-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O5+Bjbg2MNuUHyesp3jj3Itogjz9/ZY6xjxGmVilSUnXBKu1nVcPWGZKP70cKzzM 3r3uJEBOz/suqVoLGWZNUA== 0000950144-99-005231.txt : 19990504 0000950144-99-005231.hdr.sgml : 19990504 ACCESSION NUMBER: 0000950144-99-005231 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENUINE PARTS CO CENTRAL INDEX KEY: 0000040987 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MOTOR VEHICLE SUPPLIES & NEW PARTS [5013] IRS NUMBER: 580254510 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05690 FILM NUMBER: 99608654 BUSINESS ADDRESS: STREET 1: 2999 CIRCLE 75 PARKWAY CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 4049531700 MAIL ADDRESS: STREET 1: 2999 CIRCLE 75 PARKWAY CITY: ATLANTA STATE: GA ZIP: 30339 10-Q 1 GENUINE PARTS COMPANY 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1999 Commission File Number 1-5690 -------------- ------
GENUINE PARTS COMPANY --------------------- (Exact name of registrant as specified in its charter) GEORGIA 58-0254510 ------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2999 CIRCLE 75 PARKWAY, ATLANTA, GEORGIA 30339 ---------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (770) 953-1700 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (the close of the period covered by this report). 179,062,976 ----------- (Shares of Common Stock) =============================================================================== 2 FORM 10-Q PART 1 - Financial Information Item 1 - Financial Statements GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS Mar. 31, Dec. 31, 1999 1998 ---- ---- (Unaudited) (in thousands) CURRENT ASSETS Cash and cash equivalents ...................................................... $ 148,797 $ 84,972 Trade accounts receivable, less allowance for doubtful accounts (1999 - $4,404; 1998 - $5,019) ........................... 990,153 907,561 Inventories - at lower of cost (substantially last-in, first-out method) or market .................................................... 1,680,375 1,660,233 Prepaid and other current accounts ............................................. 39,385 30,591 ---------- ---------- TOTAL CURRENT ASSETS .................................................. 2,858,710 2,683,357 Goodwill, less accumulated amortization (1999 - $15,271 ; 1998 - $12,578) ...... 398,748 344,733 Other assets ................................................................... 193,631 168,282 Total property, plant and equipment, less allowance for depreciation (1999 - $369,292; 1998 - $355,574) ............................ 416,814 404,008 ---------- ---------- $3,867,903 $3,600,380 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable ............................................................... $ 541,082 $ 509,532 Current portion long-term debt and other borrowings ............................ 259,027 156,316 Income taxes ................................................................... 47,491 21,837 Dividends payable .............................................................. 46,419 44,776 Other current liabilities ...................................................... 80,450 85,948 ---------- ---------- TOTAL CURRENT LIABILITIES ............................................. 974,469 818,409 Long-term debt ................................................................. 672,070 588,640 Deferred income taxes .......................................................... 94,956 94,956 Minority interests in subsidiaries ............................................. 47,577 45,043 SHAREHOLDERS' EQUITY Stated capital: Preferred Stock, par value - $1 per share Authorized - 10,000,000 shares - None Issued ............................ -0- -0- Common Stock, par value - $1 per share Authorized - 450,000,000 shares Issued - 1999 - 179,062,976; 1998 - 179,505,151 ......................... 179,063 179,505 Additional paid-in capital ..................................................... 5,501 19,989 Accumulated other comprehensive income ......................................... (2,328) (3,110) Retained earnings .............................................................. 1,896,595 1,856,948 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY ............................................ 2,078,831 2,053,332 ---------- ---------- $3,867,903 $3,600,380 ========== ==========
See notes to condensed consolidated financial statements. 2 3 FORM 10-Q GENUINE PARTS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended March 31, ---------------------------- 1999 1998 ---- ---- (000 omitted except per share data) Net sales ...................................................................... $1,901,357 $1,533,138 Cost of goods sold ............................................................. 1,350,467 1,086,402 ---------- ---------- 550,890 446,736 Selling, administrative & other expenses ....................................... 408,396 314,508 ---------- ---------- Income before income taxes ..................................................... 142,494 132,228 Income taxes ................................................................... 56,428 52,230 ---------- ---------- NET INCOME ..................................................................... $ 86,066 $ 79,998 ========== ========== Basic net income per common share .............................................. $ .48 $ .45 ========== ========== Diluted net income per common share ........................................... $ .48 $ .45 ========== ========== Dividends declared per common share ............................................ $ .26 $ .25 ========== ========== Average common shares outstanding .............................................. 179,784 178,822 Dilutive effect of stock options and non-vested restricted stock awards ........ 508 733 ---------- ---------- Average common shares outstanding - assuming dilution .......................... 180,292 179,555 ========== ==========
3 4 FORM 10-Q GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended Mar. 31, -------------- (000 omitted) 1999 1998 ---- ---- OPERATING ACTIVITIES: Net income ............................................................................ $ 86,066 $ 79,998 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ....................................................... 22,740 16,485 Other ............................................................................... 2,534 974 Changes in operating assets and liabilities ......................................... (40,711) (21,971) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES ................................................ 70,629 75,486 INVESTING ACTIVITIES: Purchase of property, plant and equipment ............................................. (20,376) (20,035) Acquisitions of businesses and other investing activities ............................. (85,669) 10,862 --------- --------- NET CASH USED IN INVESTING ACTIVITIES .................................................... (106,045) (9,173) FINANCING ACTIVITIES: Proceeds from lines of credit and other borrowings, net of payments ................... 186,141 5,000 Dividends paid ........................................................................ (44,776) (43,436) Purchase of stock ..................................................................... (46,693) (8,789) Other financing activities ............................................................ 4,569 6,899 --------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ...................................... 99,241 (40,326) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS ................................................ 63,825 25,987 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ......................................... 84,972 72,823 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................................... $ 148,797 $ 98,810 ========= =========
See notes to condensed consolidated financial statements. 4 5 FORM 10-Q NOTES TO FINANCIAL STATEMENTS Note A - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. However, in the opinion of management, all adjustments necessary to a fair statement of the operations of the interim period have been made. These adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 1999 are not necessarily indicative of results for the entire year. Note B - Segment Information
THREE MONTH PERIOD ENDED MARCH 31 1999 1998 --------------------------------- (In thousands) Net sales: Automotive $ 941,350 $ 743,599 Industrial 522,503 499,685 Office products 310,003 289,854 Electrical/electronic materials 127,501 -- -------------------------------- Total net sales $1,901,357 $1,533,138 ================================ Operating profit: Automotive $ 82,976 $ 69,547 Industrial 43,795 42,595 Office products 35,840 32,817 Electrical/electronic materials 5,640 -- -------------------------------- Total operating profit 168,071 144,959 Interest expense (12,443) (3,918) Other, net (13,134) (8,813) -------------------------------- Income before income taxes $ 142,494 $ 132,228 ================================
Note C - Comprehensive Income Total comprehensive income was $86,848,000 and $79,220,000 for the three month periods ended March 31, 1999 and 1998, respectively. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Genuine Parts Company (the "Company") reported record sales and earnings in the first quarter of 1999. Sales for the quarter were $1.9 billion, up 24% over the same period in 1998. Net income in the quarter advanced 8% to $86.1 million. On a per-share diluted basis, net income in the quarter was 48 cents versus 45 cents in the same quarter of the prior year, an increase of 7%. Sales would have increased 6% in the first quarter of 1999, excluding the impact of acquisitions made after March 31, 1998. Sales for the Automotive Parts Group increased 27% for the quarter and increased 7%, excluding the impact of acquisitions in 1999. The sales increase is attributed to increased market share, improved market conditions and the impact of acquisitions. Sales for the Industrial Parts Group increased 4.6% for the quarter reflecting continued slow growth in various industrial markets, such as steel, food and paper. The Office Products Group was up 7% for the quarter reflecting slight improvement in market conditions in the office products industry. EIS, the Electrical/Electronic Materials Group acquired on July 1,1998, had sales of $127 million in the first quarter of 1999. Cost of goods sold increased slightly as a percentage of net sales compared to the same quarter of the prior year. Selling, administrative and other expenses increased 30% for the quarter (7% increase excluding acquisitions) and the percentage of selling, administrative and other expenses to net sales increased slightly, reflecting increased salaries, acquisition costs and costs of upgrading/improving facilities. The ratio of current assets to current liabilities is 2.9 to 1 and the Company's cash position is good. 5 6 FORM 10-Q Impact of Year 2000 The Year 2000 problem is the result of computer programs written using two digits (rather than four) to define the applicable year. Any of the Company's programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in miscalculations or system failures. The Company is continuing its assessments of the impact of the Year 2000 across its business and operations, including its customer and vendor base. The Company has substantially completed its identification of information technology systems that are not Year 2000 compliant and is in the process of implementing a comprehensive initiative to make its information technology systems ("IT systems") and its non-information technology systems ("non-IT systems"), including embedded electronic circuits in equipment, building security, product handling and environmental controls, Year 2000 compliant. The initiative covers the following three phases: (1) identification of all IT and non-IT systems and an assessment of repair requirements, (2) repair of the identified IT and non-IT systems, and (3) testing of the IT and non-IT systems repaired to determine correct manipulation of dates and date-related data. As of December 31, 1998, the Company has substantially completed phase (1) of its initiative and has begun phases (2) and (3). The Company anticipates that it will substantially complete phase (2) by the end of the second quarter of fiscal 1999 at which time it will complete its final testing phase. The Company expects the final testing phase to be complete by third quarter of 1999. To date, the Company has not identified any IT or non-IT system that presents a material risk of not being Year 2000 ready or for which a suitable alternative cannot be implemented. However, as the initiative moves further into the testing phase, it is possible that the Company may identify potential risks of Year 2000 disruption. It is also possible that such a disruption could have a material adverse effect on the financial condition and results of operations. In addition, if any third parties who provide goods or services or that are customers that are critical to the Company's business activities fail to appropriately address their Year 2000 issues, there could be a material adverse effect on the Company's financial condition and results of operations. The Company is still in the process of modifying or replacing certain time-sensitive software programs and other date sensitive devices to avoid a potential inability to process transactions or engage in other normal business activities. The Company has initiated formal communications with substantially all of its significant business partners to evaluate their Year 2000 compliance plans and status of readiness, including upgrading of embedded technology devices in products the Company purchases. These communications include determining the extent to which the Company is vulnerable to those third parties' failure to remedy their own Year 2000 conversion issues. However, there can be no guarantee that the systems of other companies on which the Company's system rely will be timely converted or that a failure to convert by another company or a conversion that is incompatible with the Company's systems would not have a material adverse effect on the Company. The Company is in the process of identifying and prioritizing any embedded technology devices which may be deemed to be mission critical or that tend to have a significant impact on normal operations. The Company has developed a separate plan to upgrade these higher priority embedded technology devices. Management currently expects these activities to be substantially complete by mid 1999. The Company could potentially experience disruptions to some aspects of its various activities and operations as a result of non-compliant systems utilized by the Company or unrelated third parties. Contingency plans are, therefore, under development to mitigate the extent of any such potential disruption to business operations. The Company is utilizing both internal and external resources to reprogram, or replace, and test the software for Year 2000 modifications. The total estimated cost of the Year 2000 project is estimated between $7 million and $10 million and is being funded through operating cash flows. These costs are not expected to be material to the Company's consolidated results of operations. Of the total project cost, approximately $3 million is attributable to the purchase of new software or equipment, which will be capitalized. The remaining $4 million to $7 million is expensed as incurred. To date, the Company has expensed approximately $4.5 million related to the assessment of and preliminary efforts in connection with its Year 2000 project. The costs attributable to the Year 2000 exclude costs incurred by the Company for replacement of hardware and implementation of new systems which were undertaken for operating reasons. The implementation of new systems has been in progress for the past three to five years. The costs of the Year 2000 project and the date which the Company plans to complete the Year 2000 modifications are based on management's best estimates, which were derived utilizing numerous assumptions of future events including the continued availability of certain resources, third party modification plans and other factors. There can be no guarantee that these estimates will be achieved and actual results could differ materially from those plans. Specific factors that might cause such material differences include, but are not limited to, the availability and cost of personnel trained in this area, the ability to locate and correct all relevant computer codes, and similar uncertainties. 6 7 FORM 10-Q Forward-Looking Statements: The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for forward-looking statements made by or on behalf of the Company. The Company and its representatives may from time to time make written or verbal forward-looking statements, including statements contained in our Company's filings with the Securities and Exchange Commission and in our reports to shareholders. All statements which address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to revenue, market share and net income growth, or statements expressing general optimism about future operating results, are forward-looking statements within the meaning of the Act. The forward-looking statements are and will be based on management's then current views and assumptions regarding future events and operating performance. There are many factors which could cause actual results to differ materially from those anticipated by statements made herein. Such factors include, but are not limited to, changes in general economic conditions, the growth rate of the market for the Company's products and services, the ability to maintain favorable supplier arrangements and relationships, competitive product and pricing pressures, the effectiveness of the Company's promotional, marketing and advertising programs, the Company's ability to discover and correct potential Year 2000 issues and the ability of third parties to appropriately address their Year 2000 issues, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed from time to time in the Company's filings with the Securities and Exchange Commission. PART II - OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds During the first quarter of 1999, the Company issued an aggregate of approximately 942,809 shares of Company stock in connection with the acquisition of three companies. This number of shares is subject to change based upon closing amount settlements, indemnification obligations and the satisfaction of earnout thresholds. All such shares were issued in transactions exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, and the regulations thereunder. Such acquisitions were: Johnson Industries, Inc. which closed on January 5, 1999, Morse Auto Supply which closed on January 6, 1999 and H.A. Holden, Inc. which closed on January 15, 1999. Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are filed as part of this report: Exhibit 3.1 Restated Articles of Incorporation of the Company (incorporated herein by reference from the Company's Annual Report on Form 10-K, dated March 3, 1995). Exhibit 3.2 Bylaws of the Company, as amended (incorporated herein by reference from the Company's Annual Report on Form 10-K, dated March 5, 1993). Exhibit 10.31 *Restricted Stock Agreement dated February 25, 1999 between the Company and Larry L. Prince. Exhibit 10.32 *Restricted Stock Agreement dated February 25, 1999 between the Company and Thomas C. Gallagher. Exhibit 27 Financial Data Schedule (for SEC use only).
*Indicates executive compensation plans and arrangements. (b) No reports on Form 8-K were filed by the registrant during the quarter ended March 31, 1999. 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. Genuine Parts Company ---------------------------------------- (Registrant) Date May 3, 1999 /s/ Jerry Nix ----------- ---------------------------------------- Jerry W. Nix Senior Vice President - Finance /s/ George W. Kalafut ---------------------------------------- George W. Kalafut Executive Vice President - Finance and Administration (Principal Financial and Accounting Officer) 7 EX-10.31 2 RESTRICTED STOCK AGREEMENT DATED FEBRUARY 25, 1999 1 EXHIBIT 10.31 GENUINE PARTS COMPANY 1999 LONG-TERM INCENTIVE PLAN RESTRICTED STOCK AGREEMENT Grantee: LARRY PRINCE Number of Shares: 150,000 Date: February 25, 1999 1. Agreement to Award Restricted Stock. Subject to the satisfaction of the conditions specified in Section 2 hereof, Genuine Parts Company (the "Company") hereby agrees to award to Larry L. Prince ("Grantee"), under its 1999 Long-Term Incentive Plan ("Plan"), up to a maximum of One Hundred Fifty Thousand (150,000) shares of Stock, such shares to be awarded to Grantee as Restricted Stock pursuant to the terms of the Plan and this Restricted Stock Agreement (this "Agreement"). The Plan is incorporated herein by reference and made a part of this Agreement, and any term used in this Agreement and not defined herein shall have the meaning set forth in the Plan. Grantee shall have no rights as a shareholder of Company with respect to any of the shares of Stock subject hereto prior to the awarding of such shares pursuant to Section 2 below. 2. Conditions for Award of Restricted Stock. (a) A maximum of 75,000 shares of Restricted Stock will be awarded to Grantee if the Company's Stock achieves specified target prices (the "Stock Price Targets"). The Company will be deemed to have achieved a Stock Price Target, and shares of Restricted Stock will be awarded to the Grantee, on the date on which the average Fair Market Value (as defined in the Plan) of the Stock over a period of twenty (20) consecutive trading days (days on which shares of Stock are actually traded on the New York Stock Exchange) first equals or exceeds the Stock Price Target (the "Stock Price Award Dates"). The Grantee will be awarded the following number of shares of Restricted Stock on the Stock Price Award Dates upon the Company's achievement of the following Stock Price Targets:
-------------------------------------------------------------------- Stock Price Target Shares of Restricted Stock Awarded ------------------ ---------------------------------- -------------------------------------------------------------------- $34.36 15,000 -------------------------------------------------------------------- $39.47 15,000 -------------------------------------------------------------------- $45.34 15,000 -------------------------------------------------------------------- $52.08 15,000 -------------------------------------------------------------------- $59.81 15,000 --------------------------------------------------------------------
2 (b) A maximum of 75,000 shares of Restricted Stock will be awarded to Grantee if the Company achieves certain earnings per share targets (the "EPS Targets"). The Company's earnings per share ("EPS") shall be deemed to be the Company's "net income per common share" as reported in the Company's annual audited consolidated financial statements. The determination of whether the Company has achieved the EPS Targets, and the award of shares of Restricted Stock to the Grantee based thereon, shall be made immediately upon the conclusion of the annual audit closing conference with the Company's independent auditors if such auditors have provided to Company management at that conference an unqualified opinion on the Company's fiscal year end audited consolidated financial statements (the "EPS Award Dates"). The Grantee will be awarded the following number of shares of Restricted Stock on the EPS Award Dates upon the Company's achievement during fiscal years 1999, 2000, 2001, 2002 and 2003 of the following EPS Targets: For fiscal year 1999:
- --------------------------------------------------------------------------------------------------- Number of Shares of Earnings Per Share Restricted Stock Awarded - ------------------ ------------------------ - --------------------------------------------------------------------------------------------------- Greater than or equal to $2.18 (1998 EPS plus 10%) 15,000 - --------------------------------------------------------------------------------------------------- Greater than or equal to $2.16 (1998 EPS plus 9%) but less 13,500 than $2.18 - --------------------------------------------------------------------------------------------------- Greater than or equal to $2.14 (1998 EPS plus 8%) but less 12,000 than $2.16 - --------------------------------------------------------------------------------------------------- Less than $2.14 0 - ---------------------------------------------------------------------------------------------------
For each of fiscal year 2000, 2001, 2002 and 2003:
- --------------------------------------------------------------------------------------------------- Number of Shares of Earnings Per Share Restricted Stock Awarded - ------------------ ------------------------ - --------------------------------------------------------------------------------------------------- Greater than or equal to the prior fiscal year EPS plus 10% 15,000 - --------------------------------------------------------------------------------------------------- Greater than or equal to the prior fiscal year EPS plus 9% 13,500 but less than the prior fiscal year EPS plus 10% - --------------------------------------------------------------------------------------------------- Greater than or equal to the prior fiscal year EPS plus 8% 12,000 but less than the prior fiscal year EPS plus 9% - --------------------------------------------------------------------------------------------------- Less than the prior fiscal year EPS plus 8% 0 - ---------------------------------------------------------------------------------------------------
(c) For the purposes of determining the Company's EPS and the EPS Targets hereunder, actual figures shall be rounded up or down, as appropriate, to the second decimal place (with $0.005 to be rounded up to $0.01). - 2 - 3 (d) All Stock Price Targets and EPS Targets, and the number of shares of Restricted Stock to be awarded hereunder, shall be adjusted to reflect any adjustment of shares of Stock as described in Section 14.1 of the Plan. 3. Restricted Period. Subject to the provisions of Sections 9 and 10 of this Agreement, the Restricted Period with respect to the shares of Restricted Stock awarded to the Grantee under Section 2 shall commence on the respective Award Dates for such shares and shall terminate at 5:00 p.m., Eastern Standard Time, on February 25, 2009, the tenth anniversary of the date of this Agreement. 4. Issuance of Shares. The Company shall issue a certificate for an appropriate number of shares of Stock awarded to the Grantee as Restricted Stock pursuant to Section 2 of this Agreement on the relevant Award Date. The Company shall issue a separate certificate for each award of shares of Restricted Stock under Section 2. Each certificate issued for shares awarded to the Grantee under this Agreement shall be registered in the name of the Grantee and shall be deposited with the Company or its designee in an escrow account, together with stock powers or other instruments of transfer to be provided and appropriately endorsed in blank by the Grantee as of the relevant Award Date. Each such certificate shall bear a legend in substantially the following form: This certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the Genuine Parts Company 1999 Long-Term Incentive Plan and a Restricted Stock Agreement between the registered owner of the shares represented hereby and Genuine Parts Company. Release from such terms and conditions shall be made only in accordance with the provisions of such Plan and Agreement, copies of which are on file in the office of the Secretary of Genuine Parts Company. 5. Release of Shares. Subject to the provisions of Sections 9 and 10 of this Agreement, the Company, provided that the Grantee remains in the employment of the Company or a Subsidiary during the entirety of the applicable Restricted Period, shall release from escrow and deliver to the Grantee or the legal representative of the Grantee, as appropriate, free of the legend described in Section 4 above, the certificate evidencing shares of Restricted Stock awarded under Section 2 as promptly as practicable following the date the Restricted Period expires with respect to such Restricted Stock. 6. Restrictions on Transfer of Shares. Restricted Shares awarded under the Plan, and the right to vote such shares and to receive dividends thereon, may not, except as otherwise provided in the Plan, be sold, assigned, transferred, exchanged, pledged or otherwise encumbered during the Restricted Period applicable to such shares, and no such sale, assignment, transfer, exchange, pledge or encumbrance, whether made or created by voluntary act of the Grantee or of any agent of such Grantee or by operation of law, shall be recognized by, or be binding upon or shall in any manner affect the rights - 3 - 4 of, the Company or any agent or any custodian holding certificates for such shares during the applicable Restricted Period. 7. Rights of Grantee During Restricted Periods. Except as otherwise provided in the Plan, the Grantee shall, during the applicable Restricted Periods, have all of the other rights of a common shareholder with respect to Restricted Shares awarded to the Grantee under Section 2 including, without limitation, the right to receive cash dividends, if any, as may be declared on such shares from time to time, and the right to vote (in person or by proxy) such shares at any meeting of shareholders of the Company. Any shares of Stock issued to Grantee as a dividend with respect to Restricted Stock awarded hereunder shall have the same status and bear the same legend as the Restricted Stock and shall be held in escrow, if the relevant Restricted Stock is held in escrow, unless otherwise determined by the Committee. 8. Termination of Employment. Subject to Section 10 of this Agreement, upon the termination of Grantee's employment with the Company ("Termination"), other than in connection with a Change in Control or Grantee's Retirement, Disability or death (as such terms are defined in Section 9(b) hereof), (i) all of Grantee's rights to future awards of Restricted Stock upon achievement of Stock Price Targets or EPS Targets on Award Dates subsequent to the date of Termination shall terminate without the payment of any consideration by the Company, (ii) all shares of Restricted Stock theretofore awarded to the Grantee for which the Restricted Period has not terminated prior to such Termination shall be forfeited by the Grantee to the Company without the payment of any consideration by the Company, and (iii) all unissued shares of Stock reserved for issuance to Grantee pursuant to Section 14 hereof shall be released from such reservation. In such event, neither the Grantee nor any successors, heirs, assigns, or personal representatives of the Grantee shall thereafter have any further rights or interest in such shares, and the Grantee's name shall thereupon be deleted from the list of the Company's shareholders with respect to such shares. 9. Change of Control, Retirement, Disability or Death. (a) Upon a Change in Control, the Retirement or Disability of the Grantee, or the Grantee's death while in the employment of the Company or a Subsidiary, (i) all of Grantee's rights to future awards of Restricted Stock upon achievement of Stock Price Targets or EPS Targets on Award Dates subsequent to the date of Termination shall terminate without the payment of any consideration by the Company, and (ii) the Restricted period to which any shares of Restricted Stock awarded to the Grantee under Section 2 are subject shall expire as of the date of the Change in Control or Grantee's Retirement, Disability or death. In such event, the Company shall release from escrow and deliver to the Grantee or the legal representative of the Grantee, as appropriate, the certificate(s) representing the relevant Restricted Stock free of restrictive legend in accordance with Section 5 hereof. (b) For the purposes of this Agreement, the following terms shall have the following meanings: (i) a Change in Control shall have the meaning specified in - 4 - 5 Section 3.1(d) of the Plan; (ii) "Retirement" shall mean normal retirement as defined in the Company's Pension Plan or in any modification thereof or successor thereto; and (iii) "Disability" shall have the meaning specified in Section 3.1(i) of the Plan. 10. Committee Acceleration Power. Notwithstanding any other provisions of the Plan or this Agreement, the Committee shall be authorized in its discretion, based upon its review and evaluation of the performance of the Company and its Subsidiaries, to accelerate the release to the Grantee of Restricted Stock subject to this Agreement upon such terms and conditions as the Committee may deem advisable. 11. Federal Income Tax Matters. The Grantee, upon award of the shares of Restricted Stock under Section 2, shall be authorized to make an election to be taxed upon such award under Section 83(b) of the Code. To effect such election, the Grantee may file an appropriate election with the Internal Revenue Service within thirty (30) days after such awards of the Restricted Stock hereunder and otherwise in accordance with applicable Treasury Regulations. The Grantee recognizes that, pursuant to Section 16.3 of the Plan, the Company may require the Grantee to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax liability in connection with the agreement to award, award of, or release from escrow of the shares of Restricted Stock granted hereunder. 12. Continued Employment Not Presumed. Neither (i) the Plan, (ii) the agreement to award, award or vesting of Restricted Stock under this Agreement nor (iii) this Agreement, shall give Grantee a right to continued employment by the Company or its Subsidiaries or affect the right of the Company and its Subsidiaries to terminate the employment of Grantee with or without cause. 13. Grantee's Covenant. The Grantee hereby agrees to use his best efforts to provide services to the Company in a workmanlike manner and to promote the Company's interests. 14. Reservation of Shares. As of the date of this Agreement, the Company shall reserve for issuance 150,000 shares of its Stock to be issued pursuant to the terms of this Agreement. If the Grantee's rights with respect to the unissued shares of Restricted Stock subject to this Agreement terminate pursuant to Section 8 or Section 9 hereof, then such unissued shares of Stock shall no longer be reserved for issuance pursuant to this Agreement. 15. Plan Controls. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. 16. Successors. This Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Agreement and the Plan. - 5 - 6 IN WITNESS WHEREOF, Genuine Parts Company, acting by and through its duly authorized officers, has caused this Restricted Stock Agreement to be executed, and the Grantee has executed this Restricted Stock Agreement, all as of the day and year first above written. GENUINE PARTS COMPANY By: /s/ George W. Kalafut ----------------------------------- Name: George W. Kalafut ---------------------------- Title: Exec Vice Pres Finance ---------------------------- ATTEST: /s/ Carol Yancey - ----------------------------------- Name: /s/ Carol Yancey ---------------------------- Title: Corp. Secretary ---------------------------- GRANTEE /s/ Larry L. Prince -------------------------------------- LARRY PRINCE - 6 - EX-10.32 3 RESTRICTED STOCK AGREEMENT DATED FEBRUARY 25, 1999 1 EXHIBIT 10.32 GENUINE PARTS COMPANY 1999 LONG-TERM INCENTIVE PLAN RESTRICTED STOCK AGREEMENT Grantee: TOM GALLAGHER Number of Shares: 75,000 Date: February 25, 1999 1. Agreement to Award Restricted Stock. Subject to the satisfaction of the conditions specified in Section 2 hereof, Genuine Parts Company (the "Company") hereby agrees to award to Thomas C. Gallagher ("Grantee"), under its 1999 Long-Term Incentive Plan ("Plan"), up to a maximum of Seventy-Five Thousand (75,000) shares of Stock, such shares to be awarded to Grantee as Restricted Stock pursuant to the terms of the Plan and this Restricted Stock Agreement (this "Agreement"). The Plan is incorporated herein by reference and made a part of this Agreement, and any term used in this Agreement and not defined herein shall have the meaning set forth in the Plan. Grantee shall have no rights as a shareholder of Company with respect to any of the shares of Stock subject hereto prior to the awarding of such shares pursuant to Section 2 below. 2. Conditions for Award of Restricted Stock. (a) A maximum of 37,500 shares of Restricted Stock will be awarded to Grantee if the Company's Stock achieves specified target prices (the "Stock Price Targets"). The Company will be deemed to have achieved a Stock Price Target, and shares of Restricted Stock will be awarded to the Grantee, on the date on which the average Fair Market Value (as defined in the Plan) of the Stock over a period of twenty (20) consecutive trading days (days on which shares of Stock are actually traded on the New York Stock Exchange) first equals or exceeds the Stock Price Target (the "Stock Price Award Dates"). The Grantee will be awarded the following number of shares of Restricted Stock on the Stock Price Award Dates upon the Company's achievement of the following Stock Price Targets:
------------------------------------------------------------------- Stock Price Target Shares of Restricted Stock Awarded ------------------ ---------------------------------- ------------------------------------------------------------------- $34.36 7,500 ------------------------------------------------------------------- $39.47 7,500 ------------------------------------------------------------------- $45.34 7,500 ------------------------------------------------------------------- $52.08 7,500 ------------------------------------------------------------------- $59.81 7,500 -------------------------------------------------------------------
2 (b) A maximum of 37,500 shares of Restricted Stock will be awarded to Grantee if the Company achieves certain earnings per share targets (the "EPS Targets"). The Company's earnings per share ("EPS") shall be deemed to be the Company's "net income per common share" as reported in the Company's annual audited consolidated financial statements. The determination of whether the Company has achieved the EPS Targets, and the award of shares of Restricted Stock to the Grantee based thereon, shall be made immediately upon the conclusion of the annual audit closing conference with the Company's independent auditors if such auditors have provided to Company management at that conference an unqualified opinion on the Company's fiscal year end audited consolidated financial statements (the "EPS Award Dates"). The Grantee will be awarded the following number of shares of Restricted Stock on the EPS Award Dates upon the Company's achievement during fiscal years 1999, 2000, 2001, 2002 and 2003 of the following EPS Targets: For fiscal year 1999:
- --------------------------------------------------------------------------------------------------------- Number of Shares of Restricted Earnings Per Share Stock Awarded - ------------------ ------------------------------ - --------------------------------------------------------------------------------------------------------- Greater than or equal to $2.18 (1998 EPS plus 10%) 7,500 - --------------------------------------------------------------------------------------------------------- Greater than or equal to $2.16 (1998 EPS plus 9%) but less 6,750 than $2.18 - --------------------------------------------------------------------------------------------------------- Greater than or equal to $2.14 (1998 EPS plus 8%) but less 6,000 than $2.16 - --------------------------------------------------------------------------------------------------------- Less than $2.14 0 - ---------------------------------------------------------------------------------------------------------
For each of fiscal year 2000, 2001, 2002 and 2003:
- --------------------------------------------------------------------------------------------------- Number of Shares of Earnings Per Share Restricted Stock Awarded - ------------------ ------------------------ - --------------------------------------------------------------------------------------------------- Greater than or equal to the prior fiscal year EPS plus 10% 7,500 - --------------------------------------------------------------------------------------------------- Greater than or equal to the prior fiscal year EPS plus 9% 6,750 but less than the prior fiscal year EPS plus 10% - --------------------------------------------------------------------------------------------------- Greater than or equal to the prior fiscal year EPS plus 8% 6,000 but less than the prior fiscal year EPS plus 9% - --------------------------------------------------------------------------------------------------- Less than the prior fiscal year EPS plus 8% 0 - ---------------------------------------------------------------------------------------------------
(c) For the purposes of determining the Company's EPS and the EPS Targets hereunder, actual figures shall be rounded up or down, as appropriate, to the second decimal place (with $0.005 to be rounded up to $0.01). - 2 - 3 (d) All Stock Price Targets and EPS Targets, and the number of shares of Restricted Stock to be awarded hereunder, shall be adjusted to reflect any adjustment of shares of Stock as described in Section 14.1 of the Plan. 3. Restricted Period. Subject to the provisions of Sections 9 and 10 of this Agreement, the Restricted Period with respect to the shares of Restricted Stock awarded to the Grantee under Section 2 shall commence on the respective Award Dates for such shares and shall terminate at 5:00 p.m., Eastern Standard Time, on February 25, 2009, the tenth anniversary of the date of this Agreement. 4. Issuance of Shares. The Company shall issue a certificate for an appropriate number of shares of Stock awarded to the Grantee as Restricted Stock pursuant to Section 2 of this Agreement on the relevant Award Date. The Company shall issue a separate certificate for each award of shares of Restricted Stock under Section 2. Each certificate issued for shares awarded to the Grantee under this Agreement shall be registered in the name of the Grantee and shall be deposited with the Company or its designee in an escrow account, together with stock powers or other instruments of transfer to be provided and appropriately endorsed in blank by the Grantee as of the relevant Award Date. Each such certificate shall bear a legend in substantially the following form: This certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the Genuine Parts Company 1999 Long-Term Incentive Plan and a Restricted Stock Agreement between the registered owner of the shares represented hereby and Genuine Parts Company. Release from such terms and conditions shall be made only in accordance with the provisions of such Plan and Agreement, copies of which are on file in the office of the Secretary of Genuine Parts Company. 5. Release of Shares. Subject to the provisions of Sections 9 and 10 of this Agreement, the Company, provided that the Grantee remains in the employment of the Company or a Subsidiary during the entirety of the applicable Restricted Period, shall release from escrow and deliver to the Grantee or the legal representative of the Grantee, as appropriate, free of the legend described in Section 4 above, the certificate evidencing shares of Restricted Stock awarded under Section 2 as promptly as practicable following the date the Restricted Period expires with respect to such Restricted Stock. 6. Restrictions on Transfer of Shares. Restricted Shares awarded under the Plan, and the right to vote such shares and to receive dividends thereon, may not, except as otherwise provided in the Plan, be sold, assigned, transferred, exchanged, pledged or otherwise encumbered during the Restricted Period applicable to such shares, and no such sale, assignment, transfer, exchange, pledge or encumbrance, whether made or created by voluntary act of the Grantee or of any agent of such Grantee or by operation of law, shall be recognized by, or be binding upon or shall in any manner affect the rights - 3 - 4 of, the Company or any agent or any custodian holding certificates for such shares during the applicable Restricted Period. 7. Rights of Grantee During Restricted Periods. Except as otherwise provided in the Plan, the Grantee shall, during the applicable Restricted Periods, have all of the other rights of a common shareholder with respect to Restricted Shares awarded to the Grantee under Section 2 including, without limitation, the right to receive cash dividends, if any, as may be declared on such shares from time to time, and the right to vote (in person or by proxy) such shares at any meeting of shareholders of the Company. Any shares of Stock issued to Grantee as a dividend with respect to Restricted Stock awarded hereunder shall have the same status and bear the same legend as the Restricted Stock and shall be held in escrow, if the relevant Restricted Stock is held in escrow, unless otherwise determined by the Committee. 8. Termination of Employment. Subject to Section 10 of this Agreement, upon the termination of Grantee's employment with the Company ("Termination"), other than in connection with a Change in Control or Grantee's Retirement, Disability or death (as such terms are defined in Section 9(b) hereof), (i) all of Grantee's rights to future awards of Restricted Stock upon achievement of Stock Price Targets or EPS Targets on Award Dates subsequent to the date of Termination shall terminate without the payment of any consideration by the Company, (ii) all shares of Restricted Stock theretofore awarded to the Grantee for which the Restricted Period has not terminated prior to such Termination shall be forfeited by the Grantee to the Company without the payment of any consideration by the Company, and (iii) all unissued shares of Stock reserved for issuance to Grantee pursuant to Section 14 hereof shall be released from such reservation. In such event, neither the Grantee nor any successors, heirs, assigns, or personal representatives of the Grantee shall thereafter have any further rights or interest in such shares, and the Grantee's name shall thereupon be deleted from the list of the Company's shareholders with respect to such shares. 9. Change of Control, Retirement, Disability or Death. (a) Upon a Change in Control, the Retirement or Disability of the Grantee, or the Grantee's death while in the employment of the Company or a Subsidiary, (i) all of Grantee's rights to future awards of Restricted Stock upon achievement of Stock Price Targets or EPS Targets on Award Dates subsequent to the date of Termination shall terminate without the payment of any consideration by the Company, and (ii) the Restricted period to which any shares of Restricted Stock awarded to the Grantee under Section 2 are subject shall expire as of the date of the Change in Control or Grantee's Retirement, Disability or death. In such event, the Company shall release from escrow and deliver to the Grantee or the legal representative of the Grantee, as appropriate, the certificate(s) representing the relevant Restricted Stock free of restrictive legend in accordance with Section 5 hereof. (b) For the purposes of this Agreement, the following terms shall have the following meanings: (i) a Change in Control shall have the meaning specified in - 4 - 5 Section 3.1(d) of the Plan; (ii) "Retirement" shall mean normal retirement as defined in the Company's Pension Plan or in any modification thereof or successor thereto; and (iii) "Disability" shall have the meaning specified in Section 3.1(i) of the Plan. 10. Committee Acceleration Power. Notwithstanding any other provisions of the Plan or this Agreement, the Committee shall be authorized in its discretion, based upon its review and evaluation of the performance of the Company and its Subsidiaries, to accelerate the release to the Grantee of Restricted Stock subject to this Agreement upon such terms and conditions as the Committee may deem advisable. 11. Federal Income Tax Matters. The Grantee, upon award of the shares of Restricted Stock under Section 2, shall be authorized to make an election to be taxed upon such award under Section 83(b) of the Code. To effect such election, the Grantee may file an appropriate election with the Internal Revenue Service within thirty (30) days after such awards of the Restricted Stock hereunder and otherwise in accordance with applicable Treasury Regulations. The Grantee recognizes that, pursuant to Section 16.3 of the Plan, the Company may require the Grantee to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax liability in connection with the agreement to award, award of, or release from escrow of the shares of Restricted Stock granted hereunder. 12. Continued Employment Not Presumed. Neither (i) the Plan, (ii) the agreement to award, award or vesting of Restricted Stock under this Agreement nor (iii) this Agreement, shall give Grantee a right to continued employment by the Company or its Subsidiaries or affect the right of the Company and its Subsidiaries to terminate the employment of Grantee with or without cause. 13. Grantee's Covenant. The Grantee hereby agrees to use his best efforts to provide services to the Company in a workmanlike manner and to promote the Company's interests. 14. Reservation of Shares. As of the date of this Agreement, the Company shall reserve for issuance 75,000 shares of its Stock to be issued pursuant to the terms of this Agreement. If the Grantee's rights with respect to the unissued shares of Restricted Stock subject to this Agreement terminate pursuant to Section 8 or Section 9 hereof, then such unissued shares of Stock shall no longer be reserved for issuance pursuant to this Agreement. 15. Plan Controls. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. 16. Successors. This Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Agreement and the Plan. - 5 - 6 IN WITNESS WHEREOF, Genuine Parts Company, acting by and through its duly authorized officers, has caused this Restricted Stock Agreement to be executed, and the Grantee has executed this Restricted Stock Agreement, all as of the day and year first above written. GENUINE PARTS COMPANY By: /s/ George W. Kalafut ---------------------------------- Name: George W. Kalafut ---------------------------- Title: Exec Vice Pres Finance ---------------------------- ATTEST: /s/ Carol Yancey - --------------------------------- Name: Carol Yancey -------------------------- Title: Corp. Secretary -------------------------- GRANTEE /s/ Tom Gallagher -------------------------------------- TOM GALLAGHER - 6 - EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE THREE MONTHS ENDED MARCH 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 148,797 0 990,153 4,447 1,680,375 2,858,710 416,814 378,791 3,867,903 974,469 672,070 0 0 179,063 1,899,768 3,867,903 1,901,357 1,901,357 1,350,467 408,396 0 0 12,443 142,494 56,428 86,066 0 0 0 86,066 .48 .48
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