O'Reilly Auto Parts 2001 Annual Report Download - page 31

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Profit sharing contributions accrued at December 31, 2001, 2000
and 1999, funded in the next year through the issuance of shares of
the Company’s common stock were as follows:
YEAR MARKET
FUNDED SHARES VALUE
2001 88,118 $1,729,000
2000 132,890 1,919,000
1999 60,640 1,300,000
The Company also sponsors a non-funded non-contributory
defined benefit health care plan, which provides certain health benefits
to retired employees. According to the terms of this plan, retirees’
annual benefits are limited to $1,000 per employee starting at age
66 for employees with 20 or more years of service. Post-retirement
benefit costs for each of the years ended December 31, 2001, 2000
and 1999, amounted to $12,000.
Additionally, the Company has adopted a stock purchase plan
under which 1,000,000 shares of common stock are reserved for
future issuance. Under the plan, substantially all employees and
non-employee directors have the right to purchase shares of the
Company’s common stock monthly at a price equal to 85% of the fair
market value of the stock. Under the plan, 97,991 shares were issued
at a weighted-average price of $22.13 per share during 2001, 147,315
shares were issued at a weighted-average price of $12.83 per share
during 2000, and 78,927 shares were issued at a weighted-average
price of $18.90 per share during 1999.
The Company has in effect a performance incentive plan for
the Company’s senior management under which 400,000 shares of
restricted stock are reserved for future issuance. Under the plan,
no shares were issued to senior management in 2001. In 2000
and 1999, 12,164 shares and 6,796 shares were issued under the
plan, respectively.
NOTE 10—STOCK OPTION PLANS
The Company has a stock option plan under which incentive stock
options or non-qualified stock options may be granted to officers and
key employees. An aggregate of 6,000,000 shares of common stock is
reserved for future issuance under this plan. The exercise price of
options granted shall not be less than the fair market value of the
stock on the date of grant, and the options will expire no later than
10 years from the date of grant. Options granted pursuant to the plan
become exercisable no sooner than six months from the date of
grant. In the case of a shareholder owning more than 10% of the
outstanding stock of the Company, the exercise price of an incentive
option may not be less than 110% of the fair market value of the stock
on the date of grant, and such options will expire no later than 10
years from the date of grant. Also, the aggregate fair market value
of the stock with respect to which incentive stock options are
exercisable for the first time by any individual in any calendar year
may not exceed $100,000. A summary of outstanding stock options
is as follows:
NUMBER
PRICE PER SHARE OF SHARES
Outstanding at December 31, 1998 $ 5.94 - 22.91 3,183,850
Granted 18.44 - 26.75 1,148,000
Exercised 5.94 - 18.75 (948,620)
Canceled 6.75 - 26.38 (35,750)
Forfeitures 6.07 (1,000)
Outstanding at December 31, 1999 $ 6.07 - 26.75 3,346,480
Granted 10.56 - 24.38 581,250
Exercised 6.07 - 22.75 (361,875)
Canceled 10.00 - 25.88 (206,625)
Outstanding at December 31, 2000 $ 8.00 - 26.75 3,359,230
Granted 14.37 - 37.62 1,328,000
Exercised 8.15 - 26.37 (1,082,695)
Canceled 14.25 - 34.30 (220,787)
Outstanding at December 31, 2001 $ 8.00 - 37.62 3,383,748
Options to purchase 1,250,261, 1,729,033 and 1,171,888 shares
of common stock were exercisable at December 31, 2001, 2000 and
1999, respectively.
The Company also maintains a stock option plan for non-
employee directors of the Company under which 300,000 shares of
common stock are reserved for future issuance. All director stock
options are granted at fair market value on the date of grant and
expire on the earlier of termination of service to the Company as