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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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<S> <S>
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED,
EFFECTIVE OCTOBER 7, 1996).
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
COMMISSION FILE NO. 1-5690
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GENUINE PARTS COMPANY
(Exact name of Registrant as specified in its Charter)
<TABLE>
<S> <C>
GEORGIA 58-0254510
(State of Incorporation) (IRS Employer Identification No.)
</TABLE>
2999 CIRCLE 75 PARKWAY, ATLANTA, GEORGIA 30339
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (770) 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. [X]
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 for February 11, 1997) held by non-affiliates as of February
11, 1997 was approximately $5,257,393,196.
The number of shares outstanding of Registrant's Common Stock, as of
February 11, 1997: 119,879,085.
Documents Incorporated by Reference:
--Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 1996, 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 21, 1997 are incorporated by reference
into Part III.
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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 1996,
business was conducted throughout most of the United States and in western
Canada from approximately 1,300 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 at the end of February, 1997, the Company closed
its NAPA Distribution Center in Bridgeport, West Virginia, with the distribution
center's business being divided between the Company's NAPA Distribution Centers
in Carrollton, Ohio, Altoona, Pennsylvania, and Charleston, West Virginia.
Industry Segment Data. The following table sets forth the net sales, operating
profit and identifiable assets for the fiscal years 1996, 1995 and 1994
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.
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
NET SALES (in thousands)
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<S> <C> <C> <C>
Automotive Parts $ 3,008,105 $ 2,804,086 $ 2,693,961
Industrial Parts 1,677,859 1,509,566 1,317,495
Office Products 1,034,510 948,252 846,959
----------- ----------- -----------
TOTAL NET SALES $ 5,720,474 $ 5,261,904 $ 4,858,415
=========== =========== ===========
OPERATING PROFIT
----------------
Automotive Parts $ 321,852 $ 307,726 $ 304,164
Industrial Parts 150,815 132,952 111,822
Office Products 103,309 93,888 78,206
----------- ----------- -----------
TOTAL OPERATING PROFIT 575,976 534,566 494,192
Interest Expense (8,498) (3,419) (1,321)
Corporate Expense (29,057) (25,939) (22,854)
Equity in Income 9,398 8,298 7,224
Minority Interests (2,586) (2,712) (2,373)
----------- ----------- -----------
INCOME BEFORE
INCOME TAXES $ 545,233 $ 510,794 $ 474,868
=========== =========== ===========
IDENTIFIABLE ASSETS
-------------------
Automotive Parts $ 1,495,106 $ 1,320,910 $ 1,223,416
Industrial Parts 527,253 482,067 404,647
Office Products 379,394 360,456 308,817
----------- ----------- -----------
TOTAL IDENTIFIABLE ASSETS 2,401,753 2,163,433 1,936,880
Corporate Assets 20,394 18,631 5,950
Equity Investments 99,484 92,068 86,641
----------- ----------- -----------
TOTAL ASSETS $ 2,521,631 $ 2,274,132 $ 2,029,471
=========== =========== ===========
</TABLE>
For additional information regarding industry data, see Page 21 of
Annual Report to Shareholders for 1996.
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 27 of Annual Report to
Shareholders for 1996.
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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, 1996, the Company employed approximately 24,200
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 approximately 165,000 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 1996, 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; 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 the United
States operated by corporations in which Genuine Parts Company owned either a
51% or a 70% interest; distribution centers owned by Balkamp, Inc., a
majority-owned subsidiary; rebuilding plants owned by the Company and operated
by its Rayloc division; and automotive parts distribution centers and auto parts
stores 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.
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 60% of 1996 automotive inventories were
purchased from 10 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 1996, Genuine Parts Company operated 63 domestic NAPA
automotive parts distribution centers located in 38 states and 750 domestic
company-owned NAPA Auto Parts stores located in 43 states. At December 31, 1996,
Genuine Parts Company owned a 51% interest in 94 corporations and a 70% interest
in 5 corporations which operated 178 auto parts stores in 31 states.
In Canada, Genuine Parts Company Ltd., a wholly-owned subsidiary, owns
a 49% interest in UAP/NAPA which operated 5 automotive parts distribution
centers and 115 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, which 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 12 distribution centers and 29 auto parts
stores. In 1996, Auto Todo was licensed to and used the NAPA(R) name in Mexico.
The Company's investments in UAP/NAPA and Auto Todo are accounted for by the
equity method of accounting.
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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 31% 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 .4% of the total sales of the Company.
Products. Distribution centers carry approximately 165,000 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 24,000 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 NAPA 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 NAPA.
Segment Data. In the year ended December 31, 1996, sales from the Automotive
Parts Group approximated 53% of the Company's net sales as compared to 53% in
1995 and 56% in 1994.
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
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 statistics, 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
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operation of its classification system which involves product return privileges
with most of its suppliers.
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 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 in 1996 operated 72
distribution centers located throughout the United States, 63 of which were
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 NAPA'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 throughout the United States and in Western Canada. 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 1996, the Company distributed industrial parts in the United States
through Motion Industries, Inc. ("Motion"), headquartered in Birmingham,
Alabama, and Berry Bearing Company ("Berry Bearing"), headquartered in Chicago,
Illinois. Both Motion and Berry are wholly owned subsidiaries of the Company. In
Canada, industrial parts are distributed by Oliver Industrial Supply Ltd.
("Oliver"), 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. Oliver's service area is principally the
Provinces of Alberta, British Columbia, Manitoba and Saskatchewan. In 1996, the
Company formed Motion (Canada), Inc., which is a shell corporation designed to
protect the Motion name in Canada. An affiliate relationship in Mexico allows
Motion to provide the Mexican industrial sector with industrial parts.
On June 5, 1996, and October 1, 1996, the Company completed the
acquisitions of Capstan, Inc. and Amarillo Bearing Corp., respectively. Capstan,
Inc., headquartered in Portland, Maine and operating one branch, is a
distributor of hydraulics, pneumatics and industrial products throughout Maine,
Vermont and New Hampshire. Amarillo Bearing Corp., a major supplier to the beef
packing and chemical industries in the Texas Panhandle area, operates two
branches in Amarillo and Dumas, Texas. Both companies have been merged into the
Company's Motion Industries, Inc. subsidiary.
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As of December 31, 1996, the Group served more than 150,000 customers
in all types of industries located throughout the United States, Mexico and
western Canada.
Distribution System. In the United States, the Industrial Parts Group operates 7
distribution centers, two re-distribution centers, 12 service centers for fluid
power, electrical and special hose applications and over 390 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 60% of
1996 total industrial purchases were made from 10 major suppliers. Sales are
generated from the Group's branches located in 43 states, each of which has
warehouse facilities that stock significant amounts of inventory representative
of the lines of products used by customers in the respective market area served.
In Canada, Oliver operates an industrial parts and agricultural supply
distribution center for its nine 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.
Integrated Supply. In response to customer demands for a more simple and a more
economic method of purchasing and managing inventory, Motion has developed and
joined various strategic integrated supply alliance programs. These programs,
designed to provide the end-user with increased value by reducing marketing,
operational and financial redundancies, are known as Integrated Supply Programs.
The largest is an integrated supply alliance in which Motion has joined with
Ferguson Enterprises and W.W. Grainger.
Segment Data. In the year ended December 31, 1996, sales from the Company's
Industrial Parts Group approximated 29% of the Company's net sales as compared
to 29% in 1995 and 27% in 1994.
Competition. The Industrial Parts Group competes with other distributors
specializing in the distribution of such items, general line distributors and
others who have developed or joined integrated supply programs. To a lesser
extent, the Group competes with manufacturers that sell directly to the
customer.
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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, imaging supplies, office machines, general office supplies,
janitorial supplies, breakroom supplies, and office furniture. Lesker Office
Furniture, a furniture only wholesaler acquired in 1993, operates from 5
branches in the Northeast. Horizon USA Data Supplies, Inc., acquired by the
Company in 1995, is a computer supplies distributor headquartered in Reno,
Nevada.
The Office Products Group distributes computer supplies including
diskettes, printer supplies, printout paper and printout binders; office
furniture to include desks, credenzas, chairs, chair mats, partitions, files and
computer furniture; office machines to include telephones, answering machines,
calculators, typewriters, shredders and copiers; and general office supplies to
include copier supplies, desk accessories, business forms, accounting supplies,
binders, report covers, writing instruments, note pads, envelopes, secretarial
supplies, mailroom supplies, filing supplies, art/drafting supplies, janitorial
supplies, breakroom supplies and audio visual supplies.
The Office Products Group distributes more than 20,000 items to over
6,000 office supply dealers from 46 facilities located in 30 states.
Approximately 53% of 1996 total office products purchases were made from 10
major suppliers.
The Office Products Group 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 the Group's 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 Company also markets items produced for it under its own SPARCO(R)
brand name, as well as its NATURE SAVER(R) brand of recycled products and
CompuCessory(TM) brand of computer supplies and accessories.
Segment Data. In the year ended December 31, 1996, sales from the Company's
Office Products Group approximated 18% of the Company's net sales as compared to
18% in 1995 and 17% in 1994.
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
11, 1997, 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.
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Year First
Assumed
Name Age Position of Office Position
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<S> <C> <C> <C>
Larry L. Prince 58 Chairman of the Board of Directors
and Chief Executive Officer 1990/1989
Thomas C. Gallagher 49 President and Chief Operating Officer 1990
George W. Kalafut 63 Executive Vice President-Finance and
Administration * 1991
John J. Scalley 66 Executive Vice President 1986
</TABLE>
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<S> <C> <C> <C>
Keith M. Bealmear 50 Group Vice President 1994
Robert J. Breci 61 Group Vice President 1987
Albert T. Donnon, Jr 49 Group Vice President 1993
Edward Van Stedum 46 Senior Vice President-Human Resources 1996
</TABLE>
* Also serves as the Company's Principal Financial and Accounting
Officer.
All executive officers except Mr. Van Stedum have been employed by and
have served as officers of the Company for at least the last five years. Prior
to his joining the Company in May, 1994, Mr. Van Stedum owned and operated a
consulting company in Atlanta, Georgia, that performed various services for the
Company's Personnel Department.
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 62 NAPA
Distribution Centers in the United States distributed among eight geographic
divisions. More than 90% of the distribution center properties are owned by the
Company. At December 31, 1996, the Company owned 750 NAPA Auto Parts stores
located in 43 states, and Genuine Parts Company owned either a 51% or 70%
interest in 178 auto parts stores located in 31 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 49% interest, operated 115 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 Company, operates 7 distribution centers, 2 re-distribution
centers, 12 service centers and over 390 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 9 branches of which approximately 85% are operated in
leased facilities.
The Company's Office Products Group operates 46 facilities in the
United States distributed among the Group's six geographic divisions.
Approximately 75% of these facilities are operated in leased buildings.
For additional information regarding rental expense on leased
properties, see "Note 4 of Notes to Consolidated Financial Statements" on Page
28 of Annual Report to Shareholders for 1996.
ITEM 3. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
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PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 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, 1996, and is incorporated herein by reference.
The Company has made no unregistered sales of securities during the year ended
December 31, 1996.
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, 1996, 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 Pages 19 and 20 of Annual Report to
Shareholders for the year ended December 31, 1996, and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required by this item is set forth in the consolidated
financial statements on Page 21 and Pages 23 through 30, in "Report of
Independent Auditors" on Page 22, and under the heading "Quarterly Results of
Operations" on Page 20, of the Annual Report to Shareholders for the year ended
December 31, 1996, 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 under the headings
"Nominees for Director" and "Members of the Board of Directors Continuing in
Office" on Pages 2 through 4 of the definitive proxy statement for the Company's
Annual Meeting to be held on April 21, 1997, 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 under the heading
"Executive Compensation and Other Benefits" on Pages 7 and 8, and under the
headings "Compensation Committee Interlocks and Insider Participation",
"Compensation Pursuant to Plans" and "Termination of Employment and Change of
Control Arrangements" on Pages 11 through 14 of the definitive proxy statement
for the Company's Annual Meeting to be held on April 21, 1997, and is
incorporated herein by reference. In no event shall the information contained in
the definitive proxy statement for the Company's 1997 Annual Meeting on Pages 9
and 10 under the heading "Compensation and Stock Option Committee Report on
Executive Compensation" or on Pages 15 and 16 under the heading "Performance
Graph" be incorporated herein by reference.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is set forth under the headings
"Common Stock Ownership of Certain Beneficial Owners" and "Common Stock
Ownership of Management" on Pages 5 and 6 of the definitive proxy statement for
the Company's Annual Meeting to be held on April 21, 1997, and is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is set forth under the heading
"Compensation Committee Interlocks and Insider Participation" on Page 11 of the
definitive proxy statement for the Company's 1997 Annual Meeting to be held on
April 21, 1997, and is incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-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
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. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 3, 1995).
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 4.2 Specimen Common Stock Certificate.
(Incorporated herein by reference from the
Company's Registration Statement on Form
S-1, Registration No. 33-63874).
Exhibit 10.1 * 1988 Stock Option Plan. (Incorporated herein
by reference from the Company's Annual
Meeting Proxy Statement, dated March 9,
1988).
Exhibit 10.2 * 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).
-10-
<PAGE> 11
Exhibit 10.3 * 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 10.4 * 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 10.5 * 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).
Exhibit 10.6 * 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 10.7 * Restricted Stock Agreement dated March 31,
1994, between the Company and Thomas C.
Gallagher. (Incorporated herein by refer-
ence from the Company's Form 10-Q, dated May
6, 1994).
Exhibit 10.8 * The Genuine Parts Company Restated
Tax-Deferred Savings Plan, effective January
1, 1993. (Incorporated herein by reference
from the Company's Annual Report on Form
10-K, dated March 3, 1995).
Exhibit 10.9 * Amendment No. 2 to the Genuine Parts Company
Supplemental Retirement Plan, effective
January 1, 1995. (Incorporated herein by
reference from the Company's Annual Report
on Form 10-K, dated March 3, 1995).
Exhibit 10.10 * Genuine Partnership Plan, as amended and
restated January 1, 1994. (Incorporated
herein by reference from the Company's
Annual Report on Form 10-K, dated March 3,
1995).
Exhibit 10.11 * Genuine Parts Company Pension Plan, as
amended and restated effective January 1,
1989. (Incorporated herein by reference from
the Company's Annual Report on Form 10-K,
dated March 3, 1995).
Exhibit 10.12 * Amendment No. 1 to the Genuine Partnership
Plan, effective September 1, 1995.
(Incorporated herein by reference to the
Company's Form 10-K, dated March 7, 1996).
Exhibit 10.13 * Amendment No. 1 to the Genuine Parts Company
Pension Plan, effective April 1, 1995.
(Incorporated herein by reference to the
Company's Form 10-K, dated March 7, 1996).
-11-
<PAGE> 12
Exhibit 10.14 * Amendment No. 2 to the Genuine Parts Company
Pension Plan, dated September 28, 1995,
effective January 1, 1995. (Incorporated
herein by reference to the Company's Form
10-K, dated March 7, 1996).
Exhibit 10.15* Genuine Parts Company Directors' Deferred
Compensation Plan, effective November 1,
1996.
Exhibit 10.16* Amendment No. 3 to the Genuine Parts Company
Pension Plan dated May 24, 1996, effective
January 1, 1996.
Exhibit 10.17* Amendment No. 4 to the Genuine Parts Company
Pension Plan dated December 3, 1996,
effective January 1, 1996.
Exhibit 10.18* Amendment No. 2 to the Genuine Partnership
Plan, dated December 3, 1996, effective
November 1, 1996.
* Indicates executive compensation plans and arrangements
Exhibit 13 The following sections and pages of the 1996
Annual Report to Shareholders:
- Selected Financial Data on Page 18
- Market and Dividend Information on Page
18
- Management's Discussion and Analysis on
Pages 19 and 20
- Quarterly Results of Operations on Page 20
- Industry Data on Page 21
- Report of Independent Auditors on Page 22
- Consolidated Financial Statements and
Notes to Consolidated Financial Statements
on Pages 23-30
Exhibit 21 Subsidiaries of the Company
Exhibit 23 Consent of Independent Auditors
Exhibit 27 Financial Data Schedule
-12-
<PAGE> 13
(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 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 3/10/97 /s/George W. Kalafut 3/10/97
- -------------------------------------- ------------------------------------
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
-13-
<PAGE> 14
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.
/s/ Bradley Currey, Jr. 2/17/97 /s/ Larry L. Prince 2/17/97
- -------------------------------------- ------------------------------------
Bradley Currey, Jr. (Date) Larry L. Prince (Date)
Director Director
Chairman of the Board and
Chief Executive Officer
/s/ Jean Douville 2/17/97 /s/ John J. Scalley 2/17/97
- -------------------------------------- ------------------------------------
Jean Douville (Date) John J. Scalley (Date)
Director Director
Chairman of the Board and Executive Vice President
Chief Executive Officer UAP Inc.
/s/ Robert P. Forrestal 2/17/97 /s/ Alana S. Shepherd 2/17/97
- -------------------------------------- ------------------------------------
Robert P. Forrestal (Date) Alana S. Shepherd (Date)
Director Director
/s/ Thomas C. Gallagher 2/17/97 /s/ Lawrence G. Steiner 2/17/97
- -------------------------------------- ------------------------------------
Thomas C. Gallagher (Date) Lawrence G. Steiner (Date)
Director Director
President and Chief Operating Officer
/s/ J. Hicks Lanier 2/17/97 /s/ James B. Williams 2/17/97
- -------------------------------------- ------------------------------------
J. Hicks Lanier (Date) James B. Williams (Date)
Director Director
- --------------------------------------
William A. Parker (Date)
Director
-14-
<PAGE> 15
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, 1996
GENUINE PARTS COMPANY
ATLANTA, GEORGIA
<PAGE> 16
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, 1996, are incorporated by reference
in Item 8:
Consolidated balance sheets - December 31, 1996 and 1995
Consolidated statements of income - Years ended December 31, 1996,
1995, and 1994
Consolidated statements of cash flows - Years ended December 31, 1996,
1995 and 1994
Notes to consolidated financial statements - December 31, 1996
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> 17
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(3)
LIST OF EXHIBITS
The following Exhibits are filed as a part of this Report:
10.15* Genuine Parts Company Directors' Deferred Compensation Plan, effective
November 1, 1996.
10.16* Amendment No. 3 to the Genuine Parts Company Pension Plan dated May 24,
1996, effective January 1, 1996.
10.17* Amendment No. 4 to the Genuine Parts Company Pension Plan dated
December 3, 1996, effective January 1, 1996.
10.18* Amendment No. 2 to the Genuine Partnership Plan, dated December 3,
1996, effective November 1, 1996.
13 The following Sections and Pages of Annual Report to Shareholders for
1996:
- Selected Financial Data on Page 18
- Market and Dividend Information on Page 18
- Management's Discussion and Analysis on Pages 19 and 20
- Quarterly Results of Operations on Page 20
- Industry Data on Page 21
- Report of Independent Auditors on Page 22
- Consolidated Financial Statements and Notes to Consolidated
Financial Statements on Pages 23-30
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 10 and 11 of this Form 10-K:
- 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.
- 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.
- 4.2 Specimen Common Stock Certificate. (Incorporated herein by
reference form the Company's Registration Statement on Form
S-1, Registration No. 33-63874).
<PAGE> 18
- 10.1* 1988 Stock Option Plan.
- 10.2* Form of Amendment to Deferred Compensation Agreement adopted
February 13, 1989, between the Company and certain executive
officers of the Company.
- 10.3* 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.
- 10.4* Genuine Parts Company Supplemental Retirement Plan, effective
January 1, 1991.
- 10.5* 1992 Stock Option and Incentive Plan, effective April 20,
1992.
- 10.6* Restricted Stock Agreement dated March 31, 1994, between the
Company and Larry L. Prince.
- 10.7* Restricted Stock Agreement dated March 31, 1994, between the
Company and Thomas C. Gallagher.
- 10.8* The Genuine Parts Company Restated Tax-Deferred Savings Plan,
effective January 1, 1993.
- 10.9* Amendment No. 2 to the Genuine Parts Company Supplemental
Retirement Plan, effective January 1, 1995.
- 10.10* Genuine Partnership Plan, as amended and restated January 1,
1994.
- 10.11* Genuine Parts Company Pension Plan, as amended and restated,
effective January 1, 1989.
- 10.12* Amendment No. 1 to the Genuine Partnership Plan, effective
September 1, 1995.
- 10.13* Amendment No. 1 to the Genuine Parts Company Pension Plan,
effective April 1, 1995.
- 10.14* Amendment No. 2 to the Genuine Parts Company Pension Plan,
dated September 28, 1995, effective January 1, 1995.
* Indicates executive compensation plans and arrangements.
<PAGE> 1
EXHIBIT 10.15
GENUINE PARTS COMPANY
DIRECTORS' DEFERRED COMPENSATION PLAN
ARTICLE 1
ESTABLISHMENT OF PLAN
1.01 Background of Plan. Genuine Parts Company hereby establishes, effective
as of November 1, 1996, a deferred compensation plan known as the
Genuine Parts Company Directors' Deferred Compensation Plan. The Plan
will be effective for Fees payable in 1997 or thereafter.
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. Although the plan is unfunded for tax purposes, the Company
may establish a trust under Revenue Procedure 92-64 to provide benefits
under the Plan. (See Section 1.03).
1.03 Establishment of Trust. As noted in Section 1.02, the Company may
establish a trust to fund benefits provided under the terms of the Plan
("Trust"). It is intended that a 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.
1.04 Purpose. The purpose of the Plan is to permit Directors to defer Fees
they receive from the Company and, through the Stock Account, give
Directors the opportunity to further align their interests with the
interests of the Company's shareholders.
ARTICLE 2
DEFINITIONS
2.01 Definitions. Certain terms of the Plan have defined meanings 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.
Accounts. The Variable Rate Account and the Stock Account, as defined
below.
Beneficiary. Any person or persons designated by a Participant, in
accordance with procedures established by the Committee or Plan
Administrator, 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 surviving
spouse, or, if none, the Participant's surviving descendants (who shall
take per stirpes) and
<PAGE> 2
if there are no surviving descendants, the Beneficiary shall be the
Participant's estate.
Board. The Board of Directors of the Company.
Committee. The Executive Committee of the Board or its designee that
will administer and interpret the terms of the Plan.
Common Stock. The $1.00 par value common stock of the Company.
Company. Genuine Parts Company and its corporate successors.
Director. A member of the Board.
Director Fees. The fees that the Company pays a Director to serve as a
member of the Board other than Meeting Fees.
Effective Date. The Plan will be effective for Fees payable in 1997 or
thereafter.
Election Form. A form, substantially in the form attached hereto as
Exhibit A, pursuant to which a Director elects to defer Fees under the
Plan.
Election Date. The date established by the Plan as the date by which a
Participant must submit a valid Election Form to the Plan Administrator
in order to participate in the Plan for a calendar year. For each
calendar year, the Election Date is December 31 of the preceding
calendar year; provided, however, that the Election Date for a newly
eligible Participant shall be the 30th day following the date on which
such individual becomes a Director.
Fair Market Value. The average highest and lowest quoted selling prices
of a share of Common Stock as traded on the New York Stock Exchange on
a given date, or if the Common Stock was not traded on such day, then
on the next preceding trading date on which the Common Stock was
traded.
Fees. Director Fees and Meeting Fees.
Meeting Fees. The fees that the Company pays a Director for attendance
at meetings of the Board or committees of the Board.
Participant. Any Director who is participating in the Plan.
Plan. The Genuine Parts Company Directors' Deferred Compensation Plan
as set forth in this document together with any subsequent amendments
hereto.
-2-
<PAGE> 3
Plan Administrator. The Treasurer of the Company or such other
individual(s) appointed by the Committee.
Stock Account. The account established by the Company for each
Participant for Fees deferred pursuant to the Plan, the performance and
value of which shall be measured by reference to the Fair Market Value
of the Common Stock from time to time. The maintenance of individual
Stock Accounts is for bookkeeping purposes only.
Termination of Service. A Termination of Service occurs when a
Participant ceases to serve as a Director for any reason.
Transfer Form. A form, substantially in the form attached hereto as
Exhibit B, pursuant to which a Director elects to transfer amounts
between his Accounts.
Variable Rate Account. The account established by the Company for each
Participant for Fees deferred pursuant to the Plan and which shall be
credited with interest on the last day of each month (or such other day
as determined by the Plan Administrator) based on the "prime rate"
published in the Wall Street Journal on the last business day of such
month (or on any other date for which interest is credited to the
Variable Rate Account). The maintenance of individual Variable Rate
Accounts is for bookkeeping purposes only.
ARTICLE 3
PARTICIPATION
3.01 Election to Participate. Each Director is automatically eligible to
participate in the Plan. A Director may participate in the Plan by
delivering a properly completed and signed Election Form to the Plan
Administrator on or before the Election Date. The Director's
participation in the Plan will be effective as of the first day of the
calendar year beginning after the Plan Administrator receives the
Director's Election Form, or, in the case of a newly eligible
Participant, on the first day of the calendar month beginning after the
Plan Administrator receives such Director's Election Form. A
Participant shall not be entitled to any benefit hereunder unless such
Participant has properly completed an Election Form and deferred the
receipt of his or her Fees pursuant to the Plan.
3.02 Voluntary Termination of Election Form. A Participant may terminate his
or her Election Form at any time. Such termination will be effective on
the first day of the calendar quarter after the Participant notifies
the Plan Administrator of the Participant's termination of the Election
Form. If a Participant terminates his or her Election Form, however,
the Participant may not activate a new Election Form to defer his or
her Fees for the remainder of the calendar year in which the
Participant's former Election Form was terminated. However, effective
as of the first day of the following calendar year or the first day of
any subsequent calendar
-3-
<PAGE> 4
year, the Participant may deliver a new Election Form and thereby defer
the receipt of any future Fees attributable to the service on the
Board. Such new Election Form shall be effective only for Fees
applicable to the Participant's service on the Board after the first
day of the calendar year following the Plan Administrator's receipt of
the Participant's new Election Form. Any Fees deferred prior to the
termination of the Election Form shall remain subject to the original
Election Form and the Plan.
3.03 Continuation of Election Form. Prior to the commencement of each
calendar year, a Participant shall have the right, by executing and
delivering to the Plan Administrator a new Election Form, to modify the
dollar amount or percentage of his or her Fees which are deferred under
the Plan. If the Participant fails to deliver 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.
3.04 Automatic Termination of Election Form. A Participant's Election Form
will automatically terminate at the earlier of (i) the Participant's
Termination of Service, or (ii) the termination of the Plan.
3.05 No Right to Continue as a Director. Nothing contained in the Plan shall
be deemed to give any Director the right to be retained as a Director
of the Company.
ARTICLE 4
PLAN BENEFITS
4.01 Deferred Fees. A Director may elect to defer (i) all of his or her
Director Fees, (ii) all of his or her Meeting Fees, or (ii) all of his
or her Director Fees and Meeting Fees to his or her Variable Rate
Account and/or Stock Account in accordance with the terms of the Plan
and the Election Form. A Director cannot defer only a portion of his or
her Director Fees or only a portion of his or her Meeting Fees under
the Plan. For bookkeeping purposes, the amount of the Fees which the
Director elects to defer pursuant to the Plan shall be transferred to
and held in individual Accounts.
4.02 Time of Election of Deferral. A Director who wishes to defer Fees for a
calendar year must irrevocably elect to do so on or prior to the
Election Date for such calendar year, by delivering a valid Election
Form to the Plan Administrator. The Election Form shall indicate: (1)
the Fees to be deferred; and (2) the portion of the deferral to be
credited to the Participant's Variable Rate Account and Stock Account,
respectively. Amounts to be deferred shall be credited to the
Participant's Variable Rate Account and or Stock Account, as
applicable, as of the date such Fees are otherwise payable.
-4-
<PAGE> 5
4.03 Accounts.
(a) Variable Rate Account. Amounts in a Participant's Variable
Rate Account will be credited with interest as of the last day
of each month (or such other day as determined by the Plan
Administrator) based on the "prime rate" published in the Wall
Street Journal on the last business day of such month (or any
other date for which interest is credited to the Variable Rate
Account).
(b) Stock Account. Amounts in a Participant's Stock Account are
invested in units based on Common Stock. Amounts deferred into
a Stock Account are recorded as units of Common Stock, and
fractions thereof, with one unit equating to a single share of
Common Stock. Thus, the value of one unit shall be the Fair
Market Value of a single share of Common Stock. The use of
units is merely a bookkeeping convenience; the units are not
actual shares of Common Stock. However, the trustee of the
Trust may elect to purchase actual shares of Common Stock,
which Common Stock, under grantor trust rules, will be treated
as owned by the Company. As described below in Section 4.05, a
Participant may elect to have some or all of the value of his
or her Stock Account distributed in actual shares of Common
Stock. The maximum number of Common Stock units that may be
allocated by deferral of Fees to Stock Accounts under the Plan
is 100,000.
(c) Sub-Accounts. To the extent required for bookkeeping purposes,
a Participant's Variable Rate Account and Stock Account will
be subdivided to reflect deferred Fees on a year-by-year
basis. For example, a 1997 Variable Rate Sub-Account, a 1998
Variable Rate Sub-Account, a 1997 Stock Sub-Account, a 1998
Stock Sub-Account, and so on.
4.04 Investment in the Stock Account and Transfers Between Accounts.
(a) Election Into the Stock Account. If a Participant elects to
defer Fees into his or her Stock Account, his or her Stock
Account shall be credited, as of the date described in Section
4.02, with that number of units of Common Stock, and fractions
thereof, obtained by dividing the dollar amount to be deferred
into the Stock Account by the Fair Market Value of the Common
Stock as of such date.
(b) Transfers Between Accounts. Except as provided in the
remainder of this paragraph (b), a Participant may, by
delivering a valid Transfer Form to the Plan Administrator,
direct that all or any portion, designated as a whole dollar
amount or as a number of whole units, of the existing balance
of one of his or her Accounts be transferred to his or her
other Account. However, a Participant may not effect "opposite
way" transfers between
-5-
<PAGE> 6
his or her Accounts more often than once in any six-month
period. A transfer shall be effective as of the next day on
which the Common Stock is traded on the New York Stock
Exchange following the Plan Administrator's receipt of the
Transfer Form (the "Transfer Date").
(c) Transfer Into the Stock Account. If a Participant elects
pursuant to Section 4.04(b) to transfer an amount from his or
her Variable Rate Account to his or her Stock Account, then
effective as of the election's Transfer Date, (i) his or her
Stock Account shall be credited with that number of units of
Common Stock, and fractions thereof, obtained by dividing the
dollar amount elected to be transferred by the Fair Market
Value of the Common Stock on the business day immediately
preceding the election's Transfer Date; and (ii) his or her
Variable Rate Account shall be reduced by the amount elected
to be transferred.
(d) Transfer Out of the Stock Account. If a Participant elects
pursuant to Section 4.04(b) to transfer an amount from his or
her Stock Account to his or her Variable Rate Account, then
effective as of the election's Transfer Date, (i) his or her
Variable Rate Account shall be credited with a dollar amount
equal to the amount obtained by multiplying the number of
units to be transferred by the Fair Market Value of the Common
Stock on the business day immediately preceding the election's
Transfer Date; and (ii) his or her Stock Account shall be
reduced by the number of units elected to be transferred.
(e) Dividend Equivalents. Effective as of the payment date for
each cash dividend on the Common Stock, the Stock Account of
each Participant who had a balance in his or her Stock Account
on the record date for such dividend shall be credited with a
number of units of Common Stock, and fractions thereof,
obtained by dividing (i) the aggregate dollar amount of such
cash dividend payable in respect of such Participant's Stock
Account (determined by multiplying the dollar value of the
dividend paid upon a single share of Common Stock by the
number of units of Common Stock held in the Participant's
Stock Account on the record date for such dividend); by
(ii) the Fair Market Value of the Common Stock on the business
day immediately preceding the payment date for such cash
dividend.
(f) Stock Dividends. Effective as of the payment date for each
stock dividend on the Common Stock, additional units of Common
Stock shall be credited to the Stock Account of each
Participant who had a balance in his or her Stock Account on
the record date for such dividend. The number of units that
shall be credited to the Stock Account of such a Participant
shall equal the number of shares of Common Stock, and
fractions thereof, which the Participant would have received
as stock dividends had he or she been the
-6-
<PAGE> 7
owner on the record date for such stock dividend of the number
of shares of Common Stock equal to the number of units
credited to his or her Stock Account on such record date.
(g) Allocation of Dividends. To the extent required for
bookkeeping purposes, the allocation of additional units
attributable to cash dividends or stock dividends will be made
to the Stock Sub-Account holding existing units to which the
cash dividend or stock dividend relates. For example, a
Participant's 1997 Stock Sub-Account will be credited with
dividends attributable to units held in the 1997 Stock
Sub-Account. A Participant's 1998 Stock Sub-Account will be
credited with dividends attributable to units held in the 1998
Stock Sub-Account, and so on.
(h) Recapitalization. If, as a result of a recapitalization of the
Company, the outstanding shares of Common Stock shall be
changed into a greater number or smaller number of shares, the
number of units credited to a Participant's Stock Account
shall be appropriately adjusted on the same basis.
(i) Distributions. Amounts in respect of units of Common Stock may
only be distributed out of the Stock Account by transfer to
the Variable Rate Account or withdrawal from the Stock
Account. Withdrawals from the Stock Account shall be made
either in cash or shares of Common Stock, as indicated by the
Participant at least six months prior to the scheduled
distribution. Any fractional units shall be paid in cash. For
purposes of transfers to the Variable Rate Account or
distributions from the Stock Fund payable in cash, the number
of units to be transferred or distributed from a Participant's
Stock Account shall be valued by multiplying the number of
such units by the Fair Market Value of the Common Stock as of
the business day immediately preceding the date such
distribution is to occur.
(j) Responsibility for Investment Choices. Each Participant is
solely responsible for any decision to defer Fees into his or
her Stock Account or Variable Rate Account and accepts all
investment risks entailed by such decision, including the risk
of loss and a decrease in the value of the amounts he or she
elects to defer into his or her Stock Account or Variable Rate
Account.
4.05 Form of Payment.
(a) Payment Election. Payment of Plan benefits shall commence on
the date the Participant selects on the Participant's initial
Election Form. Any date selected by the Participant must be at
least two calendar years following the date of the Director's
initial Election Form. In no event, however, shall a
-7-
<PAGE> 8
Participant's Account commence to be distributed later than
the first regular business day of the fourth month following
the Participant's death. If the Participant fails to designate
a payment commencement date in the Participant's initial
Election Form or within six months of such initial Election
Form, the Participant's Account shall commence to be
distributed no later than the first regular business day of
the fourth month following the Participant's Termination of
Service.
(b) Optional Forms of Payment. Distributions from Participant
Accounts (either in cash or in Common Stock) may 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 Participant's initial Election Form. Such
annual installments may be for 5 years, 10 years or 15 years.
The method of payment (e.g., in lump sum or installments)
elected on the Participant's initial Election Form will apply
to all amounts (including future deferrals) held in both the
Variable Rate Sub-Account and Stock Sub-Account. If a
Participant elects to receive a distribution of his or her
Account in cash installments, the Plan Administrator may
purchase an annuity from an insurance company which annuity
will pay the Participant the desired annual installments. If
the Plan Administrator purchases an annuity contract, the
Director 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 Plan Administrator does not purchase an
annuity contract, the value of the Account remaining unpaid
shall continue to receive allocations of return as provided in
Section 4.03 and Section 4.04. If the Participant fails to
designate a payment method in the Participant's initial
Election Form or within six months of such initial Election
Form, the Participant's Account shall be distributed in a lump
sum.
(c) Stock Payment. If a Participant so designates as provided in
Section 4.04(i), distributions from the Stock Account may be
distributed to the Participant in the form of Common Stock
rather than cash. The shares of Common Stock distributable to
Directors under the Plan must be previously issued and
repurchased shares and may not be original issue shares.
(d) Irrevocable Elections. A Participant may not elect a different
payment commencement date for each year's Fees deferred under
the Plan. In addition, a Participant may not elect a different
payment form for each year's Fees deferred under the Plan. The
payment commencement date and payment form elected or deemed
elected on the Participant's initial Election Form shall
become irrevocable and may not be modified six months after
the execution of such initial Election Form.
(e) Acceleration of Payment. If a Participant elects an
installment distribution and the value of such annual
installment payment elected by the Participant
-8-
<PAGE> 9
would result in a combined distribution of cash and Common
Stock (valued at its Fair Market Value on the initial
commencement date) of less than $3,000, the Plan Administrator
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 distributed is at least
$3,000. If payment of the Participant's benefits over a 5 year
period will not provide annual distributions of at least
$3,000, the Participant's Account shall be paid in a lump sum.
(f) 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
the Plan. Such payment will be commence to be paid on the
first business day of the fourth month following the
Participant's death.
4.06 Financial Hardship. The Plan Administrator 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 cash in a lump sum. Such payments will be made on a
first-in, first-out basis so that the oldest Fees deferred under the
Plan shall be deemed distributed first in a financial hardship.
4.07 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 Plan Administrator, 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 Plan Administrator, 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 Plan Administrator
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.
4.08 Application for Benefits. The Plan Administrator may require a
Participant or Beneficiary to complete and file certain forms as a
condition precedent to receiving the payment of benefits. The Plan
Administrator may rely upon all such
-9-
<PAGE> 10
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 Plan
Administrator informed of their current mailing addresses.
4.09 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 Plan Administrator and will be effective only when
filed with the Plan Administrator during the Participant's lifetime.
Each Beneficiary designation filed with the Plan Administrator will
cancel all Beneficiary designations previously filed with the Plan
Administrator. 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 Funding. Plan benefits 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.
ARTICLE 6
ADMINISTRATION OF THE PLAN
6.01 Administration of the Plan. The Committee and the Plan Administrator
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 and
the Plan Administrator shall have the following specific powers and
responsibilities:
(a) To construe the Plan and to determine all questions arising in
the administration, interpretation and operation of the Plan;
(b) To determine the benefits of the Plan to which any
Participant, Beneficiary or other person may be entitled;
(c) To keep records of all acts and determinations of the
Committee and Plan Administrator, and to keep all such
records, books of accounts, data and
-10-
<PAGE> 11
other documents as may be necessary for the proper
administration of the Plan;
(d) To prepare and distribute to all Participants and
Beneficiaries information concerning the Plan and their rights
under the Plan;
(e) To do all things necessary to operate and administer the Plan
in accordance with its provisions.
ARTICLE 7
AMENDMENT AND TERMINATION
7.01 Amendment and Termination. 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 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 (other than an
amendment to increase the number of Common Stock units available under
the Plan -- see Section 4.03(b)), modification, alteration, or
termination of the 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.
ARTICLE 8
CHANGE IN CONTROL
8.01 Immediate Payment upon Change of Control. Notwithstanding any other
provisions in the Plan, in the event there is a Change of Control of
the Company as defined in Section 8.01(c), any Participant whose
service is terminated on account of such Change of Control shall
receive an immediate lump sum payment of the Participant's Account
balances. For purposes of this Section 8.01(a), a Participant's service
shall be considered to have "terminated on account of such Change of
Control" only if the Participant's service on the Board is terminated
without cause during the 24-month period following the Change of
Control.
8.02 Acceleration of Installment Distributions. Notwithstanding any other
provisions in the Plan, in the event there is a Change of Control as
defined in Section 8.01(c), 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 Accounts.
-11-
<PAGE> 12
8.03 Definition of Change of Control. 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
sale or other disposition of 50% or more of the assets or earning power
of the Company; or (iv) the shareholders of the Company 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 the Plan there shall be no such Change of
Control upon that event.
ARTICLE 9
MISCELLANEOUS
9.01 Headings. The headings and sub-headings in the 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 the 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 the Plan except to
the extent expressly provided herein to the contrary.
-12-
<PAGE> 13
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 the Plan, shall
to the extent thereof be in full satisfaction of all claims hereunder
against the Committee, the Plan Administrator 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
Plan Administrator, 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 the Plan by or through a
lawyer or lawyers, the Company 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 SunTrust Bank or its successors from
time to time.
9.07 Successors and Assigns. The 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 November 1, 1996.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
------------------------------------
Title: Exec. Vice Pres. Finance & Admin.
---------------------------------
Date: November 26, 1996
----------------------------------
[CORPORATE SEAL]
Attest:
/s/ Carol Yancey
- --------------------------------
-13-
<PAGE> 1
EXHIBIT 10.16
AMENDMENT NO. 3 TO
THE GENUINE PARTS COMPANY
PENSION PLAN
This Amendment to the Genuine Parts Company Pension Plan is adopted by
Genuine Parts Company (the "Company") through action of the Pension Committee,
effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Parts Company Pension Plan
(the "Plan"), as amended and restated effective January 1, 1989, and such Plan
is currently in effect; and
WHEREAS, under Section 8.06(c), the Pension Committee has the authority
to amend the Plan to comply with changes in law and to make other amendments
that do not materially increase the costs associated with the Plan; and
WHEREAS, the Company wishes to amend the Plan to permit beneficiaries
with small monthly benefits the option of receiving a lump sum distribution in
lieu of such monthly payments and to make other changes;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as
follows:
1. A new Section 5.06 is hereby added to Plan as follows:
"5.06. Lump Sum Distribution to Beneficiary. The Plan
Administrator may, with the Spouse's or Beneficiary's consent,
pay such Spouse or Beneficiary his or her Retirement Income
under this Article V in a single lump sum in lieu of the
Spouse's or Beneficiary's monthly Retirement Income, provided
the Actuarial Equivalent present value of the Spouse's or
Beneficiary's monthly Retirement Income payments is $3,500 or
less. Notwithstanding anything to the contrary in this Plan,
payment of any such lump sum shall act as a complete discharge
of the Plan's obligation to provide any benefit to the Spouse
or any Beneficiary. Such election must be made within the
first twelve months of the date payments commence to be paid
to the Spouse or Beneficiary."
2. A new Section 6.02(g) is hereby added to the Plan as follows:
"(g) An 'alternate payee' may, pursuant to a 'qualified
domestic relations order' (as such terms are defined in Code
Section 414(p)), receive a distribution in the form of a Life
Annuity Option or in the form of any optional form of benefit
described in this Section 6.02(a). However,
<PAGE> 2
neither an alternate payee nor the alternate payee's spouse
may receive a distribution in the form of a Joint and 50%
Survivor Annuity or in any other form prohibited by applicable
law."
3. This Amendment shall be effective January 1, 1996. Except as
amended herein, the Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Pension
Committee has caused this Amendment to Plan to be executed on the date shown
below but effective as of the date indicated above.
PENSION COMMITTEE TO THE
GENUINE PARTS COMPANY
PENSION PLAN
By: /s/ George W. Kalafut
--------------------------------
Date: May 24, 1996
------------------------------
Attest: /s/ Frank M. Howard
------------------------
-2-
<PAGE> 1
EXHIBIT 10.17
AMENDMENT NO. 4 TO
THE GENUINE PARTS COMPANY
PENSION PLAN
This Amendment to the Genuine Parts Company Pension Plan is adopted by
Genuine Parts Company (the "Company") through action of the Pension Committee,
effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Parts Company Pension Plan
(the "Plan"), as amended and restated effective January 1, 1989, and such Plan
is currently in effect; and
WHEREAS, under Section 8.06(c), the Pension Committee has the authority
to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as
follows:
1.
Section 4.10 is hereby deleted and a new Section 4.10 is substituted in
lieu thereof as follows:
4.10 Grandfathered Retirement Benefits.
(a) 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
<PAGE> 2
401(a)(4), Code Section 415, Code Section
401(a)(17), etc.).
(b) 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
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.
(c) 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.
(d) The following special early retirement benefit shall apply to
Participants who participated in the S.P. Richards Company
Pension Plan on December 31, 1983 ("S.P. Richards
Participant").
(i) An S.P. Richards Participant who had not attained age
55 on or prior to January 1, 1984 and who retires
under Sections 4.01 or 4.02 (considering the rules of
Section 4.10(b)) prior to January 1,
-2-
<PAGE> 3
1993, shall receive a Retirement Income in accordance
with the rules of Section 4.10(a).
(ii) An S.P. Richards Participant who had not attained age
55 on or prior to January 1, 1984, and who retires
under Sections 4.01 or 4.02 (considering the rules of
Section 4.10(b)) shall receive a Retirement Income in
accordance with Sections 4.01 or 4.02 (whichever is
applicable). However, such Retirement Income shall be
increased if such Participant would have received a
greater benefit had the formula in the S.P. Richards
Company Pension Plan applied instead of the formula
in Sections 4.01 or 4.02. The amount of such increase
shall be determined by first reducing the retirement
benefit that would have been paid using the
retirement formula in the S.P. Richards Company
Pension Plan (with the adjustments described in
Section 4.10(a) by the Retirement Income computed
using the formula in Sections 4.01 or 4.02 above
(whichever is applicable). Second, such difference
shall then be multiplied by 66.67% for any such S.P.
Richards Participant who retires during 1993 and by
33.33% for any such S.P. Richards Participant who
retires during 1994.
(iii) An S.P. Richards Participant who had not attained age
55 on or prior to January 1, 1994, and who retires
under Sections 4.01 or 4.02 on or after January 1,
1995, shall receive a Retirement Income based solely
on the formula set forth in Sections 4.01 or 4.02
above (whichever is applicable).
2.
1. A new Section 10.09 is hereby added to Plan as follows:
10.09 Forfeiture of Benefits where Recipient Cannot be
Located.
(a) Except as provided in Section 10.09(b) below, if
the Plan may distribute a Participant's Accrued Benefit and
the Employer has been unable to locate said Participant or his
Beneficiary after taking such actions as are prudent under the
circumstances to locate the Participant or Beneficiary, the
Committee shall declare the Accrued Benefit to be a
forfeiture.
(b) Should a Participant or Beneficiary whose benefit
has been forfeited under the provisions of Section 10.09(a)
later be located, the Committee shall immediately direct the
Trustee to commence payment of benefits to said Participant or
his Beneficiary, according to the terms of the
-3-
<PAGE> 4
Plan. The Employer shall make up any resultant deficiency in
the Trust Fund as soon as possible thereafter.
3.
The amendment described in Paragraph 1 shall be effective January 1,
1992. The amendment described in Paragraph 2 shall be effective January 1, 1996.
Except as amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Pension
Committee has caused this Amendment to Plan to be executed on the date shown
below but effective as of the date indicated above.
PENSION COMMITTEE TO THE
GENUINE PARTS COMPANY
PENSION PLAN
By: /s/ George W. Kalafut
-----------------------------------
Date: December 3, 1996
---------------------------------
Attest: /s/ Frank M. Howard
-------------------------
-4-
<PAGE> 1
EXHIBIT 10.18
AMENDMENT NUMBER TWO TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine
Parts Company (the "Company"), effective as of the date set forth herein.
W I T N E S S E T H:
WHEREAS, the Company maintains the Genuine Partnership Plan (the
"Plan"), as amended and restated effective January 1, 1994, and such Plan is
currently in effect; and
WHEREAS, the Company desires to permit newly hired Employees to make
Pre-Tax Contributions to the Plan upon commencement of employment; and
WHEREAS, the Company wishes to continue its practice of making Employer
Contributions and allocating forfeitures to the Accounts of Participants who are
at least 21 years of age and have completed one year of service;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as
follows:
1.
Section 3.01(b) is deleted in its entirety, and a new Section 3.01(b)
is substituted in lieu thereof, as follows:
"(b) An Eligible Employee who is not described in subsection (a)
above shall become a Participant in the Plan for the purposes
described below as of the following dates:
(1) For purposes of becoming eligible to make Pre-Tax
Contributions and for all other purposes of the Plan related
to making Pre-Tax Contributions (e.g., Investment Funds and
elections) other than eligibility to receive an Employer
Contribution and an allocation of forfeitures, the Entry Date
next following the later of (i) the date on which the Employee
has both completed one Hour of Service and attained age 21 or
(ii) the date the Employee becomes a member of the class of
Eligible Employees.
(2) For purposes of becoming eligible to receive an
Employer Contribution and share in the allocation of any
forfeitures (see Article 5), 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.
<PAGE> 2
(3) See Section 3.04 below for special rules that
apply to new Employees following an acquisition."
2.
Section 3.02(b) is deleted in its entirety and a new Section 3.02(b) is
substituted in lieu thereof as follows:
"(b) Break in Service. For purposes of determining whether an
Eligible Employee has satisfied the requirements of Section
3.01(b)(2), an Employee shall not receive credit for any Hours
of Service for purposes of Section 3.01(b)(2) during any
period of Employment which precedes a Break in Service if, at
the time of such Break in Service, the Employee had not
satisfied the requirements of Section 3.01(b)(2). This rule
shall also apply for purposes of determining eligibility under
Section 3.01(b)(1) if, at the time of such Break in Service,
the Employee had not satisfied the requirements of Section
3.01(b)(1)."
3.
Section 3.03(b) is deleted in its entirety and a new Section 3.03(b) is
substituted in lieu thereof, as follows:
"(b) An Eligible Employee who was a Participant in this Plan at the
time of his Terminated Date and who is subsequently rehired by
an Employer, shall be eligible to immediately participate in
the portion(s) of the Plan for which the Participant was
previously eligible effective on the date of his rehire or, if
later, on the date he becomes an Eligible Employee."
4.
The following sentence shall be added to the end of Sections 5.01(a),
5.02 and 5.04 as follows:
"See Section 3.01(b)(2) and Section 5.05 for additional eligibility
requirements."
5.
A new Section 5.05 is hereby added to the Plan, as follows:
"5.05 Eligibility to Share in Employer Contributions and
Forfeitures.
See Section 3.01(b)(2) for age and service requirements that
an Eligible Employee must satisfy as a condition to receiving
an Employer Contribution or sharing in the allocation of any
forfeiture. An Eligible Employee who has satisfied the
requirements of Section 3.01(b)(1) (eligibility to make
Pre-Tax
-2-
<PAGE> 3
Contributions) but not Section 3.01(b)(2) may make Pre-Tax
Contributions (subject to the terms of the Plan) but shall not
be eligible to receive an Employer Matching Contribution on
such Pre-Tax Contribution or any other Employer Contribution
or allocation of forfeitures."
6.
The definition of Participant set forth in Section 12.01 is hereby
deleted, and a new Section 12.01 is substituted in lieu thereof as follows:
"Participant. For purposes of computing the Average Actual
Contribution Percentage and related provisions 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 or (ii) is unable to receive an
Employer Matching Contribution because his or her Compensation
is less than a stated amount. For purposes of computing the
Average Actual Deferral Percentage and related provisions of
this Article 12, a Participant shall mean any Eligible
Employee who (i) is eligible to make a Pre-Tax Contribution,
including an Eligible Employee whose right to make Pre-Tax
Contributions has been suspended because of an election not to
participate or a hardship distribution and (ii) is unable to
make a Pre-Tax Contribution because his Compensation is less
than a stated amount."
7.
This Amendment shall be effective November 1, 1996. Except as amended
herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company has caused this Amendment to
the Plan to be executed on the date shown below, but effective as of the date
indicated above.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
--------------------------------------
Date: December 3, 1996
------------------------------------
Attest:
/s/ Frank M. Howard
- --------------------------------
-3-
<PAGE> 1
EXHIBIT 13
GENUINE PARTS COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended December 31 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------------
(in thousands except per share data)
<S> <C> <C> <C> <C> <C>
Net sales ........................................... $5,720,474 $5,261,904 $4,858,415 $4,384,294 $4,016,751
Cost of goods sold .................................. 4,002,971 3,654,703 3,343,699 3,023,038 2,781,731
Selling, administrative and other expenses .......... 1,172,270 1,096,407 1,039,848 935,427 852,610
Income before income taxes .......................... 545,233 510,794 474,868 425,829 382,410
Income taxes ........................................ 215,157 201,626 186,320 166,961 145,440
Net income* ......................................... $ 330,076 $ 309,168 $ 288,548 $ 257,813 $ 236,970
Average common shares outstanding during year ....... 121,045 122,615 124,041 124,217 124,085
Per common share:
Net income* ................................. $ 2.73 $ 2.52 $ 2.33 $ 2.08 $ 1.91
Dividends declared .......................... 1.34 1.26 1.15 1.06 1.00
December 31 closing stock price ............. 44.50 41.00 36.00 37.63 34.00
Long-term debt, less current maturities ............. 110,241 60,607 11,431 12,265 13,043
Shareholders' equity ................................ 1,732,054 1,650,882 1,526,165 1,445,263 1,316,372
Total assets ........................................ $2,521,631 $2,274,132 $2,029,471 $1,870,756 $1,707,303
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Net of cumulative effect of changes in accounting principles of $1,055 in 1993.
SELECTED RATIO ANALYSIS
<TABLE>
<CAPTION>
Year Ended December 31 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(In % of net sales)
Cost of goods sold ................................ 69.98% 69.46% 68.82% 68.95% 69.25%
Selling, administrative and other expenses ........ 20.49 20.84 21.40 21.34 21.23
Income before income taxes ........................ 9.53 9.71 9.77 9.71 9.52
Net income ........................................ 5.77 5.88 5.94 5.88 5.90
Rate earned on shareholders' equity at the beginning
of each year ....................................... 19.99% 20.26% 19.97% 19.59% 19.56%
- ---------------------------------------------------------------------------------------------------------------------------------
</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 1996 1995
- -----------------------------------------------------------------
High Low High Low
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
First .............. $ 46.50 $ 40.00 $ 40.00 $ 35.50
Second ............. 46.88 42.63 40.38 37.50
Third .............. 46.38 41.50 40.88 36.25
Fourth ............. 47.50 43.38 42.00 38.88
Dividends Declared per Share
1996 1995
- -----------------------------------------------------------------
First .............. $ .335 $ .315
Second ............. .335 .315
Third .............. .335 .315
Fourth ............. .335 .315
</TABLE>
Number of Record Holders of Common Stock - 7,788
18
<PAGE> 2
GENUINE PARTS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 1996
RESULTS OF OPERATIONS:
Net sales in 1996 increased for the 47th consecutive year to a record high of
$5.7 billion. This was an increase of 9% over the prior year and compares with
increases of 8% in 1995, and 11% in 1994. Sales for the Automotive Parts Group
increased 7% in 1996 versus 4% in 1995, reflecting results from improving the
appearance and location of Company-owned stores, increased market share, new
marketing programs and sales efforts. Price increases for the Automotive Parts
Group were 1.3% in 1996 and less than 2% in 1995. Sales for the Industrial
Parts Group increased 11% in 1996 versus 15% in 1995 reflecting geographic
growth through acquisitions and opening new branches and favorable fundamentals
in industrial production. Price increases for the Industrial Parts Group were
2.5% in 1996 and slightly less than 5% in 1995. Sales for the Office Products
Group increased 9% in 1996 compared with 12% in 1995 reflecting an increased
customer base, expanded product offerings, new marketing programs and
outstanding service levels. Price increases for the Office Products Group were
less than 1% in 1996 and approximately 2% in 1995.
Costs of goods sold was 70% of net sales in 1996 compared to 69.5% in 1995 and
68.8% in 1994. While selling, administrative and other expenses increased each
year, the percentage to net sales remained approximately the same. The
effective income tax rate was 39.5% in 1996 and in 1995 and 39.2% in 1994. Net
income in 1996 increased 7% over 1995 net income and net income in 1995
increased 7% over 1994.
Effective December 31, 1996, the Company changed the rate of increase in future
compensation levels and the expected long-term rate of return on assets for the
Pension Plan from 5% to 4.4% and 9.5% to 9.75%. The changes in the assumptions
for 1996 had no significant effect on the projected benefit obligation at
December 31, 1996.
Effective December 31, 1995, the Company changed the weighted average discount
rate for the Pension Plan from 8.40% to 7.40%, resulting in a net $66,200,000
increase in the projected benefit obligation.
LIQUIDITY AND SOURCES OF CAPITAL:
The ratio of current assets to current liabilities was 3.41 to 1 at the close
of 1996 with current assets amounting to 77% of total assets. Trade accounts
receivable and inventories increased 10% and 9% respectively, while working
capital increased 6%. The increase in working capital has been financed
principally from the Company's cash flow generated by operations.
At December 31, 1996, $47,000,000 was outstanding under an unsecured revolving
line of credit with a bank compared to $45,000,000 outstanding at December 31,
1995. In December 1995 the Company converted $50,000,000 of amounts outstanding
under the line of credit into an unsecured term note which matures in December
2000 and bears interest at a fixed rate of 5.98%. In December 1996, the Company
signed a $50,000,000 unsecured term note which matures in December 2001 and
bears interest at a floating rate of LIBOR plus .25% (5.92% at December 31,
1996).
<TABLE>
<CAPTION>
EARNINGS PER SHARE
(In Dollars)
<S> <C>
1987 $1.25
1988 1.57
1989 1.71
1990 1.79
1991 1.81
1992 1.91
1993 2.08
1994 2.33
1995 2.52
1996 2.73
<CAPTION>
DIVIDENDS PER SHARE
(In Dollars)
<S> <C>
1987 $0.61
1988 0.69
1989 0.80
1990 0.92
1991 0.97
1992 1.00
1993 1.06
1994 1.15
1995 1.26
1996 1.34
</TABLE>
19
<PAGE> 3
GENUINE PARTS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS CONTINUED
At the August 16, 1994 meeting, the 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 5.2 million shares have been
repurchased. Existing credit facilities, current financial resources and
anticipated funds from operations are expected to meet requirements for working
capital in 1997. Capital expenditures during 1996 amounted to $95 million
compared with $91 million in 1995 and $66 million in 1994. The increases
reflect the Company's continuing geographic expansion as well as the upgrading
of existing facilities. It is anticipated that capital expenditures in 1997
will be approximately the same as 1996.
On February 17, 1997, the Board of Directors approved a three-for-two stock
split, to be effected in the form of a 50% stock dividend, payable to
shareholders of record on March 14, 1997. In connection with the stock dividend
$60,016,145 was transferred to common stock from retained earnings in the
December 31, 1996 balance sheet. Pro forma earnings per share, giving
retroactive effect to the stock split, were $1.82, $1.68 and $1.55 for 1996,
1995 and 1994, respectively.
QUARTERLY RESULTS OF OPERATIONS:
Miscellaneous year-end adjustments resulted in increasing net income during the
fourth quarter of 1996 and 1995 by approximately $22,782,000 ($.19 per share)
and $20,093,000 ($.16 per share), respectively.
The following is a summary of the quarterly results of operations for the years
ended December 31, 1996 and 1995.
<TABLE>
<CAPTION>
Three Months Ended
- ---------------------------------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996 (in thousands except per share data)
- ----
Net Sales ................................... $1,399,922 $1,444,873 $1,474,836 $1,400,843
Gross Profit ................................ 409,620 423,941 435,272 448,670
Net Income .................................. 73,874 80,813 81,552 93,837
Net Income per
Common Share .............................. .61 .67 .68 .78
1995
- ----
Net Sales ................................... $1,281,230 $1,308,712 $1,362,481 $1,309,481
Gross Profit ................................ 382,554 390,956 408,495 425,196
Net Income .................................. 69,036 74,931 76,952 88,249
Net Income per
Common Share ....................... .56 .61 .63 .72
</TABLE>
<TABLE>
<CAPTION>
BOOK VALUE PER SHARE
(In Dollars)
<S> <C>
1987 $ 6.56
1988 7.44
1989 8.36
1990 9.02
1991 9.85
1992 10.60
1993 11.63
1994 12.45
1995 13.54
1996 14.43
<CAPTION>
MARKET VALUE PER SHARE
(In Dollars)
<S> <C>
1987 $23.41
1988 23.67
1989 28.00
1990 25.33
1991 32.50
1992 34.00
1993 37.63
1994 36.00
1995 41.00
1996 44.50
</TABLE>
20
<PAGE> 4
GENUINE PARTS COMPANY AND SUBSIDIARIES
INDUSTRY DATA
<TABLE>
<CAPTION>
(dollars in thousands) 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales
Automotive .......................... $ 3,008,105 $ 2,804,086 $ 2,693,961 $ 2,485,267 $ 2,318,761
Industrial .......................... 1,677,859 1,509,566 1,317,495 1,153,371 1,082,428
Office products ..................... 1,034,510 948,252 846,959 745,656 615,562
- ------------------------------------------------------------------------------------------------------------------
Total net sales ................... $ 5,720,474 $ 5,261,904 $ 4,858,415 $ 4,384,294 $ 4,016,751
- ------------------------------------------------------------------------------------------------------------------
Operating profit
Automotive .......................... $ 321,852 $ 307,726 $ 304,164 $ 282,791 $ 262,422
Industrial .......................... 150,815 132,952 111,822 96,727 87,493
Office products ..................... 103,309 93,888 78,206 65,938 50,967
- ------------------------------------------------------------------------------------------------------------------
Total operating profit ............ 575,976 534,566 494,192 445,456 400,882
Interest expense ...................... (8,498) (3,419) (1,321) (1,584) (1,871)
Corporate expense ..................... (29,057) (25,939) (22,854) (20,405) (17,577)
Equity in income ...................... 9,398 8,298 7,224 4,452 2,513
Minority interests .................... (2,586) (2,712) (2,373) (2,090) (1,537)
- ------------------------------------------------------------------------------------------------------------------
Income before income taxes ........ $ 545,233 $ 510,794 $ 474,868 $ 425,829 $ 382,410
- ------------------------------------------------------------------------------------------------------------------
Identifiable assets
Automotive .......................... $ 1,495,106 $ 1,320,910 $ 1,223,416 $ 1,152,148 $ 1,040,191
Industrial .......................... 527,253 482,067 404,647 370,633 354,547
Office products ..................... 379,394 360,456 308,817 283,479 228,802
Corporate ........................... 20,394 18,631 5,950 6,731 27,333
Equity investments .................. 99,484 92,068 86,641 57,765 56,430
- ------------------------------------------------------------------------------------------------------------------
Total assets ...................... $ 2,521,631 $ 2,274,132 $ 2,029,471 $ 1,870,756 $ 1,707,303
- ------------------------------------------------------------------------------------------------------------------
Depreciation and amortization
Automotive .......................... $ 35,360 $ 30,239 $ 26,588 $ 24,056 $ 21,905
Industrial .......................... 6,179 5,049 4,640 5,410 5,286
Office products ..................... 7,571 6,814 5,257 4,246 3,752
Corporate ........................... 1,335 1,132 889 708 744
- ------------------------------------------------------------------------------------------------------------------
Total depreciation and amortization $ 50,445 $ 43,234 $ 37,374 $ 34,420 $ 31,687
- ------------------------------------------------------------------------------------------------------------------
Capital expenditures
Automotive .......................... $ 80,682 $ 67,643 $ 45,921 $ 39,502 $ 24,272
Industrial .......................... 7,330 12,132 4,164 2,779 2,553
Office products ..................... 5,652 10,587 13,547 12,378 3,395
Corporate ........................... 1,494 407 2,370 2,854 1,365
- ------------------------------------------------------------------------------------------------------------------
Total capital expenditures ........ $ 95,158 $ 90,769 $ 66,002 $ 57,513 $ 31,585
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOTAL ASSETS
(In Millions of Dollars)
<S> <C>
1992 $1,707
1993 1,871
1994 2,029
1995 2,274
1996 2,522
<CAPTION>
CAPITAL EXPENDITURES
(In Millions of Dollars)
<S> <C>
1992 $ 32
1993 58
1994 66
1995 91
1996 95
</TABLE>
21
<PAGE> 5
GENUINE PARTS COMPANY AND SUBSIDIARIES
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Genuine Parts Company
We have audited the accompanying consolidated balance sheets of Genuine Parts
Company and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1996. 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, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
- ---------------------
Atlanta, Georgia
February 5, 1997, except as to Note 9, as to
which the date is February 17, 1997
22
<PAGE> 6
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(dollars in thousands)
- -------------------------------------------------------------------------------------------------------------------------
December 31 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
- -------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents ...................................................... $ 67,373 $ 44,254
Trade accounts receivable ...................................................... 622,836 565,305
Merchandise inventories ........................................................ 1,233,820 1,127,456
Prepaid expenses and other current accounts .................................... 13,613 26,946
- -------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,937,642 1,763,961
INVESTMENTS AND OTHER ASSETS (Notes 1 and 7) ................................... 237,994 206,932
PROPERTY, PLANT AND EQUIPMENT:
Land ........................................................................... 44,662 38,844
Buildings, less allowance for depreciation
(1996-$69,273; 1995-$63,507) ................................................ 130,089 119,580
Machinery and equipment, less allowance for
depreciation (1996-$165,518; 1995-$146,290) ................................. 171,244 144,815
- -------------------------------------------------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 345,995 303,239
- -------------------------------------------------------------------------------------------------------------------------
$ 2,521,631 $ 2,274,132
=========================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable ......................................................... $ 401,842 $ 331,704
Revolving line of credit (Note 2) .............................................. 47,000 45,000
Accrued compensation ........................................................... 41,325 33,802
Accrued expenses ............................................................... 22,189 24,810
Dividends payable .............................................................. 40,258 38,401
Income taxes payable ........................................................... 15,765 1,807
- -------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 568,379 475,524
LONG-TERM DEBT (NOTE 2) ........................................................ 110,241 60,607
DEFERRED INCOME TAXES (NOTE 6) ................................................. 75,388 58,690
MINORITY INTERESTS IN SUBSIDIARIES ............................................. 35,569 28,429
SHAREHOLDERS' EQUITY (Notes 1, 3, 5 and 9):
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 180,048,435 shares
in 1996; 121,913,040 shares in 1995 ......................................... 180,048 121,913
Additional paid-in capital ..................................................... -- --
Retained earnings .............................................................. 1,552,006 1,528,969
- -------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,732,054 1,650,882
- -------------------------------------------------------------------------------------------------------------------------
$ 2,521,631 $ 2,274,132
=========================================================================================================================
</TABLE>
See accompanying notes.
23
<PAGE> 7
Genuine Parts Company and Subsidiaries
Consolidated Statements of Income
<TABLE>
<CAPTION>
(dollars in thousands, except per share data)
- ------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales ................................................................... $5,720,474 $5,261,904 $4,858,415
Cost of goods sold .......................................................... 4,002,971 3,654,703 3,343,699
- ------------------------------------------------------------------------------------------------------------------------
1,717,503 1,607,201 1,514,716
Selling, administrative and other expenses .................................. 1,172,270 1,096,407 1,039,848
- ------------------------------------------------------------------------------------------------------------------------
Income before income taxes .................................................. 545,233 510,794 474,868
Income taxes (Note 6) ....................................................... 215,157 201,626 186,320
- ------------------------------------------------------------------------------------------------------------------------
NET INCOME .................................................................. $ 330,076 $ 309,168 $ 288,548
========================================================================================================================
Net income per common share (before giving effect to the three-for-two
stock split declared on February 17, 1997-- see Note 9) ................. $ 2.73 $ 2.52 $ 2.33
========================================================================================================================
Average common shares outstanding during the year (Note 9) .................. 121,045 122,615 124,041
========================================================================================================================
</TABLE>
See accompanying notes.
24
<PAGE> 8
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional Total
-------------------- Paid-In Retained Shareholders'
(dollars in thousands) Shares Amount Capital Earnings Equity
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1994 .................. 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
Net income ................................ -- -- -- 309,168 309,168
Cash dividends declared ................... -- -- -- (154,411) (154,411)
Stock options exercised ................... 149,827 150 3,955 -- 4,105
Purchase of stock ......................... (1,021,551) (1,021) (9,835) (29,326) (40,182)
Other ..................................... 157,461 157 5,880 -- 6,037
- -------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 ................ 121,913,040 121,913 -- 1,528,969 1,650,882
Net income ................................. -- -- -- 330,076 330,076
Cash dividends declared .................... -- -- -- (162,070) (162,070)
Stock options exercised .................... 293,795 294 7,587 -- 7,881
Purchase of stock .......................... (2,174,545) (2,175) (7,587) (84,953) (94,715)
Three-for-two stock split (Note 9) ......... 60,016,145 60,016 -- (60,016) --
- -------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996 ................ 180,048,435 $ 180,048 $ -- $ 1,552,006 $ 1,732,054
===================================================================================================================
</TABLE>
See accompanying notes.
25
<PAGE> 9
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(dollars in thousands)
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities
Net income ................................................................... $ 330,076 $ 309,168 $ 288,548
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization ........................................... 50,445 43,234 37,374
Gain on sale of property, plant and equipment ........................... (786) (1,248) (158)
Provision for deferred taxes ............................................ 13,930 12,340 6,699
Equity in income from investees ......................................... (9,398) (8,298) (7,224)
Income applicable to minority interests ................................. 2,586 2,712 2,373
Changes in operating assets and liabilities:
Trade accounts receivable ............................................. (57,531) (77,910) (58,484)
Merchandise inventories ............................................... (106,364) (122,876) (125,426)
Prepaid expenses and other current accounts ........................... 13,333 (5,550) (11,097)
Trade accounts payable ................................................ 70,138 15,115 57,641
Income taxes payable and other current liabilities .................... 21,586 (8,000) 8,708
- ---------------------------------------------------------------------------------------------------------------------------
(2,061) (150,481) (89,594)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 328,015 158,687 198,954
Investing Activities
Investment in Grupo Auto Todo ................................................ -- -- (26,009)
Purchase of property, plant and equipment .................................... (95,158) (90,769) (66,002)
Proceeds from sale of property, plant and equipment .......................... 4,385 4,836 2,885
Proceeds from sale and maturity of short-term investments .................... -- -- 64,599
Other investing activities ................................................... (23,306) (18,199) (9,062)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (114,079) (104,132) (33,589)
Financing Activities
Proceeds from revolving line of credit, net ................................... 2,000 45,000 --
Proceeds from long-term debt .................................................. 50,000 50,000 --
Payments on long-term debt .................................................... (324) (1,167) (698)
Stock options exercised ....................................................... 7,881 4,105 4,368
Dividends paid ................................................................ (160,214) (151,257) (140,289)
Purchase of stock ............................................................. (94,715) (40,182) (70,345)
Contributions from minority interests ......................................... 4,555 790 778
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (190,817) (92,711) (206,186)
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 23,119 (38,156) (40,821)
- ---------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 44,254 82,410 123,231
- ---------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 67,373 $ 44,254 $ 82,410
===========================================================================================================================
Supplemental disclosure of cash flow information
Cash paid during the year for:
Income taxes ................................................................. $ 187,809 $ 223,641 $ 178,307
===========================================================================================================================
Interest ..................................................................... $ 8,405 $ 2,919 $ 1,333
===========================================================================================================================
</TABLE>
See accompanying notes.
26
<PAGE> 10
GENUINE PARTS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
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.
Use of Estimates
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results may differ from those
estimates.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Investments
The Company has a 23% ownership interest in UAP Inc., a Canadian automotive
parts distributor and 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 and
represent less than five percent of consolidated amounts. Translation
adjustments are not material.
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 $124,566,000 and $114,381,000 higher than reported at
December 31, 1996 and December 31, 1995, 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.
Long-Lived Assets
In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company adopted Statement 121
in the first quarter of 1996. The adoption had no effect on the financial
statements.
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. CREDIT FACILITIES
In June 1995 the Company obtained a $100,000,000 unsecured revolving line of
credit with a bank which matured in May 1996. The note was renewed in May 1996
and matures in May 1997, bearing interest at the bank's cost of funds rate plus
.10% (5.48% as of December 31, 1996). At December 31, 1996 and 1995,
respectively, $47,000,000 and $45,000,000 was outstanding under this line.
In December 1995 the Company converted $50,000,000 of amounts outstanding under
the line of credit into an unsecured term note which matures in December 2000
and bears interest at a fixed rate of 5.98%. In December 1996 the Company
signed a $50,000,000 unsecured term note which matures in December 2001 and
bears interest at a floating rate of LIBOR plus .25% (5.92% as of December 31,
1996). Other long-term debt of $10,241,000 and $10,607,000 at December 31, 1996
and 1995, respectively, consists of various industrial development bonds and
other obligations which bear interest at varying rates and mature at varying
dates through 2004. The current portion of this long-term debt is included in
accrued expenses.
The Company believes that the fair value of these financial instruments
approximates the carrying value.
27
<PAGE> 11
GENUINE PARTS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
3. 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.
4. 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, 1996 (in thousands):
<TABLE>
<C> <C>
1997........................ $ 49,187
1998........................ 37,698
1999........................ 26,019
2000........................ 18,308
2001........................ 11,697
Subsequent to 2001.......... 24,501
- ---------------------------------------
$ 167,410
=======================================
</TABLE>
Rental expense for operating leases was $61,259,000 in 1996; $58,146,000 in
1995; $53,913,000 in 1994.
5. STOCK OPTIONS
The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123, "Accounting for Stock-Based Compensation," requires use of
option valuation models that were not developed for use in valuing employee
stock options. Under APB 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.
Under the Genuine Parts Company 1988 Stock Option Plan and the Genuine Parts
Company 1992 Stock Option and Incentive Plan, the Company has authorized the
grant of options of up to 750,000 and 6,750,000 shares of common stock,
respectively, after giving effect to the three-for-two stock split disclosed in
Note 9. In accordance with stock option plans approved by shareholders, options
are granted to key personnel for the purchase of the Company's 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.
Pro forma information regarding net income and earnings per share is required
by Statement 123, which also requires that the information be determined as if
the Company had accounted for its employee stock options granted subsequent to
December 31, 1994 under the fair value method of that Statement. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for 1995
and 1996, respectively: risk-free interest rates of 7.2% and 6.3%; a dividend
yield of 3%; volatility factors of the expected market price of the Company's
common stock of .13 and .12; and a weighted-average expected life of the option
of 8 years and 7.3 years.
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows (in thousands except for earnings per share
information, after giving effect to the three-for-two stock split disclosed in
Note 9):
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Pro forma net income ................ $ 329,387 $ 306,908
Pro forma earnings per share ........ $ 1.81 $ 1.67
</TABLE>
28
<PAGE> 12
A summary of the Company's stock option activity, and related information for
the years ended December 31 follows, after giving effect to the three-for-two
stock split disclosed in Note 9:
<TABLE>
<CAPTION>
1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Shares Exercise Shares Exercise Shares Exercise
(000's) Price (000's) Price (000's) Price
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year ................. 3,318 $ 23 2,850 $ 21 2,244 $ 20
Granted .......................................... 18 31 750 27 1,040 23
Exercised ........................................ (555) 19 (273) 18 (410) 18
Forfeited ........................................ (38) 21 (9) 23 (24) 20
----- ----- -----
Outstanding at end of year ....................... 2,743 $ 23 3,318 $ 23 2,850 $ 21
===== ===== =====
Exercisable at end of year ....................... 2,106 $ 23 2,006 $ 21 1,157 --
===== ===== =====
Weighted-average fair value of options
granted during the year ......................... $ 6.31 $ 6.37 --
===== ===== =====
Shares available for future grants ............... 3,324 3,300 4,041
===== ===== =====
</TABLE>
Exercise prices for options exercised during 1996 ranged from approximately $17
to $31. Exercise prices for options outstanding as of December 31, 1996 ranged
from approximately $18 to $27. The weighted-average remaining contractual life
of those options is 7 years.
On March 31, 1994, the Company entered into restricted stock agreements with
two officers which provide for the award of up to 150,000 and 75,000 shares,
respectively, during the period 1994 through 1998 based on the Company
achieving certain increases in earnings per share and stock price levels, after
giving effect to the three-for-two stock split disclosed in Note 9. The
officers earned 40,500 and 18,000 shares for the years ended December 31, 1996
and 1995, 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.
6. 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>
1996 1995
- -------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Employee and retiree benefits ..... $ 40,885 $ 27,775
Property, plant and equipment ..... 24,052 19,966
Merchandise inventories ........... 1,730 4,039
Other ............................. 8,721 6,910
- -------------------------------------------------------------------------------
$ 75,388 $ 58,690
===============================================================================
</TABLE>
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
- ---------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Federal:
Current .................... $164,585 $155,895 $148,282
Deferred ................... 13,930 12,340 6,699
State ........................ 36,642 33,391 31,339
- ---------------------------------------------------------------------
$215,157 $201,626 $186,320
=====================================================================
</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>
1996 1995 1994
- ---------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Statutory rate applied
to pre-tax income .......... $190,831 $178,778 $166,204
Plus state income taxes,
net of Federal tax
benefit .................... 23,818 21,704 20,370
Other ........................ 508 1,144 (254)
- ---------------------------------------------------------------------
$215,157 $201,626 $186,320
=====================================================================
</TABLE>
7. 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 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.
29
<PAGE> 13
Genuine Parts Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
The following table sets forth the plan's funded status and amounts recognized
in the Company's financial statements at December 31:
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of
benefit obligations:
Accumulated benefit obligation,
including vested benefits of
$266,263 in 1996 and
$244,256 in 1995 ......................... $(274,607) $(251,245)
===============================================================================
Projected benefit obligation for
service rendered to date ................... (413,657) (394,974)
Plan assets at fair value, primarily
bonds and equity securities ................ 487,753 436,846
- -------------------------------------------------------------------------------
Plan assets in excess of projected
benefit obligation ......................... 74,096 41,872
Unrecognized prior service cost ............. (20,794) (23,657)
Unrecognized net loss from past
experience different from that
assumed and effects of changes
in assumptions ............................. 49,347 62,835
Unrecognized net transition
obligation ................................. 1,302 1,562
- -------------------------------------------------------------------------------
Net prepaid pension cost .................... $ 103,951 $ 82,612
===============================================================================
</TABLE>
Net pension cost (income) included the following components at December 31:
<TABLE>
<CAPTION>
1996 1995 1994
- -----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Service cost ........................... $ 13,723 $ 10,710 $ 12,247
Interest cost .......................... 28,431 26,032 25,002
Actual return on plan
assets ................................ (55,058) (90,127) 3,578
Net amortization and
deferral .............................. 12,202 51,622 (36,606)
- -----------------------------------------------------------------------------------------
Net periodic pension
(income) cost ........................ $ (702) $ (1,763) $ 4,221
=========================================================================================
</TABLE>
Assumptions used in the accounting for the defined benefit plan as of December
31 were:
<TABLE>
<CAPTION>
1996 1995 1994
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Weighted-average
discount rate ............... 7.40% 7.40% 8.40%
Rate of increase in future
compensation levels ......... 4.40% 5.00% 5.00%
Expected long-term rate
of return on assets ......... 9.75% 9.50% 9.50%
</TABLE>
The changes in the above assumptions had no significant effect on the projected
benefit obligation at December 31, 1996. The 1995 change resulted in a net
increase in the projected benefit obligation of $66,200,000 at December 31,
1995.
At December 31, 1996, the plan held 547,074 shares of common stock of the
Company with a market value of $24,344,778.
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
$3,743,000 in 1996, $3,556,000 in 1995 and $3,364,000 in 1994, respectively.
8. INDUSTRY DATA
The industry data for the past five years presented on page 21 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
throughout the United States. 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 and headquarters' facilities and equipment.
9. STOCK SPLIT
On February 17, 1997, the Board of Directors approved a three-for-two stock
split, to be effected in the form of a 50% stock dividend, payable to
shareholders of record on March 14, 1997. In connection with the stock dividend
$60,016,145 was transferred to common stock from retained earnings in the
December 31, 1996 balance sheet. Pro forma earnings per share, giving
retroactive effect to the stock split, were $1.82, $1.68 and $1.55 for 1996,
1995 and 1994, respectively.
30
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
JURISDICTION OF
NAME % OWNED INCORPORATION
- ---- ------- -------------
<S> <C> <C>
BALKAMP 89.6 INDIANA
BERRY BEARING COMPANY 100.0 ILLINOIS
GENUINE PARTS HOLDINGS, LTD 100.0 ALBERTA, CANADA
GENUINE PARTS COMPANY, LTD 100.0 ALBERTA, CANADA
OLIVER INDUSTRIAL, LTD 100.0 ALBERTA, CANADA
GPC MEXICO, S.A. de C.V. 100.0 PUEBLA, MEXICO
GPC TRADING CORPORATION 100.0 VIRGIN ISLANDS
MOTION INDUSTRIES 100.0 DELAWARE
MOTION INDUSTRIES (CANADA), INC. 100.0 OTTAWA, ONTARIO
S.P. RICHARDS COMPANY 100.0 GEORGIA
HORIZON DATA SUPPLY, INC. 100.0 NEVADA
1ST CHOICE AUTO PARTS, INC. 51.0 GEORGIA
ANN ARBOR AUTO SUPPLY, INC. 51.0 GEORGIA
ANTIOCH AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
AUTO PAINT & SUPPLY CO. OF LEXINGTON, INC. 51.0 GEORGIA
AUTO PARTS OF BIG CREEK, INC. 51.0 GEORGIA
AUTO PARTS OF DAYTONA, INC. 51.0 GEORGIA
AUTO PARTS OF EAST BRUNSWICK, INC. 51.0 GEORGIA
AUTO PARTS OF JUPITER, INC. 51.0 GEORGIA
AUTO PARTS OF PALMDALE, INC. 51.0 GEORGIA
BAD AXE AUTO SUPPLY, INC. 51.0 GEORGIA
BAKER AUTOMOTIVE PARTS, INC. 70.0 GEORGIA
BONNEY LAKE AUTO & TRUCK PARTS, INC. 51.0 GEORGIA
BRIGHAM AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
BULLDOG AUTO PARTS, INC. 51.0 GEORGIA
C&O AUTO PARTS, INC. 51.0 GEORGIA
CALCUTTA AUTO SUPPLY, INC. 100.0 GEORGIA
CEDAR CITY AUTO PARTS, 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
COCHISE AUTO PARTS, INC. 51.0 GEORGIA
COLORADO MOTOR PARTS, INC. 51.0 GEORGIA
COPPS HILL AUTO PARTS, INC. 51.0 GEORGIA
CROSS TIMBERS AUTO SUPPLY, INC. 51.0 GEORGIA
CRYSTAL RIVER AUTO PARTS, INC. 51.0 GEORGIA
EAST TENN AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
FAIRFIELD AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
FARM AUTO AND TRUCK PARTS, INC. 51.0 GEORGIA
FIRST CHOICE AUTOMOTIVE, INC. 51.0 GEORGIA
FIRST CLASS AUTO PARTS, INC. 70.0 GEORGIA
FIRST SETTLEMENT AUTOMOTIVE, INC. 51.0 GEORGIA
FRANKLIN COUNTY SUPPLY, INC. 51.0 GEORGIA
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
GAINESVILLE AUTO SUPPLY, INC. 51.0 GEORGIA
GILA AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
GLENWOOD SPRINGS AUTO PARTS, INC. 51.0 GEORGIA
GRAND CANYON AUTO SUPPLY, INC. 51.0 GEORGIA
GRAND PRAIRIE AUTO SUPPLY, INC. 70.0 GEORGIA
GRAY'S HARBOR AUTO & TRUCK, INC. 51.0 GEORGIA
GREAT MIAMI AUTOMOTIVE PARTS, INC. 51.0 GEORGIA
HANSENS AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
HASTINGS AUTO SUPPLY, INC. 51.0 GEORGIA
HIGH DESERT AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
HOLTON AUTO PARTS, INC. 51.0 GEORGIA
HOUGHTON LAKE AUTO SUPPLY, INC. 51.0 GEORGIA
HUNTSVILLE PARTS & EQUIPMENT, INC. 51.0 GEORGIA
JBH AUTO SUPPLY INCORPORATED 51.0 GEORGIA
KANE AUTO PARTS, INC. 51.0 GEORGIA
L&P AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
LAKE CITY AUTO PARTS, INC. 51.0 GEORGIA
LAKE HAVASU CITY AUTO PARTS, INC. 51.0 GEORGIA
LANA LOU AUTO PARTS, INC. 51.0 GEORGIA
LAUDERDALE COUNTY SUPPLY, INC. 51.0 GEORGIA
LITTLE SIOUX AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
LIVONIA AUTO SUPPLY, INC. 51.0 GEORGIA
LODI AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
LUKE'S AUTO SUPPLY, INC. 51.0 GEORGIA
MALDEN AUTO SUPPLY, INC. 100.0 GEORGIA
MARION AUTO SUPPLY, INC. 51.0 GEORGIA
MCKINNEY PARTS, INC. 51.0 GEORGIA
McMINN COUNTY AUTOMOTIVE, INC. 51.0 GEORGIA
MID-TOWN AUTO & MACHINE SHOP, INC. 51.0 GEORGIA
MID-VALLEY AUTOMOTIVE, INC. 51.0 GEORGIA
MIDDLETOWN PARTS UNLIMITED, INC. 51.0 GEORGIA
MODESTO AUTO AND TRUCK PARTS, INC. 51.0 GEORGIA
MONTANA MOTOR SERVICE, INC. 51.0 GEORGIA
MUSCATINE AUTO PARTS, INC. 51.0 GEORGIA
N. V. AUTOMOTIVE SUPPLY, INC. 51.0 GEORGIA
NACOGDOCHES AUTO PARTS, INC. 51.0 GEORGIA
OBERLIN AUTO PARTS, INC. 51.0 GEORGIA
PARTS & COMPANY OF SELMA, INC. 51.0 GEORGIA
PARTS OF HILLSVILLE, INC. 70.0 GEORGIA
PETOSKEY AUTOMOTIVE CENTER, INC. 51.0 GEORGIA
POLYCO CORPORATION 70.0 GEORGIA
PORT CHARLOTTE AUTO SUPPLY, INC. 51.0 GEORGIA
PRESCOTT AUTO PARTS, INC. 51.0 GEORGIA
PRIDE CITY AUTO PARTS, INC. 51.0 GEORGIA
PROCTORVILLE AUTO PARTS, INC. 51.0 GEORGIA
QUALITY AUTO PARTS & PAINT SUPPLY, INC. 51.0 GEORGIA
R.K.R., INC. 51.0 GEORGIA
RIALTO AUTO PARTS, INC. 51.0 GEORGIA
RIO VERDE AUTO PARTS, INC. 51.0 GEORGIA
RIVER VALLEY AUTO PARTS, INC. 51.0 GEORGIA
RIVERSIDE AUTO PARTS, INC. 51.0 GEORGIA
RKKC, INC. 51.0 GEORGIA
RUTHERFORD AUTO PARTS 51.0 GEORGIA
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SAN JOAQUIN PARTS CORPORATION, INC. 51.0 GEORGIA
SEVIER COUNTY AUTOMOTIVE, INC. 51.0 GEORGIA
SLIDELL PARTS WAREHOUSE, INC. 51.0 GEORGIA
SOUTHERN INDIANA PARTS, INC. 51.0 GEORGIA
SUMNER AUTO & TRUCK, INC. 51.0 GEORGIA
SWEET HOME AUTO & TRUCK SUPPLY, INC. 51.0 GEORGIA
TAG AUTOMOTIVE. INC. 51.0 GEORGIA
TERREBONNE PARISH AUTO PARTS, INC. 51.0 GEORGIA
THE FLOWERS COMPANY 51.0 NORTH CAROLINA
TNT SUPPLY, INC. 51.0 GEORGIA
UPTERGROVE AUTO SUPPLY, INC. 51.0 GEORGIA
VICKSBURG AUTOMOTIVE,INC. 51.0 GEORGIA
VIKING AUTO PARTS, INC. 51.0 GEORGIA
WARREN COUNTY AUTOMOTIVE, INC. 51.0 GEORGIA
WATSONVILLE AUTO SUPPLY, INC. 51.0 GEORGIA
WHITNEY POINT UNIT PARTS, 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 5, 1997, included in the
1996 Annual Report to Shareholders of Genuine Parts Company.
We also consent to the incorporation by reference in the Registration Statements
of Genuine Parts Company listed below of our report dated February 5, 1997, 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, 1996.
- - Registration Statement No. 33-30982 on Form S-8 pertaining to the 1988
Stock Option Plan
- - Registration Statement No. 33-62512 on Form S-8 pertaining to the 1992
Stock Option and Incentive Plan
- - Registration Statement No. 333-21969 on Form S-8 pertaining to the
Directors' Deferred Compensation Plan
/s/ Ernst & Young
Atlanta, Georgia
March 10, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 67,376
<SECURITIES> 0
<RECEIVABLES> 622,836
<ALLOWANCES> 1,772
<INVENTORY> 1,233,820
<CURRENT-ASSETS> 1,937,642
<PP&E> 345,995
<DEPRECIATION> 234,791
<TOTAL-ASSETS> 2,521,631
<CURRENT-LIABILITIES> 568,379
<BONDS> 110,241
0
0
<COMMON> 180,048
<OTHER-SE> 1,552,006
<TOTAL-LIABILITY-AND-EQUITY> 2,521,631
<SALES> 5,720,474
<TOTAL-REVENUES> 5,720,474
<CGS> 4,002,971
<TOTAL-COSTS> 4,002,971
<OTHER-EXPENSES> 1,163,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,498
<INCOME-PRETAX> 545,233
<INCOME-TAX> 215,157
<INCOME-CONTINUING> 330,076
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 330,076
<EPS-PRIMARY> 2.73
<EPS-DILUTED> 2.73
</TABLE>
