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PG.56 O’REILLY AUTOMOTIVE 2008 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
e following is a summary of available-for-sale securities included in Other Current Assets on the Company’s balance sheet at December 31, 2007:
Estimated
Gross Gross Fair Value
Amortized Unrealized Unrealized (Net Carrying
(In thousands) Cost Gains Losses Amount)
Equity securities $ 21,724 $ -- $ (10,933) $ 10,791
$ 21,724 $ -- $ (10,933) $ 10,791
Available-for-sale securities held by the Company are securities that are publicly traded in active markets and are valued based on quoted
closing prices as of December 31, 2007. e Company did not hold any available-for-sale securities at December 31, 2008.
NOTE 11 – SH A R E - B A SE D EMP L OYEE COMP ENSAT I ON PL A N S A N D O T HER BENEF I T PL ANS
STOCK OPTIONS
e Company’s employee stock-based incentive plans provides for the granting of stock options to certain key employees of the Company for
the purchase of common stock of the Company. A total of 24,000,000 shares have been authorized for issuance under this plan. Options are
granted at an exercise price that is equal to the closing market price of the Company’s common stock on the date of the grant. Options granted
under the plan expire aer ten years and typically vest 25% a year, over four years. Under SFAS No. 123R, the Company records compensation
expense for the grant date fair value of option awards evenly over the vesting period under the straight-line method. A summary of the shares
subject to currently issued and outstanding stock options under this plan is as follows:
Weighted -
Weighted - Average
Average Remaining Aggregate
Exercise Contractual Intrinsic
Shares Plan Terms (In Years) Value
Outstanding at December 31, 2007 6,244,840 $ 20.38
Granted 4,747,575 26.26
Exchanged CSK options 1,742,278 29.05
Exercised (848,054) 21.48
Forfeited (615,663) 30.31
Outstanding at December 31, 2008 11,270,976 $ 25.25 7.08 $ 69,646,090
Vested or expected to vest at December 31, 2008 10,196,979 $ 24.91 6.84 $ 66,743,536
Exercisable at December 31, 2008 4,368,702 $ 23.12 4.92 $ 48,823,812
e Company maintains a stock based incentive plan for non-employee directors of the Company pursuant to which the Company may grant
stock options. Up to 1,000,000 shares of common stock have been authorized for issuance under this plan. Options are granted at an exercise
price that is equal to the market value of the Company’s common stock on the date of the grant. Options granted under the plan expire aer
seven years and vest fully aer six months. Under SFAS No. 123R, the Company records compensation expense for the grant date fair value
of option awards evenly over the vesting period under the straight-line method. A summary of the shares subject to currently issued and
outstanding stock options under this plan is as follows:
Weighted -
Weighted - Average
Average Remaining Aggregate
Exercise Contractual Intrinsic
Shares Plan Terms (in Years) Value
Outstanding at December 31, 2007 215,000 $ 18.09
Granted 65,000 24.88
Exercised (40,000) 10.33
Forfeited -- --
Outstanding at December 31, 2008 240,000 $ 23.04 6.56 2,054,875
Vested or expected to vest at December 31, 2008 240,000 $ 23.04 6.56 2,054,875
Exercisable at December 31, 2008 150,000 $ 23.12 5.97 1,731,275