8-KMaterial Agreements

COPART INC 8-K Report, Material Agreement (Jun 29, 2012)

Filed June 29, 2012For Securities:CPRT

Summary

This 8-K filing by Copart, Inc. (CPRT) on June 29, 2012, reports a material definitive agreement for the repurchase of company stock. Specifically, Copart entered into an agreement to acquire 2,800,000 shares of its common stock from its Chairman of the Board, Willis J. Johnson, at a price of $23.22 per share, totaling approximately $65.0 million. This transaction is part of the company's previously announced stock repurchase program. The repurchase is significant as it follows Mr. Johnson's earlier sale of over 1.2 million shares under a Form 144 filing. With this new agreement, Mr. Johnson has indicated his intention to terminate further sales under his existing Form 144 notification. The terms of this repurchase were approved by the company's audit committee and an internal committee authorized for such repurchases, underscoring governance oversight.

Key Highlights

  • 1Copart entered into a material definitive agreement to repurchase 2,800,000 shares of its common stock from its Chairman, Willis J. Johnson.
  • 2The repurchase price is $23.22 per share, which was the closing price on June 28, 2012.
  • 3The total aggregate purchase price for the shares is approximately $65,016,000.
  • 4This repurchase is being conducted under Copart's previously disclosed stock repurchase program.
  • 5Mr. Johnson's prior intention to sell shares under a Form 144 filing will be terminated as a result of this repurchase.
  • 6The terms of the repurchase were pre-approved by Copart's audit committee and an internal committee of directors.

Frequently Asked Questions

Copart is repurchasing the stock as part of its previously authorized stock repurchase program. This specific transaction involves acquiring shares from the Chairman, Willis J. Johnson, at the prevailing market price, indicating a strategic move by the company to manage its outstanding shares.

The company will spend approximately $65.0 million to repurchase 2,800,000 shares. This will reduce the number of outstanding shares, which can potentially increase earnings per share (EPS) if net income remains constant. It also reduces the company's cash on hand by the purchase amount.

The termination of the Form 144 filing by Mr. Johnson indicates that he will not proceed with further sales of Copart stock that he had previously notified the SEC about. This could be seen positively by investors as it removes potential future selling pressure from a significant insider.

Yes, the filing explicitly states that the terms of this repurchase were pre-approved by Copart's audit committee and an internal committee of directors specifically authorized to approve repurchases under the company's stock repurchase program, ensuring proper oversight.