Section 2 – Financial Information
Item 2.02 – Results of Operations and Financial Condition
On February 8, 2023, O’Reilly Automotive, Inc. (the “Company”) issued a press release announcing its 2022 fourth quarter and full-year earnings. The text of the press release is attached hereto as Exhibit 99.1.
Section 5 – Corporate Governance and Management
Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On February 2, 2023, the Board of Directors (the “Board”) of the Company amended its stock ownership requirements so that it now also applies to its affiliated Board Director(s), President(s), and Co-President(s). The Board believes that its amended stock ownership requirements further align the interests of the Company’s Board and management with those of its shareholders. The affiliated Director and executive stock ownership requirements, as amended, are identified below:
| • | Affiliated Board Director(s) – maintain a minimum ownership requirement of five times base salary |
| • | Chief Executive Officer – maintain a minimum ownership requirement of five times base salary |
| • | President(s) and Co-President(s) – maintain a minimum ownership requirement of four times base salary |
| • | Chief Financial Officer, Chief Operating Officer and Executive Vice President(s) – maintain a minimum ownership requirement of three times base salary |
| • | Senior Vice President(s) – maintain a minimum ownership requirement of two times base salary |
The affiliated Directors and executives listed above must comply with and maintain the stock ownership requirements within five years of February 2, 2023, the effective date of the requirements, or within five years of the attainment of an applicable position. Shares included in the determination of the affiliated Director and executive stock ownership requirements are identified below:
| • | Shares owned through the Company’s Employee Stock Purchase Plan |
| • | Shares of stock equivalents held in the Company’s Profit Sharing Plan |
| • | Restricted shares awarded by the Company, which have vested |
| • | Tax affected intrinsic value of stock options granted by the Company, which have vested |
If any of the affiliated Directors or executives listed above fails to comply with these ownership requirements within the specified time period, such person(s) will be required to hold 50% of net after-tax shares received upon the exercise of any stock option and will be restricted from selling shares of the Company until compliance is achieved. The requirements no longer apply to an executive upon reaching the age of 62 and, in addition, the Board has discretion to waive the requirements for an executive in its sole discretion.
The Board also reiterated its stock ownership requirements for its independent Board Directors at a minimum of five times their annual cash retainer. The independent Directors must comply with and maintain the stock ownership requirements within five years of the date they first become a Director or of a change in the minimum requirement. Shares included in the determination of the independent Director stock ownership requirements are identified below:
| • | Shares owned directly or indirectly |
| • | Restricted shares awarded by the Company, which have vested |
| • | Intrinsic value of stock options granted by the Company, which have vested |
Section 9 – Financial Statements and Exhibits
Item 9.01 – Financial Statements and Exhibits
| | |
Exhibit Number | | Description |
99.1 | | Press release dated February 8, 2023 |
104 | | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document |
The information in Item 2 of this Current Report on Form 8-K, including the exhibit hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
