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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-5690
GENUINE PARTS COMPANY
(Exact name of Registrant as specified in its Charter)
GEORGIA 58-0254510
(State of Incorporation) (IRS Employer Identification No.)
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 12, 1998) held by
non-affiliates as of February 12, 1998 was approximately $6,149,387,319.
The number of shares outstanding of Registrant's Common Stock, as of
February 12, 1998: 178,803,145.
Documents Incorporated by Reference:
- Portions of the Annual Report to Shareholders for the fiscal year
ended December 31, 1997, 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 20, 1998 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 1997,
business was conducted throughout most of the United States, in western Canada
and in Mexico from approximately 1,350 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.
INDUSTRY SEGMENT DATA. The following table sets forth the net sales, operating
profit and identifiable assets for the fiscal years 1997, 1996 and 1995
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>
1997 1996 1995
---- ---- ----
NET SALES (in thousands)
---------
<S> <C> <C> <C>
Automotive Parts $ 3,071,153 $ 3,008,105 $ 2,804,086
Industrial Parts 1,853,270 1,677,859 1,509,566
Office Products 1,080,822 1,034,510 948,252
----------- ----------- -----------
TOTAL NET SALES $ 6,005,245 $ 5,720,474 $ 5,261,904
=========== =========== ===========
OPERATING PROFIT
Automotive Parts $ 324,008 $ 321,852 $ 307,726
Industrial Parts 166,053 150,815 132,952
Office Products 110,663 103,309 93,888
----------- ----------- -----------
TOTAL OPERATING PROFIT 600,724 575,976 534,566
Interest Expense (13,365) (8,498) (3,419)
Corporate Expense (26,943) (29,057) (25,939)
Equity in Income from Investees 6,730 9,398 8,298
Minority Interests (1,546) (2,586) (2,712)
----------- ----------- -----------
INCOME BEFORE INCOME TAXES $ 565,600 $ 545,233 $ 510,794
=========== =========== ===========
IDENTIFIABLE ASSETS
Automotive Parts $ 1,644,288 $ 1,495,106 $ 1,320,910
Industrial Parts 602,656 527,253 482,067
Office Products 383,452 379,394 360,456
----------- ----------- -----------
TOTAL IDENTIFIABLE ASSETS 2,630,396 2,401,753 2,163,433
Corporate Assets 23,343 20,394 18,631
Equity Investments 100,624 99,484 92,068
----------- ----------- -----------
TOTAL ASSETS $ 2,754,363 $ 2,521,631 $ 2,274,132
=========== =========== ===========
</TABLE>
For additional information regarding industry data, see Page 21 of
Annual Report to Shareholders for 1997.
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 26 of Annual Report to
Shareholders for 1997.
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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, 1997, the Company employed approximately 24,500
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 200,000 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 1997, 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 58% of 1997 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 1997, Genuine Parts Company operated 62 domestic NAPA
automotive parts distribution centers located in 38 states and approximately
750 domestic company-owned NAPA AUTO PARTS stores located in 43 states. At
December 31, 1997, Genuine Parts Company owned a 51% interest in 136
corporations and a 70% interest in 5 corporations which operated 203 auto parts
stores in 39 states.
In Canada, Genuine Parts Company Ltd., a wholly-owned subsidiary, owns a
49% interest in UAP/NAPA which operated seven automotive parts distribution
centers and 106 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 20 distribution centers and 23 auto parts
stores. Auto Todo is licensed to and uses 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 4,900
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 17% 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 .3% of the total sales of the Company.
PRODUCTS. Distribution centers have access to approximately 200,000 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 400 suppliers. All Balkamp
items are cataloged separately to provide single source convenience for NAPA
customers. BALKAMP(R), a federally registered trademark, 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 five 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 NAPA.
SEGMENT DATA. In the year ended December 31, 1997, sales from the Automotive
Parts Group approximated 51% of the Company's net sales as compared to 53% in
1996 and 53% in 1995.
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 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
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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 1997 operated 71
distribution centers located throughout the United States, 62 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, Canada and Mexico. 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 1997, the Company distributed industrial parts in the United States
through Motion Industries, Inc. ("Motion"), headquartered in Birmingham,
Alabama, and Motion's operating division, 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 another of Motion's operating divisions, Motion (Canada), Inc. ["Motion
(Canada)"], formerly Oliver Industrial Supply Ltd., a wholly owned subsidiary
of Genuine Parts Holdings Ltd., headquartered in Lethbridge, Alberta. Genuine
Parts Holdings Ltd. is a wholly owned subsidiary of the Company. Motion
(Canada)'s service area is principally the provinces of Alberta, British
Columbia, Manitoba and Saskatchewan. An affiliate relationship in Mexico allows
Motion to provide the Mexican industrial sector with industrial parts.
In October 1997, the Company completed the acquisitions of Utah Bearing
and Fabrication Company and Colorado Bearing and Supply, Inc. Utah Bearing,
based in Salt Lake City, distributes bearings and mechanical, electrical and
fluid power components through 14 locations in Utah, New Mexico, Wyoming, Idaho
and Oregon. Colorado Bearing and Supply has one location in Denver, Colorado.
Utah Bearing and Colorado Bearing and Supply, Inc. are among the most
successful independent power transmission distributors in the Rocky Mountain
region. These branches have been added to the Industrial Parts Group.
Additionally, Motion opened 12 new branches (including one in San Juan, Puerto
Rico) raising the number of total industrial branches to 420 operating in 46
states.
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As of December 31, 1997, 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
seven distribution centers, two re-distribution centers, 27 service centers for
fluid power, electrical and special hose applications and 420 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 1997 total industrial purchases were made from 10 major
suppliers. Sales are generated from the Group's branches located in 46 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, Motion (Canada) 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. Motion (Canada) also 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. Motion's integrated supply solutions continued to gain
momentum in 1997. Motion's integrated supply process not only reduces the costs
associated with MRO (Maintenance, Repairs and Operation) inventory management,
but also enables the manufacturing customer to focus on its core competency,
free working capital associated with inventories, improve service levels to
end-users, and allow management to focus on more strategic concerns. Motion's
integrated supply process analyzes a customer's current operation to develop
integration goals and then provides solutions based on industry's accepted best
practices.
SEGMENT DATA. In the year ended December 31, 1997, sales from the Company's
Industrial Parts Group approximated 31% of the Company's net sales as compared
to 29% in 1996 and 29% in 1995.
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.
OFFICE PRODUCTS GROUP
The Office Products Group, operated 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 and other 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 five branches in the Northeast. Horizon USA Data Supplies,
Inc., acquired by the Company in 1995, is a computer supplies distributor
headquartered in Reno, Nevada.
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In June 1997, the Company completed the purchase of the majority of the
assets of Westwide Distributors, Inc., a Texas corporation, formerly operating
an office supply distribution center in Albuquerque, New Mexico. When S. P.
Richards Company began the operation of this office supply distribution center,
it became its 39th office products distribution center. In November 1997, the
Company opened its 40th business products distribution center in Davenport,
Iowa.
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 31 states.
Approximately 57% of 1997 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, 1997, sales from the Company's
Office Products Group approximated 18% of the Company's net sales as compared
to 18% in 1996 and 18% in 1995.
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
12, 1998, the position or office held by each and the period during which each
has served as such. Each executive officer is elected by the Board of Directors
and serves at the pleasure of the Board of Directors until his successor has
been elected and has qualified, or until his earlier death, resignation,
removal, retirement or disqualification.
<TABLE>
<CAPTION>
YEAR FIRST
ASSUMED
NAME AGE POSITION OF OFFICE POSITION
- ---- --- ------------------ --------
<S> <C> <C> <C>
Larry L. Prince 59 Chairman of the Board of Directors and 1990/1989
Chief Executive Officer
Thomas C. Gallagher 50 President and Chief Operating Officer 1990
Robert J. Breci 62 Executive Vice President 1987
George W. Kalafut 63 Executive Vice President-Finance and 1991
Administration *
Keith M. Bealmear 51 Group Vice President 1994
Albert T. Donnon, Jr. 50 Group Vice President 1993
Edward Van Stedum 48 Senior Vice President-Human Resources 1996
</TABLE>
* Also serves as the Company's Principal Financial and Accounting Officer.
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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, 1997, the Company owned 750 NAPA AUTO PARTS stores
located in 43 states, and Genuine Parts Company owned either a 51% or 70%
interest in 203 auto parts stores located in 39 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 106 auto parts stores
in western Canada. The Company's Automotive Parts Group also operates three
Balkamp distribution centers, five Rayloc rebuilding plants, and one transfer
and shipping facility.
The Company's Industrial Parts Group, operating through Motion and Berry
Bearing Company, operates 7 distribution centers, 2 re-distribution centers, 27
service centers and 420 branches. Approximately 90% 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
27 of Annual Report to Shareholders for 1997.
ITEM 3. LEGAL PROCEEDINGS.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED 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, 1997, and is incorporated herein by reference. The
Company has made no unregistered sales of securities during the year ended
December 31, 1997.
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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, 1997, 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, 1997, and is incorporated herein
by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOVE MARKET RISK.
The Company has no significant market risk sensitive instruments.
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 Annual Report to Shareholders for the year ended
December 31, 1997, 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 20, 1998, 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 through 9, 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 15 of the definitive proxy statement
for the Company's Annual Meeting to be held on April 20, 1998, and is
incorporated herein by reference. In no event shall the information contained
in the definitive proxy statement for the Company's 1998 Annual Meeting on
Pages 9 through 11 under the heading "Compensation and Stock Option Committee
Report on Executive Compensation" or on Pages 16 and 17 under the heading
"Performance Graph" be incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is set forth under the headings
"Common Stock Ownership of Certain Beneficial Owners" and "Common Stock
Ownership of Management" on Pages 5 through 7 of the definitive proxy statement
for the Company's Annual Meeting to be held on April 20, 1998, and is
incorporated herein by reference.
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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 Pages 11 and
12 of the definitive proxy statement for the Company's 1998 Annual Meeting to
be held on April 20, 1998, 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, 1998, 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.)
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.)
-10-
<PAGE> 11
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 reference 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 form 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.)
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.
(Incorporated herein by reference to the
Company's Form 10-K, dated March 10, 1997.)
Exhibit 10.16 * Amendment No. 3 to the Genuine Parts Company
Pension Plan dated May 24, 1996, effective
January 1, 1996. (Incorporated herein by
reference to the Company's Form 10-K, dated
March 10, 1997.)
Exhibit 10.17 * Amendment No. 4 to the Genuine Parts Company
Pension Plan dated December 3, 1996, effective
January 1, 1996. (Incorporated herein by
reference to the Company's Form 10-K, dated
March 10, 1997.)
Exhibit 10.18 * Amendment No. 2 to the Genuine Partnership Plan,
dated December 3, 1996, effective November 1,
1996. (Incorporated herein by reference to the
Company's Form 10-K, dated March 10, 1997.)
Exhibit 10.19 * Amendment No. 4-A to the Genuine Parts Company
Pension Plan, dated August 29, 1997, effective
January 1, 1996.
-11-
<PAGE> 12
Exhibit 10.20 * Amendment No. 5 to the Genuine Parts Company
Pension Plan, dated August 7, 1997.
Exhibit 10.21 * Amendment No. 6 to the Genuine Parts Company
Pension Plan, dated October 6, 1997, effective
January 1, 1997.
Exhibit 10.22 * Amendment No. 3 to the Genuine Partnership Plan,
dated August 7, 1997.
Exhibit 10.23 * Amendment No. 3 to the Genuine Parts Company
Supplemental Retirement Plan, dated August 29,
1997, effective August 15, 1997.
Exhibit 10.24 * Genuine Parts Company Death Benefit Plan,
effective July 15, 1997.
* Indicates executive compensation plans and arrangements.
Exhibit 13 The following sections and pages of the 1997
Annual Report to Shareholders:
<TABLE>
<S> <C>
- 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.
</TABLE>
Exhibit 21 Subsidiaries of the Company
Exhibit 23 Consent of Independent Auditors
Exhibit 27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the
Registrant during the last quarter of the fiscal year.
(c) Exhibits. The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) Financial Statement Schedules. The response to this portion of Item
14 is submitted as a separate section of this report.
-12-
<PAGE> 13
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
<TABLE>
<S> <C>
/S/ LARRY L. PRINCE 3/10/98 /S/ GEORGE W. KALAFUT 3/10/98
- ----------------------------------------------------- --------------------------------------------------
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
</TABLE>
-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.
<TABLE>
<S> <C>
/S/ BRADLEY CURREY, JR. 2/16/98 /S/ JEAN DOUVILLE 2/16/98
- --------------------------------------------------- ------------------------------------------------
BRADLEY CURREY, JR. (Date) JEAN DOUVILLE (Date)
Director Director
Chairman of the Board and Chief Executive Officer
of UAP Inc.
/S/ ROBERT P. FORRESTAL 2/16/98 /S/ THOMAS C. GALLAGHER 2/16/98
- --------------------------------------------------- ------------------------------------------------
ROBERT P. FORRESTAL (Date) THOMAS C. GALLAGHER (Date)
Director Director
President and Chief Operating Officer
/S/ J. HICKS LANIER 2/16/98
- --------------------------------------------------- ------------------------------------------------
J. HICKS LANIER WILLIAM A. PARKER (Date)
Director Director
/S/ LARRY L. PRINCE 2/16/98 /S/ ALANA S. SHEPHERD 2/16/98
- --------------------------------------------------- ------------------------------------------------
LARRY L. PRINCE (Date) ALANA S. SHEPHERD (Date)
Director Director
Chairman of the Board and Chief Executive Officer
/S/ LAWRENCE G. STEINER 2/16/98 /S/ JAMES B. WILLIAMS 2/16/98
- --------------------------------------------------- ------------------------------------------------
LAWRENCE G. STEINER (Date) JAMES B. WILLIAMS (Date)
Director Director
</TABLE>
-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, 1997
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, 1997, are incorporated by
reference in Item 8:
Consolidated balance sheets - December 31, 1997 and 1996
Consolidated statements of income - Years ended December 31, 1997,
1996, and 1995
Consolidated statements of cash flows - Years ended December 31, 1997,
1996 and 1995
Notes to consolidated financial statements - December 31, 1997
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:
10.19* Amendment No. 4-A to the Genuine Parts Company Pension Plan, dated
August 29, 1997, effective January 1, 1996.
10.20* Amendment No. 5 to the Genuine Parts Company Pension Plan, dated
August 7, 1997.
10.21* Amendment No. 6 to the Genuine Parts Company Pension Plan, dated
October 6, 1997, effective January 1, 1997.
10.22* Amendment No. 3 to the Genuine Partnership Plan, dated August 7, 1997.
10.23* Amendment No. 3 to the Genuine Parts Company Supplemental Retirement
Plan, dated August 29, 1997, effective August 15, 1997.
10.24* Genuine Parts Company Death Benefit Plan, effective July 15, 1997.
13 The following Sections and Pages of Annual Report to Shareholders for
1997:
- 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.
<PAGE> 18
- 4.2 Specimen Common Stock Certificate. (Incorporated herein by
reference form the Company's Registration Statement on
Form S-1, Registration No. 33-63874).
- 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.
- 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.
* Indicates executive compensation plans and arrangements.
<PAGE> 1
Exhibit 10.19
AMENDMENT NO. 4-A 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, the Amendment No. 4 to the Plan was submitted to the Internal
Revenue Service for a determination letter; and
WHEREAS, the Internal Revenue Service requested changes to Amendment
#4; and
WHEREAS, it was determined that to reduce confusion, the Plan should
retain Amendment #4 (which was previously executed on December 3, 1996) and
make the IRS requested changes in this Amendment #4-A; 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
<PAGE> 2
(ii) is the benefit such Participant would
have received under his respective
Predecessor Plan assuming that the
benefit formula in such Predecessor Plan
as in effect on December 31, 1983 had
remained in effect until such
Participant's Retirement. For this
purpose, the benefit formula of the
Predecessor Plan shall reflect current
requirements of law and limitations of
law (e.g., current covered compensation
tables, limitations of Code Section
401(a)(4), Code Section 415, Code
Section 401(a)(17), etc.).
(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").
-2-
<PAGE> 3
(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,
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
Plan. The Employer shall make up any resultant deficiency in
the Trust Fund as soon as possible thereafter.
-3-
<PAGE> 4
3.
The amendments described in Paragraph 1 and 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: August 29, 1997
------------------------
Attest: /s/ Frank M. Howard
--------------------------
-4-
<PAGE> 1
Exhibit 10.20
AMENDMENT NO. 5 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 reflect changes in
law, to remove the Alternative Death Benefit (which benefit will be provided
outside of the Plan through an insured arrangement) and to remove the offset
for workers compensation;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as
follows:
1. Section 2.11(b) is hereby deleted and a new Section 2.11 is
substituted therefor as follows:
"(b) A married Participant's Beneficiary shall be his Spouse
unless the terms of a qualified domestic relations order
require payment to a non-Spouse Beneficiary.
For purposes of this Section, revocation of prior Beneficiary
designations will occur when a Participant; (i) files a valid
designation with the Committee, or (ii) files a signed
statement with the Committee evidencing his intent to revoke
any prior designations."
2. Section 4.07(c) (dealing with offsets for Participants who
receive payments under the Workers' Compensation laws of any State) is hereby
deleted effective for Participants who terminate Employment on or after July
15, 1997. Participants who terminate Employment prior to July 15, 1997 shall be
subject to the provisions of Section 4.07(c) as it existed immediately prior to
July 15, 1997.
<PAGE> 2
3. Section 5.02 is hereby deleted and a new Section 5.02 is
substituted therefor as follows:
"5.02. Alternate Death Benefit.
(a) For Beneficiaries of certain Participants who died (i)
prior to terminating Employment and (ii) prior to July
15, 1997, the Plan offered an Alternative Death
Benefit. See Schedule F for the terms of the pre-July
15, 1997 Alternative Death Benefit.
(b) Effective July 15, 1997, the Plan no longer provides
the Alternative Death Benefit. Any references in the
Plan to the Alternative Death Benefit shall apply only
to those Participants who, prior to July 15, 1997, (i)
satisfied the requirements of Section 5.02(a) above,
(ii) satisfied the eligibility criteria set forth in
Schedule F and (iii) satisfied any other eligibility
requirement for the Alternative Death Benefit set
forth in this Plan (see, for example, Section
5.01(f)).
(c) The Company intends to establish a self-funded death
benefit outside of the Plan to replace the Alternative
Death Benefit (the "GPC Death Benefit"). If a
surviving Spouse is otherwise entitled to the
Pre-Retirement Survivor Annuity, the surviving Spouse
may waive the Pre-Retirement Survivor Annuity and in
lieu thereof elect the GPC Death Benefit (if otherwise
available under the terms of the GPC Death Benefit).
It is the purpose of this Section 5.02(c) that if an
individual receives the GPC Death Benefit, no
Pre-Retirement Survivor Annuity shall be payable under
this Plan.
4. A new Schedule F is hereby added to the Plan as follows
"SCHEDULE F
ALTERNATIVE DEATH BENEFIT FOR CERTAIN PARTICIPANTS WHO
DIED PRIOR TO JULY 15, 1997
(a) This Schedule F shall apply to a Participant's
Beneficiary only if the Participant dies prior to July
15, 1997 and only if all of the following conditions
are satisfied:
(i) The Participant has earned 5 or more years of
redited Service prior to his death;
(ii) The Participant dies prior to terminating his
Employment and prior to his Annuity Starting
Date;
- 2 -
<PAGE> 3
(iii) In the case of a married Participant, either (1)
the Participant receives the notice described in
this Schedule F, the Spouse consents to the
Participant's election of a non-Spouse
Beneficiary and the Alternate Death Benefit, and
the Spouse agrees to waive the Pre-Retirement
Survivor Annuity of Section 5.01, or (2)
following the Participant's death, the Spouse
elects the Alternate Death Benefit in lieu of
the Pre-Retirement Survivor Annuity.
(b) The Alternate Death Benefit shall provide a monthly
Retirement Income payable to the Participant's
Beneficiary commencing on the first day of the month
following the Participant's death and continuing only
for a specified number of months as determined under
the following table:
<TABLE>
<CAPTION>
Complete Years of
Credited Service at Number of
Date of Death Months Payable
------------------- --------------
<S> <C>
5 but less than 10 12.5
10 but less than 15 25
15 or more 50
</TABLE>
The monthly Retirement Income payable under the
Alternate Death Benefit shall be determined as
follows:
(i) If the Participant dies prior to his Normal
Retirement Date, the Beneficiary's Retirement
Income shall equal the greater of (A) 30% of the
Participant's current monthly Earnings or (B)
30% of the Participant's Average Earnings.
(ii) If the Participant dies after his Normal
Retirement Date, the Beneficiary's Retirement
Income shall equal the Retirement Income the
Participant would have received if the
Participant had retired on the day before his
death and elected the Life Annuity Option.
However, in such case the maximum number of
payments as determined pursuant to the table
above shall be reduced by the number of months
that have elapsed since the Participant's Normal
Retirement Date.
(c) Prior to electing the Alternate Death Benefit and
prior to designating a non-Spouse Beneficiary, a
married Participant must receive a written explanation
of the Pre-Retirement Survivor Annuity. Such
explanation shall contain comparable information as
provided in the
- 3 -
<PAGE> 4
notice described in Section 6.02(d). The notice must
be provided to the Participant during the
"Applicable Period". The "Applicable Period" shall
mean whichever of the following periods ends last:
(i) The period beginning with the first
Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year in
which the Participant attains age 34; or
(ii) A reasonable period of time ending
after the Employee becomes a Participant.
However, the Committee may provide such notice to the
Participant prior to the Applicable Period. If the
Participant receives the notice prior to the
commencement of the Applicable Period, a second notice
must be given to the Participant during the Applicable
Period.
(d) The Participant's Spouse must consent in writing on a
form provided by the Plan Administrator in the
presence of a Notary Public or Plan representative
to the Participant's election of the Alternate Death
Benefit and designation of a non-Spouse Beneficiary,
if any. The Spouse's consent must acknowledge the
effect of such consent and must specifically state
the non-Spouse Beneficiary, if any, selected by the
Participant. However, if the Participant establishes
to the satisfaction of the Plan Administrator that
his Spouse's consent cannot be obtained because he
has no Spouse, because his Spouse cannot be located,
or because of other circumstances as determined by
applicable Treasury Regulations, the Committee may
treat the Participant's election as an election for
which spousal consent was obtained. A Spouse's
consent, if given on or after the Plan Year in which
the Participant attains age 35, shall be
irrevocable. If, however, the Spouse's consent was
given prior to such Plan Year, the Spouse's consent
shall be void as of the first day of the Plan Year
in which the Participant attains age 35. In such
case, the Participant may again elect the Alternate
Death Benefit and select a non-Spouse Beneficiary,
provided the Participant's Spouse consents to such
election in the manner provided in this paragraph
(d). The Spouse's consent shall then be irrevocable.
The Participant's election of the Alternate Death
Benefit and the Spouse's consent to such election
shall constitute a waiver of the Pre-Retirement
Survivor Annuity.
(e) A married Participant may revoke his designation of
the Alternate Death Benefit and his designation of a
non-Spouse Beneficiary at any time prior to his death.
Furthermore, the Participant's election shall cease to
be valid upon the remarriage of the Participant
following the death or divorce of the Spouse giving
the consent to the non-Spouse
- 4 -
<PAGE> 5
Beneficiary. If the Participant revokes his election
of a non-Spouse Beneficiary or of the Alternate
Death Benefit or if such election otherwise ceases
to be valid, any death benefit payable shall be
determined pursuant to Section 5.01.
(f) A married Participant may elect the Alternate Death
Benefit in lieu of the Pre-Retirement Survivor Annuity
at any time before his Termination Date. However, if
the Participant's Beneficiary is not entitled to
receive the Alternate Death Benefit by virtue of the
Participant's failure to complete five years of
Credited Service or the Participant's death following
his Termination Date, the Participant's Beneficiary
for purposes of Article V shall be his Spouse and any
death benefit available to such Spouse shall be
determined pursuant to Section 5.01.
(g) In the event of the death of a Beneficiary who
survives the Participant and who, at his or her
death, is receiving the Alternate Death Benefit, the
remaining benefits, if any, shall be payable to a
person designated by the Participant to receive the
remaining benefits or, if no person was so
designated, then to a person designated by the
Beneficiary of the deceased Participant; provided,
however, that if no person so designated be living
upon the occurrence of such contingency, the
remaining benefits, if any, shall be payable to the
Spouse of the deceased Participant, if living;
otherwise, to the descendants of the deceased
Beneficiary per stirpes; or if none, to the legal
representative of the estate of the deceased
Beneficiary.
(h) The Beneficiary may, prior to the commencement of
benefits under this Schedule F, request that the
Alternate Death Benefit be paid in the form of a lump
sum. Such lump sum payment shall be the Actuarial
Equivalent of the Beneficiary's Alternate Death
Benefit. The Plan Administrator shall direct the
Trustee to distribute the Alternate Death Benefit in
the form selected by the Beneficiary."
5. Section 5.03 is hereby deleted and a new Section 5.03 is
substituted in lieu thereof as follows:
"5.03 Death After Normal Retirement Date but Prior to
Delayed Retirement Date.
(a) Notwithstanding any other provision of the Plan to the
contrary, any Participant who remains in Employment
after his Normal Retirement Date shall be entitled to
elect an optional death benefit in lieu of the death
benefits provided under Sections 5.01 or 5.02. The
Participant shall elect such optional death benefit by
selecting one of the
- 5 -
<PAGE> 6
following options on a form provided by the Plan
Administrator for such purpose.
(i) A death benefit equal to the monthly amount that
would have been paid to the Participant's
Beneficiary assuming the Participant had retired
on the first day of the month preceding his
death and had elected to receive Retirement
Income under the Ten Years Certain and Life
Option (See Section 6.02(a)(i)). Such death
benefit shall be paid to the Participant's
Beneficiary for a period of ten years commencing
on the first day of the month following the
Participant's death.
(ii) A death benefit equal to the monthly amount that
would have been paid to the Participant's
Beneficiary assuming the Participant had retired
on the first day of the month preceding his
death and had elected to receive Retirement
Income under the Joint and Last Survivor Option
(See Section 6.02(a)(ii)) with the Participant's
Beneficiary receiving 50%, 75%, or 100% (as
designated by the Participant) of the monthly
Retirement Income payable to the Participant
during the Participant's lifetime. Such death
benefit will be paid to the Participant's
Beneficiary for the Beneficiary's lifetime
beginning on the first day of the month
following the Participant's death.
(b) A married Participant's election of the optional death
benefit provided by this Section 5.03 shall be void
unless the Participant's Spouse (after receipt of
the explanation of the Pre-Retirement Survivor
Annuity described in Schedule F, Paragraph (c))
consents in writing on a form provided by the Plan
Administrator in the presence of a Notary Public or
Plan representative to the Participant's election of
such optional death benefit. The Spouse's consent
must acknowledge the effect of such consent and must
specifically state the non-Spouse beneficiary, if
any, selected by the Participant. However, if the
Participant establishes to the satisfaction of the
Plan Administrator that his Spouse's consent cannot
be obtained because he has no Spouse, because his
Spouse cannot be located, or because of other
circumstances as determined by applicable Treasury
Regulations, the Committee may treat the
Participant's election as an election for which
spousal consent was obtained. A Spouse's consent
pursuant to this paragraph shall be irrevocable.
(c) A married Participant may revoke his election of the
optional death benefit provided by this Section 5.03
at any time prior to his Delayed Retirement Date.
Furthermore, the Participant's election to receive
such optional death benefit shall cease to be valid
upon
- 6 -
<PAGE> 7
the remarriage of the Participant following the death
or divorce of the Spouse giving the consent to such
optional death benefit. If the Participant revokes his
election or if such election otherwise ceases to be
valid, any death benefit payable to the Participant's
Spouse shall be determined pursuant to Section 5.01
unless the married Participant, with his Spouse's
consent, elects the Alternate Death Benefit under
Schedule F (or, if the Alternative Death Benefit is
not available, the GPC Death Benefit described in
Section 5.02)."
6. Section 6.03(a) is hereby deleted and a new Section 6.03(a)
is substituted therefor as follows:
"(a) In no event may the payment of Retirement Income
commence later than the 60th day after the latest of
the close of the Plan Year in which:
(i) the Participant attains age 65;
(ii) the fifth (5th) anniversary of the date the
Participant commenced participation in this
Plan; or
(iii) the Participant's termination of Employment.
Notwithstanding the foregoing, distribution to the
Participant shall commence not later than April 1
following the calendar year in which the Participant
attains age 70-1/2. However, if a Participant is not a
5% owner of an Employer (as defined in Code Section
401(a)(9) and the Treasury Regulations thereunder),
such Participant's Retirement Income shall commence no
later than April 1 following the calendar year in
which he terminates his Employment. (The applicable
commencement date described above, is referred to as
the "required beginning date")."
7. A new Section 6.03(e) is hereby added to the Plan as follows:
"(e) Although distribution of a Participant's Retirement
Income is not required under this Section 6.03 until
the Participant's required beginning date, to the
extent (and only to the extent) the IRS or other
applicable authority determines that a mandatory
distribution under Code Section 401(a)(9) is a
protected benefit under Code Section 411(d)(6), a
Participant who is not a 5% owner (as defined in
paragraph (a) above) may elect to be treated as a 5%
owner for purposes of this Section 6.03 (e.g., such
Participant may elect to commence distributions no
later than April 1 following the calendar year in
which the Participant attains age 70-1/2)."
- 7 -
<PAGE> 8
8. A new Section 10.10 is hereby added as follows:
"10.10 Qualified Military Service.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance
with Code Section 414(u). It is the intent of this Section
10.10 to adopt the IRS model amendment set forth in Rev.
Proc. 96-49 for the purposes set forth in such revenue
procedure."
9. Section 12.07 is hereby deleted and a new Section 12.07 is
substituted therefor as follows:
"12.07 Combined Plan Limitation For Top-Heavy Years Repealed.
Effective January 1, 2000, adjustments to the combined plan
limitation of Code Section 415 for top heavy plans are
repealed and no longer applicable."
10. Section 13.02 is hereby deleted and a new Section 13.02 is
substituted therefor as follows:
"13.02 Combined Plan Limitation Repealed.
Effective January 1, 2000, the combined plan test of Code
Section 415 is repealed and no longer applicable."
11. Article XIV (Highly Compensated Employees) is hereby deleted
and a new Article XIV is substituted therefor as follows:
"ARTICLE XIV
14.01 In General
For the purposes of this Plan, the term "Highly Compensated
Employee" is any active Employee described in Section 14.02
below and any Former Employee described in Section 14.03
below. Various definitions used in this Section are contained
in Section 14.04. A Non-highly Compensated Employee is an
Employee who is not a Highly Compensated Employee.
- 8 -
<PAGE> 9
14.02 Highly Compensated Employees
(a) Look-Back Year. An Employee is a Highly Compensated
Employee if during a Look Back Year the Employee:
(1) is a 5 Percent Owner; or
(2) receives Compensation in excess of $80,000 and
is a member of the Top Paid Group.
The dollar amount described above shall be
increased annually as provided in Code Section
414(q)(1).
(b) Current Year. An Employee is a Highly Compensated
Employee if during a Current Year the Employee is a 5
Percent Owner.
14.03 Former Highly Compensated Employee
A Former Employee is a Highly Compensated Employee if
(applying the rules of Section 14.02(a) or (b)) the Former
Employee was a Highly Compensated Employee during a
Separation Year or during any Current Year ending on or after
the Former Employee's 55th birthday.
14.04 Definitions
The following special definitions shall apply to this Article
14:
Current Year shall mean the current Plan Year.
Employer for purposes of this Article 14 shall mean the
Employer and its Affiliates.
5 Percent Owner shall mean any Employee who owns or is deemed
to own (within the meaning of Code Section 318), more than
five percent of the value of the outstanding stock of the
Employer or stock possessing more than five percent of the
total combined voting power of the Employer.
Former Employee shall mean an Employee (i) who has incurred a
Severance from Service Date or (ii) who remains employed by
the Employer but who has not performed services for the
Employer during the Current Year (e.g., an Employee on
Authorized Leave of Absence).
Look Back Year shall mean the Plan Year preceding the Current
Year, or if the Employer elects (and such election is
available to the Employer), the calendar year ending with or
within the Current Year.
- 9 -
<PAGE> 10
Separation Year shall mean any of the following years:
(1) An Employee who incurs a Separation from Service
Date shall have a Separation Year in the Current
Year in which such Separation from Service Date
occurs;
(2) An Employee who remains employed by the Employer
but who temporarily ceases to perform services
for the Employer (e.g., an Employee on Leave of
Absence) shall have a Separation Year in the
calendar year in which he last performs services
for the Employer;
(3) An Employee who remains employed by the Employer
but whose Compensation for a calendar year is
less than 50% of the Employee's average annual
Compensation for the immediately preceding three
calendar years (or the Employee's total years of
employment, if less) shall have a Separation
Year in such calendar year. However, such
Separation Year shall be ignored if the Employee
remains employed by the Employer and the
Employee's Compensation returns to a level
comparable to the Employee's Compensation
immediately prior to such Separation Year.
Top Paid Group shall mean the top 20% of all Employees ranked
on the basis of Compensation received from the Employer
during the applicable year. The number of Employees in the
Top Paid Group shall be determined by ignoring Employees who
are non-resident aliens, Employees who do not perform
services for the Employer during the applicable year,
Employees who do not satisfy the age and service exclusion
provided in applicable Treasury Regulations and Employees who
are covered by a collective bargaining agreement as provided
in applicable Treasury Regulations.
14.05 Other Methods Permissible
To the extent permitted by the Code, judicial decisions,
Treasury Regulations and IRS pronouncements, the Committee
may (without further amendment to this Plan) take such other
steps and actions or adopt such other methods or procedures
(in addition to those methods and procedures described in
this Article 14) to determine and identify Highly Compensated
Employees (including adopting alternative definitions of
Compensation which satisfy Code Section 414(q)(7) and are
uniformly applied)."
- 10 -
<PAGE> 11
12. Paragraph 2 of this Amendment shall be effective for Participants
who terminate Employment on or after July 15, 1997. Paragraphs 1 and 3-5 of
this Amendment shall be effective July 15, 1997. Paragraphs 6, 7 and 11 of this
Amendment shall be effective January 1, 1997. Paragraph 8 of this Amendment
shall be effective December 12, 1994 (the effective date of Code Section
414(u)). Paragraphs 9 and 10 of this Amendment shall be effective January 1,
2000. 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 the 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: August 8, 1997
-------------------------------
By: /s/ Edward J. Van Stedum
---------------------------------
Date: August 11, 1997
-------------------------------
By: /s/ Jerry Nix
---------------------------------
Date: August 7, 1997
-------------------------------
By: /s/ Frank M. Howard
---------------------------------
Date: August 7, 1997
-------------------------------
- 11 -
<PAGE> 1
EXHIBIT 10.21
AMENDMENT NO. 6 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 Schedule B to the Plan;
NOW, THEREFORE, BE IT RESOLVED that Schedule B is hereby deleted and a
new Schedule B is substituted therefor as follows:
"SCHEDULE B
CREDIT FOR SERVICE WITH PREDECESSOR EMPLOYERS
I. Participants employed by a predecessor employer not listed in Sections
II or III below shall be deemed to have as their date of Employment for
all purposes of this Plan, the date the predecessor employer was
acquired by or merged into Genuine Parts Company.
II. Participants employed by the following predecessor employers shall
receive Credited Service for all purposes of this Plan beginning with
their employment commencement date with that predecessor employer but
subject to all the rules concerning crediting of service set forth in
this Plan.
1. Clark Siviter Co.
St. Petersburg, FL
2. Standard Parts Company
Columbia, SC
3. Standard Unit Parts Company
Normal, IL
<PAGE> 2
Except that the benefits provided to Richard R. Mikulechy under
this Plan shall be reduced by one hundred percent (100%) of the
benefits provided under that certain Salary Continuation
Agreement dated January 10, 1977 in the event of his retirement,
death, disability or other termination of service; and
Except that the benefits provided to Mark R. Larson under this
Plan shall be reduced by one hundred percent (100%) of the
benefits provided under that certain Salary Continuation
Agreement dated January 10, 1977 in the event of his retirement,
death, disability or other termination of service.
4. National Parts Service Inc.
Hartford, CT
Covering the following National Parts Service employees:
<TABLE>
<CAPTION>
Name S.S. No. Employment Date
---- -------- ---------------
<S> <C> <C>
Raymond Jensen ###-##-#### May 1, 1946
Charles A. Veci ###-##-#### July 1, 1952
Paul F. Baldi ###-##-#### August 27, 1960
Bernhardt E. Johnson ###-##-#### October 1, 1966
Jean L. Veillette ###-##-#### July 1, 1972
Paul R. Denis ###-##-#### July 26, 1974
Mark P. Taylor ###-##-#### January 17, 1980
Roy M. Robbins ###-##-#### June 16, 1980
</TABLE>
5. General Automotive Parts Company and its subsidiaries
6. NAPA Des Moines Warehouse
III. (a) Acquisitions Prior to January 1, 1994.
Participants employed by those predecessor employers listed below that
were acquired prior to January 1, 1994 shall be deemed to have as their
date of Employment for all purposes of this Plan, the date the
predecessor employer was acquired by or merged into Genuine Parts
Company or its subsidiaries. However, after an employee of such
predecessor employer becomes a Participant in the Plan by satisfying
the requirements of Section 3.02, such Participant shall receive credit
for all employment with such predecessor employer for purposes of (1)
determining the Participant's vested percentage under Section 4.05(c);
(2) determining whether a Participant has completed five years of
Credited Service for the Disability Retirement provisions of Schedule
D; and (3) determining the Participant's entitlement to Death Benefits
under Article V and related sections of the Plan.
-2-
<PAGE> 3
(b) Acquisitions On or After January 1, 1994.
Participants employed by those predecessor employers listed below that
were acquired on or after January 1, 1994 shall receive credit under
this Plan for all employment with such predecessor employer for
purposes of (1) determining the Participant's vested percentage under
Section 4.05(c); (2) determining whether a Participant has completed
five years of Credited Service for the Disability Retirement provisions
of Schedule D; and (3) determining the Participant's entitlement to
Death Benefits under Article V and related sections of the Plan.
(c) Important Restrictions.
Credited Service granted under (a) or (b) below may be forfeited or
disregarded in accordance with Section 2.18. Furthermore, no Credited
Service shall be granted for employment with a predecessor employer if
the granting of such Credited Service will adversely impact the tax
qualified status of the Plan.
<TABLE>
<CAPTION>
Name Employment Date
---- ---------------
<S> <C>
Odell Hardware Company January 1, 1980
Greensboro, NC
Brooks-Noble Parts & Machine Co., Inc. August 1, 1981
Jackson, MS
One Stop Auto Parts Inc. March 10, 1982
Lathan, NY
One Stop Auto Parts Inc. March 16, 1983
Albany, NY
E. E. Long Inc. September 1, 1984
Des Moines, IA
Motor Parts & Supply April 1, 1986
Baton Rouge, LA
Chattanooga Service Auto Center May 1, 1986
Chattanooga, TN
Gerace Auto Parts December 1, 1986
Port Allen, LA
</TABLE>
-3-
<PAGE> 4
<TABLE>
<S> <C>
Lawwill Auto Parts September 1, 1987
Chattanooga, TN
Smith Automotive Corp. August 1, 1990
(2 stores) Martinez, GA & Belvedere, SC
Kings Parts Company, Inc. August 10, 1990
Lake Oswego, OR
W.K. NAPA on Kensington, Inc. August 10, 1990
Elk Grove Village, IL
Auto Parts, Inc. of Wilmington October 1, 1990
Wilmington, NC
Carolina Auto Parts of Thomasville, Inc. October 1, 1990
Thomasville, NC
Stokes Auto Parts, Inc. October 1, 1990
Thomasville, NC
MGM Auto Parts, Inc. November 1, 1990
Kenmore, NY
Wholesale Sationers Corp. December 1, 1990
Salt Lake City, UT (S.P. Richards)
Santa Monica Auto Parts November 1, 1990
Santa Monica, CA
Precise Industries, Inc. December 1, 1990
(2 Stores) Kingsport & Blountville, TN
Automotive Service & Supply, Inc. December 1, 1990
(3 Stores) Kingsport, TN, Bristol & Abingdon, VA
NAPA Auto Parts of Lombard, Inc. December 1, 1990
Lombard, IL
Middleburg Parts and Hardware, Inc. December 31, 1990
Middleburg, FL
</TABLE>
-4-
<PAGE> 5
<TABLE>
<S> <C>
Strap Industries, Inc. March 1, 1991
Tempe, AZ
Anderson's Parts March 1, 1991
Blue Springs, MO
Evergreen Automotive Supply, Inc. May 1, 1991
Chicago, IL
Heath Motor Supply Co. July 1, 1991
Panama City, FL
Bryant Stooks - D.J.'s Auto Supply July 1, 1991
(2 Stores) Chandler and Mesa, AZ
NAPA Auto Parts Store of John Nall August 1, 1991
South Milwaukee, WI
Deer Park Automotive Parts, Inc. September 1, 1991
Mt. Carmel, OH
T & L Auto Parts Company, Inc. October 1, 1991
(4 Stores) Fayetteville, NC
B.W.P. Ltd. October 1, 1991
(2 Stores) Fayetteville, Roseboro, NC
Auto Parts of Clinton October 1, 1991
Clinton, NC
Byrd-Wood Parts Group, Inc. October 1, 1991
Fayetteville, NC
Burien Auto Parts, Inc. October 1, 1991
(2 Stores) Seattle, WA
B.N. Auto Parts Co. December 1, 1991
Marietta, GA
Capital Automotive Parts, Inc. December 1, 1991
Milwaukee, WI
Bill's Auto Supply, Inc. January 1, 1992
Milwaukee, WI
</TABLE>
-5-
<PAGE> 6
<TABLE>
<S> <C>
Bill's Auto Supply, Inc. January 1, 1992
Kansas City, MO
Bald Hill Auto Parts, Inc. February 1, 1992
Warwick, RI
Manton Auto Prats, Inc. February 1, 1992
Providence, RI
Hudson Auto Parts February 1, 1992
Hudson, WI
B&B Genuine Auto Parts, Inc. February 16, 1992
Canton, OH
Jimmy's Auto Parts, Inc. March 1, 1992
Alpharetta, GA
West Town Auto Parts, Inc. June 1, 1992
Knoxville, TN
Lakeland Motor Parts, Inc. June 1, 1992
(2 Stores) Lakeland, FL
Haas Auto Parts & Machine Co., Inc. June 1, 1992
Jeffersonville, IN
Parts Dept. of Shakopee, Inc. June 1, 1992
Shakopee, MN
HMH Automotive Parts, Inc. June 1, 1992
(2 Stores) Galesburg, Monmouth, IL
Southern Parts & Electric, Inc. July 1, 1992
(4 Stores) Durham, NC
Service Supply Co. of Douglasville, Inc. July 1, 1992
Douglasville, GA
Service Supply Company of Dallas, Inc. July 1, 1992
Dallas, GA
NAPA of Lemon Grove, Inc. August 1, 1992
La Mesa, CA
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C>
Whitewater Auto Supply, Inc. September 1, 1992
Janesville, WI
Regalia Auto Parts, Inc. September 1, 1992
Seattle, WA
Drexel Auto Parts, Inc. October 1, 1992
Huntsville, AL
Warren Auto Supply, Inc. December 4, 1992
(2 Stores) Warren, OH
Cal's Service Parts, Inc. January 1, 1993
(6 Stores) Boise, ID
H & G Enterprises, Inc. January 1, 1993
Louisville, KY
Kernersville Auto Parts, Inc. February 1, 1993
Kernersville, NC
McCowen Enterprises, Inc. April 1, 1993
(2 Stores) Champaign & Urbana, IL
Breese Company, Inc. May 1, 1993
(3 Stores, Iowa City, Muscatine & Coralville, IA)
Young's Auto Supply Warehouse, Inc. July 1, 1993
Norfolk, VA
Joliet Auto Supply, Inc. July 1, 1993
Joliet, IL
Bryan - Rogers, Inc. August 1, 1993
(3 Stores) Tupelo, Baldwyn & Amory, MS
Hyllberg Enterprises, Inc. August 1, 1993
Virginia Beach, VA
Hager Auto & Industrial Parts, Inc. November 1, 1993
(2 Stores) Burlington & South Burlington, VT
</TABLE>
-7-
<PAGE> 8
<TABLE>
<S> <C>
Ballard Auto Parts, Inc. January 1, 1994
Cornelius, NC
Service Parts of Hendersonville, Inc. January 1, 1994
Hendersonville, NC
Power's Auto Parts, Inc. March 1, 1994
Williamsburg, VA
Big J Auto Parts, Inc. March 14, 1994
Johnson City, TN
Economy Auto Supply Co., Inc. April 1, 1994
Norfolk, VA
Paul's Automotive, Inc. April 1, 1994
Toledo, OH
Sulphur Springs Parts Co., Inc. June 1, 1994
Sulphur Springs, TX
The Parts Place August 1, 1994
Gulfport, MS
A & J Automotive Co. August 1, 1994
Dalton, GA
Clewiston Auto Parts, Inc. September 1, 1994
Clewiston, FL
Oregon City Auto Parts, Inc. October 1, 1994
Oregon City and Clackamas, OR
Kiema Car Part, Inc. November 1, 1994
El Monte, CA
Shoreline Auto Parts November 1, 1994
Seattle, WA
Lockport Automotive Supply, Inc. December 1, 1994
Lockport, NY
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C>
Mircon, Inc. Scardsdale Auto Parts December 1, 1994
Scarsdale, NY
Motor Parts Company December 1, 1994
Booneville, MS
Davis & Wilmar, Inc. July 1, 1992
(Eligible to Begin
Participation 5/1/93)
The Parts, Inc. January 1, 1994
(Eligible to Begin
Participation 1/1/95)
Dade City Jobbing Group January 2, 1992
(Eligible to Begin
Participation 1/1/94)
Colorado Parts Company December 1, 1994
(4 stores) Ft. Collins, Loveland,
Longmont, CO
Serene Plaza Auto Parts December 1, 1994
Seattle, WA
Atlantic Tracy Inc. November 1, 1995
Midcap Bearing June 1, 1995
Motion Equipment June 1, 1995
Power Drives & Bearings, Inc. October 1,1995
Auto Parts Companies of Topeka July 1, 1996
(Kansas City, Kansas)
Auto Parts of Bonner Springs, Inc. July 1, 1996
(Bonner Springs, Kansas)
Auto Parts of Holton, Inc. July 1, 1996
(Holton, Kansas)
Auto Parts of Junction City, Inc. July 1, 1996
(Junction City, Kansas)
</TABLE>
-9-
<PAGE> 10
<TABLE>
<S> <C>
Auto Parts of Leavenworth, Inc. July 1, 1996
Leavenworth, Kansas
Auto Parts of Salina, Inc. July 1, 1996
Salina, Kansas
July 1, 1996 of Sedalia, Inc. July 1, 1996
Sedalia, Inc.
Auto Parts West, Inc. July 1, 1996
Topeka, Kansas
Auto Supply North, Inc. July 1, 1996
Topeka, Kansas
Auto Parts of Eastboro, Inc. July 1, 1996
Topeka, Kansas
Auto Partsmith, Inc. July 1, 1996
Topeka, Kansas
Auto Parts of Wichita #1, Inc. July 1, 1996
Wichita, Kansas
Auto Parts of Wichita #2, Inc. July 1, 1996
Wichita, Kansas
Auto Parts of Wichita #3, Inc. July 1, 1996
Wichita, Kansas
Auto Parts of St. Joe, Inc. July 1, 1996
St. Joseph, Missouri
Friend's Motor Supply, Inc. June 30, 1997
Hastings, NE
Standard Parts, Inc. June 5, 1997
(Monroe, LA)
Utah Bearing and Fabrication, Inc. October 3,1997
Colorado Bearing and Supply, Inc. October 3, 1997
</TABLE>
-10-
<PAGE> 11
This amendment shall be effective January 1, 1997. 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: October 8, 1997
------------------------------
By: /s/ Edward J. Van Stedum
--------------------------------
Date: October 9, 1997
------------------------------
By: /s/ Jerry Nix
--------------------------------
Date: October 6, 1997
------------------------------
By: /s/ Frank M. Howard
--------------------------------
Date: October 6, 1997
------------------------------
-11-
<PAGE> 1
EXHIBIT 10.22
AMENDMENT NUMBER THREE 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.
WITNESSETH:
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 amend the Plan for various purposes
including amendments to reflect changes in law;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as
follows:
1.
Section 3.01 is deleted in its entirety, and a new Section 3.01 is
substituted in lieu thereof, as follows:
"3.01 Participation.
(a) In General. If an Eligible Employee is normally scheduled to
work twenty-four (24) or more hours per week ("Full-Time
Employee"), such Eligible Employee shall participate in the
Plan in accordance with Section 3.01(b) below. If an Eligible
Employee is normally scheduled to work fewer than twenty-four
(24) hours per week ("Part-Time Employee"), such Eligible
Employee shall participate in the Plan in accordance with
Section 3.01(c) below.
(b) Full-Time Employees. An Eligible Employee who is a Full-Time
Employee 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 later of (i) the
first day of the month after the Eligible Employee
has completed three full months of Employment and
attained age 18 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
<PAGE> 2
EntryDate next following the later of (i) the date on
which the Eligible Employee has both completed one
Year of Eligibility Service and attained age 18 or
(ii) the date the Employee becomes a member of the
class of Eligible Employees.
(c) Part-Time Employees. An Eligible Employee who is a Part-Time
Employee shall become a Participant in the Plan for all
purposes of the Plan on the Entry Date next following the
later of (i) the date on which the Eligible Employee has both
completed one Year of Eligibility Service and attained age 18
or (ii) the date the Employee becomes a member of the class of
Eligible Employees.
(d) Acquisitions. See Section 3.04 below for special rules that
apply to new Employees following an acquisition."
2.
Section 4.04 is hereby deleted and a new Section 4.04 is substituted
therefor as follows:
"Pre-Tax Contributions shall be deducted by the Employer from
the Participant's Compensation and paid to the Trustee as
promptly as possible but no later than fifteen days after the
Employer retains the Pre-Tax Contributions (or such longer
period of time granted by the Department of Labor or other
government entity, agency or by an employee of such
governmental entity or agency)."
3.
Section 8.05(b) is hereby deleted and a new Section 8.05(b) is
substituted therefor as follows:
"(b) In no event may the distribution of a Participant's Account
commence later than April 1 following the calendar year in
which the Participant attains age 70-1/2. However, if a
Participant is not a 5% owner of an Employer (as defined in
Code Section 401(a)(9) and the Treasury Regulations
thereunder), such Participant's Retirement Income shall
commence no later than April 1 following the calendar year in
which he terminates his Employment. (The applicable
commencement date described above, is referred to as the
"required beginning date")." Notwithstanding the preceding
distribution requirements, a distribution on behalf of any
Participant may be made in accordance with a benefit payment
election executed before January 1, 1984 in a manner that
satisfies the requirements of the transitional rule of Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act of
1982."
-2-
<PAGE> 3
4.
A new Section 9.16 is hereby added to the Plan as follows:
"9.16 Suspension of Loan Repayments During Military Service
Loan repayments will be suspended under this Plan as permitted
under Section 414(u)(4) of the Internal Revenue Code (e.g.,
suspension of loan repayments during a Participant's periods
of military service as defined in Code Section 414(u))."
5.
A new Section 12.03(d) is hereby added to the Plan as follows:
"(d) In computing the Average Actual Deferral Percentage, the
Employer may exclude Non-highly Compensated Employees who
prior to the last day of the Plan Year have not yet attained
age 21 or have not yet completed a Year of Eligibility Service
(see Section 3.02) if the Employer satisfies a special
coverage rule described below. The special coverage rule
requires the Plan to satisfy the minimum coverage rules of
Code Section 410(b)(4)(B) with respect to all Employees who
are permitted to participate in the Plan but have not yet
attained age 21 or have not yet completed a Year of
Eligibility Service. This paragraph (d) shall be effective
January 1, 1999."
6.
Section 12.05(a) is hereby deleted and a new Section 12.05(a) is
substituted therefor as follows:
"(a) Pre-Tax Contributions exceeding the limitations of Section
12.03(a) ("Excess ADP Deferrals") and any income or loss
allocable to such Excess ADP Deferral may be designated by the
Committee as Excess ADP Deferrals and may be distributed to
Highly Compensated Employees whose Accounts were credited with
the largest dollar amount of Pre-Tax Contributions. In
determining the amount of Excess ADP Deferrals for each Highly
Compensated Employee, the Committee shall reduce the ADP for
each Highly Compensated Employee as follows:
(1) The amount of Salary Deferrals made by the Highly
Compensated Employee(s) with the highest dollar
amount of Salary Deferrals will be reduced until
equal to the second highest amount of Salary
Deferrals under the Plan; then
-3-
<PAGE> 4
(2) The amount of Salary Deferrals made by the two (or
more) Highly Compensated Employees with the highest
dollar amount of Salary Deferrals under the Plan will
be reduced until equal to the third highest dollar
amount of Salary Deferrals under the Plan; then
(3) The steps described in (1) and (2) shall be repeated
with respect to the third and successive highest
Salary Deferrals under the Plan until the Plan has
distributed all Excess ADP Deferrals."
7.
A new Section 12.06(c) is hereby added to the Plan as follows:
"(c) In computing the Average Actual Contribution Percentage, the
Employer may exclude Non-highly Compensated Employees who
prior to the last day of the Plan Year have not yet attained
age 21 if the Employer satisfies a special coverage rule
described below. The special coverage rule requires the Plan
to satisfy the minimum coverage rules of Code Section
410(b)(4)(B) with respect to all Employees who are permitted
to participate in the Plan but have not yet attained age 21.
This paragraph (d) shall be effective January 1, 1999."
8.
Article 13 is hereby deleted and a new Article 13 is substituted
therefor as follows:
"13.01 In General
For the purposes of this Plan, the term "Highly Compensated Employee"
is any active Employee described in Section 13.02 below and any Former
Employee described in Section 13.03 below. Various definitions used in
this Section are contained in Section 13.04. A Non-highly Compensated
Employee is an Employee who is not a Highly Compensated Employee.
13.02 Highly Compensated Employees
(a) Look-Back Year. An Employee is a Highly Compensated Employee if during
a Look Back Year the Employee:
(1) is a 5 Percent Owner; or
(2) receives Compensation in excess of $80,000 and is a member of
the Top Paid Group.
The dollar amount described above shall be increased annually as
provided in Code Section 414(q)(1).
-4-
<PAGE> 5
(b) Current Year. An Employee is a Highly Compensated Employee if
during a Current Year the Employee is a 5 Percent Owner.
13.03 Former Highly Compensated Employee
A Former Employee is a Highly Compensated Employee if
(applying the rules of Section 13.02(a) or (b)) the Former
Employee was a Highly Compensated Employee during a Separation
Year or during any Current Year ending on or after the Former
Employee's 55th birthday.
13.04 Definitions
The following special definitions shall apply to this Article
13:
Current Year shall mean the current Plan Year.
Employer for purposes of this Article 13 shall mean the
Employer and its Affiliates.
5 Percent Owner shall mean any Employee who owns or is deemed
to own (within the meaning of Code Section 318), more than
five percent of the value of the outstanding stock of the
Employer or stock possessing more than five percent of the
total combined voting power of the Employer.
Former Employee shall mean an Employee (i) who has incurred a
Severance from Service Date or (ii) who remains employed by
the Employer but who has not performed services for the
Employer during the Current Year (e.g., an Employee on
Authorized Leave of Absence).
Look Back Year shall mean the Plan Year preceding the Current
Year, or if the Employer elects (and such election is
available to the Employer), the calendar year ending with or
within the Current Year.
Separation Year shall mean any of the following years:
(1) An Employee who incurs a Separation from Service Date
shall have a Separation Year in the Current Year in
which such Separation from Service Date occurs;
(2) An Employee who remains employed by the Employer but
who temporarily ceases to perform services for the
Employer (e.g., an Employee on Leave of Absence)
shall have a Separation Year in the calendar year in
which he last performs services for the Employer;
-5-
<PAGE> 6
(3) An Employee who remains employed by the Employer but
whose Compensation for a calendar year is less than
50% of the Employee's average annual Compensation for
the immediately preceding three calendar years (or
the Employee's total years of employment, if less)
shall have a Separation Year in such calendar year.
However, such Separation Year shall be ignored if the
Employee remains employed by the Employer and the
Employee's Compensation returns to a level comparable
to the Employee's Compensation immediately prior to
such Separation Year.
Top Paid Group shall mean the top 20% of all Employees ranked
on the basis of Compensation received from the Employer during
the applicable year. The number of Employees in the Top Paid
Group shall be determined by ignoring Employees who are
non-resident aliens, Employees who do not perform services for
the Employer during the applicable year, Employees who do not
satisfy the age and service exclusion provided in applicable
Treasury Regulations and Employees who are covered by a
collective bargaining agreement as provided in applicable
Treasury Regulations.
13.05 Other Methods Permissible
To the extent permitted by the Code, judicial decisions,
Treasury Regulations and IRS pronouncements, the Committee may
(without further amendment to this Plan) take such other steps
and actions or adopt such other methods or procedures (in
addition to those methods and procedures described in this
Article 13) to determine and identify Highly Compensated
Employees (including adopting alternative definitions of
Compensation which satisfy Code Section 414(q)(7) and are
uniformly applied)."
9.
Section 14.02 is hereby deleted and a new Section 14.02 is substituted
therefor as follows:
"14.02 Combined Plan Limitation Repealed.
Effective January 1, 2000, the combined plan test of Code
Section 415 is repealed and no longer applicable."
10.
Section 14.03(c) is hereby deleted and a new Section 14.03(c) is
substituted therefor as follows:
"'Compensation' shall have the same meaning as defined in
Section 13.04 (thereby including Pre-Tax Contributions under
this Plan and salary deferrals
-6-
<PAGE> 7
under a Code Section 125 Cafeteria Plan in the definition of
Compensation). This definition shall be effective January 1,
1998."
11.
Section 15.04 is hereby deleted and a new Section 15.04 is substituted
therefor as follows:
"15.04 Combined Plan Limitation For Top-Heavy Years Repealed.
Effective January 1, 2000, adjustments to the combined plan
limitation of Code Section 415 for top heavy plans are
repealed and no longer applicable."
12.
A new Section 16.14 is hereby added to the Plan as follows:
"16.14 Qualified Military Service
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with
Code Section 414(u). It is the intent of this Section 16.14 to
adopt the IRS model amendment set forth in Rev. Proc. 96-49
for the purposes set forth in such revenue procedure."
13.
Paragraphs 1 and 10 of this Amendment shall be effective January 1,
1998. Paragraph 2 of this Amendment shall be effective February 3, 1997.
Paragraphs 3, 6 and 8 of this Amendment shall be effective January 1, 1997.
Paragraphs 4 and 12 of this Amendment shall be effective December 12, 1994 (the
effective date of Code Section 414(u)). Paragraphs 5 and 7 of this Amendment
shall be effective January 1, 1999. Paragraphs 9 and 11 of this Amendment shall
be effective January 1, 2000. Except as amended herein, the Plan shall remain in
full force and effect.
-7-
<PAGE> 8
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee
has caused this Amendment to the Plan to be executed on the date shown below but
effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ George W. Kalafut
----------------------------------
Date: August 8, 1997
---------------------------------
By: /s/ Edward J. Van Stedum
----------------------------------
Date: August 11, 1997
---------------------------------
By: /s/ Jerry Nix
----------------------------------
Date: August 7, 1997
---------------------------------
By: /s/ Frank M. Howard
----------------------------------
Date: August 7, 1997
---------------------------------
-8-
<PAGE> 1
EXHIBIT 10.23
AMENDMENT NO. 3
TO THE GENUINE PARTS COMPANY
SUPPLEMENTAL RETIREMENT PLAN
WHEREAS, the Compensation and Stock Option Committee of the Board of
Directors of Genuine Parts Company desires to amend the Genuine Parts Company
Supplemental Retirement Plan (the "Plan") as follows:
NOW, THEREFORE, BE IT RESOLVED, that the following Amendments be
adopted:
1.
Section 3.01 is deleted in its entirety, and a new Section 3.01 is
substituted in lieu thereof, as follows:
"3.01 Calculation of Supplement.
(a) Each Participant who terminates active employment
with the Employer on or after his Normal or Delayed
Retirement Date by reason of retirement or voluntary
or involuntary termination shall, except as provided
in Section 6.05, be entitled to a monthly
supplemental retirement income ("Supplemental
Retirement Income") equal to (1) minus (2), where
(1) equals the monthly Normal or Delayed
Retirement Income which Participant would be
entitled to receive under the Pension Plan
beginning on the Benefit Commencement Date
(as defined in Section 3.02) if the benefit
limitations of Code Sections 401(a)(17) and
415 as reflected in the Pension Plan were
not in effect (measured in the form of a
single life annuity payable in monthly
installments for the Participant's life) and
if the definition of Earnings under this
Plan were used to compute the Participant's
Normal or Delayed Retirement Income under
the Pension Plan;
(2) equals the monthly Normal or Delayed
Retirement Income which Participant is
actually entitled to receive under the
Pension Plan beginning on the Benefit
Commencement Date measured in the form of a
single life annuity payable in monthly
installments for the Participant's life.
(b) Each Participant who terminates active employment
with the Employer on or after his Early Retirement
Date by reason of early retirement or voluntary or
involuntary termination shall, except as provided in
Section 6.05, be entitled to a monthly Supplemental
Retirement Income equal to (1) minus (2), where
<PAGE> 2
(1) equals the monthly Early Retirement Income
which Participant would be entitled to
receive under the Pension Plan beginning on
the Benefit Commencement Date (as defined in
Section 3.02) if the benefit limitations of
Code Sections 401(a)(17) and 415 as
reflected in the Pension Plan were not in
effect (measured in the form of a single
life annuity payable in monthly installments
for the Participant's life) and if the
definition of Earnings under this Plan were
used to compute the Participant's Early
Retirement Income under the Pension Plan;
(2) equals the monthly Early Retirement Income
which Participant is actually entitled to
receive under the Pension Plan beginning on
the Benefit Commencement Date measured in
the form of a single life annuity payable in
monthly installments for the Participant's
life.
(3) The Participant's benefit in (1) and (2)
above shall be reduced by the early
retirement reduction factors set forth in
the Pension Plan (e.g., see Section 4.02)
regardless of whether the Participant is
entitled to an increased benefit under the
Pension Plan by reason of terminating
employment pursuant to an early retirement
window.
(c) Except as provided in Section 5.01, no payment of any
kind shall be made under this Plan to any Participant
who terminates active employment with the Employer
prior to his Early Retirement Date.
(d) In computing a Key Employee's benefit under this
Plan, the Committee shall assume the Participant did
not accrue a benefit under the Pension Plan (and did
not receive any Earnings) during any calendar year in
which the Key Employee did not accrue a benefit under
this Plan (see Section 2.02)."
2.
Section 3.02 is deleted in its entirety, and a new Section 3.02 is
substituted in lieu thereof, as follows:
"3.02 Benefit Commencement Date; Manner of Payment.
The Employer shall commence payment of the Supplemental
Retirement Income as of the Benefit Commencement Date and such
benefit shall continue on a monthly basis for the
Participant's lifetime and for any period thereafter provided
for under the form of benefit elected by the Participant. The
Benefit Commencement Date shall mean the day that Retirement
Income is deemed to commence under the Pension Plan with
respect to the Participant. The Supplemental Retirement Income
shall be paid in the form elected by the Participant in his
Joinder
-2-
<PAGE> 3
Agreement. In the event that the Participant fails to elect a
form of payment, then the Supplemental Retirement Income shall
be paid in the form of a 50% joint and survivor annuity if the
Participant has a Spouse on the Benefit Commencement Date and
in the form of a Life Annuity if the Participant does not have
a Spouse on the Benefit Commencement Date. If the Supplemental
Retirement Income is paid in a form other than a Life Annuity,
then the amount of such benefit shall be adjusted so that it
is the Actuarial Equivalent of the Life Annuity described in
Section 3.01."
3.
Section 2 of the Joinder Agreement to the Plan is deleted in its
entirety, and a new Section 2 is substituted in lieu thereof, as follows:
"2. Payments Contingent on Normal Retirement. Executive
acknowledges and understands that Genuine Parts is obligated
to provide benefits under the Plan only if Executive
terminates active employment with Genuine Parts on or after
the Executive's Early Retirement Date. For example, Genuine
Parts Company is not obligated to provide payments under the
Plan if the Executive (absent a change in control) terminates
employment with Genuine Parts prior to his or her Early
Retirement Date."
4.
This Amendment shall be effective as of August 15, 1997.
5.
Except as amended herein, the Plan shall continue in full force and
effect.
IN WITNESS WHEREOF, Genuine Parts Company has caused this Amendment to
be executed by its duly authorized officer.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------------
Title: C. F. O. GPC
---------------------------------------
Date: August 29, 1997
----------------------------------------
-3-
- -
<PAGE> 1
EXHIBIT 10.24
GENUINE PARTS COMPANY
DEATH BENEFIT PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 -- INTRODUCTION.................................................... 1
ARTICLE 2 -- PLAN DEFINITIONS................................................ 1
Alternative Death Benefit........................................... 1
Annuity Starting Date............................................... 1
Average Earnings.................................................... 1
Beneficiary......................................................... 1
Company ............................................................ 1
Credited Service.................................................... 1
Earnings............................................................ 1
Effective Date...................................................... 1
Employee............................................................ 2
Employer............................................................ 2
Employment.......................................................... 2
Normal Retirement Age............................................... 2
Normal Retirement Date.............................................. 2
Participant......................................................... 2
Plan ........................................................... 2
Plan Administrator or Committee..................................... 2
Plan Year........................................................... 2
Trustee............................................................. 2
ARTICLE 3 -- ELIGIBILITY AND PARTICIPATION................................... 2
3.1 Eligibility.................................................... 2
3.2 Termination of Coverage........................................ 3
ARTICLE 4 -- BENEFITS........................................................ 3
4.1 Computation of Benefit......................................... 3
ARTICLE 5 -- PAYMENT OF BENEFITS............................................. 4
5.1 Form of Payment................................................ 4
5.2 Withholding.................................................... 4
ARTICLE 6 -- CLAIMS.......................................................... 4
6.1 General Information............................................ 4
ARTICLE 7 -- FUNDING......................................................... 4
7.1 Funding........................................................ 4
ARTICLE 8 -- PLAN ADMINISTRATION............................................. 4
8.1 Plan Administrator............................................. 4
8.2 Claims Procedure............................................... 5
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
8.3 Procedure For Appeals Of Denied Claims.......................... 6
8.4 Claim and Appeal Procedures Are Conditions
Precedent to Benefits........................................... 6
ARTICLE 9 -- PLAN AMENDMENT AND TERMINATION................................... 7
9.1 Right to Amend or Terminate the Plan............................ 7
ARTICLE 10 -- MISCELLANEOUS................................................... 7
10.1 Construction................................................... 7
10.2 Governing Law.................................................. 7
10.3 Legal Process.................................................. 7
10.4 No Employment Rights........................................... 8
10.5 No Guarantee of Tax Consequences............................... 8
10.6 Rights to Assets............................................... 8
10.7 Conclusiveness of Records...................................... 8
10.8 Payment of Expenses............................................ 8
10.9 Right to Require Information and Reliance Thereon.............. 8
10.10 Mental or Physical Incompetency............................... 9
10.11 Assignment of Benefits........................................ 9
10.12 Inability to Locate Payee..................................... 9
</TABLE>
-ii-
<PAGE> 4
ARTICLE 1 -- INTRODUCTION
Prior to July 15, 1997, Genuine Parts Company (the "Company") offered an
Alternative Death Benefit to Beneficiaries of certain Participants under the
Genuine Parts Company Pension Plan (the "Pension Plan"). Effective July 15,
1997, the Pension Plan ceased providing an Alternative Death Benefit with regard
to Participants who died after July 15, 1997. To replace the Alternative Death
Benefit, the Company adopted the Genuine Parts Company Death Benefit Plan (the
"Plan"). The purpose of the Plan is to provide a death benefit to a Beneficiary
of certain Participants upon a Participant's death.
THIS DOCUMENT CONTAINS ALL PROVISIONS OF THE DEATH BENEFIT PLAN. ANY CONFLICT OR
AMBIGUITY ARISING BETWEEN THIS DOCUMENT AND ANY OTHER DOCUMENT OR COMMUNICATION,
INCLUDING BUT NOT LIMITED TO ANY SUMMARY PLAN DESCRIPTION, BROCHURE, OR ORAL OR
VIDEO PRESENTATION, DESCRIBING THE RIGHTS, BENEFITS, OR OBLIGATIONS OF THE
COMPANY AND EMPLOYEES UNDER THE DEATH BENEFIT PLAN SHALL BE RESOLVED IN FAVOR OF
THIS PLAN DOCUMENT.
ARTICLE 2 -- PLAN DEFINITIONS
The following terms are used in the Plan. Each such term shall have the
following meaning unless a different meaning is clearly required by the context.
For purposes of this Plan, the singular shall be read as the plural, and the
masculine gender shall include the feminine gender unless the context clearly
requires otherwise.
ALTERNATIVE DEATH BENEFIT shall have that meaning as defined in Section 5.02 of
the Pension Plan in effect before July 15, 1997.
ANNUITY STARTING DATE shall mean have that meaning as defined in the Pension
Plan.
AVERAGE EARNINGS shall mean the Participant's Average Earnings under the Pension
Plan.
BENEFICIARY shall mean the Participant's beneficiary as defined in the Pension
Plan.
COMPANY shall mean Genuine Parts Company and its successors or assigns who adopt
this Plan.
CREDITED SERVICE shall mean the Participant's number of years of Credited
Service under the Pension Plan.
EARNINGS shall have that meaning as defined in the Pension Plan.
EFFECTIVE DATE shall mean July 15, 1997.
<PAGE> 5
EMPLOYEE shall mean any person employed by the Employer.
EMPLOYER shall mean the Company and any affiliated company whose employees
participate in the Pension Plan.
EMPLOYMENT shall mean the active service of an Employee with the Employer.
NORMAL RETIREMENT AGE shall mean the Participant's 65th birthday or, if later,
the fifth anniversary of the date the Participant commenced participation in the
Pension Plan.
NORMAL RETIREMENT DATE shall mean the first day of the month coincident with or
next following the Participant's Normal Retirement Age.
PARTICIPANT shall mean an Employee who becomes eligible to participate in the
Pension Plan and who satisfies the requirements of Article 3 of this Plan.
PLAN shall mean this Genuine Parts Company Death Benefit Plan, as amended from
time to time.
PLAN ADMINISTRATOR OR COMMITTEE shall mean the Pension Committee of the Genuine
Parts Company Pension Plan or such other individual(s) designated by the
Company's Board of Directors or the Board's Executive Committee.
PLAN YEAR shall be the calendar year.
TRUSTEE shall mean any institution or individual(s) who shall accept the
appointment of the Committee to serve as Trustee pursuant to the Plan.
ARTICLE 3 -- ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY
A Beneficiary shall be eligible to receive benefits under this Plan only if all
of the following conditions are satisfied:
(a) The Participant has earned 3 or more years of Credited
Service;
(b) The Participant dies prior to terminating his Employment and
prior to his Annuity Starting Date; and
(c) The Participant (or his or her Beneficiary) is not entitled to
or has waived his or her right to a death benefit under the
Pension Plan.
- 2-
<PAGE> 6
3.2 TERMINATION OF COVERAGE
Coverage under this Plan ends on the earliest of the following events:
(a) The Participant is no longer eligible under Section 3.1;
(b) The Plan is terminated;
(c) The Plan is amended to cease coverage or eligibility for
coverage with respect to a Participant or class of
Participants.
ARTICLE 4 -- BENEFITS
4.1 COMPUTATION OF DEATH BENEFIT
Benefits under this Plan shall be equal to the following amount:
(a) The Beneficiary's death benefit shall be the present value of
the following hypothetical monthly benefits:
(i) For a Participant with at least 3 but less than 10
complete years of Credited Service, the greater of
(A) 30% of the Participant's current monthly Earnings
as of the date immediately prior to the Participant's
death, or (B) 30% of the Participant's Average
Earnings, payable for 12.5 months.
(ii) For a Participant with 10 but less than 15 complete
years of Credited Service, the greater of (A) 30% of
the Participant's current monthly Earnings as of the
date immediately prior to the Participant's death, or
(B) 30% of the Participant's Average Earnings,
payable for 25 months;
(iii) For a Participant with 15 or more complete years of
Credited Service, the greater of (A) 30% of the
Participant's current monthly Earnings as of the date
immediately prior to the Participant's death, or (B)
30% of the Participant's Average Earnings, payable
for 50 months.
(b) Present value shall be determined using the actuarial
assumptions set forth in the Pension Plan for determining
single sum values.
-3-
<PAGE> 7
ARTICLE 5 -- PAYMENT OF BENEFITS
5.1 FORM OF PAYMENT.
Payments under this Plan shall be made in lump sum cash amounts only as soon as
administratively feasible (as determined by the Plan Administrator in its sole
discretion).
5.2 WITHHOLDING.
The Plan Administrator will withhold from any payment any income or employment
taxes required to be withheld under applicable federal, state or local law.
ARTICLE 6 -- CLAIMS
6.1 GENERAL INFORMATION
Upon a Participant's death, the Participant's Beneficiary must contact the Plan
Administrator in order to arrange for the submission of a claim for benefits.
Once notification of death is received by the Plan Administrator, the Plan
Administrator will supply the necessary forms for submitting a claim.
ARTICLE 7 -- FUNDING
7.1 FUNDING
The benefits provided under this Plan shall be paid from the Employer's general
assets or from a trust designated by the Committee.
ARTICLE 8 -- PLAN ADMINISTRATION
8.1 PLAN ADMINISTRATOR
(A) RESPONSIBILITY OF PLAN ADMINISTRATOR. The Plan Administrator
shall have total and exclusive responsibility to control,
operate, manage and administer the Plan in accordance with its
terms.
(B) AUTHORITY OF THE PLAN ADMINISTRATOR. The Plan Administrator
shall have all the authority that may be necessary or helpful
to enable him to discharge his responsibilities with respect
to the Plan. Without limiting the generality of the preceding
sentence, the Plan Administrator shall have the exclusive
right: to interpret the Plan ( to determine eligibility for
coverage; to determine eligibility for benefits; to construe
any ambiguous provision of
-4-
<PAGE> 8
the Plan; to correct any default, to supply any omission; to
reconcile any inconsistency; and to decide any and all
questions (including, but not limited to questions of fact)
arising in the administration, interpretation, and application
of the Plan.
(C) DISCRETIONARY AUTHORITY. The Plan Administrator shall have
full discretionary authority in all matters related to the
discharge of his responsibilities and the exercise of his
authority under the Plan including, without limitation, his
construction of the terms of the Plan and his determination of
eligibility for coverage and benefits. It is the intent of the
Plan that the decisions of the Plan Administrator and his
action with respect to the Plan shall be conclusive and
binding upon all persons having or claiming to have any right
or interest in or under the Plan and that no such decision or
action shall be modified upon judicial review unless such
decision or action is proven to be arbitrary or capricious.
(D) DELEGATION OF AUTHORITY. The Plan Administrator may delegate
some or all of his authority under the Plan to any person or
persons provided that any such delegation shall be in writing.
8.2 CLAIMS PROCEDURE
(A) CLAIMS SUBMISSION. A Beneficiary must submit a claim to the
Plan Administrator at the time and in the manner provided
under Section 6.1. The Plan Administrator has 90 days,
following the date on which it receives the claim, to allow or
deny the claim in whole or in part. Under special
circumstances, the Plan Administrator may require an
additional 90 days to make its decision. However, in order to
require such additional 90 days, the Plan Administrator must
notify the Beneficiary in writing within the first 90 day
period that it requires an additional 90 days.
(B) ALLOWANCE OF A CLAIM. If the claim is allowed in whole or in
part, the Plan Administrator shall pay the benefit as provided
in Article 5.
(C) DENIAL OF A CLAIM. If a claim is denied in whole or in part,
the Plan Administrator shall provide a written notice of the
denial to the Beneficiary. The notice shall include the
information described under Section 8.2(d). A claim is deemed
denied in whole or in part when the Plan Administrator
provides such notice to the Beneficiary. However, if the Plan
Administrator fails to provide such notice to the Beneficiary
within the period of time provided under Section 8.2(a), the
claim is deemed denied on the last day of such period to the
extent that it is not allowed by the Plan Administrator during
such period.
-5-
<PAGE> 9
(D) NOTICE OF DENIAL. If the claim is denied in whole or in part,
the Plan Administrator shall provide the Beneficiary with a
written notice setting forth the following information:
(1) The specific reason for the denial;
(2) The specific provisions of the Plan on which the
denial is based;
(3) A description of any additional material or
information necessary for the Beneficiary to perfect
the claim, together with an explanation as to why
such material or information is necessary; and
(4) Information as to how the Beneficiary may submit the
claim to the Plan Administrator for review.
8.3 PROCEDURE FOR APPEALS OF DENIED CLAIMS
(A) RIGHT TO APPEAL. Any Beneficiary whose claim has been properly
submitted to the Plan Administrator and whose claim has been
denied in whole or in part by the Plan Administrator may file
an appeal in writing with the Plan Administrator within 90
days after receipt by the Beneficiary of written notice of the
denial or within 90 days after the claim is deemed denied.
(B) RIGHT TO REVIEW DOCUMENTS, ETC. The Beneficiary or his
representative (authorized to represent the Beneficiary
pursuant to a written instrument which is satisfactory to the
Plan Administrator) may review any pertinent documents and
submit any issues or comments to the Plan Administrator.
(C) DECISION OF PLAN ADMINISTRATOR. The Plan Administrator has 60
days, following the date on which he receives the appeal, to
allow or deny the appeal in whole or in part. Under special
circumstances, the Plan Administrator may require an
additional 60 days to make his decision. However, in order to
require such additional 60 days, the Plan Administrator must
notify the Beneficiary in writing within the first 60 day
period that he requires an additional 60 days. The Beneficiary
shall be notified in writing of the decision of the Plan
Administrator and the reasons therefore, including references
to applicable Plan provisions. If the Beneficiary is not
notified of the decision within 60 days (120 days under
special circumstances), then the appeal is deemed denied.
8.4 CLAIM AND APPEAL PROCEDURES ARE CONDITIONS PRECEDENT TO BENEFITS
The claim and appeal procedures described in the Plan are integral parts of the
Plan and the entitlement of any Beneficiary to a benefit is subject to a
condition precedent that such
-6-
<PAGE> 10
Beneficiary comply with the claim and appeal procedures in proper and timely
fashion. It is the intent of the Plan that no benefit be paid and no denial of a
benefit be subjected to judicial review unless the Beneficiary first complies
fully with the claim procedures and, if the claim is denied or deemed denied,
the appeal procedures described in the Plan.
ARTICLE 9 -- PLAN AMENDMENT AND TERMINATION
9.1 RIGHT TO AMEND OR TERMINATE THE PLAN
Although Genuine Parts Company intends to continue the Plan indefinitely, the
Plan may be terminated, suspended or modified, in whole or in part, at any time
for any reason by independent action of the Board or the Executive Committee of
the Board. The Committee may also adopt any amendment to the Plan which (1) is
required to comply with any applicable law or (2) does not materially increase
the costs associated with the Plan. The procedure for terminating, suspending,
or modifying the Plan is the adoption of a resolution to such effect. A
resolution is considered adopted when a majority of the members of the Board or,
if applicable, Committee, who are present approve of the resolution by vocal or
written vote at a Board or Committee meeting, whichever is applicable. If no
meeting is held, the resolution is in writing and signed by all the members of
the Board or Committee.
ARTICLE 10 -- MISCELLANEOUS
10.1 CONSTRUCTION
Headings of articles, sections, subsections and paragraphs are inserted for
convenience of reference; they are not part of this Plan and shall not be
considered in construing it. Any reference herein to an article, section,
subsection or paragraph shall be a reference to an article, section, subsection
or paragraph of this Plan unless the context clearly indicates otherwise. The
term "person" shall be construed to mean and include an individual (or natural
person); an entity such as a corporation, partnership, trust or association; or
a division or department of such an entity.
10.2 GOVERNING LAW
This document shall be construed and governed in accordance with the laws of
Georgia, except as such laws are preempted by applicable federal law.
10.3 LEGAL PROCESS
The Plan Administrator is the designated agent for service of legal process.
-7-
<PAGE> 11
10.4 NO EMPLOYMENT RIGHTS
Nothing contained in this Plan shall give any Employee the right to be retained
in the employment of the Company or affect the right of the Company to dismiss
any Employee. The adoption and maintenance of this Plan shall not constitute a
contract between the Company and the Employee for consideration for, or
inducement or condition of, the employment of the Employee.
10.5 NO GUARANTEE OF TAX CONSEQUENCES
No person connected to the Plan in any capacity, including but not limited to
the Employer, its affiliates, and the directors, officers and employees of the
Employer and its affiliates, makes any representation, commitment or guarantee
that any tax treatment, including, but not limited to federal, state and local,
income, estate and gift tax treatment, will be applicable with respect to
amounts paid to or for the benefit of a Participant or a Beneficiary in
connection with this Plan, or that any such tax treatment will apply to or be
available to a Participant or Beneficiary on account of any coverage or any
action (including action permitted or required under the Plan) taken in
connection with such coverage.
10.6 RIGHT TO ASSETS
Neither the creation of any fund or accounts, nor the payment of benefits under
this document shall be construed as giving any legal or equitable right to any
Employee, former Employee or Beneficiary against the Employer, its officers or
employees except as expressly provided herein.
10.7 CONCLUSIVENESS OF RECORDS
The records of the Employer with respect to age, Credited Service, employment
history, compensation, absences, illnesses and all other relevant matters shall
be conclusive for purposes of the administration of, and the resolution of
claims arising under this document.
10.8 PAYMENT OF EXPENSES
The Employer may, but does not obligate itself to pay all or part of the
expenses of administration of the Plan contained in this document and the
expenses of the Administrator, and any other expenses incurred at the direction
of the Administrator.
10.9 RIGHT TO REQUIRE INFORMATION AND RELIANCE THEREON
The Employer and Plan Administrator shall have the right to require any
Participant or Beneficiary to provide it and its agents with such information,
in writing, and in such form as it may deem necessary to the administration of
this document and may rely on that
-8-
<PAGE> 12
information in carrying out its duties hereunder. Any payment to a Participant
or Beneficiary in accordance with the provisions of this document in good faith
reliance upon any written information provided by the Participant and/or
Beneficiary shall be in full satisfaction of all claims by the Participant
and/or his Beneficiary.
10.10 MENTAL OR PHYSICAL INCOMPETENCY
Every person receiving or claiming benefits under the Plan shall be presumed to
be mentally and physically competent and of age until the Plan Administrator
receives a written notice, in a form and manner acceptable to it, that such
person is mentally or physically incompetent or a minor, and that a guardian,
conservator or other person legally vested with the care of his estate has been
court appointed.
10.11 ASSIGNMENT OF BENEFITS
Benefits under this Plan may not be assigned; any attempt to assign benefits is
void.
10.12 INABILITY TO LOCATE PAYEE
If the Plan Administrator is unable to make payment to any Participant or other
person to whom a payment is due under the Plan because he cannot ascertain the
identity or whereabouts of such Participants or other person after reasonable
efforts have been made to identify or locate such person such payment and all
subsequent payments otherwise due to such Participant or other person shall be
forfeited seven (7) years after the date any such payment first became due.
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 July 15, 1997.
GENUINE PARTS COMPANY
By: /s/ George W. Kalafut
-----------------------------------
Title: Committee Chairman
---------------------------------
Date: July 15, 1997
---------------------------------
Attest:
/s/ Frank M. Howard
- ----------------------------------
V. P. & Treasurer
-9-
<PAGE> 1
EXHIBIT 13
Selected Financial Data
Genuine Parts Company and Subsidiaries
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales....................................... $6,005,245 $5,720,474 $5,261,904 $4,858,415 $4,384,294
cost of goods sold.............................. 4,178,642 4,002,971 3,654,703 3,343,699 3,023,038
Selling, administrative and other expenses...... 1,261,003 1,172,270 1,096,407 1,039,848 935,427
Income before income taxes...................... 565,600 545,233 510,794 474,868 425,829
Income taxes.................................... 223,203 215,157 201,626 186,320 166,961
Net income**.................................... $ 342,397 $ 330,076 $ 309,168 $ 288,548 $ 257,813
Average common shares outstanding during year*.. 179,592 181,567 183,923 186,062 186,326
Per common share:*
Basic net income**......................... $ 1.91 $ 1.82 $ 1.68 $ 1.55 $ 1.38
Diluted net income**....................... 1.90 1.81 1.68 1.55 1.38
Dividends declared......................... .96 .89 .84 .77 .71
December 31 closing stock price............ 33.94 29.67 27.33 24.00 25.09
Long-term debt, less current maturities......... 209,490 110,241 60,607 11,431 12,265
Shareholders' equity............................ 1,859,468 1,732,054 1,650,882 1,526,165 1,445,263
Total assets.................................... $2,754,363 $2,521,631 $2,274,132 $2,029,471 $1,870,756
----------------------------------------------------------------------
</TABLE>
*Adjusted to reflect the three-for-two-stock split in 1997.
**Net of cumulative effect of changes in accounting principles of $1,055 in
1993.
Selected Ratio Analysis
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------
IN % OF NET SALES 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cost of goods sold......................... 69.58% 69.98% 69.46% 68.82% 68.95%
Selling, administrative and other expenses. 21.00 20.49 20.84 21.40 21.34
Income before income taxes................. 9.42 9.53 9.71 9.77 9.71
Net income................................. 5.70 5.77 5.88 5.94 5.88
Rate earned on shareholders' equity at the
beginning of each year..................... 19.77% 19.99% 20.26% 19.97% 19.59%
--------------------------------------------------------------------
</TABLE>
Market and Dividend Information
High and Low Sales Price and Dividends per Share of Common Shares Traded on the
New York Stock Exchange.
Adjusted to reflect the three-for-two stock split in 1997.
<TABLE>
<CAPTION>
SALES PRICE OF COMMON SHARES
----------------------------------------------------
1997 1996
------------------ ------------------
QUARTER HIGH LOW HIGH LOW
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First....................................... $32.17 $28.67 $31.00 $26.67
Second...................................... 35.44 29.83 31.25 28.42
Third....................................... 35.88 30.00 30.92 27.67
Fourth...................................... 33.94 30.00 31.67 28.92
DIVIDENDS DECLARED PER SHARE
----------------------------------------------------
QUARTER 1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
First....................................... $ .24 $ .223
Second...................................... .24 .223
Third....................................... .24 .223
Fourth...................................... .24 .223
</TABLE>
Number of Record Holders of Common Stock 7,992
18
<PAGE> 2
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Genuine Parts Company and Subsidiaries
December 31, 1997
Results of Operations:
Net sales in 1997 increased for the 48th consecutive year to a record high of
$6.0 billion. This was an increase of 5% over the prior year and compares with
increases of 9% in 1996, and 8% in 1995. Sales for the Automotive Parts Group
increased 2% in 1997 versus 7% in 1996, reflecting slow growth in the
automotive aftermarket. Price increases for the Automotive Parts Group were .9%
in 1997 and 1.3% in 1996. Sales for the Industrial Parts Group increased 10% in
1997 versus 11% in 1996, reflecting geographic growth through acquisitions and
opening new branches and strong industrial production. Price increases for the
Industrial Parts Group were 1.4% in 1997 and 2.5% in 1996. Sales for the Office
Products Group increased 4% in 1997 compared with 9% in 1996, reflecting an
extremely competitive industry. Price increases for the Office Products Group
were less than 1% in 1997 and 1996.
Costs of goods sold was 69.6% of net sales in 1997 compared to 70.0% in 1996
and 69.5% in 1995. Selling, administrative and other expenses increased 7.6% in
1997 and 6.9% in 1996 and was 21.0% of net sales in 1997 and 20.5% of net sales
in 1996. The effective income tax rate was 39.5% in 1997, 1996, and 1995. Net
income in 1997 increased 4% over 1996 and net income in 1996 increased 7% over
1995.
Liquidity and Sources of Capital:
The ratio of current assets to current liabilities was 3.8 to 1 at the close of
1997 with current assets amounting to 76% of total assets. Trade accounts
receivable and inventories increased 10% and 7% respectively, while working
capital increased 12%. The increase in working capital has been financed
principally from the Company's cash flow generated by operations. At December
31, 1997, $36 million was outstanding under an unsecured revolving line of
credit with a bank compared to $47 million outstanding at December 31, 1996. At
December 31, 1997, the Company had the following unsecured term notes: $50
million, 5.98%, due 2000; $50 million, LIBOR plus .25%, due 2001; $50 million,
6.125%, due 2002; and $50 million, 5.98%, due 2002.
At the August 16, 1994 meeting, the Board of Directors approved a stock
repurchase program which authorizes the Company to reacquire up to 15 million
shares of its Common Stock. To date, approximately 10.2 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 1998. Capital expenditures during 1997 amounted to $90 million
compared with $95 million in 1996 and $91 million in 1995. The amounts reflect
the
Earnings Per Share* in dollars Dividends Per Share* in dollars
[GRAPH] [GRAPH]
*Restated to reflect stock splits *Restated to reflect stock splits
19
<PAGE> 3
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Genuine Parts Company and Subsidiaries
Company's continuing geographic expansion as well as the upgrading of
existing facilities. It is anticipated that capital expenditures in 1998 will
be approximately the same as 1997.
Impact of Year 2000:
The Company has completed an assessment of its computer software programs to
determine their ability to function properly in the year 2000 and thereafter.
Based on this assessment, the Company is in the process of modifying or
replacing certain time-sensitive software programs to avoid a potential
temporary inability to process transactions or engage in other normal business
activities. The project is estimated to be completed well in advance of
December 31, 1999, which is prior to any anticipated significant impact on the
Company's operating systems from the Year 2000 issues. The costs of the project
to date and the estimated costs to complete are not expected to be significant
to the Company's consolidated financial position or results of operations. The
Company believes that, upon completion of its ongoing project, the Year 2000
issues will not pose significant operational problems for its computer systems.
Quarterly Results of Operations:
Miscellaneous year-end adjustments resulted in increasing net income during the
fourth quarter of 1997 and 1996 by approximately $26.6 million ($.15 per share)
and $22.8 million ($.13 per share), respectively.
The following is a summary of the quarterly results of operations for the
years ended December 31, 1997 and 1996.
<TABLE>
<CAPTION>
Three Months Ended
- ---------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
- ---------------------------------------------------------------------------------
1997 (in thousands except for per share data)
- ----
<S> <C> <C> <C> <C>
Net Sales............ $1,457,646 $1,510,456 $1,555,776 $1,481,367
Gross Profit......... 429,267 445,120 463,967 488,249
Net Income........... 76,595 83,741 83,712 98,349
Basic Net Income per
Common Share....... .43 .47 .47 .55
Diluted Net Income
per Common
Share.............. .42 .46 .47 .55
1996
- ----
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
Basic Net Income per
Common Share....... .40 .44 .45 .52
Diluted Net Income
per Common
Share.............. .40 .44 .45 .52
</TABLE>
Book Value Per Share* in dollars Market Value Per Share* in dollars
[GRAPH] [GRAPH]
*Restated to reflect stock splits *Restated to reflect stock splits
20
<PAGE> 4
Industry Data
Genuine Parts Company and Subsidiaries
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------------------------
Dollars in thousands 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales:
Automotive.......................................... $ 3,071,153 $ 3,008,105 $ 2,804,086 $ 2,693,961 $ 2,485,267
Industrial.......................................... 1,853,270 1,677,859 1,509,566 1,317,495 1,153,371
Office products..................................... 1,080,822 1,034,510 948,252 846,959 745,656
---------------------------------------------------------------
Total net sales.................................. $ 6,005,245 $ 5,720,474 $ 5,261,904 $ 4,858,415 $ 4,384,294
===============================================================
Operating profit:
Automotive.......................................... $ 324,008 $ 321,852 $ 307,726 $ 304,164 $ 282,791
Industrial.......................................... 166,053 150,815 132,952 111,822 96,727
Office products..................................... 110,663 103,309 93,888 78,206 65,938
---------------------------------------------------------------
Total operating profit........................... 600,724 575,976 534,566 494,192 445,456
Interest expense....................................... (13,365) (8,498) (3,419) (1,321) (1,584)
Corporate expense...................................... (26,943) (29,057) (25,939) (22,854) (20,405)
Equity in income from investees........................ 6,730 9,398 8,298 7,224 4,452
Minority interests..................................... (1,546) (2,586) (2,712) (2,373) (2,090)
---------------------------------------------------------------
Income before income taxes....................... $ 565,600 $ 545,233 $ 510,794 $ 474,868 $ 425,829
===============================================================
Identifiable assets:
Automotive.......................................... $ 1,644,288 $ 1,495,106 $ 1,320,910 $ 1,223,416 $ 1,152,148
Industrial.......................................... 602,656 527,253 482,067 404,647 370,633
Office products..................................... 383,452 379,394 360,456 308,817 283,479
Corporate........................................... 23,343 20,394 18,631 5,950 6,731
Equity investments.................................. 100,624 99,484 92,068 86,641 57,765
---------------------------------------------------------------
Total assets..................................... $ 2,754,363 $ 2,521,631 $ 2,274,132 $ 2,029,471 $ 1,870,756
===============================================================
Depreciation and amortization:
Automotive.......................................... $ 41,855 $ 35,360 $ 30,239 $ 26,588 $ 24,056
Industrial.......................................... 7,002 6,179 5,049 4,640 5,410
Office products..................................... 7,995 7,571 6,814 5,257 4,246
Corporate........................................... 2,015 1,335 1,132 889 708
---------------------------------------------------------------
Total depreciation and amortization.............. $ 58,867 $ 50,445 $ 43,234 $ 37,374 $ 34,420
===============================================================
Capital expenditures:
Automotive.......................................... $ 68,305 $ 80,682 $ 67,643 $ 45,921 $ 39,502
Industrial.......................................... 13,451 7,330 12,132 4,164 2,779
Office products..................................... 6,069 5,652 10,587 13,547 12,378
Corporate........................................... 2,600 1,494 407 2,370 2,854
---------------------------------------------------------------
Total capital expenditures....................... $ 90,425 $ 95,158 $ 90,769 $ 66,002 $ 57,513
===============================================================
</TABLE>
Total Assets in millions of dollars Capital Expenditures in millions of dollars
[GRAPH] [GRAPH]
21
<PAGE> 5
Report of Independent Auditors
Genuine Parts Company and Subsidiaries
Board of Directors
Genuine Parts Company
We have audited the accompanying consolidated balance sheets of Genuine Parts
Company and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1997. 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, 1997 and 1996, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
Atlanta, Georgia
February 4, 1998
22
<PAGE> 6
Consolidated Balance Sheets
Genuine Parts Company and Subsidiaries
<TABLE>
<CAPTION>
December 31
-----------------------------
Dollars in thousands 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents......................................................... $ 72,823 $ 67,373
Trade accounts receivable......................................................... 686,551 622,836
Merchandise inventories........................................................... 1,321,597 1,233,820
Prepaid expenses and other current accounts....................................... 12,580 13,613
- ----------------------------------------------------------------------------------------------------------------------------
Total Current Assets 2,093,551 1,937,642
Investments and Other Assets (Notes 1 and 7)......................................... 288,298 237,994
Property, Plant and Equipment:
Land ............................................................................ 49,025 44,662
Buildings, less allowance for depreciation (1997-$72,569; 1996-$69,273)........... 138,263 130,089
Machinery and equipment, less allowance for depreciation
(1997-$186,065; 1996-$165,518)................................................. 185,226 171,244
- ----------------------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment 372,514 345,995
-----------------------------
$ 2,754,363 $ 2,521,631
=============================
Liabilities and Shareholders' Equity
Current Liabilities:
Trade accounts payable............................................................ $ 405,141 $ 401,842
Revolving line of credit (Note 2)................................................. 36,000 47,000
Accrued compensation.............................................................. 38,967 41,325
Other accrued expenses............................................................ 19,022 22,189
Dividends payable................................................................. 43,436 40,258
Income taxes payable.............................................................. 14,372 15,765
- ----------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 556,938 568,379
Long-Term Debt (Note 2).............................................................. 209,490 110,241
Deferred Income Taxes (Note 6)....................................................... 89,049 75,388
Minority Interests in Subsidiaries................................................... 39,418 35,569
Shareholders' Equity (Notes 1, 3 and 5):
Preferred Stock, par value $1 per share-authorized
10,000,000 shares; none issued................................................. -- --
Common Stock, par value $1 per share-authorized
450,000,000 shares; issued 178,947,976 shares
in 1997; 180,048,435 shares in 1996............................................ 178,948 180,048
Additional paid-in capital........................................................ -- --
Retained earnings................................................................. 1,680,520 1,552,006
- ----------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 1,859,468 1,732,054
-----------------------------
$ 2,754,363 $ 2,521,631
=============================
</TABLE>
See accompanying notes.
23
<PAGE> 7
Consolidated Statements of Income
Genuine Parts Company and Subsidiaries
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------
Dollars in thousands, except per share data 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales.................................................................. $ 6,005,245 $ 5,720,474 $ 5,261,904
Cost of goods sold......................................................... 4,178,642 4,002,971 3,654,703
----------------------------------------------
1,826,603 1,717,503 1,607,201
Selling, administrative and other expenses................................. 1,261,003 1,172,270 1,096,407
----------------------------------------------
Income before income taxes................................................. 565,600 545,233 510,794
Income taxes (Note 6)...................................................... 223,203 215,157 201,626
----------------------------------------------
Net Income ................................................................ $ 342,397 $ 330,076 $ 309,168
==============================================
Basic net income per common share.......................................... $ 1.91 $ 1.82 $ 1.68
==============================================
Diluted net income per common share........................................ $ 1.90 $ 1.81 $ 1.68
==============================================
Average common shares outstanding.......................................... 179,592 181,567 183,923
Dilutive effect of stock options and non-vested restricted stock awards.... 573 622 452
----------------------------------------------
Average common shares outstanding--assuming dilution....................... 180,165 182,189 184,375
==============================================
</TABLE>
See accompanying notes.
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, 1995......................... 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)
Stock issued in connection with acquisitions.... 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....................... 60,016,145 60,016 -- (60,016) --
--------------------------------------------------------------------
Balance at December 31, 1996....................... 180,048,435 180,048 -- 1,552,006 1,732,054
Net income...................................... -- -- -- 342,397 342,397
Cash dividends declared......................... -- -- -- (172,334) (172,334)
Stock options exercised, including tax benefit.. 656,443 657 12,270 -- 12,927
Purchase of stock............................... (2,427,927) (2,428) (32,784) (41,549) (76,761)
Stock issued in connection with acquisitions.... 671,025 671 20,514 -- 21,185
--------------------------------------------------------------------
Balance at December 31, 1997....................... 178,947,976 $178,948 $ -- $1,680,520 $1,859,468
====================================================================
</TABLE>
See accompanying notes.
24
<PAGE> 8
Consolidated Statements of Cash Flows
Genuine Parts Company and Subsidiaries
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
Dollars in thousands 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities
Net income.................................................................... $ 342,397 $ 330,076 $ 309,168
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization........................................... 58,867 50,445 43,234
Gain on sale of property, plant and equipment........................... (5,014) (786) (1,248)
Provision for deferred taxes............................................ 13,843 13,930 12,340
Equity in income from investees......................................... (6,730) (9,398) (8,298)
Income applicable to minority interests................................. 1,546 2,586 2,712
Changes in operating assets and liabilities:
Trade accounts receivable............................................ (63,715) (57,531) (77,910)
Merchandise inventories.............................................. (87,777) (106,364) (122,876)
Prepaid expenses and other current accounts.......................... 1,033 13,333 (5,550)
Trade accounts payable............................................... 3,299 70,138 15,115
Income taxes payable and other current liabilities................... (7,140) 21,586 (8,000)
- ---------------------------------------------------------------------------------------------------------------------------
(91,788) (2,061) (150,481)
- ---------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 250,609 328,015 158,687
Investing Activities
Purchase of property, plant and equipment..................................... (90,425) (95,158) (90,769)
Proceeds from sale of property, plant and equipment........................... 11,580 4,385 4,836
Other investing activities.................................................... (23,915) (23,306) (18,199)
- ---------------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (102,760) (114,079) (104,132)
- ---------------------------------------------------------------------------------------------------------------------------
Financing Activities
Proceeds from revolving line of credit, net................................... (11,000) 2,000 45,000
Proceeds from long-term debt.................................................. 100,000 50,000 50,000
Payments on long-term debt.................................................... (712) (324) (1,167)
Stock options exercised....................................................... 12,927 7,881 4,105
Dividends paid................................................................ (169,156) (160,214) (151,257)
Purchase of stock............................................................. (76,761) (94,715) (40,182)
Contributions from minority interests......................................... 2,303 4,555 790
- ---------------------------------------------------------------------------------------------------------------------------
Net Cash Used in Financing Activities (142,399) (190,817) (92,711)
-------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 5,450 23,119 (38,156)
Cash and Cash Equivalents at Beginning of Year 67,373 44,254 82,410
-------------------------------------
Cash and Cash Equivalents at End of Year $ 72,823 $ 67,373 $ 44,254
=====================================
Supplemental disclosure of cash flow information
Cash paid during the year for:
Income taxes............................................................... $ 212,178 $ 187,809 $ 223,641
=====================================
Interest................................................................... $ 12,871 $ 8,405 $ 2,919
=====================================
</TABLE>
See accompanying notes.
25
<PAGE> 9
Notes to Consolidated Financial Statements
Genuine Parts Company and Subsidiaries
December 31, 1997
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. Additionally, the Company has 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 are not material in relation to the Company's consolidated
financial statements.
- - 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 $132,092,000 and $124,566,000 higher than reported at
December 31, 1997 and December 31, 1996, 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
Long-lived assets are periodically reviewed for impairment based on an
assessment of future operations. The Company records impairment losses 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.
- - Net Income Per Common Share
In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings per Share. Statement 128 replaced the calculation of primary and fully
diluted net income per common share with basic and diluted net income per
common share. Basic net income per common share is computed by dividing net
income by the weighted average number of common shares outstanding during the
year. The computation of diluted net income per common share includes the
dilutive effect of stock options and non-vested restricted stock awards.
Options to purchase 1,790,000 shares of common stock at $35 per share were
outstanding during the second half of 1997 but were not included in the
computation of diluted net income per common share because the options'
exercise price was greater than the average market price of the common shares.
- - New Accounting Standards
In 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130, Reporting Comprehensive Income and No.
131, Disclosures about Segments of an Enterprise and Related Information. These
statements, which are effective for fiscal years beginning after December 15,
1997, expand or modify disclosures and will have no impact
26
<PAGE> 10
Notes to Consolidated Financial Statements
Genuine Parts Company and Subsidiaries
on the Company's consolidated financial position, results of operations or cash
flows.
2. Credit Facilities
The Company has a $100,000,000 unsecured revolving line of credit with a bank
which matures in May 1998 and bears interest at the bank's cost of funds rate
plus .10% (6.85% at December 31, 1997). At December 31, 1997 and 1996,
$36,000,000 and $47,000,000, respectively, was outstanding under this line.
The Company also has long term debt which consists of the following:
<TABLE>
<CAPTION>
December 31,
1997 1996
- -----------------------------------------------------------
(in thousands)
<S> <C> <C>
Five year, unsecured term notes:
December 26, 1995, 5.98%,
due 2000........................ $ 50,000 $ 50,000
December 27, 1996, Libor plus
.25%, due 2001.................. 50,000 50,000
September 18, 1997, 6.125%,
due 2002........................ 50,000 --
October 31, 1997, 5.98%,
due 2002........................ 50,000 --
Other borrowings..................... 10,160 10,871
--------------------
210,160 110,871
Current portion included in
accrued expenses.................. 670 630
---------------------
$209,490 $110,241
=====================
</TABLE>
Interest is paid monthly on the term notes. The 1997 term notes contain
provisions whereby the rates may become variable (LIBOR plus .25%) in the year
2000, if such variable rates are higher. Total interest expense for all
borrowings was $13,365,000, $8,498,000, and $3,419,000 in 1997, 1996, and 1995,
respectively.
The Company believes that the fair value of these financial instruments
approximates the carrying value.
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, 1997 (in thousands):
<TABLE>
<CAPTION>
<S> <C>
1998............................................ $ 52,024
1999............................................ 40,115
2000............................................ 26,411
2001............................................ 16,884
2002............................................ 12,184
Subsequent to 2002.............................. 18,589
---------
$ 166,207
=========
</TABLE>
Rental expense for operating leases was $65,137,000 in 1997; $61,259,000 in
1996; $58,146,000 in 1995.
5. Stock Options and Restricted Stock Awards
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
27
<PAGE> 11
Notes to Consolidated Financial Statements
Genuine Parts Company and Subsidiaries
authorized the grant of options of up to 750,000 and 6,750,000 shares of common
stock, respectively. 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 1997 and 1996, respectively: risk-free interest rates of 6.4%
and 6.3%; dividend yield of 2.5% and 2.7%; volatility factor of the expected
market price of the Company's common stock of .12, and a weighted-average
expected life of the option of 5.4 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):
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------
<S> <C> <C> <C>
Pro forma net income...... $338,978 $329,387 $306,908
Pro forma basic net
income per common
share................... $1.89 $1.81 $1.67
Pro forma diluted net
income per common
share................... $1.88 $1.81 $1.66
</TABLE>
A summary of the Company's stock option activity and related information are as
follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
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........... 2,743 $23 3,318 $23 2,850 $21
Granted.................................... 1,790 35 18 31 750 27
Exercised.................................. (907) 20 (555) 19 (273) 18
Forfeited.................................. (38) 21 (38) 21 (9) 23
------ ------ ------
Outstanding at end of year................. 3,588 $29 2,743 $23 3,318 $23
====== ====== ======
Exercisable at end of year................. 1,363 $24 2,106 $23 2,006 $21
====== ====== ======
Weighted-average fair value of options
granted during the year................. $6.13 $6.31 $ 6.37
====== ====== ======
Shares available for future grants......... 1,572 3,324 3,304
====== ====== ======
</TABLE>
28
<PAGE> 12
Notes to Consolidated Financial Statements
Genuine Parts Company and Subsidiaries
Exercise prices for options exercised during 1997 ranged from approximately
$20 to $26. Exercise prices for options outstanding as of December 31, 1997
ranged from approximately $17 to $35. The weighted-average remaining
contractual life of those options is 8 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 net income per common share and stock price
levels. Through December 31, 1997, the two officers have earned 69,000 and
34,500 shares, respectively. The Company recognizes compensation expense equal
to the fair market value of the stock on the award date over the remaining
vesting period which expires on March 31, 2004.
6. Income Taxes
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of 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>
1997 1996
- -----------------------------------------------------------
(in thousands)
<S> <C> <C>
Employee and retiree benefits........ $ 53,228 $40,885
Property, plant and equipment........ 25,704 24,052
Merchandise inventories.............. 1,311 1,730
Other ............................... 8,806 8,721
--------------------
$ 89,049 $75,388
====================
</TABLE>
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Federal:
Current................ $171,676 $164,585 $155,895
Deferred............... 13,843 13,930 12,340
State..................... 37,684 36,642 33,391
------------------------------
$223,203 $215,157 $201,626
==============================
</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 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Statutory rate applied
to pre-tax income..... $197,960 $190,831 $178,778
Plus state income taxes,
net of Federal tax
benefit............... 24,494 23,818 21,704
Other ................... 749 508 1,144
------------------------------
$223,203 $215,157 $201,626
==============================
</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.
The following table sets forth the plan's funded status and amounts
recognized in the Company's financial statements at December 31:
<TABLE>
<CAPTION>
1997 1996
- ------------------------------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of
benefit obligations:
Accumulated benefit obligation,
including vested benefits
of $281,753 in 1997 and
$266,263 in 1996 ............ $(291,650) $(274,607)
=======================
Projected benefit obligation for
service rendered to date........ (432,708) (413,657)
Plan assets at fair value, primarily
bonds and equity securities .... 590,733 487,753
-----------------------
Plan assets in excess of projected
benefit obligation.............. 158,025 74,096
Unrecognized prior service cost.... (26,550) (20,794)
Unrecognized net (gain) loss from
past experience different from
that assumed and effects of
changes in assumptions.......... (2,232) 49,347
Unrecognized net transition
obligation...................... 1,041 1,302
----------------------
Net prepaid pension cost........... $ 130,284 $ 103,951
======================
</TABLE>
29
<PAGE> 13
Notes to Consolidated Financial Statements
Genuine Parts Company and Subsidiaries
Net pension cost (income) included the following components:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Service cost........... $ 15,301 $ 13,723 $ 10,710
Interest cost.......... 30,147 28,431 26,032
Actual return on plan
assets............. (105,772) (55,058) (90,127)
Net amortization and
deferral............ 55,568 12,202 51,622
--------------------------------
Net periodic pension
(income) cost....... $ (4,756) $ (702) $ (1,763)
================================
</TABLE>
Assumptions used in the accounting for the defined benefit plan are as
follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ---------------------------------------------------------------
<S> <C> <C> <C>
Weighted-average
discount rate........... 7.40% 7.40% 7.40%
Rate of increase in future
compensation levels..... 4.15% 4.40% 5.00%
Expected long-term rate
of return on assets..... 10.00% 9.75% 9.50%
</TABLE>
The changes in the above assumptions had no significant effect on the
projected benefit obligation at December 31, 1997 and 1996.
At December 31, 1997, the plan held 845,111 shares of common stock of the
Company with a market value of $28,680,959.
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 $3,953,000 in 1997, $3,743,000 in 1996, and $3,556,000 in 1995,
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 effected in the form of a 50% stock dividend and paid 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. All applicable amounts
reflected herein give retroactive effect to the stock split.
30
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
JURISDICTION OF
NAME % OWNED INCORPORATION
- ---- ------- -------------
<S> <C> <C>
Balkamp 89.61 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
Manco Trucking 100.0 Illinois
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
Horizon Data Corporation South 100.0 Florida
1st Choice Auto Parts, Inc. 51.0 Georgia
A & M Parts, Inc. 51.0 Georgia
Ann Arbor Auto Supply, Inc. 51.0 Georgia
Antioch Automotive Supply, Inc. 51.0 Georgia
Auto & Truck Parts of Santa Fe, 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 Chanute, Incorporated 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
Autobahn Supply of River Falls, Inc. 51.0 Georgia
Automotion Parts Corp. 51.0 Georgia
Automotive Parts of Quitman, Inc. 51.0 Georgia
Back Bay Auto Parts, Inc. 51.0 Georgia
Bad Axe Auto Supply, Inc. 51.0 Georgia
Big Horn Auto Parts, Inc. 51.0 Georgia
Bonney Lake Auto & Truck Parts, Inc. 51.0 Georgia
Brigham Automotive Supply, Inc. 51.0 Georgia
C & O Auto Parts, Inc. 51.0 Georgia
Cal-Davis Auto & Truck Parts, Inc. 51.0 Georgia
Carolina Piedmont Corporation 51.0 Georgia
Cass City Auto & Truck, Inc. 70.0 Georgia
Cedar City Auto Parts, Inc. 51.0 Georgia
Central Motor Parts, Inc. 51.0 Georgia
Central Nebraska Supply Co. 51.0 Georgia
Cereal City Auto Parts, Inc. 51.0 Georgia
Chemung River Auto Supply, Inc. 51.0 Georgia
CKT Motive Parts, Inc. 51.0 Georgia
Clermont-Brown Automotive Supply, Inc. 51.0 Georgia
</TABLE>
1
<PAGE> 2
<TABLE>
<S> <C> <C>
Clinton County Auto Supply, Inc. 51.0 Georgia
Cochise Auto Parts, Inc. 51.0 Georgia
College Station Auto Parts Co. 51.0 Georgia
Colorado Motor Parts, Inc. 51.0 Georgia
Copps Hill Auto Parts, Inc. 51.0 Georgia
Creswell Auto & Truck Supply, Inc. 51.0 Georgia
Cross Timbers Auto Supply, Inc. 51.0 Georgia
Crystal River Auto Parts, Inc. 51.0 Georgia
Diamond G Auto Parts of Beaumont, Inc. 51.0 Georgia
East Tenn Automotive Supply, Inc. 51.0 Georgia
El Campo Parts, Inc. 51.0 Georgia
Elkton Auto 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. 100.0 Georgia
First Class Auto Parts, Inc. 70.0 Georgia
First Settlement Automotive, Inc. 51.0 Georgia
Foothills Auto Supply, Inc. 51.0 Georgia
Franklin County Supply, Inc. 51.0 Georgia
Gainesville Auto Supply, Inc. 51.0 Georgia
Gila Automotive Supply, Inc. 51.0 Georgia
Glenwood Springs Auto Parts, Inc. 51.0 Georgia
Gold Stream Auto Parts, Inc. 51.0 Georgia
Grand Canyon Auto Supply, Inc. 51.0 Georgia
Grand Prairie Auto Supply, Inc. 70.0 Georgia
Grantsville Auto Parts, Inc. 51.0 Georgia
Gray's Harbor Auto & Truck, Inc. 51.0 Georgia
Great Miami Automotive Parts, Inc. 51.0 Georgia
Grimm Management Resources, Inc. 51.0 Georgia
Hanford Auto & Truck Parts, Inc. 51.0 Georgia
Hansens Automotive Supply, Inc. 51.0 Georgia
Hastings Auto Supply, Inc. 51.0 Georgia
Heartland Automotive Parts 51.0 Georgia
High Desert Automotive Supply, Inc. 51.0 Georgia
Holton Auto Parts, Inc. 51.0 Georgia
Hood Canal Auto Parts, Inc. 51.0 Georgia
Houghton Lake Auto Supply, Inc. 51.0 Georgia
Huntsville Parts & Equipment, Inc. 51.0 Georgia
Hyland Hill Automotive Supply, Inc. 51.0 Georgia
Innovative Parts, Incorporated 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
Labelle Auto and Truck 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
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C> <C>
Livonia Auto Supply, Inc. 51.0 Georgia
Lodi Automotive Supply, Inc. 51.0 Georgia
Luke's Auto Supply, Inc. 51.0 Georgia
Marion Auto Supply, Inc. 51.0 Georgia
Marion Automotive Parts, Incorporated 51.0 Georgia
McKinney Parts, Inc. 51.0 Georgia
McMinn County Automotive, Inc. 51.0 Georgia
Mid-Town Auto & Machine Shop, Inc. 100.0 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
Motor Innovations, Inc. 51.0 Georgia
Muscatine Auto Parts, Inc. 100.0 Georgia
N. V. Automotive Supply, Inc. 51.0 Georgia
Nacogdoches Auto Parts, Inc. 51.0 Georgia
Northwest Auto Parts, Inc. 51.0 Georgia
Oberlin Auto Parts, Inc. 51.0 Georgia
Outland Supply, Inc. 51.0 Georgia
Overton County Parts Center, Inc. 51.0 Georgia
Parts & Company of Selma, Inc. 51.0 Georgia
Parts Connection, Inc. 51.0 Georgia
Parts of Columbus, Inc. 51.0 Georgia
Parts of Hillsville, Inc. 70.0 Georgia
Parts Unlimited, Inc. 51.0 Georgia
Peninsula Parts Company 51.0 Georgia
Petoskey Automotive Center, Inc. 51.0 Georgia
Pima Auto Supply, Inc. 51.0 Georgia
Polyco Corporation 70.0 Georgia
Port Charlotte Auto Supply, Inc. 51.0 Georgia
Potomac Creek Auto Supply, Inc. 51.0 Georgia
Prairie Hills Corp. 51.0 Georgia
Preferred Parts Company 51.0 Georgia
Prescott Auto Parts, Inc. 51.0 Georgia
Pride City Auto Parts, Inc. 51.0 Georgia
Pueblo Automotive, Inc. 51.0 Georgia
Quality Auto Parts & Paint Supply, Inc. 51.0 Georgia
Quality Auto Parts of Los Lunas, Incorporated 51.0 Georgia
R.K.R., Inc. 51.0 Georgia
Razorback Enterprises, 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
San Joaquin Parts Corporation, Inc. 51.0 Georgia
San Juan Quality Parts, Inc. 51.0 Georgia
Seaside Auto Parts, Inc. 51.0 Georgia
Sevier County Automotive, Inc. 51.0 Georgia
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
Smithfield Auto Parts, Inc. 51.0 Georgia
South Central Kansas Automotive, Inc. 51.0 Georgia
Southern Indiana Parts, Inc. 51.0 Georgia
Spooner Auto Parts, Inc. 51.0 Georgia
Standard Motor Parts of Reidsville, Inc. 51.0 Georgia
Sugar River Auto Parts, Inc. 51.0 Georgia
Sumner Auto & Truck, Inc. 51.0 Georgia
Sweet Home Auto & Truck Supply, Inc. 51.0 Georgia
Terrebonne Parish Auto Parts, Inc. 51.0 Georgia
The Carolina Ritchie Company 51.0 Georgia
The Flowers Company 51.0 North Carolina
The Parts House, Inc. 51.0 Georgia
The Parts Store, Inc. 51.0 Georgia
The Rock Parts Co. 70.0 Georgia
The Wilbur Group, Inc. 51.0 Georgia
Thousand Oaks Auto Parts, Inc. 51.0 Georgia
Timberland Auto & Truck Parts, Inc. 51.0 Georgia
TNT Supply, Inc. 51.0 Georgia
Twin Lake Parts & Equipment, Inc. 51.0 Georgia
Union County Auto Parts, 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
Warrick Automotive Supply, Inc. 51.0 Georgia
Watsonville Auto Supply, Inc. 51.0 Georgia
West Monroe Auto Parts, Inc. 51.0 Georgia
West Volusia Auto Supply, Inc. 51.0 Georgia
Wharton Auto & Truck Parts, Inc. 51.0 Georgia
Whitney Point Unit Parts, Inc. 51.0 Georgia
Wisota Auto Parts, Inc. 51.0 Georgia
Yorkville Automotive Supply, Inc. 51.0 Georgia
</TABLE>
4
<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 4, 1998, included in the
1997 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 4, 1998, 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, 1997.
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 LLP
Atlanta, Georgia
March 6, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE YEAR ENDED DECEMBER 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 72,823
<SECURITIES> 0
<RECEIVABLES> 686,551
<ALLOWANCES> 1,849
<INVENTORY> 1,321,597
<CURRENT-ASSETS> 2,093,551
<PP&E> 372,514
<DEPRECIATION> 258,634
<TOTAL-ASSETS> 2,754,363
<CURRENT-LIABILITIES> 556,938
<BONDS> 209,490
0
0
<COMMON> 178,948
<OTHER-SE> 1,680,520
<TOTAL-LIABILITY-AND-EQUITY> 2,754,363
<SALES> 6,005,245
<TOTAL-REVENUES> 6,005,245
<CGS> 4,178,642
<TOTAL-COSTS> 4,178,642
<OTHER-EXPENSES> 1,247,638
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,365
<INCOME-PRETAX> 565,600
<INCOME-TAX> 223,203
<INCOME-CONTINUING> 342,397
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 342,397
<EPS-PRIMARY> 1.91
<EPS-DILUTED> 1.90
</TABLE>
