O'Reilly Auto Parts 2003 Annual Report Download - page 50

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notes to consolidated financial statements (continued)
page 48
note 9 – shareholders’ equity
Shareholder Rights Plan
On May 17, 2002, the Board of Directors adopted a Shareholder Rights Plan. One Right was distributed for each share of common
stock, par value $.01 per share, of the Company held by stockholders of record as of the close of business on May 31, 2002. The
Rights initially entitle stockholders to buy a unit representing one one-hundredth of a share of a new series of preferred stock of the
Company for $160 and expire on May 30, 2012. The Rights generally will be exercisable only if a person or group acquires beneficial
ownership of 15% or more of the Company’s common stock or commences a tender or exchange offer upon consummation of
which such person or group would beneficially own 15% or more of the Company’s common stock. If a person or group acquires
beneficial ownership of 15% or more of the Company’s common stock, each Right (other than Rights held by the acquiror) will,
unless the Rights are redeemed by the Company, become exercisable upon payment of the exercise price of $160 for common stock
of the Company having a market value of twice the exercise price of the Right. A copy of the Stockholder Rights Plan was filed on
May 28, 2002, with the Securities and Exchange Commission, as Exhibit 99.1 to our report on Form 8-K.
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 12,000,000 shares of common stock were reserved for 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. All grants under the plan since its inception have been non-qualified stock option grants. A summary of outstanding
stock options under this plan is as follows:
number
price per share of shares
Outstanding at December 31, 2000 $ 8.00 - 26.75 3,295,830
Granted 18.25 - 37.62 1,214,750
Exercised 8.15 - 26.37 (1,012,695)
Canceled 8.00 - 37.38 (220,750)
Outstanding at December 31, 2001 $ 8.69 - 37.62 3,277,135
Granted 24.96 - 35.48 712,500
Exercised 8.69 - 30.23 (296,858)
Canceled 8.75 - 38.00 (202,075)
Outstanding at December 31, 2002 $ 8.94 - 37.62 3,490,702
Granted 23.01 - 44.81 1,035,750
Exercised 8.94 - 37.62 (1,051,940)
Canceled 8.94 - 38.98 (222,413)
Outstanding at December 31, 2003 $10.56 - 44.81 3,252,099
Options to purchase 1,223,409, 1,566,104 and 1,250,261 shares of common stock were exercisable at December 31, 2003, 2002,
and 2001, respectively.