AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 2004
Registration No. 33-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
O'REILLY AUTOMOTIVE, INC.
____________________________________________
(Exact Name of Registrant as Specified in its Charter)
Missouri 44-0618012
__________________ ___________________________
(State of Other Jurisdiction of (I.R.S.
Incorporation or Organization) Employer Identification No.)
233 South Patterson
Springfield, Missouri 65802
__________________________ ___________________________
(Address of Principal (Zip Code)
Executive Offices)
O'Reilly Automotive, Inc. 2003 Employee Stock Option Plan
O'Reilly Automotive, Inc. 2003 Director Stock Option Plan
O'Reilly Automotive, Inc. 1993 Employee Stock Option Plan
O'Reilly Automotive, Inc. Stock Purchase Plan
___________________________________________________________
(Full Title of the Plan)
David E. O'Reilly
President and Chief Executive Officer
O'Reilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802
____________________________________________________________
(Name and Address of Agent for Service)
(417)862-6708
____________________________________________________________
(Telephone Number, Including Area Code,
of Agent for Service)
Copies of All Correspondence to:
Robert H. Wexler, Esq.
Gallop, Johnson & Neuman, L.C.
Interco Corporate Tower
101 South Hanley Road, Suite 1600
St.Louis, Missouri 63105
-------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
Amount to be Proposed maximum offering Proposed maximum Amount of
Title of securities to be registered registered (1)(5) price per share (2) aggregate offering price registration fee
----------------------------------------- ---------------- -------------------------- ------------------------ ----------------
Common Stock $.01 par value per share 6,500,000 $36.95 $240,175,000 $19,430.16
(and associated Preferred Stock Purchase
Rights) (3) (4)
----------------------------------------- -------------- -------------------------- ------------------------ ----------------
(1) Represents maximum number of additional shares available for issuance under
the stock plans covered hereby.
(2) Estimated solely for the purpose of calculating the registration fee. Such
estimate has been calculated in accordance with Rule 457(h) under the
Securities Act of 1933 and is based upon the average of the high and low
prices per share of the Registrant's Common Stock as reported by the
National Association of Securities Dealers Automated Quotation National
Market System on January 9, 2004.
(3) Each share of common stock also represents one common stock purchase right.
Common stock purchase rights cannot trade separately from the underlying
common stock and, therefore, do not carry a separate price or necessitate
an additional fee.
(4) Of the 6,500,000 shares of common stock registered, 4,000,000 shares, with
a proposed maximum aggregate offering price of $147,800,000 shall be
offered pursuant to the 2003 Employee Stock Option Plan, 200,000 shares,
with a proposed maximum aggregate offering price of $7,390,000, shall be
offered pursuant to the 2003 Director Stock Option Plan, 300,000, with a
proposed maximum aggregate offering price of $11,085,000 shall be offered
pursuant to the Stock Purchase Plan and 2,000,000 with a proposed maximum
aggregate offering price of $73,900,000 are issuable upon the vesting and
exercise of options granted under the 1993 Employee Stock Option Plan.
(5) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the
"Act"), this registration statement shall be deemed to cover additional
shares that may be issued to adjust the number of shares issued pursuant to
stock option plans as a result of any future stock split, stock dividend or
other similar adjustment of the outstanding shares of common stock of
O'Reilly Automotive, Inc.
2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Registrant with the Securities and
Exchange Commission are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K, for the year ended December
31, 2002;
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2003, June 30, 2003 and September 30, 2003, and the
Registrant's Current Reports on Form 8-K filed on October 31, 2003,
November 12, 2003 and November 19, 2003;
(c) The description of the Registrant's common stock which is contained in the
Registrant's Registration Statement on Form S-1 (File No. 33-58948),
including any amendment or report filed for the purpose of updating such
description; and
(d) The description of the Registrant's Preferred Stock Purchase Rights which
is contained in the Registrant's Registration Statement on Form 8-A (File
No. 000-21318) filed on June 3, 2002.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment that indicates that all securities offered hereby have
been sold or which deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in the registration statement and to
be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein and filed prior to the
filing hereof shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein modifies
or supersedes such statement, and any statement contained herein or in any other
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained in any other subsequently filed document which also is
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
None.
Item 6. Indemnification of Directors and Officers
Sections 351.355(1) and (2) of The General and Business Corporation Law of
Missouri (the "Act") provides that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, other than an action by or in the right of the corporation, by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorney's fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful, except
that no person shall be indemnified as to any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the corporation unless and only to the extent
that the court in which the action or suit was brought determines upon
application that, despite the adjudication of liability and in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses that the court deems proper.
3
Section 351.355(3) of the Act provides that, except as otherwise provided
in the corporation's articles of incorporation or bylaws, to the extent that a
director, officer, employee or agent of the corporation has been successful in
the defense of any such action, suit or proceeding referred to in subsection (1)
or (2) of any claim, issue or matter therein, he shall be indemnified against
expenses, including attorney's fees, actually and reasonably incurred by him in
connection with such action, suit or proceeding. Section 351.355(7) of the Act
provides that a corporation may provide additional indemnification to any person
indemnifiable under subsection (1) or (2), provided such additional
indemnification is authorized by the corporation's articles of incorporation or
an amendment thereto or by a shareholder-approved bylaw or agreement, and
provided further that no person shall thereby be indemnified against conduct
that was finally adjudged to have been knowingly fraudulent, deliberately
dishonest or willful misconduct.
Article IX of the Registrant's Restated Articles of Incorporation, as
amended (the "Articles of Incorporation") permits the Registrant to enter into
agreements with its directors, officers, employees and agents, providing such
indemnification as deemed appropriate, up to the maximum extent permitted by
law. Article IX of the Restated Articles of Incorporation of the Registrant
provides that the Registrant shall extend to its directors and executive
officers the indemnification specified in subsections (1) and (2) of the Act and
the additional indemnification authorized in subsection (7) of the Act and that
it may extend to other officers, employees and agents such indemnification and
additional indemnification.
In addition, Article XI of the Articles of Incorporation states that no
director of the Registrant shall be personally liable to the Registrant or its
shareholders for monetary damages for breach of fiduciary duty by such director
as a director, but it does not eliminate or limit the liability of a director to
the extent provided by applicable law (i) for any breach of the director's duty
of loyalty to the Registrant or its shareholders, (ii) for acts or omissions not
in subjective good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 351.345 of the Act, or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment or repeal of Article XI will apply to or have any effect on the
liability or alleged liability of any director of the Registrant for or with
respect to any acts or omissions of such director prior to such amendment or
repeal.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
4.1 Restated Articles of Incorporation of the Registrant, as amended, filed
herewith.
4.2 Amended and Restated Bylaws of the Registrant, as amended, filed as Exhibit
3.2 to the Registrant's current report on Form 8-K filed on November 12,
2003, are incorporated herein by reference.
4.3 Rights Agreement, dated as of May 7, 2002, between O'Reilly Automotive,
Inc. and UMB Bank, N.A., as Rights Agent, including the form of Certificate
of Designation, Preferences and Rights as Exhibit A, the form of Rights
Certificates as Exhibit B and the Summary of Rights as Exhibit C, filed as
Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated May 8,
2002, is incorporated herein by this reference.
5.1 Opinion of Gallop, Johnson & Neuman, L.C., filed herewith.
23.1 Consent of Ernst & Young LLP, filed herewith.
23.2 Consent of Gallop, Johnson & Neuman, L.C., included in Exhibit 5.1, filed
herewith.
24 Power of Attorney (included on signature page of the registration
statement).
4
99.1 O'Reilly Automotive, Inc. 2003 Employee Stock Option Plan.
99.2 O'Reilly Automotive, Inc. 2003 Director Stock Option Plan.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
5
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the city of Springfield, state of Missouri, on January 16,
2004.
O'REILLY AUTOMOTIVE, INC.
By:/s/ David E. O'Reilly
------------------------------
David E. O'Reilly
Co-Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of O'Reilly Automotive, Inc.,
hereby severally and individually constitute and appoint David E. O'Reilly, the
true and lawful attorney and agent of each of us to execute in the name, place
and stead of each of us (individually and in any capacity stated below) any and
all amendments to this Registration Statement on Form S-8 and all instruments
necessary or advisable in connection therewith and to file the same with the
Securities and Exchange Commission, said attorney and agent to have the power to
act and to have full power and authority to do and perform in the name and on
behalf of each of the undersigned every act whatsoever necessary or advisable to
be done in the premises as fully and to all intents and purposes as any of the
undersigned might or could do in person, and we hereby ratify and confirm our
signatures as they may be signed by our said attorney and agent to any and all
such amendments and instruments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
---------------------------- ------------------------------------------------- -----------------
/s/ David E. O'Reilly Co-Chairman of the Board, Chief Executive January 16, 2004
---------------------------- Officer and Director (principal executive officer)
David E. O'Reilly
/s/ Lawrence P. O'Reilly Co-Chairman of the Board and Director January 16, 2004
----------------------------
Lawrence P. O'Reilly
/s/ Charles H. O'Reilly, Jr. Vice-Chairman of the Board and Director January 16, 2004
----------------------------
Charles H. O'Reilly, Jr.
/s/ Rosalie O'Reilly Wooten Director January 16, 2004
----------------------------
Rosalie O'Reilly Wooten
/s/ James R. Batten Executive Vice-President of Finance, Chief January 16, 2004
---------------------------- Financial Officer and Treasurer (principal
James R. Batten financial officer)
/s/ Joe C. Greene Director January 16, 2004
----------------------------
Joe C. Green
/s/ Jay D. Burchfield Director January 16, 2004
----------------------------
Jay D. Burchfield
/s/ Paul R. Lederer Director January 16, 2004
----------------------------
Paul R. Lederer
6
/s/ John Murphy Director January 16, 2004
----------------------------
John Murphy
/s/ Ronald Rashkow Director January 16, 2004
----------------------------
Ronald Rashkow
7
FORM S-8
O'REILLY AUTOMOTIVE, INC.
EXHIBIT INDEX
Exhibit
Number Description Page
------- ---------------- ----
4.1 Restated Articles of Incorporation of the Registrant, as amended, filed
herewith............................................................................ 9
4.2 Amended and Restated Bylaws of the Registrant, filed as Exhibit 3.2 to the
Registrant's current report on Form 8-K filed on November 12, 2003, are
incorporated herein by reference.................................................... NA
4.3 Rights Agreement, dated as of May 7, 2002, between O'Reilly Automotive,
Inc. and UMB Bank, N.A., as Rights Agent, including the form of Certificate
of Designation, Preferences and Rights as Exhibit A, the form of Rights
Certificates as Exhibit B and the Summary of Rights as Exhibit C, filed as
Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated May 8,
2002, is incorporated herein by this reference...................................... NA
5.1 Opinion of Gallop, Johnson & Neuman, L.C., filed herewith.......................... 25
23.1 Consent of Ernst & Young LLP, filed herewith........................................ 26
23.2 Consent of Gallop, Johnson & Neuman, L.C., included in Exhibit 5.1, filed
herewith............................................................................. 25
24 Power of Attorney (included on signature page of the registration
statement).......................................................................... 6
99.1 O'Reilly Automotive, Inc. 2003 Employee Stock Option Plan........................... 27
99.2 O'Reilly Automotive, Inc. 2003 Director Stock Option Plan........................... 34
8
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation
RESTATED
ARTICLES OF INCORPORATION
OF
O'REILLY AUTOMOTIVE, INC.
Pursuant to the provisions of the General and Business Corporation Law of
Missouri, we, the undersigned officers of O'Reilly Automotive, Inc., hereby
execute the following Restated Articles of Incorporation of said corporation and
state that the Restated Articles of Incorporation set forth below have been
adopted by action duly taken pursuant to Section 351.106, R.S.Mo. 1986, as
amended (by the vote in favor thereof by a majority of the outstanding shares
entitled to vote). The original Articles of Incorporation of the corporation
were filed in the office of the Missouri Secretary of State on August 15, 1957.
The name under which the corporation was originally organized was Springfield
Supply and Motor Parts, Inc. The incorporators of the corporation and the place
of residence of each at the time of incorporation were George N. Lockridge, 6617
Wenonga Terrace, Kansas City, Missouri; Russell W. Baker, 417 West 59th Terrace,
Kansas City, Missouri; and Daniel McDonald, 5441 Chadwick, Kansas City, Kansas.
These Restated Articles of Incorporation correctly set forth without change the
corresponding provisions of the Articles of Incorporation of the corporation as
heretofore amended, and supersede the original Articles of Incorporation and all
amendments thereto.
ARTICLE I
The name of this corporation is "O'Reilly Automotive, Inc."
ARTICLE II
The address of the corporation's registered office in the State of Missouri
is 233 South Patterson, Box 1156, Springfield, Missouri, 65805 and the name of
its registered agent is C. H. O'Reilly.
ARTICLE III
(a) The aggregate number, class, and par value of shares which the corporation
shall have the authority to issue shall be thirty-five million (35,000,000)
shares, which shall include thirty million (30,000,000) shares of common
stock having a par value of one cent ($.01) per share and five million
(5,000,000) shares of preferred stock having a par value of one cent ($.01)
per share.
(b) Upon the effectiveness of this Amendment to the Articles of Incorporation,
and without any further action on the part of the corporation or its
shareholders, each share of common stock, par value $0.50 per share, then
issued and outstanding shall be changed and reclassified into 120.15353
fully paid and non-assessable shares of common stock, par value $0.01 per
share, and holders of shares of common stock, par value $0.50, shall for
all purposes be deemed holders of the number of shares of common stock, par
value $0.01 per share, into which such shares shall have been changed and
reclassified; provided, that no fractional shares of common stock, par
value 0.01 per share, shall be issued pursuant to such change, and an
amount of cash equal to the value of any fractional interest created
thereby, based upon a valuation of $15.00 per share, shall be paid to a
shareholder in lieu thereof. To reflect the change and reclassification
provided above, each certificate representing shares of common stock, par
value $0.50 per share, theretofore issued and outstanding shall, as soon as
practicable after the effective date of this Amendment, be surrendered to
the corporation, which as soon as practicable thereafter shall issue a new
certificate representing the number of whole shares of common stock, par
value $0.01 per share, equal to 120.15353 times the number of shares
theretofore held.
(c) The voting power of the corporation shall be vested in the holders of the
common stock, who shall be entitled to one vote per share of common stock
on all matters to be voted on by the shareholders, except to the extent
voting rights are determined for holders of preferred stock by the Board of
Directors in accordance with part (e) of this Article III.
9
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
(d) The Board of Directors may cause shares of preferred stock to issued from
time to time, in one or more series and for such consideration (not less
than the par value of such shares to be so issued) as the Board of
Directors may determine from time to time.
(e) The Board of Directors shall determine the relative rights, preferences,
and limitations of each series of preferred stock established pursuant to
part (d) of this Article III, including, but not limited to, the following:
(i) the number of shares constituting that series and its distinctive
designation;
(ii) the dividend rate whether dividends shall be cumulative, and, if so,
from which date or dates and the relative rights of priority, if any,
of the payment of dividends on shares of that series;
(iii)whether that series shall have voting rights in addition to the
voting rights provided by law, and, if so, the terms of such voting
rights;
(iv) whether that series shall have conversion privileges, and, if so, the
terms and conditions of such conversion privileges, including the
designation of the securities into which such series may be converted,
the conversion rate, and provisions for adjustment of the conversion
rate upon the occurrence of such events as the Board of Directors
shall determine;
(v) whether or not the shares of the series shall be redeemable, and, if
so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
(vi) whether the corporation shall establish a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms
and amount of such sinking fund; and
(vii)the rights of the shares of that series in the event of the voluntary
or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment
of shares of that series.
(f) No holder of any share of stock or other security of the corporation,
either now or hereafter authorized or issued, shall have any preferential
or preemptive right to acquire additional shares of stock or any other
security of the corporation other than such, if any, as the Board of
Directors may in its discretion from time to time determine pursuant to the
authority conferred by these Articles of Incorporation of the corporation.
(g) There shall be no right to cumulative voting in the election of directors.
(h) Except as otherwise required by The General and Business Corporation Law of
Missouri, whenever the holders of shares of stock of the corporation shall
be entitled to vote as a class with respect to any matter, the affirmative
vote of a majority of the outstanding shares of such class shall be
required to constitute the act of such class.
ARTICLE IV
The number of directors of the corporation shall be that number that is
fixed by, or in the manner provided in, the Bylaws of the corporation; provided,
however, that the number of directors of the corporation shall not be less than
three. Any changes in the number of directors shall be reported to the Missouri
Secretary of State within thirty (30) calendar days of such change. Directors
need not be shareholders of the corporation. The Board of Directors shall be
divided into three classes, as nearly equal in number as possible, which shall
be designated Class I, Class II and Class III. The term of office the initial
Class I directors shall expire at the annual meeting of shareholders held in
1994; the term of office of the initial Class II directors shall expire at the
annual meeting of shareholders held in 1995; and the term of office of the
initial Class III directors shall expire at the annual meeting of shareholders
held in 1996. At each annual meeting of shareholders held after 1993, the
directors elected to succeed those whose terms then expire shall be elected for
a term of three (3) years expiring at the third succeeding annual meeting
thereafter.
10
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
If the number of directors is changed, any increase or decrease in the number of
directors shall be apportioned among the classes so that the number of directors
in each class remains as nearly equal as possible. As used in these Articles of
Incorporation, the term "entire Board of Directors" means the directors
comprising all three classes into which the Board of Directors has been so
divided. Subject to the rights, if any, of the holders of any class of capital
stock of the corporation other than common stock then outstanding, any vacancies
in the Board of Directors that occur for any reason prior to the expiration of
the term of office of the class in which the vacancy occurs, including vacancies
that occur by reason of an increase in the number of directors, shall be filled
only by the Board of Directors of the corporation, acting by the affirmative
vote of a majority of the remaining directors then in office (even if less than
a quorum).
ARTICLE V
The corporation shall continue in perpetual existence or until dissolved and
liquidated according to law.
ARTICLE VI
The corporation is formed for the following purposes and shall have the
following powers:
(a) to distribute and sell automotive aftermarket parts, products, tools,
supplies, equipment, and accessories (collectively, "Automotive Products")
to all segments of the marketplace, including, without limitation,
mechanics, automobile repair shops, automobile dealers, fleet owners, mass
and general merchandisers, retail and all other consumers of Automotive
Products, and in furtherance thereof, to operate retail stores selling
Automotive Products to the public, and to do all things necessary or
desirable in furtherance of the foregoing activities; and
(b) to do all other things permitted of corporations pursuant to the provisions
of The General and Business Corporation Law of Missouri, as amended from
time to time.
ARTICLE VII
A special meeting of the shareholders may be called only by: (i) the Board
of Directors pursuant to a resolution adopted by the affirmative vote of a
majority of the entire Board of Directors; (ii) the Chief Executive Officer of
the corporation; or (iii) the Chief Operating Officer of the corporation. At
such special meeting of shareholders, only such business shall be conducted, and
only such proposals shall be acted upon, as were specified in the notice
thereof.
ARTICLE VIII
The provisions of Section 351.407 or any other section of The General and
Business Corporation Law of Missouri limiting the voting rights of control
shares of public corporations that are acquired in a control share acquisition
shall not apply to control share acquisitions of shares of the corporation.
ARTICLE IX
(a) The corporation may indemnify any person (other than a party plaintiff
suing on his own behalf or in the right of the corporation) who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative, other than an action by or in the right of
the corporation, by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit, or proceeding if such person
acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect
to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he or she reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his or her conduct was unlawful.
11
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
Indemnification under this part (a) of Article IX shall be mandatory with
respect to any action taken by a person in such person's capacity as a director
of this corporation that would otherwise be indemnifiable under this part (a) at
the discretion of this corporation.
(b) The corporation may indemnify any person (other than a party plaintiff
suing on such person's own behalf or in right of the corporation) who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses, including attorneys' fees, and
amounts paid in settlement actually and reasonably incurred by him or her
in connection with the defense or settlement of the action or suit if such
person acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation; except that
no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his or her duty to the
corporation unless and only to the extent that the court in which the
action or suit was brought determines upon application that, despite the
adjudication of liability and in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper. The indemnification permitted under this
part (b) of Article IX shall be mandatory with respect to any action taken
by a person in such person's capacity as a director of this corporation
that would otherwise be indemnifiable under this part (b) at the discretion
of the corporation.
(c) To the extent that an officer, employee, or agent of the corporation has
been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in parts (a) and (b) of this Article IX, or in
defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the action, suit, or
proceeding.
(d) Subject to any applicable court order, any indemnification of a director
required under part (a) or part (b) of this Article IX shall be made by the
corporation unless a determination is made reasonably and promptly that
indemnification of said director is not proper under the circumstances
because he has not met the applicable standard of conduct set forth in or
established pursuant to this Article IX. Subject to any applicable court
order, any indemnification of an officer, employee, or agent of the
corporation authorized under part (a) or part (b) of this Article IX shall
be made by the corporation only as authorized in a specific case upon a
determination that indemnification is proper in the circumstances because
such person has met the applicable standard of conduct set forth in or
established pursuant to this Article IX. Any such determination with
respect to indemnification of a director, officer, employee, or agent shall
be made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or even if
obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by majority vote of the
shareholders; provided that no such determination shall preclude an action
brought in an appropriate court to challenge such determination.
(e) Expenses incurred by a person who is or was a director of the corporation
in defending a civil or criminal action, suit, or proceeding shall be paid
by the corporation in advance of the final disposition of an action, suit,
or proceeding, and expenses incurred by a person who is or was an officer,
employee, or agent of the corporation in defending a civil or criminal
action, suit, or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding as authorized by
or at the direction of the Board of Directors, in either case upon receipt
of an undertaking by or on behalf of the director, officer, employee, or
agent to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation as authorized in
or pursuant to this Article.
(f) The indemnification provided by this Article IX shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled, whether under any statute, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in an official
capacity and as to action in another capacity while holding such office.
(g) Without limiting the other provisions of this Article IX, the corporation
is authorized from time to time, without further action by the shareholders
of the corporation, to enter into agreements with any director, officer,
employee or agent of the corporation providing such rights of
indemnification as the corporation may deem appropriate, up to the maximum
extent permitted by law. Any agreement entered into by the corporation with
a director may be authorized by the other directors, and such authorization
shall not be invalid on the basis that different of similar agreements may
have been or may thereafter be entered into with other directors.
12
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
(h) Except as may otherwise be permitted by law, no person shall be indemnified
pursuant to this Article IX (including, without limitation, pursuant to any
agreement entered into pursuant to part (g) of this Article IX) from or on
account of such person's conduct which is finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct. The
corporation may (but need not) adopt a more restrictive standard of conduct
with respect to the indemnification of any employee or agent of the
corporation.
(i) The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, or agent of the corporation,
or who is or was otherwise serving on behalf or at the request of the
corporation as a director, officer, employee, member or agent of another
corporation, partnership, joint venture, trust, trade or industry
association, or other enterprise (whether incorporated or unincorporated,
for-profit or not-for-profit), against any claim, liability or expense
asserted against such person and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him against such liability
under the provisions of this Article IX.
(j) For the purposes of this Article IX:
(i) Any director of the corporation who shall serve as a director,
officer, or employee of any other corporation, partnership, joint
venture, trust, or other enterprise of which the corporation, directly
or indirectly, is or was the owner of 20% or more of either the
outstanding equity interests or the outstanding voting stock (or
comparable interests), shall be deemed to be so serving at the request
of the corporation, unless the Board of Directors of the corporation
shall determine otherwise. In all other instances where any person
shall serve as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise of
which the corporation is or was a shareholder or creditor, or in which
it is or was otherwise interested, if it is not otherwise established
that such person is or was serving as a director, officer, employee,
or agent at the request of the corporation, the Board of Directors of
the corporation may determine whether such service is or was at the
request of the corporation, and it shall not be necessary to show any
actual or prior request for such service.
(ii) References to a corporation include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or
surviving corporation so that any person who is or was a director,
officer, employee, or agent of a constituent corporation or is or was
serving at the request of a constituent corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise shall stand in the same position
under the provisions of this Article IX with respect to the resulting
or surviving corporation as such person would if he or she had served
the resulting or surviving corporation in the same capacity.
(iii)The term "other enterprise" shall include, without limitation,
employee benefit plans and voting or taking action with respect to
stock or other assets therein; the term "serving at the request of the
corporation" shall include, without limitation, any service as a
director, officer, employee, or agent of the corporation which imposes
duties on or involves services by , a director, officer, employee, or
agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
or she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have
satisfied any standard of care required by or pursuant to this Article
IX in connection with such plan; and the term "fines" shall include,
without limitation, any excise taxes assessed on a person with respect
to an employee benefit plan and shall also include any damages
(including treble damages) and any other civil penalties.
(k) Any indemnification rights provided pursuant to this Article IX shall
continue as to a person who has ceased to be a director, officer, employee,
or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person. Notwithstanding any other provision in
these Articles of Incorporation, any indemnification rights arising under
or granted pursuant to this Article IX shall survive the amendment or
repeal of this Article IX with respect to any acts or omissions occurring
prior to the effective time of such amendment or repeal and persons to whom
such indemnification rights are given shall be entitled to rely upon such
indemnification rights with respect to such acts or omissions as a binding
contract with the corporation.
(l) It is the intention of the corporation to limit the liability to the
directors of the corporation, in their capacity as such, whether to the
corporation, its shareholders or otherwise, to the fullest extent permitted
by law. Consequently, should The General and Business Corporation Law of
Missouri or any other applicable law be amended or adopted hereafter so as
to permit the
13
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
elimination or limitation of such liability, the liability of the directors of
the corporation shall be so eliminated or limited to the greatest possible
extent without the need for amendment of this Article IX or further action on
the part of the Board of Directors or shareholders of the corporation.
ARTICLE X
The Board of Directors shall have power to adopt, repeal, or amend the
By-laws of this corporation and to adopt new or additional By-laws, subject
however, to the paramount right of the holders or common stock to limit or
divest such power of the Board of Directors, to such extent and for such periods
as the holders of common stock at any regular or special meeting shall
determine.
IN WITNESS WHEREOF, the undersigned, David O'Reilly, Vice President, and
Ann Drennan, Secretary, of the corporation, have executed these Restated
Articles of Incorporation on behalf of the Corporation this 26th day of
February, 1993.
O'REILLY AUTOMOTIVE, INC.
By: /s/ David O'Reilly
-------------------------------------------
Vice President and Chief Executive Officer
By: /s/ Ann Drennan
-------------------------------------------
Secretary
STATE OF MISSOURI )
) SS.
COUNTY OF GREENE )
I, Patricia M. Headley, a notary public, do hereby certify that on this
26th day of February, 1993, personally appeared before me David O'Reilly and Ann
Drennan, who being by me first duly sworn, declared that they are the persons
who signed the foregoing document as officers of the corporation named therein
and the statements therein contained are true.
/s/ Patricia M. Headley
-------------------------------------------
Notary Public
My Commission Expires:
January 3, 1995
(Filed and Certificate Issued Mar. 1, 1993)
14
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
Secretary of State
State of Missouri
P.O. Box 778
Jefferson City, Missouri 65102
AMENDMENT OF ARTICLES OF INCORPORATION
(To be submitted in duplicate)
Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The name of the Corporation is O'Reilly Automotive, Inc.
2. An amendment to the Corporation's Restated Articles of Incorporation was
adopted by the shareholders at a meeting duly held on May 4, 1999.
3. Section (a) of Article III of the Corporation's Restated Articles of
Incorporation is deleted in its entirety, and the following is inserted in
its place:
ARTICLE III
The aggregate number, class and par value of shares which the corporation
shall have the authority to issue shall be ninety million (90,000,000) shares of
common stock, par value $.01 per share and five million (5,000,000) shares of
preferred stock, par value $.01 per share.
4. Of the 21,376,421 shares outstanding, all of such shares were entitled to
vote on such amendment.
5. The number of shares voted for and against the amendment was as follows:
16,122,317 shares voted for the amendment;
1,080,310 shares voted against the amendment; and
28,027 shares abstained from voting.
6. The amendment changed the number of authorized shares having a par value,
and the amount in dollars of authorized shares having a par value as
changed is $950,000.
The amendment did not change the number of authorized shares without par
value.
7. The amendment does not provide for an exchange, reclassification or
cancellation of issued shares, or a reduction of the number of authorized
shares of any class.
15
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
IN WITNESS WHEREOF, the undersigned, James R. Batten, has executed this
instrument and its Secretary has affixed its corporate seal hereto and attested
said seal as of the 20th day of July 1999.
O'REILLY AUTOMOTIVE, INC.
CORPORATE SEAL
By: /s/ James R. Batten
-------------------------------------
Title: Vice-President of Finance/CFO
ATTEST:
/s/ Tricia Headley, Secretary
--------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF GREENE )
I, Cynthia L. Bennett, a Notary Public, do hereby certify that on this 20th
day of July, 1999, personally appeared before me James R. Batten, who being by
me first duly sworn, declared that he is the Vice-President of Finance and CFO
of O'Reilly Automotive, Inc., that he signed the foregoing document as
Vice-President of the Corporation, and that the statements therein contained are
true.
/s/ Cynthia L. Bennett
-------------------------------------
Notary Public
My commission expires:
January 28, 2003
(Attachment)
16
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
Secretary of State
State of Missouri
P.O. Box 778
Jefferson City, Missouri 65102
AMENDMENT OF ARTICLES OF INCORPORATION
(To be submitted in duplicate)
Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The name of the Corporation is O'Reilly Automotive, Inc.
The name under which it was originally organized was Springfield Supply and
Motor Parts, Inc.
2. An amendment to the Corporation's Restated Articles of Incorporation was
adopted by the shareholders at a meeting duly held on May 8, 2001.
3. That the Corporation's Restated Articles of Incorporation be amended by
adding the following new Article XI to read as follows:
ARTICLE XI
No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article XI
shall not eliminate or limit the liability of a director to the extent provided
by applicable law (i) for any breach of the director's duty of loyalty to the
corporation or its shareholders, (ii) for acts or omissions not in subjective
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under section 351.345 of the General Corporation Law of Missouri, or
(iv) for any transaction from which the director derived an improper personal
benefit. No amendment to or repeal of this Article XI shall apply to or have any
effect on the liability or alleged liability of any director of the corporation
for or with respect to any acts or omissions of such director prior to such
amendment or repeal.
4. Of the 51,571,313 shares outstanding, all of such shares were entitled to
vote on such amendment.
The number of outstanding shares of any class entitled to vote thereon as a
class were as follows:
Class Number of Outstanding Shares
-------- ------------------------------
Common 51,571,313
5. The number of shares voted for and against the amendment was as follows:
45,584,712 shares of Common stock voted for the amendment
245,164 shares of Common stock voted against the amendment
55,063 shares of Common stock abstained from voting
6. The amendment did not change the number of authorized shares having a par
value.
The amendment did not change the number of authorized shares without par
value.
17
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES EXHIBIT 4.1 - Restated
Articles of Incorporation (continued)
7. The amendment does not provide for an exchange, reclassification or
cancellation of issued shares, or a reduction of the number of authorized
shares of any class.
[Remainder of Page Intentionally Blank]
18
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
IN WITNESS WHEREOF, the undersigned, David O'Reilly, has executed this
instrument and its Secretary has affixed its corporate seal hereto and attested
said seal as of the 10th day of May, 2001.
O'REILLY AUTOMOTIVE, INC.
CORPORATE SEAL
By:/s/David O'Reilly
--------------------------------
Title: CEO
ATTEST:
/s/ Tricia Headley, Secretary
--------------------------------
STATE OF MISSOURI )
) SS
COUNTY OF GREENE )
I, Julie A. Hibler, a Notary Public, do hereby certify that on this 10th
day of May, 2001, personally appeared before me David O'Reilly, who being by me
first duly sworn, declared that he is the CEO of O'Reilly Automotive, Inc., that
he signed the foregoing document as President of the Corporation, and that the
statements therein contained are true.
/s/ Julie A. Hibler
--------------------------------
Notary Public
My commission expires:
19
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
O'REILLY AUTOMOTIVE, INC.
Pursuant to Section 180 of the General Corporation Law
of the State of Missouri
We, James R. Batten, Vice President and Tricia Headley, Secretary, of
O'Reilly Automotive, Inc., a corporation organized and existing under the
General Corporation Law of the State of Missouri, in accordance with the
provisions of Section 351.046 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Restated Articles of Incorporation of the said Corporation, the said Board of
Directors on May 7, 2002, adopted the following resolution creating a series of
900,000 shares of Preferred Stock designated as Series A Junior Participating
Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Restated Articles
of Incorporation, a series of Preferred Stock of the Corporation be and it
hereby is created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 900,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares
of any series of Preferred Stock ranking prior and superior to the shares of
Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the fifteenth day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. In the event the Corporation shall at any
time after May 7, 2002 (the "Rights Declaration Date") (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
20
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
(B) The Corporation shall declare a dividend or distribution on the Series
A Junior Participating Preferred Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A Junior
Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Junior Participating Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Series A Junior Participating Preferred Stock shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of
Series A Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series A Junior Participating
Preferred Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect two (2) directors.
(ii) During any default period, such voting right of the holders of Series
A Junior Participating Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of directors shall be exercised unless the holders
of ten percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
directors or, if such right is exercised at an annual meeting, to elect two (2)
directors.
21
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
If the number which may be so elected at any special meeting does not amount to
the required number, the holders of the Preferred Stock shall have the right to
make such increase in the number of directors as shall be necessary to permit
the election by them of the required number. After the holders of the Preferred
Stock shall have exercised their right to elect directors in any default period
and during the continuance of such period, the number of directors shall not be
increased or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this Paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions of this Paragraph
(C)(iii), no such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock, and other classes
of stock of the Corporation if applicable, shall continue to be entitled to
elect the whole number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as a class, after
the exercise of which right (x) the directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in Paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the remaining
directors theretofore elected by the holders of the class of stock which elected
the director whose office shall have become vacant. References in this Paragraph
(C) to directors elected by the holders of a particular class of stock shall
include directors elected by such directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right of
the holders of Preferred Stock as a class to elect directors shall cease, (y)
the term of any directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of directors shall be such number as may be
provided for in the articles of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of Paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the articles of incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Junior Participating
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series
A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
22
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under Paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares.
Any shares of Series A Junior Participating Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred tock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon
iquidation, dissolution or winding up) to the Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Series A
Junior Participating Preferred Stock shall have received an amount equal to
$100 per share of Series A Participating referred Stock, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series A Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the quotient btained by
dividing (i) the Series A Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
23
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 4.1 - Restated Articles of Incorporation (continued)
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption.
The shares of Series A Junior Participating Preferred Stock shall not be
redeemable.
Section 9. Ranking.
The Series A Junior Participating Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment.
At any time when any shares of Series A Junior Participating Preferred Stock are
outstanding, neither the Restated Articles of Incorporation of the Corporation
nor this Certificate of Designation shall be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares.
Series A Junior Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this
30th day of May, 2002.
Vice President:/s/ James R. Batten
----------------------------------
Attest:/s/Tricia Headley
------------------------------------------
Secretary:/s/Tricia Headley
---------------------------------------
24
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 5.1 - Opinion of Gallop, Johnson & Neuman, L.C.
GALLOP, JOHNSON & NEUMAN, L.C.
101 S. Hanley
St. Louis, Missouri 63105
January 16, 2004
Board of Directors
O'Reilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802
Re: Registration Statement on Form S-8
O'Reilly Automotive, Inc. 2003 Employee Stock Option Plan
O'Reilly Automotive, Inc. 2003 Director Stock Option Plan
O'Reilly Automotive, Inc. 1993 Employee Stock Option Plan, as amended
O'Reilly Automotive, Inc. Stock Purchase Plan, as amended
Ladies and Gentlemen:
We have served as counsel to O'Reilly Automotive, Inc. (the "Company") in
connection with the various legal matters relating to the filing on a
registration statement of Form S-8 (The "Registration Statement") under the
Securities Act of 1933, as amended, and the Rules and Regulations promulgated
thereunder, relating to 4,000,000 shares of common stock of the Company, par
value $.01 per share ("Common Stock"), 200,000 shares of Common Stock, 300,000
shares of Common Stock and 2,000,000 shares of Common Stock (collectively, the
"Shares"), reserved for issuance in accordance with the O'Reilly Automotive,
Inc. 2003 Employee Stock Option Plan, the O'Reilly Automotive, Inc. 2003
Director Stock Option Plan the O'Reilly Automotive, Inc. Stock Purchase Plan, as
amended, and the O'Reilly Automotive 1993 Employee Stock Option Plan, as
amended, respectively (collectively, the "Plans").
We have examined such corporate records of the Company, such laws and such
other information as we have deemed relevant, including the Company's Restated
Articles of Incorporation, as amended, and Amended and Restated Bylaws, as
amended, certain resolutions adopted by the Board of Directors of the Company
relating to the Plans and certificates received from state officials and from
officers of the Company. In delivering this opinion, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to the originals of all documents submitted to us
as certified, photostatic or conformed copies, and the correctness of all
statements submitted to us by officers of the Company.
Based upon the foregoing, the undersigned is of the opinion that:
1. The Company is corporation duly incorporated, validly existing and in
good standing under the laws of the State of Missouri; and
2. The Shares being offered by the Company, if issued in accordance with
the applicable Plan, will be validly issued and outstanding and will
be fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name in Registration Statement. We also
consent to your filing copies of the opinion as an exhibit to the
Registration Statement with agencies of such states as you deem necessary
in the course of complying with the laws of such states regarding the
issuance of the Shares pursuant to the Plan.
Very truly yours,
/s/GALLOP, JOHNSON & NEUMAN, L.C.
------------------------------------
GALLOP, JOHNSON & NEUMAN, L.C.
25
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 23.1 - Consent of Ernst & Young LLP
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-00000) pertaining to the O'Reilly Automotive, Inc. 2003 Employee
Stock Option Plan, the O'Reilly Automotive, Inc. 2003 Director Stock Option
Plan, the O'Reilly Automotive, Inc. 1993 Stock Option Plan, and the O'Reilly
Automotive, Inc. Stock Purchase Plan of O'Reilly Automotive, Inc. and
subsidiaries of our report dated February 21, 2003, with respect to the
consolidated financial statements of O'Reilly Automotive, Inc. and subsidiaries
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 2002 and the related financial statement schedule included therein,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
----------------------------
Kansas City, Missouri
January 13, 2004
26
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003 Employee Stock Option Plan
O'REILLY AUTOMOTIVE, INC.
2003 EMPLOYEE STOCK OPTION PLAN
I. Purpose of the Plan.
The O'Reilly Automotive, Inc. 2003 Employee Stock Option Plan (the "Plan")
is intended to provide a means whereby certain key employees of O'Reilly
Automotive, Inc., a Missouri corporation (the "Company"), may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company and its subsidiaries, and to encourage them to remain with and
devote their best efforts to the business of the Company and its subsidiaries,
thereby advancing the interests of the Company and its shareholders.
Accordingly, the Company may make awards to certain employees in the form of
stock options ("Options") with respect to shares of the Company's common stock,
par value $0.01 per share (the "Stock"). Options may either be nonqualified
stock options ("Nonqualified Options") or options ("Incentive Stock Options")
that are intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
II. Administration.
(a) Committee Composition. The Plan shall be administered by a committee
of the Board of Directors of the Company (the "Board") consisting of
not less than two members of the Board as the Board may appoint (the
"Committee"). The members of the Committee shall be "Non-Employee
Directors" within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Act"), and "outside
directors" as defined under Section 162(m) of the Code; provided,
however, that noncompliance with such qualifications shall not
invalidate any grants of Options by the Committee. Committee members
may resign at any time by delivering written notice to the Board.
Vacancies in the Committee, however caused, shall be filled by the
Board. The Committee shall act by a majority of its members in office
and the Committee may act either by vote at a telephonic or other
meeting or by a consent or other written instrument signed by all of
the members of the Committee. If the Committee does not exist, or for
any other reason determined by the Board, the Board mat take any
action under the Plan that would otherwise be the responsibility of
the Committee.
(b) Committee Authority. The Committee shall have the sole authority to:
(i) determine the terms and provisions of the Option agreements (the
"Agreements") entered into under the Plan; (ii) prepare and
distribute, in such manner as the Committee determines to be
appropriate, information about the Plan; and (iii) make all other
determinations deemed necessary or advisable for the administration of
the Plan. The Committee may vary the terms and provisions of the
individual Agreements in its discretion. Further, the Committee shall
have authority to grant options and to determine the exercise price of
the Stock covered by each Option, the terms and duration of each
Option, the key employees to whom, and the times at which, Options
shall be granted, whether the Option shall be a Nonqualified Option or
an Incentive Stock Option and the number of shares to be covered by
each Option. Notwithstanding the foregoing, the Committee shall not
have the authority to make any determination that would be
inconsistent with the requirements, restrictions, prohibitions or
limitations specified in the Plan.
(c) Day-to-Day Administration. The day-to-day administration of the Plan
may be carried out by such officers and employees of the Company as
shall be designated from time to time by the Committee. All expenses
and liabilities incurred by the Committee in connection with the
administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons, and the Committee, the Board, the Company
and the officers and employees of the Company shall be entitled to
rely upon the advice, opinions or valuations of any such persons. The
interpretation and construction by the Committee of any provision of
the Plan and any determination by the Committee under any provision of
the Plan shall be final and conclusive for all purposes. Neither the
Committee nor any member thereof shall be liable for any act,
omission, interpretation, construction or determination made in
connection with the Plan in good faith, and the members of the
Committee shall be entitled to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense
(including counsel fees) arising therefrom to the fullest extent
permitted by law. The members of the Committee shall be named as
insureds in connection with any directors and officers liability
insurance coverage that may be in effect from time to time.
27
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003
Employee Stock Option Plan (Continued)
III. Shares Subject to the Plan.
The aggregate number of shares that may be issued under the Plan shall not
exceed 4,000,000 shares of Stock plus all shares authorized under the 1993
Employee Stock Option Plan not covered by an option on the date such plan
expires. No more than 1,000,000 shares of Stock may be subject to Options that
are intended to be "performance-based compensation" (as that term is used for
purposes of Section 162(m) of the Code) granted to any one individual during any
calendar year, regardless of when such shares are deliverable. The shares of
Stock issuable under the Plan may consist of authorized but unissued shares of
Stock or previously issued shares of Stock reacquired by the Company. Any of
such shares that remain unsold and that are not subject to outstanding Options
at the termination of the Plan shall cease to be subject to the Plan, but until
termination of the Plan and the expiration of all Options granted under the
Plan, the Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan and the outstanding Options. If any
Option, in whole or in part, expires or terminates unexercised or is cancelled
or forfeited, the shares theretofore subject to such Option may again be subject
to an Option granted under the Plan. The aggregate number of shares that may be
issued under Options granted under the Plan and any maximums set forth in this
Plan shall be subject to adjustment as provided in Article V hereof. The
issuance of Stock pursuant to the exercise of an Option shall result in a
decrease in the number of shares of Stock that may thereafter be available for
purposes of the Plan by the number of shares as to which the Option is exercised
or cancelled.
IV. Grants of Options.
(a) Type and Number. Options granted under the Plan shall be of such type
(Nonqualified Option or Incentive Stock Option) and for such number of
shares of Stock and subject to such terms and conditions as the
Committee shall designate. The Committee may grant Options at any time
and from time to time through, but not after, May 6, 2013, to any
individual eligible to receive the same. For purposes of the Plan, the
date on which an Option is granted is referred to herein as the "Grant
Date."
(b) Option Agreement. Options granted pursuant to the Plan shall be
evidenced by Agreements that shall comply with and be subject to the
terms and conditions set forth in this Section IV and may contain such
other provisions, consistent with the Plan, as the Committee shall
deem advisable. Each Agreement shall state the total number of shares
of Stock that are subject to the Option. References herein to
"Agreements" shall include, to the extent applicable, any amendments
to such Agreements.
(c) Persons Eligible to Receive Options.
(i) Only key employees of the Company or its subsidiaries shall be
eligible to receive Options under the Plan. In granting Options
to an employee, the Committee shall take into consideration the
contribution the employee has made or may make to the success of
the Company or its subsidiaries and such other considerations as
the Committee shall determine. The Committee shall also have the
authority to consult with and receive recommendations from
officers and other employees of the Company and its subsidiaries
with regard to these matters. In no event shall any employee, his
legal representatives, heirs, legatees, distributees, or
successors have any right to participate in the Plan, except to
such extent, if any, as the Committee shall determine.
(ii) Options may be granted under the Plan from time to time in
substitution for stock options and stock appreciation rights
granted by other corporations (the "Acquired Corporation") to
their employees who become key employees of the Company or of any
of its subsidiaries as a result of a merger or consolidation of
the Acquired Corporation with the Company or any such subsidiary,
or the acquisition by the Company or a subsidiary of all or
substantially all of the assets of the Acquired Corporation or
the acquisition by the Company or a subsidiary of stock of the
Acquired corporation.
28
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003
Employee Stock Option Plan (Continued)
(d) Exercise Price.
(i) The exercise price of each share of Stock covered by each
Option ("Exercise Price") shall not be less than one hundred
percent (100%) of the Market Value Per Share (as defined
below) of the Stock on the date the Option is granted;
provided, however, if and when an Incentive Stock Option is
granted and the employee receiving the Incentive Stock
Option owns or will be considered to own by reason of
Section 424(d) of the Code more than ten percent (10%) of
the total combined voting power of all classes of stock of
the Company (a "10% Shareholder"), the Exercise Price of the
Stock covered by such Incentive Stock Option shall not be
less than one hundred and ten percent (110%) of the Market
Value Per Share of the Stock on the Grant Date of the
Incentive Stock Option.
(ii) "Market Value Per Share" of the Stock shall mean: (A) if the
Stock is not publicly traded, the amount determined by the
Committee on the date of the grant of the Option; (B) if the
Stock is traded only otherwise than on a securities exchange
and is not quoted on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), the closing
quoted selling price of the Stock on the date of grant of
the Option as quoted in "pink sheets" published by the
National Daily Quotation Bureau; (C) if the Stock is traded
only otherwise than on a securities exchange and is quoted
on NASDAQ, the closing quoted selling price of the Stock on
the date of grant of the Option, as reported by the Wall
Street Journal; or (D) if the Stock is admitted to trading
on a securities exchange, the closing quoted selling price
of the Stock on the date of grant of the Option, as reported
in the Wall Street Journal.
(e) Exercisability of Options.
(i) An Option may be exercisable in installments or otherwise
upon such terms as the Committee shall determine when the
Option is granted. The Committee may fix such waiting and/or
vesting periods, exercise dates or other limitations as it
shall deem appropriate with respect to Options granted under
the Plan including, without limitation, making the
exercisability thereof contingent upon the achievement of
specific goals. Notwithstanding the foregoing, however, in
no event shall an Option, or any portion thereof, be
exercisable until at least six months after the date of
grant of such Option.
(ii) The Committee at any time: (A) may accelerate the time at
which any Option granted hereunder is exercisable or
otherwise vary the terms of an Option, notwithstanding the
fact that such variance may cause the Option to be treated
as a Nonqualified Option; (B) in the case of a Nonqualified
Option, may permit the transferability of such Option and
may remove any restrictions or conditions to which a
Nonqualified Option is subject; and (C) subject to the
consent of the optionee, may convert an outstanding
Incentive Stock Option to a Nonqualified Option if it deems
such conversion to be in the best interest of the optionee.
(iii)No Option shall be exercisable (and any attempted exercise
shall be deemed null and void) if such exercise would create
a right of recovery for "short-swing profits" under Section
16(b) of the Act, unless the optionee pays the Company the
amount of such "short-swing profits" at the time of the
exercise of the Option.
(iv) To the extent that the aggregate Market Value Per Share
(determined at the Grant Date) of Stock with respect to
which Incentive Stock Options (determined without regard to
this sentence) are exercisable for the first time by any
individual during any calendar year (under all plans of the
Company and its subsidiaries) exceeds One Hundred Thousand
Dollars ($100,000), such excess portion of such Incentive
Stock Options shall be treated as Nonqualified Options (this
sentence shall be applied by taking Incentive Stock Options
into account in the order in which they were granted).
(f) Method of Exercise and Payment of Exercise Price.
(i) Options may be exercised by giving written notice to the
Company stating the number of shares for which the Option is
being exercised, accompanied by payment in full of the
Exercise Price relating to the shares with respect to which
the Option is so exercised.
29
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003
Employee Stock Option Plan (Continued)
(ii) The full Exercise Price for the shares with respect to which
the Option is being exercised shall be payable to the
Company: (A) in cash or by check payable and acceptable to
the Company; (B) subject to the approval of the Committee,
by tendering to the Company shares of Stock owned by the
optionee having an aggregate Market Value Per Share as of
the date of exercise that is not greater than the full
Exercise Price for the shares with respect to which the
Option is being exercised, provided that such shares shall
have been then owned by the optionee for a period of at
least six months prior to such exercise, and by paying any
remaining amount of the Exercise Price as provided in (A)
above; or (C) subject to the approval of the Committee and
to such instructions as the Committee may specify, at the
optionee's written request the Company may deliver
certificates for the shares of Stock for which the Option is
being exercised to a broker for sale on behalf of the
optionee, provided that the optionee has irrevocably
instructed such broker to remit directly to the Company on
the optionee's behalf the full amount of the Exercise Price
from the proceeds of such sale; provided, however, that in
the case of an Incentive Stock Option, (B) and (C) above
shall apply only if Committee approval is given on or prior
to the Grant Date and the Agreement expressly provides for
such optional payment terms. In the event that the optionee
elects to make payment as allowed under clause (B) above,
the Committee may, upon confirming that the optionee owns
the number of shares of Stock being tendered, authorize the
issuance of a new certificate for the number of shares being
acquired pursuant to the exercise of the Option less the
number of shares being tendered upon the exercise and return
to the optionee (or not require surrender of) the
certificate for the shares of Stock being tendered upon the
exercise. Payment instruments will be received subject to
collection.
(iii)Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any shares of
Stock under the Plan or make any other distribution of
benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933,
as amended), and the applicable requirements of any
securities exchange, the NASDAQ or similar entity. If the
employee fails to timely accept delivery of and pay for the
shares specified in such notice, the Committee shall have
the right to terminate the Option with respect to such
shares.
(g) Term.
(i) The term of each Option shall be determined by the Committee
at the Grant Date; provided, however, that each Option
shall, notwithstanding anything in the Plan or any Agreement
to the contrary, expire not more than ten years (five years
with respect to an Incentive Stock Option granted to an
employee who is a 10% Shareholder) from the Grant Date or,
if earlier, the date specified in the Agreement.
(ii) In the event an individual's employment with the Company and
its subsidiaries shall terminate for reasons other than: (i)
retirement in accordance with the terms of a retirement plan
of the Company or one of its subsidiaries ("Retirement");
(ii) permanent disability (as defined in Section 22(e)(3) of
the Code); or (iii) death, the individual's Options shall
terminate as of the date of such termination of employment
and shall not be exercisable to any extent as of and after
such time.
(iii)If any termination of employment is due to Retirement or
permanent disability, the individual shall have the right to
exercise any Option at any time within the 12-month period
(three-month period in the case of Retirement for Options
that are Incentive Stock Options) following such termination
of employment, but only to the extent that the Option was
exercisable immediately prior to such termination of
employment. Notwithstanding any other provision contained in
the Plan or the Agreements, if the termination of employment
is due to retirement, and such retiring individual at the
time of his or her retirement (A) is at least fifty-five
(55) years of age, and (B) the sum of the individual's age
and years of service to the Company is equal to or greater
than eighty (80) years, then all outstanding options granted
to such retiring individual shall automatically become
immediately exercisable within such 12-month period (three
month period in the case of Options that are Incentive Stock
Options).
(iv) Whether any termination of employment is due to Retirement
or permanent disability and whether an authorized leave of
absence or absence for military or government service or for
other reasons shall constitute a termination of employment
for purposes of the Plan shall be determined by the
Committee in its sole discretion.
30
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003
Employee Stock Option Plan (Continued)
(v) If an individual shall die while entitled to exercise an
Option, the individual's estate, personal representative or
beneficiary, as the case may be, shall have the right to
exercise the Option at any time within the 12-month period
following the date of the optionee's death, to the extent
that the optionee was entitled to exercise the same on the
day immediately prior to the optionee's death.
(vi) The right of an individual to exercise an Option shall
terminate to the extent that such Option is exercised.
V. Corporate Transactions and Adjustment.
(a) Effect on Corporate Actions. The existence of the Plan and the Options
granted hereunder shall not affect in any way the right or power of
the Board of Directors or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business, any merger
or consolidation of the Company with or into another entity, any
issuance of bonds, debentures, preferred or prior preference stocks
ahead of or affecting the Stock or the rights thereof, the dissolution
or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or any other corporate act or
proceeding.
(b) Adjustment. The shares with respect to which Options may be granted
are shares of Stock as presently constituted. If, however, the number
of outstanding shares of Stock are increased or decreased, or such
shares are exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger,
recapitalization, reclassification, stock dividend, stock split,
combination of shares or other similar transaction, the aggregate
number of shares of Stock subject to the Plan and any maximums set
forth in Section III hereof, and the shares of Stock subject to issued
and outstanding Options under the Plan shall be appropriately and
proportionately adjusted by the Committee. Any such adjustment in an
outstanding Option shall be made without change in the aggregate
Exercise Price applicable to the unexercised portion of the Option but
with an appropriate adjustment in the price for each share or other
unit of any security covered by the Option.
(c) No Adjustment Upon Issuance of Securities. Except as may otherwise be
expressly provided in the Plan, the issuance by the Company of shares
of capital stock of any class or securities convertible into shares of
capital stock of any class for cash, property, labor or services, upon
direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares of capital stock or other securities, and
in any case whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number
of shares of Stock available under the Plan or subject to Options
theretofore granted or the Exercise Price per share with respect to
outstanding Options.
(d) Final Determination. Adjustments under this Section shall be made by
the Committee whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive.
No fractional shares of Stock shall be issued under the Plan or in
connection with any such adjustment.
(e) Automatic Termination of Plan and Options. Notwithstanding anything to
the contrary contained in this Section V, upon: (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger or
consolidation of the Company with one or more corporations in which
the Company is not the surviving corporation, or (iii) a sale of
substantially all of the assets of the Company, the Plan shall
terminate, and any outstanding Options granted under the Plan shall
terminate on the day before the consummation of the transaction;
provided that the Committee shall have the right, but not the
obligation, to accelerate the time in which any Options may be
exercised prior to such a termination. However, the termination of
such Options shall not occur if provision is made in writing in
connection with the transaction, in a manner acceptable to the
Committee, for: (A) the continuance of the Plan and assumption of
outstanding Options, (B) the substitution for such Options of new
options to purchase the stock of a successor corporation (or parent or
subsidiary thereof), with appropriate adjustments as to number and
kind of shares and option price or (C) other treatment of the Options
acceptable to the Committee. The Committee shall have the authority to
amend this paragraph to provide for a requirement that a successor
corporation assume any outstanding Options.
31
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003
Employee Stock Option Plan (Continued)
VI. Term of Plan.
No Option shall be granted pursuant to the Plan after ten (10) years from
the earlier of the date of adoption of the Plan by the Board of the Company or
the date of approval by the Company's shareholders. Notwithstanding the
foregoing, if a longer term is permitted with respect to the duration of an
incentive stock option plan under law, the Board may extend the term of this
Plan to a term not to exceed the longest term permitted with respect to an
incentive stock option plan.
VII. Amendment and Termination of Plan.
(a) Authority to Amend and Terminate. The Board may, from time to time,
with respect to any shares at the time not subject to Options, suspend
or terminate the Plan or amend or revise the terms of the Plan;
provided that any amendment to the Plan shall be approved by a
majority of the shareholders of the Company if the amendment would (i)
materially increase or decrease the benefits accruing to participants
under the Plan; (ii) increase or decrease the number of shares of
Stock which may be issued under the Plan, except as permitted under
the provisions of Section V above; or (iii) materially modify the
requirements as to eligibility for participation in the Plan.
(b) Consent of Optionholder Required. Subject to the provisions in Section
V above, no amendment, suspension or termination of this Plan shall,
without the consent of the optionee, alter or impair any rights or
obligations under any Option granted to such optionee under the Plan.
VIII. Effective Date of Plan.
The Plan shall become effective upon adoption by the Board and approval by
the Company's shareholders; provided, however, that prior to approval of the
Plan by the Company's shareholders but after adoption by the Board, Options may
be granted under the Plan subject to obtaining such approval.
IX. Preemption by Applicable Laws and Regulations.
Anything in the Plan or any Agreement entered into pursuant to the Plan to
the contrary notwithstanding, if, at any time specified herein or therein for
the making of any determination with respect to the issuance or other
distribution of shares of Stock, any law, regulation or requirement of any
governmental authority having jurisdiction in the premises shall require either
the Company or the optionee (or the optionee's beneficiary), as the case may be,
to take any action in connection with any such determination, the issuance or
distribution of such shares or the making of such determination shall be
deferred until such action shall have been taken.
X. Miscellaneous.
(a) Taxes and Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition
the delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations. The Committee,
in its discretion, and subject to such requirements as the Committee
may impose prior to the occurrence of such withholding, may permit
such withholding obligations to be satisfied through cash payment by
the optionee, through the surrender of shares of Stock that the
optionee already owns, or through the surrender of shares of Stock to
which the optionee is otherwise entitled under the Plan.
(b) No Employment Contract. Nothing contained in the Plan shall be
construed as conferring upon any optionee the right to continue in the
employ of the Company or any of its subsidiaries.
(c) Employment with Subsidiaries. Employment by the Company for the
purpose of this Plan shall be deemed to include employment by, and to
continue during any period in which an employee is in the employment
of, any subsidiary.
32
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.1 - O'Reilly Automotive, Inc. 2003
Employee Stock Option Plan (Continued)
(d) No Rights as a Shareholder. An optionee shall have no rights as a
shareholder with respect to shares covered by such optionee's Option
until the date of the issuance of shares to the optionee upon the
optionee's exercise of the Option. No adjustment will be made for
dividends or other distributions or rights for which the record date
is prior to the date of such issuance.
(e) No Right to Corporate Assets. Nothing contained in the Plan shall be
construed as giving any optionee, such optionee's beneficiaries or any
other person any equity or other interest of any kind in any assets of
the Company or any subsidiary or creating a trust of any kind or a
fiduciary relationship of any kind between the Company or any
subsidiary and any such person. Any optionee shall have only a
contractual right to shares of Stock as set forth in the Agreement,
unsecured by any assets of the Company or any subsidiary, and nothing
contained in the Plan shall constitute a guarantee that the assets of
the Company or any subsidiary shall be sufficient to pay any benefits
to any person.
(f) No Restriction on Corporate Action. Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from
taking any corporate action that is deemed by the Company or such
subsidiary to be appropriate or in its best interests, whether or not
such action would have an adverse effect on the Plan or any Option
made under the Plan. No optionee, beneficiary or other person shall
have any claim against the Company or any subsidiary as a result of
any such action.
(g) Limitations on Transfer. Except as designated by the optionee by will
or by the laws of descent and distribution, neither an optionee nor an
optionee's beneficiary shall have the power or right to sell,
exchange, pledge, transfer, assign or otherwise encumber or dispose of
such optionee's or beneficiary's interest arising under the Plan or
any Option received under the Plan, nor shall such interest be subject
to seizure for the payment of an Optionee's or beneficiary's debts,
judgments, alimony, or separate maintenance or be transferable by
operation of law in the event of an optionee's or beneficiary's
bankruptcy or insolvency and to the extent any such interest arising
under the Plan or an Option received under the Plan is awarded to a
spouse pursuant to any divorce proceeding, such interest shall be
deemed to be terminated and forfeited notwithstanding any vesting
provisions or other terms herein or in the agreement evidencing such
Option.
(h) Application of Funds. The proceeds received by the Company from the
sale of shares of Stock pursuant to the Plan shall be used for general
corporate purposes.
(i) Elections in Writing. Unless otherwise specified herein, each election
required or permitted to be made by any optionee or other person
entitled to benefits under the Plan, and any permitted modification,
or revocation thereof, shall be in writing at such times, in such
form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall
require.
(j) Governing Law; Construction. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance
with, the laws of the State of Missouri without regard to the
principles of conflicts of laws. Titles and headings to Sections
herein are for purposes of reference only, and shall in no way limit,
define or otherwise affect the meaning or interpretation of any
provisions of the Plan.
33
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.2 - O'Reilly Automotive, Inc.
2003 Director Stock Option Plan
O'REILLY AUTOMOTIVE, INC.
2003 DIRECTOR STOCK OPTION PLAN
I. Establishment and Purpose.
O'Reilly Automotive, Inc. hereby establishes a stock option plan to be
named the 2003 O'Reilly Automotive, Inc. Director Stock Option Plan. The purpose
of the Plan is to provide (a) further inducement to qualified persons to become
and remain Eligible Directors of the Company, and (b) additional incentive to
Eligible Directors of the Company by encouraging them to acquire shares of Stock
upon the exercise of Options granted hereunder in return for services rendered
by them to the Company, thereby increasing such Eligible Directors' proprietary
interest in the business of the Company; thereby furthering the interest of the
Company and its shareholders.
II. Definitions.
(a) "Act" means the Securities and Exchange Act of 1934, as amended from
time to time.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time.
(d) "Committee" means the Committee of the Board consisting of not less
than two members of the Board as the Board may appoint.
(e) "Company" means O'Reilly Automotive, Inc., a corporation organized and
existing under the laws of the State of Missouri.
(f) "Eligible Director" means a director of the Company who is not
otherwise an officer or employee of the Company or of any subsidiary
thereof.
(g) "Fair Market Value" of the Stock shall mean: (A) if the Stock is not
publicly traded, the amount determined by the Committee on the date of
the grant of the Option; (B) if the Stock is not traded on a
securities exchange and not quoted on the NASDAQ, the closing quoted
selling price of the Stock on the date of grant of the Option as
quoted in "pink sheets" published by the National Daily Quotation
Bureau; (C) if the Stock is not traded on a securities exchange but is
quoted on the NASDAQ, the closing quoted selling price of the Stock on
the date of grant of the Option, as reported by the Wall Street
Journal; or (D) if the Stock is admitted to trading on a securities
exchange, the closing quoted selling price of the Stock on the date of
grant of the Option, as reported in the Wall Street Journal.
(h) "Option" means an option granted under this Plan to acquire Stock.
(i) "Optionee" means the person to whom an Option is granted.
(j) "Option Agreement" means an agreement issued to each Eligible Director
with respect to each Option.
(k) "Option Date" means the date as of which an Option is granted, which
shall be the first business day after the annual meeting of
Shareholders of the Company .
(l) "NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
(m) "Plan" means the 2003 O'Reilly Automotive, Inc. Director Stock Option
Plan.
34
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.2 - O'Reilly Automotive, Inc.
2003 Director Stock Option Plan (Continued)
(n) "Post-Death Representative(s)" means the executor(s) or
administrator(s) of the Optionee's estate or the person or persons to
whom the Optionee's rights under his or her Option pass by the
Optionee's will or the laws of the descent and distribution.
(o) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Act, as amended from time to time, or
any successor rule.
(p) "Stock" means authorized and unissued shares of $0.01 per value common
stock of the Company or reacquired shares of such common stock held in
its treasury.
III. Administration.
(a) The Plan shall be administered by the Committee. The members of the
Committee shall be "Non-Employee Directors" within the meaning of Rule
16b-3 Act, provided, however, that noncompliance with such
qualifications shall not invalidate any grants of Options by the
Committee. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee, however
caused, shall be filled by the Board. The Committee shall act by a
majority of its members in office and the Committee may act either by
vote at a telephonic or other meeting or by a consent or other written
instrument signed by all of the members of the Committee. If the
Committee does not exist, or for any other reason determined by the
Board, the Board mat take any action under the Plan that would
otherwise be the responsibility of the Committee.
(b) Subject to and not inconsistent with the express provisions of the
Plan, the Committee has and may exercise such powers and authority of
the Board as may be necessary or appropriate for the Committee to
carry out its functions under the Plan. Without limiting the
generality of the foregoing, the Committee shall have full power and
authority (i) to determine all questions of fact that may arise under
the Plan, (ii) to interpret the Plan and to make all other
determinations necessary or advisable for the administration of the
Plan and (iii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including, without limitation, any rules that
the Committee determines are necessary or appropriate to ensure that
the Company and the Plan will be able to comply with all applicable
provisions of any applicable federal, state or local law. All
interpretations, determinations and actions by the Committee will be
final and binding upon all persons, including the Company, Eligible
Directors and Optionees.
IV. Shares Subject to the Plan.
(a) Subject to the provisions of Section 10 hereof, the Stock which may be
issued pursuant to the exercise of Options granted under the Plan
shall not exceed in the aggregate 200,000 shares of Stock, plus all
shares authorized under the 1993 Director Stock Option Plan not
covered by an option on the date such plan expires.
(b) At any time during the existence of the Plan, there shall be reserved
for issuance upon the exercise of Options granted under the Plan an
amount of Stock (subject to adjustment as provided in Section 10
hereof) equal to the total number of share then issuable pursuant to
all such Option grants which shall have been made prior to such time.
The Company in its discretion may use reacquired shares held in the
treasury in lieu of authorized but unissued shares.
(c) If an Option terminates, in whole or in part, by expiration or for any
other reason except exercise of such Option, the shares previously
reserved for issuance upon grant of the Option shall again be
available for issuance as if such shares had never been subject to an
Option.
V. Granting of Options.
(a) Each person who is an Eligible Director on the Option Date shall
receive Options to acquire 10,000 shares of Stock at a per share
purchase price equal to the per share Fair Market Value of the Stock
on the Option Date, provided, however, that no grant shall be made to
any Eligible Director who is first elected a director of the Company
at the annual meeting of the shareholders immediately preceding the
Board meeting on the Option Date.
(b) Each Eligible Director may also be granted Options from time to time
upon approval by the full Board.
35
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.2 - O'Reilly Automotive, Inc.
2003 Director Stock Option Plan (Continued)
(c) All Options granted under the Plan shall be granted as of an
Option Date. Promptly after each Option Date, the Company shall
notify the Optionee of the grant of the Option, and shall hand
deliver or mail to the Optionee an Option Agreement, duly
executed by and on behalf of the Company, with the request that
the Optionee execute and return the Option Agreement within
thirty days after the Option Date. If the Optionee shall fail to
execute and return the written Option Agreement within said
thirty-day period, his or her Option shall be automatically
terminated, except that if the Optionee dies within said
thirty-day period, such Option Agreement shall be effective
notwithstanding the fact that it has not been signed prior to
death.
(d) Options granted under the Plan will not be incentive stock options
within the meaning of Section 422 of the Code.
VI. Terms of Options.
Notwithstanding any other provision of the Plan, each Option shall be evidenced
by an Option Agreement, which shall include the substance of the following terms
and conditions:
(a) The option price for each share of Stock covered by an Option shall be
an amount equal to 100% of the Fair Market Value of a share of Stock
on the Option Date of such Option.
(b) The Option by its terms shall not be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the
Code or regulations thereunder. The designation of a beneficiary does
not constitute a transfer. The Option shall be exercisable, during the
Optionee's lifetime, only by the Optionee.
(c) The Option by its terms shall be immediately exercisable as to any or
all shares and may be exercised at any time and from time to time.
(d) Each Option granted under the Plan and all unexercised rights
thereunder shall expire automatically upon the earlier of (i) the date
on which an Optionee ceases to hold office as a director of the
Company for any reason other than retirement, death or disability,
(ii) the date that is three months following the effective date of the
Optionee's retirement from service on the Board, (iii) the date that
is one year following the date on which the Optionee's service on the
Board of Directors of the Company ceases due to death or disability,
and (iv) the seventh anniversary date of the Option date.
VII. No Right to Remain a Director.
The grant of an Option shall not create any right in any person to remain as a
director of the Company.
VIII. Exercise of Options.
(a) An Option may be exercised in whole or in part except as otherwise may
be provided in the Option Agreement, by giving written notice to the
Company stating the number of shares of Stock for which the Option is
being exercised, accompanied by payment in full of the aggregate
purchase price for the shares of Stock being purchased. Payment of the
aggregate purchase price for the shares of Stock may be made (i) in
cash or by check payable and acceptable to the Company for the full
amount of the purchase price of the shares with respect to which the
Option is exercised, (ii) subject to the approval of the Committee,
upon delivery to the Company on the exercise date of certificates
representing shares of Stock, owned by the Optionee for longer than
six months and registered in the Optionee's name, having a Fair Market
Value on the date of such exercise and delivery equal to the full
amount of the purchase price of the shares with respect to which the
Option is exercised, (iii) at the Optionee's written request and
subject to the approval of the Committee and to such instructions as
the Committee may specify, in accordance with a cashless exercise
program pursuant to which the Company may deliver certificates for the
shares of Stock for which the Option is being exercised to a broker
for sale on behalf of the Optionee, provided that the Optionee has
irrevocably instructed such broker to remit directly to the Company on
the Optionee's behalf the full amount of such purchase price from the
proceeds of such sale, or (iv) a combination of (i) and (ii) that
collectively equals the full amount of the purchase price of the
shares with respect to which the Option is exercised.
(b) An Optionee shall have none of the rights of a shareholder with
respect to shares of Stock subject to his or her Option until shares
of Stock are issued to him or her upon the exercise of his or her
Option.
36
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
EXHIBIT 99.2 - O'Reilly Automotive, Inc.
2003 Director Stock Option Plan (Continued)
IX. General Provisions.
The Company shall not be required to issue or deliver any certificate for shares
of Stock to an Optionee upon the exercise of his or her Option:
(a) Prior to (i) if requested by the Company, the filing with the Company
by the Optionee or the Optionee's Post-Death Representative of a
representation in writing that at the time of such exercise that it is
his or her then present intention to acquire the shares of Stock being
purchased for investment and not for resale, and/or (ii) the
completion of any registration or other qualification of such shares
of Stock under any state or federal securities laws or rulings or
regulations of any governmental regulatory body which the Company
shall determine to be necessary or advisable; and
(b) Unless such issuance or delivery would comply with all applicable laws
and the applicable requirements of any securities exchange, the NASDAQ
or similar entity.
X. Adjustment Provisions.
(a) The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the shareholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or
its business, any merger or consolidation of the Company with or into
another entity, any issuance of bonds, debentures, preferred or prior
preference stocks ahead of or affecting the Stock or the rights
thereof, the dissolution or liquidation of the Company for any sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding.
(b) The shares with respect to which Options may be granted are shares of
Stock as presently constituted. If, however, the number of outstanding
shares of Stock are increased or decreased, or such shares are
exchanged for a different number or kind of shares or securities of
the Company through a reorganization, merger, recapitalization,
reclassification, stock dividend, stock split, number of shares of
Stock subject to the Plan as provided in Section 4 hereof, and the
shares of Stock subject to issuance under outstanding Options under
the Plan shall be appropriately and proportionately adjusted by the
Committee. Any such adjustment in an outstanding Option shall be made
without change in the aggregate purchase price applicable to the
unexercised portion of the Option but with an appropriate adjustment
in the price for each share or other unit of any security covered by
the Option.
(c) Except as may otherwise be expressly provided in the Plan, the
issuance by the Company of shares of capital stock of any class or
securities convertible into shares of capital stock of any class for
cash, property, labor or services, upon direct sale, upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares of
capital stock or other securities, and in any case such shares of
capital stock or other securities, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares of Stock available
under the Plan or subject to Options theretofore granted or the
purchase price per share with respect to outstanding Options.
(d) Adjustments under this Section 10 be made by the Committee whose
determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive. No fractional shares
of Stock shall be issued under the Plan or in connection with any such
adjustment.
(e) Notwithstanding anything to the contrary contained in this Section 10,
upon: (i) the dissolution or liquidation of the Company, (ii) a
reorganization, merger or consolidation of the Company with one or
more corporations in which the Company is not the surviving
corporation, or (iii) a sale of substantially all of the assets of the
Company, the Plan shall terminate, and any outstanding Options granted
under the Plan shall terminate on the day before the consummation of
the transaction; provided that the Committee shall have the right, but
not the obligation, to accelerate the time in which any Options may be
exercised prior to such a termination. However, the termination of
such Options shall not occur if provision is made in writing in
connection with the transaction, in a manner acceptable to the
Committee, for: (A) the continuance of the Plan and assumption of
outstanding Options, (B) the substitution for such Options of new
options to purchase the stock of a successor corporation (or parent or
subsidiary thereof), with appropriate adjustments as to number and
kind of shares and option price, or (C) other treatment of the Options
acceptable to the Committee. The Committee shall have the authority to
amend this paragraph to provide for a requirement that a successor
corporation assume any outstanding Options.
37
O'REILLY AUTOMOTIVE, INC.AND SUBSIDIARIES
EXHIBIT 99.2 - O'Reilly Automotive, Inc.
2003 Director Stock Option Plan (Continued)
XI. Duration, Amendment and Termination.
(a) The Board may at any time terminate the Plan or make such amendments
thereof as it shall deem advisable and in the best interests of the
Company, without further action on the part of the shareholders of the
Company; provided, however, that no such termination or amendment
shall, without the consent of the Optionee, adversely affect or impair
the rights of such Optionee, and provided further, that no amendment
requiring shareholder approval in order to meet the requirements of
Rule 16b-3 shall be effective unless such shareholder approval is
obtained, and provided, further that the provisions relating to
eligible persons, the amount and price of awards and the timing of
awards may not be amended more than once every six months except to
comport with changes in the Code or the Employee Retirement Income
Security Act of 1974, or the rules thereunder. (b) The period during
which Options may be granted under the Plan shall terminate on May 6,
2013, unless the Plan earlier shall have been terminated as provided
above.
XII. Withholding.
The Company shall have the right to deduct from payments of any kind
otherwise due to the Optionee any federal, state or local taxes of any
kind required by law to be withheld with respect to any shares issued
upon exercise of Options under the Plan.
XIII. Shareholder Approval.
The Plan shall become effective upon adoption by the Board and approval by the
Company's shareholders; provided, however, that prior to approval of the Plan by
the Company's shareholders but after adoption by the Board, Options may be
granted under the Plan subject to obtaining such approval.
38