The Retirement Income so
determined shall be reduced by the
Actuarial Equivalent of any Retirement
Income previously paid to the Participant.
- 25 -
<PAGE> 31
(ii) The monthly Retirement Income the
Participant was receiving or was entitled
to receive prior to his termination of
Employment. However, if the Participant's
Retirement Income was suspended during his
period of reemployment and such
reemployment included Hours of Service
after the Participant's Normal Retirement
Date, the Participant's Retirement Income
shall be actuarially increased for the
period of time beginning on the later of
the Participant's Normal Retirement Date
or the date the Participant's Retirement
Income was suspended and ending on the
date his Retirement Income resumes.
(b) Conflict with Suspension of Benefit Regulations. In no
event shall the determination under this Section 4.06 as to
when a reemployed Participant's Retirement Income may be
suspended be less favorable to the Participant than the
rules set forth in Department of Labor Regulation Section
2530.203-3. In the event of any conflict between the
provisions of this Section 4.06 and said Regulation, the
provisions of said Regulation shall prevail.
4.07 Reduction of Benefit in Certain Cases.
(a) Notwithstanding any other provision of the Plan, any
Participant who reaches his Termination Date and who was
during any period of his Employment a member of a
collective bargaining unit whose employees were, during
such period, covered by a retirement, pension plan or group
contract to which Employer contributed or is responsible
(other than this Plan) which is qualified or intended to
qualify under Section 401(a) of the Code shall be entitled
to a Retirement Income computed in accordance with the
following rules:
(1) Such Participant shall receive Credited Service
for all actual service in the employ of the
Employer in accordance with the rules of paragraph
2.18 and for purposes of 2.18(c) there shall be
included as Credited Service any service during
any period in which such Participant was a member
of a collective bargaining unit whose employees
were, during such period, covered by a retirement
or pension plan to which Employer contributed
(other than this Plan).
(2) The amount of the benefit to which such
Participant is entitled shall be computed in
accordance with 4.01, 4.02, 4.03 (or Schedule D as
applicable), 4.04, 4.05 or Article V (whichever is
applicable), but shall be reduced on an Actuarial
Equivalent basis
- 26 -
<PAGE> 32
by 100% of the value of any retirement,
termination, disability, or death benefits payable
to such Participant from such other retirement or
pension plan which are attributable to the
contributions of Employer. The Pension Committee
shall be empowered to adopt rules which shall be
applied on a uniform basis to all Employees
similarly situated for the determination of
benefits under this Section 4.07.
(b) Any Participant who is granted Credited Service for benefit
accrual purposes for any period of employment with any
predecessor business prior to its acquisition by Employer
or during any period of employment with a Participating
Employer prior to its designation as a Participating
Employer shall be entitled to a benefit the amount of which
shall be computed in accordance with 4.0l, 4.02, 4.03 (or
Schedule D), 4.04, 4,05 or Article V (whichever is
applicable) but shall be reduced on an Actuarial Equivalent
basis by l00% of the value of any retirement, termination,
disability, or death benefits received or payable from the
pension or retirement plan of such predecessor business or
of such Participating Employer.
(c) Notwithstanding anything in this Plan to the contrary, any
monthly Retirement Income payable under this Plan to the
Participant or his Beneficiary shall be reduced by the
amount of any benefits received by a Participant under the
Workers' Compensation laws of any State to the extent such
benefits are attributable to Employment with the Employer.
No offset, however, shall be made for the following:
(i) Worker's Compensation payments specifically
allocated for hospitalization or medical expenses
(i.e., if not specifically allocated, the payment
will be treated as not attributable to
hospitalization or medical expense); or
(ii) Worker's Compensation payments applicable to
periods prior to the date the Participant ceased
active employment with the Employer.
For the purpose of this Section 4.07, Worker's Compensation
benefits include periodic payments, lump sum payments and
payments made in settlement of actual or disputed Worker's
Compensation claims. Where an amount is paid to a
Participant in a single sum, no further payments shall be
paid hereunder until the total amount of the monthly
payments otherwise payable hereunder equals the amount of
such single sum payment. Thereafter, payments hereunder
shall resume.
- 27 -
<PAGE> 33
4.08 Increase in Benefits for Retired Participants. The Committee may
from time to time declare an increase in the monthly Retirement
Income payable to retired Participants, Spouses, or Beneficiaries
by reason of a former Participant's taking Early, Normal, Delayed,
or (prior to January 1, 1993) Disability Retirement during any
given calendar year designated by the Company. The class of former
Participants to whom such increase applies; the amount of such
increase; the time when such increase becomes effective; and any
other relevant information shall from time to time be set forth on
the records of the Committee.
4.09 Minimum Benefit of Prior Plans. Notwithstanding any contrary
provision of this Plan, in no event shall any Participant's
Retirement Income Under this Plan be less than the Participant's
benefit that he had accrued under the terms of any Predecessor
Plan, or under the terms of the Prior Plan.
4.10 Grandfathered Retirement Benefits. Any Participant who (a) was a
Participant in any of the Predecessor Plans on December 31, 1983,
(b) attained the age of 55 on or prior to January 1, 1984, and (c)
retires on or after January 1, 1984 under Section 4.01, 4.02 or
4.04 shall automatically receive a Retirement Income hereunder
which is the greater of (i) and (ii) where:
(i) is the Retirement Income otherwise provided under
Section 4.01, 4.02 or 4.04, whichever is
applicable, and
(ii) is the benefit such Participant would have
received under his respective Predecessor Plan
assuming that the benefit formula in such
Predecessor Plan as in effect on December 31, 1983
had remained in effect until such Participant's
Retirement. For this purpose, the benefit formula
of the Predecessor Plan shall reflect current
requirements of law and limitations of law (e.g.,
current covered compensation tables, limitations
of Code Section 401(a)(4), Code Section 415, Code
Section 401(a)(17), etc.).
For purposes of determining whether any such Participant may retire
under Section 4.02 and this Section 4.10, any such Participant who
does not meet the age or service condition to elect Early
Retirement may nonetheless retire under Section 4.02 and this
Section 4.10 if he would have met the age and service early
retirement conditions of his respective Predecessor Plan assuming
such Predecessor Plan as in effect on December 31, 1983 had
remained in effect until such Participant's Retirement. For
purposes of determining such grandfathered retirement benefits, the
Predecessor Plans as in effect on December 31, 1983, are attached
hereto as Schedule F:
S.P. Richards Company Pension Plan
- 28 -
<PAGE> 34
General Automotive Parts Pension Plan
Pension Plan for Employees of Standard
Unit Parts Corporation
Retirement Plan for Employees of
Balkamp, Inc.
Restated NAPA Des Moines Warehouse
Pension Plan.
The following modifications in the Plan shall apply to those
Participants who are eligible for grandfathered retirement benefits
under this Section 4.10:
(i) The Normal Retirement Age under the Plan for a
Participant eligible for grandfathered retirement
benefits under the General Automotive Parts
Pension Plan shall mean such Participant's 62nd
birthday.
(ii) Participants eligible for grandfathered retirement
benefits under the S.P. Richards Company Pension
Plan may elect to receive their Retirement Income
in the form of a five years certain and life
option in addition to the other optional forms
provided in Article VI. However, the election of
the five years and certain benefit option shall be
subject to the provisions of Section 6.02.
- 29 -
<PAGE> 35
ARTICLE V
DEATH BENEFITS
5.01 Pre-Retirement Survivor Annuity.
(a) Except as provided in Section 5.02, if a married
Participant with three (3) or more years of Credited
Service dies prior to his Annuity Starting Date, the
Participant's Spouse shall be entitled to a monthly
Retirement Income known as a "Pre-Retirement Survivor
Annuity." The amount of the Pre-Retirement Survivor
Annuity shall be determined under Section 5.01(b) or (c),
whichever is applicable. The Pre-Retirement Survivor
Annuity shall commence as of the date determined under
Section 5.01(e).
(b) If the Participant dies after his Earliest Retirement Age,
the Spouse's Pre-Retirement Survivor Annuity shall equal
50% of the monthly Retirement Income that the Participant
would have received assuming the Participant had retired on
the day before his death and elected to receive his
Retirement Income under the Joint and 50% Survivor Annuity.
(c) If the Participant dies on or before his Earliest
Retirement Age, the Spouse's Pre-Retirement Survivor
Annuity shall equal 50% of the monthly Retirement Income
that the Participant would have received assuming the
Participant (i) had separated from service on his
Termination Date; (ii) had survived until his Earliest
Retirement Age; (iii) had retired on his Earliest
Retirement Age and elected to receive his Retirement Income
under the Joint and 50% Survivor Annuity; and (iv) had died
on the next day.
(d) Notwithstanding (b) and (c) above, if during the 90 day
period preceding the Participant's Annuity Starting Date
the Participant had elected (with spousal consent) to
receive a Joint and Last Survivor Option (as described in
Section 6.02) with his Spouse as his Beneficiary, the
Spouse's Pre-Retirement Survivor Annuity shall be
determined assuming the Participant had retired under the
Joint and Last Survivor Option instead of the Joint and 50%
Survivor Annuity.
(e) The Spouse may elect to receive the Pre-Retirement Survivor
Annuity commencing as of the date of the Participant's
deemed Retirement or as of the first day of any succeeding
month. In no event will the Pre-Retirement Survivor
Annuity commence later than the date the Participant would
have attained his Normal Retirement Date or the first day
of the month following the Participant's death, if later.
The monthly Retirement Income of a delayed Pre-Retirement
Survivor Annuity shall equal the Actuarial Equivalent of a
Pre-Retirement Survivor Annuity
- 30 -
<PAGE> 36
commencing as of the date of the Participant's deemed
Retirement. If the Spouse dies prior to the commencement
of the Pre-Retirement Survivor Annuity, no monthly
Retirement Income payments shall be made under this Section
5.01.
(f) If the Participant dies prior to terminating employment and
the Participant's Spouse is entitled to a Pre-Retirement
Survivor Annuity, such Spouse, after the Participant's
death, may elect to receive the Alternate Death Benefit
described in Section 5.02 in lieu of the Pre-Retirement
Survivor Annuity, provided the Participant had completed
five or more years of Credit Service prior to his death.
(g) If the Participant does not have three years of Credited
Service at the time of his death, if the Participant dies
without a Spouse, or if the Participant dies after his
Annuity Starting Date, neither the Participant's Spouse nor
the Participant's Beneficiary shall be entitled to
Retirement Income under this Section 5.01.
5.02 Alternate Death Benefit.
(a) The Alternate Death Benefit shall be paid to a
Participant's Beneficiary if the following conditions are
satisfied:
(i) The Participant has earned 5 or more years
of Credited Service;
(ii) The Participant dies prior to terminating
his Employment and prior to his Annuity
Starting Date; and
(iii) In the case of a married Participant,
either (1) the Participant receives the
notice described in Section 5.02(c), the
Spouse consents to the Participant's
election of the Alternate Death Benefit,
and the Spouse agrees to waive the Pre-
Retirement Survivor Annuity of Section
5.01, or (2) following the Participant's
death, the Spouse elects the Alternate
Death Benefit in lieu of the
Pre-Retirement Survivor Annuity.
(b) The Alternate Death Benefit shall provide a monthly
Retirement Income payable to the Participant's Beneficiary
commencing on the first day of the month following the
Participant's death and continuing only for a specified
number of months as determined under the following table:
- 31 -
<PAGE> 37
<TABLE>
<CAPTION>
Complete Years of
Credited Service at Number of
Date of Death Months Payable
------------------- --------------
<S> <C>
5 but less than 10 12.5
10 but less than 15 25
15 or more 50
</TABLE>
The monthly Retirement Income payable under the Alternate
Death Benefit shall be determined as follows:
(i) If the Participant dies prior to his Normal
Retirement Date, the Beneficiary's Retirement
Income shall equal the greater of (A) 30% of the
Participant's current monthly Earnings or (B) 30%
of the Participant's Average Earnings.
(ii) If the Participant dies after his Normal
Retirement Date, the Beneficiary's Retirement
Income shall equal the Retirement Income the
Participant would have received if the Participant
had retired on the day before his death and
elected the Life Annuity Option. However, in such
case the maximum number of payments as determined
pursuant to the table above shall be reduced by
the number of months that have elapsed since the
Participant's Normal Retirement Date.
(c) Prior to electing the Alternate Death Benefit and prior to
designating a non-Spouse Beneficiary, a married Participant
must receive a written explanation of the Pre-Retirement
Survivor Annuity. Such explanation shall contain
comparable information as provided in the notice described
in Section 6.02(d). The notice must be provided to the
Participant during the "Applicable Period". The
"Applicable Period" shall mean whichever of the following
periods ends last:
(i) The period beginning with the first Plan Year in
which the Participant attains age 32 and ending
with the close of the Plan Year in which the
Participant attains age 34; or
(ii) A reasonable period of time ending after the
Employee becomes a Participant.
However, the Committee may provide such notice to the
Participant prior to the Applicable Period. If the
Participant receives the notice prior to the commencement
of the Applicable Period, a second notice must be given to
the Participant during the Applicable Period.
- 32 -
<PAGE> 38
(d) The Participant's Spouse must consent in writing on a form
provided by the Plan Administrator in the presence of a
Notary Public or Plan representative to the Participant's
election of the Alternate Death Benefit and designation of
a non-Spouse Beneficiary, if any. The Spouse's consent
must acknowledge the effect of such consent and must
specifically state the non-Spouse Beneficiary, if any,
selected by the Participant. However, if the Participant
establishes to the satisfaction of the Plan Administrator
that his Spouse's consent cannot be obtained because he has
no Spouse, because his Spouse cannot be located, or because
of other circumstances as determined by applicable Treasury
Regulations, the Committee may treat the Participant's
election as an election for which spousal consent was
obtained. A Spouse's consent, if given on or after the
Plan Year in which the Participant attains age 35, shall be
irrevocable. If, however, the Spouse's consent was given
prior to such Plan Year, the Spouse's consent shall be void
as of the first day of the Plan Year in which the
Participant attains age 35. In such case, the Participant
may again elect the Alternate Death Benefit and select a
non-Spouse Beneficiary, provided the Participant's Spouse
consents to such election in the manner provided in this
Section 5.02(d). The Spouse's consent shall then be
irrevocable. The Participant's election of the Alternate
Death Benefit and the Spouse's consent to such election
shall constitute a waiver of the Pre-Retirement Survivor
Annuity.
(e) A married Participant may revoke his designation of the
Alternate Death Benefit and his designation of a non-Spouse
Beneficiary at any time prior to his death. Furthermore,
the Participant's election shall cease to be valid upon the
remarriage of the Participant following the death or
divorce of the Spouse giving the consent to the non-Spouse
Beneficiary. If the Participant revokes his election of a
non-Spouse Beneficiary or of the Alternate Death Benefit or
if such election otherwise ceases to be valid, any death
benefit payable shall be determined pursuant to Section
5.01.
(f) A married Participant may elect the Alternate Death Benefit
in lieu of the Pre-Retirement Survivor Annuity at any time
before his Termination Date. However, if the Participant's
Beneficiary is not entitled to receive the Alternate Death
Benefit by virtue of the Participant's failure to complete
five years of Credited Service or the Participant's death
following his Termination Date, the Participant's
Beneficiary for purposes of Article V shall be his Spouse
and any death benefit available to such Spouse shall be
determined pursuant to Section 5.01.
(g) In the event of the death of a Beneficiary who survives the
Participant and who, at his or her death, is receiving the
Alternate Death Benefit, the
- 33 -
<PAGE> 39
remaining benefits, if any, shall be payable to a person
designated by the Participant to receive the remaining
benefits or, if no person was so designated, then to a
person designated by the Beneficiary of the deceased
Participant; provided, however, that if no person so
designated be living upon the occurrence of such
contingency, the remaining benefits, if any, shall be
payable to the Spouse of the deceased Participant, if
living; otherwise, to the descendants of the deceased
Beneficiary per stirpes; or if none, to the legal
representative of the estate of the deceased Beneficiary.
(h) The Beneficiary may, prior to the commencement of benefits
under this Section 5.02, request that the Alternate Death
Benefit be paid in the form of a lump sum. Such lump sum
payment shall be the Actuarial Equivalent of the
Beneficiary's Alternate Death Benefit. The Plan
Administrator shall direct the Trustee to distribute the
Alternate Death Benefit in the form selected by the
Beneficiary.
5.03 Death After Normal Retirement Date but Prior to Delayed Retirement
Date.
(a) Notwithstanding any other provision of the Plan to the
contrary, any Participant who remains in Employment after
his Normal Retirement Date shall be entitled to elect an
optional death benefit in lieu of the death benefits
provided under Sections 5.01 or 5.02. The Participant
shall elect such optional death benefit by selecting one of
the following options on a form provided by the Plan
Administrator for such purpose.
(i) A death benefit equal to the monthly amount that
would have been paid to the Participant's
Beneficiary assuming the Participant had retired
on the first day of the month preceding his death
and had elected to receive Retirement Income under
the Ten Years Certain and Life Option (See Section
6.02(a)(i)). Such death benefit shall be paid to
the Participant's Beneficiary for a period of ten
years commencing on the first day of the month
following the Participant's death.
(ii) A death benefit equal to the monthly amount that
would have been paid to the Participant's
Beneficiary assuming the Participant had retired
on the first day of the month preceding his death
and had elected to receive Retirement Income under
the Joint and Last Survivor Option (See Section
6.02(a)(ii)) with the Participant's Beneficiary
receiving 50%, 75%, or 100% (as designated by the
Participant) of the monthly Retirement Income
payable to the Participant during the
Participant's lifetime. Such death benefit will
be paid to the Participant's Beneficiary for the
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Beneficiary's lifetime beginning on the first day
of the month following the Participant's death.
(b) A married Participant's election of the optional death
benefit provided by this Section 5.03 shall be void unless
the Participant's Spouse (after receipt of the explanation
of the Pre-Retirement Survivor Annuity described in Section
5.02(c)) consents in writing on a form provided by the Plan
Administrator in the presence of a Notary Public or Plan
representative to the Participant's election of such
optional death benefit. The Spouse's consent must
acknowledge the effect of such consent and must
specifically state the non-Spouse beneficiary, if any,
selected by the Participant. However, if the Participant
establishes to the satisfaction of the Plan Administrator
that his Spouse's consent cannot be obtained because he has
no Spouse, because his Spouse cannot be located, or because
of other circumstances as determined by applicable Treasury
Regulations, the Committee may treat the Participant's
election as an election for which spousal consent was
obtained. A Spouse's consent pursuant to this paragraph
shall be irrevocable.
(c) A married Participant may revoke his election of the
optional death benefit provided by this Section 5.03 at any
time prior to his Delayed Retirement Date. Furthermore,
the Participant's election to receive such optional death
benefit shall cease to be valid upon the remarriage of the
Participant following the death or divorce of the Spouse
giving the consent to such optional death benefit. If the
Participant revokes his election or if such election
otherwise ceases to be valid, any death benefit payable to
the Participant's Spouse shall be determined pursuant to
Section 5.01 unless the married Participant, with his
Spouse's consent, elects the Alternate Death Benefit under
Section 5.02.
5.04 Death On or After the Annuity Starting Date.
Neither the Participant's Spouse nor the Participant's Beneficiary
shall be entitled to a Retirement Income under this Article V if
the Participant dies on or after his Annuity Starting Date.
Instead, any benefit payable to the Participant's Spouse or
Beneficiary will be determined pursuant to Article VI.
5.05 Purchase of Insurance Policies. The Committee may in its
discretion direct the Trustee to purchase life insurance policies
on the lives of Participants in amounts not exceeding the death
benefits herein provided. Any policy so purchased shall name the
Trustee as the beneficiary and owner thereof. The Committee shall
select the Insurer or Insurers providing any such policies,
establish the terms and conditions thereof, and the premiums
payable therefor. The Committee shall furnish the Trustee with
properly completed application forms for its signature. The
Committee shall instruct the Trustee in all matters pertaining to
any policy
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<PAGE> 41
issued hereunder, including inter alia, the application of any
dividends payable on any policy. If the Committee shall so direct,
the Trustee shall enter into agreements in such form as the
Committee shall direct with an Insurer whereby the Insurer retains
custody of any insurance policies issued hereunder.
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<PAGE> 42
ARTICLE VI
OPTIONAL FORMS OF RETIREMENT INCOME
6.01 Automatic Forms of Payment.
If a Participant does not have a Spouse on his Annuity Starting
Date, the Participant's Retirement Income shall be payable under
the Life Annuity Option described below unless the Participant
otherwise elects under Section 6.02. If a Participant has a Spouse
on his Annuity Starting Date, the Participant's Retirement Income
shall be payable under the Joint and 50% Survivor Annuity described
below unless the Participant (with spousal consent) otherwise
elects under Section 6.02.
(a) Life Annuity Option is a monthly Retirement Income payable
during the Participant's lifetime, with payments ceasing
upon the Participant's death.
(b) Joint and 50% Survivor Annuity is a monthly Retirement
Income equal to the reduced Actuarial Equivalent of the
Life Annuity Option. The Retirement Income shall be
payable to the Participant for his life, and upon the
Participant's death, 50% of such Retirement Income shall be
payable to the Participant's Spouse for the Spouse's life.
Such Retirement Income shall cease on the later of the
death of the Participant or the death of the Participant's
Spouse.
6.02 Optional Forms of Payment.
(a) Within 90 days prior to the Participant's Annuity Starting
Date, the Participant may elect to receive any of the
following optional forms of payment in lieu of the
automatic form of payment described in Section 6.01. In
addition, a married Participant may designate a non-Spouse
Beneficiary to receive the Retirement Income, if any, that
is payable upon such Participant's death.
(i) Ten Years Certain and Life Option is a
monthly Retirement Income equal to the
reduced Actuarial Equivalent of the Life
Annuity Option. The Retirement Income
shall be payable to the Participant during
his lifetime and, in the event of the
Participant's death within a period of ten
years after the commencement of benefits,
the same monthly amount shall be payable
to the Participant's Beneficiary for the
remainder of such ten-year period.
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<PAGE> 43
(ii) Joint and Last Survivor Option is a
monthly Retirement Income equal to the
reduced Actuarial Equivalent of the Life
Annuity Option. The Retirement Income
shall be payable to the Participant for
his life, and upon the Participant's
death, a designated percentage (100%, 75%,
or 50%) of the Participant's Retirement
Income shall be payable to the
Participant's Beneficiary for the
Beneficiary's life. Such Retirement
Income shall cease on the later of the
death of the Participant or the death of
the Participant's Beneficiary.
(b) A married Participant's election to receive an optional
form of payment or to designate a non-Spouse Beneficiary
shall be valid only if the Participant's Spouse (after
receipt of the written explanation described in Section
6.02(d)) consents in writing on a form provided by the
Committee in the presence of a Notary Public or Plan
representative to the Participant's election. The Spouse's
consent must acknowledge the effect of such consent and
must specifically state the non-Spouse beneficiary, if any,
selected by the Participant. However, if the Participant
establishes to the satisfaction of the Committee that his
Spouse's consent cannot be obtained because he has no
Spouse, because his Spouse cannot be located, or because of
other circumstances as determined by applicable Treasury
Regulations, the Committee may treat the Participant's
election as an election for which spousal consent was
obtained. A Spouse's consent pursuant to this paragraph
shall be irrevocable.
(c) A Participant may revoke his election of an optional form
of payment or make a new election (provided any required
spousal consent is obtained) at any time prior to his
Annuity Starting Date. Furthermore, the Participant's
election shall cease to be valid upon the marriage of the
Participant or upon the remarriage of the Participant
following the death or divorce of the Spouse giving the
consent to the Participant's election. If the Participant
revokes his election or if such election otherwise ceases
to be valid, the Participant's Retirement Income shall be
payable under the applicable automatic form of payment
described in Section 6.01.
(d) Prior to the Participant's Annuity Starting Date, the Plan
Administrator shall provide an election form on which the
Participant may elect an optional form of benefit. In
addition to the election form, the Plan Administrator shall
provide each Participant a written explanation of the
applicable automatic form of payment described in Section
6.01 and the optional forms of payment described in Section
6.02(a). Such explanation should describe the
circumstances under which Joint and 50% Survivor Annuity
will be provided, and an explanation of the
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<PAGE> 44
financial effect of electing not to have such form.
Furthermore, the written explanation shall provide a
general description of the eligibility conditions (if any)
and other material features of the optional forms of
payment including sufficient information regarding the
relative values of the optional forms of payment and the
automatic form of payment. If payment is scheduled to
commence prior to the Participant's Normal Retirement Date,
the written explanation must also inform the Participant of
his right to defer receipt of the distribution until his
Normal Retirement Date. If a Participant makes a request
for additional information that is received 90 days prior
to the Annuity Starting Date, such information must be
furnished within 30 days. The Participant will then be
entitled to a 90-day period in which to make or change an
election, even if such 90-day period extends beyond the
Participant's Annuity Starting Date and, in such case, the
Participant's first payment shall be made after such
election form has been received, on a retroactive basis, if
necessary.
(e) If the Participant elects the Joint and Last Survivor
Option and the Participant's Beneficiary dies prior to the
Participant's Annuity Starting Date, the Participant's
election shall be null and void and, unless the Participant
makes another election or selects another Beneficiary (with
spousal consent if required), the Participant's Retirement
Income shall be payable in accordance with the applicable
automatic form of payment described in Section 6.01.
(f) If the Participant elects the Ten Year Certain and Life
Option and the Participant's Beneficiary fails to survive
the Participant, the Beneficiary shall be the Participant's
Spouse, if living, otherwise to the Participant's
descendants who shall take per stirpes. If there are no
surviving descendants, the Beneficiary shall be the
Participant's estate.
6.03 Special Distribution Rules.
(a) In no event may the payment of Retirement Income commence
later than the 60th day after the latest of the close of
the Plan Year in which:
(i) the Participant attains age 65;
(ii) the fifth (5th) anniversary of the date the
Participant commenced participation in this Plan;
or
(iii) the Participant's termination of Employment.
Notwithstanding the foregoing, distribution to the
Participant shall commence not later than April 1 following
the calendar year in which the
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<PAGE> 45
Participant attains age 70-1/2 (the "required beginning
date"). However, if a Participant attained age 70-1/2
prior to January 1, 1988 and is not a 5% owner of an
Employer (as defined in Code Section 401(a)(9) and the
Treasury Regulations thereunder), such Participant's
Retirement Income shall commence no later than April 1
following the calendar year in which he terminates his
Employment.
(b) The entire interest of each Participant in this Plan will
be distributed, beginning not later than the required
beginning date described in paragraph (a) above, over the
life of such Participant or over the lives of such
Participant and his beneficiary (or over a period not
extending beyond the life expectancy of such Participant or
the life expectancy of such Participant and his
beneficiary).
(c) If distribution of a Participant's interest has begun in
accordance with paragraph (b) above, and if the Participant
dies before his entire interest has been distributed to
him, then the remaining portion of such interest will be
distributed at least as rapidly as under the method of
distribution being used under paragraph (b) as of the date
of the Participant's death.
(d) If a Participant dies before distribution of the
Participant's interest has begun in accordance with
paragraph (b) above, the entire interest of the Participant
must be distributed within five years after the death of
the Participant unless
(i) any portion of the Participant's interest is
payable to or for the benefit of his beneficiary;
(ii) such portion will be distributed over the life of
the beneficiary (or over a period not extending
beyond the life expectancy of the beneficiary);
and
(iii) such distributions begin not later than one year
after the date of the Participant's death or such
later date as may be prescribed in Treasury
regulations.
If the conditions stated in clauses (i), (ii) and (iii) are met,
then the portion referred to in clause (i) shall be treated as
distributed on the date on which distributions begin. If the
Beneficiary referred to in clause (i) above is the surviving spouse
of the Participant, then the date on which the distributions are
required to begin under clause (iii) above shall not be earlier
than the date on which the Participant would have attained age
70-1/2, and if the surviving spouse dies before distributions to
such spouse begin, this paragraph shall be applied as if the
surviving spouse were the Participant.
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<PAGE> 46
The Participant's Beneficiary may elect whether the Participant's
entire interest will be distributed within five years of the
Participant's death or pursuant to the provisions of paragraphs (i)
- (iii) above. Such election must be made within the time limits
described in Treasury Regulation Section 1.401(a)(9)-1, C-4. If
no election is made, the Plan Administrator shall distribute the
Participant's entire interest pursuant to the provisions of
paragraphs (i) - (iii) above.
6.04 Small Payments. Notwithstanding anything in this Plan to the
contrary, the Plan Administrator shall pay a Participant's,
Spouse's or Beneficiary's Retirement Income in a single lump sum
if, as of the payment date, the Actuarial Equivalent present value
of the Participants' vested Retirement Income is $3,500 or less and
monthly Retirement Income payments to the Participant have not
commenced. Notwithstanding anything to the contrary in this Plan,
the payment of any such lump sum shall act as a complete discharge
of the Plan's obligation to provide any benefit to the Participant,
his Spouse, or any Beneficiary of such Participant or Spouse. In
the event of the subsequent employment of a Participant who has
received a single sum cash payment pursuant to this paragraph, such
Participant shall continue to accrue a benefit under this Plan
based on service before and after his date of reemployment subject
to all the provisions of this Plan; provided, however, that any
Retirement Income subsequently payable to the Participant and his
Beneficiaries shall be reduced on an actuarial equivalent basis by
the value of the single sum payment received under this paragraph.
6.05 Application For Commencement of Benefits. A Participant must apply
to have Retirement Income commence. The application must be on the
form prescribed by the Committee, and must be filed with the
Committee not more than 90 days prior to the Participant's Annuity
Starting Date.
6.06 Miscellaneous. Notwithstanding any other provision of the Plan, if
the amount of any Retirement Income computed under the Plan is
other than an even dollar amount, then the amount of the Retirement
Income payable shall be increased to the next larger even dollar
amount.
6.07 Direct Rollover.
(a) This section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election
under this section, a Distributee may elect, at the time and
in the manner prescribed by the Committee, to have any portion
of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a
direct rollover.
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<PAGE> 47
(b) Definitions.
(i) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion
of the balance to the credit of the Distributee, except
that an Eligible Rollover Distribution does not include
(i) any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified
period of ten years or more; (ii) any distribution to
the extent such distribution is required under Section
401(a)(9) of the Code; and (iii) the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities.)
(ii) Eligible Retirement Plan. An Eligible Retirement Plan
is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that
accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
(iii) Distributee. A Distributee includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is an alternate
payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are Distributees
with regard to the interest of the spouse or former
spouse.
(iv) Direct Rollover. A Direct Rollover is a payment by the
Plan to the Eligible Retirement Plan specified by the
Distributee.
(c) If a distribution is one to which Sections 401(a)(11) and 417
of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(i) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least
30 days after receiving
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<PAGE> 48
the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular
distribution option), and
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
(d) Application to Plan. Life Annuity payments, Joint and 50%
Survivor Annuity payments, Ten Year Certain and Life Annuities
and Joint and Last Survivor Annuities are not Eligible
Rollovers and are not subject to the requirements of this
Section 6.07. However, lump sum payments of small benefits
and certain death benefits (if paid over a period of time less
than 10 years) are subject to this Section 6.07 and may be
directly rolled over to another Eligible Retirement Plan
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<PAGE> 49
ARTICLE VII
METHOD OF FINANCING
7.01 Establishment of Trust Fund. The Board shall designate a Trustee
or Trustee(s) to serve as herein provided and Trust Agreement(s)
shall be executed between the Employer and such Trustee(s). The
Trust Agreement(s), the terms of which are incorporated by
reference, shall govern the establishment of the Fund or Fund(s)
from which the benefits provided by the Plan shall be paid.
7.02 Employer Contributions. The Employer shall contribute to the Fund
from time to time such amounts as the Board shall determine, based
upon the recommendations of an Actuary, in order to fund the
benefits provided hereunder on an actuarially sound basis. All
Employer contributions when made to the Fund and all property and
funds of the Trust Fund, including income from investments and from
all other sources, shall be retained for the exclusive benefits of
Participants and Beneficiaries and shall be used to pay Retirement
Income provided hereunder or to pay expenses of administration of
the Plan and the Trust Fund provided, however, that the foregoing
shall not prevent the Trustee from entering into agreement with an
Insurer whereby the Insurer maintains custody of insurance policies
in accordance with 5.04.
Upon an Employer's request and to the extent permitted by the Code
and other applicable laws and regulations thereunder, a
contribution which was made by a mistake in fact, or conditioned
upon the initial qualification of the Plan under Code Section
401(a) or upon the deductibility of the contribution under Section
404 of the Code shall be returned to the Employer within one year
after the payment of the contribution, the denial of the Plan's
initial qualification, or the disallowance of the deduction (to the
extent disallowed) whichever is applicable. All contributions to
the Plan are expressly made upon the assumption such contributions
are fully deductible for federal income tax purposes.
7.03 Participant Contributions. No contributions shall be required of
or permitted by any Participant under this Plan.
7.04 Miscellaneous.
(a) Any actuarial gains arising from actuarial experience under
the Plan shall be used to reduce the Employer contributions
and will not be used to increase any benefits payable under
this Plan. No forfeiture arising from severance of
employment, death or for any other reason, shall be applied
to increase the benefits any Participant would otherwise
receive under the Plan at any time prior to the termination
of the Plan or the complete discontinuance of Employer
contributions hereunder, but all amounts so
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<PAGE> 50
forfeited shall be used as soon as possible to reduce the
Employer contributions under the Plan.
(b) No person shall have any interest in or right to the Fund
or any part thereof, except as expressly provided in the
Plan.
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<PAGE> 51
ARTICLE VIII
ADMINISTRATION OF THE PLAN
8.01 Named Fiduciaries.
(a) The following parties are named as Fiduciaries of the Plan
and shall have the authority to control and manage the
operation and administration of the Plan:
(1) The Board;
(2) The Trustee(s);
(3) The Safekeeping Trustees;
(4) The Pension Committee; and
(5) The Insurer.
(b) The Fiduciaries named above shall have only the powers and
duties hereinafter expressly enumerated and shall have no
other powers and duties under the Plan. In discharging
their powers and duties hereunder, the Fiduciaries shall
act in accordance with the Standard of Fiduciary Duty set
forth in 8.07.
8.02 Board of Directors.
(a) The Board shall have the following powers and duties with
respect to the Plan:
(1) to formulate and to implement a funding policy
designed to produce sufficient funds to discharge
when due all obligations of the Plan with respect
to the benefits provided hereunder;
(2) to cause the Employer to make contributions to the
Plan pursuant to the funding policy and based on
the recommendations of the Actuary in such amounts
as are necessary to fund the Plan on a basis
permitted under Section 302 of the Act;
(3) to appoint and remove the members of the Pension
Committee as provided herein; and
(4) to terminate the Plan in whole or in part pursuant
to the procedures provided hereunder.
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<PAGE> 52
(b) The Compensation and Stock Option Committee of the Board
shall have the power to amend any or all of the provisions
of the Plan. (However, see 8.06(c) for certain amendment
powers granted to the Committee).
(c) The Board shall have no other responsibilities with respect
to the Plan.
8.03 Trustee(s). The Trustee(s) shall exercise all of the powers and
duties assigned to the Trustee(s) as set forth in the Trust
Agreement(s). The Trustee(s) shall have no other responsibilities
with respect to the Plan. (See Section 2.52 and Schedule C.)
8.04 Safekeeping Trustees. The Safekeeping Trustees shall have the
powers and duties set forth in Section 11.01 and in the Safekeeping
Trust. The Safekeeping Trustees shall have no other
responsibilities with respect to the Plan.
8.05 Insurer. An Insurer which issues an insurance policy under 5.04
shall perform its obligations under any such policy in accordance
with the terms thereof. An Insurer which agrees to maintain
custody of such policies in accordance with 5.04 shall hold and
safeguard such policies subject to the provisions of the written
agreement with the Trustee. The Insurer shall have no other
responsibilities with respect to the Plan.
8.06 Pension Committee.
(a) The Committee shall consist of not less than three
individuals who shall be appointed by and serve at the
pleasure of the Board. Any Participant, officer, former
officer or director of any Employer shall be eligible to be
appointed a member of the Committee and all members shall
serve as such without compensation. Upon termination of
his employment with such Employer or upon termination of
his position as a director, if not a Participant or former
officer, he shall cease to be a member of the Committee.
The Board shall have the right to remove any member of the
Committee at any time. A member may resign at any time by
written notice to the Committee and the Board. If a
vacancy in the Committee should occur, a successor shall be
appointed by the Board. The Committee shall by written
notice keep the Trustee notified of current membership of
the Committee, its officers and agents. The Committee
shall furnish the Trustee a certified signature card for
each member of the Committee and for all purposes hereunder
the Trustee shall be conclusively entitled to rely upon
such certified signatures.
(b) The Board shall appoint a Chairman and a Secretary from
among the members of the Committee. All resolutions,
determinations and other actions shall be by a majority
vote of all members of the Committee. The
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<PAGE> 53
Committee may appoint such agents, who need not be members
of the Committee, as it deems necessary for the effective
performance of its duties, and may delegate to such agents
such powers and duties, whether ministerial or
discretionary, as the Committee deems expedient or
appropriate. The compensation of such agents shall be
fixed by the Committee; provided, however, that in no event
shall compensation be paid if such payment violates the
provisions of Section 406 of the Act and is not exempted
from such prohibitions by Section 408 of the Act.
(c) The Committee shall have complete control of the
administration of the Plan with all powers necessary to
enable it to properly carry out the provisions of the Plan.
In addition to all implied powers and responsibilities
necessary to carry out the objectives of the Plan and to
comply with the requirements of the Act, the Committee
shall have the following specific powers and
responsibilities:
(1) to construe the Plan and Trust Agreement and to
determine all questions arising in the
administration, interpretation and operation of
the Plan;
(2) to decide all questions relating to the
eligibility of Employees to participate in and to
receive benefits under the Plan and Trust
Agreement;
(3) to determine the benefits of the Plan to which any
Participant or Beneficiary may be entitled;
(4) to adopt procedures for providing adequate notice
in writing to any Participant or Beneficiary whose
claim for benefits under the Plan is denied, which
notice shall set forth the specific reasons for
such denial (written in a manner calculated to be
understood by the Participant or Beneficiary); and
to provide a procedure for affording a reasonable
opportunity to any Participant or Beneficiary
whose claim for benefits has been denied, a full
and fair review by the Committee of the decision
denying the claim;
(5) to keep records of all acts and determinations of
the Committee, and to keep all such records, books
of accounts, data and other documents as may be
necessary for the proper administration of the
Plan;
(6) to prepare and distribute to all Plan Participants
and Beneficiaries information concerning the Plan
and their rights under the Plan, including, but
not limited to, all information which is required
to
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<PAGE> 54
be distributed by the Act, the regulations
thereunder, or by any other applicable law;
(7) to file with the Secretary of Labor such reports
and additional documents as may be required by the
Act and regulations issued thereunder, including,
but not limited to, a plan description, summary
plan description, modifications and changes,
annual reports, terminal reports and supplementary
reports;
(8) to file with the Secretary of the Treasury and the
Pension Benefit Guaranty Corporation all reports
and information required to be filed by the
Internal Revenue Code, the Act and regulations
issued under each;
(9) to do all things necessary to operate and
administer the Plan in accordance with its
provisions and in compliance with applicable
provisions of federal law;
(10) to amend certain portions of this Plan as
specifically delegated to the Committee in this
Plan (e.g., any Schedule authorizing Affiliated
Sponsors to participate in the Plan, etc.), to
amend the Plan to comply with changes in law
recommended by legal counsel that are necessary to
maintain the tax qualified status of the Plan and
to make other amendments to the Plan that do not
materially increase the costs associated with the
plan.; and
(11) to appoint and remove the Trustee(s).
(d) Miscellaneous. To enable the Committee to perform its
functions, the Employer shall supply full and timely
information of all matters relating to the compensation and
length of service of all Participants, their retirement,
death or other cause of termination of employment, and such
other pertinent facts as the Committee may require. The
Committee shall advise the Trustee of such facts and issue
to the Trustee such instructions as may be required by the
Trustee in the administration of the Plan. The Committee
and the Employer shall be entitled to rely upon all
certificates and reports made by a Certified Public
Accountant selected or approved by the Company. The
Committee, the Employer and its officers and the Trustee,
shall be fully protected in respect of any action taken or
suffered by them in good faith in reliance upon the advice
or opinion of any actuary, accountant or attorney, and all
action so taken or suffered shall be conclusive upon each
of them and upon all other persons interested in the Plan.
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<PAGE> 55
8.07 Standard of Fiduciary Duty. Any Fiduciary, or any person
designated by a Fiduciary to carry out fiduciary responsibilities
with respect to the Plan, shall discharge his duties solely in the
interests of the Participants end Beneficiaries for the exclusive
purpose of providing them with benefits and defraying the
reasonable expenses of administering the Plan. Any Fiduciary shall
discharge his duties with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
Any Fiduciary shall discharge his duties in accordance with the
documents and instruments governing the Plan insofar as such
documents and instruments are consistent with the provisions of the
Act. Notwithstanding any other provisions of the Plan, no
Fiduciary shall be authorized to engage in any transaction which is
prohibited by Sections 406 and 2003(a) of the Act or Section 4975
of the Code in the performance of its duties hereunder.
8.08 Indemnification of Committee. To the extent permitted under the
Act, the Plan shall indemnify the Board and the Committee against
any cost or liability which they may incur in the course of
administering the Plan and executing the duties assigned pursuant
to the Plan. The Employer shall indemnify the Committee and the
members of the Board against any personal liability or cost not
provided for in the preceding sentence which they may incur as a
result of any act or omission in relation to the Plan or its
Participants. The Employer may purchase fiduciary liability
insurance to insure its obligation under this Section.
8.09 Claims Procedure. Any Participant, Former Participant,
Beneficiary, Spouse or legal representative thereof (hereinafter
referred to as "Claimant"), may file a claim for benefits under the
Plan by submitting to the Committee a written statement describing
the nature of the claim and requesting a determination of its
validity under the terms of the Plan. Within sixty (60) days after
the date such claim is received by the Committee, it shall issue a
ruling with respect to the claim.
If special circumstances require an extension of time for
processing, the Committee shall send the Claimant written notice of
the extension prior to the termination of the 60-day period. In no
case, however, shall the extension of time delay the Committee's
decision on such appeal beyond one hundred twenty (120) days
following receipt of the actual request. If the claim is wholly or
partially denied, written notice shall be furnished to the
claimant, which notice shall set forth in a manner calculated to be
understood by the Claimant:
(a) the specific reason or reasons for denial;
(b) specific reference to pertinent Plan provisions on which
the denial is based;
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<PAGE> 56
(c) a description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is
necessary; and
(d) an explanation of the claims review procedures.
Any Claimant whose claim for benefits has been denied, may appeal
such denial by submitting to the Committee a written statement
requesting a further review of the decision within sixty (60) days
of the date the Claimant receives a notice of such denial. Such
statement shall set forth the reasons supporting the claim, the
reason such claim should not have been denied, and any other issues
or comments which the Claimant deems appropriate with respect to
the claim.
If the Claimant shall request in writing, the Committee shall make
copies of the Plan documents pertinent to his claim available for
examination by the Claimant.
Within sixty (60) days after the request for further review is
received, the Committee shall review its determination of benefits
and the reasons therefor and notify the claimant of its final
decision.
If special circumstances require an extension of time for
processing, the Committee shall send the Claimant written notice of
the extension prior to the termination of the 60-day period. In
no case, however, shall the extension of time delay the Committee's
decision on such appeal request beyond one hundred twenty (120)
days following receipt of the actual request.
Such written notice shall include specific reasons for the
decision, written in a manner calculated to be understood by the
Claimant, with specific references to the pertinent Plan provisions
on which the decision is based.
8.10 Appointment of Investment Manager. The Company, acting through its
Chief Executive Officer or the Pension Committee, may from time to
time appoint (and remove) one or more investment fund managers (the
"Investment Manager") who shall have the authority to direct
investments to be made by the Trustee with respect to all or any
part of the assets of the Trust Fund. Any such Investment Managers
must either be registered as an investment advisor under the
Investment Advisors Act of 1940 or be a bank, as defined in such
Act. Any Investment Managers appointed under this Section shall
acknowledge, in writing, its acceptance of such appointment and
that it is a fiduciary with respect to the assets of the Trust Fund
subject to its investment direction. Upon receipt of written
notice of the appointment of an Investment Manager, the Trustee
shall perform such custodial and disbursing functions and
ministerial acts relating to investments directed by the Investment
Manager as may be required to carry out the administration of the
Trust Fund but shall be relieved of all responsibility for
investment or failure to invest that portion of the Trust Fund
subject to
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<PAGE> 57
investment direction by the Investment Manager during the period of
appointment of such Investment Manager.
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<PAGE> 58
ARTICLE IX
AMENDMENT AND TERMINATION
9.01 Amendment of the Plan.
The Pension Committee shall have the right, at any time, to amend
any or all of the provisions of the Plan; provided, however, that
no such amendment shall authorize or permit any part of the Fund
held by the Trustee to be diverted to purposes other than for the
exclusive benefit of Participants and their Beneficiaries; and
further provided that no amendment shall have the effect of
revesting in the Employer any portion of the Fund except such
amounts as may, due to erroneous actuarial computation, remain in
the Fund after termination of the Plan and after all liabilities
under the Plan have been satisfied.
9.02 Termination of the Plan.
(a) The Employer expects this Plan to be continued indefinitely
but, of necessity, the right to terminate the Plan and its
Contributions hereunder at any time with respect to its
Employees is reserved by the Company. In the event that it
becomes necessary to terminate or partially terminate the
Plan, or there is a complete discontinuance of Employer
contribution, then the Accrued Benefit of each Participant,
to the extent funded, shall become fully vested and
non-forfeitable as of the date of such termination or
partial termination in the manner hereinafter provided in
this Section 9.02.
(b) If the Company shall elect to terminate the Plan, the Board
shall give written notice of such fact to the Pension
Committee, thereafter the Pension Committee shall wind up
the affairs of the Plan and file all requests for
determinations, notices of intent to terminate and terminal
reports as may be required by the Internal Revenue Code,
the Act and regulations issued thereunder.
(c) In the event that the Plan shall be terminated or partially
terminated, the Committee shall then allocate the assets of
the Plan among the Employers and, with respect to each
terminating Employer separately, shall arrange for the
assets of the Plan (available to provide benefits) to be
allocated among the Participants and Beneficiaries in
accordance with Section 4044 of the Act and regulations
issued thereunder, in the following order:
(1) FIRST, in the case of benefits payable as an annuity -
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<PAGE> 59
(A) To benefits which were being paid as of
three years prior to the date of
termination of the Plan, with the amount
to be allocated to each such benefit,
based on the provisions of the Plan in
effect during the 5-year period preceding
the date of termination under which such
benefit would be the least,
(B) To benefits which would have been paid as
of three years prior to the date of
termination (i) if the Participant had
retired prior to the three-year period and
(ii) if his benefits had commenced (in the
normal form of annuity under the Plan) as
of the beginning of such three-year
period, with the amount to be allocated to
each such benefit determined under the
provisions of the Plan in effect during
the five-year period preceding the date of
termination under which the benefit would
be the least.
(2) SECOND, to all other benefits guaranteed by the
termination insurance provisions of Title IV of
the Act (with the amount to be allocated to each
such benefit determined without regard to the
limitation contained in Section 4022(b)(5) of the
Act on the amount of guaranteed non-forfeitable
basic benefits), including those benefits which
would have been guaranteed except for the
limitation on coverage of a "substantial owner"
under Section 4022(b)(6) of the Act.
(3) THIRD, to all other uninsured, non-forfeitable
benefits under the Plan.
(4) FOURTH, to all other benefits under the Plan.
(e) If the assets available for allocation of any class
specified above are insufficient to satisfy in full the
benefits of all individuals within that class, the assets
shall be allocated pro rata among such individuals on the
basis of present value (as of the termination date) of
their respective benefits.
(f) The Committee shall then arrange for the Trustee to
liquidate the assets held in the Fund which are applicable
to each terminating Employer and shall secure from the
Trustee a statement of the liquidated value of such assets.
The Committee, in its sole discretion, shall direct the
Trustee to purchase from an insurance company an annuity
contract or contracts which provides the benefits to which
each Participant or Beneficiary is entitled. The Trustee
shall distribute the assets in accordance with the
directions of the Committee.
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<PAGE> 60
(g) Any residual assets of the Plan remaining after
distribution in accordance with the preceding paragraphs
shall be distributed to the Employer, provided:
(1) all liabilities of the Plan to Participants and
Beneficiaries have been satisfied, and
(2) the distribution does not contravene any provision
of law.
9.03 Restriction on Certain Benefits and Distributions.
(a) In the event the Plan is terminated, the benefits provided
to any Top-25 Highly Compensated Employee shall be limited
to a benefit that is nondiscriminatory within the meaning
of Code Section 401(a)(4).
(b) The annual distribution to a Top-25 Highly Compensated
Employee cannot exceed the annual payment under a Life
Annuity (as defined in Section 6.01(a)) based on the
Actuarial Equivalence of the Participant's Accrued Benefit
and other benefits under the Plan.
(c) The restriction in Section 9.03(b) shall not apply under
the following circumstances:
(i) After payment of the Top-25 Highly Compensated
Employee's Retirement Income, the value of the
Plan's assets equals or exceeds 110 percent of the
value of the Plan's Current Liabilities.
(ii) The value of the Top-25 Highly Compensated
Employee's Retirement Income is less than one
percent of the value of the Plan's Current
Liabilities.
(d) The restrictions of this Section 9.03 (including paragraphs
(a) and (b)) shall not apply if the Commissioner of
Internal Revenue or his/her delegate determines that such
restrictions are not necessary to prevent prohibited
discrimination in favor of Highly Compensated Employees in
the event of an early termination of the Plan.
(e) For the purposes of this Section 9.03, the following
definitions shall apply:
(i) "Top-25 Highly Compensated Employee" shall mean
any member of the top 25 Highly Compensated
Employees and highly compensated former employees
(as defined in Code Section
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<PAGE> 61
414(q)(9)) with the greatest Compensation (as
defined in Plan Section 13.04(b)).
(ii) "Current Liabilities" shall have that meaning
contained in Code Section 412(l)(7).
(iii) "Retirement Income" shall have that meaning
contained in Plan Section 2.46 and, in addition,
loans in excess of the amount set forth in Code
Section 72(p)(2)(A), any periodic income, any
withdrawal values payable to a living employee,
and any death benefits not provided for by
insurance on the employee's life.
(f) This Section 9.03 is intended to comply with the provisions
of Proposed Regulation Section 1.401(a)(4)-5(c) or any
successor regulation thereto, and the provisions of this
Section 9.03 shall be so interpreted. This Section 9.03
shall be effective January 1, 1991. Prior to that date,
the provisions of the Prior Plan dealing with the top 25
highest paid employees shall apply.
9.04 Adoption of the Plan by a Participating Employer.
(a) The Committee shall determine which employers shall become
participating employers within the terms of the Plan. In
order for the Committee to designate an Employer as a
Participating Employer, the Committee must approve the
addition of the Participating Employer's identity to
Schedule A (which approval may be retroactive to an earlier
effective date). The Committee may also specify such terms
and conditions pertaining to the adoption of the Plan by
the Participating Employer as the Board deems appropriate.
With the Committee's consent, a Participating Employer may
limit participation in the Plan to certain of its
Employees.
The Committee shall maintain a schedule, Schedule A,
attached to the plan document, listing Participating
Employers, groups of Employees designated as participating
in the Plan by those Participating Employers, and the
effective date of designation (the "Designation Date") as a
Participating Employer. Such Schedule shall specify the
extent, if any, to which service with the Participating
Employer prior to the Designation Date shall qualify as
Credited Service hereunder. Notwithstanding any other
provision of this Plan, no Employee whose termination of
employment precedes the Designation Date shall be entitled
to any benefits hereunder.
(b) The plan of the Participating Employer and of the Company
shall be considered a single plan for purposes of Section
1.414(1)-1(b)(1) of the
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<PAGE> 62
Treasury Regulations. All assets contributed to the Plan
by the Participating Employer shall be held in a single
fund together with the assets contributed by the Company
(and with the assets of any other Participating Employers);
and so long as the Participating Employer continues to be
designated as such, all assets held in such fund shall be
available to pay benefits to all eligible employees and
beneficiaries covered by the Plan irrespective of whether
such Employees are employed by the Company or by the
Participating Employer. Nothing contained herein shall be
construed to prohibit the separate accounting for assets
contributed by the Company and the Participating Employers
for purposes of cost allocation if directed by the
Committee or the holding of plan assets in more than one
Trust Fund with more than one Trustee.
(c) So long as the Participating Employer's designation as such
remains in effect, the Participating Employer shall be
bound by, and subject to all provisions of the Plan and the
Trust Agreement. The exclusive authority to amend the Plan
and the Trust Agreement shall be vested in the Committee
and no Participating Employer shall have any right to amend
the Plan or the Trust Agreement. Any amendment to the Plan
or the Trust Agreement adopted by the Committee shall be
binding upon every Participating Employer without further
action by such Participating Employer.
(d) So long as each Participating Employer shall be designated
as such pursuant to Section 9.04(a), such Participating
Employer shall be liable for its pro rata share of the
contribution deemed necessary by the Actuary to fund the
Plan on an acceptable basis in accordance with Title I,
Section 302 and Title II, Section 1013 of the Act. The
total contribution required each year to fund the Plan
shall be apportioned among the Company and the
Participating Employers based upon the advice of the
Actuary and subject to such Treasury or Labor regulations
as may be from time to time applicable.
(e) No Participating Employer other than the Company shall have
the right to terminate the Plan. However, any
Participating Employer may withdraw from the Plan by action
of its Board of Directors provided such action is
communicated in writing to the Committee. The withdrawal
of a Participating Employer shall be effective as of the
December 31st following receipt of the notice of withdrawal
(unless the Committee consents to a different effective
date). In addition, the Committee may terminate the
designation of a Participating Employer to be effective on
such date as the Committee specifies. Any such
Participating Employer which ceases to be a Participating
Employer shall be liable for all cost accrued through the
effective date of its withdrawal or termination. In
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<PAGE> 63
the event of the withdrawal or termination of a
Participating Employer as provided in this paragraph, such
Employer shall have no right to direct that assets of the
Plan be transferred to a successor plan for its Employees
unless such a transfer is approved by the Committee in its
sole discretion.
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<PAGE> 64
ARTICLE X
MISCELLANEOUS
10.01 Headings. The headings and subheadings in this Plan have been
inserted for convenience of reference only and are to be ignored in
any construction of the provisions hereof.
10.02 Governing Law. The Plan shall be construed and enforced and all
provisions thereof administered in accordance with the Act and to
the extent not governed by the Act in accordance with the laws of
the State of Georgia.
10.03 Spendthrift Clause. Except as provided in the terms of a
"qualified domestic relations order" as defined in Code Section
414(p) and to the extent otherwise required or permitted by law,
none of the benefits, payments, proceeds or distributions under
this Plan shall be subject to the claim of any creditor of the
Former Employee, Participant or Beneficiary hereunder, or to any
legal process by any creditor of such Former Employee, Participant
or Beneficiary, and none of them shall have any right to alienate,
commute, anticipate or assign any of the benefits, payments,
proceeds or distributions under this Plan except to the extent
expressly provided herein to the contrary. If any Participant
shall attempt to dispose of the benefits provided for him
hereunder, or to dispose of the right to receive such benefits, or
in the event there should be an effort to seize such benefits or
the right to receive such benefits by attachment, execution or
other legal or equitable process, such right may pass and be
transferred, at the discretion of the Committee, to such one or
more as may be appointed by the Committee from among the
Beneficiaries, if any, theretofore designated by the Participant,
or from the spouse, children or other dependents of the
Participant, in such shares as the Committee may appoint. Any
appointment so made by the Committee may be revoked by it at any
time and further appointment made by it which may include the
Participant.
10.04 Legally Incompetent; Minors. If any Former Employee, Participant
or Beneficiary is a minor, or, in the judgment of the Committee, is
otherwise legally incapable of personally receiving and giving a
valid receipt for any payment due him hereunder, the Committee may,
unless and until claim shall have been made by a duly appointed
guardian or committee of such person, direct that such payment or
any part thereof be made to such person's spouse, child, parent,
brother or sister, or other person deemed by the Committee to have
incurred expense for or assumed responsibility for the expenses of
such person.
10.05 Discrimination. The Employer, through the Committee, shall
administer the Plan in a uniform and consistent manner with respect
to all Participants and shall not permit discrimination in favor of
Highly Compensated Employees.
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<PAGE> 65
10.06 Claims. Any payment to a Participant or Beneficiary, or to their
legal representatives, in accordance with the provisions of this
Plan, shall to the extent thereof be in full satisfaction of all
claims hereunder against the Trustee, Committee and the Employer,
any of whom may require such Participant, Beneficiary or legal
representative, as a condition precedent to such payment, to
execute a receipt and release therefor in such form as shall be
determined by the Trustee, the Committee or the Employer, as the
case may be.
10.07 Compliance with Applicable Laws. The Employer, through the
Committee, shall interpret and administer the Plan in such manner
that the Plan and Trust shall remain in compliance with the Code,
with the Act, and all other applicable laws, regulations and
revenue rulings.
10.08 Merger. In the event of any merger or consolidation of the Plan
with any other plan, or the transfer of assets or liabilities by
the Plan to another plan, each Participant must receive (assuming
that the Plan then terminated) a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater
than the benefit such Participant would have been entitled to
receive immediately before the merger, consolidation, or transfer
(assuming that the Plan had then terminated), provided such merger,
consolidation, or transfer took place after the date of enactment
of the Act.
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<PAGE> 66
ARTICLE XI
SPECIAL PROVISION REGARDING SAFEKEEPING TRUST
11.01 The assets of the Plan are held primarily by Trust Company Bank and
its successors, if any, pursuant to an Agreement and Declaration of
Trust effective as of January 1, 1975. As of November 1, 1982, the
Employer established a second Trust Agreement ("Safekeeping
Trust"). As of the Effective Date, Edward M. Jones, Jerry Nix, and
Earl Dolive are the Trustees of the Safekeeping Trust ("Safekeeping
Trustees"). Effective February 1, 1990, George Kalafut was added
as a Safekeeping Trustee. The Employer may from time to time
maintain certain other trust funds as part of the Fund as permitted
under this Plan, as amended effective January 1, 1989.
The Safekeeping Trust was established to hold certain assets of the
Plan and exists concurrently with the other trusts described above,
all of which comprise the Trust Fund of this Plan. The purpose of
this Article XI is to make clear that Trust Company Bank and the
other trustees shall have no duties or responsibilities whatsoever
with respect to the Safekeeping Trust and the Safekeeping Trustees
shall have no duties or responsibilities whatsoever with respect to
any portion of the Fund other than the portion held in the
Safekeeping Trust. The Company shall indemnify and hold harmless
each Safekeeping Trustee against any personal liability or expense
arising from his service as Safekeeping Trustee.
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<PAGE> 67
ARTICLE XII
TOP-HEAVY RULES
12.01 General Rule. If the Plan is or becomes Top-Heavy, the provisions
of this Article will supersede any conflicting provision in the
Plan.
12.02 Definitions.
(a) Top-Heavy: The Plan shall be Top-Heavy for the Plan Year
if, as of the Determination Date, the present value of the
Accrued Benefits attributable to Key Employees exceeds 60%
of the present value of all Accrued Benefits under the
Plan. If the Employer maintains more than one plan, all
plans in which any Key Employee participates and all plans
which enable this Plan to satisfy the antidiscrimination
requirements of Section 401(a)(4) and 410 must be combined
with this Plan ("required aggregation group") for the
purposes of applying the 60% test described in the
preceding sentence. Plans maintained by the Employer which
are not in the required aggregation group may be combined
at the Employer's discretion with this Plan for the
purposes of determining Top-Heavy status if the combined
plan satisfies the requirements of Code Section 401(a)(4).
If the Employer maintains a defined contribution plan which
is aggregated with this Plan, the account balances of
participants under the defined contribution plan shall be
determined in accordance with the provisions of that plan
and combined with Accrued Benefits under this Plan for the
purpose of applying the 60% test described in the first
sentence of this paragraph.
In determining the present value of Participant Accrued
Benefits, all distributions made during the five year
period ending on the Determination Date shall be included.
The Accrued Benefit of (i) any employee who at one time was
a Key Employee but who is not a Key Employee for the Plan
Year ending on the Determination Date; and (ii) any
employee who has received no Compensation from the Employer
or a related employer maintaining a plan in the aggregation
group for the five years immediately preceding the
Determination Date shall be disregarded in determining
Top-Heavy status.
For the purposes of this subsection, a Participant rollover
shall be included in the present value of Participant
Accrued Benefits except to the extent that the rollover was
received in a transaction consummated after December 31,
1983 which was initiated by the Participant and the amount
received is attributable to a distribution or transfer from
the plan of an employer which is unrelated to the Employer.
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<PAGE> 68
Solely for the purpose of determining if the Plan, or any
other plan included in the required aggregation group, is
Top-Heavy, the Accrued Benefit of an Employee other than a
Key Employee shall be determined under (i) the method, if
any, that uniformly applies for accrual purposes under all
plans maintained by the Affiliates, or (ii) if there is no
such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the
fractional accrual rate of Code Section 411(b)(1)(C). This
paragraph shall be effective January 1, 1987.
(b) Key Employee. Shall mean any Employee or former Employee
(and the Beneficiaries of such Employee) who at any time
during the Plan Year which ends on the Determination Date
or the preceding 4 Plan Years (1) was an officer of the
Employer having annual Compensation from the Employer
greater than 50% of the amount in effect under Code Section
415(b)(1)(A) for such Plan Year; (ii) an owner (or
considered an owner under Section 318 of the Code) of one
of the ten largest interests in the Employer if such
individual's Compensation equals or exceeds the dollar
limitation under Section 415(c)(1)(A) of the Code; (iii) a
5-percent owner of the Employer; or (iv) a 1-percent owner
of the Employer who has an annual Compensation of more than
$150,000.
(c) Determination Date: For any Plan Year, the last day of the
preceding Plan Year.
(d) Non-key Employee. Any Participant who is not a
Key-Employee.
(e) Present Value: The present value of Accrued Benefits for
the purpose of determining Top-Heavy status, shall be
calculated in accordance with the actuarial assumptions
specified in Section 2.03 of the Plan.
12.03 Minimum Accrued Benefit.
(a) Notwithstanding any other provision in this Plan except (b)
below, for any Plan Year in which this Plan is Top-Heavy,
each Participant who is not a Key Employee and has
completed 1,000 Hours of Service will accrue a benefit (to
be provided solely by Employer contributions and expressed
as a single life annuity commencing at Normal Retirement
Age) of not less than two percent (2%) of his or her
highest average Compensation for the five consecutive years
for which the Participant had the highest Compensation.
The minimum accrual applies even though under other Plan
provisions the Participant would not otherwise be entitled
to receive an accrual, or would have received a lesser
accrual for the year because (i) the Participant fails to
make mandatory contributions to the Plan, (ii) the
Participant's Compensation is less than a stated amount,
(iii) the Participant is not employed on the last day of
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<PAGE> 69
the accrual computation period, or (iv) the Plan is
integrated with Social Security.
(b) No additional benefit accruals shall be provided pursuant
to (a) above to the extent that the total accrual on behalf
of the Participant attributable to Employer contributions
will provide a benefit expressed as a single life annuity
commencing at Normal Retirement Age that equals or exceeds
20 percent of the Participant's highest average
compensation for the five consecutive years for which the
Participant had the highest compensation. Also, the
benefit accrual requirement of this section shall not apply
if the Employer maintains a defined contribution plan and
contributes thereto an amount sufficient to render the
benefit accrual requirements of this section inapplicable
under regulations prescribed by the Secretary of the
Treasury.
12.04 Form of Benefit. If the form of benefit is other than a single
life annuity, the Participant must receive an amount that is the
actuarial equivalent of the minimum single life annuity benefit.
If the benefit commences at a date other than at Normal Retirement
Age, the Participant must receive at least an amount that is the
actuarial equivalent of the minimum single life annuity benefit
commencing at Normal Retirement Age.
12.05 Nonforfeitability of Employer Top-Heavy Contribution. The Employer
Top-Heavy Accrued Benefit (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited
under Code Sections 411(a)(3)(B) or 411(a)(3)(D).
12.06 Minimum Vesting. If the Plan becomes Top Heavy, the following
vesting schedule shall be applied notwithstanding any provision in
this Plan to the contrary:
<TABLE>
<CAPTION>
Credited Service Percent of Accrued
at Termination Date Benefit Vested
------------------------- ------------------
<S> <C>
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
</TABLE>
The vesting schedule described above shall not apply to any
Participant unless the Participant has accumulated at least one
Hour of Service after the Plan becomes Top Heavy. If the Plan
becomes Top Heavy and subsequently ceases to be such, the vesting
schedule described above shall continue to apply in
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<PAGE> 70
determining the vested Accrued Benefit of any Participant who has
at least three years of Credited Service on the last day of the Top
Heavy Plan Year. Notwithstanding the foregoing, no change in the
vesting schedule shall reduce the then vested percentage of any
Participant's Accrued Benefit.
12.07 Combined Plan Limitation For Top Heavy Years. In any Plan Year
during which more than 90% of the Accrued Benefits under the Plan
(after aggregation) are attributable to Key Employees, 100% or an
equivalent factor shall be substituted for 125% or an equivalent
factor in the combined plan fraction denominators set forth in the
Section of this Plan which limits maximum benefits pursuant to
Section 415 of the Code. In any Plan Year during which more than
60% but not more than 90% of the Accrued Benefits under the Plan
(after aggregation) are attributable to Key Employees, 100% or an
equivalent factor shall be substituted for 125% or an equivalent
factor in the combined plan fraction denominators unless the
minimum Accrued Benefit of each non Key Employee meets the
requirements of Section 12.03 after substituting 3% for 2% in
Section 12.03(a) and 30% for 20% in Section 12.03(b).
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<PAGE> 71
ARTICLE XIII
MAXIMUM BENEFITS
13.01 General Rule.
The provisions of this Article XIII shall be effective for Plan
Years beginning after December 31, 1986. The annual benefit
payable to a Participant at any time shall not exceed the maximum
permissible amount. "Maximum permissible amount" shall mean the
lesser of (i) $90,000 (such limitation to be adjusted automatically
as determined by the Commissioner of Internal Revenue for each
calendar year, and the new limitation to apply to limitation years
ending within the calendar year of the date of the adjustment); or
(ii) 100 percent of the Participant's highest average compensation.
If the annual benefit commences before or after the Participant's
Social Security Retirement Age, the maximum permissible amount
shall be determined under Section 415 of the Code and Regulations
and rulings thereunder. If the annual benefit commences when the
Participant has less than ten years of Credited Service with the
Company or less than ten years of participation in this Plan or any
predecessor plan to this Plan, the maximum permissible amount
otherwise defined above shall be reduced by one-tenth for each year
less than ten in accordance with applicable regulations.
13.02 Combined Plan Limitations.
If the Employer maintains, or any time maintained, one or more
qualified defined contribution plans covering any Participant in
this Plan, the sum of the Participant's defined contribution
fraction and defined benefit fraction shall not exceed 1.0 in any
limitation year, and the annual benefit otherwise payable to the
Participant under this Plan shall be frozen or reduced to the
extent necessary so that the sum of such fractions shall not exceed
1.0.
13.03 Grandfather Rule.
In the case of an individual who was a participant in one or more
defined benefit plans of the Employer which were in existence on
July 1, 1982, the maximum permissible amount for such individual
under all such defined benefit plans shall not be less than the
individual's accrued benefit under all such defined benefit plans
as of the end of the last limitation year beginning before January
1, 1983, but determined without regard to changes in the plan or
cost-of-living increases occurring after July 1, 1982. The
preceding sentence applies only if all such defined benefit plans
met the requirements of Section 415 of the Code, as in effect on
July 1, 1982, for all limitation years beginning before January 1,
1983.
13.04 Definitions. For purposes of Article XIII, the following
definitions shall apply:
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<PAGE> 72
(a) "Annual benefit" means Retirement Income under the Plan
which is payable annually in the form of a straight life
annuity. The interest rate assumption used to determine
actuarial equivalence for this purpose shall be the greater
of the interest rate specified in this plan or 5 percent.
No actuarial adjustment to the benefit is required for (i)
the value of a qualified Joint and Survivor Annuity; (ii)
the value of benefits that are not directly related to
retirement benefits (such as a qualified disability
benefit, pre-retirement death benefits, and post-retirement
medical benefits); or (iii) the value of post-retirement
cost-of-living increases made in accordance with federal
income tax regulations.
(b) "Compensation" means a Participant's wages as defined in
Code Section 3401(a) (wages subject to income tax
withholding at the source) but without regard to exceptions
contained in Code Section 3401(a) for wages based on the
nature or location of the employment or the services
performed. The intent of this definition is to comply with
the alternative definition of compensation described in
Treasury Regulation Section 1.415-2(d)(11)(ii).
(c) "Defined benefit fraction" means a fraction, the numerator
of which is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the
denominator of which is the lesser of (i) 125 percent of
the dollar limitation in effect for the limitation year
under Section 415(b)(1)(A) of the Code; or (ii) 140 percent
of the Participant's highest average compensation.
Notwithstanding the foregoing, if the Participant was a
Participant in a plan in existence on July 1, 1982, the
denominator of this fraction shall not be less than 125
percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the end of the last
limitation year beginning before January 1, 1983, but
determined without regard to changes in the Plan or
cost-of-living increases occurring after July 1, 1982. The
preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 for all limitation years
beginning before January 1, 1983.
(d) "Defined contribution fraction" means a fraction, the
numerator of which is the sum of the annual additions to
the Participant's account under all the defined
contribution plans (whether or not terminated) maintained
by the Employer for the current and all prior limitation
years, and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior
limitation years of employment with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer).
- 67 -
<PAGE> 73
The maximum aggregate amount in any limitation year is the
lesser of 125 percent of the dollar limitation in effect
under Section 415(c)(1)(A) of the Code; or (ii) 35 percent
of the Participant's compensation for such year.
If the Employee was a participant in one or more defined
contribution plans maintained by the Employer which were in
existence on July 1, 1982, the numerator of this fraction
shall be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under
the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
fractions over 1.0 times and (2) the denominator of this
fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the
last limitation year beginning before January 1, 1983.
(e) "Employer" means an Affiliate.
(f) "Highest average compensation" means the average
compensation for the three consecutive years of Credited
Service with the Employer that produces the highest
average.
(g) "Limitation year" means the Plan Year.
(h) "Projected annual benefit" means the annual benefit to
which the Participant would be entitled under the terms of
the Plan assuming (i) the Participant will continue
employment until normal retirement age under the Plan (or
current age, if later); and (ii) the Participant's
compensation for the current limitation year and all other
relevant factors used to determine benefits under the Plan
will remain constant for all future limitation years.
(i) "Annual additions" means the sum of the following amounts
credited to a Participant's account for the limitation
year:
(i) Employer contributions;
(ii) Forfeitures;
(iii) nondeductible employee contributions; provided,
however, that the annual addition for any
limitation year beginning before January 1, 1987
shall not be recomputed to treat nondeductible
employee contributions as an annual addition; and
(iv) Amounts described in Code Sections 415(l)(1) and
419A(d)(2).
- 68 -
<PAGE> 74
(j) "Social Security Retirement Age" shall mean the age used as
the retirement age for the Participant under Section 216(l)
of the Social Security Act, except that such section shall
be applied without regard to the age increase factor, and
as if the early retirement age under Section 216(l) of such
Act were 62.
- 69 -
<PAGE> 75
ARTICLE XIV
HIGHLY COMPENSATED EMPLOYEES
14.01 In General.
For the purposes of this Plan, the term "Highly Compensated Employee"
is any active Employee described in Section 14.02 below and any Former
Employee described in Section 14.03 below. Various definitions used
in this Article are contained in Section 14.05. A Non-Highly
Compensated Employee is an Employee who is neither a Highly
Compensated Employee nor a Family Member of a Highly Compensated
Employee. This Article 14 shall be effective January 1, 1987.
14.02 Highly Compensated Employees.
(a) An Employee is a Highly Compensated Employee if during the
Determination Year the Employee:
(1) is a 5 Percent Owner;
(2) receives Compensation in excess of $75,000;
(3) receives Compensation in excess of $50,000 and is a
member of the Top Paid Group; or
(4) is an Includable Officer.
The dollar amounts described above shall be increased annually
as provided in Code Section 414(q)(1).
(b) Calendar Year Election. The Employer hereby elects the
calendar year calculation election described in Temporary
Regulation Section 1.414(q)-1T, Q&A-14(b) or any successor
regulation thereto. Because the Plan uses the calendar year
as its Plan Year, there is no separate Look Back Year
calculation. This election is binding on all other qualified
retirement Plans maintained by the Employer until the election
is withdrawn.
14.03 Former Highly Compensated Employee.
A Former Employee is a Highly Compensated Employee if (applying the
rules of Section 14.02(a) or (b)) the Former Employee was a Highly
Compensated Employee during a Separation Year or during any
Determination Year ending on or after the Former Employee's 55th
birthday. With respect to a Former Employee
- 70 -
<PAGE> 76
whose Separation Year was prior to January 1, 1987, such Former
Employee will be treated as a Highly Compensated Employee only if the
Former Employee was a 5% Owner or received Compensation in excess of
$50,000 during (i) the Former Employee's Separation Year (or the year
preceding such Separation Year); or (ii) any year ending on or after
such Former Employee's 55th birthday (or the last year ending before
such Former Employee's 55th birthday).
14.04 Family Aggregation Rules.
(a) For purposes of this Article 14, an Employee who is, for a
given Determination Year or Look Back Year, either (i) a 5
Percent Owner, or (ii) a Highly Compensated Employee who is
one of the ten most highly compensated Employees ranked on the
basis of Compensation paid during such year, shall be
aggregated with such Employee's Family Members.
(b) For purposes of this Section 14.04, the term "Family Member"
means, with respect to an Employee described in Section
14.04(a), a person who is, on any day during the given
Determination Year or Look Back Year:
(1) his spouse; or
(2) his lineal ascendant or descendant; or
(3) the spouse of his lineal ascendant or descendant.
(c) The determination of Employees and Family Members who must be
aggregated for purposes of this Article 14 shall be made in
accordance with Temporary Regulation Section 1.414(q)-1T,
Q&A-11 and Q&A-12.
(d) For purposes of applying the limits of Code Section
401(a)(17) (i.e., the $150,000 limit on compensation, as
adjusted) with respect to Compensation under Article 14
(Section 415 limits), the Compensation for any Employee
described in Section 14.04(a) and for any Family Member who is
such Employee's spouse or lineal descendant under age 19,
shall be aggregated. In such event, the deemed Compensation
for each such Employee shall be an amount equal to the Section
401(a)(17) limit for the Plan Year (as adjusted) multiplied by
a fraction, the numerator of which is the Employee's actual
Compensation for the Plan Year, and the denominator of which
is the aggregate Compensation of the Employee and the
aggregated Family Member for the Plan Year. The same
procedure shall then be used to determine the deemed
Compensation of the aggregated Family Member.
- 71 -
<PAGE> 77
14.05 Definitions.
Unless otherwise indicated, the definitions of Article II shall apply
to Article XIV. In addition, the following special definitions shall
apply to this Article XIV:
Determination Year shall mean the Plan Year for which an individual's
status as a Highly Compensated Employee is determined.
Employee shall mean Employees as defined in Article II, leased
employees described in Code Section 414(n), and employees who are
members of any collective bargaining unit.
5 Percent Owner shall mean any Employee who owns or is deemed to own
(within the meaning of Code Section 318), more than five percent of
the value of the outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting power of the
Employer.
Former Employee shall mean an Employee (i) who has incurred a
Severance from Service or (ii) who remains employed by the Employer
but who has not performed services for the Employer during the
Determination Year (e.g., an Employee on Authorized Absence).
Includable Officer shall mean any officer of the Employer who, during
the applicable year, receives Compensation in excess of 50% of the
dollar limitations under Code Section 415(b)(1)(A)(as adjusted by the
Secretary of the Treasury for cost of living increases). The Employer
shall be deemed to have a minimum of 3 officers or, if greater, a
number equal to 10 percent of all Employees. However, no more than 50
officers shall be considered Includable Officers under this Article
14. If the Employer does not have any Includable Officers because no
officer receives Compensation in excess of the dollar limitations of
Code Section 415(b)(1)(A), the Employer's highest paid officer shall
be considered an Includable Officer.
Look Back Year shall mean the Plan Year preceding the Determination
Year, or if the Employer elects, the calendar year ending with or
within the determination year.
Separation Year shall mean any of the following years:
(1) An Employee who incurs a Termination of Employment shall have
a Separation Year in the Determination Year in which such
Termination of Employment occurs;
(2) An Employee who remains employed by the Employer but who
temporarily ceases to perform services for the Employer (e.g.,
an Employee on
- 72 -
<PAGE> 78
Authorized Absence) shall have a Separation Year in the
calendar year in which he last performs services for the
Employer;
(3) An Employee who remains employed by the Employer but whose
Compensation for a calendar year is less than 50% of the
Employee's average annual Compensation for the immediately
preceding three calendar years (or the Employee's total years
of employment, if less) shall have a Separation Year in such
calendar year. However, such Separation Year shall be ignored
if the Employee remains employed by the Employer and the
Employee's Compensation returns to a level comparable to the
Employee's Compensation immediately prior to such Separation
Year.
Top Paid Group shall mean the top 20% of all Employees ranked on the
basis of Compensation received from the Employer during the applicable
year. The number of Employees in the Top Paid Group shall be
determined by ignoring Employees who are non-resident aliens and
Employees who do not perform services for the Employer during the
applicable year. The Employer elects to compute the Top Paid Group
without the age and service exclusion provided in applicable Treasury
Regulations.
14.06 Other Methods Permissible.
To the extent permitted by the Code, judicial decisions, Treasury
Regulations and IRS pronouncements, the Committee may (without further
amendment to this Plan) take such other steps and actions or adopt
such other methods or procedures (in addition to those methods and
procedures described in this Article 14) to determine and identify
Highly Compensated Employees (including adopting alternative
definitions of Compensation which satisfy Code Section 414(q)(7) and
are uniformly applied).
IN WITNESS WHEREOF, the Employer has caused this Plan to be duly
executed and its seal to be hereunto affixed on the date indicated below, but
effective as of January 1, 1989.
GENUINE PARTS COMPANY
By: /s/ Frank W. Howard
-------------------
Title: Treasurer
----------------
Date: December 1, 1995
-----------------
Attest:
/s/ Brainard T. Webb, Jr.
- ------------------------------
- 73 -
<PAGE> 79
SCHEDULE A
PARTICIPATING EMPLOYERS DESIGNATED UNDER SECTION 9.04
<TABLE>
<CAPTION>
Extent of Credit for
Name and Service with a
Designation Participating Employer
Date Prior to Designation Date
----------- -------------------------
<S> <C> <C>
1. S.P. Richards Participants in the Plan who were employed
Company by S. P. Richards Company shall receive Credited
January 1, 1984 Service for all purposes of this Plan beginning with
their employment commencement date with S. P. Richards
Company but subject to all of the rules concerning
crediting of service set forth in this Plan.
2. Balkamp, Inc. Participants in the Plan who were employed by
and National Balkamp, Inc. or affiliates NAPA shall receive
Automotive Parts Credited Service for all purposes of this Plan
Association (NAPA) this Plan beginning with their employment
January 1, 1984 commencement date with Balkamp, Inc. or NAPA, Inc.
but subject to all of the rules concerning
crediting of service set forth in this plan.
3. Motion Eligibility:
Industries, -----------
Inc. ("Motion") Employees of Motion whose initial date of hire
January 1, 1984 is on or after January 1, 1984, shall automatically
become Participants of this Plan on the date such
Employee satisfies the age and service requirements
of Section 3.02 (and for such purpose all employment
with Motion shall be counted as though it was employment
with the Company).
Employees of Motion whose initial date of hire is prior
to January 1, 1984, and who have made an election in the
manner authorized by the committee not to participate in
the Motion Industries, Inc. Profit Sharing Plan (the
"Profit Sharing Plan") shall commence participation in
this Plan, effective as follows:
</TABLE>
<PAGE> 80
<TABLE>
<S> <C>
1) Employees hired prior to January 1, 1984, who were
Participants in the Profit Sharing Plan as of
December 31, 1983, shall participate in this Plan
effective as of January 1, 1984, and
2) Employees hired prior to January 1, 1984, who were
not Participants in the Profit Sharing Plan shall become
Participants in this Plan on the date that they would
have been eligible to participate in the Profit Sharing
Plan if the Profit Sharing Plan as in effect on
December 31, 1983 had continued unchanged.
Participants in this Plan employed by Motion who were
not participants in the Motion Profit Sharing Plan as of
December 31, 1983, shall receive Credited Service for
all purposes of this Plan beginning with their employment
commencement date with Motion but subject to all of the rules
concerning crediting of service set forth in this Plan.
Participants employed by Motion who were participants in
the Motion Profit Sharing Plan as of December 31, 1983 and
who elected to commence participation in this Plan effective
January 1, 1984, shall receive Credited Service for purposes
of determining an Employee's vested percentage under
Section 4.05; for purposes of determining an Employee's
benefits under the Disability Retirement provisions of
Schedule D; for purposes of determining an Employee's
entitlement to Death Benefits under Article V; but service
with Motion prior to January 1, 1984 shall not be credited
for purposes of determining the amount of such Employee's
Retirement Income.
Effective January 1, 1990, the Profit Sharing Plan was
terminated. Employees of Motion who participated in the
Profit Sharing Plan on December 31, 1989, and who are employed
by Motion on January 1, 1990, shall commence participation in
this Plan effective as of January 1, 1990. Such Participants
shall receive Credited Service under this Plan beginning with
their employment commencement date with Motion but only for the
</TABLE>
<PAGE> 81
<TABLE>
<S> <C>
purpose described in the following sentence and subject
to all of the rules concerning crediting of service set
forth in this Plan. The Participants discussed in this
paragraph shall receive Credited Service for purposes of
determining an Employee's vested percentage under
Section 4.05; for purposes of determining an Employee's
benefits under the Disability Retirement provisions of
Schedule D; and for purposes of determining an Employee's
entitlement to Death Benefits under Article V. In no
event, shall such Participants receive Credited Service
prior to January 1, 1990 for purposes of determining the
amount of such Employee's Retirement Income (other than
for the Disability Retirement described in Schedule D).
</TABLE>
<PAGE> 82
SCHEDULE B
CREDIT FOR SERVICE WITH PREDECESSOR EMPLOYERS
I. Participants employed by a predecessor employer not listed in Sections
II or III below shall be deemed to have as their date of Employment
for all purposes of this Plan, the date the predecessor employer was
acquired by or merged into Genuine Parts Company.
II. Participants employed by the following predecessor employers shall
receive Credited Service for all purposes of this Plan beginning with
their employment commencement date with that predecessor employer but
subject to all the rules concerning crediting of service set forth in
this Plan.
1. Clark Siviter Co.
St. Petersburg, FL
2. Standard Parts Company
Columbia, SC
3. Standard Unit Parts Company
Normal, IL
Except that the benefits provided to Richard R. Mikulechy under
this Plan shall be reduced by one hundred percent (100%) of the
benefits provided under that certain Salary Continuation
Agreement dated January 10, 1977 in the event of his retirement,
death, disability or other termination of service; and
Except that the benefits provided to Mark R. Larson under this
Plan shall be reduced by one hundred percent (100%) of the
benefits provided under that certain Salary Continuation
Agreement dated January 10, 1977 in the event of his retirement,
death, disability or other termination of service.
4. National Parts Service Inc.
Hartford, CT
Covering the following National Parts Service employees:
<TABLE>
<CAPTION>
Name S.S. No. Employment Date
---------------- ------------ ---------------
<S> <C> <C>
Raymond Jensen ###-##-#### May 1, 1946
Charles A. Veci ###-##-#### July 1, 1952
Paul F. Baldi ###-##-#### August 27, 1960
</TABLE>
<PAGE> 83
<TABLE>
<S> <C> <C>
Bernhardt E. Johnson ###-##-#### October 1, 1966
Jean L. Veillette ###-##-#### July 1, 1972
Paul R. Denis ###-##-#### July 26, 1974
Mark P. Taylor ###-##-#### January 17, 1980
Roy M. Robbins ###-##-#### June 16, 1980
</TABLE>
5. General Automotive Parts Company and its subsidiaries
6. NAPA Des Moines Warehouse
7. M&B, Inc. (Lesker Office Furniture), November 1, 1993
III. Participants employed by the following predecessor employers shall be
deemed to have as their date of Employment for all purposes of this
Plan, the date the predecessor employer was acquired by or merged into
Genuine Parts Company. However, after an employee of such predecessor
employer becomes a Participant in the Plan by satisfying the
requirements of Section 3.02, such Participant shall receive Credited
Service for all employment with such predecessor employer for purposes
of (1) determining the Participant's vested percentage under Section
4.05(c); (2) determining whether a Participant has completed five
years of Credited Service for the Disability Retirement provisions of
Schedule D; and (3) determining the Participant's entitlement to Death
Benefits under Article V and related sections of the Plan. Such
Credited Service may be forfeited or disregarded in accordance with
Section 2.18. Furthermore, no Credited Service shall be granted for
employment with a predecessor employer if the granting of such
Credited Service will adversely impact the tax qualified status of the
Plan.
<TABLE>
<CAPTION>
Name Employment Date
---------------- ---------------
<S> <C>
Odell Hardware Company January 1, 1980
Greensboro, NC
Brooks-Noble Parts & Machine Co., Inc. August 1, 1981
Jackson, MS
One Stop Auto Parts Inc. March 10, 1982
Lathan, NY
One Stop Auto Parts Inc. March 16, 1983
Albany, NY
E. E. Long Inc. September 1, 1984
Des Moines, IA
Motor Parts & Supply April 1, 1986
</TABLE>
<PAGE> 84
<TABLE>
<S> <C>
Baton Rouge, LA
Chattanooga Service Auto Center May 1, 1986
Chattanooga, TN
Gerace Auto Parts December 1, 1986
Port Allen, LA
Lawwill Auto Parts September 1, 1987
Chattanooga, TN
Smith Automotive Corp. August 1, 1990
(2 stores) Martinez, GA & Belvedere, SC
Kings Parts Company, Inc. August 10, 1990
Lake Oswego, OR
W.K. NAPA on Kensington, Inc. August 10, 1990
Elk Grove Village, IL
Auto Parts, Inc. of Wilmington October 1, 1990
Wilmington, NC
Carolina Auto Parts of Thomasville, Inc. October 1, 1990
Thomasville, NC
Stokes Auto Parts, Inc. October 1, 1990
Thomasville, NC
MGM Auto Parts, Inc. November 1, 1990
Kenmore, NY
Wholesale Sationers Corp. December 1, 1990
Salt Lake City, UT (S.P. Richards)
Santa Monica Auto Parts November 1, 1990
Santa Monica, CA
Precise Industries, Inc. December 1, 1990
(2 Stores) Kingsport & Blountville, TN
Automotive Service & Supply, Inc. December 1, 1990
(3 Stores) Kingsport, TN, Bristol & Abingdon, VA
NAPA Auto Parts of Lombard, Inc. December 1, 1990
</TABLE>
<PAGE> 85
<TABLE>
<S> <C>
Lombard, IL
Middleburg Parts and Hardware, Inc. December 31, 1990
Middleburg, FL
Strap Industries, Inc. March 1, 1991
Tempe, AZ
Anderson's Parts March 1, 1991
Blue Springs, MO
Evergreen Automotive Supply, Inc. May 1, 1991
Chicago, IL
Heath Motor Supply Co. July 1, 1991
Panama City, FL
Bryant Stooks - D.J.'s Auto Supply July 1, 1991
(2 Stores) Chandler and Mesa, AZ
NAPA Auto Parts Store of John Nall August 1, 1991
South Milwaukee, WI
Deer Park Automotive Parts, Inc. September 1, 1991
Mt. Carmel, OH
T & L Auto Parts Company, Inc. October 1, 1991
(4 Stores) Fayetteville, NC
B.W.P. Ltd. October 1, 1991
(2 Stores) Fayetteville, Roseboro, NC
Auto Parts of Clinton October 1, 1991
Clinton, NC
Byrd-Wood Parts Group, Inc. October 1, 1991
Fayetteville, NC
Burien Auto Parts, Inc. October 1, 1991
(2 Stores) Seattle, WA
B.N. Auto Parts Co. December 1, 1991
Marietta, GA
Capital Automotive Parts, Inc. December 1, 1991
</TABLE>
<PAGE> 86
<TABLE>
<S> <C>
Milwaukee, WI
Bill's Auto Supply, Inc. January 1, 1992
Milwaukee, WI
Bill's Auto Supply, Inc. January 1, 1992
Kansas City, MO
Bald Hill Auto Parts, Inc. February 1, 1992
Warwick, RI
Manton Auto Prats, Inc. February 1, 1992
Providence, RI
Hudson Auto Parts February 1, 1992
Hudson, WI
B&B Genuine Auto Parts, Inc. February 16, 1992
Canton, OH
Jimmy's Auto Parts, Inc. March 1, 1992
Alpharetta, GA
West Town Auto Parts, Inc. June 1, 1992
Knoxville, TN
Lakeland Motor Parts, Inc. June 1, 1992
(2 Stores) Lakeland, FL
Haas Auto Parts & Machine Co., Inc. June 1, 1992
Jeffersonville, IN
Parts Dept. of Shakopee, Inc. June 1, 1992
Shakopee, MN
HMH Automotive Parts, Inc. June 1, 1992
(2 Stores) Galesburg, Monmouth, IL
Southern Parts & Electric, Inc. July 1, 1992
(4 Stores) Durham, NC
Service Supply Co. of Douglasville, Inc. July 1, 1992
Douglasville, GA
Service Supply Company of Dallas, Inc. July 1, 1992
</TABLE>
<PAGE> 87
<TABLE>
<S> <C>
Dallas, GA
NAPA of Lemon Grove, Inc. August 1, 1992
La Mesa, CA
Whitewater Auto Supply, Inc. September 1, 1992
Janesville, WI
Regalia Auto Parts, Inc. September 1, 1992
Seattle, WA
Drexel Auto Parts, Inc. October 1, 1992
Huntsville, AL
Warren Auto Supply, Inc. December 4, 1992
(2 Stores) Warren, OH
Cal's Service Parts, Inc. January 1, 1993
(6 Stores) Boise, ID
H & G Enterprises, Inc. January 1, 1993
Louisville, KY
Kernersville Auto Parts, Inc. February 1, 1993
Kernersville, NC
McCowen Enterprises, Inc. April 1, 1993
(2 Stores) Champaign & Urbana, IL
Breese Company, Inc. May 1, 1993
(3 Stores, Iowa City, Muscatine & Coralville, IA)
Young's Auto Supply Warehouse, Inc. July 1, 1993
Norfolk, VA
Joliet Auto Supply, Inc. July 1, 1993
Joliet, IL
Bryan - Rogers, Inc. August 1, 1993
(3 Stores) Tupelo, Baldwyn & Amory, MS
Hyllberg Enterprises, Inc. August 1, 1993
Virginia Beach, VA
Hager Auto & Industrial Parts, Inc. November 1, 1993
</TABLE>
<PAGE> 88
<TABLE>
<S> <C>
(2 Stores) Burlington & South Burlington, VT
Ballard Auto Parts, Inc. January 1, 1994
Cornelius, NC
Service Parts of Hendersonville, Inc. January 1, 1994
Hendersonville, NC
Power's Auto Parts, Inc. March 1, 1994
Williamsburg, VA
Big J Auto Parts, Inc. March 14, 1994
Johnson City, TN
Economy Auto Supply Co., Inc. April 1, 1994
Norfolk, VA
Paul's Automotive, Inc. April 1, 1994
Toledo, OH
Sulphur Springs Parts Co., Inc. June 1, 1994
Sulphur Springs, TX
The Parts Place August 1, 1994
Gulfport, MS
A & J Automotive Co. August 1, 1994
Dalton, GA
Clewiston Auto Parts, Inc. September 1, 1994
Clewiston, FL
Oregon City Auto Parts, Inc. October 1, 1994
Oregon City and Clackamas, OR
Kiema Car Part, Inc. November 1, 1994
El Monte, CA
Shoreline Auto Parts November 1, 1994
Seattle, WA
Lockport Automotive Supply, Inc. December 1, 1994
Lockport, NY
Mircon, Inc. Scardsdale Auto Parts December 1, 1994
</TABLE>
<PAGE> 89
<TABLE>
<S> <C>
Scarsdale, NY
Motor Parts Company December 1, 1994
Booneville, MS
Davis & Wilmar, Inc. July 1, 1992
(Eligible to Begin Participation 5/1/93)
The Parts, Inc. January 1, 1994
(Eligible to Begin Participation 1/1/95)
Dade City Jobbing Group January 2, 1992
(Eligible to Begin Participation 1/1/94)
Colorado Parts Company December 1, 1994
(4 stores) Ft. Collins, Loveland,
Longmont, CO
Serene Plaza Auto Parts December 1, 1994
Seattle, WA
</TABLE>
<PAGE> 90
SCHEDULE C
TRUST FUND ESTABLISHED PURSUANT TO PLAN
Under the Plan, the Employer may establish multiple trust funds
("sub-trusts") pursuant to one or more agreements of trust between the Employer
and one or more trustees to provide the benefits of the Plan. The Plan also
provides that the term Trust Fund includes any group annuity or deposit
administration contract entered into between the Employer and an Insurer. All
such sub-trusts in the aggregate shall comprise the Trust Fund as defined in
Section 2.51 of the Plan. The Trust Fund (including all sub-trusts) shall be
available to provide all benefits under the Plan to any Plan Participant
irrespective of the division or unit which employs such Participant.
As of January 1, 1989, the following sub-trusts comprise the
Trust Fund under the Plan:
1. Agreement of Trust Entered Into Between Genuine Parts
Company and Trust Company Bank Effective as of January 1, 1975.
2. Agreement of Trust Entered Into By and Between Genuine
Parts Company and the Safekeeping Trustees adopted effective November 1, 1982.
3. Group Annuity Contract Number DA710 Issued by
Massachusetts Mutual Life Insurance Company to Standard Unit Parts Corporation.
4. Group Annuity Contract Number GA1466 Issued by Aetna
Life Insurance Company to Balkamp Inc.
<PAGE> 91
SCHEDULE D
DISABILITY RETIREMENT FOR PARTICIPANTS WHO TERMINATE ACTIVE
EMPLOYMENT PRIOR TO JANUARY 1, 1993
(a) This Schedule D shall apply to any Participant who is not in active
Employment on or after January 1, 1993. Any Participant who is in
active Employment with an Employer on or after January 1, 1993 will
not be eligible for a Disability Retirement under this Schedule D.
Instead, such Participant's Disability Retirement benefit, if any,
will be determined pursuant to the provisions of Section 4.03.
(b) Each Participant who prior to his cessation of active Employment
completes five years of Credited Service and becomes Permanently
Disabled shall be entitled to elect disability retirement. A
Participant who elects disability retirement shall receive a monthly
Retirement Income in the form of a Life Annuity Option (see Section
6.01(a)) for the life of the Participant beginning on his Disability
Retirement Date.
(c) The monthly Retirement Income payable to a Participant who is
Permanently Disabled shall be determined in the same manner as his
monthly Retirement Income would be determined under Section 4.01
except as modified below:
(i) The Participant's disability Retirement Income shall be
determined using the Participant's Credited Service as of the
Participant's Disability Retirement Date (ignoring Credited
Service beyond such Disability Retirement Date).
(ii) The Participant's Average Earnings shall be the greater of the
following two amounts:
(A) The Participant's current monthly Earnings, or
(B) 1/l2th of the Participant's previous calendar year
Earnings.
(iii) If a Participant has less than 15 years of Credited Service on
his Disability Retirement Date, the Participant's disability
Retirement Income shall equal 30% of the Participant's Average
Earnings (as modified in paragraph (ii) above) without the
reduction provided in Section 4.01(c).
(iv) In computing the Participant's disability Retirement Income
under Section 4.01(b) (for Participants with 15 or more years
of Credited Service), the offset of 50% of the Participant's
monthly Anticipated Social Security
<PAGE> 92
Benefit shall not exceed 64% of the Participant's actual
Social Security disability retirement benefit.
(c) A married Participant's election to receive a disability retirement
shall be valid only if the Participant's Spouse consents in writing to
the disability retirement on a form provided by the Committee for such
purpose in the presence of a Notary Public or Plan representative.
The Spouse's consent must acknowledge the effect of such consent.
However, if the Participant establishes to the satisfaction of the
Committee that his Spouse's consent cannot be obtained because he has
no Spouse, because his Spouse cannot be located, or because of other
circumstances as determined by applicable Treasury Regulations, the
Committee may treat the Participant's election as an election for
which spousal consent was obtained. A Spouse's consent pursuant to
this paragraph shall be irrevocable.
(d) Prior to electing or consenting to the disability retirement, the
Participant and the Participant's Spouse (if married) shall receive a
written explanation of the disability retirement and of the option of
receiving normal or early retirement benefits in accordance with
Sections 4.01 and 4.02. The explanation shall also describe the
impact of electing disability retirement benefits including waiver of
the Joint and 50% Survivor Annuity and Pre-Retirement Survivor
Annuity. Such explanation shall also provide all other relevant
information described in Section 6.02(d).
(e) By electing and consenting to the disability retirement, Participant
and Spouse waive all rights to benefits under all other sections of
Article IV, including normal retirement (Section 4.01), early
retirement (Section 4.02), delayed retirement (Section 4.04) and
termination of employment benefits (Section 4.05). In addition, all
death benefits under Article V shall be waived and the death benefit,
if any, provided to the Participant's Beneficiary shall be limited to
the death benefits described in paragraph (f) below. If the
Participant fails to elect to receive disability retirement or the
Participant's Spouse fails to consent to the Participant's election,
the Participant shall not be entitled to elect a Retirement Income
under this Schedule D but shall instead be entitled to a Retirement
Income pursuant to and in accordance with Sections 4.01, 4.02, 4.04 or
4.05, as the case may be.
(f) If a Participant is Permanently Disabled and dies while he is entitled
to benefits under this Schedule D, the Participant's Beneficiary shall
be entitled to receive a monthly Retirement Income to the extent the
total months of Retirement Income paid to the Participant under
Schedule D is less than the number of months determined pursuant to
the following table:
<PAGE> 93
<TABLE>
<CAPTION>
Complete Years of Credited Number of
-------------------------- ---------
Service at Disability Retirement Months
--------------------------------- ------
Date Payable
----- -------
<S> <C>
5 but less than 10 12.5
10 but less than 15 25
15 or more 50
</TABLE>
In such event, the Participant's Beneficiary shall receive a
Retirement Income in the same amount as the Participant was receiving
under this Schedule D immediately prior to his death beginning on the
first day of the month following the Participant's death and
continuing only until the total months of Retirement Income paid to
the Participant and the total months of Retirement Income paid to the
Participant's Beneficiary equal the appropriate number of months as
determined by the above table. The Beneficiary may, prior to the
receipt of benefits, request that the death benefit be paid in a lump
sum. Such lump sum payment shall be the Actuarial Equivalent of the
benefits payable to the Beneficiary.
(g) Notwithstanding anything in this Plan to the contrary, any Participant
who remains in the employ of the Employer after his Normal Retirement
Date and who thereafter becomes Permanently Disabled while employed by
the Employer, shall have his Retirement Income determined under
Section 4.04 instead of this Schedule D.
(h) If the Participant's Permanent Disability ceases prior to his Normal
Retirement Date, the following shall apply:
(i) All payments under this Schedule D shall cease. In addition,
the Participant's and Spouse's, if married, election to waive
the Automatic Form of Payment (Section 6.01) shall be void.
Thereafter, the Participant's Retirement Income shall be
determined under the terms of Sections 4.01, 4.02, 4.04 or
4.05, whichever is applicable.
(ii) If the Participant recommences Employment within 90 days after
he recovers from his Permanent Disability, the Participant
shall receive Credited Service for the period of his Permanent
Disability (starting as of his Disability Retirement Date and
ending on the date of his recovery from Permanent Disability).
In addition, the Participant's Average Earnings will be
determined assuming the Participant received monthly Earnings
during his period of Permanent Disability equal to his Average
Earnings received immediately prior to his Permanent
Disability. Any Retirement Income subsequently paid to the
Participant will be reduced by the Actuarial Equivalent of
benefits previously paid to the Participant under this
Schedule D.
(iii) If the Participant does not recommence Employment within 90
days after he recovers from his Permanent Disability, the
Participant's subsequent
<PAGE> 94
Retirement Income shall be based on the Participant's Average
Earnings and Credited Service as of his Disability Retirement
Date.
(i) If a Participant has not completed five years of Credited Service
prior to his cessation of active Employment or if the Participant
becomes Permanently Disabled after his cessation of active Employment,
the Participant shall not be entitled to a monthly Retirement Income
under this Schedule D.
(j) Disability Retirement Date shall mean the first day of the month
coincident with or immediately following the later of (i) the date the
Permanent Disability as defined in Section 2.38 has existed for five
consecutive months or (ii) the date the Committee determines that the
Participant is Permanently Disabled.
(k) In each case, the Disability Retirement Benefit described in this
Schedule D remains subject to all limitations, reductions, adjustments
of this Plan, including but not limited to adjustments under Code
Section 401(a)(17) (limit on Earnings), Code Section 415 (see Article
XIII) and Section 4.07 of the Plan (reduction of benefit in certain
cases).
<PAGE> 95
SCHEDULE E
SPECIAL PROVISIONS RELATING TO RETIREMENT WINDOWS
(SEE SECTION 4.02(C))
1. Retirement Window for Certain Employees of the Mid-South Data
Processing and D.C. Accounting to Normal, Illinois. Employees who
have attained age 55 and earned 15 or more years of Credited Service
as of December 31, 1989 and who are employed on October 31, 1989 by
(1) Mid-South Data Processing, (2) Mid-South Distribution Center
Accounting, or (3) Memphis-area Locals may elect early retirement
without the early retirement reduction factor described in Section
4.02(b) of the Plan. Such eligible Employees must notify the Company
of their desire to elect early retirement between September 19, 1989
and October 31, 1989 (inclusive) and must actually retire from the
Company between December 31, 1989 and February 1, 1990 (inclusive).
The term "Memphis-area Locals" refers to Company-owned (NAPA) stores
located in the Memphis area served by the Memphis Distribution Center.
All eligible Employees will be notified of this special early
retirement on or about September 19, 1989.
2. Retirement Window for Certain Employees Employed by Rayloc
Atlanta. Employees who (1) were actively employed on October 21,
1994, by Rayloc and continuously employed thereafter by Rayloc through
December 31, 1994, at its Atlanta facility; and, (2) have attained age
59-1/2 but are younger than age 65 (i.e., born after January 1, 1930
and before July 1, 1935); and, (3) have earned 15 or more years of
Credited Service may elect early retirement without the early
retirement reduction factor described in Section 4.02(b) of the Plan.
Such eligible Employees must notify the Company of their desire to
elect early retirement between October 21, 1994, and December 9, 1994
(inclusive) and must actually terminate employment from Rayloc on
December 31, 1994 (with early retirement effective January 1, 1995).
<PAGE> 96
<TABLE>
<S> <C>
NAPA Auto Parts March 1, 1984
Pella, IA
Motor Parts & Supply August 1, 1988
Hattiesburg, MS
Motor Parts & Supply August 1, 1988
Petal, MS
W. C. Hendrie & Co. August 1, 1988
Long Beach, CA (Motion Ind.)
Auto Parts of Fairfield August 1, 1989
Fairfield, IA
M & J Auto Parts November 1, 1989
Toledo, OH
Strong Auto Parts January 1, 1990
Deer Park, WA
Loeb Auto Parts February 1, 1990
Washington, IL
Central City Auto Parts March 1, 1990
Central City, KY
Beaver Dam Auto Parts March 1, 1990
Beaver Dam, KY
Les Hite Inc. June 1, 1990
Leesburg, SC
Sheppard Auto Supply Inc. July 1, 1990
Montgomery, WV
Ansted, WV
Belle, WV
Clay, WV
Gauley Bridge, WV
Oak Hill, WV
Neilson Auto Parts July 1, 1990
Idaho Falls, ID
Rigby Auto Parts July 1, 1990
Idaho Falls, ID
</TABLE>
- i -
<PAGE> 97
<TABLE>
<S> <C>
BMP Inc. August 1, 1990
Schofield, WI
Wausau, WI
Milligan Parts Company October 1, 1990
Georgetown, OH
Bethel, OH
Pebbles, OH
Ripley, OH
W. Union, OH
Lovell Bros, Inc. November 1, 1990
Ocala, FL
Bolleview, FL
Crystal River, FL
Inverness, FL
Lynn, FL
Williston, FL
A&J Automotive Parts, Inc. December 1, 1990
Commerce, GA
</TABLE>
- ii -
<PAGE> 1
EXHIBIT 13
SELECTED FINANCIAL DATA
Genuine Parts Company and Subsidiaries
[LOGO]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
(restated to give effect to pooling of interests) Year Ended December 31
- ----------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
================================================================================================================
(in thousands except per share data)
<S> <C> <C> <C> <C> <C>
Net sales .................................... $4,858,415 $4,384,294 $4,016,751 $3,763,736 $3,660,443
Cost of goods sold ........................... 3,343,699 3,023,038 2,781,731 2,612,059 2,543,951
Selling, administrative and other expenses ... 1,039,848 935,427 852,610 790,559 755,051
Income before income taxes ................... 474,868 425,829 382,410 361,118 361,441
Income taxes ................................. 186,320 166,961 145,440 137,154 137,718
Net income** ................................. $ 288,548 $ 257,813 $ 236,970 $ 223,964 $ 223,723
Average common shares outstanding during year* 124,041 124,217 124,085 123,980 125,262
Per common share*:
Net income** ......................... $ 2.33 $ 2.08 $ 1.91 $ 1.81 $ 1.79
Dividends declared ................... 1.15 1.06 1.00 .97 .92
December 31 closing stock price ...... 36.00 37.63 34.00 32.50 25.33
Long-term debt, less current maturities ...... 11,431 12,265 13,043 12,658 16,369
Shareholders' equity ......................... 1,526,165 1,445,263 1,316,372 1,211,716 1,122,182
Total assets ................................. $2,029,471 $1,870,756 $1,707,303 $1,577,516 $1,488,412
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted to reflect the three-for-two split in 1992.
**Net of cumulative effect of changes in accounting principles of $1,055 in
1993.
SELECTED RATIO ANALYSIS
<TABLE>
<CAPTION>
(restated to give effect to pooling of interests) Year Ended December 31
- ----------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
================================================================================================================
<S> <C> <C> <C> <C> <C>
(In % of net sales)
Cost of goods sold .............................. 68.82% 68.95% 69.25% 69.40% 69.50%
Selling, administrative and other expenses ...... 21.40 21.34 21.23 21.00 20.63
Income before income taxes ...................... 9.77 9.71 9.52 9.60 9.87
Net income ...................................... 5.94 5.88 5.90 5.95 6.11
Rate earned on shareholders' equity at the beginning
of each year .................................... 19.97% 19.59% 19.56% 19.96% 21.14%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
MARKET AND DIVIDEND INFORMATION
High and Low Sales Price and Dividends Declared per Share of Common Shares
Traded on the New York Stock Exchange.
<TABLE>
<CAPTION>
Sales Price of Common Shares
- ----------------------------------------------------------------------------------------------------------------
Quarter 1994 1993
================================================================================================================
High Low High Low
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First.............................................. $39.38 $33.75 $37.25 $32.88
Second............................................. 36.88 33.63 37.38 33.50
Third.............................................. 37.38 34.13 38.25 34.50
Fourth............................................. 37.00 33.88 39.00 34.88
</TABLE>
<TABLE>
<CAPTION>
Dividends Declared per Share
- ----------------------------------------------------------------------------------------------------------------
1994 1993
================================================================================================================
<S> <C> <C>
First ............................................. $.2875 $.265
Second ............................................ .2875 .265
Third ............................................. .2875 .265
Fourth ............................................ .2875 .265
Number of Record Holders of Common Stock........... 7,917
</TABLE>
eighteen
<PAGE> 2
REPORT OF INDEPENDENT AUDITORS
Genuine Parts Company and Subsidiaries
[LOGO] ERNST & YOUNG LLP
Board of Directors
Genuine Parts Company
We have audited the accompanying consolidated balance sheets of Genuine Parts
Company and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Genuine Parts Company and subsidiaries at December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the financial statements, in 1993 the
Company changed its method of accounting for postretirement benefits and
income taxes.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
February 6, 1995
nineteen
<PAGE> 3
CONSOLIDATED BALANCE SHEETS
Genuine Parts Company and Subsidiaries
[LOGO]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
December 31
- --------------------------------------------------------------------------------------------
1994 1993
============================================================================================
(dollars in thousands)
ASSETS
- --------------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ....................................... $ 82,410 $ 123,231
Short-term investments, at cost, which
approximates market value ..................................... --- 64,599
Trade accounts receivable ....................................... 487,395 428,911
Merchandise inventories ......................................... 1,004,580 879,154
Prepaid expenses and other current accounts ..................... 21,396 10,299
- --------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,595,781 1,506,194
INVESTMENTS AND OTHER ASSETS (Notes 1 and 8) .................... 175,658 133,364
PROPERTY, PLANT AND EQUIPMENT
Land ............................................................ 32,152 28,109
Buildings, less allowance for depreciation
(1994 - $60,176; 1993 - $56,839)............................... 106,608 103,146
Machinery and equipment, less allowance for
depreciation (1994 - $131,905; 1993 - $128,262) ............... 119,272 99,943
- --------------------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 258,032 231,198
- --------------------------------------------------------------------------------------------
$2,029,471 $1,870,756
============================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Trade accounts payable .......................................... $ 316,589 $ 258,949
Current maturities on long-term debt ............................ 933 797
Accrued compensation ............................................ 37,790 30,883
Accrued expenses ................................................ 20,368 18,222
Dividends payable ............................................... 35,246 32,933
Income taxes payable ............................................ 11,482 10,167
Deferred income taxes ........................................... --- 1,521
- --------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 422,408 353,472
LONG-TERM DEBT, less current maturities ......................... 11,431 12,265
DEFERRED INCOME TAXES ........................................... 44,540 37,980
MINORITY INTERESTS IN SUBSIDIARIES .............................. 24,927 21,776
SHAREHOLDERS EQUITY (Notes 2, 3, 4 and 6):
Preferred Stock, par value $1 a share-authorized
10,000,000 shares; none issued
Common Stock, par value $1 a share-authorized
450,000,000 shares; issued 122,627,303 shares
in 1994; 124,282,289 shares in 1993 ........................... 122,627 124,282
Additional paid-in capital ...................................... --- 2,566
Retained earnings ............................................... 1,403,538 1,318,415
- --------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,526,165 1,445,263
- --------------------------------------------------------------------------------------------
$2,029,471 $1,870,756
============================================================================================
</TABLE>
See accompanying notes.
twenty
<PAGE> 4
CONSOLIDATED STATEMENTS OF INCOME
Genuine Parts Company and Subsidiaries
(LOGO)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Year Ended December 31
- -------------------------------------------------------------------------------------------------
1994 1993 1992
=================================================================================================
(dollars in thousands except per share data)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales ............................................ $4,858,415 $4,384,294 $4,016,751
Cost of goods sold ................................... 3,343,699 3,023,038 2,781,731
- -------------------------------------------------------------------------------------------------
1,514,716 1,361,256 1,235,020
Selling, administrative and other expenses ........... 1,039,848 935,427 852,610
- -------------------------------------------------------------------------------------------------
Income before income taxes and cumulative effect of
changes in accounting principles ................... 474,868 425,829 382,410
Income taxes (Note 7) ................................ 186,320 166,961 145,440
- -------------------------------------------------------------------------------------------------
Income before cumulative effect of changes in
accounting principles .............................. 288,548 258,868 236,970
Cumulative effect of changes in accounting principles,
net of tax (Note 1) ................................ -- 1,055 --
- -------------------------------------------------------------------------------------------------
NET INCOME ........................................... $ 288,548 $ 257,813 $ 236,970
=================================================================================================
Net income per common share .......................... $ 2.33 $ 2.08 $ 1.91
=================================================================================================
Average common shares outstanding during the year .... 124,041 124,217 124,085
=================================================================================================
See accompanying notes.
</TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
Genuine Parts Company and Subsidiaries
(LOGO)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Common Stock Additional Total
------------ Paid-In Retained Shareholders
Shares Amount Capital Earnings Equity
=========================================================================================================
(dollars in thousands)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1992 ........ 82,670,204 $ 82,670 $ -- $1,129,046 $1,211,716
Net income ...................... -- -- -- 236,970 236,970
Cash dividends declared ......... -- -- -- (114,508) (114,508)
Three-for-two stock split ....... 41,350,036 41,350 -- (41,395) (45)
Stock options exercised ......... 142,849 143 -- 3,270 3,413
Repurchase of shares by pooled
companies prior to merger ..... -- -- -- (4,895) (4,895)
Cash dividends declared by pooled
companies prior to merger ..... -- -- -- (16,279) (16,279)
- ------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 ...... 124,163,089 124,163 -- 1,192,209 1,316,372
Net income ...................... -- -- -- 257,813 257,813
Cash dividends declared ......... -- -- -- (131,681) (131,681)
Stock options exercised ......... 119,200 119 2,566 74 2,759
- ------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 ...... 124,282,289 124,282 2,566 1,318,415 1,445,263
Net income ...................... -- -- -- 288,548 288,548
Cash dividends declared ......... -- -- -- (142,602) (142,602)
Stock options exercised ......... 192,613 193 4,175 -- 4,368
Purchase of stock ............... (2,011,000) (2,011) (6,741) (61,593) (70,345)
Other ........................... 163,401 163 -- 770 933
- ------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994 ...... 122,627,303 $122,627 $ -- $1,403,538 $1,526,165
=========================================================================================================
See accompanying notes.
</TABLE>
twenty-one
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
Genuine Parts Company and Subsidiaries
[LOGO]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Year Ended December 31
- ----------------------------------------------------------------------------------------------------------------
1994 1993 1992
================================================================================================================
(dollars in thousands)
<S> <C> <C> <C>
Operating Activities
Net income ............................................................ $ 288,548 $ 257,813 $ 236,970
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization ..................................... 37,374 34,420 31,687
Gain on sale of property, plant and equipment ..................... (158) (1,342) (895)
Provision for deferred taxes ...................................... 6,699 5,990 3,896
Equity in income from investees ................................... (7,224) (4,452) (2,513)
Income applicable to minority interests ........................... 2,373 2,090 1,537
Changes in operating assets and liabilities:
Trade accounts receivable ....................................... (58,484) (25,759) (33,455)
Merchandise inventories ......................................... (125,426) (91,462) (60,614)
Prepaid expenses and other current accounts ..................... (11,097) (1,413) 488
Trade accounts payable .......................................... 57,641 18,319 22,090
Income taxes payable and other current liabilities .............. 8,708 6,367 (12,987)
- ----------------------------------------------------------------------------------------------------------------
(89,594) (57,242) (50,766)
- ----------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 198,954 200,571 186,204
Investing Activities
Acquisition of Davis & Wilmar, Inc., net of cash acquired of $3,556 ... -- -- (28,444)
Investment in Grupo Auto Todo ......................................... (26,009) -- --
Purchase of property, plant and equipment ............................. (66,002) (57,513) (31,585)
Proceeds from sale of property, plant and equipment ................... 2,885 4,831 3,862
Purchase of short-term investments .................................... -- (64,599) (12,010)
Proceeds from sale and maturity of short-term investments ............. 64,599 12,010 17,698
Other investing activities ............................................ (9,062) (12,962) (9,696)
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (33,589) (118,233) (60,175)
Financing Activities
Payments on long-term debt ............................................ (698) (804) (5,954)
Stock options exercised ............................................... 4,368 2,759 3,368
Dividends paid ........................................................ (140,289) (129,846) (127,338)
Purchase of stock ..................................................... (70,345) -- (4,896)
Contributions from minority interests ................................. 778 765 822
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (206,186) (127,126) (133,998)
- ----------------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (40,821) (44,788) (7,969)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 123,231 168,019 175,988
- ----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 82,410 $ 123,231 $ 168,019
================================================================================================================
Supplemental disclosure of cash flow information
Cash paid during the year for:
Income taxes ........................................................ $ 178,307 $ 160,944 $ 154,498
================================================================================================================
Interest ............................................................ $ 1,333 $ 1,587 $ 1,890
================================================================================================================
</TABLE>
See accompanying notes.
twenty-two
<PAGE> 6
Notes to Consolidated Financial Statements
Genuine Parts Company and Subsidiaries
December 31, 1994 GPC(LOGO)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of Genuine Parts Company and all of its subsidiaries (the "Company").
Income applicable to minority interests is included in other expenses.
Significant intercompany accounts and transactions have been eliminated in
consolidation.
CASH EQUIVALENTS: The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.
INVESTMENTS: On August 27, 1992, the Company paid approximately $5.5 million to
increase its ownership in UAP Inc., a Canadian automotive parts distributor,
from 20% to 24%. The Company also has a 49% interest in a partnership formed by
the Company and UAP Inc.
On October 1, 1994, the Company paid approximately $26 million to acquire
a 49% interest in Grupo Auto Todo, a partnership formed by the Company and Auto
Todo, a Mexican automotive parts distributor.
These investments are accounted for by the equity method of accounting.
INVENTORIES: Inventories are valued at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method for substantially all
automotive parts, and certain industrial parts, and by the first-in, first-out
(FIFO) method for all other inventories. If the FIFO method had been used for
all inventories, cost would have been $102,077,000 and $100,772,000 higher than
reported at December 31, 1994 and December 31, 1993, respectively.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is stated on the
basis of cost. Depreciation is determined principally on a straight-line basis
over the estimated useful life of each asset.
STOCK OPTIONS: Proceeds from the sale of stock under options are credited to
common stock at par value and the excess of the option price over par value is
credited to additional paid-in capital.
INTEREST INCOME: Interest income (1994 - $6,765,000; 1993 - $6,273,000; 1992 -
$7,538,000) has been deducted from selling, administrative and other expenses.
FOREIGN OPERATIONS: Foreign operations represent less than five percent of
consolidated amounts. Translation adjustments are not significant.
ACCOUNTING CHANGES: Effective January 1, 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 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) in 1993.
Also effective January 1, 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 1993 net
income by $4,000,000.
The adoption of Statements 106 and 109 did not have a material impact on
the Company's financial statements or results of operations.
NET INCOME PER COMMON SHARE: Net income per common share is based on the
weighted average number of shares of common stock outstanding during each year.
Options outstanding under the Company's stock option plan would not materially
dilute net income per share and, therefore, have not been included in the
computation.
2. ACQUISITIONS
On June 30, 1992, the Company acquired all of the outstanding common stock of
Davis & Wilmar, Inc., an automotive parts distributor, for $32 million. The
acquisition has been recorded using the purchase method of accounting.
On January 29, 1993, the Company completed its merger of Berry Bearing
Company and certain affiliated companies into the Company. The Berry Companies
distribute industrial replacement parts and related supplies throughout the
Midwestern United States. The Company issued 9,586,531 shares of common stock
for all of the outstanding common stock of the Berry Companies. This
transaction has been accounted for as a pooling of interests and, accordingly,
the accompanying financial statements have been retroactively combined to
include the accounts of the pooled companies.
3. STOCK SPLIT
On February 17, 1992, the Board of Directors approved a three-for-two stock
split, effected in the form of a 50% stock dividend, payable to shareholders of
record on March 16, 1992. The par value of the shares issued was charged to
retained earnings.
twenty-three
<PAGE> 7
4. SHAREHOLDERS' EQUITY
The Company has a Shareholder Protection Rights Agreement which includes the
distribution of Rights to common shareholders. The Rights entitle the holder,
upon occurrence of certain events, to purchase additional stock of the Company.
The Rights will be exercisable only if a person, group or company acquires 20%
or more of the Company's common stock or commences a tender offer that would
result in ownership of 30% or more of the common stock. The Company is entitled
to redeem each Right for one cent.
5. LEASED PROPERTIES
The Company leases land, buildings and equipment. Certain land and building
leases have renewal options generally for periods ranging from two to ten
years. Future minimum payments, by year and in the aggregate, under the
noncancellable operating leases with initial or remaining terms of one year or
more consisted of the following at December 31, 1994 (in thousands):
<TABLE>
<S> <C>
1995.......................... $ 48,238
1996.......................... 35,159
1997.......................... 24,534
1998.......................... 17,755
1999.......................... 12,031
Subsequent to 1999............ 24,725
- --------------------------------------------
$162,442
============================================
</TABLE>
Rental expense for operating leases was $53,913,000 in 1994; $48,935,000
in 1993; and $47,033,000 in 1992.
6. STOCK OPTIONS
In accordance with stock option plans approved by the shareholders, options are
granted to key personnel for the purchase of the Company's common stock at
prices not less than the fair market value of the shares on the dates of grant.
Most options may be exercised not earlier than twelve months nor later than ten
years from the date of grant. On April 20, 1992, the shareholders approved the
1992 Stock Option and Incentive Plan which provides for 4,500,000 shares of
common stock to be available for granting of incentive and nonqualified stock
options to key employees. Further information relating to the options is as
follows:
<TABLE>
<CAPTION>
Shares
Option Price --------------------------------------
Per Share 1994 1993 1992
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding at
January 1 ........ $22.58 to $37.06 1,496,301 1,432,850 798,556
Granted .......... 30.31 to 37.06 693,000 235,700 858,900
Exercised ........ 22.58 to 31.92 (272,887) (150,749) (206,481)
Cancelled ........ 22.79 to 35.69 (16,337) (21,500) (18,125)
- ---------------------------------------------------------------------------------
Outstanding at
December 31 ...... 23.21 to 37.06 1,900,077 1,496,301 1,432,850
=================================================================================
Exercisable at
December 31 ...... 23.21 to 37.06 770,774 1,014,843 520,316
=================================================================================
Shares available for
future grants .... 2,694,193 3,520,856 3,735,056
=================================================================================
</TABLE>
On March 31, 1994, the Company entered into restricted stock agreements
with two officers which provide for the award of up to 100,000 and 50,000
shares, respectively, during the period 1994 - 1998 based on the Company
achieving certain increases in earnings per share and stock price levels, as
defined in the agreements. For the year ended December 31, 1994, the officers
earned 10,000 and 5,000 shares, respectively. The Company recognizes
compensation expense equal to the fair market value of the stock on the award
date over the remaining vesting period which expires on March 31, 2004.
7. INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of the assets and liabilities for financial
reporting purposes and amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities are as follows:
<TABLE>
<CAPTION>
1994 1993
- ----------------------------------------------------
(in thousands)
<S> <C> <C>
Employee and retiree benefits.. $17,301 $15,793
Property, plant and equipment.. 17,231 15,944
Merchandise inventories ....... 6,855 6,243
Other ......................... 3,153 1,521
- ----------------------------------------------------
$44,540 $39,501
====================================================
</TABLE>
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
- --------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Federal:
Current..... $148,282 $132,298 $116,772
Deferred.... 6,699 5,990 3,896
State ......... 31,339 28,673 24,772
- --------------------------------------------------
$186,320 $166,961 $145,440
==================================================
</TABLE>
The reasons for the difference between total tax expense and the amount
computed by applying the statutory Federal income tax rate to income before
income taxes were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
- ---------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Statutory rate applied to
pre-tax income ............. $ 166,204 $ 149,040 $ 130,019
Plus state income taxes,
net of Federal tax benefit.. 20,370 18,637 16,350
Other ........................ (254) (716) (929)
- ---------------------------------------------------------------------
$ 186,320 $ 166,961 $ 145,440
=====================================================================
</TABLE>
8. EMPLOYEE BENEFIT PLANS
The Company's noncontributory defined benefit pension plan covers substantially
all of its employees. The benefits are based on an average of the employees'
compensation during five of their last ten years of credited service. The
Company's funding policy is to contribute amounts
twenty-four
<PAGE> 8
deductible for income tax purposes. Contributions are intended to provide not
only for benefits attributed for service to date but also for those expected to
be earned in the future.
The following table sets forth the plan's funded status and amounts
recognized in the Company's financial statements at December 31:
<TABLE>
<CAPTION>
1994 1993
- -------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of
benefit obligations:
Accumulated benefit obligation,
including vested benefits of $201,029
in 1994 and $202,994 in 1993 ........ $(205,808) $(207,707)
===================================================================
Projected benefit obligation for service
rendered to date ...................... $(315,368) $(339,271)
Plan assets at fair value, primarily
insurance contracts, U.S. Government
securities and equity securities ...... 346,303 344,217
- -------------------------------------------------------------------
Plan assets in excess of projected
benefit obligation .................... 30,935 4,946
Unrecognized prior service cost ......... (26,520) (24,365)
Unrecognized net loss from past
experience different from that
assumed and effects of changes
in assumptions ........................ 51,926 61,307
Unrecognized net transition obligation .. 1,822 2,083
- -------------------------------------------------------------------
Net prepaid pension cost ................ $ 58,163 $ 43,971
===================================================================
</TABLE>
Net pension cost (income) included the following components at December 31:
<TABLE>
<CAPTION>
1994 1993 1992
- ---------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Service cost ........ $ 12,247 $ 9,498 $ 10,775
Interest cost ....... 25,002 23,192 23,909
Actual return on plan
assets ............ 3,578 (35,190) (21,080)
Net amortization and
deferral .......... (36,606) 2,353 (5,870)
- ---------------------------------------------------------
Net periodic pension
cost (income) ..... $ 4,221 $ (147) $ 7,734
=========================================================
</TABLE>
Effective January 1, 1993, the Company began insuring new long-term
disability claims under a policy separate from the pension plan, resulting in a
decrease in net pension cost of approximately $7,000,000 during 1993.
Assumptions used in the accounting for the defined benefit plan as of
December 31 were:
<TABLE>
<CAPTION>
1994 1993 1992
- -----------------------------------------------------------
<S> <C> <C> <C>
Weighted-average
discount rate ............. 8.40% 7.50% 8.75%
Rate of increase in
future compensation
levels .................... 5.00% 5.75% 5.75%
Expected long-term rate
of return on assets.. 9.50% 10.00% 10.00%
</TABLE>
The changes in the above assumptions resulted in a net $37,400,000 decrease
in the projected benefit obligation at December 31, 1994.
At December 31, 1994, the plan held 534,997 shares of common stock of the
Company with a market value of $19,259,892.
The Company has a defined contribution plan which covers substantially all
of its employees. The Company's contributions are determined based on 20% of
the first 6% of the covered employee's salary. Total plan expense was
approximately $3,364,000 in 1994, $2,712,000 in 1993, and $2,212,000 in 1992,
respectively.
9. INDUSTRY DATA
The industry data for the past five years presented in the Exhibit on page 27
is an integral part of these financial statements.
The Company is primarily engaged in the distribution of merchandise,
principally automotive and industrial replacement parts, and office supplies.
In the automotive industry, the Company distributes replacement parts (other
than body parts) for substantially all makes and models of domestically
manufactured automobiles, most domestically manufactured trucks and buses, and
most vehicles manufactured outside the United States. In addition, this segment
of the business includes the rebuilding of some automotive parts and the
distribution of replacement parts for certain types of farm equipment,
motorcycles, motorboats and small engines.
The Company's industrial segment distributes a wide variety of industrial
bearings, mechanical and fluid power transmission equipment, including
hydraulic and pneumatic products, material handling components, and related
parts and supplies.
The Company's office products segment distributes a wide variety of office
products, computer supplies, office furniture and business electronics.
Intersegment sales are not significant. Operating profit for each industry
segment is calculated as net sales less operating expenses excluding general
corporate expenses, interest expense, equity in income from investees and
minority interests. Identifiable assets by industry are those assets that are
used in the Company's operations in each industry. Corporate assets are
principally cash, cash equivalents, short-term investments and headquarters'
facilities and equipment.
twenty-five
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYIS
Genuine Parts Company and Subsidiaries
(LOGO)
December, 31, 1994
RESULTS OF OPERATIONS:
Net sales in 1994 increased for the 45th consecutive year to a record high of
$4.9 billion. This was an increase of 11% over the prior year and compares
with increases of 9% in 1993, and 7% in 1992. Sales for the Automotive Parts
Group increased 8% in 1994 versus 7% in 1993, reflecting an improved economic
climate and enhanced marketing programs for all segments of the automotive
aftermarket. Sales for the Industrial Parts Group increased 14% in 1994 versus
7% in 1993 as industrial production continues to increase and factory
utilization remains high. Sales for the Office Products Group increased 14% in
1994 compared with 21% in 1993 reflecting geographic expansion, increased
market share and improved service level.
Costs of goods sold remained approximately the same as a percentage of net
sales in each of the past two years. Selling, administrative and other
expenses increased each year, and the percentage to net sales remained
approximately the same. The effective income tax rate was 39.2% in 1994 and in
1993 and 38.0% in 1992. The effective tax rate in 1993 reflects the increase
in the federal tax rate from 34% to 35% effective January 1, 1993.
Consolidated net income in 1994 increased 12% over 1993 net income. Net income
in 1993 increased 9% over 1992.
Effective December 31, 1994, the Company changed the assumptions in the
Pension Plan as follows: weighted average discount rate from 7.50% to 8.40%,
rate of increase in future compensation levels from 5.75% to 5.00%, and the
expected long-term rate of return on assets from 10.00% to 9.50%. The changes
in these assumptions resulted in a net $37,400,000 decrease in the projected
benefit obligation at December 31, 1994.
Effective January 1, 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 effective January 1, 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 change in accounting method.
The adoption of Statements 106 and 109 did not have a material impact on
the Company's financial statements or results of operations.
LIQUIDITY AND SOURCES OF CAPITAL:
The ratio of current assets to current liabilities was 3.8 at the close of 1994
with current assets amounting to 79% of total assets. Trade accounts
receivable and inventories increased 13.6% and 14.3% respectively, while
working capital increased 2%. The increase in working capital has been
financed principally from the Company's cash flow generated by operations.
Working capital only increased a small percentage due to the Company's stock
repurchase program for 1994. At its August 16, 1994 meeting, the Genuine Parts
Company Board of Directors approved a stock repurchase program which authorizes
the Company to reacquire up to 10 million shares of its Common Stock. To date,
approximately 2 million shares have been repurchased. Current financial
resources and anticipated funds from operations are expected to meet
requirements for working capital in 1995. Capital expenditures during 1994
amounted to $66 million compared with $58 million in 1993 and $32 million in
1992. The increase in 1994 and 1993 reflects the Company's continuing
geographic expansion as well as the upgrading of its existing facilities.
Additionally, capital expenditures in 1992 reflected the Company's response to
the difficult business environment and the overall economy. It is anticipated
that capital expenditures in 1995 will be approximately the same as 1994.
On January 29, 1993, 9,586,531 shares of common stock were issued for all
of the outstanding common stock of Berry Bearing Company and certain affiliated
companies. This transaction has been accounted for as a pooling of interests;
and accordingly, the financial statements prior to that date have been
retroactively combined to include the accounts of the pooled companies.
INFLATION:
There were no price increases in the Automotive Parts Group in 1994 as sales
increased 8%. The Industrial Parts Group had a sales increase of 14% and price
increases of approximately 2.9%. The Office Products Group had a sales
increase of 14% and price increases of less than 1%.
Price increases in the Automotive Group were approximately 1% in 1993 as
sales increased 7%. The Industrial Parts Group had a sales increase of 7% and
price increases of approximately 3%. The Office Products Group had a sales
increase of 21% and price increases of less than 1%.
The charges to operations for depreciation represent the allocation of
historical costs incurred over past years and are significantly less than if
they were based on the current cost of productive capacity being consumed.
twenty-six
<PAGE> 10
Industry Data
Genuine Parts Company and Subsidiaries
GPC(LOGO)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
==============================================================================================================
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Net sales
Automotive ........................... $2,693,961 $2,485,267 $2,318,761 $2,188,698 $2,117,464
Industrial ........................... 1,317,495 1,153,371 1,082,428 1,021,019 1,019,227
Office products ...................... 846,959 745,656 615,562 554,019 523,752
- --------------------------------------------------------------------------------------------------------------
Total net sales ................... $4,858,415 $4,384,294 $4,016,751 $3,763,736 $3,660,443
- --------------------------------------------------------------------------------------------------------------
Operating profit
Automotive ........................... $ 304,164 $ 282,791 $ 262,422 $ 260,818 $ 252,862
Industrial ........................... 111,822 96,727 87,493 76,922 80,578
Office products ...................... 78,206 65,938 50,967 45,112 45,606
- --------------------------------------------------------------------------------------------------------------
Total operating profit ............ 494,192 445,456 400,882 382,852 379,046
Interest expense ....................... (1,321) (1,584) (1,871) (5,434) (5,411)
Corporate expense ...................... (22,854) (20,405) (17,577) (18,662) (14,448)
Equity in income ....................... 7,224 4,452 2,513 4,000 3,814
Minority interests ..................... (2,373) (2,090) (1,537) (1,638) (1,560)
- --------------------------------------------------------------------------------------------------------------
Income before income taxes ........ $ 474,868 $ 425,829 $ 382,410 $ 361,118 $ 361,441
- --------------------------------------------------------------------------------------------------------------
Identifiable assets
Automotive ........................... $1,223,416 $1,152,148 $1,040,191 $ 926,617 $ 875,324
Industrial ........................... 404,647 370,633 354,547 338,054 337,418
Office products ...................... 308,817 283,479 228,802 201,036 186,815
Corporate ............................ 5,950 6,731 27,333 57,197 43,881
Equity investments ................... 86,641 57,765 56,430 54,612 44,974
- --------------------------------------------------------------------------------------------------------------
Total assets ...................... $2,029,471 $1,870,756 $1,707,303 $1,577,516 $1,488,412
- --------------------------------------------------------------------------------------------------------------
Depreciation and amortization
Automotive ........................... $ 26,588 $ 24,056 $ 21,905 $ 20,301 $ 19,436
Industrial ........................... 4,640 5,410 5,286 5,732 5,450
Office products ...................... 5,257 4,246 3,752 3,794 3,727
Corporate ............................ 889 708 744 768 964
- --------------------------------------------------------------------------------------------------------------
Total depreciation and amortization $ 37,374 $ 34,420 $ 31,687 $ 30,595 $ 29,577
- --------------------------------------------------------------------------------------------------------------
Capital expenditures
Automotive ........................... $ 45,921 $ 39,502 $ 24,272 $ 22,381 $ 33,190
Industrial ........................... 4,164 2,779 2,553 2,479 8,586
Office products ...................... 13,547 12,378 3,395 3,055 3,488
Corporate ............................ 2,370 2,854 1,365 358 845
- --------------------------------------------------------------------------------------------------------------
Total capital expenditures ........ $ 66,002 $ 57,513 $ 31,585 $ 28,273 $ 46,109
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Assets acquired in prior years will, of course, be replaced at higher costs, but
this will take place over many years.
Present tax laws do not allow deductions for adjustments for the impact of
inflation. Thus, taxes are levied on the Company at rates which, in real terms,
exceed established statutory rates. In general, during periods of inflation,
this tax policy results in a tax on shareholders' investment in the Company.
QUARTERLY RESULTS OF OPERATIONS:
Miscellaneous year-end adjustments resulted in increasing net income during the
fourth quarter of 1994 and 1993 by approximately $18,353,000 ($.15 per share)
and $16,206,000 ($.13 per share), respectively.
The following is a summary of the quarterly results of operations for the
years ended December 31, 1994 and 1993.
<TABLE>
<CAPTION>
Three Months Ended
- ------------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec.31,
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
- ----
Net Sales............... $1,162,075 $1,219,801 $1,268,417 $1,208,122
Gross Profit............ 346,457 362,817 382,280 423,162
Net Income.............. 62,891 71,011 72,924 81,722
Net Income per
Common Share.......... .51 .57 .59 .66
1993
- ----
Net Sales............... $1,037,914 $1,106,176 $1,144,839 $1,095,365
Gross Profit............ 310,421 326,282 347,399 377,154
Net Income.............. 55,336 65,905 63,019 73,553
Net Income per
Common Share.......... .45 .53 .51 .59
</TABLE>
twenty-seven
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
Jurisdiction of
Name % Owned Incorporation
---- ------- -------------
<S> <C> <C>
Balkamp, Inc. 89.61 Indiana
Berry Bearing Company 100.0 Illinois
Genuine Parts Holdings, Ltd. 100.0 Province of
Alberta, Canada
Motion Industries, Inc. 100.0 Delaware
S. P. Richards Company 100.0 Georgia
Alamogordo Parts & Supply, Inc. 51.0 Georgia
Auto Paint and Supply Company
of Lexington, Inc. 51.0 Georgia
Best Auto Parts, Inc. 51.0 Georgia
Brigham Automotive Supply, Inc. 51.0 Georgia
Bulldog Auto Parts, Inc. 51.0 Georgia
Calcutta Auto Supply, Inc. 51.0 Georgia
Central Motor Parts, Inc. 51.0 Georgia
CKT Motive Parts, Inc. 51.0 Georgia
Clermont-Brown Automotive Supply, Inc. 51.0 Georgia
C & O Auto Parts, Inc. 51.0 Georgia
First Choice Automotive, Inc. 51.0 Georgia
First Settlement Automotive, Inc. 51.0 Georgia
1st Choice Auto Parts, Inc. 51.0 Georgia
Franklin County Supply, Inc. 51.0 Georgia
Gila Automotive Supply, Inc. 51.0 Georgia
Hansens Automotive Supply, Inc. 51.0 Georgia
Hastings Auto Supply, Inc. 51.0 Georgia
J.B.H. Auto Supply Incorporated 51.0 Georgia
</TABLE>
<PAGE> 2
Exhibit 21 (cont.)
<TABLE>
<S> <C> <C>
L & P Automotive Supply, Inc. 51.0 Georgia
Lana Lou Auto Parts, Inc. 51.0 Georgia
Landry Supply, Inc. 51.0 Georgia
Luke's Auto Supply, Inc. 51.0 Georgia
Mid-town Auto & Machine Shop, Inc. 51.0 Georgia
McMinn County Automotive, Inc. 51.0 Georgia
Middletown Parts Unlimited, Inc. 51.0 Georgia
Nelson Enterprises, Inc. 51.0 Georgia
North Shore Automotive, Inc. 51.0 Georgia
Oberlin Auto Parts, Inc. 51.0 Georgia
Parts & Company of Selma, Inc. 51.0 Georgia
Petoskey Automotive Center, Incorporated 51.0 Georgia
P.M.A. Associates, Inc. 51.0 Georgia
Port Charlotte Auto Supply, Inc. 51.0 Georgia
Price Automotive Enterprises, Inc. 75.5 Georgia
Pride City Auto Parts, Inc. 51.0 Georgia
Quality Auto Parts & Paint Supply, Inc. 51.0 Georgia
R.K.R., Inc. 51.0 Georgia
Rasmussen Auto Supply, Inc. 51.0 Georgia
River Valley Auto Parts, Inc. 51.0 Georgia
Rome Auto Parts, Inc. 51.0 Georgia
Rutherford Automotive, Inc. 51.0 Georgia
Sanchez Truck & Auto Parts, Inc. 51.0 Georgia
Sevier County Auto Parts, Inc. 51.0 Georgia
Slidell Parts Warehouse, Inc. 51.0 Georgia
Sumner Auto & Truck, Inc. 51.0 Georgia
TAG Automotive, Inc. 51.0 Georgia
TNT Supply, Inc. 51.0 Georgia
Uptergrove Auto Supply, Inc. 51.0 Georgia
Warren County Automotive, Inc. 51.0 Georgia
Wisota Auto Parts, Inc. 51.0 Georgia
</TABLE>
<PAGE> 1
Exhibit 23 - Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Genuine Parts Company of our report dated February 6, 1995, included in the
1994 Annual Report to Shareholders of Genuine Parts Company.
We also consent to the incorporation by reference in the Registration Statement
(Form S-8 Number 33-30982) pertaining to the Genuine Parts Company 1988 Stock
Option Plan and in the Registration Statement (Form S-8 Number 33-62512)
pertaining to the Genuine Parts Company 1992 Stock Option and Incentive Plan of
our report dated February 6, 1995, with respect to the consolidated financial
statements of Genuine Parts Company incorporated by reference in the Annual
Report (Form 10-K) for the year ended December 31, 1994.
ERNST & YOUNG LLP
Atlanta, Georgia
March 22, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE YEAR ENDED DECEMBER 31,
1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 82,410
<SECURITIES> 0
<RECEIVABLES> 487,395
<ALLOWANCES> 0
<INVENTORY> 1,004,580
<CURRENT-ASSETS> 1,595,781
<PP&E> 258,032
<DEPRECIATION> 192,081
<TOTAL-ASSETS> 2,029,471
<CURRENT-LIABILITIES> 422,408
<BONDS> 11,431
<COMMON> 122,627
0
0
<OTHER-SE> 1,403,538
<TOTAL-LIABILITY-AND-EQUITY> 2,029,471
<SALES> 4,858,415
<TOTAL-REVENUES> 4,858,415
<CGS> 3,343,699
<TOTAL-COSTS> 3,343,699
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 474,868
<INCOME-TAX> 186,320
<INCOME-CONTINUING> 288,548
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 288,548
<EPS-PRIMARY> 2.33
<EPS-DILUTED> 2.33
</TABLE>
