Exhibit 10.1 – Second Form of Director Indemnification Agreement
This Indemnification Agreement (this “Agreement”) is made and entered into this ____ day of ____, 2020 between O'Reilly Automotive, Inc., a Missouri corporation (the “Company”), and [INSERT BOARD MEMBER NAME] (“Indemnitee”), a director of the Company.
WHEREAS, Indemnitee serves or has been nominated to serve on the Company’s board of directors (the “Board”) and agrees, on the condition that Indemnitee be so indemnified, to continue to serve or to serve as a director of the Company and in such capacity will render services to the Company;
WHEREAS, the Company is aware that because of the increased exposure to litigation subjecting directors to expensive litigation risks, talented and experienced persons are increasingly reluctant to serve or continue to serve as directors and officers of corporations unless they are appropriately indemnified;
WHEREAS, the Company is also aware that statutes and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous or conflicting and therefore fail to provide directors with adequate guidance regarding the proper course of action;
WHEREAS, the Company desires to attract and retain the services of highly experienced and capable individuals, such as Indemnitee, to serve as directors of the Company and to indemnify its directors so as to provide them with the maximum protection permitted by law;
WHEREAS, the Company believes that it is reasonable, prudent, fair, proper and necessary to protect the Company’s directors from the risk of judgments, fines, settlements and other expenses that may occur as a result of their service to the Company;
WHEREAS, in recognition of Indemnitee’s reliance on the provisions of the Amended and Restated Bylaws of the Company (the "Bylaws") that require indemnification of Indemnitee to the fullest extent permitted by law, and in part to provide Indemnitee with specific contractual assurance that the protection promised by such Bylaws will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of such Bylaws or any change in the composition of the Company’s Board or acquisition transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of, and the advancement of expenses to, Indemnitee to the fullest extent, whether partial or complete, permitted by law and as set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Indemnitee, intending to be legally bound, hereby agree as follows:
SECTION 1.Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:
(a)“Change of Control” shall be deemed to have occurred in any one of the following circumstances occurring after the date hereof: (i) there shall have occurred an event required to be reported with respect to the Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item or any similar schedule or form) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regardless of whether the Company is then subject to such reporting requirement, (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) shall have become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding voting securities, (iii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter or (iv) all or substantially all the assets of the Company are sold or disposed of in a transaction or series of related transactions.
(b)“Enterprise” means any Person of which Indemnitee is or was a Fiduciary.
(c)“Expenses” means all direct and indirect costs (including, without limitation, attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness fees, travel expenses, appeal bonds, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or out-of-pocket expenses) actually and reasonably incurred in connection with (i) any Proceeding or (ii) establishing or enforcing any right to indemnification or advancement of expenses under this Agreement, applicable law, any other agreement, or any provision of the Company’s Amended and Restated Articles of Incorporation (the "Articles of Incorporation") or Bylaws now or hereafter in effect or otherwise; provided, however, that “Expenses” shall not include any Liabilities.