8-KSecurities & ListingOther EventsExhibits & Filings

O REILLY AUTOMOTIVE INC 8-K Report, Listing Notice (May 19, 2009)

Filed May 19, 2009For Securities:ORLY

Summary

O'Reilly Automotive, Inc. (ORLY) filed an 8-K report on May 19, 2009, primarily to disclose two key events. Firstly, the company received a notice from NASDAQ indicating a deficiency in board independence following the death of independent director Joseph C. Greene. ORLY now has a cure period until its next annual shareholder meeting or May 8, 2010, to appoint a new independent director and regain compliance with NASDAQ's majority independent director requirement. Secondly, two board members, Larry O'Reilly and David O'Reilly, have established Rule 10b5-1 trading plans for their company stock. These plans are designed for portfolio diversification and, in David O'Reilly's case, to facilitate the exercise and sale of stock options. Both plans were established during unrestricted trading windows and without the possession of material non-public information.

Key Highlights

  • 1O'Reilly Automotive is temporarily non-compliant with NASDAQ's majority independent director rule due to the passing of a board member.
  • 2The company has a cure period until May 8, 2010, or the next annual shareholder meeting, to rectify the board independence issue.
  • 3Board member Paul R. Lederer has been appointed to lead the Corporate Governance/Nominating Committee.
  • 4Larry O'Reilly, a Board member, has initiated a 10b5-1 trading plan for stock diversification.
  • 5David O'Reilly, a Board member, has initiated a 10b5-1 trading plan for stock option exercise, sale, diversification, and liquidity.
  • 6Both 10b5-1 plans were established during the company's open trading window and when the individuals possessed no material non-public information.
  • 7The company issued a press release on May 19, 2009, disclosing the NASDAQ deficiency notice.

Frequently Asked Questions

The company is temporarily out of compliance with NASDAQ Listing Rule 5605, which requires a majority of the board of directors to be independent. This occurred due to the death of independent director Joseph C. Greene, which resulted in the board having an equal number of independent and non-independent directors (4 each out of 8 total directors).

The company has a 'cure period' until its next annual shareholders' meeting or May 8, 2010, to regain compliance. The Board intends to identify and appoint a new director who meets NASDAQ's independence requirements before this deadline. Paul R. Lederer, an existing independent director, has been appointed as the interim Chairman of the Corporate Governance/Nominating Committee.

Larry O'Reilly and David O'Reilly have each established pre-arranged plans for trading their company stock, compliant with SEC Rule 10b5-1. These plans allow for the sale of a specified number of shares at certain market prices over time. Larry O'Reilly's plan is for portfolio diversification, while David O'Reilly's plan is intended to facilitate the exercise and sale of stock options, contributing to asset diversification and liquidity.

The filing indicates these plans were established during the company's 'unrestricted trading window' and at a time when the individuals were not in possession of material, non-public information. This suggests the sales are pre-planned and executed under strict regulatory guidelines to avoid insider trading concerns. Both individuals have committed to publicly disclosing any sales made under these plans as required by law.