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 "Charter").
The Committees 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 a one-year term 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
1. 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 directors.
2. 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 candidates 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.
3. 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.
4. Review on an annual basis and recommend to the Board one member of the Board to serve as Lead Director.
5. Review any proposed amendments to the Company's Articles of Incorporation and By-laws and recommend appropriate action to the Board.
Corporate Governance Oversight
6. 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.
7. 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 approval.
8. Oversee the review and update, when appropriate, of the Company's Code of Business Conduct and Ethics.
9. Review and recommend adoption of all director and officer insurance policy requirements.
Other Powers and Responsibilities
10. Make regular reports to the Board, providing an overview of its activities, summarizing Committee actions and commenting on the fulfillment of the Committees duties under this Charter. The Committee shall also present resolutions to the Board that the Committee has recommended be adopted at the Board level.
11. 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.
12. Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for its approval.
13. 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, 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 requests
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.