<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 5, 1997
---------------------
Brentwood, Tennessee
April 25, 1997
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 5, 1997, 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;
2. To approve an amendment to the Republic Automotive Parts, Inc. Stock
Compensation Plan ("Stock Compensation Plan") to increase the maximum
number of shares of common stock (the "Common Stock") available for
Awards under the Stock Compensation Plan from 450,000 to 750,000;
3. To approve the Republic Automotive Parts, Inc. 1997 Stock Option Plan
for Non-Employee Directors; and
4. 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 7, 1997 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 5,
1997, 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, the amendment of the
Company's Stock Compensation Plan and the adoption of a stock option plan for
non-employee 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, FOR the amendment of the Company's
Stock Compensation Plan and FOR the adoption of the stock option plan for
non-employee directors.
It is expected that this proxy statement, accompanied by the Company's 1996
Annual Report, will be released on or about April 25, 1997.
STOCKHOLDERS ENTITLED TO VOTE AT MEETING
At the close of business on April 7, 1997, 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 7, 1997 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 7, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENTAGE
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- ----------
<S> <C> <C>
T. Rowe Price Associates, Inc. 315,500(1) 9.3
T. Rowe Price Small Cap Value Fund,
Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Dimensional Fund Advisors, Inc. 201,200(2) 5.9
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
- ---------------
(1) These securities are owned by various individuals and institutional
investors including T. Rowe Price Small Cap Value Fund, Inc. (which owns
300,500 shares, representing 8.8% of the shares outstanding) as to which T.
Rowe Price Associates, Inc. ("Price Associates") serves as investment
adviser with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates is deemed to be the beneficial owner
of such securities; however, Price Associates expressly disclaims that it
is, in fact, the beneficial owner of such securities.
<PAGE> 4
(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
adviser, is deemed to have beneficial ownership of 201,200 shares of common
stock as of December 31, 1996, all of which shares are held in portfolios of
DFA Investment Dimensions Group, Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimension Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
MATTERS TO BE PRESENTED AT THE MEETING
The Company intends to present for consideration at the Annual Meeting of
Stockholders the election of directors to serve until the next annual meeting of
stockholders, a proposal to amend the Company's Stock Compensation Plan to
increase the number of shares which may be awarded thereunder from 450,000 to
750,000 and a proposal to adopt a Stock Option Plan for non-employee directors.
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 1996 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
FIRST NUMBER OF SHARES
POSITIONS WITH COMPANY ELECTED OF COMMON STOCK PERCENT
PRINCIPAL OCCUPATIONS AS OWNED ON OF
NAME AGE AND AFFILIATIONS DIRECTOR APRIL 7, 1997(4) CLASS
- ---- --- ---------------------- -------- ---------------- -------
<S> <C> <C> <C> <C> <C>
William F. Ballhaus 78 Private investor; Director, 1984 7,000 *
Northrop Corporation, an
aerospace manufacturer
(1974-93)
Edgar R. Berner 56 Chairman of the Board of the 1968 55,123(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 44 Partner, Berner & Berner, P.C., 1981 47,614(1) 1.4
a law firm (1982-present);
Chairman of the Board, Concord
Fund, a mutual fund (1991-
present)
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
YEAR
FIRST NUMBER OF SHARES
POSITIONS WITH COMPANY ELECTED OF COMMON STOCK PERCENT
PRINCIPAL OCCUPATIONS AS OWNED ON OF
NAME AGE AND AFFILIATIONS DIRECTOR APRIL 7, 1997(4) CLASS
- ---- --- ---------------------- -------- ---------------- -------
<S> <C> <C> <C> <C> <C>
Nicholas A. Fedoruk 56 Principal, Verdance & 1973 70,354(1) 2.1
Associates, an environmental
consulting firm
(1995-present); Environmental
Policy Consultant (1992-1995);
Environmental Policy Director,
Citizen Action (1990-92)
Oliver R. Grace, Jr. 43 Private investor; Chairman, 1982 10,164 *
Andersen Group, Inc., a dental
products and video
broadcasting equipment
manufacturing company
(1990-present)
Donald B. Hauk 52 Executive Vice President and 1988 86,860(2) 2.5
Chief Financial Officer of the
Company (1986-present)
Leroy M. Parker, M.D. 53 Associate Professor of Medicine, 1986 165,313(1) 4.9
Dana Farber Partners Cancer
Care, Dana Farber Cancer
Institute, Brigham & Womans
Hospital (1996-present);
Associate Professor of
Medicine and Associate
Physician, Dana Farber Cancer
Institute, Harvard Medical
School (1991-1996); Co-
Director, Deaconess-Dana
Farber Oncology Program
(1991-1995)
Douglas R. Stern 47 President and CEO, United Media, 1994 1,000 *
a licensing and newspaper
syndication company (1993-
present); President, National
Research Group, a market
research firm (1991-1993)
Keith M. Thompson 56 President and Chief Executive 1986 153,082(3) 4.5
Officer of the Company (1986-
present); Director, Acklands
Limited, a Canadian automotive
parts and industrial supplies
distributor (1991-present);
Director, Sirrom Capital
Corporation, an investment
company (1997-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 the controlling shareholder of the
general partner of limited partnerships through which he is deemed to be the
beneficial owner of 24,120 shares and the beneficiary of a trust which owns
168 shares. Richard O. Berner is the controlling shareholder of the general
partner of a limited partnership through which he is deemed to be the
beneficial owner of 47,614 shares. Mr. Fedoruk's wife is the controlling
shareholder of the general partner of limited partnerships through which she
is deemed to be the beneficial owner of 30,131 shares. She is
3
<PAGE> 6
also the owner of 12,899 shares directly and is an executrix of an estate
owning 20,324 shares as to which Mr. Fedoruk disclaims beneficial ownership
of all shares beneficially owned by his wife. Dr. Parker's wife is the
controlling shareholder of the general partner of limited partnerships
through which she is deemed to be the beneficial owner of 21,586 shares. Dr.
Parker's wife also owns 29,413 shares directly and is trustee of other
trusts owning 87,490 shares. Dr. Parker's wife is an executrix, together
with Mr. Fedoruk's wife as referred to above, of an estate owning 20,324
shares. Dr. Parker disclaims beneficial ownership of all shares beneficially
owned by his wife.
(2) Includes 32,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 7, 1997 and 35,803 shares owned by Mr. Hauk's wife as to which Mr.
Hauk disclaims beneficial ownership.
(3) Includes 34,800 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 7, 1997.
(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 1996. 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
once in 1996; 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 1996; 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) met once in 1996; its primary function is
to review the Company's retirement and Section 401(k) savings plans.
The Board of Directors met four times in 1996. During 1996, 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 1996. 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 5, 1997) 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 Company.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON
STOCK
YEARS OWNED ON PERCENT
SERVED AS APRIL 7, OF
NAME OFFICE AGE OFFICER 1997 CLASS
---- ------ --- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Edgar R. Berner Chairman of the Board of Directors 56 11 (1) (1)
and Director
Keith M. Thompson President, Chief Executive Officer 56 11 (1) (1)
and Director
Donald B. Hauk Executive Vice President, Chief 52 10 (1) (1)
Financial Officer and Director
Douglas G. Goetsch Vice President and Treasurer 42 2 34,025(2) 1.0
Thomas J. Rutkowski Vice President 54 2 35,867(3) 1.0
Anthony R. Dainora Secretary 45 2 20,233(4) .6
All directors and 669,355(5) 19.0
executive officers
as a group
</TABLE>
- ---------------
(1) Same as information presented under "Election of Directors."
(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 7, 1997.
(3) Includes 32,000 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 7, 1997.
(4) Includes 13,200 shares issuable upon the exercise of stock options which are
either presently exercisable or which may be exercised within sixty days of
April 7, 1997.
(5) Includes 134,000 shares issuable upon the exercise of stock options which
are either presently exercisable or which may be exercised within sixty days
of April 7, 1997.
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, 1996, 1995
and 1994 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 ------------
------------------- 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 1996 $109,600 -- -- -- $46,947(2)
Chairman of Board 1995 109,600 -- -- -- 33,031(2)
1994 109,600 -- -- -- 31,000(2)
Keith M. Thompson 1996 324,456 $114,761 -- 9,000 4,750(3)
President and Chief Executive 1995 314,462 -- -- -- 4,620(3)
Officer 1994 291,154 167,899 -- 15,000 4,620(3)
Donald B. Hauk 1996 204,021 64,947 -- 10,000 4,750(3)
Executive Vice President and 1995 197,711 -- -- -- 4,620(3)
Chief Financial Officer 1994 182,500 94,702 -- 10,000 4,620(3)
Thomas J. Rutkowski(4) 1996 126,034 31,205 $17,550(5) 5,000 3,750(3)
Vice President 1995 122,192 -- 16,998(5) 5,000 4,116(3)
Douglas G. Goetsch(4) 1996 93,625 23,181 14,800(6) 5,000 3,253(3)
Vice President and Treasurer
</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 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. Effective April 3, 1997, Mr. Berner was granted an
additional performance share program which will be payable only if there is
a change in control of the Company prior to September 21, 1999. The amount
so payable would be equal to the benefits forfeited under the performance
share program granted on
6
<PAGE> 9
September 21, 1989 as a result of a change in control occurring prior to
September 21, 1999. Of the amounts reported as All Other Compensation for
Mr. Berner, $43,659 for 1996, $29,743 for 1995 and $27,712 for 1994 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 1996, $3,288 for 1995 and $3,288 for
1994 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. Goetsch and Mr. Rutkowski were named executive officers of the Company
effective January 1, 1995.
(5) Includes $13,557 for a car allowance for 1996 and $13,279 for 1995.
(6) Includes $13,557 for a car allowance.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL EXERCISE ANNUAL RATES OF STOCK
SECURITIES OPTIONS OR PRICE APPRECIATION FOR
UNDERLYING GRANTED TO BASE PRICE EXPIRATION OPTION TERM(2)
OPTIONS EMPLOYEES IN (PER DATE ----------------------
NAME GRANTED(#)(1) FISCAL YEAR(%) SHARE) (MM/DD/YY) 5% 10%
- ---- ------------- -------------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Edgar R. Berner............ 0
Keith M. Thompson.......... 9,000 18.8 $16.00 12/12/01 $39,800 $87,900
Donald B. Hauk............. 10,000 20.8 16.00 12/12/01 44,200 97,700
Thomas J. Rutkowski........ 5,000 10.4 16.00 12/12/01 22,100 48,850
Douglas G. Goetsch......... 5,000 10.4 16.00 12/12/01 22,100 48,850
</TABLE>
- ---------------
(1) Options vests 20% upon grant and 20% on the four succeeding anniversaries of
the date of grant.
(2) The amounts shown in these two columns represent the potential realizable
values using the options granted and the exercise price. The assumed rates
of return are set by the SEC proxy statement disclosure rules and are not
intended to forecast the future appreciation of the Company's Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY
FISCAL YEAR- OPTIONS AT
END(#) YEAR-END(1)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- --------------- --------------------
<S> <C> <C> <C> <C>
Edgar R. Berner.............. 0 None 0/ 0
Keith M. Thompson............ 0 None 34,800/19,200 $160,080/$59,520
Donald B. Hauk............... 0 None 32,000/18,000 149,380/ 52,970
Thomas J. Rutkowski.......... 0 None 32,000/10,500 192,710/ 29,103
Douglas G. Goetsch........... 0 None 22,000/10,500 121,460/ 29,103
</TABLE>
- ---------------
(1) Calculated based on the share price of the Common Stock on December 31, 1996
of $16.88 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
- ------------ -------- -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C> <C>
$ 75,000 13,583 20,374 27,165 33,956 33,956 33,956
100,000 18,708 28,061 37,415 46,769 46,769 46,769
125,000 23,833 35,749 47,665 59,581 59,581 59,581
150,000 28,958 43,436 57,915 72,394 72,394 72,394
175,000 34,083 51,124 68,165 85,206 85,206 85,206
200,000 39,208 58,811 78,415 98,019 98,019 98,019
225,000 44,333 66,499 88,665 110,831 110,831 110,831
250,000 49,458 74,186 98,915 123,644 123,644 123,644
275,000 54,583 81,874 109,165 136,456 136,456 136,456
300,000 59,708 89,561 119,415 149,269 149,269 149,269
400,000 80,208 120,311 160,415 200,519 200,519 200,519
450,000 90,458 135,686 180,915 226,144 226,144 226,144
500,000 100,708 151,061 201,415 251,769 251,769 251,769
600,000 121,208 181,811 242,415 303,019 303,019 303,019
</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
1996 for Messrs. Berner, Thompson, Hauk, Rutkowski and Goetsch was: $109,980,
$150,000, $150,000, $144,420 and $108,915, 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 eleven years of credited service except Mr.
Goetsch with ten years of credited service and Mr. Rutkowski with seven 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 1996, $164,460 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
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<PAGE> 11
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. For the fiscal year 1996, $80,600
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 1996 or previously, an officer or employee of the Company or
any of its subsidiaries. During 1996, 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 1996. It is
expected that Berner & Berner, P.C. will continue to provide legal services to
the Company during 1997 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 1996, 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
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 Compensation 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.
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<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. Cash awards under the Bonus Plan were earned in
1996 by all of the executive officers.
All executive officers and key management employees participate in the
Stock Compensation 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
1996, the Committee awarded stock option grants in the aggregate of 48,000
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 3% effective January, 1996 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 1996, Mr. Thompson received awards under both the Company's Bonus Plan and
Stock Compensation 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
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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,
1991 in the Company's Common Stock against The NASDAQ Stock Market and the
Standard & Poor's Auto Parts & Equipment Stock Price Index, assuming
reinvestment of all dividends.
<TABLE>
<CAPTION>
S&P Auto
Measurement Period Republic Au- Nasdaq Stock Parts &
(Fiscal Year Covered) tomotive Market Equipment
<S> <C> <C> <C>
1991 100 100 100
1992 100 117 126
1993 126 134 146
1994 142 131 127
1995 136 185 158
1996 178 227 177
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and the beneficial owners of more
than 10 percent of the Company's Common Stock to file reports of ownership and
changes in ownership of their equity securities of the Company. Directors and
executive officers of the Company and such beneficial owners file such reports
with the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. Directors and executive officers and such beneficial
owners are required to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of the copies of Forms 3, 4 and 5 and amendments
thereto received by the Company, and written representations from certain
directors and executive officers and such beneficial owners of the Company that
no Forms 5 were required for such persons, the Company believes that all Section
16(a) filing requirements applicable to its directors and executive officers and
such beneficial owners were complied with during 1996.
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PROPOSAL TO APPROVE AN AMENDMENT TO
THE COMPANY'S STOCK COMPENSATION PLAN
The Board of Directors recommends that stockholders approve an amendment to
the Company's Stock Compensation Plan, which has been adopted by the Board of
Directors, effective as of June 5, 1997, subject to the approval of the
stockholders, to increase the maximum number of shares of Common Stock available
for Awards under the Stock Compensation Plan from 450,000 to 750,000. The
summary of Stock Compensation Plan provisions contained below is qualified in
its entirety by reference to the actual provisions of the Stock Compensation
Plan. Terms capitalized but not otherwise defined herein shall have the meanings
assigned to them pursuant to the Stock Compensation Plan.
The Stock Compensation Plan has been designed to serve as an "umbrella
plan" to provide for the award of performance shares and restricted stock in
addition to nonqualified and incentive stock options. The Compensation and Stock
Option Committee of the Board (the "Committee") has been delegated the powers,
duties, and responsibilities for administration of the Stock Compensation Plan.
No member of the Committee may receive awards or grants under the Stock
Compensation Plan.
The purpose of the Stock Compensation Plan is to promote the interests of
the Company primarily by encouraging and enabling the acquisition of shares of
Common Stock of the Company by the officers and other employees of the Company.
All officers and other employees of the Company, including employees who are
directors, who are compensated for such employment and who are selected by the
Compensation Committee are eligible to participate in the Stock Compensation
Plan. The Stock Compensation Plan is intended as a further means not only of
attracting and retaining outstanding employees but also of promoting a close
identity of interests between the Company's employees and its stockholders. The
Stock Compensation Plan as it is proposed to be amended provides that the number
of shares of Common Stock available for issuance or transfer to all participants
under the Stock Compensation Plan shall be 750,000 shares, plus the shares, if
any, remaining unused from the shares approved by stockholders for use under the
Company's 1987 Non-Qualified Stock Option Plan. The total number of shares
issuable under the Stock Compensation Plan is subject to adjustment, at the
discretion of the Committee, in the event of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or any rights offering to purchase Common Stock at a
price substantially below fair market value, or similar change affecting the
Common Stock. The Common Stock delivered under the Stock Compensation Plan may
be shares held in the Company's treasury, authorized but previously unissued
shares or shares purchased by the Company on the open market.
Stock Options. Incentive Stock Options and Nonqualified Stock Options to
purchase the Common Stock of the Company (the "Options") granted under the Stock
Compensation Plan will be evidenced by agreements containing the terms and
conditions to which the Options are subject. An option agreement will specify
the period for which the Option is granted and will provide that the Option will
expire at the end of such period; provided, however, that, in the case of an
Incentive Stock Option, such period shall not exceed ten years (or five years in
the case of a participant who owns stock representing more than 10 percent of
the voting power of all classes of stock of the Company) from the date of grant.
The Committee may extend the option period of a Nonqualified Stock Option. The
Company will not receive any consideration for granting or extending any Option.
The purchase price per share will be determined by the Committee at the
time an Option is granted, and will be not less than the fair market value (but
in no event less than the par value) of one share of Common Stock on the date of
grant. The market value of the Company's Common Stock at April 16, 1997 was
$16.00 per share. The Option price per share of an Incentive Stock Option may
not be less than 110 percent of the fair market value as of the time of grant in
the case of a participant who owns stock representing more than 10 percent of
the voting power of all classes of stock of the Company on the date the Option
is granted. The purchase price of the shares as to which an Option is exercised
will be paid to the Company at the time of exercise in any of the following
methods, as specified by the Committee: in stock, by delivering Common Stock
already owned by the participant having a total fair market value on the date of
delivery equal to the purchase price, or by delivering a combination of cash and
Common Stock having a total fair market value on
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<PAGE> 15
the date of delivery equal to the purchase price. Accordingly, a participant may
exercise an Option through payment (either in part or in full) with Common Stock
instead of cash. A stock-for-stock exchange may occur not only in the context of
a single exercise of an Option, but also in the context of successive and
simultaneous exercises, or "pyramiding." By "pyramiding," a participant could
start with a relatively small number of shares of Common Stock and theoretically
exercise all of his or her Options then exercisable with no additional cash and
no more investment than the original share or shares of Common Stock. However,
whether the participant exercises an Option in a single exercise, or through a
series of successive and substantially simultaneous exercises, the net increase
in shares of Common Stock held by the participant as a result of either type of
exercise would be identical. The economic effect of stock-for-stock exchanges,
whether through single exercises or through simultaneous exercises, is the same.
If an Incentive Stock Option were exercised in a stock-for-stock exchange, any
shares deemed received and then surrendered as payment would be considered to
have been disposed of for purposes of determining whether there has been a
disqualifying disposition, as described below. The Committee, in its discretion,
may provide that the purchase price may be paid by delivery of a properly
executed exercise notice, in a form approved by the Committee, together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of the applicable sale or loan proceeds to pay the purchase price.
If a participant's employment terminates for any reason other than death,
disability, or retirement, all rights to exercise Nonqualified Stock Options
terminate three months after termination of employment. In such circumstances,
all rights to exercise Incentive Stock Options terminate at the expiration date
established for the Option or three months after termination of employment,
whichever date is earlier.
The Committee may provide in writing at the time an award of Nonqualified
Stock Options is made to a participant, or thereafter, that, if the participant
retires, becomes disabled or dies within specified periods, the time to exercise
such Options may be extended and the date such Options first become exercisable
may be accelerated, to the extent determined by the Committee.
No participant shall have any rights as a stockholder with respect to any
shares subject to an Option prior to the date of issuance to the participant of
such shares.
Options granted under the Stock Compensation Plan will be exercisable in
any order, regardless of the date of grant or the existence of any other
outstanding Option. The Committee may determine, at the time of grant or
thereafter, that an option agreement may provide that the participant may, at
such times as may be specified in the agreement or an amended agreement, elect
to cancel all or any portion of any such Option then subject to exercise. Upon
such election, the Company's obligation in respect of such Option shall be
discharged by (i) payment to the participant of an amount in cash equal to 50
percent of the excess, if any, of the fair market value at such time of the
shares of Common Stock subject to the portion of the Option so cancelled over
the aggregate purchase price of such shares and (ii) the issuance or transfer to
the participant of whole shares of Common Stock (plus cash for any fraction of a
share) with a fair market value at such time equal to 50 percent of any such
excess.
Notwithstanding any other provision of the Stock Compensation Plan, to the
extent required by the Internal Revenue Code, the aggregate fair market value
(determined as of the time the Option is granted) of Common Stock for which
Incentive Stock Options granted after December 31, 1986 are exercisable for the
first time by any participant during any calendar year (under all plans of the
Company and its subsidiaries) shall not exceed $100,000.
Options granted under the Stock Compensation Plan are exercisable only by
the optionee during his or her lifetime, but are transferable at death by will
or the laws of descent and distribution.
A participant granted a Nonqualified Stock Option generally will not be
deemed to receive any income for federal income tax purposes upon the grant of
such an Option and, accordingly, the Company will not be entitled to a deduction
at that time. Generally, at the time the participant exercises a Nonqualified
Stock Option, an amount equal to the excess of the fair market value of the
stock on the date of exercise over the purchase price will be treated as
ordinary income for federal income tax purposes. Special rules apply to persons
subject to the provisions of Section 16 of the Securities Exchange Act of 1934.
Any cash and the fair
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<PAGE> 16
market value of any shares received upon the cancellation of Options also will
be treated as ordinary income. The Company generally will be entitled to a
deduction at the same time as the participant realizes such income, and in the
same amount. At the time of the sale or exchange of any shares acquired upon
exercise of a Nonqualified Stock Option or cancellation of an Option, the
participant will recognize long-term capital gain or loss, provided the shares
have been held for more than one year.
A participant granted an Incentive Stock Option generally will not be
deemed to receive taxable income for federal income tax purposes on either the
grant or exercise of such an Option. If the participant sells the stock received
on exercise of an Incentive Stock Option more than two years after the Option is
granted to the participant and more than one year after the stock is transferred
to the participant, the difference between the sales proceeds and the purchase
price will be eligible for long-term capital gain or loss treatment. In such
event, no amount will be taxable as ordinary income, and the Company will not be
entitled to a deduction for federal income tax purposes. However, if the
participant disposes of stock acquired by exercise of an Incentive Stock Option
or applies such stock to the exercise of another Incentive Stock Option prior to
the end of the holding periods described above (a "disqualifying disposition"),
except as provided below, the difference between the purchase price and the fair
market value of the stock on the date of exercise is taxable as ordinary income
in the year of such disposition and any excess of the amount realized on
disposition over the value of the stock on the date of exercise is eligible for
long-term or short-term capital gain treatment depending on how long the shares
were held. If, in a disqualifying disposition, the participant sells the stock
for less than its fair market value on the date he or she exercised the Option,
then, generally, only the amount of the difference between the amount realized
on the disposition and the purchase price will be treated as ordinary income. If
the participant makes a disqualifying disposition, the Company generally will be
entitled to a deduction equal to the amount treated as ordinary income to the
participant at the time the participant realizes such income.
Restricted Common Stock. Restricted Common Stock will be issued to a
participant subject to restrictions on the right to transfer the stock as set
forth in the Stock Compensation Plan and enforced pursuant to an escrow
agreement to be executed by each participant. At the time each award of
Restricted Common Stock is made, the Committee will establish a schedule
according to which Restricted Common Stock will vest and the restricted period
will end. The Committee shall also have the authority to establish performance
goals and to provide for accelerated vesting upon the attainment of such goals.
Subject to possible accelerated vesting, at the expiration of the restricted
period a stock certificate evidencing Common Stock with respect to which the
restricted period has expired (to the nearest full share) will be delivered out
of escrow to the participant or the participant's legal representative free of
the restrictions set forth above.
Each participant will have all of the rights and privileges of a
stockholder of the Company as to the Restricted Common Stock other than the
ability to transfer it, including the right to receive any cash dividends
declared with respect to the Common Stock and to direct the escrow agent as to
the exercise of voting rights. If the employment of any participant is
terminated, (other than by reason of retirement, disability or death), all
Restricted Common Stock awarded under the Stock Compensation Plan that it is
then subject to restrictions will be forfeited by the participant and become the
property of the Company and all of the rights of the participant to the
Restricted Common Stock and as a stockholder (including the right to accrued but
unpaid dividends) will terminate without further obligation on the part of the
Company. The Committee may provide in writing at the time an award of Restricted
Common Stock is made to a participant or thereafter that if such participant's
employment by the Company terminates because of retirement, disability, or
death, the expiration date of the restricted period for all or any number of the
shares of Restricted Common Stock held for such participant's account will be
accelerated and such number of shares will be delivered out of escrow to the
participant.
The Committee has the authority to modify or remove any or all of the
restrictions whenever it may determine that by reason of changes in applicable
laws or other changes in circumstances such action is appropriate.
There are no material conditions upon which rights to receive an award
under the Stock Compensation Plan are contingent; provided that the Committee
shall impose such conditions on the receipt of, or take such actions in
connection with the making of, any award as the Committee, with advice of
counsel, deems
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<PAGE> 17
appropriate to ensure that lawful and adequate consideration is received by the
Company for the issuance of the Restricted Common Stock granted pursuant to an
award. No consideration other than the services of the participants will be
received by the Company for the awarding of stock under the Stock Compensation
Plan; provided that the Committee may, with advice of counsel, require that a
participant pay to the Company in cash an amount equal to the aggregate par
value of the Restricted Common Stock to be received, if such requirement is
appropriate to ensure that lawful and adequate consideration is received by the
Company for the issuance of such Restricted Common Stock pursuant to such award.
In such case the Committee may, in its sole discretion, award bonuses to enable
participants to pay such amounts.
Performance Shares. The Committee is authorized to establish cycles to be
effective over designated award periods. At the beginning of each award period,
the Committee will establish one or more program targets (financial or other
corporate or individual objectives) for the award period and a schedule relating
the accomplishment of the program target to the awards to be earned by the
participants. The Committee will allocate the number of performance shares to be
granted to each participant selected to receive a grant of performance shares
and may add new participants to a cycle after its commencement by making pro
rata awards to such participants.
The Committee will calculate each participant's actual award for a cycle by
multiplying the average fair market value of one share of Common Stock during
the 31-calendar-day period that ends on the last day of the award period by the
number of performance shares granted to the participant and multiplying the
amount so determined by a performance factor representing the degree of
attainment of the program targets. Any employee who is a participant for less
than a full award period shall receive such portion of an award, if any, for
that award period as the Committee may determine.
The actual awards will be payable one-half in Common Stock and one-half in
cash. The Committee, in its discretion, may vary the form of payment as to any
participant. Payments of actual awards will be made as soon as practicable after
the completion of a cycle. A participant will have no rights as a stockholder
with respect to any performance shares.
The Committee may, during an award period, make such adjustments to program
targets as it deems appropriate to compensate for, or reflect, any significant
changes that have occurred during an award period in accounting practices, tax
laws, or other laws or regulations that alter or affect the computation of the
measures of financial performance used for the calculation of actual awards.
Change in Control. Notwithstanding any other provision of the Stock
Compensation Plan, the Committee, in its sole discretion, may provide in writing
at the time an award is made to a participant or thereafter that in the event
such participant is terminated within a specified time after a change in control
of the Company, as defined in the Stock Compensation Plan, (i) any or all of
such participant's Options then outstanding shall be exercisable to the extent
specified by the Committee, (ii) the restricted period shall expire immediately
with respect to any or all of the shares of such participant's Restricted Common
Stock then subject to restrictions as specified by the Committee and (iii)
actual awards shall be calculated and paid to such participant in the manner and
to the extent specified by the Committee. In addition, the Committee in its sole
discretion may provide in writing at the time an award of Options is made to a
participant or thereafter that, if such termination occurs at least six months
after the Committee makes such provision, any or all such participant's
outstanding Options that were granted at least six months prior to such
termination shall be cancelled. In the event options are so cancelled, the
Company will pay to the optionees of such cancelled Options an amount, in cash
for each share of Common Stock subject to the Options so cancelled, in
accordance with a formula set forth in the Stock Compensation Plan.
The obligations of the Company under the Stock Compensation Plan are
binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of the Company, or upon any
successor corporation or organization succeeding to substantially all of the
assets and business of the Company. The Company agrees that it will make
appropriate provisions for the preservation of participants' rights under the
Stock Compensation Plan in any agreement or plan which it may enter into or
adopt to effect any such merger, consolidation, reorganization or transfer of
assets.
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<PAGE> 18
Other Provisions. The Board may, with prospective or retroactive effect,
amend, suspend, or terminate the Stock Compensation Plan or any portion thereof
at any time without stockholder approval, and may delegate to the Committee the
authority to amend the Stock Compensation Plan without stockholder approval;
provided, however, that no amendment that would materially increase the cost of
the Stock Compensation Plan to the Company may be made without the approval of
the stockholders of the Company, and no amendment, suspension or termination of
the Stock Compensation Plan shall deprive any participant of any rights to
awards previously made under the Stock Compensation Plan without his written
consent. Except with respect to matters that in the opinion of the Company's
counsel require stockholder approval, any provision of the Stock Compensation
Plan may be modified as to a participant by an individual agreement approved by
the Board.
Unless stockholders specify otherwise in the proxy, proxies solicited by
the Board of Directors will be voted for approval of the Amendment to the
Company's Stock Compensation Plan. The affirmative vote of a majority of the
outstanding shares of Common Stock will be required for approval of this
proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE APPROVAL OF THE PROPOSED AMENDMENT OF THE COMPANY'S STOCK COMPENSATION PLAN
WHICH WOULD INCREASE THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR
AWARDS UNDER THE PLAN FROM 450,000 TO 750,000. THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE VOTES PRESENT, IN PERSON OR BY PROXY, AT THE ANNUAL MEETING IS
REQUIRED TO APPROVE THIS PROPOSAL.
PROPOSAL TO APPROVE 1997 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS
The Board of Directors of the Company has adopted the 1997 Stock Option
Plan for Non-Employee Directors (the "1997 Outside Director Plan"), subject to
the approval of the stockholders at the Annual Meeting. The 1997 Outside
Director Plan is intended to attract and retain Outside Directors (as defined
below), and to enable such directors to participate in the long-term success and
growth of the Company. As discussed more fully below, awards under the 1997
Outside Director Plan shall be in the form of Nonqualified Stock Options. The
full text of the 1997 Outside Director Plan is attached to this Proxy Statement
as Exhibit A.
There will be 60,000 shares of Common Stock reserved and available for
issuance under the 1997 Outside Director Plan (subject to certain adjustments as
provided below). Shares of Common Stock awarded under the 1997 Outside Director
Plan may consist, in whole or in part, of authorized and unissued shares or
treasury shares. If an Option awarded under the 1997 Outside Director Plan is
surrendered or cancelled, or expires or terminates prior to exercise, the shares
of Common Stock subject to such Option will again become available for issuance
under the 1997 Outside Director Plan.
The 1997 Outside Director Plan will be administered by the Board of
Directors. The Board of Directors, subject to the terms of the 1997 Outside
Director Plan, is authorized to adopt, amend, and rescind administrative rules
and regulations regarding the 1997 Outside Director Plan, and to construe and
interpret the 1997 Outside Director Plan, the rules and regulations promulgated
thereunder, and the grant letters evidencing awards under the 1997 Outside
Director Plan.
Each person who is a member of the Board of Directors and who is not an
employee of the Company or any subsidiary or affiliate of the Company is
eligible to receive awards under the 1997 Outside Director Plan. Immediately
after the Annual Meeting, there will be six Outside Directors of the Company
eligible to participate in the 1997 Outside Director Plan.
As described below, awards under the 1997 Outside Director Plan consist of
an initial award and annual awards of Nonqualified Stock Options.
The 1997 Outside Director Plan provides for an automatic initial award to
each Outside Director of the Company of a Nonqualified Stock Option to purchase
5,000 shares of Common Stock to be made on the date that is three business days
following the first annual meeting of the stockholders at which such Outside
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<PAGE> 19
Director is elected to the Board of Directors of the Company during the term of
the 1997 Outside Director Plan and four successive annual awards of a
Nonqualified Stock Option to purchase 1,250 shares of Common Stock to be made
each year on the date that is three business days following each of the next
four annual meetings of the stockholders during the term of the 1997 Outside
Director Plan subsequent to such initial meeting as long as such Outside
Director continues to serve as such on each award date. (In the event that any
such award date is not a trading day for the Common Stock, then the award will
be made on the next following trading day.)
The Nonqualified Stock Options awarded under the 1997 Outside Director Plan
will be subject to the following terms and conditions.
1. Term. Each Nonqualified Stock Option will have a term of five years.
2. Exercisability. Except as provided below, Nonqualified Stock Options
awarded under the 1997 Outside Director Plan will become exercisable as to
one-third of the shares subject thereto on the first anniversary of the date on
which such options are granted, and as to an additional one-third of the shares
subject thereto on each of the second and third anniversaries of the date of
grant of such options; provided, however, that it shall be a condition to the
exercisability of each such option that the holder be a member of the Board of
Directors on the relevant anniversary date and, provided, further, that all
Nonqualified Stock Options awarded under the 1997 Outside Director Plan will
become immediately exercisable without regard to such three-year vesting
schedule immediately upon a change in control of the Company (as defined in the
1997 Outside Director Plan).
3. Exercise Price. The exercise price per share of Common Stock
purchasable under a Nonqualified Stock Option awarded pursuant to the 1997
Outside Director Plan will be equal to the closing price of the Common Stock, as
reported on the National Association of Securities Dealers Automated Quotation
National Market System, on the date the Nonqualified Stock Option is granted.
4. Method of Exercise. Payment of the exercise price for vested
Nonqualified Stock Options awarded pursuant to the 1997 Outside Director Plan
shall be in cash.
5. Termination of Outside Director Status. Generally, Nonqualified Stock
Options that have been granted to an Outside Director, to the extent then
vested, may be exercised within the lesser of (i) twelve months after the
Outside Director ceases to serve as an Outside Director and (ii) the expiration
of the five-year term of the Nonqualified Stock Option. However, if a director's
status as an Outside Director is terminated for cause, the Nonqualified Stock
Options that had been granted to such Outside Director will terminate
immediately and cease to be exercisable upon the giving of notice of such
termination for cause.
6. No Stockholder Rights. No holder of a Nonqualified Stock Option awarded
under the 1997 Outside Director Plan will have any rights of a stockholder with
respect to shares of Common Stock relating to the Nonqualified Stock Option
until the option has been exercised.
Nonqualified Stock Options awarded under the 1997 Outside Director Plan are
transferable to members of the optionee's family, family-controlled partnerships
or other family-controlled entities or trusts for the benefit of such family
members.
In the event of any merger, reorganization, consolidation, sale of all or
substantially all of the assets, recapitalization, stock dividend, stock split,
or other change in corporate structure affecting the Common Stock, appropriate
adjustments will be made in the aggregate number of shares of Common Stock
reserved for issuance under the 1997 Outside Director Plan.
The Board of Directors may, at any time, alter, amend, or terminate the
1997 Outside Director Plan, except that no such action may alter or impair the
rights or obligations under any outstanding award without the holder's consent.
Moreover, no alteration, amendment, suspension, or termination of the 1997
Outside Director Plan will require the approval of the stockholders unless
required by applicable law or the rules or regulations of a relevant securities
exchange or regulatory agency.
17
<PAGE> 20
During 1997, it is expected that six Outside Directors will each receive an
annual award of a Nonqualified Stock Option to purchase 5,000 shares of Common
Stock. Thus, it is expected that, in the aggregate, Nonqualified Stock Options
to purchase 30,000 shares of Common Stock will be received under the 1997
Outside Director Plan by a total of six Outside Directors during 1997. No person
who is named in the Summary Compensation Table is currently eligible to receive,
during 1997, an award under the 1997 Outside Director Plan. Because the ultimate
number of Outside Directors in any year following 1997 cannot be predicted, the
actual number of initial and annual awards under the 1997 Outside Director Plan
that will ultimately be received by Outside Directors is not determinable at
this time.
The federal income tax aspects with respect to awards that may be made
under the 1997 Outside Director Plan is summarized above in connection with the
discussion of the proposal to approve an amendment to the Company's Stock
Compensation Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE PROPOSED 1997 OUTSIDE DIRECTOR PLAN. THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE VOTES PRESENT, IN PERSON OR BY PROXY, AT THE ANNUAL MEETING IS
REQUIRED TO APPROVE THIS PROPOSAL.
THE COMPANY'S ACCOUNTANTS
Price Waterhouse LLP has been selected by the Board of Directors as the
Company's independent accountants for 1997. 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 proposals 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 proposals. 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.
18
<PAGE> 21
STOCKHOLDERS' PROPOSALS
Stockholders' proposals for inclusion in the proxy statement and proxy form
for the 1998 Annual Meeting of Stockholders must be received at the Company's
principal executive office no later than December 27, 1997.
PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
Brentwood, Tennessee
Dated: April 25, 1997
By Order of the Board of Directors,
/s/ ANTHONY R. DAINORA
ANTHONY R. DAINORA
Secretary
THE COMPANY'S 1996 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.
19
<PAGE> 22
EXHIBIT A
REPUBLIC AUTOMOTIVE PARTS, INC.
1997 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
SECTION 1: PURPOSE
The Republic Automotive Parts, Inc. 1997 Stock Option Plan for Non-Employee
Directors (the "Plan") has been adopted to promote the longer-term growth and
financial success of the Company by (1) enhancing its ability to attract and
retain nonaffiliated individuals of outstanding ability as members of the Board
and (2) promoting a greater identity of interest between non-employee members of
the Board and shareholders.
SECTION 2: DEFINITIONS
As used in the Plan, the following terms have these respective meanings:
(a) "Board" means the Company's Board of Directors.
(b) "Common Stock" means the Company's Common Stock, par value $.50 per share,
or any successor stock issued by the Company in replacement or conversion
thereof.
(c) "Company" means Republic Automotive Parts, Inc., a corporation established
under the laws of the State of Delaware.
(d) "Fair Market Value" means for any given day the closing sales price on such
date of a share of Common Stock as reported on the principal securities
exchange on which such shares of Common Stock are then listed or admitted
to trading or as reported on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System, if not so listed or
admitted. If no sales of Common Stock were made on such exchange or
reported on the NASDAQ system on that date, the closing price of a share of
Common Stock for the preceding day of such exchange or as reported by
NASDAQ shall be substituted.
(e) "Grant Date" means the third business day following the Company's Annual
Meeting of Shareholders.
(f) "Participant" means for each Grant Date any director of the Company who is
not an employee of the Company or any subsidiary or affiliate of the
Company on the applicable Grant Date.
(g) "Plan" means the Republic Automotive Parts, Inc. 1997 Stock Option Plan
for Non-Employee Directors.
(h) "Shareholders" means the holders of record from time to time of the
outstanding shares of the Common Stock.
(i) "Stock Option" means a right to purchase shares of Common Stock at the
applicable Fair Market Value.
(j) "1934 Act" means the Securities Exchange Act of 1934.
SECTION 3: EFFECTIVE DATE
The Plan shall be effective beginning on the date it is approved by the
Company's Shareholders in accordance with the provisions of the Company's
Bylaws and applicable law and shall remain in effect for each applicable Grant
Date until terminated by the Board. If the Plan is terminated, the terms of the
Plan shall continue to apply to all outstanding Stock Options granted prior to
such Termination.
<PAGE> 23
SECTION 4: OPERATION
The Plan is intended to meet the requirements for a formula plan within the
meaning of Rule 16b-3 adopted under the 1934 Act. To this end, the Plan is
intended to fix the terms and conditions of each transaction under the Plan in
advance and to require no discretionary action by any administrative body with
regard to any such transaction under the Plan.
SECTION 5: COMMON STOCK AVAILABLE FOR STOCK OPTIONS
(a) Number of Shares. A maximum of 60,000 shares of Common Stock may be issued
upon the exercise of Stock Options granted under the Plan. Shares of Common
Stock shall not be deemed issued until the applicable Stock Option has been
exercised and, accordingly, any shares of Common Stock represented by Stock
Options which expire unexercised or which are canceled shall remain
available for issuance under the Plan.
(b) Adjustments. The Board, as it deems appropriate to meet the intent of the
Plan, shall make such adjustments to the number of shares available under
the Plan and to any outstanding Stock Options in connection with any stock
dividend, stock split, combination or exchange of shares, merger,
consolidation, recapitalization, spin-off or other distribution (other than
normal cash dividends) of the Company assets to Shareholders, or any other
change affecting the Common Stock, provided such adjustments are consistent
with the effect on the other Shareholders of the Company of any such
transaction. The Board may also, when similarly appropriate, make such
adjustment in the exercise price of outstanding Stock Options as it deems
necessary to preserve the rights of Participants under the Plan.
SECTION 6: STOCK OPTION TERMS
(a) Granting of Stock Options. Each Participant shall be initially granted a
Stock Option to purchase 5,000 shares on the first Grant Date that the
Plan is in effect. After such initial award, each Participant who
continues as a Participant on the relevant Grant Date shall be granted a
Stock Option to purchase 1,250 shares on each of the next four successive
Grant Dates.
(b) Duration and Exercisability. Each Stock Option shall have a term of five
years and, subject to Section 7, shall become exercisable to the extent of
33 1/3% of the aggregate number of shares covered thereby on and after the
first anniversary of the Grant Date, to the extent of 66 2/3% of the
aggregate number of shares covered thereby on and after the second
anniversary of the Grant Date and to the extent of 100% of the aggregate
number of shares covered thereby on and after the third anniversary of the
Grant Date; provided, however, that it shall be a condition to the
exercisability of each such portion of a Stock Option that the Participant
is a member of the Board on the relevant anniversary date.
(c) Termination of Directorship. When a Participant ceases to be a member of
the Board, each Stock Option, or portion thereof which has become
exercisable as of the date such Participant ceases to be a member of the
Board, held by such Participant shall continue to be exercisable for the
lesser of one year or until the end of the original term. Notwithstanding
the foregoing, if a Participant is terminated as a member of the Board for
cause, any exercisable Stock Option or portion thereof shall cease to be
exercisable on the date of termination.
(d) Exercise of Stock Options. Stock Options may be exercised by giving
written notice to the Secretary of the Company stating the number of
shares of Common Stock with respect to which the Stock Option is being
exercised and tendering payment thereof. Payment for shares of Common
Stock shall be made in full in cash at the time that a Stock Option, or
any part thereof, is exercised. The Participant agrees that, in the event
the exercise of any Stock Options granted in this Plan or the disposition
of shares following exercise of such options results in the Participant's
realization of income which for federal, state or local income tax
purposes is, in the opinion of counsel for the Company, subject to
withholding of tax at source by the Company, the Participant will pay to
the Company an amount equal to such withholding tax in cash.
<PAGE> 24
SECTION 7: ACCELERATING EVENTS
(a) In the event of the earliest of (i) the occurrence of an Accelerating
Event, or (ii) the dissemination of a proxy statement soliciting proxies
from shareholders of the Company, by someone other than the Company,
seeking shareholder approval of an Accelerating Event of the type described
in (b)(i) below, or (iii) the publication or dissemination of an
announcement of action intended to result in an Accelerating Event of the
type described in (b)(ii) or (b)(iii) below, all outstanding Stock Options
awarded under the Plan shall immediately become fully exercisable and
vested.
(b) As used herein an "Accelerating Event" shall mean:
(i) a merger of equivalent combination involving the Company after which
forty-nine percent (49%) or more of the voting stock of the surviving
corporation is held by persons other than former shareholders of the
Company;
(ii) the acquisition of thirty percent (30%) or more of the outstanding
shares of Common Stock by any person (as defined by Section 3(a)(9)
of the 1934 Act) other than directly from the Company; or
(iii) the occurrence of any circumstance having the effect that thirty
percent (30%) or more of the directors elected by shareholders to the
Board are persons who were not nominated by management in the then
most recent proxy statement of the Company.
SECTION 8: GENERAL PROVISIONS
(a) Transferability of Stock Options. A Stock Option granted under the Plan may
be transferred by a Participant to members of the Participant's
family, family-controlled partnerships or other family-controlled
entities or trusts for the benefit of such Participant and/or one or more
of such family members.
(b) Documentation of Grants. Stock Options shall be evidenced by written
agreements.
(c) Plan Amendment. The Board may amend or terminate the Plan provided that no
amendment may impair any Participant's rights with respect to an
outstanding Stock Option without the consent of the Participant.
(d) Future Rights. Neither the Plan nor the granting of Stock Options nor any
such action taken pursuant to the Plan, shall constitute or be evidence of
any agreement or understanding, express or implied, that the Company shall
retain a Participant for any period of time, or at any particular rate of
compensation as a member of the Board. Nothing in this Plan shall in any
way limit or affect the right of the Board or the Shareholders to remove
any Participant from the Board or otherwise terminate his or her service
as a member of the Board.
(e) Governing Law. The validity, construction and effect of the Plan and any
such action taken under or relating to the Plan shall be determined in
accordance with the laws of the State of Delaware, without reference to
the principles of conflicts of law thereof, and applicable Federal law.
<PAGE> 25
APPENDIX A
REVOCABLE PROXY
REPUBLIC AUTOMOTIVE PARTS, INC.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This 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 7,
1997, at the Annual Meeting of Stockholders to be held on June 5, 1997, or any
adjournment thereof.
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS WITH- FOR ALL
FOR HELD EXCEPT
[ ] [ ] [ ]
<S> <C> <C> <C>
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
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- -----------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Amend Stock Compensation Plan [ ] [ ] [ ]
3. Approve Stock Option Plan for Non- [ ] [ ] [ ]
Employee Directors
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 AND FOR THE PROPOSALS STATED ABOVE.
NOTE: PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS HEREON. 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 BE SURE TO SIGN AND DATE Date
THIS PROXY IN THE BOX BELOW. ---------------------
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- ---- STOCKHOLDER SIGN ABOVE -------CO-HOLDER (IF ANY) SIGN ABOVE--
</TABLE>
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
REPUBLIC AUTOMOTIVE PARTS, INC.
500 WILSON PIKE CIRCLE, SUITE 115, P.O. BOX 2088, BRENTWOOD, TENNESSEE 37024
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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