<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Republic Automotive Parts, Inc.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
--------------------------------------------------------------
<PAGE> 2
(REPUBLIC AUTOMOTIVE LOGO)
REPUBLIC AUTOMOTIVE PARTS, INC.
500 Wilson Pike Circle
Suite 115
P.O. Box 2088
Brentwood, Tennessee 37024
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 8, 1995
---------------------
Brentwood, Tennessee
April 28, 1995
To the Stockholders of
Republic Automotive Parts, Inc.:
The Annual Meeting of Stockholders of Republic Automotive Parts, Inc. (the
"Company") will be held at the Rihga Royal Hotel, 151 West 54th Street, New
York, New York on Thursday, June 8, 1995, at 9:00 a.m. for the following
purposes:
1. To elect nine directors to serve for one year and until their successors
are elected and qualified; and
2. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Only stockholders of record at the close of business on April 10, 1995 will
be entitled to notice of and to vote at the Annual Meeting.
A proxy statement and proxy form are furnished herewith.
If you do not expect to be present at the Annual Meeting, please sign and
date the enclosed proxy and return it in the enclosed self-addressed
postage-paid envelope. Prompt response by our stockholders will reduce the time
and expense of solicitation.
By Order of the Board of Directors,
/s/ Anthony R. Dainora
ANTHONY R. DAINORA
Secretary
<PAGE> 3
REPUBLIC AUTOMOTIVE PARTS, INC.
500 Wilson Pike Circle
Suite 115
P.O. Box 2088
Brentwood, Tennessee 37024
---------------------
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Republic Automotive Parts, Inc. of proxies to be used
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Rihga Royal Hotel, 151 West 54th Street, New York, New York on Thursday, June 8,
1995, at 9:00 a.m. The enclosed proxy may be revoked by the stockholder at any
time prior to its exercise by personally appearing at the Annual Meeting and
casting a different vote from that specified on such proxy, or by giving to the
Company a subsequently dated proxy, properly signed.
If the enclosed form of proxy is executed and returned, all shares
represented thereby will be voted in accordance with the stockholder's
instructions with respect to the election of directors. If no such instructions
are specified, the proxy will be voted FOR the election as directors of the
nominees named below, or of such substitute nominee or nominees as may be
designated by the Board of Directors if the nominees named below are unable to
serve.
It is expected that this proxy statement, accompanied by the Company's 1994
Annual Report, will be released on or about April 28, 1995.
STOCKHOLDERS ENTITLED TO VOTE AT MEETING
At the close of business on April 10, 1995, the Company had outstanding
3,318,586 shares of common stock, $.50 par value per share ("Common Stock"),
entitled to one vote per share on each matter. Only stockholders of record at
the close of business on April 10, 1995 shall be entitled to notice of and to
vote at the Annual Meeting and at any adjournment thereof.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following are the only persons who, to the knowledge of management, are
beneficial owners of more than 5% of the Company's outstanding Common Stock as
of April 10, 1995:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENTAGE
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- - - --------------------------------- ----------------------- ----------
<S> <C> <C>
FMR Corp. 189,300(1) 5.7
82 Devonshire Street
Boston, Massachusetts
02109-3614
T. Rowe Price Associates, Inc. 200,000(2) 6.0
100 East Pratt Street
Baltimore, Maryland 21202
Nicholas Company, Inc. 201,500 6.1
700 North Water Street
Milwaukee, Wisconsin 53202
M. Dewey Morris, Jr. 201,960 6.1
202 Lavista Drive
Nashville, Tennessee 37215
</TABLE>
<PAGE> 4
- - - ---------------
(1) FMR Corp. is a "person" as defined under Section 13(d)(3) of the Securities
Exchange Act of 1934, has sole dispositive power of 189,300 shares and
serves as investment adviser to the following:
<TABLE>
<CAPTION>
NUMBER SOLE SHARED SOLE SHARED
OF PERCENTAGE VOTING VOTING DISPOSITIVE DISPOSITIVE
SHARES OF CLASS POWER POWER POWER POWER
-------- ----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Fidelity Low-Priced Stock
Fund...................... 189,300 5.7 189,300
</TABLE>
(2) T. Rowe Price Associates, Inc. is a "person" as defined under Section
13(d)(3) of the Securities Exchange Act of 1934, has sole dispositive power
of 200,000 shares, and serves as investment advisor to the following:
<TABLE>
<CAPTION>
NUMBER SOLE SHARED SOLE SHARED
OF PERCENTAGE VOTING VOTING DISPOSITIVE DISPOSITIVE
SHARES OF CLASS POWER POWER POWER POWER
-------- ----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
T. Rowe Price Small Cap
Value Fund, Inc........... 200,000 6.0 200,000
</TABLE>
ELECTION OF DIRECTORS
The directors of the Company will be elected at the Annual Meeting for the
term of one year and until their successors are elected and qualify. The Company
recommends a vote FOR the election as director of each of the nominees below.
The accompanying proxy will be voted FOR the nominees whose names are set forth
below unless other specification is made on the proxy. All of the nominees are
now members of the Board of Directors of the Company and each nominee was
elected a director at the 1994 Annual Meeting. All nominees have agreed to serve
if elected. Due to the recent death of Mr. Charles R. Spencer, the Board of
Directors has reduced the number of directors constituting the entire Board of
Directors from ten directors to nine directors. Although the Company does not
contemplate that any of the nominees named will be unavailable for election, in
the event a vacancy in the slate of nominees is occasioned by death or other
unexpected occurrence, it is presently intended that the proxy will be voted for
the election of a substitute nominee who shall be designated by the Board of
Directors.
The following table sets forth certain information for each nominee:
<TABLE>
<CAPTION>
NUMBER OF
YEAR SHARES OF
FIRST COMMON
POSITIONS WITH COMPANY ELECTED STOCK OWNED PERCENT
PRINCIPAL OCCUPATIONS AS ON OF
NAME AGE AND AFFILIATIONS DIRECTOR APRIL 10, 1995 CLASS
- - - ------------------------ --- -------------------------------- -------- -------------- ------
<S> <C> <C> <C> <C> <C>
William F. Ballhaus 76 Private investor; Director, 1984 7,000 *
Northrop Corporation, an
aerospace manufacturer
(1974-93)
Edgar R. Berner 54 Chairman of the Board of the 1968 54,935(1) 1.7
Company; Managing Director,
The Wicks Group of Companies,
an investment company;
Director, Broadcasting
Partners, Inc., an owner and
operator of radio stations;
Managing Director, New King
Street Development Group,
Inc., a real estate
development company (1987-90)
Richard O. Berner 42 Partner, Berner & Berner, P.C., 1981 47,614(1) 1.4
a law firm; Chairman of the
Board, Concord Fund, a mutual
fund
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NUMBER OF
YEAR SHARES OF
FIRST COMMON
POSITIONS WITH COMPANY ELECTED STOCK OWNED PERCENT
PRINCIPAL OCCUPATIONS AS ON OF
NAME AGE AND AFFILIATIONS DIRECTOR APRIL 10, 1995 CLASS
- - - ------------------------ --- -------------------------------- -------- -------------- -----
<S> <C> <C> <C> <C> <C>
Nicholas A. Fedoruk 54 Environmental Policy Consultant; 1973 70,350(1) 2.1
Environmental Policy Director,
Citizen Action (1990-92);
Director, Energy Conservation
Coalition, an alliance of
environmental and consumer
organizations (1987-90)
Oliver R. Grace, Jr. 41 Private investor; Chairman, 1982 10,164 *
Andersen Group, Inc., a dental
products and video
broadcasting equipment
manufacturing company
Donald B. Hauk 50 Executive Vice President and 1988 70,553(2) 2.1
Chief Financial Officer of the
Company
Leroy M. Parker, M.D. 51 Co-Director, Deaconess-Dana 1986 165,253(1) 5.0
Farber Oncology Program;
Associate Professor of
Medicine and Associate
Physician, Dana Farber Cancer
Institute, Harvard Medical
School
Douglas R. Stern 45 President and CEO, United Media, 1994 0 *
a licensing and newspaper
syndication company (1993-
present); President, National
Research Group, a market
research firm (1991-1993);
President and Publisher,
Horticulture Magazine (1988-
1991); Managing Director, The
Wicks Group of Companies, an
investment company (1988-1991)
Keith M. Thompson 54 President and Chief Executive 1986 133,000(3) 4.0
Officer of the Company;
Director, Acklands Limited, a
Canadian automotive parts and
industrial supplies
distributor
</TABLE>
- - - ---------------
* Less than one percent
(1) Directors Edgar R. Berner and Richard O. Berner are brothers, Director
Nicholas A. Fedoruk's wife is their sister as is the wife of Director Dr.
Leroy M. Parker. Edgar R. Berner is a trustee or co-trustee for trusts
owning 18,120 shares as to which he disclaims beneficial ownership of
17,952 shares. Mr. Fedoruk's wife owns 38,706 shares as to which Mr.
Fedoruk disclaims beneficial ownership. Mr. Fedoruk's wife is co-trustee
with Edgar R. Berner of trusts owning 4,320 shares as to which Mr. Fedoruk
disclaims beneficial ownership. Mr. Fedoruk's wife is an executrix of an
estate owning 20,324 shares as to which Mr. Fedoruk disclaims beneficial
ownership. Dr. Parker's wife owns 37,115 shares as to which Dr. Parker
disclaims beneficial ownership. Dr. Parker's wife is co-trustee with Edgar
R. Berner of trusts owning 12,960 shares as to which Dr. Parker disclaims
beneficial ownership. Dr. Parker's wife is trustee of other trusts owning
87,490 shares as to which Dr. Parker disclaims beneficial ownership. Dr.
Parker's wife is co-
3
<PAGE> 6
trustee with Tanya Fedoruk, Director Nicholas A. Fedoruk's daughter, of a
trust owning 864 shares as to which Dr. Parker disclaims beneficial
ownership. Dr. Parker's wife is an executrix, together with Mr. Fedoruk's
wife as referred to above, of an estate owning 20,324 shares as to which
Dr. Parker disclaims beneficial ownership. The share totals listed in the
table above include the shares for which directors or their spouses hold
voting or dispositive power regardless of whether beneficial ownership is
disclaimed.
(2) Includes 14,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995 and 35,803 shares owned by Mr. Hauk's wife as to which Mr.
Hauk disclaims beneficial ownership.
(3) Includes 15,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
The Board of Directors' Executive Committee (Messrs. Edgar R. Berner,
Richard O. Berner, Spencer and Thompson) met five times in 1994. Primarily, it
exercises the power of the Board when the latter is in recess. The Board's
Compensation and Stock Option Committee (Messrs. Ballhaus, Stern and Richard O.
Berner) met one time in 1994; its primary function is to review officers' and
directors' compensation and to grant awards under the Company's Stock
Compensation Plan. The Board's Audit Committee (Messrs. Spencer, Fedoruk and
Ballhaus) met two times in 1994; its primary function is to review the work of
the Company's internal auditors and independent accountants. The Board's
Retirement Committee (Messrs. Richard O. Berner, Fedoruk, Grace and Spencer) met
one time in 1994; its primary function is to review the Company's retirement and
Section 401(k) savings plans. The Board does not have a Nominating Committee.
The Board of Directors met five times in 1994. During 1994, all directors
attended at least 75% of the aggregate number of meetings of (1) the Board of
Directors held during the period for which they were directors and (2) standing
committees on which they served during the period, except Mr. Grace who attended
67 percent of such Board and Committee meetings.
Directors (other than the President and Executive Vice President) receive
monthly retainers of $500. Additionally, directors (other than the Chairman of
the Board, the President and Executive Vice President) receive $500 for
attendance at each meeting of the Board of Directors or meeting of a Committee
of the Board. The Executive Committee members (other than the President) receive
an additional monthly retainer of $300. Each nonemployee director, except for
Messrs. Ballhaus, Parker and Stern, is included in a group life insurance policy
in the amount of $50,000 for which the Company paid an average annual premium of
$114 each in 1994. In addition, directors may be reimbursed for their expenses
for attendance at meetings of the Board or committees thereof.
4
<PAGE> 7
EXECUTIVE OFFICERS
The following table sets forth certain information for all of the executive
officers of the Company indicating all positions and offices with the Company.
All such persons have been appointed to serve until the next annual election of
officers (which shall occur on June 8, 1995) and their successors are appointed,
or until their earlier resignation or removal. No other person other than those
listed below has been chosen to become an executive officer of the Registrant.
<TABLE>
<CAPTION>
NUMBER
OF
SHARES
OF
COMMON
STOCK
YEARS OWNED ON PERCENT
SERVED AS APRIL OF
NAME OFFICE AGE OFFICER 10, 1995 CLASS
- - - ----------------------- -------------------------------- --- ---------- -------- -------
<S> <C> <C> <C> <C> <C>
Edgar R. Berner Chairman of the Board of 54 9 (1) (1)
Directors and Director
Keith M. Thompson President, Chief Executive 54 9 (1) (1)
Officer and Director
Donald B. Hauk Executive Vice President, Chief 50 8 (1) (1)
Financial Officer and Director
Douglas G. Goetsch Vice President and Treasurer 40 -- 21,768 (2) .7
Thomas J. Rutkowski Vice President 52 -- 19,557 (3) .6
Richard M. Boesinger Vice President 52 8 20,249 (4) .6
Larry C. Lumme Vice President 48 6 18,614 (5) .6
Anthony R. Dainora Secretary 43 -- 12,436 (6) .4
All directors and 634,213 (7) 18.7
executive officers as
a group
</TABLE>
- - - ---------------
(1) Same as information presented under "Election of Directors."
(2) Includes 10,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
(3) Includes 16,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
(4) Includes 1,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
(5) Includes 4,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
(6) Includes 5,600 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
(7) Includes 65,600 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 10, 1995.
Each of the executive officers listed above has served the Company in that
capacity for the past five years except for Messrs. Goetsch, Rutkowski and
Dainora who joined the Company in 1986, 1992 and 1985, respectively, and were
elected executive officers of the Company in 1995. Mr. Rutkowski was employed by
Hayden, Inc., a wholly-owned subsidiary of The Equion Corporation, as Vice
President and General Manager from 1989 to 1992.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or to be paid by the
Company and its subsidiaries for the fiscal years ended December 31, 1994, 1993
and 1992 to: (a) the Chief Executive Officer ("CEO") and (b) the four most
highly compensated executive officers other than the CEO:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------- SECURITIES
BONUS UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY (1) OPTIONS(#) COMPENSATION
- - - ------------------------------------------- ----- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Edgar R. Berner 1994 $109,600 -- -- $ 31,000(2)
Chairman of Board 1993 109,200 -- -- 25,368(2)
1992 108,400 -- -- 18,866(2)
Keith M. Thompson 1994 291,154 $167,899 15,000 4,620(3)
President and Chief Executive Officer 1993 270,400 156,831 30,000 4,497(3)
1992 250,120 141,317 -- 4,221(3)
Donald B. Hauk 1994 182,500 94,702 10,000 4,620(3)
Executive Vice President and Chief 1993 170,000 88,739 30,000 4,497(3)
Financial Officer 1992 157,430 80,053 -- 4,364(3)
Richard M. Boesinger 1994 125,922 50,787 -- 4,017(3)
Vice President and Treasurer 1993 133,500 54,200 2,500 3,910(3)
1992 126,230 49,924 -- 3,920(3)
Larry C. Lumme 1994 112,250 22,641 5,000 2,772(3)
Vice President 1993 106,000 43,035 7,500 2,698(3)
1992 100,100 39,589 -- 3,301(3)
</TABLE>
- - - ---------------
(1) Bonuses awarded for the fiscal year shown, but paid in the subsequent year.
(2) On September 21, 1989, the Company granted Mr. Edgar R. Berner a performance
share program under The Republic Automotive Parts, Inc. Stock Compensation
Plan (the "Stock Compensation Plan"). The program provides an award cycle
commencing September 21, 1989, and continuing until September 21, 1999. The
program target for the program is to compensate and retain Mr. Berner as
Chairman of the Company. If Mr. Berner is employed as Chairman of the
Company on September 21, 1999, the program target will have been 100% met.
Mr. Berner will have no rights as a stockholder with respect to any
performance shares. All performance shares shall be forfeited by Mr. Berner
in the event that he terminates his employment with the Company prior to
the occurrence of a "Terminating Event." A "Terminating Event" is defined
as one of the following occurrences: (i) the program target is considered
to have been 100% met as provided above; (ii) Mr. Berner is terminated by
the Company for any reason as Chairman; (iii) Mr. Berner dies while he is
an employee of the Company; or (iv) there is a change of control of the
Company (as defined in the Stock Compensation Plan) and Mr. Berner
terminates his employment within three years after such change of control.
If the Terminating Event occurs on or after September 21, 1990, in order to
create an ongoing incentive for Mr. Berner to remain with the Company and
to perform the important role he has in the past, and because the award
under the performance share program would not be made until such later date
and is therefore at risk for an extended period of time, Mr. Berner shall
receive an award under the Plan of 65,760 shares of Common Stock plus an
additional amount of shares equivalent to 12% per annum of such number of
shares calculated with a starting date of September 21, 1990 and prorated
over the number of days which have elapsed subsequent to such date and
prior to the date the Terminating Event occurs. Effective August 2, 1993,
Mr. Berner's interest in the performance share program was transferred to
an irrevocable trust, of which he is neither a trustee nor a beneficiary,
for the benefit of his descendants. Of the amounts reported as All Other
Compensation for
6
<PAGE> 9
Mr. Berner, $27,712 for 1994, $22,092 for 1993 and $15,614 for 1992 is
calculated by dividing the difference between 12% and 120% of the long-term
applicable federal rate at the inception of the plan by 12% and multiplying
the quotient by the December value of the total number of shares allocated
in the year. The balance of $3,288 for 1994, $3,276 for 1993 and $3,252 for
1992 represents Company contributions under a defined contribution plan
under Section 401(k) of the Internal Revenue Code equal to that of Mr.
Berner's contribution not to exceed 3% of his annual compensation.
(3) Represents Company contributions under a defined contribution plan under
Section 401(k) of the Internal Revenue Code equal to 50% of each
participant's contribution not to exceed 3% of each participant's annual
compensation.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR EXPIRATION FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE DATE -------------------
NAME GRANTED(#) FISCAL YEAR(%) (PER SHARE) (MM/DD/YY) 5% 10%
- - - ------------------------------ ---------- -------------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Edgar R. Berner............... 0
Keith M. Thompson............. 15,000 18.1 $ 13.25 12/15/99 $54,900 $121,350
Donald B. Hauk................ 10,000 12.1 13.25 12/15/99 36,600 80,900
Richard M. Boesinger.......... 0
Larry C. Lumme................ 5,000 6.0 13.25 12/15/99 18,300 40,450
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY
FISCAL YEAR- OPTIONS AT
END(#) YEAR-END(1)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
- - - ----------------------------- --------------- -------------- --------------- --------------------
<S> <C> <C> <C> <C>
Edgar R. Berner.............. 0 0/ 0
Keith M. Thompson............ 0 15,000/30,000 $ 22,290/$34,860
Donald B. Hauk............... 0 14,000/26,000 22,100/ 34,100
Richard M. Boesinger......... 0 1,000/ 1,500 1,810/ 2,715
Larry C. Lumme............... 0 4,000/ 8,500 5,620/ 8,905
</TABLE>
- - - ---------------
(1) Based on the closing sale price of the Common Stock of $13.44 on December
31, 1994.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE -------------------------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35
- - - ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 75,000 13,898 20,848 27,797 34,746 34,746 34,746
100,000 19,023 28,535 38,047 47,559 47,559 47,559
125,000 24,148 36,223 48,297 60,371 60,371 60,371
150,000 29,273 43,910 58,547 73,184 73,184 73,184
175,000 34,398 51,598 68,797 85,996 85,996 85,996
200,000 39,523 59,285 79,047 98,809 98,809 98,809
225,000 44,648 66,973 89,297 111,621 111,621 111,621
250,000 49,773 74,660 99,547 124,434 124,434 124,434
275,000 54,898 82,348 109,797 137,246 137,246 137,246
</TABLE>
7
<PAGE> 10
The Company and its subsidiaries have a pension plan for substantially all
of their employees. Contributions by the Company were made on an aggregate basis
and no amounts were identified as to any individuals. The amount of benefit
payable under the plan is dependent upon average compensation, age at
retirement, length of service and various other factors. The Company's officers,
including those officers who also serve as directors, participate in the plan on
the same basis as other employees. The above table sets forth the estimated
annual straight life annuity benefits under the plan following retirement at age
65 and indicated average compensation and years of service levels. Average
compensation means the average of the participant's salary and bonuses during
the five highest paid consecutive years of employment. Covered compensation for
1994 for Messrs. Berner, Thompson, Hauk, Boesinger and Lumme was: $110,040,
$150,000, $150,000, $150,000 and $150,000, respectively. Covered compensation
and benefits under the plan are limited by applicable federal law. Actual
benefits will not be offset by applicable Social Security or other benefits. All
named executive officers have nine years of credited service.
On September 21, 1989, the Company granted Mr. Edgar R. Berner a
supplemental retirement benefit. This benefit provides a 100% joint and survivor
annuity commencing at age 60 for Mr. Berner and his surviving spouse commencing
at $35,000 per year, payable monthly, which sum will be increased quarterly by
$1,250 for each additional quarter he is employed by the Company. The starting
date for measuring each such year is September 30, 1989. In no event will the
annuity exceed $75,000 per year. Actual benefits will be offset by applicable
benefits provided from the Company's pension plan described in the preceding
paragraph. In the event of Mr. Berner's death, his spouse will be paid the
annuity as if he had survived until age 60. In the event of a change of control,
three additional years of service will be credited and the pension will be paid
immediately in a cash lump sum reduced actuarially and subject to offset by the
Company's pension plan. If Mr. Berner should terminate his employment before age
60, he will retain a vested benefit payable at age 60 determined by his length
of service. All payments will be paid in cash from the Company's general funds
at the time payments become due. During 1994, $92,388 was accrued under this
plan.
The Company and each of Messrs. Thompson, Hauk, Boesinger and Lumme have
entered into agreements dated October 26, 1988, which provide that the Company,
in order to encourage its management to remain with the Company and to continue
to devote full attention to the Company's business in the event an effort is
made to obtain control of the Company through a tender offer or otherwise, will
continue paying its executives their then current annual base salary for a
period of two years after termination in the case of Messrs. Thompson and Hauk,
and one year after termination in the case of Messrs. Boesinger and Lumme in the
event that a change of control takes place and the executive is involuntarily
terminated. There are no employment contracts between the Company and any
executive officer.
The Company provides a medical reimbursement plan for all executive
officers which covers eligible expenses which are not payable under the basic
group insurance plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Board's Compensation and Stock Option Committee are
Messrs. Ballhaus, Stern and Richard O. Berner. Neither Messrs. Ballhaus or Stern
is or was, during 1994 or previously, an officer or employee of the Company or
any of its subsidiaries. During 1994 Richard O. Berner served as Assistant
Secretary of the Company, but was not an employee of the Company. The Company
retained the law firm of Berner & Berner, P.C., as its legal counsel in certain
matters in 1994. Richard O. Berner, is a member of the firm. The dollar amount
of fees paid by the Company to the firm was $8,081 during 1994.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee (the "Committee") of the Board
of Directors is responsible for the administration of the executive compensation
program of the Company. The Committee is composed of three non-employee
Directors who are not eligible to participate in the Company's compensation
plans.
8
<PAGE> 11
In 1994, the compensation of the executive officers of the Company
consisted of salary, cash awards under the Executive Bonus Plan (the "Bonus
Plan") and stock option awards under the Company's Stock Compensation Plan (the
"Stock Plan"). Salaries are reviewed by the Committee, generally annually,
primarily on the basis of individual performance and contributions to the
Company. The recommendations of the Committee as to salary adjustments, the
parameters of the Bonus Plan and awards under the Stock Plan are acted upon by
the Board.
In the case of salary adjustments, the performance and contributions of the
executive officers are measured against formal and informal goals and objectives
with respect to the total Company performance, as appropriate for the respective
responsibilities of such officers. From a quantitative perspective, specific
measures of performance considered in dealing with compensation in the aggregate
include net earnings, cash flow and return on investment. From a qualitative
point of view, objectives have included the quality of long-term planning and
progress in organizational and management development.
At the same time, the Committee has taken into account the relationship of
the compensation of the Company's executive officers to the compensation of
individuals occupying comparable positions in other organizations, with a view
to ensuring that executives are fairly compensated and thus appropriately
motivated and are retained in the employment of the Company.
In the case of the Bonus Plan, the amount available each year for awards is
based solely on a formula tied to the increase in earnings of the Company over
the prior year, before income taxes and after deducting such awards. The
Committee establishes a target bonus level for each participant in the Bonus
Plan which represents a specified percentage of the participant's base salary
which will be awarded as a bonus if the Company's earnings exceed a target level
set by the Committee for the year. Certain adjustments beyond the control of the
executive officers are made to the earnings. Additionally, the awards are
increased or decreased based upon a formula tied to the change in return on
investment from the prior year.
All officers and key employees participate in the Stock Plan under which
options granted typically vest 20% upon grant and 20% on the four succeeding
anniversaries of the date of grant. Such options generally expire five years
from the date of grant. The Committee believes that stock options have been
effective in attracting and retaining officers and key employees. During 1994,
the Committee awarded stock option grants in the aggregate amount of 83,000
shares.
In making a salary increase of approximately 8% effective January, 1994 to
Mr. Keith M. Thompson, President and CEO of the Company, the Committee examined
specific measures of performance of the Company, including quantitative factors
such as percent increase in net earnings, return on stockholders' equity and
return on assets. From a qualitative point of view, the Committee's review
included the progress under his direction in developing acquisitions and the
strategic alternatives available to the Company.
The Omnibus Budget Reconciliation Act of 1993 (the "Act") imposes a limit
of $1 million, with certain exceptions, on the amount that a publicly held
corporation may deduct in any year for the compensation paid or accrued with
respect to each of its five most highly compensated officers. None of the
Company's executive officers currently receives compensation exceeding the
limits imposed by the Act. While the Committee cannot predict with certainty how
the Company's executive compensation might be affected in the future by the Act
or applicable tax regulations issued thereunder, the Committee intends to try to
preserve the tax deductibility of all executive compensation while maintaining
the Company's executive compensation plan as described in this report.
Compensation and Stock Option
Committee
William F. Ballhaus, Chairman
Richard O. Berner
Douglas R. Stern
9
<PAGE> 12
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
REPUBLIC S&P AUTO
MEASUREMENT PERIOD AUTOMOTIVE THE NASDAQ PARTS - AFTER
(FISCAL YEAR COVERED) PARTS, INC. STOCK MARKET MARKET
<S> <C> <C> <C>
1989 100 100 100
1990 79 74 81
1991 158 135 104
1992 158 170 105
1993 200 198 126
1994 224 172 132
</TABLE>
COMPLIANCE WITH SECTION 16(a)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were satisfied.
THE COMPANY'S ACCOUNTANTS
Price Waterhouse LLP has been selected by the Board of Directors as the
Company's independent accountants for 1995. Price Waterhouse LLP has served as
the independent accountants for the Company for many years. It is anticipated
that their representative will be present at the Annual Meeting and will have an
opportunity to make a statement if he desires to do so. He will also be
available to respond to any appropriate questions.
10
<PAGE> 13
VOTING PROCEDURES AND OTHER MATTERS
A quorum shall consist of the holders of a majority of the shares of the
Company's Common Stock, entitled to vote at the Annual Meeting, present in
person or by proxy.
In the event that sufficient votes in favor of the proposal set forth in
the Notice of Annual Meeting of Stockholders are not received by the time
scheduled for the Annual Meeting, the persons named as proxies may propose one
or more adjournments of such Annual Meeting to permit further solicitation of
proxies with respect to such proposal. Any such adjournment will require the
affirmative vote of the holders of the majority of the outstanding shares of the
Company's Common Stock entitled to vote and present in person or by proxy at the
session of such Annual Meeting to be adjourned. The persons named as proxies
will vote in favor of such adjournment, if proposed, those proxies which they
are entitled to vote in favor of such proposal and against such adjournment
those proxies required to be voted against such proposal.
At all elections of directors, the voting may, but need not be, by ballot
and a plurality of the votes cast thereat shall elect. Abstentions will be
counted as being present at the Annual Meeting and will have the same effect as
votes against the election of any director. Broker non-votes will not be counted
as being present at the Annual Meeting and will have no effect on the outcome of
the election of any director.
In the event any other matter is presented to the meeting, it is intended
that the enclosed proxy will be voted upon such matter according to the judgment
of the proxy holders named therein. Management is not aware that any other
matter is to be presented.
COST OF SOLICITATION
The cost of soliciting proxies in the enclosed form has been or will be
borne by the Company. In addition to solicitation of stockholders by mail,
regular employees of the Company may solicit proxies by telephone, telegraph or
personal interview, the cost being borne by the Company. Arrangements may be
made with brokerage houses and other custodians, nominees and fiduciaries to
send proxies and proxy material to their principals, and the Company may
reimburse them for their expenses in so doing. It is not anticipated that such
expenses will exceed $4,000.
STOCKHOLDERS' PROPOSALS
Stockholders' proposals for inclusion in the proxy statement and proxy form
for the 1996 Annual Meeting of Stockholders must be received at the Company's
principal executive office no later than December 30, 1995.
PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
Brentwood, Tennessee
Dated: April 28, 1995
By Order of the Board of Directors,
/s/ Anthony R. Dainora
ANTHONY R. DAINORA
Secretary
The Company's 1994 Annual Report on Form 10-K filed with the Securities and
Exchange Commission is available to stockholders on request without charge by
writing: Anthony R. Dainora, Secretary, Republic Automotive Parts, Inc., 500
Wilson Pike Circle, Suite 115, P.O. Box 2088, Brentwood, Tennessee 37024.
11
<PAGE> 14
APPENDIX A
REPUBLIC AUTOMOTIVE PARTS, INC.
500 WILSON PIKE CIRCLE, SUITE 115, P.O. BOX 2088, BRENTWOOD, TENNESSEE 37024
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edgar R. Berner and Richard O. Berner as
proxies, each with the power to appoint his substitute, and hereby authorizes
them or either of them acting in the absence of the other to represent and to
vote, as designated below, all the shares of common stock of Republic Automotive
Parts, Inc. held of record by the undersigned on April 10, 1995, at the Annual
Meeting of Stockholders to be held on June 8, 1995, or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF / / FOR all nominees listed below / / WITHHOLD AUTHORITY to
DIRECTORS (except as marked to the contrary below) vote for all nominees listed below
W. F. Ballhaus E. R. Berner R. O. Berner N. A. Fedoruk O. R. Grace, Jr.
D. B. Hauk L. M. Parker, M.D. Douglas R. Stern K. M. Thompson
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- - - --------------------------------------------------------------------------------
(TO BE DATED AND SIGNED ON REVERSE SIDE)
In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS.
Dated , 1995
--------------------
-------------------------------
Signature(s)
NOTE: PLEASE DATE AND SIGN
EXACTLY AS NAME APPEARS
THEREON. WHEN SHARES ARE HELD
BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN PLEASE GIVE
FULL TITLE AS SUCH. IF SIGNER
IS A CORPORATION, PLEASE SIGN
IN FULL CORPORATE NAME BY
AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.
PLEASE SIGN AND MAIL IN ENCLOSED ENVELOPE
