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EXHIBIT 10.13
GENUINE PARTS COMPANY
ANNUAL INCENTIVE BONUS PLAN
1. PURPOSE
The purpose of the Genuine Parts Company Annual Incentive Bonus Plan
(the "Plan") is to permit Genuine Parts Company (the "Company"), through awards
of annual incentive compensation, to attract and retain qualified management
employees and to motivate such management employees to achieve maximum
profitability and stockholder returns. The Plan is designed and intended to
comply with Section 162(m) of the Internal Revenue Code of 1986, as amended,
and the regulations and interpretations promulgated thereunder (the "Code"),
and all provisions hereof shall be construed in a manner to so comply.
2. ADMINISTRATION
The Plan shall be administered by the Compensation and Stock Option
Committee of the Company's Board of Directors, or any other committee of the
Company's Board of Directors that the Company's Board of Directors determines
shall administer the Plan which consists of at least two outside directors of
the Company and satisfies the requirements of Section 162(m) of the Code (the
"Committee"). The Committee shall have full authority to interpret the Plan,
to establish rules and regulations relating to the operation of the Plan, to
determine the Performance Goals (as defined herein) and the amount of any
Bonuses (as defined herein) and to make all other determinations and take all
other actions necessary or appropriate for the proper administration of the
Plan. The Committee's interpretation of the Plan, and all actions taken within
the scope of its authority, shall be final and binding.
3. ELIGIBILITY
The individuals entitled to receive cash awards under the Plan
("Bonuses") for any fiscal year during the term of the Plan shall be the
executive officers of the Company and any other employee(s) of the Company or
its subsidiaries, if any, which the Committee, as of the Determination Date (as
defined herein), reasonably believes may be deemed to be a "covered
employee(s)" for such fiscal year under Section 162(m) of the Code (the
"Participants").
4. DETERMINATION OF PERFORMANCE GOALS AND SALARY PERCENTAGES
4.1 Each Participant in the Plan shall be eligible to receive
Bonuses in connection with a particular fiscal year during the term of the Plan
if the Company attains certain performance goals ("Performance Goals") set
every year by the Committee.
4.2 Not later than ninety (90) days after the commencement of any
fiscal year and while the outcome of the Company's performance in relationship
to the Performance Goals is still substantially uncertain (the "Determination
Date"), the Committee shall adopt in writing certain Performance Goals based
upon the Company achieving for that fiscal year (i) certain levels of pre-tax
return on the Company's shareholders' equity as of the beginning of the fiscal
year (the "Profit Goals"), (ii) certain levels of aggregate sales (the "Sales
Goals"), and (iii) certain inventory management targets (the "Inventory
Goals").
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4.3 On the Determination Date, the Committee also sets in writing
the amount of Bonuses to be awarded under the Plan for that fiscal year by
setting a percentage of each Participant's salary that will be awarded to a
Participant if the Company achieves a particular Performance Goal or group of
Performance Goals. No Bonuses will be paid under the Plan unless the Company's
actual pre-tax return on the Company's shareholders' equity as of the beginning
of the fiscal year equals or exceeds a minimum Profit Goal set by the
Committee.
4.4 The Committee may for certain individual Participants, in its
sole discretion, set Performance Goals based upon a division or divisions of
the Company achieving Profit, Sales and Inventory Goals set by the Committee.
5. CALCULATION OF BONUSES; CERTIFICATION
As soon as reasonably practicable after the close of each fiscal year
in which any Participant is participating in the Plan, the Committee shall
determine with respect to each Participant (i) whether and the extent to which
the Performance Goals for such fiscal year have been met, and (ii) the amount
of any resulting Bonuses to be paid under the Plan. The Committee shall then
certify in writing (i) the amounts of such Bonuses and (ii) that the relevant
Performance Goals and other requirements of the Plan relating to such Bonuses
were satisfied.
6. LIMITATIONS WITH RESPECT TO BONUSES
6.1 No Participant shall have any right to receive payment of any
Bonus unless the Participant remains in the employ of the Company or its
subsidiaries through the end of the fiscal year to which such Bonus relates;
provided, however, that the Committee may, in its sole discretion, pay all or
part of a Bonus to any Participant whose employment with the Company or its
subsidiaries is terminated at any time prior to the end of the fiscal year to
which such Bonus relates by reason of death or disability. Any such
determination of the Committee shall be final and conclusive.
6.2 The Committee may, in its sole discretion, reduce the amount
of any Bonus otherwise payable under the Plan.
6.3 In no event shall an individual Participant receive Bonuses
under the Plan in connection with any one fiscal year which in the aggregate
are in excess of $1,000,000.
7. PAYMENT OF BONUSES
Each Participant shall receive a Bonus hereunder promptly after the
Committee has certified in writing under Section 5 that the relevant
Performance Goals and other requirements of the Plan were satisfied in
connection with such Bonus.
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8. AMENDMENTS
The Committee may amend this Plan at any time, provided that no such
amendment shall be effective which (i) alters the types of Performance Goals
specified in Section 4.2, or (ii) otherwise causes the loss of any tax
deduction to the Company under Section 162(m) of the Code, unless such
amendment is submitted to the shareholders of the Company.
9. TERM; TERMINATION
9.1 Subject to Sections 9.2 and 11, the Plan shall be effective
for the five year period beginning on January 1, 1995 and ending on December
31, 1999.
9.2 The Board of Directors of the Company may terminate this Plan
at any time.
10. MISCELLANEOUS PROVISIONS
10.1 The Company shall have the right to deduct at the time of
payment of any Bonus any amounts required by law to be withheld for the payment
of taxes or otherwise.
10.2 Except where federal law is applicable, the provisions of the
Plan shall be governed by and construed in accordance with the laws of the
State of Georgia.
10.3 If any provision of this Plan is found to be illegal or
invalid or would cause any Bonus not to constitute performance-based
compensation under Section 162(m) of the Code, the Committee shall have
discretion to sever that provision from this Plan and, thereupon, such
provision shall not be deemed to be a part of this Plan.
10.4 Nothing in the Plan shall confer upon a Participant the right
to continue in the employ of the Company or any of its subsidiaries or shall
limit in any way the right of the Company and/or its subsidiaries to terminate
such Participant's employment.
10.5 No Participant shall have any claim to be granted a Bonus
under the Plan, and there is no obligation for uniformity of treatment for
Participants.
10.6 The Plan shall be unfunded. The Company shall not be required
to establish any separate or special fund or to make any other segregation of
assets to assure the payment of any Bonus under the Plan.
11. EFFECTIVE DATE
If approved by the shareholders of the Company at the Company's 1995
Annual Meeting of Shareholders, the Plan shall be deemed effective as of
January 1, 1995. If this Plan is not approved by the shareholders of the
Company at the 1995 Annual Meeting of Shareholders, this Plan shall terminate
and no Bonuses shall be paid hereunder.
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