FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended November 28, 2000
Commission file number 1-11276
DISCOUNT AUTO PARTS, INC.
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(Exact name of registrant as specified in its charter)
Florida 59-1447420
------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
4900 Frontage Road, South
Lakeland, Florida 33815
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(Address of principal executive offices) (zip code)
(863) 687-9226
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock $.01 Par Value - 16,703,022 shares as of November 28, 2000
<PAGE>
Discount Auto Parts, Inc.
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - November 28, 2000 and May 30, 2000.... 3
Condensed Consolidated Statements of Income - for the thirteen weeks
and twenty-six weeks ended November 28, 2000 and November
30, 1999.................................................................... 4
Condensed Consolidated Statements of Cash Flows - for the twenty-six weeks
ended November 28, 2000 and November 30, 1999 ................................ 5
Notes to Condensed Consolidated Financial Statements...........................6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..........................................................7
Item 3. Quantitative and Qualitative Disclosures about Market Risk............10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.....................................................11
Item 2. Changes in Securities and Use of Proceeds.............................11
Item 4. Submission of Matters to a Vote of Security Holders...................11
Item 6. Exhibits and Reports on Form 8-K ... .................................12
SIGNATURES ...................................................................13
<PAGE>
<TABLE>
Item 1. Financial Statements (Unaudited)
Discount Auto Parts, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
<CAPTION>
November 28 May 30
2000 2000
------------------- ------------------
ASSETS (In thousands)
Current assets:
<S> <C> <C>
Cash $ 5,649 $ 12,612
Inventories 247,926 253,113
Prepaid expenses and other current assets 17,183 14,455
------------------- ------------------
Total current assets 270,758 280,180
Property and equipment 543,971 524,053
Less allowances for depreciation and amortization (116,620) (104,771)
------------------- ------------------
427,351 419,282
Other assets 5,992 5,247
------------------- ------------------
Total assets $ 704,101 $ 704,709
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 63,466 $ 100,804
Other current liabilities 23,254 23,207
Current maturities of long-term debt 2,400 2,400
------------------- ------------------
Total current liabilities 89,120 126,411
Deferred income taxes 10,679 10,494
Long-term debt 295,228 264,600
Stockholders' equity:
Preferred stock
- -
Common stock 167 167
Additional paid-in capital 142,399 142,379
Retained earnings 166,508 160,658
------------------- ------------------
Total stockholders' equity 309,074 303,204
------------------- ------------------
Total liabilities and stockholders' equity $ 704,101 $ 704,709
=================== ==================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Discount Auto Parts, Inc.
Condensed Consolidated Statements of Income (Unaudited)
<CAPTION>
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Ended Weeks Ended Weeks Ended Weeks
Ended
-------------- ------------- -------------- ------------
November 28 November 30 November 28 November 30
2000 1999 2000 1999
-------------- ------------- -------------- ------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Net sales $ 160,950 $ 142,643 $ 328,024 $ 286,268
Cost of sales, including distribution costs 97,586 84,096 200,736 169,294
-------------- ------------- -------------- ------------
Gross profit 63,364 58,547 127,288 116,974
Selling, general and administrative expenses 53,877 45,003 106,727 88,697
-------------- ------------- -------------- ------------
Income from operations 9,487 13,544 20,561 28,277
Other income, net 35 173 120 811
Interest expense (5,958) (4,157) (11,541) (7,808)
-------------- ------------- -------------- ------------
Income before income taxes 3,564 9,560 9,140 21,280
Income taxes 1,283 3,540 3,290 7,914
-------------- ------------- -------------- ------------
Net income $ 2,281 $ 6,020 $ 5,850 $ 13,366
============== ============= ============== ============
Net income per share:
Basic net income per common share
$ 0.14 $ 0.36 $ 0.35 $ 0.80
============== ============= ============== ============
Dilutive net income per common share
$ 0.14 $ 0.36 $ 0.35 $ 0.80
============== ============= ============== ============
Average common shares outstanding
16,700 16,693 16,696 16,692
Dilutive effect of stock options -
- - 58
-------------- ------------- -------------- ------------
Average common shares outstanding - assuming dilution 16,700 16,693 16,696 16,750
============== ============= ============== ============
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Discount Auto Parts, Inc.
Condensed Consolidated Statements Of Cash Flows (Unaudited)
<CAPTION>
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
--------------------------------------------
--------------------------------------------
November 28 November 30
2000 1999
-------------------- -----------------
--------------------------------------------
Operating activities (In thousands)
<S> <C> <C>
Net income $ 5,850 $ 13,366
Adjustments to reconcile net income to net cash used in operating activities:
Deferred income tax benefit 185 490
Depreciation and amortization 12,328 11,076
Gain on disposals of property and equipment (14) (655)
Changes in operating assets and liabilities:
Decrease (increase) in inventories 5,187 (16,242)
(Increase) decrease in prepaid expenses and other
current assets (2,728) 4,283
(Increase) in other assets (1,115) (659)
(Decrease) in trade accounts payable (37,338) (21,529)
Increase (decrease) in other current liabilities 47 (3,266)
-------------------- -----------------
-------------------- -----------------
Net cash used in operating activities (17,598) (13,136)
Investing activities
Proceeds from sales of property and equipment 744 1,149
Purchases of property and equipment (20,757) (37,169)
-------------------- -----------------
-------------------- -----------------
Net cash used in investing activities (20,013) (36,020)
Financing activities
Proceeds from short-term borrowings and long-term debt 60,236 60,751
Payments of short-term borrowings and long-term debt (29,608) (13,154)
Proceeds from other issuances of common stock 20 39
-------------------- -----------------
Net cash provided by financing activities 30,648 47,636
Net decrease in cash (6,963) (1,520)
Cash at beginning of period 12,612 8,795
-------------------- -----------------
==================== =================
Cash at end of period $ 5,649 $ 7,275
==================== =================
==================== =================
See accompanying notes.
</TABLE>
<PAGE>
Discount Auto Parts, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
November 28, 2000
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Discount Auto Parts, Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended May 30,
2000.
Operating results for the thirteen and twenty-six week periods ended November
28, 2000 are not necessarily indicative of the results that may be expected for
the entire fiscal year.
2. Long-Term Debt
Long-term debt consists of the following (in thousands):
November 28 May 30
2000 2000
---------------- -----------------
Revolving credit agreements $ 242,828 $ 211,000
Senior term notes 50,000 50,000
Senior secured notes 4,800 6,000
---------------- -----------------
297,628 267,000
Less current maturities (2,400) (2,400)
================ =================
$ 295,228 $ 264,600
================ =================
Effective July 29, 1999, the Company entered into a new five year $265 million
unsecured revolving credit agreement (the "Revolver"). The rate of interest
payable under the Revolver is a function of LIBOR or the prime rate of the lead
agent bank, at the option of the Company. During the term of the Revolver, the
Company is also obligated to pay a fee, which fluctuates based on the Company's
funded debt to EBITDAR ratio, for the unused portion of the Revolver.
Effective August 8, 1997, the Company issued $50 million senior term notes
facility (the "Notes"). The Notes provide for interest at a fixed rate of 7.46%,
payable semi-annually, with semi-annual principal payments of $7.1 million,
beginning on July 15, 2004.
At November 28, 2000 and May 30, 2000, the Company's weighted average interest
rate on its borrowing under its revolving lines of credit was 8.1% and 7.3%,
respectively.
As of November 28, 2000, the Company had approximately $22.2 million of
available borrowings.
The Company has issued two senior secured notes, each for an original principal
amount of $12 million, to an insurance company. The notes are collateralized by
a first mortgage on certain store properties, equipment and fixtures. The
agreements provide for interest at fixed rates of 10.11% and 9.8%, payable
quarterly, with annual principal payments of $1.2 million on each December 15
and May 31.
The Company's debt agreements contain various restrictions, including the
maintenance of certain financial ratios and restrictions on dividends, with
which the Company was in compliance.
3. Comprehensive Income
Comprehensive income for the periods presented equals net income.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of OperationsThirteen Weeks and Twenty-Six Weeks Ended November 28, 2000
Compared to Thirteen Weeks Twenty-Six Weeks Ended November 30, 1999
Total sales for the second quarter of fiscal 2001 increased 12.8% to $161.0
million, as compared to $142.6 million for the second quarter a year earlier.
Comparable store sales increased 5.2% for the second quarter of fiscal 2001 as
compared to the second quarter of fiscal 2000. Total sales for the first six
months of fiscal 2001 increased 14.6% to $328.0 million, from $286.3 million a
year earlier. Comparable store sales increased 5.7% for the first six months of
fiscal 2001 as compared to the first six months of fiscal 2000. Comparable store
sales results include sales from the Company's commercial delivery program. The
balance of the increase in total sales for the second quarter and first six
months of fiscal 2001 were attributable to sales from new stores opened since
the beginning of fiscal 2000.
At November 28, 2000, the Company had 658 stores in operation, compared with
643 stores at May 30, 2000 and 602 stores at November 30, 1999.
Gross profit for the second quarter of fiscal 2001 was $63.4 million as compared
to $58.5 million for the second quarter of fiscal 2000. As a percentage of
sales, gross profit was 39.4% for the second quarter of fiscal 2001 as compared
to 41.0% for the second quarter of fiscal 2000. Gross profit for the first six
months of fiscal 2001 was $127.3 million as compared to $117.0 million a year
earlier. As a percentage of sales, gross profit was 38.8% for the first six
months of fiscal 2001 as compared to 40.9% a year earlier. Gross profit for the
second quarter and first six months of fiscal 2001 was negatively impacted by
overall lower vendor incentives, higher inventory shrinkage expense and margin
pressure in commodity categories such as oil.
Selling, general and administrative (" SG&A") expenses increased as a percentage
of sales from 31.5% in the second quarter of fiscal 2000 to 33.5% in the second
quarter of fiscal 2001. SG&A expenses increased as a percentage of sales from
31.0% for the first six months of fiscal 2000 to 32.5% for the first six months
of fiscal 2001. The increase is due primarily to lower than anticipated retail
sales which resulted in a reduced ability to leverage certain store related
expenses.
Income from operations for the second quarter of fiscal 2001 was $9.5 million as
compared to $13.5 million for the second quarter of fiscal 2000. Income from
operations for the first six months of fiscal 2001 was $20.6 million as compared
to $28.3 million for the first six months of fiscal 2000.
Interest expense for the second quarter of fiscal 2001 was $6.0 million as
compared to $4.2 million for the second quarter of fiscal 2000. Interest expense
for the first six months of fiscal 2001 was $11.5 million as compared to $7.8
million during the first six months of fiscal 2000. The increase was the result
of increased borrowings primarily associated with new store growth and higher
interest rates on the Company's variable rate debt.
The Company's effective tax rate for the second quarter of fiscal 2001 was 36.0%
as compared to 37.0% for the second quarter of fiscal 2000. The Company's
effective tax rate for the first six months of fiscal 2001 was 36.0% as compared
to 37.2% for the first six months of fiscal 2000. The lower tax rate primarily
is the result of state planning and restructuring initiatives, which were
implemented as of the end of the second quarter of fiscal 2000.
Taking into account all of the above described factors, the Company reported net
income for the second quarter of fiscal 2001 of $2.3 million or $.14 per diluted
share as compared to net income of $6.0 million or $.36 per diluted share for
second quarter of fiscal 2000. Net income for the first six months of fiscal
2001 was $5.9 million or $.35 per diluted share as compared to net income of
$13.4 million or $.80 per diluted share for first six months of fiscal 2000.
Liquidity and Capital Resources
For the twenty-six weeks ended November 28, 2000, net cash of $17.6 million was
used in the Company's operations versus $13.1 million used by the Company's
operations for the comparable twenty-six week period of fiscal 2000. During the
twenty-six weeks ended November 28, 2000 and November 30, 1999, this net use of
cash was due primarily to a reduction in trade accounts payable which is normal
to the Company's operations as the Company historically receives extended credit
terms from its vendors at its fiscal year end. Such extended terms generally
come due in the first and second quarters of the new fiscal year. The uses of
cash were offset in part by current period earnings and depreciation.
Capital expenditures for the twenty-six weeks ended November 28, 2000 were $20.8
million. The majority of the capital expenditures related to the 17 new stores
opened during that period. The Company also closed two stores during first
quarter of fiscal 2001. For all of fiscal 2001, the Company expects to open
approximately 40 new stores.
In May 2000, the Company broke ground on a second distribution center in Copiah
County, Mississippi. The second distribution center is expected to be
approximately 400,000 square feet and will be able to support approximately 450
stores. The new distribution center is expected to be opened and operational
during March 2001. Expenditures associated with the construction of the second
distribution center are expected to be approximately $30 million. The second
distribution center is being leased under a new $28 million operating lease
agreement, which was consummated in May 2000. The lease will cover the land,
buildings and certain integrated operating equipment, such as conveyor systems.
Additional rolling stock, computer equipment, etc. will be funded through other
lease arrangements or the Company's existing revolving line of credit.
The Company also continued the roll-out of its commercial delivery service,
which began in the third quarter of fiscal 1998. The Company's commercial
delivery service consists of a program whereby commercial customers (such as
auto service centers, commercial mechanics, garages and the like) establish
commercial accounts with the Company and order automotive parts from the
Company, with such parts being delivered by the Company or picked up by the
customer from nearby Discount Auto Parts stores. The commercial delivery program
requires the Company to extend trade credit to certain of the commercial account
customers as part of the ordinary course of business. The extension of such
trade credit increases the capital requirements associated with the roll-out of
the program and exposes the Company to credit risk from uncollectible accounts.
The Company has established systems to manage and control such credit risk. The
amount of capital that is needed to cover extension of trade credit will be
dependent in large part upon the success of the commercial delivery service
roll-out and how quickly the commercial business develops. To date, the
commercial delivery program has incurred operating losses of approximately $10.8
million, which have been funded by the Company's retail operations and its
revolving line of credit. Although there can be no assurances, management
expects the commercial delivery program to break even on a direct cost basis
during the fourth quarter of fiscal 2001.
The Company anticipates that total capital expenditures for fiscal 2001,
including the costs associated with the addition of approximately 40 new stores,
and the expenditures associated with the construction of the second distribution
center exclusive of the operating lease will be in the range of $35 to $40
million.
The Company has historically been able to finance most of its new store growth
through unsecured lines of credit and medium and longer-term mortgage financing
provided by banks and other institutional lenders, and through cash flow from
operations. As further discussed in Note 2 of the Notes to Consolidated
Financial Statements, effective July 29, 1999, the Company entered into a new
five year $265 million unsecured revolving credit facility with a syndication of
banks. As of November 28, 2000, the Company had $22.2 million of additional
availability under its existing financing agreements.
The Company is currently in the process of seeking to complete one or more
sale/leaseback transactions for approximately 100 to 150 of its store locations
outside the state of Florida. The transactions are expected to provide the
Company with $50 to $85 million of net proceeds. The proceeds will be used to
reduce outstanding indebtedness under the Company's revolving line of credit,
thus creating additional borrowing availability under that line. Although the
Company expected to close on one or more of these transactions during its first
fiscal quarter, there have been delays in putting the financing arrangements in
place for such transaction. The Company is continuing its efforts to finalize
this transaction and, although there can be no assurance that the financing
arrangements will be completed, the Company expects the transaction to close
prior to the end of fiscal 2001.
The Company is exposed to changes in interest rates, primarily from its
revolving credit agreement. The Company also has long-term debt that bears a
fixed rate. As to the fixed rate debt, there is a risk that market rates will
decline and the required payments will exceed those based on current market
rates on the long-term debt.
The Company believes that the expected cash flows from operations, proceeds from
the pending sale/leaseback transactions, available bank borrowings and trade
credit, will be sufficient to fund the capital and liquidity needs of the
Company for the next two to three years. If one or more of sale/leasebacks were
not completed, the Company would need to immediately seek alternative types of
funding in order to supplement the existing revolving credit facility and there
can be no assurance that such alternative funding would be available or, if
available, would be available on terms favorable to the Company. If such
alternative funding proved unavailable, the Company may have to further scale
back certain of its growth plans.
Inflation and Seasonality
The Company does not believe its operations have been materially affected by
inflation. The Company has been successful, in many cases, in reducing the
effects of merchandise cost increases principally by taking advantage of vendor
incentive programs, economies of scale resulting from increased volumes or
purchases, and selective forward buying.
Although sales have historically been somewhat higher in the Company's fourth
quarter (March through May), the Company does not consider its business to be
seasonal.
Forward Looking Statements
The Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of this quarterly report contain forward looking
statements that are based on the current expectations, estimates and projections
about the industry in which the Company operates, management's beliefs and the
assumptions made by management. These statements include the words
"anticipates", "expects", "expected", "should", and "believes", variations of
such words, and similar expressions which are intended to identify such forward
looking statements. These forward looking statements are subject to potential
risks and uncertainties that could cause actual results to differ materially
from historical results or those currently anticipated.
These potential risks and uncertainties include, but are not limited to,
increased competition, extent of the market demand for auto parts, availability
of inventory supply, inventory shrinkage, propriety of inventory mix, adequacy
and perception of customer service, product quality and defect experience,
availability of and ability to take advantage of vendor pricing programs and
incentives, sourcing availability, rate of new store openings, cannibalization
of store sites, mix and types of merchandise sold, governmental regulation of
products, weather, new store development, performance of information systems,
effectiveness of deliveries from the distribution center, ability to hire, train
and retain qualified team members, availability of quality store sites, ability
to successfully implement the commercial delivery service, credit risk
associated with the commercial delivery service, environmental risks,
availability of expanded and extended credit facilities, and the ability to
successfully and efficiently establish and coordinate operations at the second
distribution center and other risks.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
No material changes have occurred in the quantitative and qualitative
market risk disclosure of the Company as presented in the Company's Annual
Report on Form 10-K for the year ended May 30, 2000.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Coalition for a Level Playing Field, et. al. V. AutoZone, Inc. et. al, Case No.
00-0953 in and for the United States District Court, Eastern District of New
York. In February 2000, the Coalition for a Level Playing Field ("Coalition")
and over one hundred independent automotive parts and accessories aftermarket
warehouse distributors and and/or jobbers filed a lawsuit in the United States
District Court for the Eastern District of New York against the Company. The
plaintiffs claim that the defendants have knowingly received volume discounts,
rebates, slotting and other allowances, fees, free inventory, sham advertising
and promotional payments, a share in the manufacturers' profits, and excessive
payments for services purportedly performed for the manufacturers in violation
of the Robinson-Patman Act. The complaint seeks injunctive and declaratory
relief, unspecified treble damages on behalf of each of the plaintiffs, as well
as attorneys' fees and costs. The defendants, including the Company, filed a
motion to dismiss in late October 2000. The plaintiff's opposition to such
motion to dismiss is expected to be filed in January 2001 with a further
response by the defendants expected by March 2001. Any discovery would follow
after disposition by the court of such motion to dismiss. The Company believes
the claims to be without merit and intends to vigorously defend the action.
The Company is currently involved in litigation with its insurance carrier
pursuant to which the Company is seeking recovery under its insurance policy of
certain amounts incurred in connection with the previously reported Airgas, Inc.
litigation and the settlement thereof. Recently, the Company's motion for
summary judgment was granted. The Company has filed a motion requesting that the
resulting judgment be amended to reflect a monetary award in excess of $21
million. The insurance carrier opposes the motion and, meanwhile filed a notice
of appeal to the United States Court of Appeals for the Eleventh Circuit. The
ultimate outcome of such an appeal or an estimate of the amount of cash
recovery, if any, cannot be determined at this time
Discount Auto Parts is not a party to any other legal proceedings, other than
various claims and lawsuits arising in the normal course of the Company's
business. The Company does not believe that such claims and lawsuits,
individually or in the aggregate, will have a material adverse effect on its
financial condition or results of operations.
Item 2. Changes in Securities and Use of Proceeds
On November 21, 2000, the Board of Directors adopted a Stockholder Rights Plan
as more fully described in the Form 8-K dated and filed on November 27, 2000.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Company was held on October 11, 2000.
There were 16,700,449 shares of Common Stock entitled to vote. The following
matters were voted at the meeting.
A proposal to decrease the number of members of the board of directors of the
Company from 6 members to 5 members was approved and adopted, with 11,523,404
votes for the proposal, 4,311,304 against the proposal and 6,350 abstentions.
E.E. Wardlow was elected to fill a Class II director seat for a three-year term,
with 11,800,391 votes for his election and 4,040,667 withheld. Directors
continuing to serve are Peter J. Fontaine, William C. Perkins, David P. Walling
and Charles W. Webster, Jr.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Amended and Restated Articles of Incorporation of Discount Auto Parts,
Inc., as amended
4.1 Form of Certificate for Common Stock of the Company
10.27 Severance Protection and Change of Control Benefits Program
27 Financial Data Schedule (For SEC Use Only)
(b) Reports on Form 8-K
The Company filed an 8-K on November 21, 2000 concerning the
Shareholders Rights Agreement during the thirteen-week period ended
November 28, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DISCOUNT AUTO PARTS, INC.
Date: January 11, 2001 By: /s/ Peter J. Fontaine
Peter J. Fontaine
Chief Executive Officer
(Principal Executive Officer)
Date: January 11, 2001 By: /s/ C. Michael Moore
C. Michael Moore
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
DISCOUNT AUTO PARTS, INC.
ARTICLE I
Name
The name of this Corporation shall be:
DISCOUNT AUTO PARTS, INC.
ARTICLE II
Principal Office and Mailing Address
The address of the principal office and mailing address of this
Corporation shall be:
4900 Frontage Road South
Lakeland, Florida 33801
ARTICLE III
Business and Purposes
The general purpose for which this Corporation is organized is the
transaction of any and all lawful business for which corporations may be
incorporated under the Business Corporation Act of the State of Florida, and any
amendments thereto, and in connection therewith, this Corporation shall have and
may exercise any and all powers conferred from time to time by law upon
corporations formed under such Act.
ARTICLE IV
Capital Stock
1. Authorized Capitalization.
(a)Capital Stock.The total number of shares of capital stock authorized
to be issued by this Corporation shall be:
(i) 50,000,000 shares of common stock, par value $.01
per share (the "Common Stock"); and
(ii) 5,000,000 shares of preferred stock, par value
$.01 per share (the "Preferred Stock").
(b) Designations, Etc. The designation, relative rights, preferences
and liabilities of each class of stock, itemized by class, shall be as follows:
(i) Common. Each share of Common Stock shall be
entitled to one vote on all matters submitted to a vote of
stockholders, except matters required to be voted on exclusively by
holders of Preferred Stock or of any series of Preferred Stock. The
holders of Common Stock shall be entitled to such dividends as may be
declared by the Board of Directors from time to time, provided that
required dividends, if any, in respect of any outstanding Preferred
Stock have been paid or provided for. In the event of the liquidation,
dissolution, or winding up, whether voluntary or involuntary, of this
Corporation, the assets and funds of this Corporation available for
distribution to stockholders, and remaining after the payment to
holders of Preferred Stock of the amounts to which they are entitled,
shall be divided and paid to the holders of the Common Stock according
to their respective shares.
(ii) Preferred. Shares of the Preferred Stock may be
issued from time to time in one or more series. The board of directors
of this Corporation (the "Board of Directors" or "Board") by resolution
shall establish each series of Preferred Stock and fix and determine
the number of shares and the designations, preferences, limitations and
relative rights of each such series, provided that all shares of the
Preferred Stock shall be identical except as to the following relative
rights and preferences, as to which there may be variations fixed and
determined by the Board of Directors between different series:
(A) The rate or manner of payment of dividends.
(B) Whether shares may be redeemed and, if so, the
redemption price and the terms and conditions
of redemption.
(C) The amount payable upon shares in the event of
voluntary and involuntary liquidation.
(D) Sinking fund provisions, if any, for the
redemption or purchase of shares.
(E) The terms and conditions, if any, on which the
shares may be converted.
(F) Voting rights, if any.
(G) Any other rights or preferences now or hereafter
permitted by the laws of the State of Florida as
variations between different series of preferred
stock.
2. No Preemptive Rights.
(a) Preferred Stock. Unless otherwise specifically provided in
the terms of the Preferred Stock, the holders of any class of Preferred Stock of
this Corporation shall have no preemptive right to subscribe for and purchase
their proportionate share of any additional Preferred Stock (of the same class
or otherwise) or Common Stock issued by this Corporation, from and after the
issuance of the shares originally subscribed for by the stockholders of this
Corporation, whether such additional shares be issued for cash, property,
services or any other consideration and whether or not such shares be presently
authorized or be authorized by subsequent amendment to these Articles of
Incorporation.
(b) Common Stock. The holders of Common Stock of this
Corporation shall have no preemptive right to subscribe for and purchase their
proportionate share of any additional Preferred Stock or Common Stock issued by
this Corporation, from and after the issuance of the shares originally
subscribed for by the stockholders of this Corporation, whether such additional
shares be issued for cash, property, services or any other consideration and
whether or not such shares be presently authorized or be authorized by
subsequent amendment to these Articles of Incorporation.
3. Payment for Stock. The consideration for the issuance of shares of
capital stock may be paid, in whole or in part, in cash, in promissory notes, in
other property (tangible or intangible), in labor or services actually performed
for this Corporation, in promises to perform services in the future evidenced by
a written contract, or in other benefits to this Corporation in each case, at a
fair valuation to be fixed by the Board of Directors. When issued, all shares of
stock shall be fully paid and nonassessable.
4. Treasury Stock. The Board of Directors of this Corporation shall
have the authority to acquire by purchase and hold from time to time any shares
of its issued and outstanding capital stock for such consideration and upon such
terms and conditions as the Board of Directors in its discretion shall deem
proper and reasonable in the interest of this Corporation.
ARTICLE V
Existence of Corporation
This Corporation shall have perpetual existence unless dissolved by law.
ARTICLE VI
Directors
1. Number. The Board of Directors of this Corporation shall consist of
not less than three (3) nor more than nine (9) members, the exact numbers of
directors to be fixed from time to time as provided in the bylaws of this
Corporation.
2. Classification.
(a) Classes. Commencing with the 1992 annual meeting of
stockholders, the Board of Directors shall be divided into three classes, Class
I, Class II and Class III, with each class to be as nearly equal in number as
possible, the specific number of directors to be assigned to each class being
determined by the existing Board of Directors. At the 1992 annual meeting of
stockholders, directors of the first class (Class I) shall be elected to hold
office for a term expiring at the 1993 annual meeting of stockholders; directors
of the second class (Class II) shall be elected to hold office for a term
expiring at the 1994 annual meeting of stockholders; and directors of the third
class (Class III) shall be elected to hold office for a term expiring at the
1995 annual meeting of stockholders. At each annual meeting of stockholders
after 1992, the successors to the class of directors whose terms then shall
expire at the time of that meeting shall be identified as being the same class
as the directors they succeed and elected to hold office for a term expiring at
the third succeeding annual meeting of stockholders.
(b) Changes, Unexpired Terms, Etc. If the number of directors
is changed, any increase or decrease shall be apportioned among the classes so
as to maintain the number of directors in each class as nearly equal as
possible, and any additional directors of any class elected to fill a vacancy
resulting from an increase in such class shall hold office for a term that shall
coincide with the remaining term of that class, but in no case will a decrease
in the number of directors shorten the term of any incumbent director. A
director shall hold office until the annual meeting for the year in which his or
her term expires and until his or her successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
(c) Preferred Stock Directors. Notwithstanding the foregoing,
whenever the holders of any one or more classes or series of Preferred Stock
issued by this Corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of these Articles of Incorporation
or the resolution or resolutions adopted by the Board of Directors pursuant to
Article IV hereof, and such directors so elected shall not be divided into
classes pursuant to this Article VI unless expressly provided by such terms.
3. Powers. The business and affairs of this Corporation shall be
managed by the Board of Directors, which may exercise all such powers of this
Corporation and do all such lawful acts and things as are not by law directed or
required to be exercised or done by the stockholders.
4. Quorum. A quorum for the transaction of business at all meetings of
the Board of Directors shall be a majority of the number of directors determined
from time to time to comprise the Board of Directors, and the act of a majority
of the directors present at a meeting at which a quorum is present shall be the
act of the directors.
5. Removal. Subject to the rights, if any, of the holders of shares of
Preferred Stock then outstanding, any or all of the directors of this
Corporation may be removed from office with or without cause by the stockholders
at any annual or special meeting of stockholders of this Corporation.
6. Vacancies. Newly created directorships resulting from any increase
in the number of directors or any vacancy on the Board of Directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum, or by a sole remaining director,
or by the stockholders. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class of
directors in which the new directorship was created or the vacancy occurred and
until such director's successor shall have been elected and qualified. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
7. Nominations and Elections.
(a) Eligible Nominees. Subject to the rights, if any, of the
holders of shares of Preferred Stock then outstanding, only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors at meetings of stockholders.
(b) Nominations. Nominations of persons for election to the
Board of Directors of this Corporation may be made at a meeting of stockholders
by or at the direction of: (i) the Board of Directors; (ii) by any nominating
committee or person appointed by the Board; or (iii) by any stockholder of this
Corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Article VI, Section 7.
(c) Notice. Nominations by stockholders shall be made pursuant
to timely notice in writing to the Secretary of this Corporation. To be timely,
a stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of this Corporation not less than 60 days prior to
the date of the meeting at which the director(s) are to be elected, regardless
of any postponements, deferrals or adjournments of that meeting to a later date;
provided, however, that if less than 70 days' notice or prior public disclosure
of the date of the scheduled meeting is given or made, notice by the
stockholder, to be timely, must be so delivered or received not later than the
close of business on the tenth day following the earlier of the day on which
notice was given or such public disclosure was made.
(d) Stockholder Nominations. A stockholder's notice to the
Secretary shall set forth (A) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, (i) the name, age, business
address and residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class and number of shares of capital stock
of this Corporation which are beneficially owned by the person and (iv) any
other information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Rule 14A under
the Securities Exchange Act of 1934, as amended; and (B) as to the stockholder
giving the notice (i) the name and address, as they appear on this Corporation's
books, of the stockholder and (ii) the class and number of shares of this
Corporation's stock which are beneficially owned by the stockholder on the date
of such stockholder notice. This Corporation may require any proposed nominee to
furnish such other information as may reasonably be required by this Corporation
to determine the eligibility of such proposed nominee to serve as a director of
this Corporation.
(e) Presiding Officer's Duties. The presiding officer of the
meeting shall determine and declare at the meeting whether the nomination was
made in accordance with the terms of this Article VI, Section 7. If the
presiding officer determines that a nomination was not made in accordance with
the terms of this Article VI, Section 7, he or she shall so declare at the
meeting and any such defective nomination shall be disregarded.
ARTICLE VII
Registered Office and Registered Agent
The registered office of this Corporation shall be located at 4900
Frontage Road South, Lakeland, FL 33802 and the registered agent of this
Corporation at such office shall be Denis L. Fontaine. This Corporation shall
have the right to change such registered office and such registered agent from
time to time, as provided by law.
ARTICLE VIII
Bylaws
1. Adoption, Amendment, Etc. The power to adopt the bylaws of this
Corporation, to alter, amend or repeal the bylaws, or to adopt new bylaws, shall
be vested in the Board of Directors of this Corporation; provided, however, that
any bylaw or amendment thereto as adopted by the Board of Directors may be
altered, amended, or repealed by vote of the stockholders entitled to vote
thereon, or a new bylaw in lieu thereof may be adopted by the stockholders, and
the stockholders may prescribe in any bylaw made by them that such bylaw shall
not be altered, amended or repealed by the Board of Directors.
2. Scope. The bylaws of this Corporation shall be for the government of
this Corporation and may contain any provisions or requirements for the
management or conduct of the affairs and business of this Corporation, provided
the same are not inconsistent with the provisions of these Articles of
Incorporation, or contrary to the laws of the State of Florida or of the United
States.
ARTICLE IX
Stockholder Meetings
1. Annual Meetings.
(a) Business to be Conducted. At an annual meeting of
stockholders, only such business shall be conducted, and only such proposals
shall be acted upon, as shall have been brought before the annual meeting (i)
by, or at the direction of, the Board of Directors, or (ii) by any stockholder
of this Corporation who complies with the notice procedures set forth in this
Article IX, Section 1.
(b) Notice. For a proposal to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of this Corporation. To be timely, a
stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of this Corporation not less than 60 days prior to
the scheduled annual meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the scheduled
annual meeting is given or made, notice by the stockholder, to be timely, must
be so delivered or received not later than the close of business on the tenth
day following the earlier of the day on which such notice of the date of the
scheduled annual meeting was given or the day on which such public disclosure
was made.
(c) Stockholder Proposals. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (i) a brief description of the proposal desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and address, as they appear on this
Corporation's books, of the stockholder proposing such business and any other
stockholders known by such stockholder to be supporting such proposal, (iii) the
class and number of shares of this Corporation's stock which are beneficially
owned by the stockholder on the date of such stockholder notice and by any other
stockholders known by such stockholder to be supporting such proposal on the
date of such stockholder notice, and (iv) any financial interest of the
stockholder in such proposal.
(d) Presiding Officer's Duties. The presiding officer of the
annual meeting shall determine and declare at the annual meeting whether the
stockholder proposal was made in accordance with the terms of this Article IX,
Section 1. If the presiding officer determines that a stockholder proposal was
not made in accordance with the terms of this Article IX, Section 1, he or she
shall so declare at the annual meeting and any such proposal shall not be acted
upon at the annual meeting.
(e) Other Business. This provision shall not prevent the
consideration and approval or disapproval at the annual meeting of reports of
officers, directors and committees of the Board of Directors, but, in connection
with such reports, no new business shall be acted upon at such annual meeting
unless stated, filed and received as herein provided.
2. Special Meetings.
(a) Call of Meetings. Special meetings of the stockholders of
this Corporation for any purpose or purposes may be called at any time by (i)
the Board of Directors; (ii) the Chairman of the Board of Directors (if one is
so appointed); (iii) the President of this Corporation; or (iv) by holders of
not less than 25% of all of the outstanding shares entitled to vote on any issue
proposed to be considered at the proposed special meeting, if such stockholders
sign, date and deliver to this Corporation's Secretary one or more written
demands for the meeting describing the purpose or purposes for which it is to be
held. Special meetings of the stockholders of this Corporation may not be called
by any other person or persons.
(b) Business to be Conducted. At any special meeting of
stockholders, only such business shall be conducted, and only such proposals
shall be acted upon, as shall have been set forth in the notice of such special
meeting.
ARTICLE X
Amendment of Articles of Incorporation
This Corporation reserves the right to amend, alter, change or repeal
any provisions contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are subject to this reservation. Notwithstanding anything contained in
these Articles of Incorporation to the contrary, the affirmative vote of at
least 66-2/3% of the outstanding shares of Common Stock of this Corporation
shall be required to amend or repeal Articles VI, IX or X of these Articles of
Incorporation or to adopt any provision inconsistent therewith.
IN WITNESS WHEREOF, DISCOUNT AUTO PARTS, INC. has caused these Amended
and Restated Articles of Incorporation to be executed and acknowledged by its
President and Secretary this 20th day of August, 1992.
ATTEST: DISCOUNT AUTO PARTS, INC.
(CORPORATE SEAL)
By: /s/ Peter J. Fontaine /s/ Denis L. Fontaine
Peter J. Fontaine, Secretary Denis L. Fontaine, President
<PAGE>
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
DISCOUNT AUTO PARTS, INC.
(Pursuant to Section 607.0602 of the
Florida Business Corporation Act)
DISCOUNT AUTO PARTS, INC., a corporation organized and existing under
the laws of State of Florida (this "Corporation"), in order to amend its
Articles of Incorporation, in accordance with the requirements of Chapter 607,
Florida Statutes, does hereby certify as follows:
1. The name of this Corporation is DISCOUNT AUTO PARTS, INC.
2. The amendment effected hereby was duly adopted by the Board of
Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") on November 21, 2000 pursuant to Section 607.0602, Florida
Statutes, and pursuant to the authority granted to and vested in the Board in
accordance with the provisions of this Corporation's Articles of Incorporation,
as amended to date (hereinafter called the "Articles of Incorporation"). In
accordance with such Section and the Articles of Incorporation, such amendment
was adopted without approval of the shareholders of this Corporation, which
approval was not and is not required, and shall become effective upon filing
hereof with the Florida Department of State without shareholder action.
3. The Board of Directors has authorized and does hereby create a
series of Preferred Stock, par value $.01 per share, of this Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, powers and preferences thereof, and the limitations thereof, as more
particularly set forth below.
4. The Articles of Incorporation are hereby amended by adding to the
end of Section 1(b) of Article IV, after the end of Section 1(b)(ii), a new
Section 1(b)(iii) as follows:
* * *
(iii) Series A Junior Participating Preferred Stock.
Of the 5,000,000 shares of Preferred Stock authorized by these Articles
of Incorporation, a series of 500,000 of such shares shall be and is
authorized and designated as follows:
(a) Designation and Amount. The shares of
such series shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A
Preferred Stock shall be 500,000. Such number of shares may be
increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number
of shares of Series A Preferred Stock to a number less than
the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities issued by this Corporation convertible
into Series A Preferred Stock.
(b) Dividends and Distributions.
(1) Subject to the rights of the
holders of any shares of any series of Preferred Stock
of this Corporation (the "Preferred Stock") (or any similar
stock) ranking prior and superior to the Series A Preferred
Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of
Common Stock, par value $.01 per share, of this Corporation
(the "Common Stock") and of any other stock of this
Corporation ranking junior to the Series A Preferred Stock,
shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day
of January, April, July, and October in each year (each such
date being referred to herein as a "Dividend Payment Date"),
commencing on the first Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends,
and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock, declared on the
Common Stock since the immediately preceding Dividend Payment
Date or, with respect to the first Dividend Payment Date,
since the first issuance of any share or fraction of a share
of Series A Preferred Stock. In the event this Corporation
shall at any time after December 14, 2000, declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) This Corporation shall declare a
dividend or distribution on the Series A Preferred
Stock as provided in Section 2(a) immediately after it
declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Dividend Payment Date and the next subsequent Dividend Payment
Date, a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable, when, as and if declared,
on such subsequent Dividend Payment Date.
(3) Dividends shall begin to accrue
and be cumulative, whether or not earned or
declared, on outstanding shares of Series A Preferred Stock
from the Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the Record Date for the first Dividend Payment
Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the
date of issue is a Dividend Payment Date or is a date after
the Record Date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly
dividend and before such Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be
cumulative from such Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board
of Directors may fix a Record Date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which Record Date shall be not more than 60 days
prior to the date fixed for the payment thereof.
(c) Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting
rights;
(1) Subject to the provision for
adjustment hereinafter set forth and except as
otherwise provided in the Articles of Incorporation or
required by law, each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes on all matters upon
which the holders of the Common Stock of this Corporation are
entitled to vote. In the event this Corporation shall at any
time after December 14, 2000 declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(2) Except as otherwise provided in
the Articles of Incorporation, as hereby or
otherwise hereafter amended, and except as otherwise required
by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock and any other capital
stock of this Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote
of stockholders of this Corporation.
(3) Except as set forth herein, or
as otherwise provided by law, holders of Series A
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
(d) Certain Restrictions.
(1) Whenever quarterly dividends or
other dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not earned or declared, on
shares of Series A Preferred Stock outstanding shall have been
paid in full, this Corporation shall not:
a. declare or pay dividends,
or make any other distributions,on any shares of stock ranking
junior (as to dividends) to the Series A Preferred Stock;
b. declare or pay dividends,
or make any other distributions, on any shares
of stock ranking on a parity (as to dividends) with the Series
A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
c. redeem or purchase or
otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A
Preferred Stock, provided that this Corporation may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of this
Corporation ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock or rights, warrants or options to acquire such
junior stock;
d. redeem or purchase or
otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(2) This Corporation s hall not
permit any Subsidiary of this Corporation to purchase or
otherwise acquire for consideration any shares of stock of
this Corporation unless this Corporation could, under Section
4(a), purchase or otherwise acquire such shares at such time
and in such manner.
(e) Reacquired Shares. Any shares of Series
A Preferred Stock purchased or otherwise acquired by this
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized but
unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
(f) Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of this
Corporation, no distribution shall be made (A) to the holders
of the Common Stock or of shares of any other stock of this
Corporation ranking junior, upon liquidation, dissolution or
winding up, to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock
shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not earned or declared, to the date of such
payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount
to be distributed per share to holders of shares of Common
Stock, or (B) to the holders of shares of stock ranking on a
parity upon liquidation, dissolution or winding up with the
Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or
winding up. In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A liquidation preference and the liquidation
preferences of all other classes and series of stock of this
Corporation, if any, that rank on a parity with the Series A
Preferred Stock in respect thereof, then the assets available
for such distribution shall be distributed ratably to the
holders of the Series A Preferred Stock and the holders of
such parity shares in the proportion to their respective
liquidation preferences. In the event this Corporation shall
at any time after December 14, 2000 declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(A) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(g) Consolidation, Merger, etc. In case this
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are converted into, exchanged for or changed into other
stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at
the same time be similarly converted into, exchanged for or
changed into an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted, exchanged
or converted. In the event this Corporation shall at any time
after December 14, 2000, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence
with respect to the conversion, exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
(h) No Redemption. The shares of Series A
Preferred Stock shall not be redeemable from any holder.
(i) Rank.The Series A Preferred Stock shall
rank, with respect to the payment of dividends and
the distribution of assets upon liquidation, dissolution or
winding up of this Corporation, junior to all other series of
Preferred Stock and senior to the Common Stock.
(j) Amendment. If any proposed amendment to
the Articles of Incorporation (including as amended by these
Articles of Amendment) would alter, change or repeal any of
the preferences, powers or special rights given to the Series
A Preferred Stock so as to affect the Series A Preferred Stock
adversely, then the holders of the Series A Preferred Stock
shall be entitled to vote separately as a class upon such
amendment, and the affirmative vote of two-thirds of the
outstanding shares of the Series A Preferred Stock, voting
separately as a class, shall be necessary for the adoption
thereof, in addition to such other vote as may be required by
the laws of the State of Florida.
(k) Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share that shall entitle
the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
* * *
IN WITNESS WHEREOF, the undersigned duly authorized officer of this
Corporation has executed these Articles of Amendment of the Articles of
Incorporation of Discount Auto Parts, Inc. this 27 day of November, 2000.
DISCOUNT AUTO PARTS, INC.
By: /s/ Peter J. Fontaine
Name: Peter J. Fontaine
Title: Chairman of the Board and
Chief Executive Officer
<PAGE>
Exhibit 4.1
COMMON STOCK COMMON STOCK
COMMON STOCK COMMON STOCK
NUMBER SHARES
DAP
[LOGO]
INCORPORATED UNDER THE LAWS
OF THE STATE OF FLORIDA
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 254642 10 1
DISCOUNT AUTO PARTS, INC.
THIS IS TO CERTIFY THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF THE PAR
VALUE OF $.01 EACH OF
Discount Auto Parts, Inc., transferable on the books of the Corporation by
the holder hereof in person, or by duly authorized attorney upon surrender of
this Certificate properly endorsed. This Certificate is not valid unless
countersigned by the Transfer Agent and registered by the Registrar.
Witness the seal of the Corporation and the signatures of its
duly authorized Officers.
Dated
/s/ C. Michael Moore /s/ Peter Fontaine
Secretary Chairman and
Chief Executive Officer
(Discount Auto Parts, Inc. Seal)
COUNTERSIGNED AND REGISTERED
MELLON INVESTOR SERVICES, LLC
(Transfer Agent and Registrar)
BY
AUTHORIZED SIGNATURE
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as renamed in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties (Cust.) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received:__________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
--------------------------------------------------------------------------------
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_______________________________________________ shares of the capital stock
represented by the within Certificate, and do hereby irrevocably constitute and
appoint ________________________________________ Attorney to transfer the said
stock on the books of the within named Corporation with full power of
substitution in the premises.
Dated __________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER
The Corporation's Articles of Incorporation authorize the Corporation
to issue more than one class or series of capital stock. The provisions
of the Articles of Incorporation setting forth the classes and series
of stock authorized to be issued, and the distinguishing
characteristics of each class or series, are hereby incorporated by
reference to the same extent as if fully set forth herein. Upon written
request to the Secretary of the Corporation at its principal executive
offices, the Corporation will furnish to any shareholder, without
charge, a full statement of (1) the designations, preferences,
limitations and relative rights of each series or class of stock
authorized to be issued, (2) the variations in the relative rights and
preferences between the shares of each series of preferred or special
class of stock, so far as the same have been fixed and determined, and
(3) the authority of the board of directors to fix and determine the
relative rights and preferences of subsequent series.
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Stockholder Rights Agreement between
the Corporation and ChaseMellon Shareholder Services, L.L.C. dated as
of November 21, 2000 as the same may be amended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of the Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any Person who becomes an
Acquiring Person (as defined in the Rights Agreement) and certain
transferees thereof will become null and void and will no longer be
transferable.
<PAGE>
Exhibit 10.27
DISCOUNT AUTO PARTS, INC.
SEVERANCE PROTECTION AND CHANGE OF CONTROL BENEFITS PROGRAM
1. Purpose
The purpose of this Discount Auto Parts, Inc. Severance Protection and
Change of Control Benefits Program (the "Program") is to provide certain team
members with severance payments in the event of certain terminations of
employment upon a "Change of Control", as hereinafter defined, and incentives
for team members to continue in employment following a Change of Control. The
Program is not intended to meet the qualification requirements of Section 401 of
the Code or to be an "employee pension benefit plan" as defined in ERISA. The
Program is not intended to affect eligibility for or payment of any other
compensation or benefits in accordance with the terms of any applicable plans or
programs of the Company.
2. Definitions
When used herein with initial capital letters, each of the following
terms shall have the corresponding meaning set forth below unless a different
meaning is plainly required by the context in which the term is used:
"Affiliate" shall mean an "affiliate" as defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
"Annual Compensation" for any Participant shall mean the Participant's
annualized base rate of salary plus all short-term incentive compensation at the
target level for the Participant specified under compensation programs
established by the Company for team members generally holding the employment
position held by the Participant, received by the Participant in all capacities
with the Company, as would be reported for federal income tax purposes on Form
W-2, together with any and all salary reduction authorized amounts under any of
the Company's benefit plans or programs, for the most recent full calendar year
immediately preceding the calendar year in which occurs Participant's Triggering
Termination Date or preceding the Change of Control, if higher. "Annual
Compensation" shall not include the value of any stock options, stock
appreciation rights, restricted stock, or restricted stock units granted to
Participant by the Company.
"Applicable Factor" for a particular Participant shall mean be equal to:
(a) the Applicable Benefit Months for such Participant,
but if the Triggering Termination occurs more than 12
months after the occurrence of a Change of Control,
then such number of months will be reduced by the
number of whole months from the first anniversary of
the Change of Control through the date of the
Triggering Termination
divided by
<PAGE>
(b) 12.
For example, if the Applicable Benefit Months for a particular Participant is 6
months and at the time of the Triggering Termination only 3 months has passed
since the date of the Change of Control, then the Applicable Factor would be
0.50 (6 / 12), but if the Applicable Benefit Months for a particular Participant
is 18 months and at the time of the Triggering Termination 15 months has passed
since the date of the Change of Control, the Applicable Factor would be 1.25
([18 - 3] / 12).
"Applicable Benefit Months" for a particular Participant shall mean
that number of months equal to the sum of the Participant's Tenure Credit and
the Participant's Position Credit.
The "Tenure Credit" for a particular Participant shall be determined as of the
date of the Change of Control and shall be computed in accordance with the
following table:
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If the Participant's Years of Service Then, the Tenure Credit
to the Company is: shall be:
------------------------------------------ -------------------------------------
------------------------------------------ -------------------------------------
Less than 6 years None
------------------------------------------ -------------------------------------
------------------------------------------ -------------------------------------
At least 6 years and less than 11 years 3 months
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At least 11 years and less than 16 years 6 months
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At least 16 years 12 months
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The "Position Credit" for a particular Participant shall be determined as of the
date of the Change of Control and shall be computed in accordance with the
following table:
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If the Participant's Position Then, the Position Credit
with the Company is: shall be:
------------------------------------------ -------------------------------------
------------------------------------------ -------------------------------------
Office Supervisor 3 months
------------------------------------------ -------------------------------------
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Key Manager 3 months
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Distribution Center Supervisor 3 months
or above
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Division Manager 6 months
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Department Director/Office Manager 6 months
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"Board" shall mean the Board of Directors of Discount Auto Parts, Inc.
<PAGE>
"Cause" with respect to the Termination of Employment of a Participant
shall mean termination resulting from (i) acts of dishonesty by the Participant
constituting a felony and resulting or intended to result directly or indirectly
in gain or personal enrichment to the Participant at the expense of the Company,
(ii) a final determination by a court or other trier of fact (without any
further rights to appeal) to the effect that the Participant engaged in
employment discrimination, sexual harassment and/or similar employment
relationship activities in violation of any applicable law and resulting in
material damage to or liability of the Company (an "Employment Law Violation")
or (iii) willful and continued failure by the Participant to substantially
perform his or her duties with the Company (other than any such failure
resulting from Disability (as defined herein)).
"Change of Control." For the purpose of this Program, a "Change of
Control" shall occur if (i) the Company shall not be the surviving entity in any
merger or consolidation (or survives only as a subsidiary of an entity other
than a previously wholly-owned subsidiary of the Company), (ii) the Company
sells, leases or exchanges or agrees to sell, lease or exchange all or
substantially all of its assets to any other person or entity (other than a
wholly-owned subsidiary of the Company), (iii) the Company is to be dissolved
and liquidated, (iv) any person or entity, including a "group" as contemplated
by Section 13(d)(3) of the 1934 Act, (other than Peter Fontaine, Fontaine
Industries Limited Partnership, Fontaine Enterprises Limited Partnership, or any
of their respective affiliates and other than (A) any employee plan established
by the Company, (B) the Company, (C) an underwriter temporarily holding
securities pursuant to an offering of such securities or (D) a corporation
owned, directly or indirectly, by stockholders of the Company in substantially
the same proportions as their ownership of the Company) acquires or gains
beneficial ownership or control (including, without limitation, power to vote)
of more than 25% of the combined voting power of the Company's then outstanding
voting securities, or (v) as a result of or in connection with any cash tender
or exchange offer, merger or other business combination, sales of assets or a
contested election for the board of directors, or any combination of the
foregoing transactions (a "Transaction"), the persons who were directors of the
Company before such Transaction shall cease to constitute a majority of the
Board.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation and Benefits Committee of the
Board, or any subsequent committee of the Board that has primary responsibility
for compensation policies. In the absence of such a committee, "Committee" shall
mean the Board or any committee of the Board designated by the Board to perform
the functions of the Committee under the Program.
"Company" includes, individually and/or collectively as the context
requires, Discount Auto Parts, Inc., and all other entities that have approved
and adopted this Program pursuant to Article VII, whether or not an individual
such entity directly compensates the Participant or the Participant appears on
the payroll of such entity.
"Effectiveness Term" shall mean a period of time from the occurrence of
a Change in Control and continuing thereafter for that number of months equal to
the sum of (a) 12 months and (b) the Participant's Applicable Benefit Months.
<PAGE>
"Disability" shall mean that the Participant is unable to perform the
essential functions of the job for which the Participant is being employed by
the Company, with or without reasonable accommodation, by reason of his or her
illness, accident or other cause, including mental disability, for a period of
six consecutive calendar months, or an aggregate of nine months during any
continuous twelve-month period.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Good Reason" For purposes of this Agreement, "Good Reason" shall mean:
(i) A determination by the Participant made in good faith that
there has been a significant reduction by the Company of the authority, duties
or responsibilities of the Participant and such reduction in duties and/or
responsibilities is not remedied within 30 days after receipt by the Company of
written notice from the Participant of such determination;
(ii) Any material reduction of the Participant's compensation
or benefits other than a reduction applicable to all employees generally and
such reduction in compensation and/or benefits is not remedied within 30 days
after receipt by the Company of written notice from the Participant that such a
reduction has occurred;
(iii) The assignment to the Participant of duties which are
materially inconsistent with the duties of the Participant's position with the
Company and such assignment of duties is not revoked within 30 days after
receipt by the Company of written notice from the Participant that such an
assignment of duties has occurred;
(iv) The transfer of the Participant, without the
Participant's written consent, to a location that is more than 50 miles from the
Participant's principal place of employment immediately preceding the then
applicable Change of Control.
"Participant" at any time shall mean each team member then employed by
the Company who (a) holds a position with the Company which qualifies as a
Qualifying Position, and (b) is not a party to a then effective separate written
agreement with the Company which has been adopted by the Board and expressly
provides cash compensation benefits following a change of control of Discount
Auto Parts, Inc. (unless such agreement expressly provides for participation in
this Program).
<PAGE>
"Qualifying Position" shall mean a position with the Company either (a)
at the level of Office Supervisor or above (or comparable positions as they may
exist or be designated in the future), (b) at the level of Key Manager or above
(or comparable positions as they may exist or be designated in the future), or
(c) at the level of Distribution Center Supervisor or above (or comparable
positions as they may exist or be designated in the future). At the time of
adoption of this Program, team members at the level of Office Supervisor and
above include, for example, Department Heads and Department Directors, and team
members at the level of Key Manager and above include, for example, Division
Managers. The Committee shall be entitled to make all decisions regarding which
team members fall within this definition of Qualifying Position, and all such
decisions shall be final and conclusive.
"Termination of Employment" of a Participant shall mean the termination
of the Participant's actual employment relationship with the Company.
"Triggering Termination" with respect to any Participant shall mean (a)
a Termination of Employment as a result of the death of the Participant during
the Effectiveness Term, (b) a Termination of Employment by the Company during
the Effectiveness Term as a result of the Disability of the Participant, (c) a
Termination of Employment by the Company during the Effectiveness Term for
reason other than death of the Participant, Disability of the Participant or
Cause, (d) a Termination of Employment by the Participant for Good Reason during
the Effectiveness Term.
"Triggering Termination Date" with respect to any Participant shall
mean the date of a Triggering Termination as to such Participant.
3. Benefits
(a) Benefits Following a Triggering Termination. So long as a
Participant executes a written release substantially in the form of Annex 2
hereto, upon the occurrence of such a Triggering Termination, (i) the Company
will pay to the Participant, in a single cash payment within 30 days after the
later of the Triggering Termination Date and the date the Participant executes
such release, an amount equal to the product of the Applicable Factor and the
Participant's Annual Compensation.
(b) Vesting. A Participant shall be vested and shall have a
nonforfeitable right with respect to the benefits to be provided hereunder from
and after the Triggering Termination Date. The respective rights and obligations
of the Company and the Participant under this Program shall survive any
termination of Participant's employment to the extent necessary to the intended
preservation of such rights and obligations.
(c) Non-Exclusivity of Rights. Nothing in this Program shall prevent or
limit any Participant's continuing or future participation in or rights under
any benefit, bonus, incentive or other plan or program provided by the Company
and for which such Participant may qualify; provided, however, that if such
Participant becomes entitled to and receives all of the payments provided for in
this Program, the Participant hereby waives his or her right to receive payments
under any severance plan or similar program applicable to employees of the
Company generally.
<PAGE>
4. Funding
Benefits payable under this Program shall be unfunded and the Company
shall administer this Program in a manner that will ensure that benefits are
unfunded and that Participants will not be considered to have received a taxable
economic benefit prior to the time at which benefits are actually payable
hereunder. Accordingly, the Company shall not be required to segregate or
earmark any of its assets for the benefit of Participants or their spouses or
other beneficiaries, and each such person shall have only a contractual right
against the Company for benefits hereunder. The rights and interests of a
Participant under this Program shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by a
Participant or any person claiming under or through a Participant, nor shall
they be subject to the debts, contracts, liabilities or torts of a Participant
or anyone else prior to payment.
5. Participant Obligations.
The following obligations shall be applicable to any Participant who
receives and retains benefits under this Program and the retaining of such
benefits shall constitute the Participant's agreement to abide by such
obligations:
(a) For a period beginning on the Triggering Termination Date and
continuing for a number of months thereafter equal to the Applicable Benefits
Months for such Participant (but if the Triggering Termination occurs more than
12 months after the occurrence of a Change of Control, then such number of
months will be reduced by the number of whole months from the first anniversary
of the Change of Control through the date of the Triggering Termination) (the
"Obligations Period"), the Participant will not do or say anything that
reasonably may be expected to have the effect of diminishing or impairing the
goodwill and good reputation of the Company and its officers, directors and
products nor will the Participant intentionally disparage or injure the
reputation of the Company by making any material negative statements about the
Company's methods of doing business, the effectiveness of its business policies
and the quality of its products or personnel;
(b) During the Obligations Period, the Participant shall not without
the prior written consent of the Company, divulge, disclose or make accessible
to any other person, firm, partnership or company or other entity any
confidential information of Discount Auto Parts, Inc. which shall not include
information known generally or available to the public or of information not
considered confidential by persons engaged in the business conducted by the
Company or from disclosure required by law or court order pertaining to the sale
of automotive parts or accessories to retail customers or to commercial auto
repair outlets (the "Business") except (x) while employed by the Company in the
Business and for the benefit of the Company or (y) when required to do so by a
court of competent jurisdiction, by any governmental agency, or by any
administrative body or legislative body (including a committee thereof) with
purported or apparent jurisdiction to order the Participant to divulge, disclose
or make accessible such information;
<PAGE>
(c) Upon leaving the Company's employ, the Participant will not take
with him or her, without the prior written consent of an officer authorized to
act in the matter by the Board, any drawing, blueprint, business strategies,
budgets, projections, nonpublic financial information, manuals, policies or
other document of the Company, its subsidiaries, affiliates and divisions.
Prior to the payment of any benefits to a Participant hereunder, the Company may
require that such Participant execute and deliver to the Company a written
instrument, in a form reasonably acceptable to the Company, under which such
Participant acknowledges his or her agreement to abide by the foregoing
obligations.
6. Administration
The Program shall be operated under the direction of the Committee and
administered by the Company. The calculation of all benefits payable under the
Program shall be performed by the Company, subject to the review of the
Committee.
7. Claims Procedure
All claims for benefits under this Program shall be determined under
the claims procedure in effect under the Company's 401(k) Plan on the date that
such claims are submitted, except that the Company shall make initial
determinations with respect to claims hereunder and the Committee shall decide
appeals of such determinations. In the event that any dispute under the
provisions of this Program is not resolved to the satisfaction of the affected
Participant, other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in the City of
Lakeland, Florida in accordance with National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be selected by the
Company and the affected Participant, respectively, and the third of whom shall
be selected by the other two arbitrators. Any award entered by the arbitrators
shall be final, binding and nonappealable and judgment may be entered thereon by
either party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically enforceable. The
arbitrators shall have no authority to modify any provision of this Program or
to award a remedy for a dispute involving this Program other than a benefit
specifically provided under or by virtue of the Program. If a Participant
prevails on any material issue which is the subject of any such arbitration or
lawsuit, the Company shall be responsible for all of the fees of the American
Arbitration Association and the arbitrators and any expenses relating to the
conduct of the arbitration (including the Company's and the Participant's
reasonable attorneys' fees and expenses). Otherwise, to the extent permitted by
law, each party shall be responsible for its own expenses relating to the
conduct of the arbitration (including reasonable attorneys' fees and expenses)
and shall share the fees of the American Arbitration Association.
<PAGE>
8. Miscellaneous
(a) Amendment or Termination. Prior to the occurrence of a Change of
Control, the Board at any time may amend this Program so long as such amendment
does not materially eliminate or reduce the payments or benefits owing to
Participants under the Program. In addition, prior to the occurrence of a Change
of Control, the Board at any time may discontinue this Program or may amend this
Program in such manner as the payments or benefits owing to Participants are
materially eliminated or reduced, but in each such case only by action taken at
least two (2) years prior to the effective date of such discontinuation or
amendment. Upon and following a Change of Control, this Program may not be
amended or terminated in any way that would eliminate or reduce the payments and
benefits owing to Participants under the Program.
(b) Headings. Headings are included in the Program for convenience only
and are not substantive provisions of the Program.
(c) Applicable Law. The interpretation of the provisions and the
administration of the Program shall be governed by the laws of the State of
Florida without giving effect to any conflict of laws provisions, and to the
extent applicable, the United States of America.
(d) Mitigation. No Participant shall be required to mitigate the amount
of any payment or benefit provided for in this Program by seeking other
employment or otherwise and there shall be no offset against amounts due any
Participant under this Program on account of any remuneration attributable to
any subsequent employment that may be obtained.
(e) Notices. All notices and other communications required or permitted
under this Program or necessary or convenient in connection herewith shall be in
writing and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail to the last known address of the Company or the
Participant, as the case may be, reflected upon Company records.
Notices to the Company shall be addressed to:
Discount Auto Parts, Inc.
4900 Frontage Road South
Lakeland, Florida 33815
Attention: Chief Financial Officer
(f) Binding Effect; Successors and Assigns. All of the terms and
provisions of this Program shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto, except that the
duties and responsibilities of the Participants under this Program are of a
personal nature and shall not be assignable or delegatable in whole or in part
by the Participants. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business or assets of the Company, by agreement
in form and substance satisfactory to the Participants, expressly to assume and
agree to perform this Plan in the same manner and to the extent the Company
would be required to perform if no such succession had taken place.
(g) Severability. If any provision of this Program or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Program which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
(h) Remedies Cumulative; No Waiver. No remedy conferred upon a party by
this Program is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Program or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Program or existing at law or in equity shall be construed as a waiver thereof,
and any such right, remedy or power may be exercised by such party from time to
time and as often as may be deemed expedient or necessary by such party in its
sole discretion.
(i) Beneficiaries/References. Each Participant shall be entitled, to
the extent permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit payable
under this Program following his or her death by giving the Company written
notice thereof. In the event of a Participant's death or a judicial
determination of a Participant's incompetence, reference in this Program to
"Participant" shall be deemed, where appropriate, to refer to such Participant's
beneficiary, estate or other legal representative.
(j) Withholding. The Company may withhold from any payments under this
Program all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation. Each
Participant shall bear all expense of, and be solely responsible for, all
federal, state and local taxes due with respect to any payment received under
this Program.
