8-KMaterial Agreements

COPART INC 8-K Report, Material Agreement (Jul 3, 2008)

Filed July 3, 2008For Securities:CPRT

Summary

Copart, Inc. (CPRT) has filed an 8-K report detailing a significant stock repurchase agreement with its Chief Executive Officer and a member of the board of directors, Willis J. Johnson. The company will acquire 1,500,000 shares of its common stock from Mr. Johnson for an aggregate price of $60 million. This transaction, priced at $40.00 per share, is based on the prior day's closing market price less a 5.5% discount and is being conducted under the company's existing stock repurchase program. The agreement was formally approved by the Board of Directors and the Audit Committee on July 2, 2008, with settlement expected around July 11, 2008. In a separate but related disclosure, Mr. Johnson also filed a Form 144 indicating his intent to sell 500,000 shares of Copart common stock through open market transactions. This sale is independent of the repurchase agreement with the company. Despite this planned sale, Mr. Johnson is expected to retain a substantial ownership stake of over 9 million shares, either directly or indirectly. Investors should view this repurchase as a capital allocation decision and consider the CEO's continued significant ownership as a sign of confidence.

Key Highlights

  • 1Copart, Inc. entered into a material definitive agreement to repurchase 1,500,000 shares of its common stock from CEO Willis J. Johnson.
  • 2The aggregate purchase price for the shares is $60,000,000, with a per-share price of $40.00.
  • 3The repurchase price reflects a discount of 5.5% from the closing price on July 1, 2008.
  • 4The transaction is part of Copart's existing stock repurchase program and was approved by the Board of Directors and Audit Committee.
  • 5Settlement for the repurchase is expected on or about July 11, 2008.
  • 6Concurrently, CEO Willis J. Johnson intends to sell 500,000 shares of Copart common stock in open market transactions, unrelated to the company's repurchase.
  • 7Despite the planned sale, Mr. Johnson will retain a significant stake of over 9 million shares.

Frequently Asked Questions

Copart is repurchasing shares from its CEO, Willis J. Johnson, as part of its existing stock repurchase program. This action is a capital allocation decision by the company to return value to shareholders. The transaction was approved by the Board and Audit Committee after independent discussions.

Copart is paying $40.00 per share for 1,500,000 shares of its common stock. This price is based on the closing price on July 1, 2008, less a 5.5% discount.

Yes, the CEO, Willis J. Johnson, is selling 1,500,000 shares to the company for $60 million. Additionally, he has separately filed a notification of intent to sell 500,000 shares in open market transactions. These two transactions are distinct.

Yes, even after selling 1,500,000 shares to the company and planning to sell another 500,000 shares in the open market, Mr. Johnson is expected to continue to hold over 9 million shares of Copart common stock, either directly or indirectly.