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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950144-01-003447.txt : 20010313
<SEC-HEADER>0000950144-01-003447.hdr.sgml : 20010313
ACCESSION NUMBER: 0000950144-01-003447
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010312
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-K
SEC ACT:
SEC FILE NUMBER: 001-05690
FILM NUMBER: 1565970
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
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>g67483e10-k.txt
<DESCRIPTION>GENUINE PARTS COMPANY
<TEXT>
<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-5690
GENUINE PARTS COMPANY
(Exact name of Registrant as specified in its Charter)
GEORGIA 58-0254510
(State of Incorporation) (IRS Employer 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.
Securities registered pursuant to Section 12(b) of the Act and the Exchange
on which such securities are registered:
Common Stock, Par Value, $1 Per Share
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. [ ]
The aggregate market value of the Registrant's Common Stock (based upon
the closing sales price reported by the New York Stock Exchange and published in
The Wall Street Journal for February 8, 2001) held by non-affiliates as of
February 8, 2001 was approximately $4,386,899,145.
The number of shares outstanding of Registrant's Common Stock, as of
February 8, 2001: 171,987,550
Documents Incorporated by Reference:
- Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 2000, are incorporated by reference into Parts I and II.
- Portions of the definitive proxy statement for the Annual Meeting of
Shareholders to be held on April 16, 2001 are incorporated by reference
into Part III.
================================================================================
<PAGE> 2
PART I.
ITEM I. BUSINESS.
Genuine Parts Company, a Georgia corporation incorporated on May 7,
1928, is a service organization engaged in the distribution of automotive
replacement parts, industrial replacement parts, office products and
electrical/electronic materials. In 2000, business was conducted throughout most
of the United States, in Canada and in Mexico from approximately 1,800
locations. As used in this report, the "Company" refers to Genuine Parts Company
and its subsidiaries, except as otherwise indicated by the context; and the
terms "automotive parts" and "industrial parts" refer to replacement parts in
each respective category.
SEGMENT DATA. The following table sets forth various segment data for the fiscal
years 2000, 1999, and 1998 attributable to each of the Company's groups of
products that the Company believes indicate segments of its business. Sales to
unaffiliated customers are the same as net sales.
<TABLE>
<CAPTION>
2000 1999 1998
----------- ----------- -----------
(in thousands)
<S> <C> <C> <C>
NET SALES
Automotive Parts $ 4,163,814 $ 4,084,775 $ 3,262,406
Industrial Parts 2,342,686 2,156,134 2,008,789
Office Products 1,336,500 1,218,367 1,122,420
Electrical/Electronic Materials 557,866 522,411 220,417
Other (31,009) (30,865) (26,456)
----------- ----------- -----------
TOTAL NET SALES $ 8,369,857 $ 7,950,822 $ 6,587,576
=========== =========== ===========
OPERATING PROFIT
Automotive Parts $ 381,250 $ 383,830 $ 330,988
Industrial Parts 206,193 186,203 176,456
Office Products 134,343 118,345 113,821
Electrical/Electronic Materials 28,010 23,343 12,030
----------- ----------- -----------
TOTAL OPERATING PROFIT 749,796 711,721 633,295
Interest Expense (63,496) (41,487) (20,096)
Corporate Expense (23,277) (22,283) (19,545)
Equity in Income from Investees -- (3,675) 3,329
Goodwill Amortization (13,843) (12,708) (5,157)
Minority Interests (2,430) (3,501) (2,709)
----------- ----------- -----------
INCOME BEFORE INCOME TAXES $ 646,750 $ 628,067 $ 589,117
=========== =========== ===========
ASSETS
Automotive Parts $ 2,099,610 $ 2,034,417 $ 1,966,774
Industrial Parts 840,585 758,206 671,454
Office Products 542,406 503,904 442,220
Electrical/Electronic Materials 190,635 174,258 147,074
Corporate Assets 17,443 18,588 18,385
Goodwill and Equity Investments 451,435 440,299 354,473
----------- ----------- -----------
TOTAL ASSETS $ 4,142,114 $ 3,929,672 $ 3,600,380
=========== =========== ===========
NET SALES
United States $ 7,665,498 $ 7,345,707 $ 6,535,020
Canada 633,715 585,504 79,012
Mexico 101,653 50,476 --
Other (31,009) (30,865) (26,456)
----------- ----------- -----------
TOTAL NET SALES $ 8,369,857 $ 7,950,822 $ 6,587,576
=========== =========== ===========
NET LONG-LIVED ASSETS
United States $ 618,818 $ 620,837 $ 545,452
Canada 201,895 207,672 187,951
Mexico 25,982 25,333 15,338
----------- ----------- -----------
TOTAL NET LONG-LIVED ASSETS $ 846,695 $ 853,842 $ 748,741
=========== =========== ===========
</TABLE>
(For additional information regarding segment data, see Page 17 of Annual Report
to Shareholders for 2000.)
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<PAGE> 3
COMPETITION - GENERAL. The distribution business, which includes all segments of
the Company's business, is highly competitive with the principal methods of
competition being product quality, sufficiency of inventory, price and the
ability to give the customer prompt and dependable service. The Company
anticipates no decline in competition in any of its business segments in the
foreseeable future.
EMPLOYEES. As of December 31, 2000, the Company employed approximately 33,000
persons.
AUTOMOTIVE PARTS GROUP.
The Automotive Parts Group, the largest division of the Company,
distributes automotive replacement parts and accessory items. The Company is the
largest member of the National Automotive Parts Association ("NAPA"), a
voluntary trade association formed in 1925 to provide nationwide distribution of
automotive parts. In addition to over 250,000 available part numbers, the
Company, in conjunction with NAPA, offers complete inventory, accounting,
cataloging, marketing, training and other programs in the automotive
aftermarket. The Automotive Parts Group is working to develop additional
channels of distribution through two separate, but coordinated, e-commerce
initiatives in business-to-consumer and business-to-business markets.
During 2000, the Company's Automotive Parts Group included NAPA
automotive parts distribution centers and automotive parts stores ("auto parts
stores" or "NAPA AUTO PARTS stores") owned in the United States by Genuine Parts
Company; automotive parts distribution centers and auto parts stores in Canada
owned and operated by UAP, a wholly-owned subsidiary; auto parts stores in the
United States operated by corporations in which Genuine Parts Company owned
either a 51% or a 70% interest; distribution centers owned by Balkamp, Inc., a
majority-owned subsidiary; rebuilding plants owned by the Company and operated
by its Rayloc division; distribution centers of ACDelco, Motorcraft and other
automotive supplies owned and operated by Johnson Industries, a wholly-owned
subsidiary; and automotive parts distribution centers and automotive parts
stores in Mexico, owned and operated by Grupo Auto Todo, S.A. de C.V. ("Auto
Todo"), a company in which a wholly-owned subsidiary of Genuine Parts Company
owns a 73% interest.
In 2000, Johnson Industries acquired Dealer Parts Service, a single
branch distribution center in Pennsylvania, as well as two California
distributors of ACDelco and Motorcraft parts.
In January 2000, the Company purchased a 15% interest in Mitchell
Repair Information ("MRIC"), a subsidiary of Snap-on Incorporated. MRIC is a
leading diagnostic and repair information company with over 35,000 North
American subscribers linked to its services and information databases. MRIC's
core product, "Mitchell ON-DEMAND", is a premier electronic repair information
source in the automotive aftermarket.
The Company's NAPA automotive parts distribution centers distribute
replacement parts (other than body parts) for substantially all motor vehicle
makes and models in service in the United States, including imported vehicles,
trucks, buses, motorcycles, recreational vehicles and farm vehicles. In
addition, the Company distributes small engines and replacement parts for farm
equipment and heavy duty equipment. The Company's inventories also include
accessory items for such vehicles and equipment, and supply items used by a wide
variety of customers in the automotive aftermarket, such as repair shops,
service stations, fleet operators, automobile and truck dealers, leasing
companies, bus and truck lines, mass merchandisers, farms, industrial concerns
and individuals who perform their own maintenance and parts installation.
Although the Company's domestic automotive operations purchase from more than
150 different suppliers, approximately 57% of 2000 automotive inventories were
purchased from 10 major suppliers. Since 1931, the Company has had return
privileges with most of its suppliers, which has protected the Company from
inventory obsolescence.
DISTRIBUTION SYSTEM. In 2000, Genuine Parts Company operated 61 domestic NAPA
automotive parts distribution centers located in 38 states and approximately 800
domestic company-owned NAPA AUTO PARTS stores located in 43 states. At December
31, 2000, Genuine Parts Company owned a 51% interest in 54 corporations and a
70% interest in 11 corporations, which operated 107 auto parts stores in 30
states.
-3-
<PAGE> 4
UAP, founded in 1926, is a Canadian leader in the distribution,
marketing, and rebuilding of replacement parts and accessories for automobiles
and trucks. UAP has annual sales of approximately $742 million Canadian ($500
million US) and employs approximately 4,640 people. UAP operates a network of 15
distribution centers supplying approximately 619 UAP/NAPA auto parts and 52
TRACTION wholesalers. These include approximately 221 company owned stores, 37
joint venture or progressive owners in which UAP owns a 50% interest, and
approximately 413 independently owned stores. UAP supplies bannered installers
and independent installers in all provinces of Canada, as well as networks of
service stations and repair shops operating under the banners of national
accounts. UAP is licensed to and uses the NAPA(R) name in Canada.
In Mexico, Auto Todo owns and operates 10 distribution centers and 18
auto parts stores. Auto Todo is licensed to and uses the NAPA(R) name in Mexico.
The Company's distribution centers serve approximately 5,000
independently owned NAPA AUTO PARTS stores located throughout the market areas
served. NAPA AUTO PARTS stores, in turn, sell to a wide variety of customers in
the automotive aftermarket. Collectively, these independent automotive parts
stores account for approximately 25% of the Company's total sales with no
automotive parts store or group of automotive parts stores with individual or
common ownership accounting for more than 0.5% of the total sales of the
Company.
PRODUCTS. Distribution centers have access to over 250,000 different parts and
related supply items. Each item is cataloged and numbered for identification and
accessibility. Significant inventories are carried to provide for fast and
frequent deliveries to customers. Most orders are filled and shipped the same
day as received. The majority of sales are on terms which require payment within
30 days of the statement date. The Company does not manufacture any of the
products it distributes. The majority of products are distributed under the
NAPA(R) name, a mark licensed to the Company by NAPA.
RELATED OPERATIONS. A majority-owned subsidiary of Genuine Parts Company,
Balkamp, Inc. ("Balkamp"), distributes a wide variety of replacement parts and
accessory items for passenger cars, heavy duty vehicles, motorcycles and farm
equipment. In addition, Balkamp distributes service items such as testing
equipment, lubricating equipment, gauges, cleaning supplies, chemicals and
supply items used by repair shops, fleets, farms and institutions. Balkamp
packages many of the approximately 24,000 part numbers which constitute the
"Balkamp" line of products which are distributed to the members of NAPA. These
products are categorized in 160 different product groups purchased from more
than 400 domestic suppliers and 130 foreign manufacturers. In addition to the
Balkamp line of products, Balkamp distributes approximately 100 part numbers of
nationally branded consumer appearance products and oils through their
Automotive Redistribution Center. These products are cataloged separately for
convenience for NAPA customers. BALKAMP(R), a federally registered trademark, is
important to the sales and marketing promotions of the Balkamp organization.
Balkamp has four distribution centers located in Indianapolis and Plainfield,
Indiana, Greenwood, Mississippi, and West Jordan, Utah.
Johnson Industries ("Johnson"), a wholly-owned subsidiary of the
Company, is an independent distributor of ACDelco, Motorcraft and other
automotive supplies. Johnson, founded in 1924, sells primarily to large fleets
and new car dealers as well as providing ACDelco products to NAPA members.
Johnson has 11 distribution centers throughout the U.S.
The Company, through its Rayloc division, also operates six plants
where certain small automotive parts are rebuilt. These products are distributed
to the members of NAPA under the NAPA brand name. Rayloc(R) is a mark licensed
to the Company by NAPA.
SEGMENT DATA. In the year ended December 31, 2000, sales from the Automotive
Parts Group approximated 50% of the Company's net sales as compared to 51% in
1999 and 49% in 1998.
SERVICE TO NAPA AUTO PARTS STORES. The Company believes that the quality and the
range of services provided to its automotive parts customers constitute a
significant part of its automotive parts distribution
-4-
<PAGE> 5
system. Such services include fast and frequent delivery, obsolescence
protection, parts cataloging (including the use of computerized NAPA AUTO PARTS
catalogs) and stock adjustment through a continuing parts classification system
which allows auto parts customers to return certain merchandise on a scheduled
basis. The Company offers its NAPA AUTO PARTS store customers various management
aids, marketing aids and service on topics such as inventory control, cost
analysis, accounting procedures, group insurance and retirement benefit plans,
marketing conferences and seminars, sales and advertising manuals and training
programs. Point of sale/inventory management is available through TAMS(R) (Total
Automotive Management Systems), a computer system designed and developed by the
Company for the NAPA AUTO PARTS store.
In association with NAPA, the Company has developed and refined an
inventory classification system to determine optimum distribution center and
auto parts store inventory levels for automotive parts stocking based on
automotive registrations, usage rates, production statistics, technological
advances and other similar factors. This system, which undergoes continuous
analytical review, is an integral part of the Company's inventory control
procedures and comprises an important feature of the inventory management
services which the Company makes available to its NAPA AUTO PARTS store
customers. Over the last 10 years, losses to the Company from obsolescence have
been insignificant, and the Company attributes this to the successful operation
of its classification system which involves product return privileges with most
of its suppliers.
COMPETITION. In the distribution of automotive parts, the Company competes with
automobile manufacturers (some of which sell replacement parts for vehicles
built by other manufacturers as well as those which they build themselves),
automobile dealers, warehouse clubs and large automotive parts retail chains. In
addition, the Company competes with the distributing outlets of parts
manufacturers, oil companies, mass merchandisers, including national retail
chains, and with other parts distributors and jobbers.
NAPA. The Company is a member of the National Automotive Parts Association, a
voluntary association formed in 1925 to provide nationwide distribution of
automotive replacement parts. NAPA, which neither buys nor sells automotive
parts, functions as a trade association whose members in 2000 operated 68
distribution centers located throughout the United States, 61 of which were
owned and operated by the Company. NAPA develops marketing concepts and programs
that may be used by its members. It is not involved in the chain of
distribution.
Among the automotive lines that each NAPA member purchases and
distributes are certain lines designated, cataloged, advertised and promoted as
"NAPA" lines. The members are not required to purchase any specific quantity of
parts so designated and may, and do, purchase competitive lines from other
supply sources.
The Company and the other NAPA members use the federally registered
trademark NAPA(R) as part of the trade name of their distribution centers and
jobbing stores. The Company contributes to NAPA's national advertising program,
which is designed to increase public recognition of the NAPA name and to promote
NAPA product lines.
The Company is a party, together with other members of NAPA and NAPA
itself, to a consent decree entered by the Federal District Court in Detroit,
Michigan, on May 4, 1954. The consent decree enjoins certain practices under the
federal antitrust laws, including the use of exclusive agreements with
manufacturers of automotive parts, allocation or division of territories among
several NAPA members, fixing of prices or terms of sale for such parts among
such members, and agreements to adhere to any uniform policy in selecting parts
customers or determining the number and location of, or arrangements with, auto
parts customers.
-5-
<PAGE> 6
INDUSTRIAL PARTS GROUP.
The Industrial Parts Group distributes industrial replacement parts and
related supplies throughout the United States, Canada and Mexico. This Group
distributes industrial bearings and power transmission equipment replacement
parts, including hydraulic and pneumatic products, material handling components,
agricultural and irrigation equipment and their related supplies. The Group is
continuing to enhance their internet-based procurement solutions.
In 2000, the Company distributed industrial parts in the United States
through Motion Industries, Inc. ("Motion"), headquartered in Birmingham,
Alabama. Motion is a wholly-owned subsidiary of the Company. In Canada,
industrial parts are distributed by another of Motion's operating divisions,
Motion Industries (Canada), Inc. ["Motion (Canada)"], comprised of the former
Oliver Industrial Supply Ltd. and Premier Industrial Division of UAP Inc., CHV
Hydraulics, Lou's Bearings and Transmissions, B. G. S. Bearings and Equipment
Ltd., and MBS Bearings Services, all wholly-owned subsidiaries of Genuine Parts
Holdings Ltd., which is a wholly-owned subsidiary of the Company. Motion
(Canada)'s service area includes seven provinces of Alberta, British Columbia,
Manitoba, Newfoundland, Ontario, Quebec, and Saskatchewan. In Mexico, industrial
parts are distributed by another operating division, Motion Industries (Mexico)
["Motion (Mexico)"], through a joint venture with power transmission specialist
Refacciones Industriales de Mexico (RIMSA). Motion (Mexico) serves the market
through seven locations in five major Mexican cities.
In 2000 the Industrial Group expanded its Canadian operations through
the acquisition of MBS Bearing Services, with 29 operations in Eastern Ontario,
Quebec, the Maritimes and a subsidiary in Plattsburgh, New York. As a result,
Motion Canada offers a national footprint, increased operational efficiencies,
and access to over 2 million parts for an unprecedented level of customer
service in Canada. The acquisition of Staley Supply, located in Delmar,
Maryland, provided additional exposure to the poultry industry as well as
broadened customer support for the northeastern United States customer base.
Additionally, Motion Industries opened 19 new branch locations and added 30
locations to its North American network through acquisition.
As of December 31, 2000, the Group served more than 165,000 customers
in all types of industries located throughout the United States, Mexico and
Canada.
DISTRIBUTION SYSTEM. In North and South America, the Industrial Parts Group
operates 509 locations including: eight distribution centers, three
re-distribution centers, and 52 service centers for fluid power, electrical and
special hose applications. The distribution centers stock and distribute more
than 200,000 different items purchased from more than 250 different suppliers.
The Group's re-distribution centers serve as collection points for excess
inventory collected from its branches for re-distribution to those branches that
need the inventory. Approximately 64% of 2000 total industrial purchases were
made from 10 major suppliers. Sales are generated from the Group's branches
located in 47 states and nine provinces in Canada, and five cities in Mexico.
Each branch has warehouse facilities that stock significant amounts of inventory
representative of the lines of products used by customers in the respective
market area served.
Motion (Canada) operates an industrial parts and agricultural supply
distribution center for the 64 Canadian locations serving industrial and
agricultural markets. Motion (Canada) also distributes irrigation systems and
related supplies.
PRODUCTS. The Industrial Parts Group distributes a wide variety of products to
its customers, primarily industrial concerns, to maintain and operate plants,
machinery and equipment. Products include such items as hoses, belts, bearings,
pulleys, pumps, valves, chains, gears, sprockets, speed reducers and electric
motors. The nature of this Group's business demands the maintenance of large
inventories and the ability to provide prompt and demanding delivery
requirements. Virtually all of the products distributed are installed by the
customer. Most orders are filled immediately from existing stock and deliveries
are normally made within 24 hours of receipt of order. The majority of all sales
are on open account.
RELATED INFORMATION. Non-exclusive distributor agreements are in effect with
most of the Group's suppliers. The terms of these agreements vary; however, it
has been the experience of the Group that the custom of the
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<PAGE> 7
trade is to treat such agreements as continuing until breached by one party, or
until terminated by mutual consent.
INTEGRATED SUPPLY. Motion's integrated supply solutions continued to gain
momentum in 2000. Motion's integrated supply process not only reduces the costs
associated with MRO (Maintenance, Repair and Operation) inventory management,
but also enables the manufacturing customer to focus on its core competency,
free working capital associated with inventories, improve service levels to
end-users, and allow management to focus on more strategic concerns. Motion's
integrated supply process analyzes a customer's current operation to develop
integration goals and then provides solutions based on industry's accepted best
practices.
SEGMENT DATA. In the year ended December 31, 2000, sales from the Company's
Industrial Parts Group approximated 28% of the Company's net sales as compared
to 27% in 1999 and 31% in 1998.
COMPETITION. The Industrial Parts Group competes with other distributors
specializing in the distribution of such items, general line distributors and
others who have developed or joined integrated supply programs. To a lesser
extent, the Group competes with manufacturers that sell directly to the
customer.
OFFICE PRODUCTS GROUP.
The Office Products Group, operated through S. P. Richards Company ("S.
P. Richards"), a wholly-owned subsidiary of the Company, is headquartered in
Atlanta, Georgia. S. P. Richards is engaged in the wholesale distribution of a
broad line of office and other products which are used in the daily operation of
businesses, schools, offices and institutions. Office products fall into the
general categories of computer supplies, imaging supplies, office machines,
general office supplies, janitorial supplies, breakroom supplies, and office
furniture. Horizon USA Data Supplies, Inc., acquired by the Company in 1995, is
a computer supplies distributor headquartered in Reno, Nevada. The Office
Products Group is developing several web-based products to benefit resellers,
manufacturers and consumers.
In August 1998, the Company completed the purchase of the Canada based
Norwestra Sales (1992), Inc. ("Norwestra"). With its headquarters near
Vancouver, British Columbia, Norwestra services office product resellers
throughout Western Canada. During 1999, the Company opened a second Norwestra
branch in Toronto, Canada. In 2000, Norwestra acquired Transwest Distributors, a
furniture wholesaler headquartered in Vancouver, with warehouses in Calgary and
Winnipeg.
The Office Products Group distributes computer supplies including
diskettes, printer supplies, printout paper and printout binders; office
furniture to include desks, credenzas, chairs, chair mats, partitions, files and
computer furniture; office machines to include telephones, answering machines,
calculators, typewriters, shredders and copiers; and general office supplies to
include copier supplies, desk accessories, business forms, accounting supplies,
binders, report covers, writing instruments, note pads, envelopes, secretarial
supplies, mailroom supplies, filing supplies, art/drafting supplies, janitorial
supplies, breakroom supplies and audio visual supplies.
The Office Products Group distributes more than 30,000 items to over
6,000 office supply dealers from 44 facilities located in 28 states and Canada.
Approximately 50% of 2000 total office products purchases were made from 10
major suppliers.
The Office Products Group sells to resellers of office products.
Customers are offered comprehensive marketing programs, which include flyers,
other promotional material and personalized product catalogs. The marketing
programs are supported by all the Group's distribution centers which stock all
cataloged products and have the capability to provide overnight delivery.
While many recognized brand-name items are carried in inventory, S. P.
Richards also markets items produced for it under its own SPARCO(R) brand name,
as well as its NATURE SAVER(R) brand of recycled
-7-
<PAGE> 8
products, Elite Image(TM) printer supplies, Brittannia brand of fashionable
writing instruments, and CompuCessory(TM) brand of computer supplies and
accessories.
SEGMENT DATA. In the year ended December 31, 2000, sales from the Company's
Office Products Group approximated 16% of the Company's net sales as compared to
15% in 1999 and 17% in 1998.
COMPETITION. In the distribution of office supplies to retail dealers, S. P.
Richards competes with many other wholesale distributors as well as with
manufacturers of office products and large national retail chains.
ELECTRICAL/ELECTRONIC MATERIALS GROUP.
The Electrical/Electronic Materials Group was formed on July 1, 1998
through the acquisition of EIS, Inc. ("EIS"). This Group distributes materials
for the manufacture and repair of electrical and electronic apparatus. With
branch locations in 45 cities nationwide and in Mexico, this Group stocks over
100,000 items, from insulating and conductive materials to assembly tools and
test equipment. This Group also has three manufacturing facilities that provide
custom fabricated parts and one manufacturing plant that produces printed
circuit board drillroom products. The Electrical/Electronic Materials Group is
an important single source to original equipment manufacturers, repair shops,
the electronic assembly market, and printed circuit board manufacturers.
In 2000, the Company distributed electrical materials through EIS,
headquartered in Atlanta, Georgia. Electronic materials were distributed through
EIS's operating divisions, Com-Kyl and Circuit Supply. Both electrical and
electronic products are distributed from warehouse locations in major user
markets throughout the U.S.
PRODUCTS. The Electrical/Electronic Materials Group distributes a wide variety
of products to customers from over 400 vendors. Products include such items as
magnet wire, copper clad laminate, conductive materials, insulating and
shielding materials, assembly tools, test equipment, adhesives and chemicals,
pressure sensitive tapes, solder, anti-static products, and thermal management
products. To meet the prompt delivery demands of its customers, this Group
maintains large inventories. The majority of sales are on open account.
Approximately 50% of 2000 total Electrical/Electronic Materials Group purchases
were made from 25 major suppliers.
INTERNET. The Electrical/Electronic Materials Group actively utilizes its
E-commerce Internet site to present its products to customers, while allowing
these on-line visitors to conveniently purchase from a large product assortment.
This strategic E-commerce program, which is currently focused on the electronic
assembly market, provides a fully integrated business system solution in support
of this new sales channel. EIS plans to leverage this system to deploy web-based
storefronts for the other markets it services.
INTEGRATED SUPPLY. The Electrical/Electronic Materials Group's integrated supply
programs are a part of the marketing strategy, as a greater number of
customers--especially national accounts--are given the opportunity to
participate in this low-cost, high-service capability. The Group developed AIMS
(Advanced Inventory Management System), a totally integrated, highly automated
solution for inventory management. This year SupplyPro will be added to the
Group's Integrated Supply offering. SupplyPro is an electronic vending dispenser
used to eliminate costly tool crib, or in-house stores, at customer warehouse
facilities.
SEGMENT DATA. In the year ended December 31, 2000 sales from the Company's
Electrical/Electronic Materials Group approximated 6% of the Company's sales, as
compared to 7% in 1999.
COMPETITION. The Electrical/Electronic Materials Group competes with other
distributors specializing in the distribution of electrical and electronic
products, general line distributors, and, to a lesser extent, manufacturers that
sell directly to customers.
* * * * * * * * * *
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<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY. The table below sets forth the name and age
of each person deemed to be an executive officer of the Company as of February
8, 2001, the position or office held by each and the period during which each
has served as such. Each executive officer is elected by the Board of Directors
and serves at the pleasure of the Board of Directors until his successor has
been elected and has qualified, or until his earlier death, resignation,
removal, retirement or disqualification.
<TABLE>
<CAPTION>
YEAR FIRST ASSUMED
NAME AGE POSITION OF OFFICE POSITION
- ------------------- --- -------------------------------------- ------------------
<S> <C> <C> <C>
Larry L. Prince 62 Chairman of the Board of Directors and 1990/1989
Chief Executive Officer
Thomas C. Gallagher 53 President and Chief Operating Officer 1990
George W. Kalafut 66 Executive Vice President 1991
Jerry W. Nix 55 Executive Vice President - Finance * 2000
Edward Van Stedum 51 Senior Vice President - Human Resources 1996
</TABLE>
* Also serves as the Company's Principal Financial and Accounting Officer.
All executive officers have been employed by and have served as
officers of the Company for at least the last five years.
ITEM 2. PROPERTIES.
The Company's headquarters are located in one of two adjacent office
buildings owned by Genuine Parts Company in Atlanta, Georgia.
The Company's Automotive Parts Group currently operates 61 NAPA
Distribution Centers in the United States distributed among eight geographic
divisions. Approximately 90% of the distribution center properties are owned by
the Company. At December 31, 2000, the Company operated approximately 800 NAPA
AUTO PARTS stores located in 43 states, and the Company owned either a 51% or
70% interest in 107 additional auto parts stores located in 30 states. Other
than NAPA AUTO PARTS stores located within Company owned distribution centers,
most of the automotive parts stores in which the Company has an ownership
interest were operated in leased facilities. In addition, UAP operated 15
distribution centers and approximately 258 automotive parts and TRACTION stores
in Canada. The Company's Automotive Parts Group also operates four Balkamp
distribution centers, six Rayloc rebuilding plants, one transfer and shipping
facility, and eleven Johnson Industries distribution centers.
The Company's Industrial Parts Group, operating through Motion, Motion
(Canada) and Motion (Mexico), operates 8 distribution centers, 3 redistribution
centers, 52 service centers and 446 branches. Approximately 90% of these
branches are operated in leased facilities.
The Company's Office Products Group operates 40 facilities in the
United States and 4 facilities in Canada distributed among the Group's five
geographic divisions. Approximately 75% of these facilities are operated in
leased buildings.
The Company's Electrical/Electronic Materials Group operates in 38
cities in the United States and 2 cities in Mexico. All of this Group's 45
facilities are operated in leased buildings except three facilities, which are
owned.
For additional information regarding rental expense on leased
properties, see "Note 5 of Notes to Consolidated Financial Statements" on Page
26 of the Company's Annual Report to Shareholders for the year ended December
31, 2000.
ITEM 3. LEGAL PROCEEDINGS.
Not applicable.
-9-
<PAGE> 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Information required by this item is set forth under the heading
"Market and Dividend Information" on Page 16 of the Company's Annual Report to
Shareholders for the year ended December 31, 2000, and is incorporated herein by
reference. The Company has made no unregistered sales of securities during the
year ended December 31, 2000.
ITEM 6. SELECTED FINANCIAL DATA.
Information required by this item is set forth under the heading
"Selected Financial Data" on Page 16 of the Company's Annual Report to
Shareholders for the year ended December 31, 2000, and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Information required by this item is set forth under the heading
"Management's Discussion and Analysis" on Pages 18 and 19 of the Company's
Annual Report to Shareholders for the year ended December 31, 2000, and is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information presented under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on Pages 18 and
19 and presented under "Note 3 - Credit Facilities" on Pages 25 and 26 of the
Company's Annual Report to Shareholders for the year ended December 31, 2000,
and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required by this item is set forth in the consolidated
financial statements on Pages 17 and 21 through 29, in "Report of Independent
Auditors" on Page 20, and under the heading "Quarterly Results of Operations" on
Page 19, of the Company's Annual Report to Shareholders for the year ended
December 31, 2000, and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
Not applicable.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information required by this item is set forth under the headings
"Nominees for Director" and "Members of the Board of Directors Continuing in
Office" on Pages 2 through 4 of the definitive proxy statement for the Company's
Annual Meeting to be held on April 16, 2001, and is incorporated herein by
reference. Certain information about Executive Officers of the Company is
included in Item 1 of Part I of this Annual Report on Form 10-K.
-10-
<PAGE> 11
ITEM 11. EXECUTIVE COMPENSATION.
Information required by this item is set forth under the heading
"Executive Compensation and Other Benefits" on Pages 8 through 10, and under
the headings "Compensation Committee Interlocks and Insider Participation",
"Compensation Pursuant to Plans" and "Termination of Employment and Change of
Control Arrangements" on Pages 13 through 16 of the definitive proxy statement
for the Company's Annual Meeting to be held on April 16, 2001, and is
incorporated herein by reference. In no event shall the information contained in
the definitive proxy statement for the Company's 2001 Annual Meeting on Pages 10
through 12 under the heading "Compensation and Stock Option Committee Report on
Executive Compensation" or on Pages 17 and 18 under the heading "Performance
Graph" be incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is set forth under the headings
"Common Stock Ownership of Certain Beneficial Owners" and "Common Stock
Ownership of Management" on Pages 5 through 8 of the definitive proxy statement
for the Company's Annual Meeting to be held on April 16, 2001, and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is set forth under the heading
"Certain Relationships and Related Transactions" on Page 19 of the definitive
proxy statement for the Company's 2001 Annual Meeting to be held on April 16,
2001, and is incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report.
(3) The following Exhibits are filed as part of this report in Item
14(c):
Exhibit 3.1 Restated Articles of Incorporation of the Company, dated
as of April 18, 1998, and as amended April 17, 1989 and
amendments to the Restated Articles of Incorporation of
the Company, dated as of November 20, 1989 and April 18,
1994. (Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated March 3,
1995.)
Exhibit 3.2 By-laws of the Company, as amended February 19, 2001.
Exhibit 4.1 Shareholder Protection Rights Agreement, dated as of
November 15, 1999, between the Company and SunTrust Bank,
Atlanta, as Rights Agent. (Incorporated herein by
reference from the Company's Report on Form 8-K, dated
November 15, 1999.)
Exhibit 4.2 Specimen Common Stock Certificate. (Incorporated herein
by reference from the Company's Registration Statement on
Form S-1, Registration No. 33-63874.)
Instruments with respect to long-term debt where the total amount of
securities authorized thereunder does not exceed 10% of the total
assets of the Registrant and its subsidiaries on a consolidated basis
have not been filed. The Registrant agrees to furnish to the Commission
a copy of each such instrument upon request.
-11-
<PAGE> 12
Exhibit 10.1* 1988 Stock Option Plan. (Incorporated herein by
reference from the Company's Annual Meeting Proxy
Statement, dated March 9, 1988.)
Exhibit 10.2* Form of Amendment to Deferred Compensation Agreement,
adopted February 13, 1989, between the Company and
certain executive officers of the Company.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 15, 1989.)
Exhibit 10.3* Form of Agreement adopted February 13, 1989, between
the Company and certain executive officers of the
Company providing for a supplemental employee benefit
upon a change in control of the Company. (Incorporated
herein by reference from the Company's Annual Report on
Form 10-K, dated March 15, 1989.)
Exhibit 10.4* Genuine Parts Company Supplemental Retirement Plan,
effective January 1, 1991. (Incorporated herein by
reference from the Company's Annual Report on Form
10-K, dated March 8, 1991.)
Exhibit 10.5* 1992 Stock Option and Incentive Plan, effective April
20, 1992. (Incorporated herein by reference from the
Company's Annual Meeting Proxy Statement, dated March
6, 1992.)
Exhibit 10.6* Restricted Stock Agreement dated March 31, 1994,
between the Company and Larry L. Prince. (Incorporated
herein by reference from the Company's Form 10-Q, dated
May 6, 1994.)
Exhibit 10.7* Restricted Stock Agreement dated March 31, 1994,
between the Company and Thomas C. Gallagher.
(Incorporated herein by reference from the Company's
Form 10-Q, dated May 6, 1994.)
Exhibit 10.8* The Genuine Parts Company Restated Tax-Deferred Savings
Plan, effective January 1, 1993. (Incorporated herein
by reference from the Company's Annual Report on Form
10-K, dated March 3, 1995.)
Exhibit 10.9* Amendment No. 2 to the Genuine Parts Company
Supplemental Retirement Plan, effective January 1,
1995. (Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated March 3,
1995.)
Exhibit 10.10* Genuine Partnership Plan, as amended and restated
January 1, 1994. (Incorporated herein by reference form
the Company's Annual Report on Form 10-K, dated March
3, 1995.)
Exhibit 10.11* Genuine Parts Company Pension Plan, as amended and
restated effective January 1, 1989. (Incorporated
herein by reference from the Company's Annual Report on
Form 10-K, dated March 3, 1995.)
Exhibit 10.12* Amendment No. 1 to the Genuine Partnership Plan,
effective September 1, 1995. (Incorporated herein by
reference to the Company's Form 10-K, dated March 7,
1996.)
Exhibit 10.13* Amendment No. 1 to the Genuine Parts Company Pension
Plan, effective April 1, 1995. (Incorporated herein by
reference to the Company's Form 10-K, dated March 7,
1996.)
-12-
<PAGE> 13
Exhibit 10.14* Amendment No. 2 to the Genuine Parts Company Pension
Plan, dated September 28, 1995, effective January 1,
1995. (Incorporated herein by reference to the
Company's Form 10-K, dated March 7, 1996.)
Exhibit 10.15* Genuine Parts Company Directors' Deferred Compensation
Plan, effective November 1, 1996. (Incorporated herein
by reference to the Company's Form 10-K, dated March
10, 1997.)
Exhibit 10.16* Amendment No. 3 to the Genuine Parts Company Pension
Plan dated May 24, 1996, effective January 1, 1996.
(Incorporated herein by reference to the Company's Form
10-K, dated March 10, 1997.)
Exhibit 10.17* Amendment No. 4 to the Genuine Parts Company Pension
Plan dated December 3, 1996, effective January 1, 1996.
(Incorporated herein by reference to the Company's Form
10-K, dated March 10, 1997.)
Exhibit 10.18* Amendment No. 2 to the Genuine Partnership Plan, dated
December 3, 1996, effective November 1, 1996.
(Incorporated herein by reference to the Company's Form
10-K, dated March 10, 1997.)
Exhibit 10.19* Amendment No. 4-A to the Genuine Parts Company
Pension Plan, dated August 29, 1997, effective January
1, 1996. (Incorporated herein by reference from the
Company's Annual Report on Form 10-K, dated March 10,
1998.)
Exhibit 10.20* Amendment No. 5 to the Genuine Parts Company Pension
Plan, dated August 7, 1997. (Incorporated herein by
reference from the Company's Annual Report on Form
10-K, dated March 10, 1998.)
Exhibit 10.21* Amendment No. 6 to the Genuine Parts Company Pension
Plan, dated October 6, 1997, effective January 1, 1997.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 10, 1998.)
Exhibit 10.22* Amendment No. 3 to the Genuine Partnership Plan, dated
August 7, 1997. (Incorporated herein by reference from
the Company's Annual Report on Form 10-K, dated March
10, 1998.)
Exhibit 10.23* Amendment No. 3 to the Genuine Parts Company
Supplemental Retirement Plan, dated August 29, 1997,
effective August 15, 1997. (Incorporated herein by
reference from the Company's Annual Report on Form
10-K, dated March 10, 1998.)
Exhibit 10.24* Genuine Parts Company Death Benefit Plan, effective
July 15, 1997. (Incorporated herein by reference from
the Company's Annual Report on Form 10-K, dated March
10, 1998.)
Exhibit 10.25* Amendment No. 4 to the Genuine Partnership Plan, dated
August 19, 1998, effective January 1, 1998.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 10, 1999.)
Exhibit 10.26* Amendment No. 5 to the Genuine Partnership Plan, dated
December 7, 1998, effective January 1, 1999.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 10, 1999.)
-13-
<PAGE> 14
Exhibit 10.27* Amendment No. 6 to the Genuine Partnership Plan, dated
December 7, 1998, effective January 1, 1994.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 10, 1999.)
Exhibit 10.28* Amendment No. 7 to the Genuine Parts Company Pension
Plan, dated August 19, 1998, effective January 1, 1998.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 10, 1999.)
Exhibit 10.29* Genuine Parts Company 1999 Long-Term Incentive Plan.
(Incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 10, 1999.)
Exhibit 10.30* Genuine Parts Company 1999 Annual Incentive Bonus Plan,
effective April 19, 1995. (Incorporated herein by
reference from the Company's Annual Report on Form
10-K, dated March 10, 1999.)
Exhibit 10.31* Restricted Stock Agreement dated February 25, 1999,
between the Company and Larry L. Prince. (Incorporated
herein by reference from the Company's Form 10-Q, dated
May 3, 1999.)
Exhibit 10.32* Restricted Stock Agreement dated February 25, 1999,
between the Company and Thomas C. Gallagher.
(Incorporated herein by reference from the Company's
Form 10-Q, dated May 3, 1999.)
Exhibit 10.33* Amendment No. 8 to the Genuine Parts Company Pension
Plan, dated January 26, 1999, effective September 30,
1998. (Incorporated herein by reference from the
Company's Form 10-K dated March 10, 2000.)
Exhibit 10.34* Amendment No. 9 to the Genuine Parts Company Pension
Plan, dated December 30, 1999, effective January 1,
1989; December 31, 1999; and January 1, 2000.
(Incorporated herein by reference from the
Company's Form 10-K dated March 10, 2000.)
Exhibit 10.35* Amendment to the Genuine Parts Company 1992 Stock
Option and Incentive Plan, dated April 19, 1999,
effective April 19, 1999. (Incorporated herein by
reference from the Company's Form 10-K dated
March 10, 2000.)
Exhibit 10.36* Amendment to the Genuine Parts Company Tax-Deferred
Savings Plan, dated April 19, 1999, effective April 19,
1999. (Incorporated herein by reference from the
Company's Form 10-K dated March 10, 2000.)
Exhibit 10.37* Amendment to the Genuine Parts Company Original
Deferred Compensation Plan, dated April 19, 1999,
effective April 19, 1999. (Incorporated herein by
reference from the Company's Form 10-K dated
March 10, 2000.)
Exhibit 10.38* Amendment to the Genuine Parts Company Directors'
Deferred Compensation Plan, dated April 19, 1999,
effective April 19, 1999. (Incorporated herein by
reference from the Company's Form 10-K dated
March 10, 2000.)
Exhibit 10.39* Amendment to the Genuine Parts Company Supplemental
Retirement Plan, dated April 19, 1999, effective April
19, 1999. (Incorporated herein by reference from the
Company's Form 10-K dated March 10, 2000.)
Exhibit 10.40* Amendment No. 7 to the Genuine Partnership Plan, dated
January 26, 1999, effective January 1, 1999.
(Incorporated herein by reference from the
Company's Form 10-K dated March 10, 2000.)
Exhibit 10.41* Amendment No. 8 to the Genuine Partnership Plan, dated
February 4, 1999, effective January 1, 1999.
(Incorporated herein by reference from the
Company's Form 10-K dated March 10, 2000.)
Exhibit 10.42* Amendment No. 9 to the Genuine Partnership Plan, dated
April 5, 1999, effective April 1, 1999. (Incorporated
herein by reference from the Company's Form 10-K dated
March 10, 2000.)
-14-
<PAGE> 15
Exhibit 10.43* Amendment No. 10 to the Genuine Partnership Plan, dated
December 30, 1999, effective November 30, 1999.
(Incorporated herein by reference from the Company's
Form 10-K dated March 10, 2000.)
Exhibit 10.44* Amendment No. 11 to the Genuine Partnership Plan, dated
January 19, 2001, effective April 1, 2000.
Exhibit 10.45* Amendment No. 12 to the Genuine Partnership Plan, dated
January 19, 2001, effective December 29, 2000.
* Indicates executive compensation plans and arrangements.
Exhibit 13 The following sections and pages of the 2000 Annual
Report to Shareholders:
- Selected Financial Data on Page 16
- Market and Dividend Information on Page 16
- Management's Discussion and Analysis on
Pages 18-19
- Quarterly Results of Operations on Page 19
- Segment Data on Page 17 - Report of
Independent Auditors on Page 20
- Consolidated Financial Statements and Notes
to Consolidated Financial Statements on
Pages 21-29.
Exhibit 21 Subsidiaries of the Company
Exhibit 23 Consent of Independent Auditors
(b) Reports on Form 8-K. There were no Reports on Form 8-K filed
for the period ended December 31, 2000.
(c) Exhibits. The response to this portion of Item 14 is submitted
as a separate section of this report.
(d) Financial Statement Schedules. The response to this portion of
Item 14 is submitted as a separate section of this report.
-15-
<PAGE> 16
SIGNATURES.
Pursuant to the requirements of Section 13 or 15(d) 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
/S/ LARRY L. PRINCE 3/12/01 /S/ JERRY W. NIX 3/12/01
- -------------------------------- --------------------------------------------
LARRY L. PRINCE (Date) JERRY W. NIX (Date)
Chairman of the Board Executive Vice President - Finance
and Chief Executive Officer (Principal Financial and Accounting Officer)
-16-
<PAGE> 17
Pursuant to the requirements of the Securities and Exchange Act of
1934, this Report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
/S/ RICHARD W. COURTS II 2/19/01 /S/ BRADLEY CURREY, JR. 2/19/01
- ----------------------------------------------------- ----------------------------------------------------
RICHARD W. COURTS II (Date) BRADLEY CURREY, JR. (Date)
Director Director
/S/ ROBERT P. FORRESTAL 2/19/01
- ----------------------------------------------------- ----------------------------------------------------
JEAN DOUVILLE (Date) ROBERT P. FORRESTAL (Date)
Director Director
/S/ THOMAS C. GALLAGHER 2/19/01 /S/ STEPHEN R. KENDALL 2/19/01
- ----------------------------------------------------- ----------------------------------------------------
THOMAS C. GALLAGHER (Date) STEPHEN R. KENDALL (Date)
Director Director
President and Chief Operating Officer
/S/ J. HICKS LANIER 2/19/01 /S/ LARRY L. PRINCE 2/19/01
- ----------------------------------------------------- ----------------------------------------------------
J. HICKS LANIER LARRY L. PRINCE (Date)
Director Director
Chairman of the Board and Chief Executive Officer
/S/ ALANA S. SHEPHERD 2/19/01
- ----------------------------------------------------- ----------------------------------------------------
ALANA S. SHEPHERD (Date) LAWRENCE G. STEINER (Date)
Director Director
/S/ JAMES B. WILLIAMS 2/19/01
- ----------------------------------------------------- ----------------------------------------------------
JAMES B. WILLIAMS (Date) MICHAEL M. E. JOHNS (Date)
Director Director
</TABLE>
-17-
<PAGE> 18
ANNUAL REPORT ON FORM 10-K
ITEM 14(A)(1) AND (2), (C) AND (D)
LIST OF FINANCIAL STATEMENTS
CERTAIN EXHIBITS
YEAR ENDED DECEMBER 31, 2000
GENUINE PARTS COMPANY
ATLANTA, GEORGIA
<PAGE> 19
Form 10-K - Item 14(a)(1) and (2)
Genuine Parts Company and Subsidiaries
Index of Financial Statements
The following consolidated financial statements of Genuine Parts Company and
subsidiaries, included in the annual report of the registrant to its
shareholders for the year ended December 31, 2000, are incorporated by reference
in Item 8:
Consolidated balance sheets - December 31, 2000 and 1999
Consolidated statements of income - Years ended December 31, 2000,
1999, and 1998
Consolidated statements of cash flows - Years ended December 31, 2000,
1999 and 1998
Notes to consolidated financial statements - December 31, 2000
The following consolidated financial statement schedule of Genuine Parts Company
and subsidiaries is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
<PAGE> 20
ANNUAL REPORT ON FORM 10-K
ITEM 14(A)(3)
LIST OF EXHIBITS
The following Exhibits are filed as a part of this Report:
<TABLE>
<S> <C>
3.2 By-laws of the Company, as amended February 19, 2001
10.44 Amendment No. 11 to the Genuine Partnership Plan, dated January 19,
2001, effective April 1, 2000.
10.45 Amendment No. 12 to the Genuine Partnership Plan, dated January 19,
2001, effective December 29, 2000.
13 The following Sections and Pages of Annual Report to Shareholders for
2000:
- Selected Financial Data on Page 16
- Market and Dividend Information on Page 16
- Management's Discussion and Analysis on Pages 18 and 19
- Quarterly Results of Operations on Page 19
- Segment Data on Page 17
- Report of Independent Auditors on Page 20
- Consolidated Financial Statements and Notes to Consolidated
Financial Statements on Pages 21-29
21 Subsidiaries of the Company
23 Consent of Independent Auditors
</TABLE>
The following Exhibits are incorporated by reference as set forth in Item 14 on
pages 11-15 of this Form 10-K:
<TABLE>
<S> <C> <C>
- 3.1 Restated Articles of Incorporation of the Company,
dated as of April 18, 1988, and as amended April 17,
1989 and amendments to the Restated Articles of
Incorporation of the Company, dated as of November
20, 1989 and April 18, 1994.
- 4.1 Shareholder Protection Rights Agreement, dated as of
November 15, 1999, between the Company and SunTrust
Bank, Atlanta, as Rights Agent.
- 4.2 Specimen Common Stock Certificate. (Incorporated
herein by reference form the Company's Registration
Statement on Form S-1, Registration No. 33-63874).
</TABLE>
Instruments with respect to long-term debt where the total amount of
securities authorized thereunder does not exceed 10% of the total
assets of the Registrant and its subsidiaries on a consolidated basis
have not been filed. The Registrant agrees to furnish to the Commission
a copy of each such instrument upon request.
<PAGE> 21
<TABLE>
<S> <C> <C>
- 10.1* 1988 Stock Option Plan.
- 10.2* Form of Amendment to Deferred Compensation Agreement
adopted February 13, 1989, between the Company and
certain executive officers of the Company.
- 10.3* Form of Agreement adopted February 13, 1989, between
the Company and certain executive officers of the
Company providing for a supplemental employee benefit
upon a change in control of the Company.
- 10.4* Genuine Parts Company Supplemental Retirement Plan,
effective January 1, 1991.
- 10.5* 1992 Stock Option and Incentive Plan, effective April
20, 1992.
- 10.6* Restricted Stock Agreement dated March 31, 1994,
between the Company and Larry L. Prince.
- 10.7* Restricted Stock Agreement dated March 31, 1994,
between the Company and Thomas C. Gallagher.
- 10.8* The Genuine Parts Company Restated Tax-Deferred
Savings Plan, effective January 1, 1993.
- 10.9* Amendment No. 2 to the Genuine Parts Company
Supplemental Retirement Plan, effective January 1,
1995.
- 10.10* Genuine Partnership Plan, as amended and restated
January 1, 1994.
- 10.11* Genuine Parts Company Pension Plan, as amended and
restated, effective January 1, 1989.
- 10.12* Amendment No. 1 to the Genuine Partnership Plan,
effective September 1, 1995.
- 10.13* Amendment No. 1 to the Genuine Parts Company Pension
Plan, effective April 1, 1995.
- 10.14* Amendment No. 2 to the Genuine Parts Company Pension
Plan, dated September 28, 1995, effective January 1,
1995.
- 10.15* Genuine Parts Company Directors' Deferred
Compensation Plan, effective November 1, 1996.
- 10.16* Amendment No. 3 to the Genuine Parts Company Pension
Plan, dated May 24, 1996, effective January 1, 1996.
- 10.17* Amendment No. 4 to the Genuine Parts Company Pension
Plan, dated December 3, 1996, effective January 1,
1996.
- 10.18* Amendment No. 2 to the Genuine Partnership Plan,
dated December 3, 1996, effective November 1, 1996.
- 10.19* Amendment No. 4-A to the Genuine Parts Company
Pension Plan, dated August 29, 1997, effective
January 1, 1996.
- 10.20* Amendment No. 5 to the Genuine Parts Company Pension
Plan, dated August 7, 1997.
- 10.21* Amendment No. 6 to the Genuine Parts Company Pension
Plan, dated October 6, 1997, effective January 1,
1997.
- 10.22* Amendment No. 3 to the Genuine Partnership Plan,
dated August 7, 1997.
- 10.23* Amendment No. 3 to the Genuine Parts Company
Supplemental Retirement Plan, dated August 29, 1997,
effective August 15, 1997.
- 10.24* Genuine Parts Company Death Benefit Plan, effective
July 15, 1997.
- 10.25* Amendment No. 4 to the Genuine Partnership Plan,
dated August 19, 1998, effective January 1, 1998.
- 10.26* Amendment No. 5 to the Genuine Partnership Plan,
dated December 7, 1998, effective January 1, 1999.
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C>
- 10.27* Amendment No. 6 to the Genuine Partnership Plan,
dated December 7, 1998, effective January 1, 1994.
- 10.28* Amendment No. 7 to the Genuine Parts Company Pension
Plan, dated August 19, 1998, effective January 1,
1998.
- 10.29* Genuine Parts Company 1999 Long-Term Incentive Plan.
- 10.30* Genuine Parts Company 1999 Annual Incentive Bonus
Plan.
- 10.31* Restricted Stock Agreement dated February 25, 1999,
between the Company and Larry L. Prince.
- 10.32* Restricted Stock Agreement dated February 25, 1999,
between the Company and Thomas C. Gallagher.
- 10.33* Amendment No. 8 to the Genuine Parts Company Pension
Plan, dated January 26, 1999, effective September 30,
1998.
- 10.34* Amendment No. 9 to the Genuine Parts Company Pension
Plan, dated December 30, 1999, effective January 1,
1989; December 31, 1999; and January 1, 2000.
- 10.35* Amendment to the Genuine Parts Company 1992 Stock
Option and Incentive Plan, dated April 19, 1999,
effective April 19, 1999.
- 10.36* Amendment to the Genuine Parts Company Tax-Deferred
Savings Plan, dated April 19, 1999, effective April
19, 1999.
- 10.37* Amendment to the Genuine Parts Company Original
Deferred Compensation Plan, dated April 19, 1999,
effective April 19, 1999.
- 10.38* Amendment to the Genuine Parts Company Directors'
Deferred Compensation Plan, dated April 19, 1999,
effective April 19, 1999.
- 10.39* Amendment to the Genuine Parts Company Supplemental
Retirement Plan, dated April 19, 1999, effective
April 19, 1999.
- 10.40* Amendment No. 7 to the Genuine Partnership Plan,
dated January 26, 1999, effective January 1, 1999.
- 10.41* Amendment No. 8 to the Genuine Partnership Plan,
dated February 4, 1999, effective January 1, 1999.
- 10.42* Amendment No. 9 to the Genuine Partnership Plan,
dated April 5, 1999, effective April 1, 1999.
- 10.43* Amendment No. 10 to the Genuine Partnership Plan,
dated December 30, 1999, effective November 30, 1999.
</TABLE>
* Indicates executive compensation plans and arrangements.
<PAGE> 23
Annual Report on Form 10-K
Item 14(d)
Financial Statement Schedule II - Valuation and Qualifying Accounts
Genuine Parts Company and Subsidiaries
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Balance at Charged Balance at
Beginning to Costs Other End
of Period and Expenses Additions(1) Deductions(2) of Period
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998:
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $1,849,110 $7,484,733 $ 3,499,025(1) $(7,813,966)(2) $5,018,902
Year ended December 31, 1999:
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts 5,018,902 14,402,137 1,479,685(1) (13,972,115)(2) 6,928,609
Year ended December 31, 2000:
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $6,928,609 $13,875,788 -- $(13,433,963)(2) $7,370,434
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------
(1) Allowance for uncollectible accounts related to significant acquisitions.
(2) Uncollectible accounts written off, net of recoveries.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<FILENAME>g67483ex3-2.txt
<DESCRIPTION>BY-LAWS OF THE COMPANY
<TEXT>
<PAGE> 1
EXHIBIT 3.2
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GENUINE PARTS COMPANY
BY-LAWS
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<PAGE> 2
GENUINE PARTS COMPANY
BY-LAWS
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE ONE - OFFICES............................................................................................... 3
1.1 General............................................................................................ 3
1.2 Other Offices...................................................................................... 3
ARTICLE TWO - SHAREHOLDERS' MEETINGS................................................................................ 3
2.1 Place of Meeting................................................................................... 3
2.2 Annual Meeting..................................................................................... 3
2.3 Special Meetings................................................................................... 3
2.4 Voting of Shares................................................................................... 3
2.5 Notice of Meetings................................................................................. 4
2.6 Quorum............................................................................................. 4
2.7 Proxies............................................................................................ 4
2.8 Adjournments....................................................................................... 4
2.9 Conduct of Meetings................................................................................ 5
ARTICLE THREE - BOARD OF DIRECTORS.................................................................................. 5
3.1 Powers............................................................................................. 5
3.2 Retirement of Directors............................................................................ 5
3.3 Compensation....................................................................................... 5
3.4 Other.............................................................................................. 6
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS.................................................................. 6
4.1 Regular Meetings.................................................................................. 6
4.2 Special Meetings.................................................................................. 6
4.3 Quorum............................................................................................ 6
4.4 Vote Required for Action.......................................................................... 6
4.5 Action by Directors Without a Meeting............................................................. 7
ARTICLE FIVE - COMMITTEES.......................................................................................... 7
5.1 Appointment of Executive Committee................................................................ 7
5.2 Procedures of Executive Committee.................................................................. 7
5.3 Other Committees.................................................................................. 7
5.4 Action by Committee............................................................................... 8
5.5 Alternate Members................................................................................. 8
5.6 Removal and Vacancies............................................................................. 8
ARTICLE SIX - NOTICES.............................................................................................. 8
6.1 Procedure......................................................................................... 8
6.2 Waiver............................................................................................ 9
ARTICLE SEVEN - OFFICERS........................................................................................... 9
7.1 Number............................................................................................ 9
7.2 Election and Term................................................................................. 9
7.3 Compensation...................................................................................... 10
7.4 Removal........................................................................................... 10
7.5 Vacancies......................................................................................... 10
7.6 Disability of Officers............................................................................ 10
7.7 Chairman of the Board of Directors................................................................ 10
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
7.8 Vice Chairman of the Board of Directors........................................................... 10
7.9 President......................................................................................... 10
7.10 Vice Presidents................................................................................... 11
7.11 Secretary......................................................................................... 11
7.12 Assistant Secretary............................................................................... 11
7.13 Treasurer......................................................................................... 11
7.14 Assistant Treasurers.............................................................................. 11
7.15 Bond.............................................................................................. 11
ARTICLE EIGHT - SHARES............................................................................................. 11
8.1 Certificates...................................................................................... 11
8.2 Transfer of Shares................................................................................ 12
8.3 Equitable Share Interests......................................................................... 12
8.4 Lost, Stolen or Destroyed Certificates............................................................ 12
8.5 Regulations....................................................................................... 12
8.6 Fixing of Record Date with Regard to Shareholder Action........................................... 12
ARTICLE NINE - DISTRIBUTIONS AND SHARE DIVIDENDS................................................................... 13
9.1 Authorization or Declaration...................................................................... 13
9.2 Record Date with Regard to Distributions and Share Dividends...................................... 13
9.3 Depositories...................................................................................... 13
9.4 Fiscal Year....................................................................................... 13
ARTICLE TEN - INDEMNIFICATION...................................................................................... 13
10.1 Definitions....................................................................................... 13
10.2 Basic Indemnification Arrangement................................................................. 14
10.3 Advances for Expenses............................................................................. 15
10.4 Authorization of and Determination of Entitlement to Indemnification.............................. 15
10.5 Court-Ordered Indemnification and Advances for Expenses........................................... 16
17.6 Indemnification of Employees and Agents........................................................... 16
10.7 Shareholder Approved Indemnification.............................................................. 17
10.8 Liability Insurance............................................................................... 17
10.9 Witness Fees...................................................................................... 18
10.10 Report to Shareholders............................................................................ 18
10.11 Severability...................................................................................... 18
ARTICLE ELEVEN - MISCELLANEOUS..................................................................................... 18
11.1 Inspection of Books and Records................................................................... 18
11.2 Description of Seal............................................................................... 18
11.3 Annual Statements................................................................................. 18
ARTICLE TWELVE - AMENDMENTS........................................................................................ 18
12.1 Power to Amend By-Laws............................................................................ 18
ARTICLE THIRTEEN - RESTRICTIONS ON CERTAIN BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS...................... 19
13.1 Governing Authority............................................................................... 19
13.2 Irrevocability.................................................................................... 19
</TABLE>
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<PAGE> 4
As Amended and Restated
February 19, 2001
BY-LAWS OF
GENUINE PARTS COMPANY
ARTICLE ONE - OFFICES
1.1 Registered Office and Registered Agent. The Corporation shall maintain
a registered office at 2999 Circle 75 Parkway, Atlanta, Georgia and shall have a
registered agent whose business office is identical with such registered office.
1.2 Other Offices. The Corporation may, in addition to its registered
office, have offices at such other places as the Board of Directors may from
time to time appoint, or as the business of the Corporation may require.
ARTICLE TWO - SHAREHOLDERS' MEETINGS
2.1 Place of Meetings. The place of all meetings of the shareholders shall
be in the Executive Offices of the Corporation at 2999 Circle 75 Parkway,
Atlanta, Georgia or such other place within or without the State of Georgia as
shall be determined from time to time by the Board of Directors, and the place
at which such meeting shall be held shall be stated in the notice and call of
the meeting.
2.2 Annual Meeting. The annual meeting of shareholders of the corporation
shall be held on such date and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meetings, at
which the shareholders shall elect by a plurality vote the directors to be
elected at such meetings, and transact such other business as may properly be
brought before the meetings.
2.3 Special Meetings. Special meetings of the shareholders for any purpose
or purposes may be called by the Chairman of the Board of Directors, or in his
absence by any Vice Chairman of the Board of Directors or the President, or by a
majority of the Board of Directors, and shall be called at any time by the
Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors or the President or the Secretary upon the written request of
shareholders owning forty per cent (40%) of the outstanding shares of the
corporation entitled to vote at an election of directors. A request by
shareholders for the calling of a special meeting, as provided herein, shall be
made in writing to the Secretary, signed by such shareholders and shall specify
the purpose or purposes of the meeting.
2.4 Voting of Shares. The voting at all meetings of shareholders may be
viva voce, but any qualified voter may demand a share vote whereupon such share
vote may be taken by ballot, each of which shall state the name of the
shareholder voting and the number of shares voted by him,
B-3
<PAGE> 5
and if such ballot be cast by proxy, it shall also state the name of such proxy.
At any meeting of the shareholders, every shareholder having the right to vote
shall be entitled to vote in person, or by proxy appointed by instrument in
writing subscribed by such shareholder. Each shareholder shall have one vote for
each share having voting power registered in his name on the books of the
corporation on the record date for determination of its shareholders entitled to
vote if such a record date has been fixed, or on the date the transfer books
were closed if they have been closed.
2.5 Notice of Meetings. Unless waived as contemplated in Section 6.2.
notice of the date, time and place of all meetings of shareholders shall be
given not less than ten (10) days, and not more than sixty (60) days prior to
the meeting, to each shareholder of record of the corporation entitled to vote
at such meeting. The Board of Directors may fix in advance a date, not exceeding
seventy (70) days preceding the date of any meeting of shareholders, as a record
date for the determination of the shareholders entitled to notice of and to vote
at any such meeting. In the case of an annual or substitute annual meeting, the
notice of the meeting need not state the purpose or purposes of the meeting
unless the purpose or purposes constitute a matter which is required by law to
be stated in the notice of the meeting. In the case of a special meeting, the
notice of meeting shall state the purpose or purposes for which the meeting is
called.
2.6 Quorum. A quorum at any annual or special meeting of shareholders shall
consist of shareholders representing, either in person or by proxy, a majority
of the outstanding shares of the corporation entitled to vote at such meeting,
except as otherwise specifically provided by law. If a quorum is present, a
majority of the shares outstanding and entitled to vote which are represented at
any meeting shall determine any matter coming before the meeting unless a
different vote is required by statute, by the Articles of Incorporation or by
these By-Laws. Shareholders at a meeting at which a quorum is present may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
2.7 Proxies. A shareholder entitled to vote pursuant to Section 2.4 may
vote in person or by proxy executed in writing by the shareholder or by his
attorney in fact. A proxy shall not be valid after eleven (11) months from the
date of its execution, unless a longer period is expressly stated therein. If
the validity of any proxy is questioned it must be submitted to the secretary of
the shareholders' meeting for examination or to a proxy officer or committee
appointed by the person presiding at the meeting. The secretary of the meeting
or, if appointed, the proxy officer or committee, shall determine the validity
or invalidity of any proxy submitted and reference by the secretary in the
minutes of the meeting to the irregularity of a proxy shall be received as prima
facie evidence of the facts stated for the purpose of establishing the presence
of a quorum at such meeting and for all other purposes.
2.8 Adjournments. A majority of the voting shares present at any properly
called shareholders' meeting, whether or not a quorum is present, may adjourn
the meeting to reconvene at a specific time and place, but no later than 120
days after the date fixed for the original meeting unless the requirements of
the Georgia Business Corporation Code concerning the selection of a new record
date and notice to shareholders have been met. It shall not be necessary to give
any notice of the reconvened meeting or of the business to be transacted, if the
time and
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<PAGE> 6
place of the reconvened meeting are announced at the meeting which was
adjourned. At any such reconvened meeting at which a quorum is represented or
present, any business may be transacted which could have been transacted at the
meeting which was adjourned.
2.9 Conduct of Meetings. All meetings of shareholders shall be governed by
such rules and decisions as the chairman of the meeting, or a parliamentarian
appointed by him, may deem appropriate.
ARTICLE THREE - BOARD OF DIRECTORS
3.1 Powers. The management of all the affairs, property, and business of
the corporation shall be vested in the Board of Directors or in an Executive
Committee as may be established pursuant to these By-Laws. In addition to the
powers and authority by these By-Laws expressly conferred upon it, the Board of
Directors may exercise all such powers of the corporation and do all such lawful
acts and things as are not by statute, the Articles of Incorporation or by these
By-Laws directed or required to be exercised or done by the shareholders.
3.2 Retirement of Directors. (a) Any director who shall have attained the
age of seventy-two (72) years on or before the first day of January, preceding
the next annual meeting shall serve only to the date of such annual meeting and
shall not be eligible to serve as a director thereafter, notwithstanding the
fact that such director may have been elected for a term which would extend
beyond the dates set forth above.
(b) Any Director, other than a Director who has served the
Corporation as Chief Executive Officer, who is also (i) an officer of the
Corporation, or (ii) an officer of any wholly-owned or majority-owned subsidiary
or former subsidiary of the Corporation, shall cease to be a Director of this
Corporation upon such Director's retirement, resignation, removal or
termination, for any reason, as an officer.
(c) Any person who has been a director but who becomes ineligible
for reelection under (a) hereof, may, upon the nomination of the Chief Executive
Officer, be designated a "Director Emeritus" by the affirmative vote of a
majority of the Board of Directors. Such a designation shall be based on past
meritorious service to the corporation and shall continue for life but shall
carry no duties or responsibilities by such person nor shall such person be
considered a member of the Board of Directors for any purpose. Directors Emeriti
may be paid such fixed annual compensation as may be deemed appropriate by the
Chief Executive Officer in view of their past services to the corporation.
3.3 Compensation. The Board of Directors may determine from time to time
the compensation, if any, directors may receive for their services as directors.
A director may also serve the corporation in a capacity other than that of
director and receive compensation, as determined by the Board of Directors, for
services rendered in any other capacity.
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3.4 Other. Information concerning (i) Number of Directors, (ii)
Classification, Terms and Election of Directors, (iii) Removal, (iv) Vacancies,
and (v) Election of Directors by Holders of Preferred Stock, is set forth in
Article Nine of this Corporation's Articles of Incorporation, specifically
paragraphs 9.1, 9.2, 9.3, 9.4 and 9.5 thereof.
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS
4.1 Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at the principal office of the corporation or at such other
place or places, within or without the State of Georgia, as the Board of
Directors may from time to time designate.
4.2 Special Meetings. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or any Vice
Chairman of the Board of Directors or the President or by any two directors to
be held at the principal office of the corporation, or at such other place or
places, within or without the State of Georgia, as may be designated in the
notice of such meeting. Unless waived as contemplated in Section 6.2, the
Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors or the President or Secretary of the corporation or any director
thereof shall give at least one day's notice to each director of each special
meeting stating the date, time, and place of the meeting.
4.3 Quorum. At meetings of the Board of Directors, more than one-half the
number of directors fixed by the shareholders at that time shall be necessary to
constitute a quorum for the transaction of business. A majority of the directors
present at any meeting, whether or not a quorum exists, may adjourn any meeting
of the Board of Directors to reconvene at a specific time and place without
further notice thereof. At any such reconvened meeting at which a quorum is
present, any business may be transacted which could have been transacted at the
meeting which was adjourned.
4.4 Vote Required for Action. (a) Except as otherwise provided in the
Articles of Incorporation, these By-Laws, or by law, the act of a majority of
the directors present at a meeting at which a quorum is present at the time
shall be the act of the Board of Directors.
(b) A director who is present at a meeting of the Board
of Directors or a committee of the Board of Directors when corporate action is
taken is deemed to have assented to the action taken unless:
(1) He objects at the beginning of the meeting (or promptly upon
his arrival) to holding it or transacting business at the
meeting;
(2) His dissent or abstention from the action taken is entered in
the minutes of the meeting; or
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<PAGE> 8
(3) He delivers written notice of his dissent or abstention to the
presiding officer of the meeting before its adjournment or to
the corporation immediately after adjournment of the meeting.
The right of dissent or abstention is not available to a director who votes in
favor of the action taken.
(c) The vote of a majority of the full Board of Directors shall be
required to adopt a resolution constituting a Committee. The vote of two-thirds
of the directors is required to adopt a resolution recommending dissolution of
the corporation to the shareholders.
4.5 Action by Directors Without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting if a written consent thereto shall be signed by
all of the directors or members of such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of the Board of
Directors or committee. Such consent shall have the same force and effect as a
unanimous vote of the Board of Directors or committee.
ARTICLE FIVE - COMMITTEES
5.1 Appointment of Executive Committee. The Board of Directors may by
resolution adopted by a majority of the full Board of Directors appoint an
Executive Committee of not less than three (3) nor more than five (5) directors,
which Executive Committee shall to the extent provided in such resolution have
all of the powers and authority of the Board of Directors, except as otherwise
provided by law. The Executive Committee shall have the power to amend or repeal
any resolution of the Board of Directors unless such resolution is by its terms
not subject to amendment or repeal by the Executive Committee. An act of the
Executive Committee taken within the scope of its authority shall be an act of
the Board of Directors.
5.2 Procedures of Executive Committee. The Executive Committee shall meet
from time to time on the call of the Chairman of the Board of Directors or any
Vice Chairman of the Board of Directors or the President or any two or more
members of the Executive Committee. Meetings of the Executive Committee may be
held at such place or places as the Executive Committee shall determine or may
be specified or fixed in the respective notices or waivers of such meetings. The
Executive Committee may fix its own rules of procedure, including provision for
a notice of its meetings. It shall keep a record of its proceedings and shall
report these proceedings to the Board of Directors at the next meeting of the
Board, and all such proceedings shall be subject to revision or alteration by
the Board of Directors except to the extent that action shall have been taken
pursuant to or in reliance upon such proceedings prior to any such revision or
alteration.
5.3 Other Committees. The Board of Directors, by resolution adopted by a
majority of the full Board of Directors, may designate one or more additional
committees, each committee to consist of one or more directors of the
corporation, and it shall have such name or names and
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<PAGE> 9
shall have any and may exercise such powers of the Board of Directors in the
management of the business and affairs of the corporation, except as otherwise
provided by law, as may be determined from time to time by resolution adopted by
a majority of the full Board of Directors. Each of such committees shall call
and hold meetings, adopt rules of procedure, maintain records, and report to the
Board of Directors in the manner provided for the Executive Committee in Section
5.2 of these By-Laws.
5.4 Action by Committees. Articles 4.1, 4.2, 4.3, 4.4, and 4.5, which
govern meetings, action without meetings, notice and waiver of notice, and
quorum and voting requirements of the Board of Directors, apply to the Executive
Committee or any other committee designated by the Board of Directors, and their
members as well.
5.5 Alternate Members. The Board of Directors, by resolution adopted in
accordance with Sect on 5.1. may designate one or more directors as alternate
members of any such committee, who may act in the place of any absent member or
members at any meeting of such committee.
5.6 Removal and Vacancies. The Board of Directors shall have power at any
time to remove any member of any committee, with or without cause, and to fill
vacancies in or to dissolve any such committee.
ARTICLE SIX - NOTICES
6.1 Procedure. Whenever these By-Laws require notice to be given to any
shareholder or director, the notice shall be given in accordance with this
Section 6.1. Notice under these By-Laws shall be in writing unless oral notice
is reasonable under the circumstances. Any notice to directors may be written or
oral. Notice may be communicated in person; by telephone, telegraph, teletype,
or other form of wire or wireless communication; or by mail or private carrier.
If these forms of personal notice are impracticable, notice may be communicated
by a newspaper of general circulation in the area where published, or by radio,
television, or other form of public broadcast communication. Written notice to
the shareholders, if in a comprehensible form, is effective when mailed, if
mailed with first-class postage prepaid and correctly addressed to the
shareholder's address shown in the corporation's current record of shareholders.
If the corporation has more than 500 shareholders of record entitled to vote at
a meeting, it may utilize a class of mail other than first class if the notice
of the meeting is mailed, with adequate postage prepaid, not less than thirty
(30) days before the date of the meeting. Except as provided above, written
notice, if in a comprehensible form, is effective at the earliest of the
following:
(1) When received or when delivered, properly addressed, to the
addressee's last known principal place of business or
residence;
(2) Five days after its deposit in the mail, as evidenced by the
postmark, if mailed with first-class postage prepaid and
correctly addressed; or
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<PAGE> 10
(3) On the date shown on the return receipt, if sent by registered
or certified mail, return receipt requested, and the receipt
is signed by or on behalf of the addressee.
Oral notice is effective when communicated if communicated in a comprehensible
manner.
In calculating time periods for notice, when a period of time measured in days,
weeks, months, years, or other measurement of time is prescribed for the
exercise of any privilege or the discharge of any duty, the first day shall not
be counted but the last day shall be counted.
6.2 Waiver. (a) A shareholder may waive any notice before or after the date
and time stated in the notice. The waiver must be in writing, specify the
business transacted or the purpose of the meeting, be signed by the shareholder
entitled to the notice, and be delivered to the corporation for inclusion in the
minutes or filing with the corporate records.
(b) A shareholder's attendance at a meeting (i) waives objection
to lack of notice or defective notice of the meeting, unless the shareholder at
the beginning of the meeting objects to holding the meeting or transacting
business at the meeting, and (ii) waives objection to consideration of a
particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder objects to considering
the matter when it is presented.
(c) A director may waive any notice before or after the date and
time specified in the notice. Except as provided below in (d), the waiver must
be in writing, signed by the director entitled to the notice, and delivered to
the corporation for inclusion in the minutes or filing with the corporate
records.
(d) A director's attendance at or participation in a meeting
waives any required notice to him of the meeting unless the director at the
beginning of the meeting (or promptly upon his arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting.
ARTICLE SEVEN - OFFICERS
7.1 Number. The officers of the corporation shall consist of a Chairman of
the Board of Directors, one or more Vice Chairmen of the Board of Directors, a
President, one or more Vice Presidents, a Secretary, a Treasurer, and any other
officers as may be appointed by the Board of Directors or appointed by the
Chairman of the Board of Directors pursuant to Section 7.7. The Board of
Directors shall designate those officers who shall be deemed the chief executive
officer, the chief operating officer and the chief financial officer of the
corporation.
7.2 Election and Term. All officer's shall be elected by the Board of
Directors, or by the Chairman of the Board pursuant to Section 7.7, and shall
serve at the pleasure of the Board of Directors or the Chairman of the Board of
Directors until their successors have been elected and have qualified or until
their earlier death, resignation, removal, retirement or disqualification.
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<PAGE> 11
7.3 Compensation. The compensation of the following senior Officers of the
Corporation shall be fixed by the Compensation and Stock Option Committee of the
Board of Directors.
Chairman of the Board
Vice Chairmen of the Board
President
Any Executive Vice President
Any Group Vice President
Any Senior Vice President
Compensation of all other Officers shall be fixed by the Chief Executive
Officer.
7.4 Removal. Any officer, however elected or appointed, may be removed at
any time with or without cause by the affirmative vote of a majority of the
whole Board of Directors provided that any officer who is not a member of the
Board of Directors may be removed at any time with or without cause by the
Chairman of the Board of Directors or by any other officer who is a member of
the Board of Directors and whose duties include supervision of such discharged
officer.
7.5 Vacancies. Vacancy in any office arising from any cause may be filled
by the Board of Directors at any regular or special meeting.
7.6 Disability of Officers. In the case of absence or inability to act of
any officer of the corporation or of any person herein authorized to act in his
place, the Board of Directors may from time to time delegate the powers and
duties of such officer to any other officer, or any director or other person
whom it may select.
7.7 Chairman of the Board of Directors. The Chairman of the Board of
Directors shall make reports to the Board of Directors and to the shareholders
and shall perform all such other duties as are incident to his office or as are
properly required of him by the Board of Directors. He shall preside at all
meetings of the shareholders and of the Board of Directors at which he may be
present. The Chairman of the Board of Directors may from time to time appoint
one or more assistant secretaries of the corporation.
7.8 Vice Chairmen of the Board of Directors. Any Vice Chairman of the Board
of Directors shall have such other powers and duties as may from time to time be
designated by the Board of Directors or by the Chief Executive Officer.
7.9 President. The President shall have responsibility for supervising and
directing the operations of the corporation's businesses subject to the
direction of the Board of Directors. He shall preside at all meetings of the
shareholders or the Board of Directors in the absence of the Chairman of the
Board of Directors.
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<PAGE> 12
7.10 Vice Presidents. The Vice Presidents shall perform such duties not
inconsistent with these By-Laws as may be specifically designated by the Board
of Directors or by the Chairman of the Board of Directors or any Vice Chairman
of the Board of Directors or the President.
7.11 Secretary. The Secretary shall have authority to issue notices for all
meetings (except that notices for special meetings of directors called at the
request of two directors as provided in Section 4.2 of these By-Laws may be
issued by such directors), shall keep minutes of all meetings, shall have charge
of the seal and of the corporate books, and shall make such reports and perform
such other duties as are incident to the office or are properly required of him
by the Board of Directors, the Chairman of the Board of Directors or any Vice
Chairman of the Board of Directors or the President.
7.12 Assistant Secretaries. The Assistant Secretaries may in the absence or
disability of the Secretary perform the duties and exercise the powers of the
Secretary, and shall perform such other duties as the Board of Directors or the
person appointing them may prescribe.
7.13 Treasurer. The Treasurer shall be responsible for the custody of all
monies and securities of the corporation and shall be responsible for the
maintenance of regular books of account. He shall have general supervision of
the disbursement of funds of the corporation and shall render to the Board of
Directors from time to time, as may be required of him, an account of all
transactions for which he is responsible and of the financial condition of the
corporation. He shall perform all duties incident to his office or which are
properly required of him by the Board of Directors, the Chairman of the Board of
Directors or any Vice Chairman of the Board of Directors or the President.
7.14 Assistant Treasurers. The Assistant Treasurers may, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer, and shall perform such other duties as the Board of Directors or the
person appointing them shall prescribe.
7.15 Bond. The Board of Directors may, by resolution, require any and all
officers to give bond to the corporation, with sufficient surety or sureties,
conditioned for the faithful performance of the duties of their respective
offices, and to comply with such other conditions as may from time to time be
required by the Board of Directors.
ARTICLE EIGHT - SHARES
8.1 Certificates. The interest of each shareholder shall be evidenced by a
certificate or certificates representing shares of the corporation which shall
be in such form as the Board of Directors may from time to time adopt. Each
certificate shall exhibit the holder's name, the number of shares and class of
shares and series, if any, represented thereby, the name of the corporation, a
statement that the corporation is organized under the laws of the State of
Georgia, and the par value of each share or a statement that the shares are
without par value. Each certificate shall be signed by the Chairman of the Board
of Directors or any Vice Chairman of the Board of Directors or the President;
provided, however, that where such certificate is signed by a
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<PAGE> 13
transfer agent, or registered by a registrar, the signature of any such officer
may be facsimile. In case any officer who has signed or whose facsimile
signature has been used on a certificate has ceased to be an officer before the
certificate has been delivered, such certificate may, nonetheless, be adopted
and issued and delivered by the corporation as though the officer who signed
such certificate or certificates, or whose facsimile signature or signatures
shall have been used thereon, had not ceased to be such officer of the
corporation.
8.2 Transfer of Shares. The transfer of shares shall be made upon the
transfer books of the corporation, kept in the office of the transfer agent
designated to transfer the shares, only by the person named in the certificate,
or by an attorney lawfully constituted in writing; and before a new certificate
is issued, the old certificate shall be surrendered for cancellation or, in the
case of a certificate alleged to have been lost, stolen, or destroyed, the
provisions of Section 8.4 of these By-Laws shall have been complied with.
8.3 Equitable Share Interest. Registered shareholders only shall be
entitled to be treated by the corporation as the holders in fact of the shares
standing in their respective names, and the corporation shall not be bound to
recognize any equitable or other claim to or interest in any share on the part
of any other person, whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of Georgia.
8.4 Lost, Stolen or Destroyed Certificates. In the case of loss, theft or
destruction of any share certificate, another may be issued in its place upon
proof of such loss, theft or destruction, and upon the giving of a satisfactory
bond of indemnity to the corporation and/or to the transfer agent and registrar
of such share certificate, in such sum as the Board of Directors may provide.
8.5 Regulations. The Board of Directors shall have power and authority to
make all rules and regulations as it may deem expedient, concerning the issue,
transfer, conversion, and registration of share certificates of the corporation,
not inconsistent with the laws of Georgia, the Articles of Incorporation, and
these By-Laws; and the Board of Directors may appoint one or more transfer
agents and one or more registrars.
8.6 Fixing of Record Date with Regard to Shareholder Action. For the
purpose of determining shareholders entitled to notice of a shareholders
meeting, to demand a special meeting, to vote, or to take any other action, the
Board of Directors may fix a future date as the record date, the date to be not
more than seventy (70) days prior to the date on which the particular action,
requiring a determination of shareholders, is to be taken. A determination of
shareholders entitled to notice of or to vote at a shareholders meeting is
effective for any adjournment of the meeting unless the Board of Directors fixes
a new record date, which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting. If no record date
is fixed by the Board of Directors, the record date shall be determined in
accordance with the provisions of the Georgia Business Corporation Code.
-12-
<PAGE> 14
ARTICLE NINE - DISTRIBUTIONS AND SHARE DIVIDENDS
9.1 Authorization or Declaration. Unless the Articles of Incorporation
provide otherwise, the Board of Directors from time to time in its discretion
may authorize or declare distributions or share dividends in accordance with the
Georgia Business Corporation Code.
9.2 Record Date with Regard to Distributions and Share Dividends. For the
purpose of determining shareholders entitled to a distribution (other than one
involving a purchase, redemption, or other reacquisition of the corporation's
shares) or a share dividend, the Board of Directors may fix a date as the record
date. If no record date is fixed by the Board of Directors, the record date
shall be determined in accordance with the provisions of the Georgia Business
Corporation Code.
9.3 Depositories. The monies of the corporation shall be deposited in the
name of the corporation, or in its duly adopted tradename, in such bank or banks
or trust company or trust companies as the Board of Directors shall designate,
and shall be drawn out only by check signed by persons designated by resolution
of the Board of Directors.
9.4 Fiscal Year. The fiscal year of the corporation shall begin on the
first day of January each year, unless otherwise provided by the Board of
Directors.
ARTICLE TEN - INDEMNIFICATION
10.1 Definitions. As used in this Article, the term:
(a) "Corporation" includes any domestic or foreign predecessor
entity of this corporation in a merger or other transaction in
which the predecessor's existence ceased upon consummation of
the transaction.
(b) "Director" means an individual who is or was a director of the
corporation or an individual who, while a director of the
corporation, is or was serving at the corporation's request as
a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee benefit plan
at the corporation's request if his duties to the corporation
also impose duties on, or otherwise involve services by, him
to the plan or to participants in or beneficiaries of the
plan. "Director" includes, unless the context requires
otherwise, the estate or personal representative of a
director.
(c) "Expenses" includes attorneys' fees.
(d) "Liability" means the obligation to pay a judgment,
settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan), or reasonable
expenses incurred with respect to a proceeding.
-13-
<PAGE> 15
(e) "Officer" means an individual who is or was an officer of the
corporation or an individual who, while an officer of the
corporation, is or was serving at the corporation's request as
a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. An
"Officer" is considered to be serving an employee benefit plan
at the corporation's request if his duties to the corporation
also impose duties on, or otherwise involve services by, him
to the plan or to participants in or beneficiaries of the
plan. "Officer" includes, unless the context requires
otherwise, the estate or personal representative of an
officer.
(f) "Party" includes an individual who was, is, or is threatened
to be made a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or
informal.
10.2 Basic Indemnification Arrangement. (a) Except as provided in
subsections 10.2(d) and 10.2(e) below, the corporation shall indemnify an
individual who is made a party to a proceeding because he is or was a director
or officer against liability incurred by him in the proceeding if he acted in a
manner he believed in good faith to be in or not opposed to the best interests
of the corporation and, in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(b) A person's conduct with respect to an employee benefit plan
for a purpose he believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection 9.2(a).
(c) The termination of a proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, be determinative that the proposed indemnitee did not meet
the standard of conduct set forth in subsection 10.2(a).
(d) The corporation shall not indemnify a person under this
Article in connection with (i) a proceeding by or in the right of the
corporation in which such person was adjudged liable to the corporation, or (ii)
any proceeding in which such person was adjudged liable on the basis that he
improperly received a personal benefit unless, and then only to the extent that,
a court of competent jurisdiction determines pursuant to Section 14-2-854 of the
Georgia Business Corporation Code that in view of the circumstances of the case,
such person is fairly and reasonable entitled to indemnification.
(e) Indemnification permitted under this Article in connection
with a proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
-14-
<PAGE> 16
10.3 Advances for Expenses. (a) The corporation shall pay for or reimburse
the reasonable expenses incurred by a director or officer as a party to a
proceeding in advance of final disposition of the proceeding if: (i) such person
furnishes the corporation a written affirmation of his good faith belief that he
has met the standard of conduct set forth in subsection 10.2(a) above; and (ii)
such person furnishes the corporation a written undertaking meeting the
qualifications set forth below in subsection 10.3(b) executed personally or on
his behalf, to repay any advances if it is ultimately determined that he is not
entitled to any indemnification under this Article or otherwise.
(b) The undertaking required by subsection 10.3(a)(ii) above must
be an unlimited general obligation of the director or officer but need not be
secured and shall be accepted without reference to financial ability to make
repayment.
10.4 Authorization of and Determination of Entitlement to Indemnification.
(a) The corporation acknowledges that indemnification of a director or officer
under Section 10.2 has been pre-authorized by the corporation in the manner
described in subsection 10.4(b) below. Nevertheless, the corporation shall not
indemnify a director or officer under Section 10.2 unless a separate
determination has been made in the specific case that indemnification of such
person is permissible in the circumstances because he has met the standard of
conduct set forth in subsection 10.2(a); provided, however, that regardless of
the result or absence of any such determination, and unless limited by the
Articles of Incorporation of the corporation, to the extent that a director or
officer has been successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party, or in defense of any claim, issue or matter
therein, because he is or was a director or officer, the corporation shall
indemnify such person against reasonable expenses incurred by him in connection
therewith.
(b) The determination referred to in subsection 10.4(a) above
shall be made, at the election of the Board of Directors:
(i) by the Board of Directors of the corporation by majority vote
of a quorum consisting of directors not at the time parties to
the proceeding;
(ii) If a quorum cannot be obtained under subdivision (i), by
majority vote of a committee duly designated by the Board of
Directors (in which designation directors who are parties may
participate), consisting solely of two or more directors not
at the time parties to the proceeding;
(iii) by special legal counsel:
(1) selected by the Board of Directors or its committee
in the manner prescribed in subdivision (i) or (ii);
or
(2) if a quorum of the Board of Directors cannot be
obtained under subdivision (i) and a committee cannot
be designated under subdivision
-15-
<PAGE> 17
(ii), selected by a majority vote of the full Board
of Directors (in which selection directors who are
parties may participate); or
(iv) by the shareholders; provided that shares owned by or voted
under the control of directors or officers who are at the time
parties to the proceeding may not be voted on the
determination.
(c) As acknowledged above, the corporation has pre-authorized the
indemnification of directors and officers hereunder, subject to a case-by-case
determination that the proposed indemnitee met the applicable standard of
conduct under subsection 10.2(a). Consequently, no further decision need or
shall be made on a case-by-case basis as to the authorization of the
corporation's indemnification of directors or officers hereunder. Nevertheless,
evaluation as to reasonableness of expenses of a director or officer in the
specific case shall be made in the same manner as the determination that
indemnification is permissible, as described in subsection 10.4(b) above, except
that if the determination is made by special legal counsel, evaluation as to
reasonableness of expenses shall be made by those entitled under subsection
10.4(b)(iii) to select counsel.
10.5 Court-Ordered Indemnification and Advances for Expenses. Unless the
corporation's Articles of Incorporation provide otherwise, a director or officer
who, is a party to a proceeding may apply for indemnification or advances for
expenses to the court conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court, after giving any notice
the court considers necessary, may order indemnification or advances for
expenses if it determines that:
(i) The applicant is entitled to mandatory indemnification under
the final clause of subsection 10.4(a) above (in which case
the corporation shall pay the indemnitee's reasonable expenses
incurred to obtain court-ordered indemnification);
(ii) The applicant is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances,
whether or not he met the standard of conduct set forth in
subsection 10.2(a) above or was adjudged liable as described
in subsection 10.2(d) above (but if he was adjudged so liable,
any court-ordered indemnification shall be limited to
reasonable expenses incurred by the indemnitee unless the
Articles of Incorporation of the corporation or a By-Law,
contract or resolution approved or ratified by shareholders
pursuant to Section 10.7 provides otherwise); or
(iii) In the case of advances for expenses, the applicant is
entitled pursuant to the Articles of Incorporation, By-Laws or
any applicable resolution or agreement, to payment or
reimbursement of his reasonable expenses incurred as a party
to a proceeding in advance of final disposition of the
proceeding.
10.6 Indemnification of Employees and Agents. Unless the corporation's
Articles of Incorporation provide otherwise, the corporation may indemnify and
advance expenses under this
-16-
<PAGE> 18
Article to an employee or agent of the corporation who is not a director or
officer to the same extent as to a director or officer.
10.7 Shareholder Approved Indemnification. (a) If authorized by the Articles
of Incorporation or a By-Law, contract or resolution approved or ratified by
shareholders of the corporation by a majority of the votes entitled to be cast,
the corporation may indemnify or obligate itself to indemnify a person made a
party to a proceeding, including a proceeding brought by or in the right of the
corporation, without regard to the limitations in other sections of this
Article; provided, however, that such provisions shall be valid only if and to
the extent they are consistent with this Article. The corporation shall not
indemnify a person under this Section 10.7 for any liability incurred in a
proceeding in which the person is adjudged liable to the corporation or is
subjected to injunctive relief in favor of the corporation:
(i) for any appropriation, in violation of his duties, of any
business opportunity of the corporation;
(ii) for acts or omissions which involve intentional misconduct or
a knowing violation of law;
(iii) for the types of liability set forth in Section 14-2-832 of
the Georgia Business Corporation Code; or
(iv) from any transaction from which he received an improper
personal benefit.
(b) Where approved or authorized in the manner described in subsection 10.7
(a) above, the corporation may advance or reimburse expenses incurred in advance
of final disposition of the proceeding only if:
(i) the proposed indemnitee furnishes the corporation a written
affirmation of his good faith belief that his conduct does not
constitute behavior of the kind described in subsection
10.7(a)(i) - (iv) above; and
(ii) the proposed indemnitee furnishes the corporation a written
undertaking, executed personally, or on his behalf, to repay
any advances if it is ultimately determined that he is not
entitled to indemnification.
10.8 Liability Insurance. The corporation may purchase and maintain
insurance on behalf of a director or officer or an individual who is or was an
employee or agent of the corporation or who, while an employee or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise against liability asserted against or incurred by him in that
capacity or arising from his status as a director officer, employee, or agent,
whether or not the corporation would have power to indemnify against the same
liability under Section 10.2 or Section 10.3 above.
-17-
<PAGE> 19
10.9 Witness Fees. Nothing in this Article shall limit the corporation's
power to pay or reimburse expenses incurred by a person in connection with his
appearance as a witness in a proceeding at a time when he has not been made a
named defendant or respondent in the proceeding.
10.10 Report to Shareholders. If the corporation indemnifies or advances
expenses to a director in connection with a proceeding by or in the right of the
corporation, the corporation shall report the indemnification or advance, in
writing, to shareholders with or before the notice of the next shareholders'
meeting.
10.11 Severability. In the event that any of the provisions of this Article
(including any provision within a single section, subsection, division or
sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, the remaining provisions of this Article shall remain
enforceable to the fullest extent permitted by law.
ARTICLE ELEVEN - MISCELLANEOUS
11.1 Inspection of Books and Records. The Board of Directors shall determine
whether and to what extent the accounts and books of the corporation, or any of
them, other than the share records, shall be open to the inspection of
shareholders, and no shareholder shall have any right to inspect any account or
books or document of the corporation except as conferred by law or by resolution
of the shareholders or the Board of Directors. Without prior approval of the
Board of Directors in their discretion, the right of inspection set forth in
Section 14-2-1602(c) of the Georgia Business Corporation Code shall not be
available to any shareholder owning two (2) percent or less of the shares
outstanding.
11.2 Description of Seal. The corporate seal of the corporation shall
consist of two concentric circles, between which shall be inscribed the words
"Genuine Parts Company, Atlanta, Ga.", and in the center shall be inscribed the
year of its incorporation and the word "Seal".
11.3 Annual Statements. Not later than four months after the close of each
fiscal year, and in any case prior to the next annual meeting of shareholders,
the corporation shall prepare (a) a balance sheet showing in reasonable detail
the financial condition of the corporation as of the close of its fiscal year,
and (b) a profit and loss statement showing the results of its operations during
its fiscal year. Upon receipt of written request, the corporation promptly shall
mail to any shareholder of record a copy of the most recent such balance sheet
and profit and loss statement.
ARTICLE TWELVE - AMENDMENTS
12.1 Power to Amend By-Laws. Alterations, amendments, or repeals of the
By-Laws may be made by the shareholders, if the notice of such meeting contains
a statement of the proposed alteration, amendment, or repeal, or by the Board of
Directors by a majority vote of all directors then holding office at any regular
or special meeting.
-18-
<PAGE> 20
ARTICLE THIRTEEN - RESTRICTIONS ON CERTAIN BUSINESS
COMBINATIONS WITH INTERESTED SHAREHOLDERS
13.1 Governing Authority. The Corporation shall be governed by all of the
requirements of Article 11A of the Georgia Business Corporation Code (Sections
14-2-1131, et seq).
13.2 Irrevocability. Article Thirteen of these By-laws shall be irrevocable
except as provided in Section 14-2-1133(b) of the Georgia Business
Corporation Code.
-19-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.44
<SEQUENCE>3
<FILENAME>g67483ex10-44.txt
<DESCRIPTION>AMENDMENT NO. 11 TO THE GENUINE PARTNERSHIP PLAN
<TEXT>
<PAGE> 1
EXHIBIT 10.44
AMENDMENT NO. 11
TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine
Parts Company (the "Company"), effective as of the dates set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Partnership Plan (the
"Plan"), as amended and restated effective January 1, 1994, and such Plan is
currently in effect;
WHEREAS, the Company desires to amend Schedules B and C of the Plan;
WHEREAS, Brittain Brothers, Inc. ("Brittain Brothers") established and
sponsored the Brittain Brothers Savings Incentive Plan (effective January 1,
1993) (the "Brittain Brothers Plan");
WHEREAS, Brittain Brothers merged with and into the Company on
September 30, 1999;
WHEREAS, the Company desires to merge the Brittain Brothers Plan into
the Plan on or about July 31, 2000; and
WHEREAS, pursuant to Section 11.01 of the Plan, the Company has
reserved the right to amend the Plan through action of the Committee for the
Plan;
NOW, THEREFORE, BE IT RESOLVED that the Plan is hereby amended as
follows:
1.
Schedule B shall be deleted in its entirety and a new Schedule B shall
be added, effective April 1, 2000, to read as follows:
"SCHEDULE B
Credit for Service with Predecessor Employers
I. General Rule - No Past Service. Unless otherwise identified in Part II
below, an Employee will not receive Credited Service or Years of Eligibility
Service under this Plan for any purpose. Instead (unless otherwise required by
law) Hours of Service worked for a predecessor employer prior to the Designation
Date shall be ignored.
<PAGE> 2
II. Definition of Past Service Credit. If Employees who were previously
employed by a predecessor employer are granted past service credit (as noted
below), such Employees who are employed by an Employer on the Designation Date
shall receive Credited Service and Years of Eligibility Service under this Plan
beginning with the employment commencement date with the predecessor employer,
but subject to all of the rules concerning crediting of service and Breaks in
Service set forth in this Plan.
<TABLE>
<CAPTION>
Extent of Credit for Service
Name Designation Date with Predecessor Company
---- ---------------- ------------------------------
<S> <C> <C>
1. Odell Hardware Company 7/1/88 Past Service Credit Granted
("Odell")
2. Clark Siviter 7/1/88 Past Service Credit Granted
3. Brooks-Noble Parts 7/1/88 Past Service Credit Granted
& Machine Co., Inc.
4. General Automotive Parts 7/1/88 Past Service Credit Granted
Company and its subsidiaries
("General Automotive")
5. Standard Units Parts 7/1/88 Past Service Credit Granted
Corporation including
its subsidiary Manco,
Inc. ("Standard Units
Parts")
6. NAPA Des Moines 7/1/88 Past Service Credit Granted
Warehouse ("Des Moines")
</TABLE>
III. (a) Acquisitions Prior to January 1, 1994.
Participants employed by the following predecessor employers that were
acquired prior to January 1, 1994, shall not receive Past Service Credit as of
the date the predecessor employer was acquired by or merged into Genuine Parts
Company. However, after an employee of such predecessor employer becomes a
Participant in the Plan by satisfying the requirements of Section 3.01, such
Participant shall receive Credited Service for all employment with such
predecessor employer effective as of the Employment Date indicated below
provided such individuals were employed by an Employer (as determined by the
Committee) on the Employment Date.
(b) Acquisitions On or After January 1, 1994.
Participants employed by the following predecessor employers that were
acquired on or after January 1, 1994 shall receive Credited Service and credit
for participation
- 2 -
<PAGE> 3
purposes under Article III for all employment with such predecessor employer
effective as of the Employment Date indicated below provided such individuals
were employed by an Employer (as determined by the Committee) on the Employment
Date.
(c) Important Restrictions.
Credited Service granted under (a) or (b) above may be forfeited or
disregarded in accordance with the definition of Credited Service set forth in
Article II. Furthermore, no Credited Service shall be granted for employment
with a predecessor employer if the granting of such Credited Service will
adversely impact the tax qualified status of the Plan.
<TABLE>
<CAPTION>
<S> <C>
Davis & Wilmar, Inc. May 1, 1993
Pittsburg, PA (Acquired 7/1/92)
M&B, Inc. (Lesker Office Supplies, Inc.) November 1, 1993
Charlotte, NC
The Parts, Inc. January 1, 1995
Anchorage, AK (Acquired 1/1/94)
Dade City Jobbing Group January 1, 1994
Dade City, FL (Acquired 1/2/92)
Atlantic Tracy Inc. November 1, 1995
Summerville, MA
Midcap Bearing Corporation June 1, 1995
San Antonio, TX
Motion Equipment, Inc. June 1, 1995
Houston, TX
Power Drives & Bearings, Inc. October 1,1995
Omaha, NE
Friend's Motor Supply, Inc. June 30, 1997
Hastings, NE
Utah Bearing and Fabrication, Inc. October 3,1997
Salt Lake City, UT
Colorado Bearing and Supply, Inc. October 3, 1997
Denver, CO
Quality Auto Supply of Alaska, Inc. April 1, 1998
</TABLE>
- 3 -
<PAGE> 4
<TABLE>
<S> <C>
Palmer, AK
Berry Bearing Company/Tom Steel Div. January 1, 1998
Lyons, IL (Acquired 2/93)
Cascade Bearings April 1, 1998
Yakima, WA
Horizon U.S.A. Data Supplies, Inc. August 1, 1998
Reno, NV (Acquired on 4/1/95)
Berry Bearing Company (all divisions October 1, 1998
other than Tom Steel Division) (Acquired 2/93)
Lyons, IL
Hub Tool & Supply, Inc. January 1, 1999
Wichita, KS
Bush-Miller, Inc. April 1, 1999
York, PA
EIS, Inc. December 1, 1999
(including the following current
and former subsidiaries of EIS, Inc.:
Com-Kyl, Inc.; Scottsdale Tool &
Supply, Inc.; Electronic Tool Co.,
Inc.; Summit Insulation Supply
Company, Inc.; and H.A. Holden,
Inc.) Atlanta, GA (Acquired 5/98)
Brittain Brothers, Inc. April 1, 2000
Oklahoma City, OK (Merged 6/30/00)"
</TABLE>
2.
A new Section VIII shall be added to the end of Schedule C to read as
follows:
"VIII. Additional Forms of Benefits for Former Participants in the
Brittain Brothers Savings Incentive Plan
A. Background. As of April 1, 2000, the Brittain
Brothers Savings Incentive Plan (the "Brittain Brothers Plan")
was frozen. The Brittain Brothers Plan was subsequently merged
into the Plan on or about July 31, 2000. Accounts established
under the Brittain Brothers Plan shall constitute Prior
Employer Accounts.
- 4 -
<PAGE> 5
B. Eligibility of Former Participants in the Brittain
Brothers Plan to Receive Additional Forms of Benefits.
Effective as of the merger of the Brittain Brothers Plan into
this Plan, former participants in the Brittain Brothers Plan
who became Participants in this Plan ("Brittain Brothers
Participants") may elect to receive, in addition to the
benefits offered under this Plan, a distribution from their
Prior Employer Accounts over a period certain, not to extend
beyond the Participant's life expectancy (or the life
expectancy of the Participant and his or her designated
Beneficiary), in monthly, quarterly, semiannual, or annual
installments."
3.
Except as amended herein, the Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee
has caused this Amendment to the Plan to be executed on the date shown below but
effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ Frank Howard
---------------------------------------------
Frank Howard, acting on behalf of the Committee
Date: January 19, 2001
----------------------------------------
- 5 -
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>4
<FILENAME>g67483ex10-45.txt
<DESCRIPTION>AMENDMENT NO. 12 TO THE GENUINE PARTNERSHIP PLAN
<TEXT>
<PAGE> 1
EXHIBIT 10.45
AMENDMENT NO. 12
TO THE
GENUINE PARTNERSHIP PLAN
This Amendment to the Genuine Partnership Plan is adopted by Genuine
Parts Company (the "Company"), effective as of the date set forth herein.
WITNESSETH:
WHEREAS, the Company maintains the Genuine Partnership Plan (the
"Plan"), as amended and restated effective January 1, 1994, for the benefit of
its eligible employees and such Plan is currently in effect;
WHEREAS, the Company desires to amend Schedule C of the Plan;
WHEREAS, the Company has authorized the Committee to the Plan
("Committee") to amend Schedules to the Plan and the Committee has authorized
Frank Howard to execute such amendments without a meeting of the Committee;
NOW, THEREFORE, the Plan shall be amended as follows:
1.
Schedule C shall be deleted in its entirety, and a new Schedule C shall
be added to read as follows:
"SCHEDULE C
Prior Employer Accounts
Any defined term used in this Schedule C shall have the same meaning as
ascribed to it in the Plan, unless otherwise defined in this Schedule C.
I. Additional Forms of Benefits for Former Participants in the Genuine
Parts 401(k) Plan for the Dade City Jobbing Group
A. Background. As of December 31, 1993, the Genuine Parts 401(k)
Plan for the Dade City Jobbing Group effective as of January
1, 1993 (the "Dade City Plan") was frozen. The Dade City Plan
was subsequently merged into the Plan. Accounts established
under the Dade City Plan shall constitute Prior Employer
Accounts.
B. Eligibility of Former Participants in the Dade City Plan to
Receive Additional Forms of Benefits. Effective as of merger
into the Plan, former participants in the Dade City Plan
("Dade City Participants") who became Participants in this
Plan may elect to receive, in addition to the benefits offered
under the Plan, a distribution from their Prior Employer
Accounts as follows:
<PAGE> 2
(i) upon reaching the Dade City Plan's early retirement
date, which can be the first day of any month within
10 years of a Dade City Participant's Normal
Retirement Date;
(ii) a qualified joint and 100% survivor annuity;
(iii) a life annuity;
(iv) a life annuity with a guarantee of 120 monthly
payments;
(v) a contingent 50% or 100% annuitant option; or
(vi) a monthly annuity, if a Dade City Participant
terminates employment with the Company before he
would have been eligible to retire under the Dade
City Plan.
II. Additional Forms of Benefits for Former Participants in the Davis &
Wilmar, Inc. Retirement Savings Plan
A. Background. The Davis & Wilmar, Inc. Retirement Savings Plan
effective as of May 1, 1993 (the "Davis & Wilmar Plan") was frozen. The Davis &
Wilmar Plan was merged into the Plan effective December 31, 1994, as part of
Genuine Parts Company's acquisition of Davis & Wilmar, Inc. Accounts established
under the Davis & Wilmar Plan shall constitute Prior Employer Accounts.
B. Eligibility of Former Participants in the Davis & Wilmar Plan
to Receive Additional Forms of Benefits. Effective as of December 31, 1994,
former participants in the Davis & Wilmar Plan who became Participants in this
Plan, or their surviving spouse (as applicable), may elect to receive, in
addition to the benefits offered under the Plan, a distribution from such
participants' Prior Plan Accounts as follows:
(i) an annuity, or
(ii) a qualified pre-retirement 100% survivor annuity.
III. Additional Forms of Benefits for Former Participants in the Parts, Inc.
401(k) Plan
A. Background. As of January 1, 1995, the Parts, Inc. 401(k) Plan
effective as of January 1, 1989 (the "Parts, Inc. Plan") was frozen. The Parts,
Inc. Plan was merged into the Plan as part of Genuine Parts Company's
acquisition of Parts, Inc. Accounts established under the Parts, Inc. Plan shall
constitute Prior Employer Accounts.
- 2 -
<PAGE> 3
B. Eligibility of Former Participants in the Parts, Inc. Plan to
Receive Additional Forms of Benefits. Effective January 1, 1995, former
participants in the Parts, Inc. Plan who became Participants in this Plan
("Parts, Inc. Participants") may elect to receive, in addition to the benefits
offered under this Plan, a distribution from their Prior Employer Accounts as
follows:
(i) on or after attaining the Parts, Inc. Plan's normal
retirement age which is age 60; or
(ii) in quarterly, semi-annual or annual installments
extending over a period certain not to exceed the
Parts Inc. Participant's life expectancy or the joint
life and last survivor expectancy of such participant
and his designated beneficiary.
IV. Additional Forms of Benefits for Former Participants in the
I.M.S./Horizon 401(k) Plan
A. Background. Genuine Parts Company's acquired International
Media & Supplies, Inc. and Horizon U.S.A. Data Supplies, Inc. ("Horizon") on
April 28, 1995. The I.M.S. Horizon Plan was continued to be maintained by
Horizon although the plan was amended to only permit participation by non-highly
compensated employees. The I.M.S./Horizon Plan was merged into the Plan
effective August 1, 1998. Accounts established under the I.M.S./Horizon Plan
shall constitute Prior Employer Accounts.
B. Eligibility of Former Participants in the I.M.S./Horizon Plan
to Receive Additional Forms of Benefits. Effective August 1, 1998, former
participants in the I.M.S./Horizon Plan who became Participants in the Plan
("I.M.S./Horizon Participants"), or their surviving spouses (as applicable), may
elect to receive, in addition to the benefits offered under the Plan, a
distribution from their Prior Employer Accounts as follows:
(i) upon termination of employment for reasons other than
death, disability or retirement, an I.M.S./Horizon
Participant may receive a distribution of his Prior
Plan Account on or after the last day of the Plan
Year coincident with or next following his
termination of employment;
(ii) on or after the I.M.S./Horizon Plan's early
retirement date, which is any date coincident with or
next following attainment of age 60 and completion of
seven years of service under the I.M.S./Horizon Plan;
(iii) a joint and 50% survivor annuity;
(iv) a joint and 75% survivor annuity;
- 3 -
<PAGE> 4
(v) a joint and 100% survivor annuity;
(vi) a life annuity;
(vii) in quarterly, semi-annual or annual cash installments
extending over a period certain not to exceed the
I.M.S./Horizon Participant's life expectancy or the
joint life and last survivor expectancy of such
participant and his designated beneficiary (a
designated beneficiary shall have the right to reduce
the period over which installment payments shall be
made);
(viii) an annuity extending over a period certain not to
exceed the I.M.S./Horizon Participant's life
expectancy or the joint life and last survivor
expectancy of such participant and his designated
beneficiary; or
(ix) a qualified pre-retirement survivor annuity.
Furthermore, any security interest held by the I.M.S./Horizon Plan by reason of
an outstanding loan to an I.M.S./Horizon Participant shall be taken into account
in determining the amount of any pre-retirement survivor annuity.
V. Additional Forms of Benefits for Former Participants in the Motion
Equipment, Inc. 401(k) Profit Sharing Plan
A. Background. The Motion Equipment, Inc. 401(k) Profit Sharing
Plan ("Motion Plan") has been merged into the Plan. Accounts established under
the Motion Plan shall constitute Prior Employer Accounts.
B. Eligibility of Former Participants in the Motion Plan to
Receive Additional Forms of Benefits. Effective as of the merger of the Motion
Plan into this Plan, former participants in the Motion Plan who became
Participants in this Plan ("Motion Participants") may elect to receive, in
addition to the benefits offered under this Plan, a distribution from their
Prior Employer Accounts as follows:
(i) on or after attaining the Motion Plan's early
retirement age, which is age 59-1/2;
(ii) on or after attaining the Motion Plan's normal
retirement age, which is age 62;
(iii) in a lump-sum distribution in-kind, or part in cash
and part in-kind; or
- 4 -
<PAGE> 5
(iv) in installments payable in cash or in-kind, over a
period certain not to exceed the Motion Participant's
life expectancy or the joint life and last survivor
expectancy of such participant and his designated
beneficiary.
VI. Additional Forms of Benefits for Former Participants in the Midcap
Bearing Corporation Profit Sharing Plan
A. Background. The Midcap Bearing Profit Sharing Plan effective
as of January 1, 1995 (the "Midcap Plan") has been merged into this Plan.
Accounts established under the Midcap Plan shall constitute Prior Employer
Accounts.
B. Eligibility of Former Participants in the Midcap Plan to
Receive Additional Forms of Benefits. Effective as of the merger of the Midcap
Plan into this Plan, former participants in the Midcap Plan who became
Participants in this Plan ("Midcap Participants") may elect to receive, in
addition to the benefits offered under this Plan, a distribution from their
Prior Employer Accounts as follows:
(i) on or after attaining the Midcap Plan's early
retirement age, which is age 59-1/2;
(ii) on or after attaining the Midcap Plan's normal
retirement age, which is age 62;
(iii) in a lump-sum distribution in-kind, or part in cash
and part in-kind; or
(iv) in installments payable in cash or in-kind, over a
period certain not to exceed the Midcap Participant's
life expectancy or the joint life and last survivor
expectancy of such participant and his designated
beneficiary.
VII. Additional Forms of Benefits for Former Participants in the Hub Tool &
Supply, Inc. 401(k) Plan
A. Background. As of December 31, 1998, the Hub Tool & Supply,
Inc. 401(k) Plan (the "Hub Plan") was frozen. The Hub Plan was subsequently
merged into the Plan. Accounts established under the Hub Plan shall constitute
Prior Employer Accounts.
B. Eligibility of Former Participants in the Hub Plan to Receive
Additional Forms of Benefits. Effective as of the merger of the Hub Plan into
this Plan, former participants in the Hub Plan who became Participants in this
Plan ("Hub Participants") may elect to receive, in addition to the benefits
offered under this Plan, a distribution from their Prior Employer Accounts as
follows:
- 5 -
<PAGE> 6
(i) in a life annuity with monthly income payable for the
life of the Participant;
(ii) in a life annuity with monthly income payable for the
life of the Participant and, if the Participant dies
before the end of a period of five, ten, or fifteen
years as selected by the Participant, with monthly
income payable to the Participant's beneficiary until
the end of such period;
(iii) in a life annuity with monthly income payable for the
life of the Participant and, if the Participant dies
before the total amount paid equals the Participant's
Prior Employer Account, with monthly income payable
to the Participant's beneficiary until the total
amount paid equals the Participant's Prior Employer
Account;
(iv) in a joint and survivor life annuity with monthly
income payable for the life of the Participant; with
50%, 66 2/3%, or 100% (as elected by the Participant)
of the Participant's monthly income payable for the
life of the Participant's survivor; and, if both the
Participant and the Participant's survivor die before
the total amount paid equals the Participant's Prior
Employer Account, payments continue to the
Participant's beneficiary until the total amount paid
equals the Participant's Prior Employer Account;
(v) in installment payments made monthly for a fixed
period of time equal to or greater than 60 months; or
(vi) in a series of flexible income payments for an amount
each year equal to that elected by the Participant
which, in the year the Participant attains age 70
1/2, must be equal to or greater than a minimum
amount.
VIII. Vesting Schedule and Additional Forms of Benefits for Former
Participants in the Summit Insulation Supply Co., Inc. Retirement Savings Plan
A. Background. As of November 30, 1999, the Summit Insulation
Supply Co., Inc. Retirement Savings Plan (the "Summit Plan") was frozen. The
Summit Plan was or will be subsequently merged into the Plan. Accounts
established under the Summit Plan shall constitute Prior Employer Accounts.
B. Vesting Schedule for Prior Employer Account. Notwithstanding
the vesting provisions of the Plan, any Participant who has two Years of
Credited Service shall be 20% vested in the regular matching
contribution/employer contribution subaccount of his Prior Employer Account that
is attributable to regular matching contributions/employer contributions made to
his account under the Summit Plan.
- 6 -
<PAGE> 7
C. Eligibility of Former Participants in the Summit Plan to
Receive Additional Forms of Benefits. Effective as of the merger of the Summit
Plan into this Plan, former participants in the Summit Plan who became
Participants in this Plan ("Summit Participants") may elect to receive, in
addition to the benefits offered under this Plan, a distribution from their
Prior Employer Accounts as follows:
(i) in a life annuity with monthly income payable for the
life of the Participant;
(ii) in a joint and survivor life annuity with monthly
income payable for the life of the Participant; with
50% of the Participant's monthly income payable to
the Participant's surviving spouse for the life of
the Participant's surviving spouse;
(iii) in a preretirement survivor annuity purchasable with
100% of the Participant's nonforfeitable accrued
benefit with monthly income payable to the
Participant's surviving spouse for the life of the
Participant's surviving spouse, in the event that the
Participant is married and dies prior to his annuity
starting date; or
(iv) in installment payments made monthly, quarterly, or
annually over a fixed reasonable period of time, not
exceeding the life expectancy of the Participant, or
the joint life and last survivor expectancy of the
Participant and his beneficiary.
IX. Additional Forms of Benefits for Former Participants in the H.A.
Holden, Inc. Profit Sharing Plan
A. Background. As of November 30, 1999, the H.A. Holden, Inc.
Profit Sharing Plan (the "Holden Plan") was frozen. The Holden Plan was or will
be subsequently merged into the Plan. Accounts established under the Holden Plan
shall constitute Prior Employer Accounts.
B. Eligibility of Former Participants in the Holden Plan to
Receive Additional Forms of Benefits. Effective as of the merger of the Holden
Plan into this Plan, former participants in the Holden Plan who became
Participants in this Plan ("Holden Participants") may elect to receive, in
addition to the benefits offered under this Plan, a distribution from their
Prior Employer Accounts as follows:
(i) in a life annuity with monthly income payable for the
life of the Participant;
(ii) in a joint and survivor life annuity with monthly
income payable for the life of the Participant; with
50% of the Participant's
- 7 -
<PAGE> 8
monthly income payable to the Participant's surviving
spouse for the life of the Participant's surviving
spouse;
(iii) in a preretirement survivor annuity purchasable with
50% of the Participant's nonforfeitable accrued
benefit with monthly income payable to the
Participant's surviving spouse for the life of the
Participant's surviving spouse, in the event that the
Participant is married and dies prior to his annuity
starting date; or
(iv) in installment payments made monthly, quarterly, or
annually over a fixed reasonable period of time, not
exceeding the life expectancy of the Participant, or
the joint life and last survivor expectancy of the
Participant and his beneficiary.
X. Additional Forms of Benefits for Former Participants in the Scottsdale
Tool & Supply, Inc. 401(k) Plan
A. Background. As of December 31, 1998, the Scottsdale Tool &
Supply, Inc. 401(k) Plan (the "Scottsdale Plan") was frozen. The Scottsdale Plan
was or will be subsequently merged into the Plan. Accounts established under the
Scottsdale Plan shall constitute Prior Employer Accounts.
B. Eligibility of Former Participants in the Scottsdale Plan to
Receive Additional Forms of Benefits. Effective as of the merger of the
Scottsdale Plan into this Plan, former participants in the Scottsdale Plan who
became Participants in this Plan ("Scottsdale Participants") may elect to
receive, in addition to the benefits offered under this Plan, a distribution
from that potion of their Prior Employer Accounts that accrued under the
Scottsdale Plan on or before December 31, 1996, in installment payments made
monthly, quarterly, or annually over a period of years certain selected by the
Participant that is less than the life of the Participant.
XI. Additional Forms of Benefits for Former Participants in the EIS, Inc.
401(k) Plan
A. Background. As of November 30, 1999, the EIS, Inc. 401(k) Plan
(the "EIS Plan"), formerly known as the EIS, Inc. Savings and Employee Stock
Ownership Plan, was frozen. The EIS Plan was or will be subsequently merged into
the Plan. Accounts established under the EIS Plan shall constitute Prior
Employer Accounts.
B. Eligibility of Former Participants in the EIS Plan to Receive
Additional Forms of Benefits. Effective as of the merger of the EIS Plan into
this Plan, former participants in the EIS Plan who became Participants in this
Plan ("EIS Participants") may elect to receive, in addition to the benefits
offered under this Plan, a distribution from their Prior Employer Accounts as
follows:
- 8 -
<PAGE> 9
(i) in a life annuity with monthly income payable for the
life of the Participant;
(ii) in a joint and survivor life annuity with monthly
income payable for the life of the Participant; with
50% of the Participant's monthly income payable to
the Participant's surviving spouse for the life of
the Participant's surviving spouse;
(iii) in a preretirement survivor annuity purchasable with
the Participant's nonforfeitable accrued benefit with
monthly income payable to the Participant's surviving
spouse for the life of the Participant's surviving
spouse, in the event that the Participant is married
and dies prior to his annuity starting date; or
(iv) in installment payments made monthly or annually over
a period of five to twenty years, not exceeding the
life expectancy of the Participant, or the joint life
and last survivor expectancy of the Participant and
his beneficiary.
Notwithstanding the provisions of Section 8.05 of the Plan, an
EIS Participant may elect to receive distributions of his
Prior Employer Account under Code Section 401(a)(9) in any of
the forms listed above. However, if an EIS Participant fails
to elect a form of benefit by his required beginning date, any
distribution of his Prior Employer Account made pursuant to
Code Section 401(a)(9) shall be in a lump sum.
C. Death Benefits for Prior Employer Account. Notwithstanding any
provisions of the Plan, in the event that an EIS Participant has not elected a
single life annuity, a joint and survivor annuity, or a preretirement survivor
annuity described above, in the event of the EIS Participant's death, his Prior
Employer Account shall be distribute to his Beneficiary (the "EIS Beneficiary")
as follows:
(i) If distributions to the EIS Participant have not
commenced, the EIS Participant's Prior Employer
Account will be distributed to the EIS Beneficiary in
either a lump sum payment or installment payments, as
described above, as elected by the EIS Beneficiary.
However, if the EIS Beneficiary fails to elect a
distribution option within ninety days of the EIS
Participant's death, the EIS Participant's Prior
Employer Account will be distributed to the EIS
Beneficiary in a lump sum.
(ii) If distributions to the EIS Participant have
commenced, the EIS Participant's Prior Employer
Account will continue to be distributed to the
Beneficiary over the same period certain elected by
the EIS Participant. However, within ninety days of
the EIS
- 9 -
<PAGE> 10
Participant's death, the EIS Beneficiary may elect to
receive the remaining unpaid Prior Employer Account
in a lump sum.
D. Additional Method of Distribution. Notwithstanding Section
8.02 of the Plan, an EIS Participant will receive a distribution of any
Qualifying Employer Securities held in his Prior Employer Account in whole
shares of the common stock of the Company.
E. Vesting Schedule for Prior Employer Account. Notwithstanding
the vesting provisions of the Plan, all EIS Participants shall be 100% vested in
their Prior Employer Accounts.
F. Additional In-Service Withdrawal Option. An EIS Participant
may invest the non-Qualifying Employer Securities portion of his "after-tax
contribution account" subaccount of his Prior Employer Account not more
frequently than once during each Plan Year.
G. Additional Investment Option. On or before December 31, 2001,
an EIS Participant may direct to have the Company Stock held in his Prior
Employer Account liquidated, the proceeds of which shall be invested in
accordance with the Participant's investment elections made pursuant to Section
6.06 of the Plan. However, an EIS Participant may not direct that any portion of
his Prior Employer Account be invested in Company Stock."
2.
This amendment shall be effective as of December 29, 2000. Except as
amended herein, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, Genuine Parts Company, acting through the Committee
has caused this Amendment to the Plan to be executed on the date shown below but
effective as of the date indicated above.
COMMITTEE TO THE
GENUINE PARTNERSHIP PLAN
By: /s/ Frank Howard
-------------------------------------
Frank Howard, acting on behalf of the
Committee
Date: December 27, 2000
---------------------------------
- 10 -
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>5
<FILENAME>g67483ex13.txt
<DESCRIPTION>ANNUAL REPORT TO SHAREHOLDERS
<TEXT>
<PAGE> 1
EXHIBIT 13
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
In thousands, except per share data 2000 1999 1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales* $8,369,857 $7,950,822 $6,587,576 $5,981,224 $5,697,592
Cost of goods sold* 5,764,360 5,436,056 4,468,568 4,049,104 3,878,879
Selling, administrative and other expenses* 1,958,747 1,886,699 1,529,891 1,366,520 1,273,480
Income before income taxes 646,750 628,067 589,117 565,600 545,233
Income taxes 261,427 250,445 233,323 223,203 215,157
Net income $ 385,323 $ 377,622 $ 355,794 $ 342,397 $ 330,076
Average common shares outstanding during year -
assuming dilution** 175,327 179,238 180,081 180,165 182,189
Per common share:**
Diluted net income $ 2.20 $ 2.11 $ 1.98 $ 1.90 $ 1.81
Dividends declared 1.10 1.04 1.00 .96 .89
December 31 closing stock price 26.19 24.81 33.44 33.94 29.67
Long-term debt, less current maturities 770,581 702,417 588,640 209,490 110,241
Shareholders' equity 2,260,806 2,177,517 2,053,332 1,859,468 1,732,054
Total assets $4,142,114 $3,929,672 $3,600,380 $2,754,363 $2,521,631
============================================================================================================================
</TABLE>
* Prior years have been reclassified in connection with the 2000 adoption of
certain new accounting pronouncements.
** Adjusted to reflect the three-for-two stock split in 1997.
SELECTED RATIO ANALYSIS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
In % of net sales 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cost of goods sold* 68.87% 68.37% 67.83% 67.70% 68.08%
Selling, administrative and other expenses* 23.40 23.73 23.22 22.85 22.35
Income before income taxes 7.73 7.90 8.94 9.46 9.57
Net income 4.60 4.75 5.40 5.72 5.79
Rate earned on shareholders' equity
at the beginning of each year 17.70% 18.39% 19.13% 19.77% 19.99%
==============================================================================================================================
</TABLE>
* Prior years have been reclassified in connection with the 2000 adoption of
certain new accounting pronouncements.
MARKET AND DIVIDEND INFORMATION
High and Low Sales Price and Dividends per Share of Common Shares Traded on the
New York Stock Exchange.
<TABLE>
<CAPTION>
SALES PRICE OF COMMON SHARES
Quarter 2000 1999
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High Low High Low
First $25.56 $19.94 $33.81 $27.81
Second 26.69 20.00 35.25 28.06
Third 22.19 18.25 35.75 25.25
Fourth 26.44 18.63 27.50 22.25
</TABLE>
<TABLE>
<CAPTION>
DIVIDENDS DECLARED PER SHARE
2000 1999
- ----------------------------------------------------------------------------------
<S> <C> <C>
First $.275 $.26
Second .275 .26
Third .275 .26
Fourth .275 .26
</TABLE>
Number of Record Holders of Common Stock: 8,102
16
<PAGE> 2
SEGMENT DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
Dollars in thousands 2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales:
Automotive $ 4,163,814 $ 4,084,775 $ 3,262,406 $ 3,071,153 $ 3,008,105
Industrial 2,342,686 2,156,134 2,008,789 1,853,270 1,677,859
Office products 1,336,500 1,218,367 1,122,420 1,080,822 1,034,510
Electrical/electronic materials 557,866 522,411 220,417 -- --
Other (31,009) (30,865) (26,456) (24,021) (22,882)
- -------------------------------------------------------------------------------------------------------------------------
Total net sales $ 8,369,857 $ 7,950,822 $ 6,587,576 $ 5,981,224 $ 5,697,592
=========================================================================================================================
Operating profit:
Automotive $ 381,250 $ 383,830 $ 330,988 $ 315,303 $ 311,816
Industrial 206,193 186,203 176,456 166,367 151,129
Office products 134,343 118,345 113,821 110,793 103,439
Electrical/electronic materials 28,010 23,343 12,030 -- --
- -------------------------------------------------------------------------------------------------------------------------
Total operating profit 749,796 711,721 633,295 592,463 566,384
Interest expense (63,496) (41,487) (20,096) (13,365) (8,498)
Corporate expense (23,277) (22,283) (19,545) (17,058) (17,917)
Equity in (loss) income from investees -- (3,675) 3,329 6,730 9,398
Goodwill amortization (13,843) (12,708) (5,157) (1,624) (1,548)
Minority interests (2,430) (3,501) (2,709) (1,546) (2,586)
- -------------------------------------------------------------------------------------------------------------------------
Income before income taxes $ 646,750 $ 628,067 $ 589,117 $ 565,600 $ 545,233
=========================================================================================================================
Assets:
Automotive $ 2,099,610 $ 2,034,417 $ 1,966,774 $ 1,623,644 $ 1,478,023
Industrial 840,585 758,206 671,454 584,356 524,998
Office products 542,406 503,904 442,220 380,804 376,616
Electrical/electronic materials 190,635 174,258 147,074 -- --
Corporate 17,443 18,588 18,385 18,611 15,662
Goodwill and equity investments 451,435 440,299 354,473 146,948 126,332
- -------------------------------------------------------------------------------------------------------------------------
Total assets $ 4,142,114 $ 3,929,672 $ 3,600,380 $ 2,754,363 $ 2,521,631
=========================================================================================================================
Depreciation and amortization:
Automotive $ 51,546 $ 51,563 $ 43,637 $ 40,675 $ 34,265
Industrial 11,617 10,926 8,619 6,688 5,860
Office products 9,598 8,814 8,391 7,865 7,437
Electrical/electronic materials 4,391 4,173 1,508 -- --
Corporate 1,308 1,783 1,993 2,015 1,335
Goodwill 13,843 12,708 5,157 1,624 1,548
- -------------------------------------------------------------------------------------------------------------------------
Total depreciation and amortization $ 92,303 $ 89,967 $ 69,305 $ 58,867 $ 50,445
=========================================================================================================================
Capital expenditures:
Automotive $ 35,031 $ 57,710 $ 69,154 $ 68,305 $ 80,682
Industrial 20,054 11,275 6,972 13,451 7,330
Office products 9,116 16,085 6,901 6,069 5,652
Electrical/electronic materials 3,183 3,113 4,688 -- --
Corporate 3,745 100 546 2,600 1,494
- -------------------------------------------------------------------------------------------------------------------------
Total capital expenditures $ 71,129 $ 88,283 $ 88,261 $ 90,425 $ 95,158
=========================================================================================================================
Net sales:
United States $ 7,665,498 $ 7,345,707 $ 6,535,020 $ 5,977,012 $ 5,697,053
Canada 633,715 585,504 79,012 28,233 23,421
Mexico 101,653 50,476 -- -- --
Other (31,009) (30,865) (26,456) (24,021) (22,882)
- -------------------------------------------------------------------------------------------------------------------------
Total net sales $ 8,369,857 $ 7,950,822 $ 6,587,576 $ 5,981,224 $ 5,697,592
=========================================================================================================================
Net long-lived assets:
United States $ 618,818 $ 620,837 $ 545,452 $ 412,344 $ 366,119
Canada 201,895 207,672 187,951 6,495 6,725
Mexico 25,982 25,333 15,338 15,767 16,196
- -------------------------------------------------------------------------------------------------------------------------
Total net long-lived assets $ 846,695 $ 853,842 $ 748,741 $ 434,606 $ 389,040
=========================================================================================================================
</TABLE>
17
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 2000
RESULTS OF OPERATIONS:
Net sales in 2000 increased for the 51st consecutive year to a record high
of $8.37 billion. This was an increase of 5% over the prior year amount of
$7.95 billion and compares with increases of 21% in 1999, and 10% in 1998.
Excluding the effect of acquisitions, sales would have increased
approximately 7% in 1999. Sales for the Automotive Parts Group increased 2%
in 2000 versus 25% (5% excluding acquisitions) in 1999 and 6% in 1998. Price
increases for the Automotive Parts Group were 1% in 2000 and flat in 1999
and 1998. Sales for the Industrial Parts Group increased 9% in 2000 versus
7% in 1999 and 8% in 1998, reflecting geographic expansion through new
branches and acquisitions and increased market share due to expanded product
offerings and new markets. Price increases for the Industrial Parts Group
were approximately 2% in 2000 and 1% in 1999 and 1998. Sales for the Office
Products Group increased 10% in 2000, 9% in 1999 and 4% in 1998, reflecting
additional market share, increased merchandising and marketing efforts and
new product offerings. Price increases for the Office Products Group were
approximately 1.7% in 2000 and less than 1% in 1999 and 1998. Sales for the
Electrical/Electronic Group, which was acquired July 1, 1998, were up 7% for
2000 reflecting new product programs and expanded customer base. Price
increases for the Electrical/Electronics Group were 1% in 2000 and less than
1% in 1999 and 1998.
Costs of goods sold was 68.9% of net sales in 2000 compared to 68.4% in 1999
and to 67.8% in 1998. Selling, administrative and other expenses increased
4% in 2000 to $1.96 billion versus a 23% increase in 1999 (8% increase,
excluding 1999 acquisitions) and was 23.4% of net sales in 2000, 23.7% of
net sales in 1999, and 23.2% of net sales in 1998. Selling, administrative
and other expenses decreased as a percentage of sales in 2000 due to
improved operating efficiencies from integration of acquisitions and branch
consolidations, as well as improved operating systems. Selling,
administrative and other expenses increased as a percentage of sales in 1999
as a result of additional acquisition costs including interest expense,
goodwill amortization and salaries and benefits plus increased information
system expenses due to e-commerce initiatives. The effective income tax rate
was 40.4% in 2000 as compared to 39.9% in 1999 and 39.6% in 1998. The
increase in the tax rate in 2000 and 1999 primarily related to increased
non-deductible goodwill amortization and the effect of international
operations. Net income as a percent of net sales was 4.6% in 2000, 4.7% in
1999, and 5.4% in 1998. Net income in 2000 increased to $385.3 million,
reflecting a 2% increase over 1999 net income of $377.6 million. Net income
in 1999 increased 6% over 1998 net income of $355.8 million. Diluted
earnings per share were $2.20 in 2000 compared to $2.11 in 1999 for an
increase of 4.3%.
LIQUIDITY AND SOURCES OF CAPITAL:
The ratio of current assets to current liabilities was 3.1 to 1 at the close
of 2000 with current assets amounting to 73% of total assets. Trade accounts
receivable and inventories increased 2% and 5% respectively, while working
capital increased 3%. The increase in working capital has been financed
principally from the Company's cash flow generated by operations.
At December 31, 2000, the Company had the following unsecured revolving
lines of credit: $200 million, LIBOR plus .55%, due 2003, $175 million
outstanding; $200 million, LIBOR plus .55%, due 2002, $119 million
outstanding; and $100 million, banker's acceptance rate, due 2001, $98
million outstanding. In
EARNINGS PER SHARE*
IN DOLLARS
[GRAPH]
*Restated to reflect stock splits
DIVIDENDS PER SHARE*
IN DOLLARS
[GRAPH]
*Restated to reflect stock splits
18
<PAGE> 4
addition, the Company had the following unsecured term notes:$50 million, LIBOR
plus .25%, due 2001; $50 million, 5.98%, due 2002; $50 million, LIBOR plus .25%,
due 2005; $50 million, LIBOR plus .25%, due 2008; $231 million, LIBOR plus .55%,
due 2003; and $44 million in other borrowings. Certain borrowings due in 2001
are classified as non-current in the Company's December 31, 2000 balance sheet
as the Company has available committed sources of long-term financing. In
addition, the weighted average interest rate on the Company's outstanding
borrowings was approximately 6.7% and 6.3% at December 31, 2000 and 1999,
respectively. Total interest expense for all borrowings was $63.5 million and
$41.5 million in 2000 and 1999, respectively.
In addition, the Company had the following Canadian dollar denominated
borrowings translated into U.S. dollars at December 31, 2000: a line of credit
secured by accounts receivable, $39 million, banker's acceptance rate plus .27%;
and $15 million in other borrowings.
In August 1999, the Company completed the repurchase of 15 million shares
authorized by the Board of Directors in 1994. The Board authorized the
repurchase of an additional 15 million shares on April 19, 1999. Through
December 31, 2000, approximately 7 million shares have been repurchased under
this new authorization.
Existing credit facilities, current financial resources and anticipated funds
from operations are expected to meet requirements for working capital in 2001.
Capital expenditures for 2000 amounted to $71 million and in 1999 and 1998
amounted to $88 million. The amounts reflect the Company's continuing geographic
expansion as well as the upgrading of existing facilities. It is anticipated
that capital expenditures in 2001 will be in the same range of 1998 through
2000.
The Company manages its exposure to changes in short-term interest rates,
particularly to reduce the impact on its floating-rate term notes, by entering
into interest rate swap agreements. The counterparties to these contracts are
high credit, quality commercial banks. Consequently, credit risk, which is
inherent in all swaps, has been minimized to a large extent. Interest expense is
adjusted for the differential to be paid or received as interest rates change.
The effect of such adjustments on interest expense has not been significant. The
level of floating-rate debt not fixed by swap agreements was approximately $282
million at December 31, 2000. Accordingly, a 1% adverse change in interest rates
would not have a material adverse impact on future earnings and cash flows of
the Company.
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,
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.
QUARTERLY RESULTS OF OPERATIONS:
Miscellaneous year-end adjustments resulted in increasing net income during the
fourth quarter of 2000 and 1999 by approximately $32.0 million ($.18 per share)
and $35.7 million ($.20 per share), respectively. Miscellaneous year-end
adjustments primarily relate to changes in management's estimates and
assumptions related to the valuation of inventory, the calculation of volume
purchasing rebates earned and other adjustments to judgmental reserves which
cannot be accurately determined until the end of the year.
The following is a summary of the quarterly results of operations for the years
ended December 31, 2000 and 1999. The quarterly financial statements have been
reclassified in connection with the Company's fourth quarter 2000 adoption of
new accounting pronouncements related to the income statement classification of
freight billed to customers and other discounts and incentives. These
reclassifications had no effect on net income.
<TABLE>
<CAPTION>
Three Months Ended
- ------------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2000 (in thousands except for per share data)
----
Net Sales $ 2,070,992 $ 2,129,377 $ 2,150,572 $ 2,018,916
Gross Profit 620,052 649,671 655,797 679,977
Net Income 91,729 96,593 91,729 105,272
Basic and Diluted
Net Income per
Common Share .52 .55 .53 .61
1999
Net Sales $ 1,894,941 $ 2,017,074 $ 2,073,256 $ 1,965,551
Gross Profit 579,920 620,952 633,669 680,225
Net Income 86,066 92,569 90,637 108,350
Basic and Diluted
Net Income per
Common Share .48 .52 .51 .61
</TABLE>
19
<PAGE> 5
REPORT OF INDEPENDENT AUDITORS
BOARD OF DIRECTORS
GENUINE PARTS COMPANY
We have audited the accompanying consolidated balance sheets of Genuine Parts
Company and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Genuine
Parts Company and subsidiaries at December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
February 2, 2001
Atlanta, Georgia
20
<PAGE> 6
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
Dollars in thousands 2000 1999
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 27,738 $ 45,735
Trade accounts receivable 1,031,662 1,006,663
Merchandise inventories 1,864,334 1,771,789
Prepaid expenses and other assets 95,747 71,016
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 3,019,481 2,895,203
Goodwill, less accumulated amortization (2000--$37,680; 1999--$25,286) 451,435 440,299
Other assets 275,938 180,627
PROPERTY, PLANT AND EQUIPMENT:
Land 40,790 40,912
Buildings, less allowance for depreciation (2000--$96,714; 1999--$90,305) 136,416 138,012
Machinery and equipment, less allowance for depreciation
(2000--$340,228; 1999--$312,716) 218,054 234,619
- -------------------------------------------------------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 395,260 413,543
- -------------------------------------------------------------------------------------------------------------------------------
$ 4,142,114 $ 3,929,672
===============================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 635,499 $ 581,010
Current portion of long-term debt and other borrowings 151,452 133,056
Accrued compensation 58,661 69,956
Other accrued expenses 58,164 58,603
Dividends payable 47,494 45,355
Income taxes payable 37,043 28,032
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 988,313 916,012
LONG-TERM DEBT 770,581 702,417
DEFERRED INCOME TAXES 77,814 87,466
MINORITY INTERESTS IN SUBSIDIARIES 44,600 46,260
SHAREHOLDERS' EQUITY:
Preferred Stock, par value $1 per share--authorized
10,000,000 shares; none issued -- --
Common Stock, par value $1 per share--authorized
450,000,000 shares; issued 172,389,688 shares
in 2000 and 177,275,602 shares in 1999 172,390 177,276
Accumulated other comprehensive income (13,041) (6,857)
Retained earnings 2,101,457 2,007,098
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 2,260,806 2,177,517
- -------------------------------------------------------------------------------------------------------------------------------
$ 4,142,114 $ 3,929,672
===============================================================================================================================
</TABLE>
See accompanying notes.
21
<PAGE> 7
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31,
In thousands, except per share data 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $8,369,857 $7,950,822 $6,587,576
Cost of goods sold 5,764,360 5,436,056 4,468,568
- --------------------------------------------------------------------------------------------------------------------
2,605,497 2,514,766 2,119,008
Selling, administrative and other expenses 1,958,747 1,886,699 1,529,891
- --------------------------------------------------------------------------------------------------------------------
Income before income taxes 646,750 628,067 589,117
Income taxes 261,427 250,445 233,323
- --------------------------------------------------------------------------------------------------------------------
NET INCOME $ 385,323 $ 377,622 $ 355,794
====================================================================================================================
Basic and diluted net income per common share $ 2.20 $ 2.11 $ 1.98
====================================================================================================================
Average common shares outstanding 175,009 178,746 179,416
Dilutive effect of stock options and non-vested restricted stock awards 318 492 665
- --------------------------------------------------------------------------------------------------------------------
Average common shares outstanding--assuming dilution 175,327 179,238 180,081
====================================================================================================================
</TABLE>
See accompanying notes.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other Total
---------------------- Paid-In Comprehensive Retained Shareholders'
Dollars in thousands Shares Amount Capital Income Earnings Equity
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1998 178,947,976 $ 178,948 $ -- $ -- $ 1,680,520 $ 1,859,468
Net income -- -- -- -- 355,794 355,794
Foreign currency translation
adjustment -- -- -- (3,110) -- (3,110)
-----------
Comprehensive income 352,684
-----------
Cash dividends declared -- -- -- -- (179,366) (179,366)
Stock options exercised,
including tax benefit 284,153 284 5,465 -- -- 5,749
Purchase of stock (2,311,580) (2,312) (74,023) -- -- (76,335)
Stock issued in connection with
acquisitions 2,584,602 2,585 88,547 -- -- 91,132
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 179,505,151 179,505 19,989 (3,110) 1,856,948 2,053,332
Net income -- -- -- -- 377,622 377,622
Foreign currency translation
adjustment -- -- -- (3,747) -- (3,747)
-----------
Comprehensive income 373,875
-----------
Cash dividends declared -- -- -- -- (185,870) (185,870)
Stock options exercised,
including tax benefit 322,003 322 6,168 -- -- 6,490
Purchase of stock (3,863,353) (3,863) (65,663) -- (41,602) (111,128)
Stock issued in connection
with acquisitions 1,311,801 1,312 37,772 -- -- 39,084
Other -- -- 1,734 -- -- 1,734
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999 177,275,602 177,276 -- (6,857) 2,007,098 2,177,517
Net income -- -- -- -- 385,323 385,323
Foreign currency translation
adjustment -- -- -- (6,184) -- (6,184)
-----------
Comprehensive income 379,139
-----------
Cash dividends declared -- -- -- -- (192,455) (192,455)
Stock options exercised,
including tax benefit 386 -- 8 -- -- 8
Purchase of stock (5,466,029) (5,466) (13,840) -- (98,509) (117,815)
Stock issued in connection
with acquisitions 579,729 580 13,832 -- -- 14,412
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000 172,389,688 $ 172,390 $ -- $(13,041) $ 2,101,457 $ 2,260,806
================================================================================================================================
</TABLE>
See accompanying notes.
22
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
Dollars in thousands 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 385,323 $ 377,622 $ 355,794
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 92,303 89,967 69,305
Gain on sale of property, plant and equipment (5,674) (4,595) (1,664)
Deferred income taxes (6,714) 12,347 10,379
Income applicable to minority interests 2,430 3,501 2,709
Changes in operating assets and liabilities:
Trade accounts receivable (14,298) (42,846) (74,165)
Merchandise inventories (84,508) (28,671) (107,290)
Trade accounts payable 50,899 12,104 14,158
Other, net (105,336) (51,662) 24,052
- ----------------------------------------------------------------------------------------------------------------------------------
(70,898) (9,855) (62,516)
- ----------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 314,425 367,767 293,278
INVESTING ACTIVITIES
Purchases of property, plant and equipment (71,129) (88,283) (88,261)
Proceeds from sale of property, plant and equipment 10,605 10,254 67,522
Acquisition of businesses and other investments, net of cash acquired (46,226) (89,272) (310,911)
- ----------------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (106,750) (167,301) (331,650)
FINANCING ACTIVITIES
Proceeds from credit facilities 2,813,820 2,579,675 1,173,359
Payments on credit facilities (2,731,601) (2,530,429) (874,175)
Stock options exercised 8 6,490 5,749
Dividends paid (189,995) (184,247) (178,027)
Purchase of stock (117,815) (111,128) (76,335)
- ----------------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (225,583) (239,639) 50,571
EFFECT OF EXCHANGE RATE CHANGES ON CASH (89) (64) (50)
- ----------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (17,997) (39,237) 12,149
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 45,735 84,972 72,823
- ----------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 27,738 $ 45,735 $ 84,972
=================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
Income taxes $ 252,416 $ 244,250 $ 200,280
=================================================================================================================================
Interest $ 61,750 $ 39,888 $ 18,867
=================================================================================================================================
</TABLE>
See accompanying notes.
23
<PAGE> 9
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS DECEMBER 31, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Genuine Parts
Company and all of its subsidiaries (the "Company"). Income applicable to
minority interests is included in other expenses. Significant intercompany
accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes. Actual results may
differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The balance sheets and statements of income of the Company's foreign
subsidiaries have been translated into U.S. dollars at the current and average
exchange rates, respectively. The foreign currency translation adjustment is
included as a component of accumulated other comprehensive income, net of income
taxes.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents.
OTHER ASSETS
Other assets consist primarily of a prepaid pension asset, certain internal-use
information systems projects in progress, and an investment accounted for under
the cost method.
MERCHANDISE INVENTORIES
Merchandise inventories are valued at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method for a majority of automotive
parts, electrical/electronic materials, and industrial parts, and by the
first-in, first-out (FIFO) method for office products and certain other
inventories. If the FIFO method had been used for all inventories, cost would
have been $155,831,000 and $141,041,000 higher than reported at December 31,
2000 and December 31, 1999, respectively.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated on the basis of cost. Depreciation is
determined principally on a straight-line basis over the estimated useful life
of each asset.
GOODWILL
Goodwill, which represents the excess of the purchase price paid over the fair
value of the net assets acquired in connection with business acquisitions, is
amortized over a period of 40 years.
LONG-LIVED ASSETS
Long-lived assets, including goodwill, are periodically reviewed for impairment
based on an assessment of future operations. The Company records impairment
losses on long-lived assets used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount.
REVENUE RECOGNITION
The Company recognizes revenues from product sales upon shipment to its
customers.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount reflected in the consolidated balance sheets for cash, cash
equivalents, accounts receivable, long-term debt and other borrowings
approximate their respective fair values. Fair values are based primarily on
quoted prices for those or similar instruments.
SHIPPING AND HANDLING COSTS
Shipping and handling costs are classified as selling, general and
administrative expenses in the accompanying consolidated statements of income
and totaled approximately $200,000,000, $180,000,000 and $148,000,000 in the
years ended December 31, 2000, 1999, and 1998, respectively.
NET INCOME PER COMMON SHARE
Basic net income per common share is computed by dividing net income by the
weighted average number of common shares outstanding during the year. The
computation of diluted net income per common share includes the dilutive effect
of stock options and non-vested restricted stock awards. Options to purchase
4,325,000, 4,265,000, and 1,790,000 shares of common stock at prices ranging
from $23 to $35 per share were outstanding at December 31, 2000, 1999 and 1998,
respectively, but were not included in the computation of diluted net income per
common share because the options' exercise price was greater than the average
market price of the common shares. The dilutive effect of options to purchase
748,312 shares of common stock at an average exercise price of approximately $7
per share issued in connection with a July 1, 1998 acquisition have been
included in the computation of diluted net income per common share since the
date of the acquisition.
24
<PAGE> 10
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for
Derivative Instruments and Hedging Activities". This statement requires the fair
value of derivatives to be recorded as assets or liabilities. Gains or losses
resulting from changes in the fair values of derivatives would be accounted for
currently in earnings or comprehensive income depending on the purpose of the
derivatives and whether they qualify for hedge accounting treatment.
The adoption of SFAS 133 will result in a $6,226,000 charge to other
comprehensive income, net of tax, from a cumulative effect of a change in
accounting principle, and a corresponding decrease in shareholders' equity in
the Company's financial statements as of January 1, 2001.
In 2000, the Emerging Issues Task Force of the FASB reached a consensus on Issue
00-10, "Accounting for Shipping and Handling Costs" and Issue 00-14 "Accounting
for Certain Sales Incentives", (collectively, "the Issues"). The Company adopted
the Issues in the fourth quarter of 2000 and prior year financial statements
have been reclassified to conform to the requirements of the Issues. There was
no effect on net income as a result of the adoption of the Issues. The net
effect of the adoption of the Issues was a reduction in net sales of
$31,009,000, $30,865,000, and $26,456,000; a decrease in cost of sales of
$159,418,000, $151,501,000, and $142,957,000; and an increase in selling,
general, and administrative expenses of $128,409,000, $120,636,000, and
$116,501,000 in the years ended December 31, 2000, 1999, and 1998, respectively.
2. ACQUISITIONS
Acquisitions have been accounted for under the purchase method of accounting.
Goodwill, representing the excess of the purchase price over the fair value of
the net assets acquired, totaled approximately $23,226,000, $108,300,000 and
$287,799,000 for the 2000, 1999 and 1998 acquisitions, respectively. All
acquired businesses are included in the Company's consolidated statements of
income from the dates of acquisition.
On July 1, 1998, the Company acquired EIS, Inc. and subsidiaries ("EIS"), a
distributor of electrical/electronic materials for a combination of cash and
stock valued at approximately $180,000,000, which includes certain non-compete
agreements. On December 1, 1998, the Company acquired the remaining outstanding
shares of UAP Inc., a Montreal, Canada-based automotive parts distributor, for
cash totaling approximately $231,000,000.
3. CREDIT FACILITIES
Amounts outstanding under the Company's credit facilities consist of the
following:
<TABLE>
<CAPTION>
December 31
In Thousands 2000 1999
- --------------------------------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR DENOMINATED BORROWINGS:
Unsecured revolving line of credit,
$200,000,000, Libor plus .55%,
due December 2003 $175,000 $200,000
Unsecured 364 day line of credit,
$200,000,000, Libor plus .55%,
due January 2002 119,000 16,800
Unsecured revolving line of credit,
$100,000,000, Banker's Acceptance
rate, due February 2001 98,249 49,464
Unsecured term notes:
December 27, 1996, Libor plus
.25%, due December 2001 50,000 50,000
October 31, 1997, 5.98% fixed
until October 2001, then the
higher of 5.98% or Libor plus
.25%, due October 2002 50,000 50,000
July 1, 1998, Libor plus .25%,
due July 2005 50,000 50,000
October 1, 1998, Libor plus .25%,
due October 2008 50,000 50,000
December 1, 1998, Libor plus .55%,
due December 2003 231,367 231,367
Other borrowings 43,742 71,858
CANADIAN DOLLAR DENOMINATED
BORROWINGS TRANSLATED INTO
U.S. DOLLARS:
Unsecured revolving lines of credit,
CND$25,000,000, Banker's
Acceptance rate plus .55%,
due October 2002 8,540 --
Unsecured revolving lines of credit,
CND$100,000,000, Banker's
Acceptance rate plus .55%,
due January 2004 6,770 22,144
Line of credit, CND$65,000,000,
secured by accounts receivable,
Banker's Acceptance rate plus .27%,
cancelable on 30 days notice or due
March 2003 39,365 41,544
Other borrowings -- 2,296
- --------------------------------------------------------------------------------------
922,033 835,473
Current portion of long-term debt
and other borrowings 151,452 133,056
- --------------------------------------------------------------------------------------
$770,581 $702,417
======================================================================================
</TABLE>
25
<PAGE> 11
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS, CONTINUED
Under the unsecured revolving line of credit due in February 2001, approximately
$49,000,000 has been classified as long-term as the Company has the current
intent and available lines of credit to refinance these amounts on a long-term
basis.
The principal amount of the Company's borrowings subject to variable rates
totaled approximately $758,463,000 and $674,602,000 at December 31, 2000 and
1999, respectively. The weighted average interest rate on the Company's
outstanding borrowings was approximately 6.70% and 6.28% at December 31, 2000
and 1999, respectively.
The Company enters into interest rate swap agreements to manage interest rate
risk, thereby reducing exposure to future interest rate movements. Under
interest rate swap agreements, the parties agree to exchange, at specific
intervals, the difference between the fixed rate and floating rate interest
amounts calculated by reference to an agreed notional amount. At December 31,
2000, the Company was committed to receive an average variable rate of 6.33% and
pay an average fixed rate of 6.79% on notional amounts of $476,688,000. The
Company's notional amounts of interest rate swaps expire as follows: $6,672,000
in 2001, $50,000,000 in 2002, $320,016,000 in 2003, $50,000,000 in 2005 and
$50,000,000 in 2008. The fair value of the liability for all such interest rate
swap agreements was approximately $9,579,000 at December 31, 2000.
The Company guaranteed borrowings of affiliates totaling approximately
$49,738,000 and $62,400,000 at December 31, 2000 and 1999, respectively.
The $231,367,000 term note contains one restrictive covenant, whereby the
Company must maintain a debt to equity ratio not greater than 50%. Total
interest expense for all borrowings was $63,496,000 in 2000, $41,487,000 in 1999
and $20,096,000 in 1998.
Approximate maturities under the Company's credit facilities are as follows (in
thousands):
<TABLE>
<S> <C>
2001 $151,452
2002 245,685
2003 411,224
2004 7,009
2005 55,185
Subsequent to 2005 51,478
------------------------------------
$922,033
====================================
</TABLE>
4. SHAREHOLDERS' EQUITY
The Company has a Shareholder Protection Rights Agreement which includes the
distribution of rights to common shareholders under certain defined
circumstances. The rights entitle the holder, upon occurrence of certain events,
to purchase additional stock of the Company. The rights will be exercisable only
if a person, group or company acquires 20% or more of the Company's common stock
or commences a tender offer that would result in ownership of 20% or more of the
common stock. The Company is entitled to redeem each right for one cent.
5. LEASED PROPERTIES
The Company leases land, buildings and equipment. Certain land and building
leases have renewal options generally for periods ranging from two to ten years.
Future minimum payments, by year and in the aggregate, under the noncancellable
operating leases with initial or remaining terms of one year or more consisted
of the following at December 31, 2000 (in thousands):
<TABLE>
<S> <C>
2001 $ 87,268
2002 68,583
2003 48,648
2004 34,964
2005 25,000
Subsequent to 2005 84,050
----------------------------------
$348,513
==================================
</TABLE>
Rental expense for operating leases was $98,689,000 in 2000, $100,546,000 in
1999, and $76,834,000 in 1998.
6. STOCK OPTIONS AND RESTRICTED STOCK AWARDS
The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123"),
requires use of option valuation models that were not developed for use in
valuing employee stock options. Under APB 25, no compensation expense is
recognized if the exercise price of the Company's employee stock options equals
the market price of the underlying stock on the date of grant.
In 1999, the Company authorized the grant of options of up to 9,000,000 shares
of common stock. In accordance with stock option plans approved by shareholders,
options are granted to key personnel for the purchase of the Company's stock at
prices not less than the fair market value of the shares on the dates of grant.
Most options may be exercised not earlier than twelve months nor later than ten
years from the date of grant.
Pro forma information regarding net income and earnings per share is required by
SFAS 123 determined as if the Company had accounted for its employee stock
options granted subsequent to December 31, 1994 under the fair value method of
that Statement. The fair value for these options was estimated at the date of
grant using a Black-Scholes option pricing model with the following
weighted-average assumptions for 2000 and 1999, respectively: risk-free interest
rates of 5.9% and 5.5%; dividend yield of 5.0% and 3.5%; volatility factor of
the expected market price of the Company's common stock
26
<PAGE> 12
of .06 and .07, and an expected life of the option of 6 years and 7 years. No
options were granted during 1998.
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows (in thousands except per share amounts):
<TABLE>
<CAPTION>
2000 1999 1998
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pro forma net income $ 384,015 $ 374,801 $ 351,875
Pro forma basic net income
per common share $ 2.19 $ 2.10 $ 1.96
Pro forma diluted net
income per common share $ 2.19 $ 2.09 $ 1.95
</TABLE>
A summary of the Company's stock option activity and related information are as
follows:
<TABLE>
<CAPTION>
2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Shares Exercise Shares Exercise Shares Exercise
(000's) Price (000's) Price (000's) Price
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 5,388 $ 28 3,827 $26 3,588 $29
Granted 2,412 21 2,046 32 -- --
Issued in connection with acquisitions -- -- -- -- 748 7
Exercised (8) 22 (430) 23 (413) 24
Forfeited (279) 27 (55) 33 (96) 35
------ ------ ------
Outstanding at end of year 7,513 $ 26 5,388 $28 3,827 $26
====== ====== ======
Exercisable at end of year 3,760 $ 28 2,715 $27 2,792 $26
====== ====== ======
Weighted-average fair value of options
granted during the year $ 1.36 $ 3.78 $ --
====== ====== ======
Shares available for future grants 6,602 8,735 1,726
====== ====== ======
</TABLE>
The exercise price for options exercised during 2000 was approximately $22.
Exercise prices for options outstanding as of December 31, 2000 ranged from
approximately $13 to $35, except for 748,312 options granted in connection with
the 1998 acquisition of EIS discussed in Note 2 for which the range is
approximately $.54 to $18. The weighted-average remaining contractual life of
those options is approximately 5 years.
On February 25, 1999, the Company entered into restricted stock agreements with
two officers which provide for the award of up to 150,000 and 75,000 shares,
respectively, during the period 1999 through 2003 based on the Company achieving
certain increases in net income per common share and stock price levels. Through
December 31, 2000, the two officers have earned 15,000 and 7,500 shares,
respectively. The Company recognizes compensation expense equal to the fair
market value of the stock on the award date over the remaining vesting period
which expires on February 25, 2009.
7. INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and amounts used for income tax purposes. Significant components of the
Company's deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
In Thousands 2000 1999
- -------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets related to:
Expenses not yet deducted for
tax purposes $ 69,271 $ 51,573
Deferred tax liabilities related to:
Employee and retiree benefits 80,989 69,489
Inventory 37,144 41,980
Property and equipment 28,480 26,156
Other 10,179 16,881
- ----------------------------------------------------------------------------
156,792 154,506
Net deferred tax liability 87,521 102,933
Current portion of deferred
tax liability (included in
income taxes payable) 9,707 15,467
- ----------------------------------------------------------------------------
Non-current deferred tax liability $ 77,814 $ 87,466
============================================================================
</TABLE>
27
<PAGE> 13
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS, CONTINUED
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
In Thousands 2000 1999 1998
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 223,452 $200,188 $184,397
State 44,689 37,910 38,547
Deferred (6,714) 12,347 10,379
- ------------------------------------------------------------------------
$ 261,427 $250,445 $233,323
========================================================================
</TABLE>
The reasons for the difference between total tax expense and the amount computed
by applying the statutory Federal income tax rate to income before income taxes
are as follows:
<TABLE>
<CAPTION>
In Thousands 2000 1999 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate applied to
pre-tax income $226,363 $219,824 $206,191
Plus state income taxes, net
of Federal tax benefit 28,322 24,641 25,056
Other 6,742 5,980 2,076
- ----------------------------------------------------------------------------------------
$261,427 $250,445 $233,323
========================================================================================
</TABLE>
8. EMPLOYEE BENEFIT PLANS
The Company's noncontributory defined benefit pension plan covers substantially
all of its employees. The benefits are based on an average of the employees'
compensation during five of their last ten years of credited service. The
Company's funding policy is to contribute amounts deductible for income tax
purposes. Contributions are intended to provide not only for benefits attributed
for service to date but also for those expected to be earned in the future.
Pension benefits also include amounts related to a supplemental retirement plan.
<TABLE>
<CAPTION>
Pension Benefits Other Postretirement Benefits
In thousands 2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CHANGES IN BENEFIT OBLIGATION
Net benefit obligation at beginning of year $ 574,496 $ 566,868 $ 420 $ 1,427
Service cost 18,859 21,564 88 (118)
Interest cost 41,363 40,332 672 11
Plan participants' contributions -- -- 1,793 2,716
Plan amendments 427 -- 7,134 --
Actuarial (gain) loss (42,865) (35,760) 3,940 (52)
Acquisitions/divestitures -- -- 22 --
Gross benefits paid (19,110) (18,508) (3,532) (3,564)
- -----------------------------------------------------------------------------------------------------------------------------------
Net benefit obligation at end of year $ 573,170 $ 574,496 $ 10,537 $ 420
==================================================================================================================================
CHANGES IN PLAN ASSETS
Fair value of plan assets at beginning of year $ 672,699 $ 647,440 $ -- $ --
Actual return on plan assets 39,189 33,276 -- --
Employer contributions 9,504 10,491 1,739 848
Plan participants' contribution -- -- 1,793 2,716
Gross benefits paid (19,110) (18,508) (3,532) (3,564)
- -----------------------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year $ 702,282 $ 672,699 $ -- $ --
==================================================================================================================================
</TABLE>
The following table sets forth the funded status of the plans and the amount
recognized in the balance sheet at December 31.
<TABLE>
<CAPTION>
Pension Benefits Other Postretirement Benefits
In thousands 2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Funded status at end of year $ 129,112 $ 98,203 $(10,537) $ (420)
Unrecognized net actuarial loss (gain) 57,582 70,530 1,326 (2,614)
Unrecognized prior service cost (income) (11,328) (14,702) 6,568 --
Unrecognized net transition obligation 260 521 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net amount recognized at end of year $ 175,626 $ 154,552 $ (2,643) $(3,034)
==================================================================================================================================
</TABLE>
28
<PAGE> 14
Net periodic pension (income) cost included the following components:
<TABLE>
<CAPTION>
Pension Benefits Other Postretirement Benefits
In thousands 2000 1999 1998 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Service cost $ 18,859 $ 21,564 $ 16,427 $ 88 $(118) $ (76)
Interest cost 41,363 40,332 34,629 672 11 138
Expected return on plan assets (69,154) (64,146) (59,123) -- -- --
Amortization of unrecognized transition obligation 260 260 260 -- -- --
Amortization of prior service (cost) income (2,911) (2,840) (2,865) 588 -- --
Amortization of actuarial loss (gain) 50 499 471 -- (237) (180)
- -----------------------------------------------------------------------------------------------------------------------------------
Net periodic pension (income) cost $(11,533) $ (4,331) $(10,201) $1,348 $(344) $(118)
===================================================================================================================================
</TABLE>
The assumptions used in the accounting for the defined benefit plans and
postretirement plan are as follows:
<TABLE>
<CAPTION>
Pension Benefits Other Postretirement Benefits
In thousands 2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted-average discount rate 7.63% 7.75% 7.63% 7.75%
Rate of increase in future compensation levels 4.15% 4.15% -- --
Expected long-term rate of return on assets 9.85% 10.00% -- --
Health care cost trend on covered charges -- -- 7.5% 8.00%
</TABLE>
The effect of a one percentage point change in the 2000 assumed health care cost
trend is as follows:
<TABLE>
<CAPTION>
In Thousands Decrease Increase
- ---------------------------------------------------------------------------------
<S> <C> <C>
Total service and interest cost components
on net periodic postretirement
health care benefit cost $(1,674) $2,563
Accumulated postretirement benefit
obligation for health care benefits (109) 173
</TABLE>
At December 31, 2000, the Company-sponsored pension plan held approximately
1,558,819 shares of common stock of the Company with a market value of
approximately $40,822,350. Dividend payments received by the plan on Company
stock totaled approximately $986,000 and $901,000 in 2000 and 1999,
respectively. Fees paid during the year for services rendered by
parties-in-interest were based on customary and reasonable rates for such
services.
The Company has a defined contribution plan which covers substantially all of
its domestic employees. The Company's contributions are determined based on 20%
of the first 6% of the covered employee's salary. Total plan expense was
approximately $4,941,000 in 2000, $4,599,000 in 1999, and $4,491,000 in 1998.
9. SEGMENT DATA
The Company is primarily engaged in the distribution of merchandise, principally
automotive and industrial replacement parts, office supplies, and
electrical/electronic materials throughout the United States, Canada and Mexico.
In the automotive segment, the Company distributes replacement parts (other than
body parts) for substantially all makes and models of automobiles, trucks and
buses. In addition, this segment of the business includes the rebuilding of some
automotive parts and the distribution of replacement parts for certain types of
farm equipment, motorcycles, motorboats and small engines.
The Company's industrial segment distributes a wide variety of industrial
bearings, mechanical and fluid power transmission equipment, including hydraulic
and pneumatic products, material handling components, and related parts and
supplies.
The Company's office products segment distributes a wide variety of office
products, computer supplies, office furniture and business electronics.
The Company's electrical/electronic materials segment distributes a wide variety
of electrical/electronic materials, including insulating and conductive
materials for use in electronic and electrical apparatus.
Intersegment sales are not significant. Operating profit for each industry
segment is calculated as net sales less operating expenses excluding general
corporate expenses, interest expense, equity in income from investees, goodwill
amortization and minority interests. Net property, plant and equipment by
country relate directly to the Company's operations in the respective country.
Corporate assets are principally cash, cash equivalents and headquarters'
facilities and equipment.
In connection with a 2000 management reporting change, certain corporate
expenses were reclassified to the Automotive segment for all years presented.
Additionally, for management purposes, net sales by segment excludes the effect
of certain discounts, incentives and freight billed to customers. The line item
"other" represents the net effect of the discounts, incentives and freight
billed to customers which are reported as a component of net sales in the
Company's consolidated statements of income.
29
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>6
<FILENAME>g67483ex21.txt
<DESCRIPTION>SUBSIDIARIES OF THE COMPANY
<TEXT>
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
JURISDICTION OF
NAME % OWNED INCORPORATION
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
BALKAMP 89.6% INDIANA
EIS, INC. 100.0% GEORGIA
L.O.C.O.A. LAMINATING COMPANY OF AMERICA 100.0% CALIFORNIA
SCOTTSDALE TOOL & SUPPLY de MEXICO, S.A. de C.V. 100.0% GUADALAJARA, JALISCO - MX
GENUINE PARTS HOLDINGS, LTD 100.0% ALBERTA, CANADA
GENUINE PARTS COMPANY, LTD 100.0% ALBERTA, CANADA
GPC MEXICO, S.A. de C.V. 100.0% PUEBLA, MEXICO
GPC TRADING CORPORATION 100.0% VIRGIN ISLANDS
JOHNSON INDUSTRIES 100.0% ATLANTA, GA
MOTION INDUSTRIES 100.0% DELAWARE
MOTION INDUSTRIES (CANADA), INC. 100.0% OTTAWA, ONTARIO
S.P. RICHARDS 100.0% GEORGIA
HORIZON USA DATA SUPPLY, INC. 100.0% NEVADA
NORWESTRA HOLDINGS 100.0% ALBERTA, CANADA
MJDH HOLDINGS LTD. 100.0% BRITISH COLUMBIA/CANADA
NORWESTRA SALES (1992), INC. 100.0% BRITISH COLUMBIA/CANADA
UAP INC. 100.0% QUEBEC, CANADA
GARANAT INC. 100.0% FEDERAL, CANADA
UAPRO INC. 100.0% FEDERAL, CANADA
UNITED AUTO PARTS (Eastern) LTD. 100.0% ONTARIO, CANADA
SERVICES FINANCIERS UAP INC. 100.0% QUEBEC, CANADA
AUTOMOTEUR TERREBONNE LTEE 100.0% QUEBEC, CANADA
CENTRE DI CULASSES DU QUEBEC INC. 100.0% QUEBEC, CANADA
REUSINAGE KNIGHT INC. 100.0% FEDERAL, CANADA
MANCO TRUCKING 100.0% ILLINOIS
THE FLOWERS COMPANY 49.0% NORTH CAROLINA
SULTAN PARTS HOUSE 51.0% GEORGIA
C&O AUTO PARTS, INC. 51.0% GEORGIA
McMINN COUNTY AUTOMOTIVE, INC. 51.0% GEORGIA
1ST CHOICE AUTO PARTS, INC. 51.0% GEORGIA
SUMNER AUTO & TRUCK, INC. 51.0% GEORGIA
FIRST SETTLEMENT AUTOMOTIVE, INC. 51.0% GEORGIA
AUTO PARTS OF DAYTONA, INC. 51.0% GEORGIA
LODI AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
LAUDERDALE COUNTY SUPPLY, INC. 51.0% GEORGIA
MARION AUTO SUPPLY, INC. 51.0% GEORGIA
BAD AXE AUTO SUPPLY, INC. 51.0% GEORGIA
RIO VERDE AUTO PARTS, INC. 51.0% GEORGIA
AUTO PARTS OF JUPITER, INC. 51.0% GEORGIA
EAST TENN AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
GAINESVILLE AUTO SUPPLY, INC. 51.0% GEORGIA
SOUTHERN INDIANA PARTS, INC. 51.0% GEORGIA
AUTO PARTS OF PALMDALE, INC. 51.0% GEORGIA
FIRST CLASS AUTO PARTS, INC. 70.0% GEORGIA
POLYCO CORPORATION 70.0% GEORGIA
N. V. AUTOMOTIVE SUPPLY, INC. 51.0% GEORGIA
WATSONVILLE AUTO SUPPLY, INC. 51.0% GEORGIA
TERREBONNE PARISH AUTO PARTS, INC. 51.0% GEORGIA
PARTS OF HILLSVILLE, INC. 70.0% GEORGIA
</TABLE>
1
<PAGE> 2
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
JURISDICTION OF
NAME & OWNED INCORPORATION
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
SMITHFIELD AUTO PARTS, INC. 70.0% GEORGIA
PRAIRIE HILLS CORP. 100.0% GEORGIA
UNION COUNTY AUTO PARTS, INC. 51.0% GEORGIA
QUALITY AUTO PARTS OF LOS LUNAS, INCORPORATED 51.0% GEORGIA
THE WILBUR GROUP, INC. 51.0% GEORGIA
WEST VOLUSIA AUTO SUPPLY, INC. 51.0% GEORGIA
AUTO & TRUCK PARTS OF SANTA FE, INC. 51.0% GEORGIA
CEREAL CITY AUTO PARTS, INC. 51.0% GEORGIA
AUTO PARTS OF CHANUTE INCORPORATED 51.0% GEORGIA
SUGAR RIVER AUTO PARTS, INC. 51.0% GEORGIA
FOOTHILLS AUTO SUPPLY, INC. 51.0% GEORGIA
THE PARTS HOUSE, INC. 51.0% GEORGIA
CAL-DAVIS AUTO & TRUCK PARTS, INC. 51.0% GEORGIA
GOLD STREAM AUTO PARTS, INC. 51.0% GEORGIA
CAROLINA PIEDMONT CORPORATION 51.0% GEORGIA
PUEBLO AUTOMOTIVE, INC. 51.0% GEORGIA
CRESWELL AUTO & TRUCK SUPPLY, INC. 51.0% GEORGIA
CLINTON COUNTY AUTO SUPPLY, INC. 51.0% GEORGIA
PARTS CONNECTION, INC. 70.0% GEORGIA
OVERTON COUNTY PARTS CENTER, INC. 51.0% GEORGIA
STANDARD MOTOR PARTS OF REIDSVILLE, INC. 51.0% GEORGIA
GRIMM MANAGEMENT RESOURCES, INC. 51.0% GEORGIA
PARTS OF COLUMBUS, INC. 51.0% GEORGIA
POTAMAC CREEK AUTO SUPPLY, INC 51.0% GEORGIA
CASS CITY AUTO & TRUCK, INC. 70.0% GEORGIA
WHITE COUNTY AUTO SUPPLY, INC. 51.0% GEORGIA
KENT-KANGLEY AUTO PARTS, INC. 51.0% GEORGIA
DALTON AUTO, TRUCK, AND INDUSTRIAL PARTS, INC. 70.0% GEORGIA
CAROLINA LOWCOUNTRY, INC. 70.0% GEORGIA
LOUISVILLE AUTO SUPPLY, INC. 51.0% GEORGIA
SUN VALLEY AUTO PARTS, INC. 51.0% GEORGIA
TRI-MOUNT, INC. 70.0% GEORGIA
SANILAC AUTO AND TRUCK PARTS, INC. 51.0% GEORGIA
MIDLAND AUTO AND TRUCK SUPPLY, INC. 70.0% GEORGIA
ROSEBURG AUTO & TRUCK SUPPLY, INC. 51.0% GEORGIA
WEST MARION COUNTY AUTO PARTS AND ACCESSORIES, INC. 70.0% GEORGIA
BOONE COUNTY AUTOMOTIVE, INC. 51.0% GEORGIA
STANDARD PARTS COMPANY OF SOUTH MONROE 51.0% GEORGIA
BROOKINGS AUTO PARTS, INC, 51.0% GEORGIA
HERTFORD COUNTY AUTO PARTS, INC. 51.0% GEORGIA
SERVICE FIRST AUTO, INC. 51.0% GEORGIA
CASCADE AUTO & TRUCK SUPPLY, INC. 51.0% GEORGIA
PAYETTE RIVER PARTS CORP. 51.0% GEORGIA
PARADISE AUTO PARTS, INC. 51.0% GEORGIA
MIDDLETON AUTO & TRUCK PARTS, INC. 51.0% GEORGIA
RHINELANDER AUTO PARTS, INC. 51.0% GEORGIA
BIG TWIN AUTOMOTIVE, INC. 70.0% GEORGIA
PRO CHOICE AUTOMOTIVE, INC. 51.0% GEORGIA
KOLKON AUTO PARTS, INC. 51.0% GEORGIA
FIRST PARTS OF MOUNT AIRY, INC. 70.0% GEORGIA
</TABLE>
2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>7
<FILENAME>g67483ex23.txt
<DESCRIPTION>CONSENT OF INDEPENDENT AUDITORS
<TEXT>
<PAGE> 1
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Genuine Parts Company of our report dated February 2, 2001, included in the
2000 Annual Report to Shareholders of Genuine Parts Company.
Our audits also included the financial statement schedule of Genuine Parts
Company listed in Item 14(d). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements
of Genuine Parts Company listed below of our report dated February 2, 2001, with
respect to the consolidated financial statements and schedule of Genuine Parts
Company incorporated by reference or included in the Annual Report (Form 10-K)
for the year ended December 31, 2000.
- - Registration Statement No. 33-62512 on Form S-8 pertaining to the 1992
Stock Option and Incentive Plan
- - Registration Statement No. 333-21969 on Form S-8 pertaining to the
Directors' Deferred Compensation Plan
- - Registration Statement No. 333-61611 on Form S-8 pertaining to the
Assumed Stock Options Under the Electrical Insulation Suppliers, Inc.
1993 Incentive Plan
- - Registration Statement No. 333-76639 on Form S-8 pertaining to the
Genuine Parts Company 1999 Long-Term Incentive Plan
/s/ Ernst & Young, LLP
Atlanta, Georgia
March 9, 2001
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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