O'REILLY AUTO PARTS
March 22, 2004
Dear Shareholder:
You are cordially invited to attend the 2004 Annual Meeting of Shareholders
of O'Reilly Automotive, Inc. to be held at the University Plaza Convention
Center, Arizona Room, 333 John Q. Hammons Parkway, Springfield, Missouri on
Tuesday, May 4, 2004, at 10:00 a.m. local time.
Details of the business to be conducted at the Annual Meeting are given in
the attached Notice of Annual Meeting and Proxy Statement.
In addition to the specific matters to be acted upon, there will be a
report on the progress of the Company and an opportunity for questions of
general interest to the shareholders.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, please complete, sign, date and return the
enclosed proxy card in the envelope provided at your earliest convenience or
vote via telephone or Internet using the instructions on the proxy card. If you
attend the meeting, you may vote your shares in person even though you have
previously signed and returned your proxy.
In order to assist us in preparing for the Annual Meeting, please let us
know if you plan to attend by contacting Tricia Headley, our Corporate
Secretary, at 233 South Patterson, Springfield, Missouri 65802, (417) 874-7161.
We look forward to seeing you at the Annual Meeting.
David E. O'Reilly Larry P. O'Reilly
Co-Chairman of the Board and Co-Chairman of the Board
Chief Executive Officer
O'REILLY AUTOMOTIVE, INC.
233 South Patterson
Springfield, Missouri 65802
_________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on May 4, 2004
_________________________________________
Springfield, Missouri
March 22, 2004
The Annual Meeting of Shareholders of O'Reilly Automotive, Inc. (the
Company), will be held on Tuesday, May 4, 2004, at 10:00 a.m., local time, at
the University Plaza Convention Center, 333 John Q. Hammons Parkway,
Springfield, Missouri 65806, for the following purposes:
(1) To elect three Class II Directors, each to serve for a three year term; and
(2) To ratify the appointment of Ernst & Young LLP as independent auditors for
the fiscal year ending December 31, 2004; and
(3) To ratify the appointment of John Murphy and Ronald Rashkow as Class I
Directors; and
(4) To transact such other business as may properly come before the meeting or
any adjournments thereof.
The Board of Directors has fixed the close of business on February 27,
2004, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting and any adjournments or
postponements. A list of all shareholders entitled to vote at the Annual
Meeting, arranged in alphabetical order and showing the address of and number of
shares held by each shareholder, will be available during usual business hours
at the principal office of the Company at 233 South Patterson, Springfield,
Missouri 65802, to be examined by any shareholder for any purpose reasonably
related to the Annual Meeting for 10 days prior to the date thereof. The list
will also be available for examination throughout the conduct of the meeting.
Your vote is important to ensure a quorum at the meeting. Even if you own
only a few shares, and whether or not you expect to be present at the meeting,
we request you to mark, date, sign and mail the enclosed proxy card in the
postage-paid envelope provided or vote your shares by telephone or Internet as
directed on the enclosed proxy card. Telephone and Internet voting facilities
for stockholders of record will be available 24 hours a day, and will close on
Monday, May 3, 2004, at 11:59 p.m. Eastern Standard Time.
A copy of the Company's Annual Shareholders' Report for fiscal year 2003
accompanies this notice.
By Order of the Board of Directors,
Tricia Headley
Secretary
O'REILLY AUTOMOTIVE, INC.
233 South Patterson
Springfield, Missouri 65802
________________________________
PROXY STATEMENT
________________________________
The enclosed proxy is solicited by the Board of Directors of O'Reilly
Automotive, Inc. (the Company), for use at the Annual Meeting of the Company's
shareholders to be held at the University Plaza Convention Center, 333 John Q.
Hammons Parkway, Springfield, Missouri 65806, on Tuesday, May 4, 2004, at 10:00
a.m., local time, and at any adjournments thereof. Whether or not you expect to
attend the meeting in person, please return your executed proxy in the enclosed
envelope or vote via telephone or Internet using the instructions on the proxy
and the shares represented thereby will be voted in accordance with your wishes.
This Proxy Statement and the accompanying proxy card are first being mailed to
shareholders on or about March 22, 2004.
Solicitation of proxies is being made by the Company and will be made
primarily by mail. The cost of solicitation of proxies will be made by us and
will also include reimbursement paid to brokerage firms and others for their
reasonable out of pocket expenses of forwarding solicitation materials to their
principals.
REVOCABILITY OF PROXY
If, after sending in your proxy, you decide to vote in person or desire to
revoke your proxy for any other reason, you may do so by notifying the Secretary
of the Company in writing at the principal office of the Company of such
revocation at any time prior to the voting of the proxy.
RECORD DATE
Shareholders of record at the close of business on February 27, 2004, will
be entitled to vote at the Annual Meeting.
ACTION TO BE TAKEN UNDER PROXY
All properly executed proxies received by the Board of Directors pursuant
to this solicitation will be voted in accordance with the shareholders'
directions specified in the proxy. If no such directions have been specified by
marking the appropriate squares in the accompanying proxy card, the shares will
be voted by the persons named in the enclosed proxy card as follows:
(1) FOR the election of Lawrence P. O'Reilly, Rosalie O'Reilly-Wooten and Joe
C. Greene, named herein as nominees for Class II Directors of the Company,
to hold office until the annual meeting of the Company's shareholders in
2007 and until his or her successor has been duly elected and qualified;
and
(2) FOR the proposal to ratify the selection of Ernst & Young LLP as our
independent auditors for the fiscal year ending December 31, 2004; and
(3) FOR the proposal to ratify John Murphy and Ronald Rashkow as Class I
Directors; and
(4) According to their judgement on the transaction of such other business as
may properly come before the meeting or any postponements or adjournments
thereof.
The nominees have not indicated that he or she would be unable or unwilling
to serve as a Director. However, should any nominee become unable or unwilling
to serve for any reason, it is intended that the persons named in the proxy will
vote for the election of such other persons in their stead as may be designated
by the Board of Directors. The Board of Directors is not aware of any reason
that might cause any nominee to be unavailable to serve as a Director.
VOTING SECURITIES AND VOTING RIGHTS
On February 27, 2004, there were 54,674,483 shares of Common Stock
outstanding, which constitute all of the outstanding shares of the voting
capital stock of the Company. Each share of Common Stock is entitled to one vote
on all matters to come before the Annual Meeting, including the election of
Directors.
A majority of the outstanding shares entitled to vote at the Annual
Meeting, represented in person or by proxy, will constitute a quorum at the
meeting. The affirmative vote of a majority of the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote is required to
elect each person nominated for Director. Shares present at the meeting but
which abstain or are represented by proxies that are marked "WITHHOLD
AUTHORITY" with respect to the election of any person to serve on the Board of
Directors will be considered in determining whether the requisite number of
affirmative votes are cast on such matter. Accordingly, such proxies will have
the same effect as a vote against the nominee as to which such abstention or
direction applies. Shares not present at the meeting will not affect the
election of Directors. Broker non-votes will not be treated as shares
represented at the meeting with respect to the election of Directors, and
therefore will have no effect.
The vote required for the other proposals described in this Proxy Statement
and for any other matter properly brought before the meeting will be the
affirmative vote of the majority of the shares of Common Stock present in person
or represented by proxy at the Annual Meeting and entitled to vote on the
proposal unless Missouri law or the Company's Restated Articles of Incorporation
or By-laws require a greater vote. Shares present at the meeting that abstain
(including proxies that deny discretionary authority on any matters properly
brought before the meeting) will be counted as shares present and entitled to
vote and will have the same effect as a vote against any such matter. Broker
non-votes will not be treated as shares represented at the meeting as to such
matter(s) voted on and therefore will have no effect.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of February 27, 2004, with
respect to each person (other than management) known to the Company to be the
beneficial owner of more than five percent (5%) of our outstanding shares of
Common Stock. Unless otherwise indicated, the Company believes that the
beneficial owners set forth in the following table have sole voting and
investment power.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership Of Class
------------------------------ -------------------- ---------
Wasatch Advisors, Inc. 6,803,250 (1) 12.4%
150 Social Hall Avenue
Salt Lake City, Utah 84111
T. Rowe Price Associates, Inc. 5,017,400 (2) 9.2%
100 E. Pratt Street
Baltimore, Maryland 21202
(1) As reflected on such beneficial owner's Schedule 13G dated February, 17,
2004, provided to the Company in accordance with the Securities Exchange
Act of 1934, as amended. Wasatch claimed sole voting power of 6,803,250, no
shared voting power, sole dispositive power of 6,803,250 shares and no
shared dispositive power.
(2) As reflected on such beneficial owner's Schedule 13G dated February 14,
2004, provided to the Company in accordance with the Securities Exchange
Act of 1934, as amended. These securities are owned by various individual
and institutional investors, to whom T. Rowe Price Associates, Inc. (Price
Associates) serves as investment adviser with power to direct investments
and/or sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, as amended, Price
Associates is deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities. Of the 5,017,400 shares reported, Price
Associates claimed sole voting power of 952,400 shares, no shared voting
power, sole dispositive power of 5,017,400 shares and no shared dispositive
power.
2
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth, as of February 27, 2004, the beneficial
ownership of each current Director (including the nominee for Director), each of
the executive officers named in the Summary Compensation Table set forth herein,
and the executive officers and Directors as a group, of the outstanding Common
Stock. Unless otherwise indicated, the Company believes that the beneficial
owners set forth in the following table have sole voting and investment power.
Amount and Nature of Percent
Name Beneficial Ownership(a) of Class
------------------------------------ ------------------------ -----------
Charles H. O'Reilly, Jr. (b) 857,420 1.6%
David E. O'Reilly (c) 2,421,783 4.4%
Lawrence P. O'Reilly (d) 805,380 1.5%
Rosalie O'Reilly-Wooten (e) 1,314,749 2.4%
Ted F. Wise (f) 220,124 *
Greg Henslee (g) 94,163 *
Jay D. Burchfield (h) 44,000 *
Joe C. Greene (i) 44,400 *
Paul Lederer (j) 47,500 *
James R. Batten (k) 30,896 *
John Murphy - *
Ronald Rashkow - *
Jeff Shaw (l) 147,784 *
Michael Swearengin (m) 33,881 *
------------------------ -----------
All Directors and executive
officers as a group (14 persons)(n) 6,062,080 11.1%
*less than 1%
(a) With respect to each person, assumes the exercise of all stock options held
by such person that are exercisable currently or within 60 days of February
27, 2004 (such options being referred to hereinafter as "currently
exercisable options").
(b) The stated number of shares includes 492,830 shares held through the
Charles H. O'Reilly, Jr. Revocable Trust, and 364,590 shares controlled by
Mr. O'Reilly as trustee of a trust for the benefit of his children.
(c) The stated number of shares includes 616,554 shares held through the David
E. O'Reilly Revocable Trust, 1,658,174 shares controlled by Mr. O'Reilly as
trustee of a trust for the benefit of his children, 3,305 shares held in
the O'Reilly Employee Savings Plus Plan with SunTrust Bank as trustee and
143,750 shares subject to currently exercisable options.
(d) The stated number of shares includes 805,380 shares held through the
Lawrence P. O'Reilly Revocable Trust.
(e) The stated number of shares includes 819,940 shares held through the
Rosalie O'Reilly-Wooten Revocable Trust, 491,658 shares controlled by Ms.
Wooten as trustee of a trust for the benefit of her children and 3,151
shares held in the O'Reilly Automotive Savings Plus Plan with SunTrust Bank
as trustee.
(f) The stated number of shares includes 82,726 shares held through a revocable
trust of which Ted Wise, as the sole trustee, has sole voting and investing
power, 4,148 shares held in the O'Reilly Employee Savings Plus Plan with
SunTrust Bank as trustee, 75,250 shares subject to currently exercisable
options and 58,000 shares held of record by a revocable trust of which Mr.
Wise's wife, as the sole trustee, has sole voting and investment power.
(g) The stated number of shares includes 9,910 shares jointly owned by Greg
Henslee and his wife, 2,018 shares held in the O'Reilly Employee Savings
Plus Plan with SunTrust Bank as Trustee, 4,485 shares held in the O'Reilly
Automotive Stock Purchase Plan with UMB Bank, N.A. as trustee and 77,750
shares subject to currently exercisable options.
(h) The stated number of shares includes 4,000 shares directly owned by Jay
Burchfield and 40,000 shares subject to currently exercisable options.
(i) The stated number of shares includes 4,000 shares directly owned by Joe
Greene, 400 shares owned by Mr. Greene's spouse and 40,000 shares subject
to currently exercisable options.
3
(j) The stated number of shares includes 17,500 shares directly owned by Paul
Lederer and 30,000 shares subject to currently exercisable options.
(k) The stated number of shares includes 278 shares directly owned by Jim
Batten, 2,934 shares held in the O'Reilly Employee Savings Plus Plan with
SunTrust Bank as Trustee, 434 shares awarded by the Company's Performance
Incentive Plan and 27,250 shares subject to currently exercisable options.
(l) The stated number of shares includes 7,245 shares directly owned by Jeff
Shaw, 78 shares held in the O'Reilly Employee Stock Purchase Plan, 1,132
shares held in the O'Reilly Employee Savings Plus Plan with SunTrust Bank
as Trustee, 329 shares awarded by the Company's Performance Incentive Plan
and 139,000 shares subject to currently exercisable options.
(m) The stated number of shares includes 1,660 directly shares owned by Michael
Swearengin, 118 shares held in the O'Reilly Employee Stock Purchase Plan,
2,867 shares held in the O'Reilly Employee Savings Plus Plan with SunTrust
Bank as Trustee, 236 shares awarded by the Company's Performance Incentive
Plan and 29,000 shares subject to currently exercisable options.
(n) Includes currently exercisable options to purchase a total of 602,000
shares held by the Company's Directors and executive officers as a group.
PROPOSAL 1-ELECTION OF CLASS II DIRECTORS
Information About The Nominees And Directors Continuing in Office
The Company's Amended and Restated By-laws and Restated Articles of
Incorporation, currently provide for three classes of Directors, each class
serving for a three-year term expiring one year after expiration of the term of
the preceding class, so that the term of one class will expire each year. The
terms of the current Class III and Class I Directors expire in 2005 and 2006,
respectively. The Board of Directors has nominated Lawrence P. O'Reilly, Rosalie
O'Reilly-Wooten and Joe C. Greene, who are current Class II Directors, for a
term expiring at the Company's annual shareholders meeting in 2007.
The following table lists the principal occupation for at least the last
five years of each of the nominee and the present Directors continuing in
office, his or her present positions and offices with the Company, the year in
which he or she first was elected or appointed a Director (each serving
continuously since first elected or appointed unless otherwise stated), his or
her age and his or her directorships in any company with a class of securities
registered pursuant to Sections 12 or 15(d) of the Securities Exchange Act of
1934, as amended, or in any company registered as an investment company under
the Investment Company Act of 1940 (as specifically noted).
Service
as
Director
Name Age Principal Occupation Since
------------------------- ----- ------------------------------------------------------------------ -----
Nominees for Director - Class II
(To Be Elected to Serve a Three-Year Term Expiring in 2007)
Lawrence P. O'Reilly 57 Co-Chairman of the Board since August 1999; retired from active 1969
Company management, February 2003; Chief Operating Officer from
March 1993 to February 2003; President from March 1993 to August
1999; Vice President of the Company from 1975 to March 1993.
Rosalie O'Reilly-Wooten 62 Retired from active Company management, February 2002. Executive 1980
Vice President of the Company from March 1993 to February 2002.
4
Service
as
Director
Name Age Principal Occupation Since
------------------------- ----- ------------------------------------------------------------------ -----
Joe C. Greene 67 Partner at the law firm of Husch & Eppenberger, LLC, managing 1993
partner of the Springfield, Missouri firm of Greene & Curtis,
LLP, from 1975 to 2002, Director of Bass Pro, Inc., Director of
Ozarks Coca-Cola Bottling Co., Chairman of Missouri Sports Hall
of Fame, Executive Secretary of Missouri Golf Association and
Director of Commerce Bank, N.A. in Springfield, Missouri; Mr.
Greene has been engaged in the private practice of law for more
than 40 years.
Directors Continuing in Office-Class III
(Terms Expiring in 2005)
David E. O'Reilly 54 Co-Chairman of the Board since August 1999; Chief Executive 1972
Officer since March 1993; President from March 1993 to August
1999; Vice-President of the Company from 1975 to March 1993.
Jay D. Burchfield 57 Director of The Beer Company since January 2003; President of 1997
Oklahoma City Bakery, Inc. since January 1999; Chairman of the
Board and Director of Trust Company of the Ozarks since April
1998; Director of Quest Capital Alliance, since January 2002;
Director of The Primary Care Network since January 1998; Chairman
of the Board and Director of City Bancorp since January 1997;
Chairman of the Board and CEO of Boatmen's National Bank of
Oklahoma from January 1996 to January 1997; Chairman, President
and CEO of Boatmens' Bank of Southern Missouri from April 1987 to
January 1996. Mr. Burchfield's career has spanned more than 30
years in the banking industry.
Paul R. Lederer 64 Retired October 1998; Executive Vice President of Worldwide 2001
Aftermarket of Federal-Mogul Corporation February 1998 to October
1998; President and Chief Operating Officer of Fel-Pro from
November 1994 to February 1998, when it was acquired by
Federal-Mogul Corporation; presently a Director of the following
companies: MAXIMUS, Vita Food Corp., R & B, Inc., and Trans-Pro,
Inc. Mr. Lederer had been a Director of the Company from April
1993 to July 1997 and was appointed again as a Director in 2001.
Directors Continuing in Office-Class I
(Term Expiring in 2006)
Charles H. O'Reilly, Jr. 64 Vice-Chairman of the Board since August 1999. Retired from active 1966
company management, February 2002. Chairman of the Board from
March 1993 to August 1999; President and Chief Executive Officer
of the Company from 1975 to March 1993.
5
Service
as
Director
Name Age Principal Occupation Since
------------------------- ----- ------------------------------------------------------------------ -----
John Murphy 53 Executive Vice President and Chief Financial Officer of Accuride 2003
Corporation, 1998 to present. Executive Vice President,
Administration/Chief Financial Officer/Corporate Secretary of
North American Stainless, Inc. 1994 to 1997.
Ronald Rashkow 63 Mr. Rashkow is presently a director of Factory 2-U Stores, Inc., 2003
and on the advisory board of Hilco Trading Co., Inc., MLC Leasing
and Milton's Baking Company. Mr. Rashkow was formerly chief
executive officer and director of Handy Andy Home Improvement
Centers and founding principal of Chapman Partners, LLC.
The Board of Directors recommends a vote "FOR" the Class II nominees.
6
INFORMATION CONCERNING BOARD OF DIRECTORS
Determination of Director Independence
Rules of the Nasdaq Stock Market require that a majority of the Board of
Directors be "independent," as defined in Nasdaq marketplace Rule 4200 (a)(15).
Under the Nasdaq rule, a director is independent if he or she is not an officer
or employee of the Company and does not have any relationship with the Company
which, in the opinion of the Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. The
Board reviewed the independence of its directors under the new Nasdaq rules.
During this review, the Board considered transactions and relationships between
each director or any member of his or her family and the Company. The Board has
determined that Messrs. Murphy, Lederer, Rashkow, Burchfield and Greene are
independent under Nasdaq Rule 4200(a)(15).
Family Relationships
Charles H. O'Reilly, Jr., Rosalie O'Reilly-Wooten, Lawrence P. O'Reilly and
David E. O'Reilly are all children of Charles H. O'Reilly, Sr., Co-Founder of
the Company.
Lead Director
The Corporate Governance/Nominating Committee nominated and the Board of
Directors approved such nomination for Paul Lederer to serve in the capacity as
Lead Director of the Board of Directors.
Board and Committee Meetings; Corporate Governance
During fiscal year 2003, four meetings of the Board of Directors were held.
During such year, each Director attended 75% or more of the aggregate of (i) the
total number of meetings of the Board of Directors held during the period for
which he or she has served as a Director, and (ii) the total number of meetings
held by all committees of the Board of Directors on which he or she served
during the period for which he or she served.
The Board of Directors has three standing committees, the Audit Committee,
the Compensation Committee and the Corporate Governance/Nominating Committee.
Each of these committees is comprised solely of independent directors in
accordance with the Nasdaq Stock Market Listing Qualifications. Charters for
each committee are available on the Company's website at www.oreillyauto.com,
and can be obtained free of charge at the Company's address appearing on the
first page of this proxy statement by written request to the attention of the
Secretary or by telephone at (417) 862-2674.
The Audit Committee currently consists of Messrs. Murphy (Chairman),
Lederer and Rashkow. The Board had determined that each member of the Audit
Committee is "independent" pursuant to the Nasdaq Marketplace Rule 4200, as well
as the independence requirements for audit committee members under Rule 10A-3
promulgated under the Securities Exchange Act of 1934. In addition, the Board
has determined that Mr. Murphy, a member of the Audit Committee, is qualified as
an audit committee financial expert as that term is defined in the rules of the
Securities and Exchange Commission. The Audit Committee recommends the
engagement of independent auditors, confers with the external auditors regarding
the adequacy of our financial controls and fiscal policy, and directs changes to
financial policies or procedures as appropriate. During fiscal year 2003, six
Audit Committee meetings were held.
The Compensation Committee consists of Messrs. Burchfield (Chairman),
Lederer and Rashkow. The purpose of the Compensation Committee is to act on
behalf of the Board of Directors with respect to the establishment and
administration of the policies which govern the annual compensation of the
Company's executive officers. The Compensation Committee also administers the
Company's stock option and other benefit plans. During fiscal year 2003, two
Compensation Committee meetings were held.
7
The Corporate Governance/Nominating Committee consists of Messrs. Greene
(Chairman), Murphy and Burchfield. The principal purpose of the committee is:
(1) to establish criteria for the selection of directors and to recommend to the
Board the nominees for Director in connection with the Company's annual meeting
of stockholders; (2) to take a leadership role in shaping the Company's
corporate governance policies and to issue and implement the Corporate
Governance Principles of the Company; (3) to develop and coordinate annual
evaluations of the Board, its committees and its members; and (4) to adhere to
all legal standards required by the Securities and Exchange Commission and The
Nasdaq National Market. The Corporate Governance/Nominating Committee functions
pursuant to a written charter, a copy of which was attached as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 2003.
During fiscal year 2003, one Corporate Governance/Nominating Committee meeting
was held. The Company's corporate governance principles may be viewed at
www.oreillyauto.com.
A shareholder who desires to nominate one or more persons for election as
directors shall deliver Timely Notice (as defined in Section 12, Article II of
the Company's Bylaws) of the shareholder's intent to make such nomination or
nominations, either by personal delivery or by United States mail, postage
prepaid, to the Secretary of the corporation. Such notice shall set forth: (a)
the name and address of record of the shareholder who intends to make the
nomination; (b) the class and number of shares of the capital stock that are
beneficially owned by the shareholder on the date of such notice; (c) the name,
age, business and residential addresses, and principal occupation or employment
of each proposed nominee; (d) a description of all arrangements or
understandings between the shareholder and each nominee, and other arrangements
or understandings known to the shareholder, pursuant to which the nomination or
nominations are to be made by the shareholder; (e) any other information
regarding each proposed nominee that would be required to be included in a proxy
statement filed with the Securities and Exchange Commission; and (f) the written
consent of each proposed nominee to being so named and to serve as a director of
the corporation. The presiding officer of a meeting may, if the facts warrant,
determine at the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should make that determination, he shall so
declare at the meeting, and the defective nomination shall be disregarded.
The established criteria for persons to be nominated for election to the
Board and its committees, taking into account the composition of the Board as a
whole, at a minimum, includes (a) a candidate's qualification as "independent"
under the federal securities laws and the rules and regulations of the SEC and
Nasdaq applicable to the Board and each of its committees; (b) depth and breadth
of experience within the Company's industry and otherwise; (c) outside time
commitments; (d) special areas of expertise; (e) accounting and finance
knowledge; (f) business judgment; (g) leadership ability; (h) experience in
developing and assessing business strategies; (i) corporate governance
expertise; (j) risk management skills; and (k) for incumbent members of the
Board, the past performance of the incumbent director.
Compensation of Directors
In 2003, the Company paid an annual fee of $10,000 to each non-employee
Director, plus $500 per Board meeting attended. Beginning in 2004, the Company
will pay an annual fee of $20,000, plus $2,000 per Board meeting to each
non-employee Director, in order to maintain competitive compensation. The
Company also reimburses Directors for out-of-pocket expenses incurred in
connection with their attendance at Board and Committee meetings. Directors'
fees of $36,000 were paid during 2003.
The Company also maintains a Directors' Stock Option Plan, providing for an
automatic annual grant (on April 22 or the first business day thereafter) to
each director who is not an employee of the Company of a non-qualified stock
option to purchase 2,500 shares of Common Stock at a per share exercise price
equal to the fair market value of the Common Stock on the date the option is
granted. Director stock options expire immediately upon the date on which the
optionee ceases to be a director for any reason or seven years after the date on
which the option is granted, whichever first occurs. Each of the Company's three
non-employee directors in 2003 were granted options during the year to purchase
10,000 shares of Common Stock under the Company's Directors' Stock Option Plan
at an exercise price of $29.20 per share. Prior to January 1, 2004, each
non-employee director was granted the option to acquire 10,000 shares of Common
Stock.
8
EXECUTIVE COMPENSATION
The following information is given for the fiscal years ended December 31,
2003, 2002 and 2001, concerning annual and long-term compensation for services
rendered to the Company and its subsidiaries for the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers (other than the Chief Executive Officer) during fiscal year 2003.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
-------------------------- -------------------------
Restricted
Stock Securities All Other
Name and Salary Bonus Other Awards Underlying Compen-
Principal Position Year ($)(a) ($) ($)(b) ($)(c) Options(#)(d) sation($)(e)
----------------------- ---- -------- ------- ------- ---------- ------------- ------------
David E. O'Reilly 2003 750,000 281,500 - - 75,000 17,063
Co-Chairman of the 2002 350,000 350,000 - - - 16,987
Board and Chief 2001 330,000 330,000 - - 30,000 4,835
Ted F. Wise 2003 410,000 102,500 - - 41,000 11,125
Co-President 2002 264,000 131,000 - - - 11,219
2001 247,500 122,500 - - 30,000 5,833
Greg Henslee 2003 410,000 102,500 - - 41,000 7,768
Co-President 2002 247,000 123,000 - - - 6,957
2001 207,500 102,500 - - 30,000 6,044
Jim Batten 2003 190,000 47,500 - - 19,000 6,523
Executive 2002 134,800 35,200 22,614 11,319 - 5,805
Vice-President of 2001 128,000 32,000 23,468 11,732 25,000 4,098
Finance and Chief
Financial Officer
Jeff Shaw 2003 127,500 - 17,000 8,500 15,000 4,501
Senior Vice- 2002 120,000 - 17,586 8,793 - 4,608
President of Store 2001 112,000 - 16,412 8,206 20,000 1,827
Operations and Sales
(a) Includes portion of salary deferred at named executive's election under the
Company's Profit Sharing and Savings Plan.
(b) Cash awarded under the Company's Performance Incentive Plan (PIP).
(c) Shares awarded to Mr. Batten under PIP include 356 shares for fiscal year
2001, having a per share fair market value of $32.955 on the day awarded,
for an aggregate value of $11,732 and 475 shares for fiscal year 2002,
having a per share fair market value of $23.83 on the day awarded, for an
aggregate value of $11,319. As of December 31, 2003, Mr. Batten owned in
the aggregate, 712 of such shares having an aggregate value of $27,455.
Shares awarded to Mr. Shaw under PIP include 249 shares for fiscal year
2001, having a per share fair market value of $32.955 on the day awarded,
for an aggregate value of $8,206 and 369 shares for fiscal year 2002,
having a per share fair market value of $23.83 on the day awarded, for an
aggregate value of $8,793. As of December 31, 2003, Mr. Shaw owned in the
aggregate, 329 of such shares having an aggregate value of $20,630. All
shares awarded under the PIP vest in equal installments over a three-year
period commencing on the first anniversary of the award and are based on
the achievement of certain performance goals. No dividends are paid on
shares of restricted stock.
(d) See "Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values" tables for additional information with respect to these
options.
(e) "All Other Compensation" for the year ended December 31, 2003, includes (i)
Company contributions of $16,758, $10,849, $7,648, $6,403 and $4,405 to its
Profit Sharing and Savings Plan made on behalf of David O'Reilly, Ted Wise,
Greg Henslee, James Batten and Jeff Shaw, respectively, and (ii) the
benefits inuring to David O'Reilly ($305), Ted Wise ($276), Greg Henslee
($120), James Batten ($120) and Jeff Shaw ($96) from the Company's payment
of certain life insurance premiums.
9
Information as to Stock Options
The following table provides certain information concerning grants of
options to purchase Common Stock made during the 2003 fiscal year to the named
executive officers. All stock options that were granted before and including May
6, 2003, were granted pursuant to the Company's 1993 Stock Option Plan. All
stock options that were granted on or after May 7, 2003, were granted pursuant
to the Company's 2003 Stock Option Plan.
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants For Option Term
-------------------------------------------------------------------- ---------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to Price Grant Date
Options Employees Per Expiration Present
Name Granted(#) in 2003 Share($) Date 5% ($) 10%($) Value($)
----------------- ---------- ----------- -------- ---------- --------- --------- ----------
David E. O'Reilly 75,000 (1) 7.1% 23.55 02/13/12 1,110,750 2,814,750 1,766,250
Ted F. Wise 41,000 (1) 3.9% 23.55 02/13/12 607,210 1,538,730 965,550
Greg Henslee 41,000 (1) 3.9% 23.55 02/13/12 607,210 1,538,730 965,550
James Batten 19,000 (1) 1.8% 23.55 02/13/12 281,390 713,070 447,450
Jeff Shaw 15,000 (1) 1.4% 38.52 12/31/13 363,450 920,865 577,800
(1) Stock options become exercisable with respect to 25% of the covered shares
one year from the date of grant; 50% exercisable two years from the date of
grant; 75% exercisable three years from the date of grant and the remainder
become exercisable four years from the date of grant.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of Value of Unexercised
Unexercised In-The-Money
Number of Options Options at
Securities At FY-End(#) FY-End ($)(1)
Underlying Options Value Exercisable/ Exercisable/
Name Exercised (#) Realized ($) Unexercisable Unexercisable
------------------ ------------------- ------------ ----------------- ---------------------
David E. O'Reilly - - 143,750 / 71,250 2,903,163 / 71,250
Ted F. Wise - - 75,250 / 45,750 1,196,978 / 642,308
Greg Henslee - - 77,750 / 45,750 2,871,468 / 1,501,515
James R. Batten 7,500 181,875 27,250 / 26,750 394,398 / 364,518
Jeff Shaw 1,000 31,131 139,000 / 25,000 3,333,240 / 121,000
(1) Represents the market value of the underlying Common Stock on December 31,
2003, less the aggregate exercise price.
10
Employment Arrangements with Executive Officers
The Company entered into a written employment agreement effective January
1, 1993, with David E. O'Reilly. Such agreement provides for Mr. O'Reilly to be
employed by the Company for a minimum period of three years and automatically
renews for each calendar year thereafter. As compensation for services rendered
to the Company, the agreement provides for Mr. O'Reilly to receive (i) a base
annual salary adjusted annually, and (ii) a bonus, the amount of which is
determined by reference to such criteria as may be established by the
Compensation Committee.
Mr. O'Reilly's employment may be terminated by the Company for cause (as
defined in the agreement) or without cause. If Mr. O'Reilly's employment is
terminated for cause or if Mr. O'Reilly resigns, his salary and bonus rights
will cease on the date of such termination or resignation. If the Company
terminates Mr. O'Reilly without cause, all compensation payments will continue
through the remainder of the agreement's term. Pursuant to his agreement, Mr.
O'Reilly has agreed for so long as he is receiving payments thereunder to
refrain from disclosing information confidential to the Company or engaging,
directly or indirectly, in any automotive parts distribution, manufacturing or
sales business in the states in which the Company operates without prior written
consent of the Company.
The Company has also entered into written retirement agreements with David
E. O'Reilly, Lawrence P. O'Reilly, Charles H. O'Reilly, Jr. and Rosalie
O'Reilly-Wooten. Such agreements, as amended and which are in substantially
identical form, provide for each of the foregoing executive officers to be
employed as a consultant upon retirement, for a period of ten years at a yearly
salary of $125,000, adjusted annually three percent for inflation and payable in
equal monthly payments. The agreements also provide for each officer to receive
medical benefits, death and disability benefits, as well as the use of a car.
Lawrence P. O'Reilly, Charles H. O'Reilly, Jr. and Rosalie O'Reilly-Wooten
have retired from the Company and currently receive payments under the
retirement agreements.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is now an officer or an employee of
the Company or any of its subsidiaries or has been at any time an officer or an
employee of the Company or any of its subsidiaries.
Compensation Committee Report
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might be incorporated by reference in
future filings, including this Proxy Statement, in whole or in part, the
following Compensation Committee Report shall not be incorporated into any such
filings.
General
The Compensation Committee of the Board of Directors is responsible for
recommending to the Board of Directors a compensation package and specific
compensation levels for the executive officers of the Company. Additionally, the
Compensation Committee establishes policies and guidelines for other benefit
programs and administers the award of stock options under the Company's 2003
Employee Stock Option Plan. The Compensation Committee is composed of three
independent members of the Board of Directors.
Policy
The Compensation Committee's policy, with respect to executive
compensation, is to provide the executive officers of the Company with a total
compensation package which is competitive and equitable and which encourages and
rewards performance based in part upon the Company's performance in terms of
increases in share value. The key components of the Company's compensation
package for its executive officers are base salary, annual cash bonuses and
long-term, stock-based incentives.
11
Base Salary
The annual base salary of each executive officer is set to bring them in
line with base compensation then being paid by the Company's competitors for
executive management, based upon the Compensation Committee's review of, among
other things, compensation data for comparable companies and positions. The
Compensation Committee believes that the Company's principal competitors for
executive management are not necessarily the same companies that would be
included in a peer group compiled for purposes of comparing shareholder returns.
Consequently, the companies that are reviewed for such compensation purposes may
not be the same as the companies comprising The Nasdaq Retail Trade Stock Price
Index included in this Proxy Statement. The base salaries of the executive
officers were increased in 2003 to reflect increases in the Consumer Price Index
from 2002 to 2003, increases in responsibilities due to the Company's growth and
to align executive compensation with comparable companies and positions.
Bonuses
The Compensation Committee has established a bonus plan for the Chief
Executive Officer and Co-Chairman of the Board, the Co-Presidents and the Chief
Financial Officer of the Company based upon objective criteria. Under this bonus
plan, these executive officers of the Company each will receive a bonus based
upon a percentage of their respective base salary for the attainment of certain
performance goals for the Company. Such performance goals are designed to
address multiple facets of financial performance, including sales performance,
operating income performance, financial returns and various balance sheet
measures. Actual Company performance in each of these areas is compared to the
targets pre-determined by the Compensation Committee, in order to determine the
bonus amount achieved by each executive officer.
The bonuses to be awarded to all other officers of the Company are based
upon each officer's contribution, responsibility and performance during the
year, and are thus subjective in nature. In formulating its recommendation for
the bonuses of other officers of the Company, the Compensation Committee
considers, among other things, the evaluation from the Chief Executive Officer
of the Company with regard to the contribution, responsibility and performance
of each officer and his views on the appropriate compensation level of each
executive officer.
Long-Term Incentives
The only long-term incentive currently offered for senior executives by the
Company is stock option awards. Stock options may be awarded to the Chief
Executive Officer, the other individual executive officers and upper and middle
managers by the Board of Directors, based upon, in the case of the Chief
Executive Officer and other executive officers, the recommendation of the
Compensation Committee.
It is the stock option program which links rewards to the achievement of
long-term corporate performance. In determining whether and how many options
should be granted, the Compensation Committee may consider the responsibilities
and seniority of each of the executive officers, as well as the financial
performance of the Company and other factors as it deems appropriate, consistent
with the Company's compensation policies.
The Chief Executive Officer and Co-Chairman of the Board, the Co-Presidents
and the Chief Financial Officer of the Company receive option grants annually in
an amount equal to 10% of their respective base salary. However, the
Compensation Committee has not established specific target awards governing the
receipt, timing or size of option grants to other individuals. Thus,
determinations with respect to the granting of these stock options are
subjective in nature.
12
CEO Compensation
The base salary of David E. O'Reilly, the Chief Executive Officer of the
Company, was established under his employment agreement dated January 1, 1993,
and the criterion to be achieved for his bonus was determined by the
Compensation Committee in February 2003, based upon a percentage of his base
salary for the attainment of certain performance goals for the Company. This
cash bonus will paid to the Chief Executive Officer during 2004. The cash bonus
to be earned by the Chief Executive Officer in 2004 will be based upon
performance goals to be determined by the Compensation Committee.
Respectfully submitted,
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF
O'REILLY AUTOMOTIVE, INC.
Jay D. Burchfield
Chairman of the Compensation Committee
Paul Lederer
Member of the Compensation Committee
Ronald Rashkow
Member of the Compensation Committee
13
Audit Committee Report
The Audit Committee functions pursuant to a written charter, a copy of
which was attached as an exhibit to the Company's Annual Report on Form 10-K for
the year ended December 31, 2003. The Audit Committee's Charter was most
recently revised and approved by the Board of Directors on May 6, 2003. In
connection with the December 31, 2003, financial statements, the Audit Committee
has:
o reviewed and discussed with management the Company's audited financial
statements as of and for the year ended December 31, 2003; and
o discussed with the Company's independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees, as amended, by the Auditing Standards Board of American
Institute of Certified Public Accountants; and
o received and reviewed the written disclosures and the letter from the
Company's independent auditors required by Independence Standard No. 1,
Independence Discussions with Audit Committees, as amended, by the
Independence Standards Board, and have discussed with the auditors their
independence.
Based on the reviews and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the audited financial statements
referred to above be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2003.
THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS OF
O'REILLY AUTOMOTIVE, INC.
John Murphy
Chairman of the Audit Committee
Paul Lederer
Member of the Audit Committee
Ronald Rashkow
Member of the Audit Committee
Transactions with Insiders and Others
Seventy of the Company's stores are leased from one of two real estate
investment partnerships and a limited liability corporation formed by the
O'Reilly family. David E. O'Reilly, Lawrence P. O'Reilly, Charles H. O'Reilly,
Jr. and Rosalie O'Reilly-Wooten, their spouses, children and grandchildren each
hold a beneficial interest in such partnerships or the limited liability
company. Leases with affiliated parties generally provide for payment of a fixed
base rent, payment of certain tax, insurance and maintenance expenses, and an
original term of six years, subject to one or more renewals at the Company's
option. The Company has entered into separate master lease agreements with each
of the affiliated real estate investment partnerships and the limited liability
company for the occupancy of the stores covered thereby. The master lease
agreements with the real estate investment partnerships expire on December 2004.
The term of the master lease with the limited liability company expires on
December 31, 2013. The total aggregate rent payments paid by the Company to the
partnerships and the limited liability company was $3,238,000 in fiscal 2003.
The Company believes that the terms and conditions of the transactions with
affiliates described above were no less favorable to the Company than those that
would have been available to the Company in comparable transactions with
unaffiliated parties.
14
Performance Graph
Set forth below is a line graph comparing the annual percentage change in
the cumulative total shareholder return of a $100 investment on December 31,
1998, in the Company's Common Stock against The Nasdaq Stock Market Total Return
Index and The Nasdaq Retail Trade Stocks Total Return Index, assuming
reinvestment of all dividends.
Measurement Period O'Reilly Nasdaq U.S. Nasdaq Retail
(Fiscal Year Covered) Automotive, Inc. Stock Market Trade Stocks
--------------------- ----------------- ------------ -------------
12/98 100 100 100
12/99 91 185 88
12/00 113 112 54
12/01 154 89 74
12/02 107 61 63
12/03 163 92 88
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and Directors, and persons who own more than
10% of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Such individuals are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based on the Company's review of
the copies of such forms furnished to it and written representations with
respect to the timely filing of all reports required to be filed, the Company
believes that such persons complied with all Section 16(a) filing requirements
applicable to them with respect to transactions during fiscal 2003 with the
following exceptions: Charlie O'Reilly made direct sells of the Company's stock
on September 28, 2001, June 28, 2002 and July 1, 2002 that were not reported
until February 16, 2004; Larry O'Reilly made direct sells of the Company's stock
on August 14, 2003 and August 15, 2003, that were not reported until February
16, 2004; David O'Reilly, Ted Wise, Greg Henslee and James R. Batten were
awarded stock options on February 13, 2003, that were not reported until April
24, 2003.
PROPOSAL 2 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has selected Ernst & Young
LLP as our independent auditors for the year ending December 31, 2004, and has
further directed that management submit the selection of independent auditors
for ratification by the shareholders at the annual meeting. Ernst & Young LLP
has audited our financial statements since 1993. Representatives of Ernst &
Young LLP are expected to be present at the annual meeting. They will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
15
Neither our Bylaws nor our other governing documents or law require
shareholder ratification of the selection of Ernst & Young LLP as our
independent auditors. However, the Audit Committee is submitting the selection
of Ernst & Young LLP to the stockholders for ratification as a matter of good
corporate practice. If the shareholders fail to ratify the selection, the Audit
Committee will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee in its discretion may direct the
appointment of different independent auditors at any time during the year if the
Audit Committee determines that such a change would be in the best interests of
the Company and our stockholders.
Fees Paid to Independent Auditors
The following is a summary of fees billed by Ernst & Young LLP for audit
and other professional services during the year ended December 31:
2003 2002
---------- ----------
Audit Fees:
Consists of fees and expenses billed for the audit of O'Reilly's
consolidated financial statements for such year and for the
review of O'Reilly's quarterly reports on Form 10-Q................... $ 267,247 $ 212,000
Audit-Related Fees:
Consists of fees and expenses billed for the annual audit of the
Company's employee benefit plan, consultations regarding
restructuring of the Company's synthetic lease arrangement
and assistance in documenting internal control policies and
procedures over financial reporting................................... 88,382 8,500
Tax Fees:
Consists of fees and expenses billed for tax advisory services,
including compliance and planning..................................... 93,808 323,500
All Other Fees........................................................ $ -- $ --
---------- ----------
Total Fees............................................................ $ 449,437 $ 544,000
========== ==========
The Audit Committee has adopted a policy that requires advance approval of
all audit, audit-related, tax services, and other services performed by the
independent auditor. The policy provides for pre-approval by the Audit Committee
of specifically defined audit and non-audit services. Unless the specific
service has been previously approved with respect to that year, the Audit
Committee must approve the permitted service before the independent auditor is
engaged to perform it. The Audit Committee has delegated to the Chairman of the
Audit Committee authority to approve permitted services, provided that the
Chairman reports any decisions to the Committee at its next scheduled meeting.
The Audit Committee, after review and discussion with Ernst & Young LLP of
the preceding information, determined that the provision of these services was
compatible with maintaining Ernst & Young LLP's independence.
Ratification of Independent Auditors
The affirmative vote of the holders of a majority of the votes attached to
the shares present in person or represented by proxy and entitled to vote at the
annual meeting will be required to ratify the selection of Ernst & Young LLP.
The Board of Directors recommends that you vote "FOR" the proposal to
ratify the selection of Ernst & Young LLP as our independent auditors for the
year ending December 31, 2004.
16
PROPOSAL 3 - RATIFICATION OF THE APPOINTMENT OF JOHN MURPHY
AND RONALD RASHKOW AS CLASS I DIRECTORS
The Board of Directors, in its written consent dated December 19, 2003,
appointed John Murphy and Ronald Rashkow to serve as Class I Directors,
effective as of December 19, 2003, to stand until the terms of the Class I
Directors expire in 2006. The addition of Mr. Murphy and Mr. Rashkow brings the
total number of independent directors to five, of nine total directors,
resulting in a majority of independent directors. The two additional independent
directors were appointed in order for the Company to comply with the new NASDAQ
Stock Market Listing Qualifications.
Mr. Murphy and Mr. Rashkow were appointed to the Board of Directors in
accordance with provisions of the Company's Bylaws, granting such authority to
the Board of Directors.
The Corporate Governance/Nominating Committee nominated Mr. Murphy and Mr.
Rashkow upon the completion of an extensive search process. The criteria
established by the Company's Corporate Governance/Nominating Committee Charter
were utilized to evaluate prospective directors.
The Board of Directors recommends that you vote "FOR" the proposal to
ratify the appointment of John Murphy and Ronald Rashkow as Class I Directors.
17
ANNUAL SHAREHOLDERS' REPORT
The Annual Shareholders' Report of the Company for fiscal 2003 containing,
among other things, audited consolidated financial statements of the Company,
accompanies this Proxy Statement.
FUTURE PROPOSALS OF SHAREHOLDERS
Shareholder proposals intended to be presented at the year 2005 Annual
Meeting and included in the Company's proxy statement and form of proxy relating
to that meeting pursuant to Rule 14a-8 under the Exchange Act must be received
by the Company at the Company's principal executive offices by November 26,
2004. In order for shareholder proposals made outside of Rule 14a-8 under the
Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c) under
the Exchange Act, the Company's Amended Bylaws require that such proposals must
be submitted, not later than February 9, 2005, and not earlier than January 19,
2005.
OTHER BUSINESS
The Board of Directors knows of no business to be brought before the Annual
Meeting other than as set forth above. If other matters properly come before the
meeting, it is the intention of the persons named in the solicited proxy to vote
the proxy on such matters in accordance with their judgment as to the best
interests of the Company.
MISCELLANEOUS
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mails, certain officers and
regular employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview and may request brokerage houses and custodians,
nominees and fiduciaries to forward soliciting material to their principals and
will agree to reimburse them for their reasonable out-of-pocket expenses.
Shareholders are urged to mark, sign, date and send in their proxies
without delay or vote via telephone or Internet using the instructions on the
proxy card.
COMMUNICATION WITH THE BOARD OF DIRECTORS
A shareholder who wishes to communicate with our Board of Directors,
specific individual directors or the independent directors as a group, may do so
by directing a written request addressed to such director(s) in care of the
Corporate Secretary at the address appearing on the first page of this proxy
statement or via e-mail through our website at www.oreillyauto.com. Such
communication will be directed to the intended director, group of directors or
the entire Board, as the case may be.
HOUSEHOLDING OF MATERIALS
In some instances, only one copy of this Proxy Statement or Annual Report
is being delivered to multiple shareholders, sharing an address, unless the
Company has received instructions from one or more of the shareholders to
continue to deliver multiple copies. We will deliver promptly upon oral or
written request a separate copy of the Proxy Statement or Annual Report, as
applicable, to any shareholder at your address. If you wish to receive a
separate copy of the Proxy Statement or Annual Report, you may call us at (417)
862-6708, or send a written request to O'Reilly Automotive, Inc., 233 South
Patterson, Springfield, Missouri 65802, Attention: Secretary. Alternatively,
shareholders sharing an address who now receive multiple copies of the Proxy
Statement or Annual Report may request delivery of a single copy, also by
calling us at the number or writing to us at the address listed above.
18
ADDITIONAL INFORMATION
Additional information regarding the Company can be found in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, filed by the
Company with the Securities and Exchange Commission.
A copy of the Company's Annual Report on Form 10-K for fiscal year (as
filed with the Securities and Exchange Commission), including financial
statements and financial statement schedule (excluding exhibits), is available
to shareholders without charge, upon written request to O'Reilly Automotive,
Inc., 233 South Patterson, Springfield, Missouri 65802, Attention: Secretary.
By Order of the Board of Directors
Tricia Headley
Secretary
Springfield, Missouri
March 22, 2004
19
APPENDIX A
O'REILLY AUTO PARTS
You are cordially invited to attend the Annual Meeting of Shareholders of
O'Reilly Automotive, Inc., to be held at the University Plaza Convention Center,
333 John Q. Hammons Parkway, Springfield, Missouri on Tuesday, May 4, 2004, at
10:00 a.m. Central Time.
2003 HIGHLIGHTS
* 11th Consecutive Year of Record Revenues and Earnings
* 15.2% Increase in Sales to $1.51 Billion
* 7.8% Comparable Store Product Sales
* 128 New Stores Opened
* Reduced Outstanding Indebtedness by $69.3 Million
* Net Income of $100.1 Million
--------------------------------------------------------------------------------
PROXY
O'REILLY AUTOMOTIVE, INC.
Annual Meeting of Shareholders - Tuesday, May 4, 2004
(THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned hereby appoints David E. O'Reilly, Lawrence P. O'Reilly and
Charles H. O'Reilly, Jr., and each of them, as proxies, with full power of
substitution, and hereby authorizes them to represent and vote as the
undersigned designates, all shares of Common Stock of O'Reilly Automotive, Inc.,
a Missouri corporation (the Company), held by the undersigned on February 27,
2004, at the Annual Meeting of Shareholders (the Annual Meeting) to be held on
May 4, 2004, at 10:00 a.m. Central Time in Springfield, Missouri or at any
adjournment or postponement thereof, upon the matters set forth on the reverse
side of this card, all in accordance with and as more fully described in the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement,
receipt of which is hereby acknowledged.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" THE ACTIONS OR PROPOSALS.
O'REILLY AUTO PARTS VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting
instructions and for electronic delivery
of information up until 11:59 P.M.Eastern
Time, May 3, 2004. Have your proxy card
in hand when you access the web site. You
will be prompted to enter your 12-digit
Control Number which is located below to
obtain your records and to create an
electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit
your voting instructions up until 11:59
P.M. Eastern Time, May 3, 2004. Have your
proxy card in hand when you call.You will
be prompted to enter your 12-digit
Control Number which is located below and
then follow the simple instructions the
Vote Voice provides you.
VOTE BY MAIL
Mark, sign and date your proxy card
and return in the postage-paid envelope
we have provided or return to O'Reilly
Automotive, Inc.,c/o ADP,51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
O'REILLY AUTOMOTIVE, INC.
The Board of Directors recommends a vote FOR the following actions
or proposals (as described in the accompanying Proxy Statement).
Election of Directors
To withhold authority to vote,
1. Proposal to elect Class II Directors For Withhold For All mark "For All Except" and write the
(three-year term). All All Except nominee's number on the line below.
_____________________________________
01) Joe C. Greene ___ ___ ___
02) Lawrence P. O'Reilly
03) Rosalie O'Reilly-Wooten
Vote on Proposal For Against Abstain
2. Ratification of apppointment of Ernst ___ ___ ___
& Young as independent auditors.
3. Ratification of two new Class I Directors
(terms to expire in 2006):
A) John Murphy ___ ___ ___
B) Ronald Rashkow
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.
Please sign exactly as name(s) appear hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
________________________________ _____ _______________________ _____