EX-10.24 2004 ANNUAL INCENTIVE BONUS PLAN



 






EXHIBIT 10.24




GENUINE PARTS COMPANY

2004 ANNUAL INCENTIVE BONUS PLAN




ARTICLE 1

ESTABLISHMENT OF PLAN




     1.1 BACKGROUND OF PLAN. Genuine Parts Company hereby establishes, effective as of
January 1, 2004, an annual incentive bonus plan for its executive officers known as the Genuine
Parts Company 2004 Annual Incentive Bonus Plan. The Plan was adopted by the Board of Directors on
February 16, 2004 and approved by the shareholders of the Company on April 19, 2004. It is a
replacement for the former Genuine Parts Company Annual Incentive Bonus Plan, which expired on
December 31, 2003.



     1.2 PURPOSE. The purpose of the Plan is to provide for the payment of annual monetary
awards to each participant equal to a percentage of such participant’s base salary based upon the
achievement by the Company of certain performance goals. The Plan is intended to preserve the
Company’s federal income tax deduction for annual bonus payments under the Plan during the years
2004 to 2008 by meeting the requirements for performance-based compensation under Section 162(m) of
the Code.



ARTICLE 2

DEFINITIONS




     2.1 DEFINITIONS. Certain terms of the Plan have defined meanings set forth in this
Article and which shall govern unless the context in which they are used clearly indicates that
some other meaning is intended.



     Beneficiary. Any person or persons designated by a Participant, in accordance with
procedures established by the Committee, to receive benefits hereunder in the event of the
Participant’s death. If any Participant shall fail to designate a Beneficiary or shall designate a
Beneficiary who shall fail to survive the Participant, the Beneficiary shall be the Participant’s
surviving spouse, or, if none, the Participant’s surviving descendants (who shall take per stirpes)
and if there are no surviving descendants, the Beneficiary shall be the Participant’s estate.



     Board. The Board of Directors of the Company.



     Code. The Internal Revenue Code of 1986, as amended from time to time.



     Committee. The Compensation, Nominating and Governance Committee of the Board.



     Company. Genuine Parts Company, a Georgia corporation, and its corporate successors.


     Disability. Any illness or other physical or mental condition of a Participant that renders
the Participant incapable of performing his customary and usual duties for the Company, or any
medically determinable illness or other physical or mental condition resulting from a bodily
injury, disease or mental disorder which, in the judgment of the Committee, is permanent and
continuous in nature. The Committee may require such medical or other evidence as it deems
necessary to judge the nature and permanency of the Participant’s condition. The effective date of
a Participant’s Disability shall be as determined by the Committee and communicated to the
Participant in writing.




     Incentive Bonus. Has the meaning described in Section 5.1.



 









 





     Participant. An employee of the Company or its Subsidiaries selected by the Committee
to participate in the Plan for any Plan Year.



     Performance Criteria. The performance criteria listed in Section 5.2 from among which
the Committee may set Performance Goals in each Plan Year.



     Performance Goals. The performance goals established each Plan Year by the Committee
from among the Performance Criteria listed in Section 5.2.



     Plan. The Genuine Parts Company 2004 Annual Incentive Bonus Plan as set forth in this
document together with any subsequent amendments hereto.



     Plan Year. The calendar year.



     Retirement. A Participant’s termination of employment with the Company or a Subsidiary
after attaining any normal or early retirement age specified in any pension, profit sharing or
other retirement program sponsored by the Company, or, in the event of the inapplicability thereof
with respect to the person in question, as determined by the Committee in its judgment.



     Subsidiary. Any corporation, limited liability company, partnership or other entity of
which a majority of the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.



     Target Bonus. Has the meaning described in Section 5.3.




ARTICLE 3

ADMINISTRATION




     3.1 COMMITTEE. The Plan shall be administered by the Committee.



     3.2 AUTHORITY OF COMMITTEE. The Committee has the exclusive power, authority and
discretion to:



(a) Designate Participants;




(b) Establish Performance Goals and weightings for difference Performance Goals;




(c) Establish target Incentive Bonuses for Participants;




(d) Determine whether Performance Goals were achieved in a given Plan Year;




(e) Reduce any Incentive Bonus, regardless of the achievement of Performance Goals;



(f) Establish, adopt or revise any rules and regulations as it may deem necessary or advisable to
administer the Plan; and



(g) Make all other decisions and determinations that may be required under the Plan or as the
Committee deems necessary or advisable to administer the Plan; and




(h) Amend the Plan as provided herein.




     3.3. DECISIONS BINDING. The Committee’s interpretation of the Plan and all decisions
and determinations by the Committee with respect to the Plan are final, binding, and conclusive on
all parties.



 









 





ARTICLE 4

ELIGIBILITY




     4.1. GENERAL. Those employees of the Company or a Subsidiary selected to participate
in the Plan by the Committee. Participation in one Plan Year does not guarantee participation in a
following Plan Year. The Committee will notify Participants of their eligibility to participate,
and the terms thereof, in writing.



     4.2. PARTIAL YEAR PARTICIPATION. When employees are chosen for participation after the
beginning of a Plan Year, the Committee may prorate their Incentive Bonus amounts based on the
number of days they participated in the Plan during the Plan Year.



     4.3. DEMOTIONS. If a Participant is demoted during the Plan Year, the Committee will
determine whether Plan participation ends at that time, or is continued, perhaps at a reduced
level. If participation ends, incentives earned during the time of participation will be prorated
for the Plan Year, if the Participant is still an employee at the time Incentive Bonuses are made.



ARTICLE 5

OPERATION OF THE PLAN




     5.1 PLAN STRUCTURE. Each Participant shall be eligible to receive an Incentive Bonus
in connection with a particular Plan Year if the Company (or, for certain Participants, one or more
Subsidiaries or divisions of the Company) meets or exceeds certain Performance Goals set every year
by the Committee.



     5.2 ESTABLISHMENT OF PERFORMANCE GOALS. Not later than ninety (90) days after the
commencement of any Plan Year (or such other date as may be permitted or required by Section 162(m)
of the Code), the Committee will set in writing Performance Goals for such Plan Year based upon one
or more of the following performance criteria:


(a) the achievement by the Company (or one or more Subsidiaries or divisions of the Company) of a
specified target return, or target growth in return, on equity or assets,



(b) the Company’s stock price,



(c) the achievement by the Company (or one or more Subsidiaries or divisions of the Company) of a
specified target, or target growth in, revenues, net income (which may be on a pre-tax or after-tax
basis) or earnings per share,



(d) the achievement of objectively determinable goals with respect to service or product delivery,
service or product quality, sales, inventory management, customer satisfaction, meeting budgets
and/or retention of employees, or



(e) any combination of the criteria set forth in (a) through (d) above.




     5.3. ESTABLISHMENT OF INCENTIVE BONUS TARGETS. At the time the Committee sets the
Performance Goals for a particular Plan Year, it shall also set in writing the percentages of each
Participant’s base salary that will be awarded to the Participant if the established Performance
Goals are achieved (the “Target Bonus”). The basis for the Target Bonus amount will be
competitive practice, as determined by the Committee. The Target Bonus percent will be
communicated in writing to each Participant at the beginning of the performance period.



 









 





     The Committee may, but is not required to, establish the weightings for each Participant for
performance within any category of the Performance Goals. If established, the weightings would be
expressed as a percent of the Target Bonus that can be earned by the Participant from performance
in each category.



     5.4 PERCENT OF TARGET EARNED. At the beginning of each Plan Year, the Committee may,
but is not required to, identify the percents of Target Bonus that will be earned at various
performance levels. For example, the Committee may establish separately for each category of
performance (e.g., net income, earnings per share, return on assets, etc.) a level of “Expected,”
“Threshold,” and “Outstanding” performance, and provide that a percent of Target Bonus will
correspond to each level of performance, such as:



                    Outstanding: 150%

                    Expected: 100%

                    Threshold: 50%

                    Below Threshold: 0%



     5.5 ACHIEVEMENT OF PERFORMANCE GOALS. The determination of whether Performance Goals
have been met shall (i) to the extent applicable, be based on financial results reflected in the
Company’s audited financial statements prepared in accordance with generally accepted accounting
principles and reported upon by the Company’s independent accountants and (ii) be objective, so
that a third party having knowledge of the relevant facts could determine whether such Performance
Goals are met. Notwithstanding the foregoing, the Committee may adjust any Performance Goals
during or after the performance period to mitigate the unbudgeted impact of unusual or
non-recurring gains and losses, accounting changes, acquisitions, divestitures or “extraordinary
items” within the meaning of generally accepted accounting principles and that were not f oreseen
at the time such Performance Goals were established.



     5.6 PAYOUT FORM AND TIMING. Incentive Bonuses will be made as soon as possible after the
audited results for the Company are available for the Plan Year. Notwithstanding the above, the
Committee may, in its discretion, reduce the amount of an Incentive Bonus otherwise payable to one
or more Participants under the Plan.



     5.7. ANNUAL LIMIT. In no event shall any Participant receive bonus payments under the
Plan in connection with any one Plan Year which exceed $2,000,000.



     5.8 DEATH, DISABILITY AND RETIREMENT. In the event of a Participant’s termination of
employment by reason of death, Disability or Retirement, a prorata Incentive Bonus will be made,
based on the number of days in the Plan Year preceding the date of termination. Performance
criteria will be based on full-year performance. Incentive Bonuses in these situations will be
calculated and paid after the end of the Plan Year, the same as for other Participants. Amounts
paid on behalf of a deceased Participant will be paid to the Participant’s Beneficiary.



     5.9 OTHER TERMINATIONS OF EMPLOYMENT. In the event of a termination of employment other
than by reason of death, Disability or Retirement, the Participant will forfeit any right to an
Incentive Bonus for the Plan Year in which the termination of employment occurs. For terminations
after a Plan Year, but before payout from the Plan for such Plan Year, payout will be made as
though the termination had not occurred. Whether military, government or other service or other
leave of absence shall constitute a termination of employment shall be determined in each case by
the Committee at its discretion, and any determination by the Committee shall be final and
conclusive. A termination of
employment shall not occur in a circumstance in which a Participant transfers from the Company to
one of its Subsidiaries, transfers from a Subsidiary to the Company, or transfers from one
Subsidiary to another Subsidiary.



 









 





ARTICLE 6

AMENDMENT, MODIFICATION AND TERMINATION




     6.1. AMENDMENT, MODIFICATION AND TERMINATION . The Committee may, at any time and from
time to time, amend, modify or terminate the Plan; provided, however, that (i) no such amendment
may, without the approval of the shareholders of the Company, change the material terms of the

Performance Goals or Performance Criteria or effect such other change that would cause the loss of
any tax deduction to the Company under Code Section 162(m) absent shareholder approval. The
Committee may condition any other amendment or modification on the approval of shareholders of the
Company if such approval is necessary or deemed advisable with respect to tax, securities or other
applicable laws, policies or regulations.



     6.2 TERMINATION AFTER OR DURING A PLAN YEAR. Termination of the Plan after a Plan Year
but before Incentive Bonuses are made will not reduce Participants’ rights to receive Incentive
Bonuses. Termination or amendment of the Plan during a Plan Year may be retroactive to the
beginning of the Plan Year, at the discretion of the Committee. If any amendment or termination
occurs during the Plan Year, the Committee shall determine when and to what extent awards, if any,
shall be paid for the portion of the Plan Year preceding the amendment or termination.



ARTICLE 7

GENERAL PROVISIONS




     7.1. NO RIGHT TO PARTICIPATE. No officer or employee shall have any right to be
selected to participate in the Plan in any Plan Year.



     7.2. NO RIGHT TO EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company or any Subsidiary to terminate any Participant’s employment at any
time, nor confer upon any Participant any right to continue in the employ of the Company or any
Subsidiary.



     7.3. WITHHOLDING. The Company or any Subsidiary shall have the authority and the
right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required
by law to be withheld with respect to any taxable event arising as a result of the Plan.



     7.4. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for
incentive and deferred compensation. With respect to any payments not yet made to a Participant
pursuant to the Plan, nothing contained in the Plan shall give the Participant any rights that are
greater than those of a general creditor of the Company or any Subsidiary.



     7.5. INDEMNIFICATION. To the extent allowable under applicable law, each member of
the Committee shall be indemnified and held harmless by the Company from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which such person may be a party or in
which he may be involved by reason of any action or failure to act under the Plan and against and
from any and all amounts paid by such person in satisfaction of judgment in such action, suit, or
proceeding against him provided he gives the Company an opportunity, at its own expense, to handle
and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to which
such person may be entitled under the Company’s Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify him or hold him harmless.



     7.6. EXPENSES. The expenses of administering the Plan shall be borne by the Company
and its Subsidiaries.



 










 





     7.7. TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.



     7.8. GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall include the singular
and the singular shall include the plural.



     7.9. GOVERNING LAW. To the extent not governed by federal law, the Plan shall be
construed in accordance with and governed by the laws of the State of Georgia.



     The foregoing is hereby acknowledged as being the Genuine Parts Company 2004 Annual Incentive
Bonus Plan as adopted by the Board on February 16, 2004 and approved by the shareholders of the
Company on April 19, 2004.



	 	 	 
	

	 	GENUINE PARTS COMPANY
	 
	 	 
	


	 	By: