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o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o | Soliciting Material Pursuant to §240.14a-12 |
x | No fee required. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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(1) To elect three Class I directors for a three-year term ending at the 2008 Annual Meeting of Shareholders; | |
(2) To ratify the selection of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending December 31, 2005; | |
(3) To act upon such other matters as may properly come before the meeting or any reconvened meeting following any adjournment thereof. |
By Order of the Board of Directors, | |
CAROL B. YANCEY | |
Vice President — Finance and Corporate Secretary |
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• | designate a substitute nominee, in which case the persons designated as proxies will cast votes for the election of such substitute nominee; | |
• | allow the vacancy to remain open until a suitable candidate is located and nominated; or | |
• | adopt a resolution to decrease the authorized number of directors. |
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Year First | ||||||||||
Name | Age | Position with the Company | Elected Director | |||||||
Thomas C. Gallagher | 57 | Chairman of the Board, President and Chief Executive Officer | 1990 | |||||||
John D. Johns | 53 | Director | 2002 | |||||||
Lawrence G. Steiner | 66 | Director | 1972 |
Year First | ||||||||||
Name | Age | Position with the Company | Elected Director | |||||||
Dr. Mary B. Bullock | 60 | Director | 2002 | |||||||
Richard W. Courts, II | 69 | Director | 1998 | |||||||
Larry L. Prince | 66 | Chairman of the Executive Committee | 1978 | |||||||
James B. Williams | 71 | Director | 1980 |
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Year First | ||||||||||
Name | Age | Position with the Company | Elected Director | |||||||
Wendy B. Needham | 52 | Director | 2003 | |||||||
Jean Douville | 61 | Director | 1992 | |||||||
Michael M.E. Johns, M.D. | 63 | Director | 2000 | |||||||
J. Hicks Lanier | 64 | Director | 1995 |
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The Board of Directors shall obtain shareholder approval prior to adopting any shareholder rights plan; provided, however, that the Board may act on its own to adopt a shareholder rights plan if a majority of the independent Directors of the Board, exercising their fiduciary duties under Georgia law, determine that such submission to shareholders would not be in the best interests of shareholders under the circumstances. |
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Executive Committee. The Executive Committee is authorized, to the extent permitted by law, to act on behalf of the Board of Directors on all matters that may arise between regular meetings of the Board upon which the Board of Directors would be authorized to act. The current members of the Executive Committee are Larry L. Prince (Chairman), Richard W. Courts, II, Thomas C. Gallagher and James B. Williams. During 2004, this committee held five meetings. | |
Audit Committee. The Audit Committee’s main role is to assist the Board of Directors with oversight of (1) the integrity of the Company’s financial statements, (2) the Company’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence and (4) the performance of the Company’s internal audit function and independent auditors. As part of its duties, the Audit Committee assists in the oversight of (a) management’s assessment of, and reporting on, the effectiveness of internal control over financial reporting, (b) the independent auditor’s integrated audit, which includes expressing an opinion on the conformity of the Company’s audited financial statements with United States generally accepted accounting principles and (c) the independent auditor’s audit of the Company’s internal control over financial reporting, which includes expressing an opinion on management’s assessment of the effectiveness of the internal control over financial reporting and on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee oversees the Company’s accounting and financial reporting process and has the authority and responsibility for the appointment, retention and oversight of the Company’s independent auditors, including pre-approval of all audit and non-audit services to be performed by the independent auditors. The Audit Committee annually reviews and approves the firm to be engaged as independent auditors for the Company for the next fiscal year, reviews with the independent auditors the plan and results of the audit engagement, reviews the scope and results of the Company’s procedures for internal auditing and monitors the design and maintenance of the Company’s internal accounting controls. The Audit Committee Report appears on page 22 of this proxy statement. A current copy of the written charter of the Audit Committee is available on the Company’s website atwww.genpt.com. | |
The current members of the Audit Committee are James B. Williams (Chairman), Michael M.E. Johns, M.D., Wendy B. Needham, Mary B. Bullock and Lawrence G. Steiner. All members of the Audit Committee are independent of the Company and management, as defined in Sections 303.01(B)(2)(a) and (3) and 303A.02 of the New York Stock Exchange listing standards. The Board has determined that all members of the Audit Committee meet the financial literacy requirements of the NYSE corporate governance listing standards. During 2004, the Audit Committee held five meetings. | |
The Board of Directors has determined that both James B. Williams and Wendy B. Needham, members of the Audit Committee, meet the requirements adopted by the SEC for qualification as an “audit committee financial expert.” Mr. Williams served as Chairman and Chief Executive Officer of Suntrust Banks, Inc. from 1991 to 1998 and in such capacity has experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions and other relevant experience. Ms. Needham was formerly Managing Director, Global Automotive Research for Credit Suisse First Boston from August 2000 to June 2003. |
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Prior to that, Ms. Needham was a Principal, Automotive Research for Donaldson, Lufkin & Jenrette for six years. In both of these positions, Ms. Needham actively reviewed financial statements and prepared various financial analyses and evaluations of such financial statements and related business operations. | |
James B. Williams also serves on the audit committees of three other public companies: Rollins, Inc. and two of its related companies, RPC, Inc. and Marine Products Corporation. In compliance with the NYSE listing requirements, the Board has determined that such simultaneous service does not impair Mr. Williams’s ability to effectively serve on the Company’s Audit Committee. | |
Compensation, Nominating and Governance Committee. The Compensation, Nominating and Governance Committee is authorized to review, recommend and approve the compensation of executive officers and other key employees of the Company, to administer the Company’s equity incentive plans, including the 1992 Stock Option and Incentive Plan, the 1999 Long-Term Incentive Plan and the Directors’ Deferred Compensation Plan, to establish and administer the 2004 Annual Incentive Bonus Plan (and any successor plan) applicable to the executive officers of the Company and to implement, administer and amend certain other benefit plans of the Company. This Committee also evaluates potential nominees for election to the Board and recommends candidates for consideration by the Board and shareholders. A description of the Committee’s policy regarding director candidates nominated by shareholders appears in “Director Nominating Process” above. In addition, the Committee is responsible for developing and recommending to the Board a set of corporate governance principles, as well as periodically reevaluating those corporate governance principles. The current members of the Compensation, Nominating and Governance Committee are J. Hicks Lanier (Chairman), John D. Johns, Richard W. Courts, II and James B. Williams. All members of the Compensation, Nominating and Governance Committee are independent of the Company and management, as defined in Sections 303.01(B)(2)(a) and (3) and 303A.02 of the NYSE listing standards. During 2004, the Compensation, Nominating and Governance Committee held five meetings. A current copy of the written charter of the Compensation, Nominating and Governance Committee is available on the Company’s website atwww.genpt.com. |
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Shares | ||||||||||
Beneficially | Percent | |||||||||
Title of Class | Name and Address of Beneficial Owner | Owned | of Class | |||||||
Common Stock, $1.00 par value | Dodge & Cox One Sansome St., 35th Floor San Francisco, California 94104 | 21,119,638 | (1) | 12.1% |
(1) | This information is based upon information included in a Schedule 13G/ A filed by Dodge & Cox on February 10, 2005. Dodge & Cox is a registered investment adviser. The reported shares are beneficially owned by clients of Dodge & Cox, which clients may include registered investment companies and/or employee benefit plans, pension funds, endowment funds or other institutional clients. |
Shares of Common | Percentage of | |||||||
Stock | Common Stock | |||||||
Name | Beneficially Owned(1) | Outstanding | ||||||
Mary B. Bullock | 1,703 | (2) | * | |||||
R. Bruce Clayton | 3,123,697 | (3) | 1.8 | % | ||||
Richard W. Courts, II | 398,139 | (4) | * | |||||
Jean Douville | 23,224 | (5) | * | |||||
Thomas C. Gallagher | 636,281 | (6) | * | |||||
John D. Johns | 6,056 | (7) | * | |||||
Michael M.E. Johns, M.D. | 11,242 | (8) | * | |||||
J. Hicks Lanier | 45,381 | (9) | * | |||||
Wendy B. Needham | 2,500 | (10) | * | |||||
Jerry W. Nix | 3,228,489 | (11) | 1.8 | % | ||||
Larry L. Prince | 873,921 | (12) | * | |||||
Lawrence G. Steiner | 14,220 | (13) | * | |||||
Robert J. Susor | 1,185,109 | (14) | * | |||||
Edward J. Van Stedum | 74,142 | (15) | * | |||||
James B. Williams | 49,101 | (16) | * | |||||
Directors, Nominees and Executive Officers as a Group (15 persons) | 5,308,084 | (17) | 3.0 | % |
* | Less than 1%. |
(1) | Information relating to the beneficial ownership of Common Stock by directors, nominees for director and executive officers is based upon information furnished by each such individual using “beneficial ownership” concepts set forth in rules promulgated by the SEC under Section 13(d) of the Securities |
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Exchange Act of 1934. Except as indicated in other footnotes to this table, directors, nominees and executive officers possessed sole voting and investment power with respect to all shares set forth by their names. The table includes, in some instances, shares in which members of a director’s, nominee’s or executive officer’s immediate family have a beneficial interest and as to which such shares the director, nominee or executive officer disclaims beneficial ownership. | ||
(2) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement and (ii) 203 shares of Common Stock equivalents held in Ms. Bullock’s stock account under the Directors’ Deferred Compensation Plan. | |
(3) | Includes 13,333 shares subject to stock options exercisable currently or within 60 days after February 21, 2005. In addition, Mr. Clayton is one of four trustees for 2,016,932 shares held in trust for Company employees under the Company Pension Plan and is also one of four trustees for 1,088,532 shares held in a benefit fund for Company employees. Mr. Clayton disclaims beneficial ownership to all such shares held in trust. Does not include 1,200 restricted stock units which each represent a right to receive one share of Common Stock on December 31, 2008, subject to earlier settlement in certain events. | |
(4) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement, (ii) 3,000 shares subject to stock options exercisable currently or within 60 days after February 21, 2005, (iii) 225 shares owned by Mr. Courts’ wife, as to which shares Mr. Courts disclaims beneficial ownership and (iv) 5,999 shares of Common Stock equivalents held in Mr. Court’s stock account under the Directors’ Deferred Compensation Plan. Also includes 1,350 shares held by a trust for which Mr. Courts is a trustee, 110,000 shares held by a charitable foundation of which Mr. Courts is the President and 276,065 shares held by certain charitable foundations for which Mr. Courts is a trustee and thereby has shared voting and investment power. Mr. Courts disclaims beneficial ownership as to the shares held by such trusts and foundations. | |
(5) | Includes (i) 18,690 shares subject to stock options exercisable currently or within 60 days after February 21, 2005 and (ii) 2,284 shares of Common Stock equivalents held in Mr. Douville’s stock account under the Directors’ Deferred Compensation Plan. | |
(6) | Includes 437,672 shares subject to stock options exercisable currently or within 60 days after February 21, 2005 and 946 shares owned jointly by Mr. Gallagher and his wife. Does not include 9,100 restricted stock units which each represent a right to receive one share of Common Stock on December 31, 2008, subject to earlier settlement in certain events. | |
(7) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement, (ii) 2,053 shares owned by Mr. Johns’ wife, as to which such shares Mr. Johns disclaims beneficial ownership and (iii) 2,503 shares of common stock equivalents held in Mr. Johns’ stock account under the Directors’ Deferred Compensation Plan. | |
(8) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement, (ii) 3,000 shares subject to stock options exercisable currently or within 60 days after February 21, 2005, (iii) 5,939 shares of Common Stock equivalents held in Dr. Johns’ stock account under the Directors’ Deferred Compensation Plan and (iv) 803 shares owned jointly by Dr. Johns and his wife. | |
(9) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement, (ii) 3,000 shares subject to stock options exercisable currently or within 60 days after February 21, 2005, (iii) 2,400 shares held by a trust for the benefit of Mr. Lanier as to which Mr. Lanier has sole voting power and has the ability to veto investment decisions made by the trustee and (iv) 9,900 shares held in four trusts for the benefit of Mr. Lanier’s siblings for which Mr. Lanier has sole voting power and has the ability to veto investment decisions made by the trustees. Mr. Lanier disclaims beneficial ownership as to these 9,900 shares. Also includes 2,250 shares |
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owned by Oxford Industries Foundation, as to which Mr. Lanier has shared voting and investment power and as to which shares Mr. Lanier disclaims beneficial ownership. Also includes 24,831 shares held by a charitable foundation for which Mr. Lanier is one of six trustees and thereby has shared voting and investment power for such shares and as to which shares Mr. Lanier disclaims beneficial ownership. |
(10) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement and (ii) 1,000 shares held jointly by Ms. Needham and her husband. |
(11) | Includes 80,473 shares subject to stock options exercisable currently or within 60 days after February 21, 2005. Mr. Nix is one of four trustees for 1,088,532 shares held in a benefit fund for Company employees and one of four trustees for 2,016,932 shares held in trust for Company employees under the Company’s Pension Plan. Mr. Nix disclaims beneficial ownership as to all such shares held in both trusts. Does not include 3,100 restricted stock units which each represent a right to receive one share of Common Stock on December 31, 2008, subject to earlier settlement in certain events. |
(12) | Includes (i) 35,000 restricted stock units which each represent a right to receive one share of Common Stock on December 31, 2008, subject to earlier settlement in certain events, including a termination of service by reason of retirement, (ii) 374,534 shares subject to stock options exercisable currently or within 60 days after February 21, 2005 and (iii) 171,125 shares held by a charitable foundation for which Mr. Prince is a trustee and thereby has shared voting and investment power for such shares. Mr. Prince disclaims beneficial ownership as to such shares held in trust. |
(13) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement, (ii) 3,000 shares subject to stock options exercisable currently or within 60 days after February 21, 2005, (iii) 1,313 shares owned by Mr. Steiner’s wife as to which such shares Mr. Steiner disclaims beneficial ownership and (iv) 2,407 shares held in trust for the benefit of Mr. Steiner, for which Mr. Steiner has sole voting and investment power. |
(14) | Includes 63,806 shares subject to stock options exercisable currently or within 60 days after February 21, 2005 and 688 shares owned jointly by Mr. Susor and his wife. Mr. Susor is one of four trustees for 1,088,532 shares held in a benefit fund for Company employees. Mr. Susor disclaims beneficial ownership as to all such shares held in trust. Does not include 3,100 restricted stock units which each represent a right to receive one share of Common Stock on December 31, 2008, subject to earlier settlement in certain events. |
(15) | Includes 68,720 shares subject to stock options exercisable currently or within 60 days after February 21, 2005. |
(16) | Includes (i) 1,500 restricted stock units which each represent a right to receive one share of Common Stock on August 16, 2009, subject to earlier settlement in certain events, including a termination of service as a director by reason of retirement, (ii) 3,000 shares subject to stock options exercisable currently or within 60 days after February 21, 2005 and (iii) 14,602 shares of Common Stock equivalents held in Mr. Williams’ stock account under the Directors’ Deferred Compensation Plan. |
(17) | Includes 1,119,228 shares or rights issuable to certain executive officers and directors upon the exercise of options or RSUs that are exercisable currently or within 60 days after February 21, 2005; 1,088,532 shares held in a benefit fund for Company employees; 2,016,932 shares held in trust for the Company’s employees under the Company’s Pension Plan; and 31,530 shares held as Common Stock equivalents in directors’ stock accounts under the Directors’ Deferred Compensation Plan. The share amounts for Mr. Courts and Mr. Prince each include 171,125 shares held by the John Bulow Campbell Foundation of which each of the foregoing individuals is a trustee; such shares have been included only once in calculating this figure. The share amounts for Messrs. Susor, Clayton and Nix each include the 1,088,532 shares mentioned above as held in a benefit fund for Company employees of which each of the foregoing individuals is a trustee; such shares have been included only once in calculating this figure. The share amounts for Messrs. Clayton and Nix each include the 2,016,932 shares mentioned above as |
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held in trust for Company employees under the Company’s Pension Plan of which each of the foregoing individuals is a trustee; such shares have been included only once in calculating this figure. |
�� | |||||||||||||||||||||||||||||
Long Term | |||||||||||||||||||||||||||||
Compensation Awards | |||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||
Restricted | Securities | All Other | |||||||||||||||||||||||||||
Other Annual | Stock | Underlying | Compensation | ||||||||||||||||||||||||||
Name and Principal Position | Year | Salary($) | Bonus($) | Compensation($) | Awards($)(1) | Options/SARs(#) | ($)(2) | ||||||||||||||||||||||
Larry L. Prince(3) | 2004 | 775,000 | 1,302,000 | 22,784 | 1,280,300 | — | 2,600 | ||||||||||||||||||||||
Chairman of the | 2003 | 750,000 | 625,845 | 24,798 | — | — | 2,400 | ||||||||||||||||||||||
Board | 2002 | 720,000 | 819,866 | 18,137 | — | 200,000 | 2,200 | ||||||||||||||||||||||
Thomas C. Gallagher(3) | 2004 | 597,500 | 1,049,400 | 20,582 | 332,878 | 69,000 | 2,600 | ||||||||||||||||||||||
President, Chief | 2003 | 542,000 | 427,924 | 13,139 | — | — | 2,400 | ||||||||||||||||||||||
Executive Officer, | 2002 | 520,000 | 560,242 | 33,388 | — | 150,000 | 2,200 | ||||||||||||||||||||||
Chief Operating Officer and Director | |||||||||||||||||||||||||||||
Jerry W. Nix | 2004 | 320,000 | 330,800 | — | 113,398 | 24,000 | 2,600 | ||||||||||||||||||||||
Executive Vice | 2003 | 275,000 | 162,928 | — | — | — | 2,400 | ||||||||||||||||||||||
President — | 2002 | 260,000 | 210,222 | — | — | 45,000 | 2,200 | ||||||||||||||||||||||
Finance and Chief | |||||||||||||||||||||||||||||
Financial Officer | |||||||||||||||||||||||||||||
Robert J. Susor | 2004 | 320,000 | 297,200 | — | 113,398 | 24,000 | 2,600 | ||||||||||||||||||||||
Executive Vice | 2003 | 292,500 | 127,095 | — | — | — | 2,400 | ||||||||||||||||||||||
President | 2002 | 260,000 | 136,644 | — | — | 35,000 | 2,200 | ||||||||||||||||||||||
Edward J. Van Stedum(4) | 2004 | 248,000 | 246,800 | — | 51,212 | 10,800 | 2,600 | ||||||||||||||||||||||
Senior Vice | 2003 | 240,000 | 118,622 | — | — | — | 2,400 | ||||||||||||||||||||||
President — | 2002 | 230,000 | 155,125 | — | — | 30,000 | 2,200 | ||||||||||||||||||||||
Human Resources | |||||||||||||||||||||||||||||
R. Bruce Clayton(4) | 2004 | 241,500 | 124,800 | — | 43,896 | 9,000 | 2,600 | ||||||||||||||||||||||
Senior Vice | 2003 | 230,000 | 59,054 | — | — | — | 2,400 | ||||||||||||||||||||||
President — | 2002 | 220,000 | 77,080 | — | — | 20,000 | 2,200 | ||||||||||||||||||||||
Human Resources |
(1) | Represents restricted stock units that each represent a contingent right to receive one share of Company common stock in the future. The restricted stock units were earned on December 31, 2004 (provided certain pre-tax targets were achieved by the Company for fiscal year 2004) and will vest and be settled in shares of common stock on December 31, 2008 if the executive is still employed by the Company on such date, subject to earlier settlement in the event of (i) the executive’s retirement from the Company after December 31, 2004, (ii) the executive’s employment with the Company is terminated due to his death or disability or (iii) a change in control of the Company. Any dividends paid on the Company’s common stock will be converted into additional restricted stock units. Based on the closing price of the Company’s |
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common stock on December 31, 2004 ($44.06), the aggregate number and value of all restricted stock units held by the Named Executive Officers as of such date were as follows: Mr. Prince: 35,000 RSUs valued at $1,542,100; Mr. Gallagher: 9,100 RSUs valued at $400,946; Mr. Nix: 3,100 RSUs valued at $136,586; Mr. Susor: 3,100 RSUs valued at $136,586; Mr. Van Stedum 1,400 RSUs valued at $61,684; Mr. Clayton 1,200 RSUs valued at $52,872. In addition, as of December 31, 2004, Mr. Prince held 15,000 shares of restricted stock valued at $660,900 and Mr. Gallagher held 7,500 shares of restricted stock valued at $330,450. | |
(2) | For 2004, 2003 and 2002, amounts of “All Other Compensation” reflect Company matching contributions pursuant to the Genuine Partnership Plan (a qualified salary deferral plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”)). |
(3) | Mr. Gallagher was elected by the Board of Directors to succeed Mr. Prince as the Company’s President and Chief Executive Officer effective as of August 16, 2004, and as Chairman of the Board on February 21, 2005. |
(4) | On November 15, 2004, Mr. Clayton was elected by the Board of Directors to succeed Mr. Van Stedum as the Company’s Senior Vice President — Human Resources. Mr. Van Stedum retired on January 1, 2005. |
Number of | ||||||||||||||||||||
Securities | % of Total | Exercise | ||||||||||||||||||
Underlying | SARs Granted | or Base | Grant Date | |||||||||||||||||
SARs Granted | to Employees | Price | Present | |||||||||||||||||
Name | (#)(1) | in Fiscal Year | ($/Share) | Expiration Date | Value($)(2) | |||||||||||||||
Larry L. Prince | 0 | — | — | — | — | |||||||||||||||
Thomas C. Gallagher | 69,000 | 6 | % | $ | 36.58 | April 19, 2014 | 478,860 | |||||||||||||
Jerry W. Nix | 24,000 | 2 | % | $ | 36.58 | April 19, 2014 | 166,560 | |||||||||||||
Robert J. Susor | 24,000 | 2 | % | $ | 36.58 | April 19, 2014 | 166,560 | |||||||||||||
Edward J. Van Stedum | 10,800 | 1 | % | $ | 36.58 | April 19, 2014 | 74,952 | |||||||||||||
R. Bruce Clayton | 9,000 | 1 | % | $ | 36.58 | April 19, 2014 | 62,460 |
(1) | Each SAR represents the right to receive from the Company upon exercise an amount, payable in shares of common stock, equal to the excess, if any, of the fair market value of one share of common stock on the date of exercise over the base value per share. The SARs were granted with a base value equal to the fair market value of the Company’s common stock on the date of grant. The SARs vest in equal annual installments on each of the first three anniversaries of the grant date, subject to accelerated vesting upon a termination of employment due to death, disability or retirement more than one year after the date of grant of the SAR, or upon a change in control of the Company. |
(2) | Based on the Black-Scholes option pricing model for use in valuing executive stock options. The Company does not advocate or necessarily agree that the Black-Scholes model can properly determine the value of an option or SAR. The actual value, if any, a Named Executive Officer may realize will depend on the excess of the stock price over the base value on the date the SAR is exercised, so that there is no assurance the value realized by a Named Executive Officer will be at or near the value estimated by the Black-Scholes model. The value calculations for the SARs listed above are based on the following assumptions: interest rate (based on the ask yield to maturity on a U.S. Treasury strip with a maturity equal to the term of the relevant SAR) of 4.0% for ten year SARs; expected dividend yield over the expected life of the SAR of 3.74%; volatility of 22.72% based upon standard deviation of annual returns of the Common Stock over the expected life of the SARs (8 years); turnover of 4.44% based on historical |
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pattern of existing grants; and a date of exercise no sooner than the date first exercisable under the terms of the SAR and no later than the expiration date of the SAR. |
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-The-Money | |||||||||||||||||||||||
Options/SARs | Options/SARs | |||||||||||||||||||||||
Value | at Fiscal Year-End(#) | at Fiscal Year-End($)(2) | ||||||||||||||||||||||
Shares Acquired | Realized | |||||||||||||||||||||||
Name | on Exercise(#) | ($)(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Larry L. Prince | 286,471 | 3,643,331 | 371,452 | 82,077 | 5,505,513 | 980,440 | ||||||||||||||||||
Thomas C. Gallagher | 45,000 | 744,900 | 434,590 | 134,410 | 5,915,772 | 1,296,223 | ||||||||||||||||||
Jerry W. Nix | 11,000 | 166,582 | 77,358 | 61,642 | 1,069,271 | 757,534 | ||||||||||||||||||
Robert J. Susor | 2,200 | 22,414 | 68,191 | 58,309 | 895,234 | 717,471 | ||||||||||||||||||
Edward J. Van Stedum | 6,062 | 98,583 | 65,605 | 44,133 | 756,277 | 629,154 | ||||||||||||||||||
R. Bruce Clayton | 16,000 | 134,479 | 13,333 | 15,667 | 160,263 | 147,457 |
(1) | Value Realized represents the amount equal to the excess of the fair market value of the shares at the time of exercise over the exercise price of the options. |
(2) | Represents the fair market value as of December 31, 2004 ($44.06 per share closing stock price) of the shares underlying options and SARS, less the exercise price of the options and base value of the SARs. |
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Final Average | ||||||||||||||||||||||||||||||
Annual | ||||||||||||||||||||||||||||||
Earnings | 15 | 20 | 25 | 30 | 35 | 40 | 45 | |||||||||||||||||||||||
400,000 | 150,040 | 160,040 | 170,040 | 180,040 | 190,040 | 200,040 | 210,040 | |||||||||||||||||||||||
450,000 | 170,040 | 181,290 | 192,540 | 203,790 | 215,040 | 226,290 | 237,540 | |||||||||||||||||||||||
500,000 | 190,040 | 202,540 | 215,040 | 227,540 | 240,040 | 252,540 | 265,040 | |||||||||||||||||||||||
600,000 | 230,040 | 245,040 | 260,040 | 275,040 | 290,040 | 305,040 | 320,040 | |||||||||||||||||||||||
700,000 | 270,040 | 287,540 | 305,040 | 322,540 | 340,040 | 357,540 | 375,040 | |||||||||||||||||||||||
800,000 | 310,040 | 330,040 | 350,040 | 370,040 | 390,040 | 410,040 | 430,040 | |||||||||||||||||||||||
900,000 | 350,040 | 372,540 | 395,040 | 417,540 | 440,040 | 462,540 | 485,040 | |||||||||||||||||||||||
1,000,000 | 390,040 | 415,040 | 440,040 | 465,040 | 490,040 | 515,040 | 540,040 | |||||||||||||||||||||||
1,100,000 | 430,040 | 457,540 | 485,040 | 512,540 | 540,040 | 567,540 | 595,040 | |||||||||||||||||||||||
1,200,000 | 470,040 | 500,040 | 530,040 | 560,040 | 590,040 | 620,040 | 650,040 | |||||||||||||||||||||||
1,300,000 | 510,040 | 542,540 | 575,040 | 607,540 | 640,040 | 672,540 | 705,040 | |||||||||||||||||||||||
1,400,000 | 550,040 | 585,040 | 620,040 | 655,040 | 690,040 | 725,040 | 760,040 | |||||||||||||||||||||||
1,500,000 | 590,040 | 627,540 | 665,040 | 702,540 | 740,040 | 777,540 | 815,040 | |||||||||||||||||||||||
1,600,000 | 630,040 | 670,040 | 710,040 | 750,040 | 790,040 | 830,040 | 870,040 | |||||||||||||||||||||||
1,700,000 | 670,040 | 712,540 | 755,040 | 797,540 | 840,040 | 882,540 | 925,040 |
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Base Salary |
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Annual Incentive Bonuses |
Long-Term Incentive Compensation — |
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Members of the Compensation, Nominating and | |
Governance Committee in 2004: | |
J. Hicks Lanier (Chairman) | |
Richard W. Courts, II | |
John D. Johns | |
James B. Williams |
(1) If the executive officer is younger than age 62 at the time of termination of his employment, the executive officer shall receive an amount equal to one dollar less than a sum equal to three times his average annual compensation for the five full taxable years ending before the date of the change of control (the “Base Severance Amount”); or | |
(2) If the officer is age 62 or older at the time of termination of his employment, he shall receive an amount computed by dividing the Base Severance Amount by 36 and multiplying the result of that division by the number of whole months between the date of termination of employment and the date the executive officer would reach age 65. |
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Genuine Parts Company, S&P 500 Index & Peer Group Composite Index | ||||||||||||||||||||||||
Shareholder’s Return ($) at Fiscal Year | ||||||||||||||||||||||||
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
Genuine Parts Company | 100.00 | 111.06 | 161.49 | 140.19 | 156.87 | 214.75 | ||||||||||||||||||
S&P 500 | 100.00 | 90.90 | 80.99 | 62.19 | 80.03 | 88.73 | ||||||||||||||||||
Peer Index | 100.00 | 90.92 | 109.33 | 94.50 | 128.38 | 151.29 |
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Industry Segment | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||
Automotive Parts | 49.56 | % | 51.51 | % | 52.27 | % | 52.76 | % | 51.92 | % | ||||||||||
Industrial Parts | 27.89 | % | 27.07 | % | 27.08 | % | 26.56 | % | 27.51 | % | ||||||||||
Office Products | 15.91 | % | 16.72 | % | 16.84 | % | 17.17 | % | 16.90 | % | ||||||||||
Electrical/Electronic Materials | 6.64 | % | 4.70 | % | 3.81 | % | 3.51 | % | 3.67 | % |
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Members of the Audit Committee in 2004 | |
James B. Williams (Chairman) | |
Mary B. Bullock | |
Michael M.E. Johns, M.D. | |
Wendy B. Needham | |
Lawrence G. Steiner |
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Please mark your votes as indicated in this example | x | |||||||||||||||
FOR all nominees listed below (except as marked to the contrary) | WITHHOLD AUTHORITY to vote for all nominees listed below | FOR | AGAINST | ABSTAIN | ||||||||||||
1. | Election of the following three nominees as Class I directors of Genuine Parts Company: | o | o | 2. | Ratification of the selection of Ernst & Young LLP as the Company’s independent auditors for the fiscal year ending December 31, 2005. | o | o | o | ||||||||
IF A VOTE IS NOT SPECIFIED, THE PROXIES WILL VOTE“FOR” PROPOSAL 1. | ||||||||||||||||
Nominees: Class I — (01) Thomas C. Gallagher, (02) John D. Johns and (03) Lawrence G. Steiner | ||||||||||||||||
To withhold authority to vote for any individual nominee(s), write the name(s) of the nominee(s) on the following line: | ||||||||||||||||
PLEASE VOTE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. | ||||||||||||||||
Signature(s) | Date: | , 2005 | ||||||||||||||
IMPORTANT: Please sign this Proxy exactly as your name or names appear above. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. |
DETACH CARD | ||||
Please detach proxy at perforation before mailing. | ||||
YOU MAY VOTE BY TELEPHONE OR THE INTERNET. | ||||
If you are voting by telephone or the Internet, please do not mail your proxy. | ||||
Vote By Telephone CallToll-Free using a Touch-Tone phone 1-800-542-1160 | Vote By Internet Access theWebsite and cast your vote http://www.votefast.com | Vote By Mail Return your proxy in the postage-paid envelope provided. |
Vote 24 hours a day, 7 days a week!
Your telephone or internet vote must be received by 11:59 p.m. eastern daylight time
on April 17, 2005, to be counted in the final tabulation. Your telephone or internet vote authorizes the named proxies to
vote your shares in the same manner as if you had marked, signed, dated and returned your proxy card.
Vote By Telephone
Have your proxy card available when you call the Toll-Free number1-800-542-1160using a Touch-Tone phone. You can follow the simple prompts that will be presented to you to record your vote.
Vote By Internet
Have your proxy card available when you access the websitehttp://www.votefast.com. You can follow the simple prompts that will be presented to you to record your vote.
Vote By Mail
Please mark, sign and date your proxy card and return it in the postage paid envelope provided or return it to: SunTrust Bank, Atlanta, P.O. Box 4625, Atlanta, GA 30302.
To Change Your Vote
Any subsequent vote by any means will change your prior vote. For example, if you voted by telephone, a subsequent internet vote will change your vote. The last vote received before 11:59 p.m. eastern daylight time, April 17, 2005, will be the one counted. You may also revoke your proxy by voting in person at the Annual Meeting.
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PROXY
GENUINE PARTS COMPANY
Annual Meeting of Shareholders to be held April 18, 2005
The undersigned hereby appoints LARRY L. PRINCE and THOMAS C. GALLAGHER, or either of them, with the individual power of substitution, proxies to vote all shares of Common Stock of Genuine Parts Company which the undersigned may be entitled to vote at the Annual Meeting of Shareholders to be held in Atlanta, Georgia on April 18, 2005 and at any reconvened Meeting following any adjournment thereof. Said proxies will vote on the proposals set forth in the Notice of Annual Meeting and Proxy Statement as specified on this card, and are authorized to vote in their discretion as to any other matters that may properly come before the meeting.
(Continued and to be signed on reverse side)