The Corporate Governance/Nominating Committee (the "Committee")
of O’Reilly Automotive, Inc. (the "Company") is appointed by, and
generally acts on behalf of, the Board of Directors of the Company (the
"Board"). The Board has determined to establish the governing
principles of the Committee through the adoption of this charter (the
The Committee’s principal purposes shall be: (1) to establish criteria for
the selection of directors and to recommend to the Board the nominees for
director in connection with the Company’s annual meeting of stockholders; (2)
to take a leadership role in shaping the Company’s corporate governance
policies and to issue and implement the Corporate Governance Principles of
the Company; (3) to develop and coordinate annual evaluations of the Board,
its committees and its members; and (4) to adhere to all legal standards
required by the Securities and Exchange Commission (the "SEC") and
the Nasdaq National Market ("Nasdaq").
The Committee shall be composed of three or more directors. Each member of
the Committee shall meet the independence and experience requirements of the
federal securities laws and the applicable rules and regulations of the SEC
and Nasdaq, as such requirements may change from time to time.
The members of the Committee shall be appointed by the Board. The Board
shall designate one member of the Committee to serve as Chairperson. If the
Chairperson is absent from a meeting, another member of the Committee may act
as Chairperson. Members of the Committee will be appointed for three-year
terms and shall serve until their resignation, retirement, or removal by the
Board or until their successors shall be appointed. The Board may fill
vacancies on the Committee and remove a member of the Committee at any time
with or without cause. No member of the Committee shall be removed except by
majority vote of the independent directors of the Board then in office.
The Committee shall:
Nomination of Directors
- Consider and make
recommendations to the Board concerning the appropriate size and overall
characteristics of the Board, including desired competencies, skills and
attributes and the desired ratio of independent and non-independent
- Establish criteria for
persons to be nominated for election to the Board and its committees,
taking into account the composition of the Board as a whole. At a
minimum, the criteria should include (a) a candidate’s qualification as
"independent" under the federal securities laws and the rules
and regulations of the SEC and Nasdaq
applicable to the Board and each of its committees; (b) depth and
breadth of experience within the Company’s industry and otherwise; (c)
outside time commitments; (d) special areas of expertise; (e) accounting
and finance knowledge; (f) business judgment; (g) leadership ability;
(h) experience in developing and assessing business strategies; (i) corporate governance expertise; (j) risk
management skills; and (k) for incumbent members of the Board, the past
performance of the incumbent director.
- Conduct searches for
prospective directors based on the foregoing criteria, review candidates
recommended by stockholders, and evaluate and recommend candidates for
election to the Board by the stockholders or to fill vacancies.
- Review on an annual
basis and recommend to the Board one member of the Board to serve as
- Establish policies for
reviewing the continued appropriateness of Board membership when an
individual director changes the position he or she held when elected or
appointed to the Board.
- Evaluate and make
recommendations to the Board concerning the appointment of directors to
Board committees and the selection of committee chairs; recommendations
shall consider suggestions from the Chairman of the Board, desired
characteristics of committee members, specific legal and regulatory
requirements, whether there should be a policy of periodic rotation of
directors among the committees, the number of boards and other
committees on which the directors serve, and whether there should be any
limitations on the number of consecutive years a director should serve
on any one committee.
- Periodically review
the independence of each director.
Corporate Governance Oversight
- Periodically review and
assess the adequacy of the Company’s Corporate Governance Principles and
recommend any changes to the Board for its approval and adoption.
- Evaluate and recommend
to the Board the responsibilities of the Board committees, including the
structure, operations and the authority to delegate to subcommittees.
- Assist the Board in
its allocation of workload among the various committees of the Board.
- Review and reassess
the adequacy of the charters of the various committees of the Board
periodically and recommend any proposed changes to the Board for its
- Assist the Board with
development of responsibilities of directors, including basic duties and
responsibilities with respect to attendance at board meetings and
advance review of meeting materials.
- Periodically review,
consider and recommend to the Board the total compensation program for
all non-employee directors of the Company for service on the Board and
- Oversee the review and
update, when appropriate, of the Company’s Code of Business Conduct and
- Review any conflicts
of interest or other issues that may arise under the Company’s Code of
Business Ethics involving the Company’s officers or members of the
- Approve all service by
senior executive officers on outside boards of directors.
- Review and recommend
adoption of all director and officer insurance policy requirements.
Board Evaluation and Development
- Develop and coordinate
an annual evaluation of the full Board, all Board committees and
individual Board members, which evaluations shall be reported to the
- Establish and maintain
an orientation program for new directors.
- Develop, or make
available, a continuing education program conducted either internally or
externally for all directors.
Other Powers and Responsibilities
- Make regular reports
to the Board, providing an overview of its activities, summarizing
Committee actions and commenting on the fulfillment of the Committee’s
duties under this Charter. The Committee shall also present resolutions
to the Board that the Committee has recommended be adopted at the Board
- Have the authority to
retain consultants and other third-party advisors of its selection as it
deems necessary to provide it with advice and counsel, including a
search firm to fulfill its responsibilities of identifying candidates
for Board membership. The Company shall provide appropriate funding for
the Committee to retain such advisors without requiring the Committee to
seek Board approval.
- Review and reassess
the adequacy of this Charter annually and recommend any proposed changes
to the Board for its approval.
- Perform any other
activities consistent with this Charter, the Company’s Articles of
Incorporation, Amended and Restated Bylaws, and governing law, as the
Committee or the Board deems necessary or appropriate.
The Committee shall meet when, where and as often as it may deem necessary
and appropriate in its judgment, but in no event less than four (4) times per
year, either in person or telephonically. A majority of the members of the
Committee shall constitute a quorum. The Chairman of the Board and Chief
Executive Officer, the Chairman of the Committee, or the Company’s Lead
Director shall have the right to call a special meeting of the Committee. The
Committee may request that any directors, officers or employees of the
Company, or other persons whose advice and counsel are sought by the
Committee, attend any meeting to provide such information as the Committee
The Committee shall fix its own rules of procedure, which shall be
consistent with the Amended and Restated Bylaws of the Company and this
Charter. A member of the Committee or the Corporate Secretary shall keep
written minutes of Committee meetings, which minutes shall be maintained with
the books and records of the Company. The Committee may delegate authority to
one or more members of the Committee when appropriate, but no such delegation
shall be permitted if the authority is required by law, regulation or listing
standard to be exercised by the Committee as a whole.