<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 13, 1996
---------------------
Brentwood, Tennessee
April 30, 1996
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 13, 1996, 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 15, 1996 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
13, 1996, 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 1995
Annual Report, will be released on or about April 30, 1996.
STOCKHOLDERS ENTITLED TO VOTE AT MEETING
At the close of business on April 15, 1996, the Company had outstanding
3,387,818 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 15, 1996 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 15, 1996:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENTAGE
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- --------------------------------- -------------------- ---------
<S> <C> <C>
Mr. Albert O. Nicholas 285,500(1) 8.4
Nicholas Company, Inc.
700 North Water Street
Milwaukee, Wisconsin 53202
T. Rowe Price Associates, Inc. 275,500(2) 8.1
T. Rowe Price Small Cap Value
Fund, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
M. Dewey Morris, Jr. 201,960 6.0
202 Lavista Drive
Nashville, Tennessee 37215
</TABLE>
- ---------------
(1) Nicholas Company, Inc., a registered investment adviser whose clients own an
aggregate of 285,500 shares of the Common Stock, and Mr. Albert O.
Nicholas, president, director and majority shareholder of Nicholas Company,
Inc., are deemed to have beneficial ownership of such 285,500 shares of the
Company. In the statement on Schedule 13G filed with the SEC by Mr.
Nicholas and Nicholas Company, Inc. dated January 26, 1996, Mr. Nicholas
disclaimed beneficial ownership of the shares.
<PAGE> 4
(2) These shares of the Common Stock are owned by T. Rowe Price Small Cap Value
Fund, Inc. ("Price Fund"), a registered investment company having sole
voting power over such shares, for which T. Rowe Price Associates, Inc.
("Price Associates"), a registered investment adviser, serves as investment
adviser with dispositive power over such shares. Price Fund and Price
Associates are deemed to be beneficial owners of such shares; however,
Price Associates disclaimed beneficial ownership of such shares in its
Statement on Schedule 13G filed with the SEC dated February 14, 1996.
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 1995 Annual Meeting. All nominees have agreed to serve
if elected. 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>
YEAR NUMBER OF
FIRST SHARES OF
POSITIONS WITH COMPANY ELECTED COMMON STOCK PERCENT
PRINCIPAL OCCUPATIONS AS OWNED ON OF
NAME AGE AND AFFILIATIONS DIRECTOR APRIL 15, 1996(4) CLASS
- ------------------------ --- ----------------------------- ------- -------------- ------
<S> <C> <C> <C> <C> <C>
William F. Ballhaus 77 Private investor; Director, 1984 7,000 *
Northrop Corporation, an
aerospace manufacturer
(1974-93)
Edgar R. Berner 55 Chairman of the Board of the 1968 55,030(1) 1.6
Company (1986-present);
Managing Director, The
Wicks Group of Companies,
an investment company
(1990- present); Director,
Broadcasting Partners,
Inc., an owner and operator
of radio stations
(1993-1995)
Richard O. Berner 43 Partner, Berner & Berner, 1981 47,614(1) 1.4
P.C., a law firm
(1982-present); Chairman of
the Board, Concord Fund, a
mutual fund (1991-present)
Nicholas A. Fedoruk 55 Principal, Verdanc & 1973 70,350(1) 2.1
Associates, an
environmental consulting
firm (1995-present);
Environmental Policy
Consultant (1992-1995);
Environmental Policy
Director, Citizen Action
(1990-92)
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
YEAR NUMBER OF
FIRST SHARES OF
POSITIONS WITH COMPANY ELECTED COMMON STOCK PERCENT
PRINCIPAL OCCUPATIONS AS OWNED ON OF
NAME AGE AND AFFILIATIONS DIRECTOR APRIL 15, 1996(4) CLASS
- ------------------------ --- ----------------------------- -------- -------------- -------
<S> <C> <C> <C> <C> <C>
Oliver R. Grace, Jr. 42 Private investor; Chairman, 1982 10,164 *
Andersen Group, Inc., a
dental products and video
broadcasting equipment
manufacturing company
(1990-present); Director,
London American Growth
Trust, PLC, an investment
company (1995-present)
Donald B. Hauk 51 Executive Vice President and 1988 77,687(2) 2.3
Chief Financial Officer of
the Company (1986-present)
Leroy M. Parker, M.D. 52 Associate Professor of 1986 165,253(1) 4.9
Medicine and Associate
Physician, Dana Farber
Cancer Institute, Harvard
Medical School
(1991-present);
Co-Director, Deaconess-Dana
Farber Oncology Program
(1991-1995)
Douglas R. Stern 46 President and CEO, United 1994 1,000 *
Media, 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 55 President and Chief Executive 1986 142,131(3) 4.2
Officer of the Company
(1986-present); Director,
Acklands Limited, a
Canadian automotive parts
and industrial supplies
distributor (1991-present)
</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
3
<PAGE> 6
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-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.
(2) Includes 22,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 15, 1996 and 35,803 shares owned by Mr. Hauk's wife as to which Mr.
Hauk disclaims beneficial ownership.
(3) Includes 24,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 15, 1996.
(4) 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.
The Board of Directors has four standing committees, the Audit Committee,
the Compensation and Stock Option Committee, the Executive Committee and the
Retirement Committee. The Board of Directors does not have a nominating
committee. The functions normally performed by a nominating committee are
performed by the Board of Directors.
The Board of Directors' Executive Committee (Messrs. Edgar R. Berner,
Richard O. Berner and Thompson) met four times in 1995. 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
twice in 1995; 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. Ballhaus, Fedoruk and Parker) met two times
in 1995; 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 and Grace) did not meet in 1995; its primary function
is to review the Company's retirement and Section 401(k) savings plans.
The Board of Directors met four times in 1995. During 1995, 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.
Directors (other than the Chairman of the Board, the President and
Executive Vice President) receive monthly retainers of $750. Additionally,
directors (other than the Chairman of the Board, the President and Executive
Vice President) receive $750 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 Chairman of the Board and 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
$120 each in 1995. 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 13, 1996) 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 15, 1996 CLASS
- ----------------------- -------------------------------- --- ---------- -------- -------
<S> <C> <C> <C> <C> <C>
Edgar R. Berner Chairman of the Board of 55 10 (1) (1)
Directors and Director
Keith M. Thompson President, Chief Executive 55 10 (1) (1)
Officer and Director
Donald B. Hauk Executive Vice President, Chief 51 9 (1) (1)
Financial Officer and Director
Douglas G. Goetsch Vice President and Treasurer 41 1 27,389 (2) .8
Thomas J. Rutkowski Vice President 53 1 27,241 (3) .8
Anthony R. Dainora Secretary 44 1 15,935 (4) .5
All directors and 629,514 (5) 18.1
executive officers as
a group
</TABLE>
- ---------------
(1) Same as information presented under "Election of Directors."
(2) Includes 15,500 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 15, 1996.
(3) Includes 23,500 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 15, 1996.
(4) Includes 9,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 15, 1996.
(5) Includes 94,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 15, 1996.
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 supplier of automotive replacement parts to the Company, a
wholly-owned subsidiary of The Equion Corporation, as Vice President and General
Manager from 1988 to 1992. Mr. Rutkowski was previously employed by one of the
Company's subsidiaries from January 1987 until July 1988 at which time the
Company sold the business and related assets of the subsidiary, which employed
Mr. Rutkowski, to Hayden, Inc. Mr. Goetsch has been responsible for the
Company's management information systems since 1989. Mr. Dainora is the
Controller and has been responsible for financial and tax reporting and
compliance since 1989.
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, 1995, 1994
and 1993 to: (a) the Chief Executive Officer ("CEO") and (b) the three most
highly compensated executive officers other than the CEO:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------- OTHER SECURITIES
BONUS ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY (1) COMPENSATION OPTIONS(#) COMPENSATION
- --------------------------------- ----- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Edgar R. Berner 1995 $109,600 -- -- -- $ 33,031(2)
Chairman of Board 1994 109,600 -- -- -- 31,000(2)
1993 109,200 -- -- -- 25,368(2)
Keith M. Thompson 1995 314,462 -- -- 15,000 4,620(3)
President and Chief Executive 1994 291,154 $167,899 -- 30,000 4,620(3)
Officer 1993 270,400 156,831 -- 4,497(3)
Donald B. Hauk 1995 197,711 -- -- 10,000 4,620(3)
Executive Vice President and 1994 182,500 94,702 -- 30,000 4,620(3)
Chief Financial Officer 1993 170,000 88,739 -- 4,497(3)
Thomas J. Rutkowski(4) 1995 122,192 -- $ 16,998(5) 5,000 4,116(3)
Vice President 1994 -- -- -- -- --
1993 -- -- -- -- --
</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 Mr. Berner, $29,743 for 1995, $27,712 for 1994 and $22,092
for 1993 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
6
<PAGE> 9
year. The balance of $3,288 for 1995, $3,288 for 1994 and $3,276 for 1993
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.
(4) Mr. Rutkowski was named an executive office of the Company effective January
1, 1995.
(5) Includes $13,279 for a car allowance.
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(2)
OPTIONS EMPLOYEES IN BASE PRICE DATE -------------------
NAME GRANTED(#)(1) FISCAL YEAR(%) (PER SHARE) (MM/DD/YY) 5% 10%
- ---------------------------- ------------- -------------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Edgar R. Berner............. 0
Keith M. Thompson........... 0
Donald B. Hauk.............. 0
Thomas J. Rutkowski......... 5,000 10.2 $ 13.38 12/14/00 $18,500 $ 40,850
</TABLE>
- ---------------
(1) Options vests 20% upon grant and 20% on the four succeeding anniversaries of
the date of grant.
(2) The amounts shown in these two columns represent the potential realizable
values using the options granted and the exercise price. The assumed rates
of return are set by the SEC proxy statement disclosure rules and are not
intended to forecast the future appreciation of the Company's Common Stock.
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 None 0/ 0
Keith M. Thompson............ 0 None 24,000/21,000 $ 22,500/$15,000
Donald B. Hauk............... 0 None 22,000/18,000 22,500/ 15,000
Thomas J. Rutkowski.......... 0 None 23,500/14,000 55,705/ 16,270
</TABLE>
- ---------------
(1) Calculated based on the share price of the Common Stock on December 29, 1995
(the last business day of fiscal year 1995) of $12.88 less the option
exercise price. An option is in-the-money if the market value of the Common
Stock subject to the option exceeds the exercise price.
7
<PAGE> 10
PENSION PLANS
The following table shows estimated annual pension benefits payable to a
participant at normal retirement age under the Company's qualified defined
benefit plan and non-qualified supplemental executive retirement plan based on
average compensation that is covered under the plans and years of service with
the Company and its subsidiaries.
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 13,690 20,535 27,380 34,225 34,225 34,225
100,000 18,615 28,222 37,630 47,037 47,037 47,037
125,000 23,940 35,910 47,880 59,850 59,850 59,850
150,000 29,065 43,597 58,130 72,662 72,662 72,662
175,000 34,190 51,285 68,380 85,475 85,475 85,475
200,000 39,315 58,972 78,630 98,287 98,287 98,287
225,000 44,440 66,660 88,880 111,100 111,100 111,100
250,000 49,565 74,347 99,130 123,912 123,912 123,912
275,000 54,690 82,035 109,389 136,725 136,725 136,725
300,000 59,815 89,722 119,630 149,537 149,537 149,537
400,000 80,315 120,472 160,630 200,787 200,787 200,787
450,000 90,565 135,847 181,130 226,412 226,412 226,412
500,000 100,815 151,222 201,630 252,037 252,037 252,037
600,000 121,315 181,972 242,630 303,287 303,287 303,287
</TABLE>
The Company and its subsidiaries have a pension plan for substantially all
of their employees. Contributions by the Company are made on an aggregate basis
and no amounts are 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
1995 for Messrs. Berner, Thompson, Hauk and Rutkowski was: $110,040, $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 ten years of credited service except Mr. Rutkowski with six years of
credited service.
On January 1, 1995, the Company adopted a Supplemental Executive Retirement
Plan ("SERP") for key executive employees. Messrs. Thompson and Hauk have been
selected by the Company to be participants in the SERP. The plan provides a
supplemental pension benefit calculated based on average compensation as
determined under the Company's pension plan without regard to the limitations
under Sections 401(a)(17) and 415 of the Internal Revenue Code as defined in the
Company's pension plan which is described above less the actual benefit payable
under the Company's pension plan subject to the above limitations. All payments
will be paid in cash from the Company's general funds at the time the payments
become due. For the fiscal year 1995, $137,482 was accrued under the SERP.
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
8
<PAGE> 11
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. For the fiscal year 1995, $88,315 was accrued under this
plan.
The Company and each of Messrs. Thompson and Hauk 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 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;
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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 1995 or previously, an officer or employee of the Company or
any of its subsidiaries. During 1995, Richard O. Berner served as Assistant
Secretary of the Company, but was not an employee of the Company.
Berner & Berner, P.C., a legal firm in New York, New York of which Richard
O. Berner, a director of the Company, is a member, provides legal services to
the Company from time to time in return for fees and certain other benefits. The
Company utilized the services of Berner & Berner, P.C. during 1995. It is
expected that Berner & Berner, P.C. will continue to provide legal services to
the Company during 1996 although the amount of such services is unknown at this
time.
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.
In 1995, the Company's executive compensation program consisted of a
mixture of base 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"). The executive compensation program is 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 base
salary adjustments, the parameters of the Bonus Plan and awards under the Stock
Plan are acted upon by the Board.
In the case of base salary adjustments, the Committee subjectively
considers the performance and contributions of each executive officer as
measured against formal and informal goals and objectives with respect to the
total Company performance, as appropriate for the respective responsibilities of
each officer. 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.
9
<PAGE> 12
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 retail and wholesale
organizations of similar size to the Company, with a view to ensuring that
executives are fairly compensated and thus appropriately motivated and are
retained in the employment of the Company. Base pay levels for the executive
officers are generally in the middle of a competitive range of salaries.
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. No cash awards under the Bonus Plan were earned
in 1995 by any of the executive officers.
All executive officers and key management 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 believe stock option
grants are an effective way to align the interests of the Company's executive
and key management employees with its shareholders. During 1995, the Committee
awarded stock option grants in the aggregate of 49,000 shares to certain
executive officers and key management employees. The number of options awarded
to each individual was based on the Committee's assessment of the contributions
of each individual toward accomplishment of Company objectives. The size of the
previous option grants are considered in determining current awards.
In making a salary increase of approximately 8% effective January, 1995 to
Mr. Keith M. Thompson, President and CEO of the Company, the Committee
subjectively evaluated 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 and qualitative factors such as his
progress in developing acquisitions and strategic alternatives for the Company.
For 1995, Mr. Thompson did not receive an award under either the Company's Bonus
Plan or Stock Plan.
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
10
<PAGE> 13
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return of a $100 investment on December 31,
1990 in the Company's Common Stock against The NASDAQ Stock Market and the
Standard & Poor's Auto Parts-After Market Stock Price Index, assuming
reinvestment of all dividends.
<TABLE>
<CAPTION>
S&P Auto
Measurement Period Nasdaq Stock Parts - After
(Fiscal Year Covered) Republic Market Market
<S> <C> <C> <C>
1900 100 100 100
1991 200 160 183
1992 200 186 231
1993 253 214 268
1994 283 209 234
1995 271 295 289
</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, 1995 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were satisfied.
11
<PAGE> 14
THE COMPANY'S ACCOUNTANTS
Price Waterhouse LLP has been selected by the Board of Directors as the
Company's independent accountants for 1996. 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.
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 for purposes of determining a
quorum but will not be included in determining the number of votes cast and will
therefore have no effect on the outcome of 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.
12
<PAGE> 15
STOCKHOLDERS' PROPOSALS
Stockholders' proposals for inclusion in the proxy statement and proxy form
for the 1997 Annual Meeting of Stockholders must be received at the Company's
principal executive office no later than December 31, 1996.
PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
Brentwood, Tennessee
Dated: April 30, 1996
By Order of the Board of Directors,
/s/ Anthony R. Dainora
ANTHONY R. DAINORA
Secretary
THE COMPANY'S 1995 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.
13
<PAGE> 16
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 15, 1996, at the Annual
Meeting of Stockholders to be held on June 13, 1996, 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 NOMINEES.
Dated , 1996
------------------
--------------------------------
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
