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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AUTOZONE, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Notes:
[LOGO OF AUTOZONE(R)]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 18, 1997
TO THE STOCKHOLDERS OF
AUTOZONE, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of AutoZone,
Inc. (the "Company") will be held at the J.R. Hyde, III, Store Support Center,
123 South Front Street, Memphis, Tennessee 38103 on Thursday, December 18,
1997, at 10 a.m. (Central Standard Time) for the following purposes:
1. To elect eleven directors for terms of one year each and until their
successors are duly elected and qualified;
2. To adopt the Amended and Restated Employee Stock Purchase Plan;
3. To ratify the appointment of Ernst & Young LLP as independent
certified public accountants for fiscal year 1998; and
4. To transact other business as may properly come before the meeting or
any adjournments thereof.
The Board of Directors has fixed the close of business on October 22, 1997,
as the record date for determining the stockholders entitled to notice of, and
to vote at, the meeting and at any adjournment thereof.
You are cordially invited to attend this meeting.
By order of the Board of Directors
HARRY L. GOLDSMITH
Secretary
Memphis, Tennessee
October 29, 1997
IMPORTANT
PLEASE COMPLETE, DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING.
AUTOZONE, INC.
123 SOUTH FRONT STREET
MEMPHIS, TENNESSEE 38103
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 18, 1997
This Proxy Statement and the accompanying proxy are being furnished to
stockholders of AutoZone, Inc. (the "Company" or "AutoZone") in connection
with the solicitation of the enclosed proxy by the Board of Directors of
AutoZone for use at the Annual Meeting of Stockholders of the Company to be
held at the J.R. Hyde, III, Store Support Center, 123 South Front Street,
Memphis, Tennessee 38103 on December 18, 1997, at 10 a.m. (Central Standard
Time) and at any adjournment thereof. This Proxy Statement and the
accompanying proxy are being first mailed on or about October 29, 1997.
PROXY
When the enclosed proxy is executed and returned, the shares it represents
will be voted at the Annual Meeting and at any adjournment thereof as directed
by the stockholder executing the proxy, unless it is earlier revoked. If an
executed proxy gives no directions concerning any particular matter to be
acted upon at the Annual Meeting or at any adjournment thereof, the shares
represented by the proxy will be voted in favor of the matters discussed
herein, and in the best judgment of the proxy holder on any other matter that
may properly come before the stockholders for a vote. Any stockholder
executing and delivering the proxy may revoke it at any time prior to a vote
on a matter by the due execution of another proxy bearing a later date or by
written notification to the Secretary of the Company. Stockholders who are
present in person at the Annual Meeting may revoke their proxy and vote in
person if they so desire. Proxies reflecting broker non-votes will be counted
as present for purposes of a quorum, but not be counted as either voting for
or against any proposal. Abstentions will be included in tabulations of the
votes cast on proposals presented (other than the election of Directors) in
the same manner as votes cast against such proposals.
SOLICITATION OF PROXIES
This solicitation of proxies is being made by the Board of Directors of the
Company and the solicitation expenses will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made in person or by telephone, facsimile or electronic communication
by officers of the Company. The Company expects to reimburse brokerage houses,
banks, and other fiduciaries for reasonable expenses of forwarding proxy
materials to beneficial owners.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on October 10, 1997, the Company had outstanding
151,446,220 shares of Common Stock. Each share of Common Stock entitles its
owner to one vote upon each matter to come before the Annual Meeting. Only
stockholders of record at the close of business on Wednesday, October 22,
1997, will be entitled to vote at the Annual Meeting and at any adjournment
thereof.
The following table sets forth certain information regarding the beneficial
ownership of AutoZone's outstanding Common Stock as of October 10, 1997, by
(i) any person or group known by the Company to be the beneficial owner of
more than five percent of the Company's common stock, (ii) each of AutoZone's
directors, (iii) each of the persons named in the Summary Compensation Table,
and (iv) all directors and executive officers
1
of AutoZone as a group. Except as indicated by the notes to the following
table, the holders listed below have sole voting power and investment power
over the shares beneficially held by them and the beneficial ownership is
direct.
BENEFICIAL
OWNERSHIP
AS OF
OCTOBER 10, 1997
(1)
------------------
NAME OF BENEFICIAL OWNER SHARES PERCENT
- ------------------------ ---------- -------
KKR Associates, L.P. (2)................................... 19,908,488 13.1%
9 West 57th Street
New York, NY 10019
The Equitable Companies, Inc. (3).......................... 13,224,725 8.7%
787 Seventh Avenue
New York, NY 10019
J. R. Hyde, III (4)........................................ 12,319,846 8.1%
123 South Front Street
Memphis, TN 38103
FMR Corp. (5).............................................. 9,023,490 6.0%
82 Devonshire Street
Boston, MA 02109
John C. Adams, Jr. (6)..................................... 1,597 *
Andrew M. Clarkson (7)..................................... 570,320 *
N. Gerry House............................................. 0 --
Robert J. Hunt (8)......................................... 100,000 *
James F. Keegan (9)........................................ 5,000 *
Michael W. Michelson (2)................................... -- --
John E. Moll............................................... 484,791 *
George R. Roberts (2) (10)................................. -- --
Ronald A. Terry (11)....................................... 5,128 *
Timothy D. Vargo (12)...................................... 7,402 *
Lawrence E. Evans (13)..................................... 183,040 *
Shawn P. McGhee (14)....................................... 35,137 *
Thomas S. Hanemann (15).................................... 7,561 *
All directors and executive officers as a group, including
those named above (19 persons) (16)....................... 13,927,837 9.2%
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* Less than 1%
(1) For purposes of this table, "beneficial ownership" includes any shares
which such person has the right to acquire within 60 days of October 10,
1997. For purposes of computing the percentage of outstanding shares held
by each person or group of persons named above on a given date, any
security which such person or persons has the right to acquire within 60
days after such date is deemed to be outstanding, but is not deemed to be
outstanding in computing the percentage ownership of any other person.
(2) Includes (i) 10,227,594 shares (6.8%) owned of record by three limited
partnerships of which KKR Associates, L.P. is the sole general partner
(the "Partnerships"), and (ii) 9,680,894 shares (6.3%) owned of record by
KKR Associates, L.P. The Partnerships dissolved on December 31, 1996 in
accordance with the terms of the limited partnership agreements pursuant
to which they were organized (the "Limited Partnership Agreements"). The
Partnerships continue to be in existence for a winding-up period after
such date. The Limited Partnership Agreements provide that, in connection
with the dissolution and winding-up of the Partnerships, KKR Associates,
L.P. has the sole discretion regarding the disposition of the shares
owned by the Partnerships, including public or private sales of such
shares, the distribution of the shares to the limited partners of the
Partnerships or a combination of the foregoing. KKR Associates, L.P., may
be deemed to beneficially own the shares held by the Partnerships.
Messrs. Roberts, Michelson, Edward A. Gilhuly, Perry Golkin, James H.
Greene, Jr., Henry R. Kravis, Robert I. MacDonnell, Paul E. Raether,
Clifton S. Robbins, Scott M. Stuart, and Michael T. Tokarz, as general
partners of KKR Associates, L.P. may be deemed to share beneficial
ownership of the shares owned by KKR Associates, L.P. However, the
2
general partners of KKR Associates, L.P., disclaim beneficial ownership of
such shares, except to the extent of their interests in such partnerships.
Messrs. Roberts and Michelson are members of AutoZone's Board of Directors.
Not included in the number of shares listed are: 120,000 shares held by Mr.
Kravis as a trustee of an irrevocable trust created by Mr. Roberts for the
benefit of Mr. Roberts's children, 120,000 shares held by Mr. Roberts as a
trustee of an irrevocable trust created by Mr. Kravis for the benefit of
Mr. Kravis's children, 120,000 shares held in an irrevocable trust created
by Mr. MacDonnell for the benefit of Mr. MacDonnell's children, 140,000
shares held in trust for the family of Mr. Raether and for which Mr.
Raether's spouse acts as co-trustee, 20,000 shares held in trust for the
family of Mr. Gilhuly and for which Mr. Gilhuly acts as co-trustee, 2,000
shares owned by Mr. Golkin, 40,000 shares owned jointly by Mr. Greene and
his wife, and 40,000 shares owned by Mr. Tokarz.
(3) All information regarding The Equitable Companies, Inc. ("Equitable") is
based upon the Schedule 13G dated February 14, 1997, filed jointly by
Equitable, on behalf of itself and its subsidiaries; AXA, which
beneficially owns a majority interest in Equitable; and the Mutuelles AXA,
as a group which beneficially own a majority interest in AXA. The shares
are held by Equitable, AXA or Mutuelles AXA either directly or through one
or more direct or indirect subsidiaries or affiliates, and of which
Equitable, AXA, Mutuelles AXA or their subsidiaries or affiliates will be
deemed to have sole power to vote or to direct the vote for 12,820,225
shares, deemed to share power to vote or to direct the vote for 320,100
shares, deemed to have sole power to dispose or to direct the disposition
of 13,125,425 shares and deemed to share power to dispose or to direct the
disposition of 9,300 shares.
(4) Includes 570,000 shares which are held in trusts for which Mr. Hyde is a
trustee and 885,000 shares held by a charitable foundation for which Mr.
Hyde is an officer and a director and over which he shares investment
power. Does not include 2,000 shares owned by Mr. Hyde's spouse.
(5) All information regarding FMR Corp. is based upon the Schedule 13G dated
February 14, 1997, which is filed on behalf of FMR Corp. and its
subsidiaries and affiliates. FMR Corp. has the sole power to vote or
direct the vote for 601,040 shares and sole power to dispose or to direct
the disposition of 9,023,490 shares.
(6) Does not include 1,572 shares held in trusts for the benefit of Mr.
Adams's children.
(7) Includes 112,400 shares held by a charitable trust for which Mr. Clarkson
is sole trustee, with respect to which Mr. Clarkson disclaims beneficial
ownership. Does not include 2,000 shares owned by members of Mr.
Clarkson's immediate family nor does it include 56,000 shares held in
trusts for the benefit of certain members of Mr. Clarkson's family, with
respect to both of which Mr. Clarkson disclaims beneficial ownership.
(8) Includes 2,000 shares owned by Mr. Hunt's wife.
(9) Does not include 400,000 shares that are held in trust for a family member
of Mr. Hyde for which Mr. Keegan is a co-trustee, with respect to which
Mr. Keegan disclaims any beneficial ownership. Does not include 800 shares
owned by members of Mr. Keegan's family with respect to which Mr. Keegan
disclaims any beneficial ownership.
(10) Does not include 120,000 shares held by an irrevocable trust created by
Mr. Roberts for the benefit of Mr. Roberts's children, nor does it include
another 120,000 shares held by Mr. Roberts as a trustee of a trust over
which Mr. Roberts has investment power. Mr. Roberts disclaims any
beneficial ownership of these shares.
(11) Does not include 12,558 shares owned by members of Mr. Terry's immediate
family.
(12) Does not include 4,635 shares owned by members of Mr. Vargo's immediate
family.
(13) Includes 182,667 shares issuable upon exercise of stock options which are
exercisable immediately or within 60 days after October 10, 1997. Does not
include 9,000 shares owned by Mr. Evans's spouse, with respect to which
Mr. Evans disclaims beneficial ownership.
(14) Includes 33,335 shares issuable upon exercise of stock options which are
exercisable immediately or within 60 days after October 10, 1997.
(15) Mr. Hanemann retired as President of the Company in November 1996 and
resigned as a director in September 1997.
(16) Includes 426,004 shares issuable upon exercise of stock options which are
exercisable immediately or within 60 days after October 10, 1997. Does not
include any shares deemed beneficially owned by KKR Associates, L.P. (see
note 2) or Mr. Hanemann (see note 15).
3
PROPOSAL 1--ELECTION OF DIRECTORS
The Board of Directors of the Company has set the number of directors at
eleven, each of whom was elected for a one year term at the 1996 Annual
Meeting, except for Mr. Hunt who was elected by the directors to replace Mr.
Hanemann after his retirement from the Board of Directors in September 1997.
Eleven directors will be elected at the Annual Meeting to serve until the
Annual Meeting in 1998. Proxies representing shares of Common Stock held on
the Record Date that are returned duly executed will be voted, unless
otherwise specified, in favor of the eleven nominees for the Board of
Directors named below. All nominees have consented to serve if elected, but
should any nominee be unavailable to serve (which event is not anticipated)
the persons named in the proxy intend to vote for such substitute nominee as
the Board of Directors may recommend. The nominees shall be elected by a
plurality of the votes cast in the election by the holders of the Common Stock
represented and entitled to vote at the Annual Meeting, assuming the existence
of a quorum.
Biographical and other information for each nominee, each of whom is an
incumbent director, is set forth below:
JOHN C. ADAMS, JR., 49--CHAIRMAN, CHIEF EXECUTIVE OFFICER, AND DIRECTOR
John C. Adams, Jr., has been a director since 1996. Mr. Adams was elected
Chairman and Chief Executive Officer in March 1997, had been President and
Chief Executive Officer since December 1996, and had been Vice Chairman and
Chief Operating Officer since March 1996. Previously, he was Executive Vice
President--Distribution since 1995. From 1990 to 1994, Mr. Adams was a co-
owner of Nicotiana Enterprises, Inc., a company primarily engaged in food
distribution. From 1983 to 1990, Mr. Adams was President of the Miami Division
of Malone & Hyde, Inc. ("Malone & Hyde") the former parent company of
AutoZone.
ANDREW M. CLARKSON, 60--DIRECTOR
Andrew M. Clarkson has been a director since 1986 and is employed by the
Company as Chairman of the Finance Committee. Mr. Clarkson had been Vice
President and Treasurer of the Company in 1986, Senior Vice President and
Treasurer of the Company from 1986 to 1988, was Secretary from 1988 to 1993
and was Treasurer from 1990 to 1995. Previously Mr. Clarkson was Chief
Financial Officer of Malone & Hyde from 1983 to 1988. Mr. Clarkson is also a
director of Amphenol Corporation.
N. GERRY HOUSE, 50--DIRECTOR
N. Gerry House has been a director since 1996. Dr. House has been
Superintendent of the Memphis, Tennessee, City Schools since 1992. Prior to
that time she was Superintendent of the Chapel Hill-Carrboro School System in
North Carolina.
ROBERT J. HUNT, 48--EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
DIRECTOR
Robert J. Hunt was elected a director in September 1997, and has been
Executive Vice President and Chief Financial Officer since 1994. Prior to that
time, Mr. Hunt was Executive Vice President, Chief Financial Officer, and a
Director of Price Company from 1991 to 1993. Mr. Hunt had been employed by
Malone & Hyde from 1984 to 1991, where he was Executive Vice President and
Chief Financial Officer from 1988 to 1991.
J.R. HYDE, III, 54--DIRECTOR AND FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER
J.R. Hyde, III, has been a director since 1986. He had been Chairman of the
Board of Directors and Chief Executive Officer from the Company's
incorporation in 1986 until his retirement as Chief Executive Officer in
December 1996 and his retirement as Chairman in March 1997. Previously, Mr.
Hyde was Chief Executive Officer of Malone & Hyde. Mr. Hyde had been employed
by AutoZone or Malone & Hyde since 1965. Mr. Hyde is also a director of
Federal Express Corporation.
4
JAMES F. KEEGAN, 65--DIRECTOR
James F. Keegan has been a director since 1991. Mr. Keegan is currently the
Chairman of Staff Line, Inc. Mr. Keegan had been a managing director of Weibel
Huffman Keegan, Inc., an investment management firm, during the past five
years, until his retirement in August 1997.
MICHAEL W. MICHELSON, 46--DIRECTOR
Michael W. Michelson has been a director since 1986. Mr. Michelson has been
a member of the limited liability company which is the general partner of
Kohlberg Kravis Roberts & Co., L.P., since January 1996. Prior to that time he
was a general partner of Kohlberg Kravis Roberts & Co., L.P. Mr. Michelson is
also a general partner of KKR Associates, L.P. Mr. Michelson is also a
director of Amphenol Corporation, Doubletree Corporation, Owens-Illinois,
Inc., Owens-Illinois Group, Inc., and Union Texas Petroleum Holdings, Inc.
JOHN E. MOLL, 63--DIRECTOR
John E. Moll has been a director since June 1992 and from 1986 until 1988.
Mr. Moll is the former President and Chief Operating Officer for Fleming
Companies, Inc., until his retirement in 1992. Previously, Mr. Moll was
Executive Vice President--Wholesale Foods of Malone and Hyde.
GEORGE R. ROBERTS, 54--DIRECTOR
George R. Roberts has been a director since 1986. Mr. Roberts is a founding
partner of Kohlberg Kravis Roberts & Co., L.P. and, effective January 1996, he
became a managing member of the limited liability company which is the general
partner of Kohlberg Kravis Roberts & Co., L.P. Mr. Roberts is also a general
partner of KKR Associates, L.P. Mr. Roberts is also a director of Borden,
Inc., Bruno's, Inc., Evenflow & Spalding Holdings Corporation, Flagstar
Companies, Inc., Flagstar Corporation, IDEX Corporation, K-III Communications
Corporation, KinderCare Learning Center, Inc., KSL Recreation Group, Inc.,
Merit Behavioral Care Corporation, Newsquest Capital, PLC, Owens-Illinois,
Inc., Owens-Illinois Group, Inc., Randall's Food Markets, Inc., Safeway Inc.,
Union Texas Petroleum Holdings, Inc., and World Color Press, Inc.
RONALD A. TERRY, 66--DIRECTOR
Ronald A. Terry was elected a Director in 1995. Mr. Terry was the Chairman
of First Tennessee National Corporation, a bank holding company, and of First
Tennessee Bank National Association, a national bank, from 1973 until his
retirement in 1995, and had been Chief Executive Officer until 1994. Mr. Terry
is also a director of BellSouth Corporation and Promus Hotels Corporation.
TIMOTHY D. VARGO, 45--PRESIDENT, CHIEF OPERATING OFFICER AND DIRECTOR
Timothy D. Vargo has been a director since 1996 and was elected President
and Chief Operating Officer in March 1997. Previously, Mr. Vargo had been Vice
Chairman and Chief Operating Officer since 1996, Executive Vice President--
Merchandising and Systems Technology since 1995 and had been Senior Vice
President--Merchandising in 1995. Mr. Vargo was Senior Vice President--
Merchandising from 1986 to 1992 and Director of Stores from 1984 to 1986.
The Company's Board of Directors held eight meetings in fiscal year 1997.
Other than Dr. House, each director attended at least 75% of the total number
of Board of Directors and Committee meetings during the fiscal year. The Board
of Directors has established standing Audit, Compensation and Finance
Committees. The Board of Directors does not have a nominating committee.
As directed by the Board, the Audit Committee recommends independent
auditors to be employed by the Company, confers with the auditors regarding
their audit of the Company, reviews the auditors' fees and other terms of
their engagement, considers the adequacy of internal financial controls and
the results of fiscal policies and financial management of the Company, meets
with the Company's internal auditors, reviews the auditors' examination
results, and recommends changes in financial policies or procedures as
suggested by the auditors. During fiscal year 1997, the Audit Committee,
consisting of Mr. Keegan (Chairman), Mr. Moll and Mr. Terry, held two
meetings.
5
The Compensation Committee reviews new and modified executive salary and
incentive compensation programs and stock option plans, direct and indirect
compensation matters, and management's compensation actions for executive
officers and other key personnel. During fiscal year 1997 the Compensation
Committee, consisting of Mr. Terry (Chairman), Mr. Keegan, and Dr. House, held
eleven meetings.
The Finance Committee reviews financing options for the Company and makes
recommendations to management and the Board of Directors as to appropriate
financing mechanisms. During fiscal year 1997, the Finance Committee,
consisting of Mr. Clarkson (Chairman) and Mr. Michelson, held one meeting.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid to (i) the Company's
current Chief Executive Officer, (ii) the Company's former Chief Executive
Officer, (iii) the Company's former President, and (iv) its other four most
highly paid executive officers, for the fiscal years ended August 30, 1997,
August 31, 1996, and August 26, 1995.
LONG TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS
------------------------------------------- --------------------- ALL OTHER
NAME AND OTHER ANNUAL SECURITIES UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) COMPENSATION ($)(2) OPTIONS/SARS (#)(3) ($)(4)
------------------ ---- ---------- ------------ ------------------- --------------------- ------------
John C. Adams, Jr. (5).. 1997 413,952 199,268 -- 350,000 2,032
Chairman and Chief 1996 292,788 92,859 -- 200,000 2,219
Executive Officer 1995 134,269 67,135 -- 200,000 1,625
J.R. Hyde, III.......... 1997 276,849 159,925 55,104 0 1,812,561
Former Chairman and 1996 634,675 404,755 94,048 0 5,544
Chief Executive Officer 1995 601,650 451,238 -- 0 5,561
Timothy D. Vargo (6).... 1997 356,859 170,973 -- 250,000 2,032
President and Chief 1996 291,282 92,583 -- 150,000 2,442
Operating Officer 1995 84,808 63,606 -- 200,000 507
Thomas S. Hanemann...... 1997 378,525 0 -- 0 571,772
Former President 1996 374,567 238,875 -- 0 5,833
1995 350,000 262,500 -- 0 8,104
Lawrence E. Evans....... 1997 208,000 76,160 -- 50,000 1,805
Executive Vice 1996 203,846 65,000 -- 0 2,958
President 1995 130,000 97,500 -- 0 4,044
Robert J. Hunt.......... 1997 261,769 96,223 -- 50,000 2,032
Executive Vice 1996 249,711 79,625 14,257 0 2,878
President and Chief 1995 144,231 81,130 51,910 150,000 1,343
Financial Officer
Shawn P. McGhee......... 1997 280,769 103,115 -- 75,000 2,029
Executive Vice 1996 209,423 66,656 -- 100,000 772
President 1995 120,769 85,269 -- 70,000 2,831
- --------
(1) Bonuses are shown in the fiscal year in which earned although paid in the
following fiscal year.
(2) Other Annual Compensation stated consists of amounts paid to: Mr. Hyde in
1997 and 1996 for personal security services, and Mr. Hunt in 1996 for
reimbursement of tax expenses and in 1995 for relocation allowances.
(3) All options in 1997 were granted pursuant to the Company's 1996 Stock
Option Plan. Options granted in 1996 and 1995 were granted pursuant to the
Company's Amended and Restated Stock Option Plan. AutoZone did not grant
SARs in the 1995, 1996 or 1997 fiscal years.
6
(4) All Other Compensation for fiscal year 1997 consists of term life
insurance provided for the benefit of the named executive's designated
beneficiary, except as otherwise stated. For Mr. Hyde, the amount stated
includes $1,230 for term life insurance, $1,455,133 to be paid in
installments and $344,867 as the Company's estimated cost of providing
security for Mr. Hyde from March 18, 1997, the date of his retirement as
Chairman, until March 18, 2002, pursuant to the agreement described in the
section entitled "Employment Agreements and Agreements with Former
Officers," and $11,331 as a director's fee prorated from his retirement as
Chairman to the end of the fiscal year, which is the same amount paid to
other directors that are not executive officers of the Company. For Mr.
Hanemann, the amount stated includes a $50,000 lump sum paid and $500,000
to be paid in equal installments over the next two fiscal years pursuant
to the agreement described under "Employment Agreements and Agreements
with Former Officers," and $21,772 paid as a director's fee prorated from
his retirement as President to the end of the fiscal year, which is the
same amount paid to other directors that are not executive officers of the
Company.
(5) Mr. Adams became an employee of the Company in November 1994. Therefore,
salary shown for fiscal year 1995 is for a partial year.
(6) Mr. Vargo became an employee of the Company in February 1995. Therefore,
salary shown for fiscal year 1995 is for a partial year.
(7) Mr. Hunt became an employee of the Company in November 1994. Therefore,
salary shown for fiscal year 1995 is for a partial year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information regarding stock options granted to
the named executive officers during the fiscal year ended August 30, 1997,
pursuant to the Company's 1996 Stock Option Plan. The Company did not grant
SARs in the 1997 fiscal year.
INDIVIDUAL GRANTS
---------------------------------------------- POTENTIAL
% OF REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL
SECURITIES OPTIONS/SARS RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION
OPTIONS/SARS EMPLOYEES OR BASE FOR OPTION TERM (2)
GRANTED IN FISCAL PRICE EXPIRATION ---------------------
NAME (#)(1) YEAR ($/SH)(1) DATE 5% ($) 10% ($)
---- ------------ ------------ --------- ---------- ---------- ----------
John C. Adams, Jr. ..... 200,000 7.4% 20.125 1/8/07 2,531,301 6,414,813
100,000 3.7% 22.875 6/7/07 1,438,596 3,645,686
50,000 1.9% 23.00 6/11/07 723,229 1,832,804
J.R. Hyde, III.......... 0 -- -- -- -- --
Timothy D. Vargo........ 150,000 5.5% 20.125 1/8/07 1,898,476 4,811,110
75,000 2.8% 22.875 6/7/07 1,078,947 2,734,264
25,000 0.9% 23.00 6/11/07 361,614 916,402
Thomas S. Hanemann...... 0 -- -- -- -- --
Lawrence E. Evans....... 50,000 1.9% 20.125 1/8/07 632,825 1,603,703
Robert J. Hunt.......... 50,000 1.9% 20.125 1/8/07 632,825 1,603,703
Shawn P. McGhee......... 50,000 1.9% 20.125 1/8/07 632,825 1,603,703
25,000 0.9% 23.5625 7/2/07 370,458 938,814
- --------
(1) All options vest and are exercisable in one-third increments on each of
the third, fourth, and fifth years, respectively, after the date of grant.
The exercise price of all options is the fair market value of the
Company's stock at the time of the grant.
(2) These amounts represent assumed rates of appreciation for the market value
of the Company's stock from the date of the grant until the end of the
option period at rates arbitrarily set by the Securities and Exchange
Commission. They are not intended to forecast possible future appreciation
in the Company's stock and any actual gains on exercise of options are
dependent on the future performance of the Company's stock.
7
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table shows the stock option exercises by the named executive
officers during the fiscal year ended August 30, 1997. In addition, this table
includes the number of exercisable and unexercisable stock options held by
each of the named executives as of August 30, 1997. The fiscal year-end value
of "in-the-money" stock options is the difference between the exercise price
of the option and the fair market value of the Company's common stock (not
including options with an exercise price greater than the fair market value)
on August 29, 1997 (the last trading day before the fiscal year end) which was
$28.25 per share. AutoZone has never granted SARs.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FY-END (#) AT FY-END ($)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- --------------- ----------- ------------- ----------- -------------
John C. Adams, Jr....... 0 -- 0 750,000 0 3,250,000
J.R. Hyde, III.......... 0 -- 0 0 0 0
Timothy D. Vargo........ 0 -- 0 600,000 0 2,528,125
Thomas S. Hanemann...... 200,000 3,991,500 480,000 100,000 12,419,800 0
Lawrence E. Evans....... 2,000 48,000 142,667 163,333 2,706,171 849,579
Robert J. Hunt.......... 0 -- 0 200,000 0 875,000
Shawn P. McGhee......... 0 -- 20,001 291,667 347,401 1,100,109
- --------
(1) "Value Realized" is the difference between the fair market value of the
underlying shares on the exercise date and the exercise price of the
option.
PENSION PLAN TABLE
The following table shows the estimated annual benefits payable upon
retirement at age 65 and the payment of a single-life annuity to a participant
with 60 monthly payments guaranteed.
YEARS OF SERVICE
---------------------------------------
REMUNERATION 15 20 25 30 35
------------ ------- ------- ------- ------- -------
$100,000 $25,731 $34,308 $42,885 $42,885 $42,885
120,000 31,431 41,908 52,385 52,385 52,385
140,000 37,131 49,508 61,885 61,885 61,885
160,000 42,831 57,108 71,385 71,385 71,385
180,000 42,831 57,108 71,385 71,385 71,385
Remuneration includes Salary and Bonus as set forth in the Summary
Compensation Table. A participant's benefit is based on the average monthly
earnings for the consecutive five year period during which the participant had
his or her highest level of earnings. The benefits stated in the table are the
benefits to be received by a participant and will not be reduced by Social
Security or other amounts received by a participant. Neither remuneration
greater than $160,000 nor years of service in excess of 25 years is credited
for benefit calculation purposes.
The following are the current years of credited service under the Pension
Plan for the named executive officers in the Summary Compensation Table: John
C. Adams, Jr.--2; J.R. Hyde, III--25 (maximum); Timothy D. Vargo--11; Thomas
S. Hanemann--22; Lawrence E. Evans--11, Robert J. Hunt--2, and Shawn P.
McGhee--9.
8
EMPLOYMENT AGREEMENTS AND AGREEMENTS WITH FORMER OFFICERS
Upon his retirement as Chairman of the Company on March 18, 1997, the
Company and Mr. Hyde entered into an agreement as subsequently amended in
which Mr. Hyde agreed not to compete with the Company through March 18, 2002,
in consideration of the Company agreeing (i) to pay Mr. Hyde a prorated bonus
for the 1997 fiscal year for the period beginning September 1, 1996, to March
18, 1997, (ii) to pay Mr. Hyde the total sum of $1,455,133 in installments
beginning on March 18, 1997, and ending on March 18, 2002, (iii) to provide
health and dental insurance from March 18, 1997, to March 18, 2002, as if Mr.
Hyde remained employed by the Company, and (iv) to continue to provide
personal security services through March 18, 2002.
Upon his retirement as President of the Company on November 8, 1996, the
Company and Mr. Hanemann entered into an agreement in which Mr. Hanemann
remains an employee of the Company and he agrees not to compete with the
Company through August 26, 1999, in consideration of the Company agreeing (i)
to pay Mr. Hanemann the full bonus for the 1996 fiscal year, (ii) to pay Mr.
Hanemann a lump-sum payment of $50,000, (iii) to continue to pay Mr. Hanemann
his current salary through the 1997 fiscal year ended August 30, 1997, and
(iv) to pay Mr. Hanemann a salary of $250,000 for each of the 1998 and 1999
fiscal years. The Company and Mr. Hanemann agreed to terminate options to
purchase 100,000 shares of common stock granted to Mr. Hanemann in the 1994
fiscal year. Mr. Hanemann will retain all other benefits as offered other
employees of the Company until August 28, 1999.
In fiscal year 1997, the Company entered into an agreement with Mr. Adams in
which the Company agreed to employ Mr. Adams as Chairman and Chief Executive
Officer of the Company for a period of five years. The Company agreed to pay
Mr. Adams a salary of $500,000 per year, subject to increases as determined by
the Compensation Committee, and a bonus of up to 75% of his salary in
accordance with the policies and procedures established by the Compensation
Committee. In addition, the Compensation Committee reserves the right to pay
additional compensation as it may deem appropriate. The Company may terminate
the agreement without cause at any time, in which case for a period of three
years thereafter Mr. Adams shall remain an employee of the Company, continue
to receive his then current salary and all benefits available to the Company's
employees, but no bonus shall be payable. The agreement may be terminated with
cause by the Company or voluntarily by Mr. Adams at any time, in which case
Mr. Adams shall cease to receive salary, bonus and other benefits. Upon
termination of the Agreement by AutoZone with or without cause, or by Mr.
Adams for reasons other than a change in control of the Company, Mr. Adams
will be prohibited from competing with the Company for a period of three years
from the termination date.
In fiscal year 1997, the Company entered into agreements with Messrs. Vargo,
Hunt and McGhee (individually an "Executive") in which the Company agreed to
employ each Executive for a period of five years in their current capacity
with the Company. The Company agreed to pay minimum annual salaries as
follows: Mr. Vargo, $400,000; Mr. Hunt, $285,000; Mr. McGhee, $300,000, each
of which is subject to increases as determined by the Compensation Committee.
Further, each Executive is entitled to receive a bonus each year in accordance
with the policies and procedures established by the Compensation Committee.
The amount of each bonus is based on a percentage of the annual salary of each
Executive. The bonus percentage established for Mr. Vargo is 75%, and for
Messrs. Hunt and McGhee, 60%. In addition, the Compensation Committee reserves
the right to pay additional compensation as it may deem appropriate. The
Company may terminate the agreements without cause at any time, in which case
for a period of three years the Executive shall be an employee of the Company,
continue to receive his then current salary and he will receive all benefits
available to the Company's employees, but no bonus shall be payable. The
agreement may be terminated with cause by the Company or voluntarily by the
Executive at any time, in which case the Executive shall cease to receive
salary, bonus and other benefits. Upon termination of an Agreement by AutoZone
with or without cause, or by the Executive for reasons other than a change in
control of the Company (or a change in management, in the case of the
agreement with Mr. McGhee), the Executive will be prohibited from competing
with the Company for a period of three years from the termination date.
9
"Cause" is defined in each agreement discussed above as meaning the willful
engagement by the Executive in conduct which is demonstrably or materially
injurious to AutoZone, monetarily or otherwise. "Change in control" in each
agreement is defined as (a) the acquisition after the date hereof, in one or
more transactions, of beneficial ownership (as defined in Rule 13d-3(a)(1)
under the Securities Exchange Act of 1934, as amended ("Exchange Act")), by
any person or entity or any group of persons or entities who constitute a
group (as defined in Section 13(d)(3) under the Exchange Act) of any
securities such that as a result of such acquisition such person, entity or
group beneficially owns the Company's then outstanding voting securities
representing 51% or more of the total combined voting power entitled to vote
on a regular basis for a majority of the Board of Directors of the Company, or
(b) the sale of all or substantially all of the assets of the Company
(including, without limitation, by way of merger, consolidation, lease or
transfer) in a transaction where the Company or the beneficial owners (as
defined in Rule 13d-3(a)(1) under the Exchange Act) of capital stock of the
Company do not receive (i) voting securities representing a majority of the
total combined voting power entitled to vote on a regular basis for the board
of directors of the acquiring entity or of an affiliate which controls the
acquiring entity or (ii) securities representing a majority of the total
combined equity interest in the acquiring entity, if other than a corporation;
provided however, that a change in control shall not be deemed to occur upon
the transfer, sale or disposition of shares of capital stock of the Company to
any person or persons who are affiliates of the Company on the date of the
agreement. "Change in management" is defined in Mr. McGhee's agreement as a
change in the current Chief Executive Officer or Chief Operating Officer.
COMPENSATION OF DIRECTORS
Directors of the Company who do not serve as executive officers receive an
annual fee of $25,000. Members of the Committees of the Board of Directors who
do not serve as executive officers receive $1,000 for each Committee meeting
attended in person.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors ("Committee") is
composed of N. Gerry House, James F. Keegan, and Ronald A. Terry, each of whom
is a non-employee director of the Company.
The Committee reviews and approves executive compensation, establishes
target profit goals, makes grants of long-term incentives, and determines the
compensation to be paid to the Chief Executive Officer and each of the other
officers of the Company. The goal of the executive compensation program is to
reward executives for their performance and enhancement of stockholder value.
The Company's executive compensation program is designed to attract and
retain executives who are key to the long-term success of the Company and
align compensation with the attainment of the Company's business goals and the
increase in share value. The Company utilizes the same philosophy as the
Committee in establishing compensation for employees other than officers.
Executive compensation consists of (1) salary, (2) annual performance
incentives, and (3) long-term incentives. The Committee reviews executive
compensation annually and makes appropriate adjustments based on (i) Company
performance, (ii) achievement of predetermined goals, and (iii) changes in an
executive's duties and responsibilities.
Salary. The Committee desires that overall compensation reflect the
performance of each individual executive over time. Base salaries are set at
levels subjectively determined by the Committee to adequately reward and
retain capable executives, including the Chief Executive Officer. The
Committee considers the importance of and skills required in a particular
executive position in establishing salary.
At the beginning of each fiscal year, the Committee reviews and establishes
the annual salary of each officer, including the Chief Executive Officer. The
Committee makes an independent, subjective determination of the
10
appropriate level of each officer's salary. The Committee does not use any
mechanical formulations or weighting of any of the factors considered.
Annual Performance Incentives. The Company has established an annual bonus
plan for executive officers that is based on the attainment by the Company of
targeted increases in earnings, which are set at the beginning of each fiscal
year. Under the bonus plan, a maximum bonus is established for each executive
officer, which may equal up to a maximum of 100% of an executive's salary
depending on the position of the executive and the achievement of certain
profit goals set by the Committee. As a general matter, as an executive's
level of management responsibility in the Company increases, the greater the
portion of his or her potential total compensation depends on the Company's
performance as measured by increases in earnings over the previous year. No
bonus is payable under the bonus plan unless a predetermined minimum increase
in earnings is achieved. It is the Committee's desire that a significant
portion of each officer's compensation be directly related to the performance
of the Company.
Long Term Incentives. In an effort to properly align the long-term interests
of the Company's management and stockholders, the Committee has a history of
awarding non-qualified stock options to all levels of management, including
individual store managers. The 1996 Stock Option Plan ("Option Plan") under
which the Company may award non-qualified or incentive stock options, gives
employees the opportunity to acquire an equity interest in the Company and to
participate in appreciation of the value of the Company's common stock. The
Committee believes that the Option Plan enables the Company to attract and
retain the highest quality managers. Under the Option Plan, the Committee is
responsible for establishing who is granted options, the term of the options,
requisite conditions for exercise, and the number of options to be granted.
Stock option awards granted to any recipient are made by a subjective
determination by the Committee, upon recommendation by the Chief Executive
Officer, who considers the person's past performance and current
responsibilities, and the number of shares previously granted to that person.
CEO Compensation. At the beginning of fiscal year 1997, Mr. Hyde was the
Company's Chairman and Chief Executive Officer. The Committee established a
salary for Mr. Hyde of $641,381, which was a 3% increase over Mr. Hyde's
salary for fiscal year 1996 (after eliminating the 53rd week of fiscal year
1996). In determining the increase in salary, the Committee made a subjective
review of the Chief Executive Officer's performance compared to the Company's
performance in the prior year. Upon Mr. Hyde's retirement as Chief Executive
Officer on December 12, 1996, the Committee reduced Mr. Hyde's salary to
$370,000, to reflect his reduction in responsibilities. Upon Mr. Hyde's
retirement as Chairman in March 1997, the Company entered into a non-compete
agreement with Mr. Hyde which is described in the section entitled "Employment
Agreements and Agreements with Former Officers."
At the beginning of the 1997 fiscal year, Mr. Adams was Vice Chairman and
Chief Operating Officer with a salary of $367,000. On December 12, 1996, Mr.
Adams was elected President and Chief Executive Officer and his salary was
increased to $400,000 to reflect his increase in duties. In March 1997, Mr.
Adams was elected Chairman and Chief Executive Officer and his salary was
increased in June 1997 to $500,000 to reflect his increased responsibilities.
During the fiscal year, the Committee awarded Mr. Adams options to purchase
up to 350,000 shares of the Company's common stock at a price equal to the
market value of the stock on the date of each of the option grants. The
options do not begin to vest until the passage of three years from the grant
date, and vest in one-third increments at one year intervals thereafter. The
option grants were made to encourage Mr. Adams to remain at the Company for an
extended period of time and to provide a strong incentive for him to increase
the value of the Company during his employment. Reflecting Mr. Hyde's high
percentage ownership of the Company's common stock, Mr. Hyde had not received
stock options since prior to the Company's initial public offering in 1991.
In fiscal year 1997, the Company entered into employment agreements with Mr.
Adams and certain other executive officers of the Company which are described
in the section entitled "Employment Agreements and Agreements with Former
Officers."
11
Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal
Revenue Code of 1986 places a limit of $1,000,000 on the amount of compensation
that may be deducted by the Company in any one fiscal year with respect to the
Chief Executive Officer and the other four most highly compensated individuals
who are executive officers as of the end of the fiscal year. However, this
deduction limitation does not apply to certain "performance based"
compensation. The Committee intends to generally design and implement
compensation plans that qualify for full deductibility in accordance with
Section 162(m). However, the Company may from time to time pay other
compensation to its executive officers that may not be deductible.
Summary. The Committee has established compensation for executive officers
that links a large portion of each officer's compensation to the profit
performance of the Company and the long term appreciation of the stock price
and in so doing has rewarded executive officers for performance and enhancement
of stockholder value.
This report was unanimously adopted by the Compensation Committee and
approved by the Board of Directors.
Ronald A. Terry, Chairman
N. Gerry House
James F. Keegan
STOCK PERFORMANCE GRAPH
The following graph shows, from the end of fiscal year 1992 to the end of
fiscal year 1997, changes in the value of $100 invested in (i) the Company's
common stock, (ii) Standard & Poor's Retail Store Composite Index, and (iii)
Standard & Poor's 500 Composite Index.
The Stock Performance Graph shall not be deemed incorporated by reference by
any general statement incorporating by reference the Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference and shall not otherwise be deemed filed.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG AUTOZONE, INC., S&P 500 INDEX AND S&P RETAIL STORE COMPOSITE
PERFORMANCE GRAPH APPEARS HERE
Measurement Period AUTOZONE, S&P S&P RETAIL
(Fiscal Year Covered) INC. 500 INDEX STORE COMPOSITE
- --------------------- --------- --------- ---------------
Measurement Pt- Aug. 92 $100.00 $100.00 $100.00
FYE Aug. 93 $178.63 $114.24 $110.87
FYE Aug. 94 $164.11 $120.45 $111.45
FYE Aug. 95 $183.77 $146.57 $116.93
FYE Aug. 96 $186.33 $174.90 $140.51
FYE Aug. 97 $193.17 $246.00 $180.86
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Hyde is the sole stockholder of a corporation that owns an aircraft that
was leased to the Company for Company business at times during the 1997 fiscal
year. For the use of that aircraft in fiscal year 1997, the Company paid lease
fees and expenses to the corporation totaling $106,973. In addition, pilots
who are employees of AutoZone operated the aircraft for Mr. Hyde's personal
benefit at times during the 1997 fiscal year. For the use of the pilots'
services, Mr. Hyde paid AutoZone $96,000. AutoZone believes that the charges
for the use of the plane by AutoZone and for the pilots used by Mr. Hyde are
reasonable and equivalent to the fees charged by others for the use of similar
aircraft and pilots.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who beneficially
own more than ten percent of the Company's common stock to file reports of
their beneficial ownership (Forms 3, 4, and 5) with the Securities and
Exchange Commission and the New York Stock Exchange. Executive officers,
directors, and greater-than-ten percent holders are required to furnish the
Company with copies of the forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of Forms 3 and 4 and any amendments received during fiscal year 1997,
and Forms 5 and any amendments received with respect to fiscal year 1996, or
written representations that no reports were required, all filings applicable
to its officers, directors, greater-than-ten percent beneficial owners and
other persons subject to Section 16 of the Exchange Act were timely, except
that Timothy D. Vargo, currently President and Chief Operating Officer, was
late filing a Form 5 covering one transaction for the 1996 fiscal year and
Thomas S. Hanemann, former President and a former director, was late filing a
Form 4 covering one transaction for the 1997 fiscal year.
PROPOSAL 2--ADOPTION OF THE AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
On October 21, 1997, the Board of Directors approved the Amended and
Restated Employee Stock Purchase Plan ("Plan"). As the Plan has no more shares
available for distribution under the Plan, the Board of Directors recommends
that the stockholders adopt the Plan as amended to continue the Company's
tradition of encouraging equity ownership among all of its employees. The
proposed text of the Plan is attached to this Proxy Statement as Exhibit A,
and the following summary of the Plan is subject to and is qualified by the
terms and conditions of the Plan.
The price of AutoZone Common Stock as quoted on the New York Stock Exchange
as of the close of business on October 10, 1997, was $32 1/16.
Summary of the Plan. All employees of the Company and its domestic
subsidiaries, after at least six months of service, are eligible to
participate in the Plan. At August 30, 1997, the Company and its subsidiaries
had approximately 28,400 employees, all of whom are eligible to participate in
the Plan after six weeks of employment, and 6,472 employees were participating
in the Plan. Participating employees may contribute up to the lesser of $4,000
or 10% of their yearly earnings, including bonuses, to the Plan via payroll
deduction to purchase the Company's common stock at 85% of the lower of the
market value of the Company's common stock at the beginning or the ending of
each calendar quarter. Holders of 5% or more of the Company's common stock are
not eligible to participate in the Plan.
Under the Plan as amended, the Company would be authorized to issue up to
3,000,000 shares of common stock under the Plan. The shares issued may either
be authorized but unissued shares or shares purchased by the Company for
issuance under the Plan. In the past, the Company has repurchased shares
previously issued under the Plan from employees at the fair market value of
the shares at the date of repurchase.
13
The Plan is administered by the Compensation Committee, which has the power
to interpret the Plan and to adopt such rules for the administration,
interpretation and application of the Plan.
The Plan will terminate on December 31, 2002, unless it is extended by the
Board of Directors.
Amendments. The proposed amendments principally (i) increase the number of
shares available under the Plan from 1,200,000 to 3,000,000, (ii) permit the
Company and its employees to initiate transactions in the Plan via electronic
communication, (iii) conform the Plan to amendments in regulations related to
Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"), (iv) limit
the grant of options to employees of the Company and its domestic subsidiaries
only, and (v) extend the termination date of the Plan to December 31, 2002.
Any further amendments to the Plan may be approved by the Board of
Directors, except that stockholder approval would be required to (i) increase
the number of shares available for issuance under the Plan, (ii) decrease the
price at which the common stock would be sold under the Plan, (iii) materially
alter the requirements for eligibility to participate in the Plan, or (iv)
modify the Plan in a manner requiring stockholder approval under the Internal
Revenue Code of 1986, as amended, or the Exchange Act.
The following table shows the benefit that each of the named executive
officers received during fiscal year 1997 as a result of participation in the
Plan. The benefit to each named executive is the difference between the
purchase price and the fair market value of the shares on the date purchased.
DOLLAR NUMBER OF
NAME AND POSITION VALUE ($) SHARES (#)
----------------- --------- ---------
John C. Adams, Jr. ................................... 754 182
J.R. Hyde, III (1).................................... -- --
Timothy D. Vargo...................................... 705 209
Thomas S. Hanemann.................................... 0 0
Lawrence E. Evans..................................... 709 210
Robert J. Hunt........................................ 0 0
Shawn P. McGhee....................................... 705 209
Executive Officers as a Group......................... 5,104 1,479
Non-Executive Officer Employee Group.................. 1,207,684 306,662
- --------
(1) Mr. Hyde was not eligible to participate in the Plan when he was an
employee as he is a holder of 5% or more of the outstanding common stock
of the Company.
Federal Income Tax Consequences. The Plan is intended to meet the
requirements of an "employee stock purchase plan" under section 423 of the
Internal Revenue Code of 1986, as amended. Employees do not recognize taxable
income upon grant of an option to purchase or upon the exercise of the option
to purchase the discounted shares of common stock. In general, if shares are
held for more than one year after they are purchased and for more than two
years from the date the option is granted or if the employee dies while owning
the shares, gain on the sale or other disposition of the shares will be
taxable to the employee as ordinary income (with no corresponding deduction to
the Company) to the extent of the lesser of: (i) 15% of the fair market value
of the shares on the date the option was granted or (ii) the amount by which
the fair market value of the shares on the date of the sale, other disposition
or death exceeds the purchase price. Any additional gain is treated as capital
gain. However, if an employee disposes of the stock purchased under the Plan
prior to the later of two years after the granting of the option or one year
from the date of the exercise of the option to purchase the stock
("Disqualifying Disposition"), then the excess of the fair market value of the
shares at the date of exercise over the actual price paid for such shares will
be taxable as ordinary income to the employee. The Company may not deduct the
difference between the consideration paid for the shares of common stock and
the fair market value of the stock under the Plan unless the employee makes a
Disqualifying Disposition of the common stock.
Vote Required. The affirmative vote of a majority of the shares entitled to
vote at the Annual Meeting is required to approve the Amended and Restated
Employee Stock Purchase Plan.
14
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSED
AMENDMENT AND RESTATEMENT OF THE EMPLOYEE STOCK PURCHASE PLAN.
PROPOSAL 3--RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors, acting on the recommendation of its Audit Committee,
has selected the firm of Ernst & Young LLP, which has served as independent
auditors for the past ten fiscal years, to conduct an audit, in accordance
with generally accepted auditing standards, of the Company's financial
statements for the 52-week fiscal year ending August 29, 1998. AutoZone
expects representatives of that firm to be present at the Annual Meeting to
respond to appropriate questions and to make a statement, if they so desire.
This selection is being submitted for ratification at the meeting.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote is required for such ratification. If not ratified, the Board will
reconsider the selection upon recommendation of the Audit Committee, although
the Board of Directors will not be required to select different independent
auditors for the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
OTHER MATTERS
The Board of Directors is not presently aware of any matters to be presented
at the Annual Meeting other than the election of directors and the
ratification of Ernst & Young LLP as the Company's independent auditors. If,
however, other matters are properly brought before the Annual Meeting, the
enclosed proxy gives discretionary authority to the persons named therein to
act in accordance with their best judgment on such matters.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Stockholder proposals to be presented at the fiscal year 1998 annual meeting
of stockholders must be received by the Company by July 2, 1998, to be
considered by the Board of Directors for inclusion in the 1998 Proxy
Statement. Any proposals must be mailed to AutoZone, Inc., to the attention of
the Secretary, Post Office Box 2198, Dept. 8074, Memphis, Tennessee 38101-
9842.
ANNUAL REPORT
The Company's Annual Report to Stockholders containing audited financial
statements for the year ended August 30, 1997, is being mailed with this Proxy
Statement to all stockholders of record.
By the order of the Board of
Directors
HARRY L. GOLDSMITH
Secretary
Memphis, Tennessee
October 29, 1997
15
EXHIBIT A
AUTOZONE, INC.
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
AUTOZONE, INC., a corporation organized under the laws of the State of
Delaware, by resolution of its Board of Directors on March 29, 1991, adopted
the Employee Stock Purchase Plan (the "Plan"). The Plan was approved by the
stockholders of the Company on March 29, 1991. The Plan was amended by the
Board of Directors on June 18, 1991, to conform the Plan to amendments to the
regulations related to the Securities Exchange Act of 1934, as amended. On
December 21, 1991, the Plan was assumed by AutoZone, Inc., a Nevada
corporation, after its reincorporation. The Plan was amended by the Board of
Directors on March 2, 1996, and October 21, 1996, to extend the expiration
date of the Plan. On October 21, 1997, the Board of Directors adopted this
Amended and Restated Stock Option Plan.
The purposes of the Plan are as follows:
(1) To assist employees of the Company or of a Parent or Subsidiary of
the Company in acquiring a stock ownership interest in the Company pursuant
to a plan which is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986, as amended.
(2) To help employees provide for their future security and to encourage
them to remain in the employment of the Company or of a Parent or
Subsidiary of the Company.
1. DEFINITIONS
Whenever any of the following terms are used in the Plan with the first
letter or letters capitalized, they shall have the meaning specified below
unless the context clearly indicates to the contrary. The masculine pronoun
shall include the feminine and neuter and the singular shall include the
plural where the context so indicates:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Compensation Committee of the Board
appointed to administer the Plan pursuant to paragraph 12.
(d) "Company" shall mean AutoZone, Inc., a Nevada corporation.
(e) "Date of Exercise" shall mean with respect to any Option (i) the
March 31 of the Plan Year in which the Option was granted (in the case of
an Option granted on January 1), (ii) the June 30 of the Plan Year in which
the Option was granted (in the case of an Option granted on April 1), (iii)
the September 30 of the Plan Year in which the Option was granted (in the
case of an Option granted on July 1), (iv) the December 31 of the Plan Year
in which the Option was granted (in the case of an Option granted on
October 1) or (v) such other day, as may be determined by the Committee, of
the Plan Year in which the Option was granted.
(f) "Date of Grant" shall mean the date upon which an Option is granted,
as set forth in paragraph 3(a).
(g) "Eligible Compensation" shall mean (i) the Eligible Employee's rate
of pay for the immediately preceding calendar year based on the wages, tips
and other compensation as reported on Form W-2 issued by the Company, if
the Eligible Employee's Form W-2 issued by the Company reports wages, tips,
and other compensation for the full preceding calendar year, otherwise (ii)
the Eligible Employee's annualized current rate of pay on the Date of
Grant.
A-1
(h) "Eligible Employee" shall mean an employee of the Company and those
of any present or future Parent or Subsidiary of the Company incorporated
under the laws of a state of the United States of America (i) who has
completed six months of employment; and (ii) who does not, immediately
after the Option is granted, own stock (as defined by Sections 423(b)(3)
and 424(d) of the Code) possessing five percent or more of the total
combined voting power or value of all classes of stock of the Company or of
a Parent or Subsidiary of the Company.
(i) "Form" shall mean either a paper form or a form on electronic media,
prepared by the Company.
(j) "Option" shall mean an option granted under the Plan to an Eligible
Employee to purchase shares of the Company's Stock.
(k) "Option Period" shall mean with respect to any Option the period
beginning upon the Date of Grant and ending upon the Date of Exercise.
(l) "Option Price" has the meaning set forth in paragraph 4(b).
(m) "Parent of the Company" shall mean any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if,
at the time of the granting of the Option each of the corporations other
than the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
(n) "Participant" shall mean an Eligible Employee who has complied with
the provisions of paragraph 3(b).
(o) "Plan" shall mean the AutoZone, Inc. Amended and Restated Employee
Stock Purchase Plan.
(p) "Plan Year" shall mean the calendar year beginning on January 1 and
ending on December 31.
(q) "Stock" shall mean shares of the Company's common stock.
(r) "Subsidiary of the Company" shall mean any corporation other than the
Company in an unbroken chain of corporations beginning with the Company if,
at the time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
2. STOCK SUBJECT TO THE PLAN
Subject to the provisions of paragraph 9 (relating to adjustment upon
changes in the Stock), the Stock which may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate 3,000,000 shares, and may be
unissued shares or reacquired shares or shares bought on the market for
purposes of the Plan.
3. GRANT OF OPTIONS
(a) General Statement. Following the effective date of the Plan and
continuing while the Plan remains in force, the Company may offer Options
under the Plan to all Eligible Employees. These Options may be granted four
times each Plan Year on the January 1, the April 1, the July 1, or the October
1 of each Plan Year, or on such other days as may be determined by the
Committee. The term of each Option shall be for three months and shall end on
the March 31 (with respect to a January 1 Date of Grant), the June 30 (with
respect to an April 1 Date of Grant), the September 30 (with respect to a July
1 Date of Grant), or the December 31 (with respect to an October 1 Date of
Grant) of the Plan Year in which the Option is granted or for such other term
or Date of Exercise as may be determined by the Committee. The number of
shares of the Stock subject to each Option shall be the whole number quotient
of (i) the aggregate payroll deductions authorized by each Participant in
accordance with subparagraph (b) for the Option Period divided by (ii) the
Option Price of the Stock.
(b) Election To Participate; Payroll Deduction Authorization. An Eligible
Employee may participate in the Plan only by payroll deduction. Each Eligible
Employee who elects to participate in the Plan shall deliver to
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the Company during the calendar month next preceding either a January 1 Date
of Grant, an April 1 Date of Grant, a July 1 Date of Grant, or an October 1
Date of Grant, or on such other days as may be determined by the Committee,
the properly completed Form whereby the Eligible Employee gives notice of the
election to participate in the Plan as of the next following Date of Grant,
and which shall designate a stated dollar amount, in $5.00 increments, of
Eligible Compensation to be withheld on each payday. The stated dollar amount
may not be less than $5.00 and may not exceed 10% of the Eligible
Compensation. In addition, at the discretion of the Committee exercised
uniformly as to all Eligible Employees at any particular time, an Eligible
Employee who participates in the Plan may also elect to have an amount
withheld from any bonus. Notwithstanding the foregoing, the maximum cumulative
amount an Eligible Employee may have withheld through payroll deduction and
from any bonus shall not exceed $4,000 per Plan Year.
(c) Changes in Payroll Authorization. The payroll deduction authorization
referred to in subparagraph (b) may only be changed during the enrollment
period described in subparagraph (b) and may not be changed during the Option
Period, except as provided in paragraph 5.
(d) $25,000 Limitation. Notwithstanding anything to the contrary contained
herein, no Participant shall be permitted to purchase Stock under the Plan or
under any other employee stock purchase plan of the Company or of a Parent or
Subsidiary of the Company which is intended to qualify under Section 423 of
the Code, at a rate which exceeds $25,000 in fair market value of the Stock
(determined at the time the option is granted) for each calendar year in which
any such option granted to such Participant is outstanding at any time.
4. EXERCISE OF OPTIONS
(a) General Statement. Each Participant automatically will be deemed to have
exercised the Option on each Date of Exercise to the extent that the balance
then in the Participant's account under the Plan is sufficient to purchase at
the Option Price whole shares of the Stock subject to the Option. The excess
balance, if any, in Participant's account shall remain in the account and be
available for the purchase of Stock on the following Date of Exercise,
provided that no withdrawal from the Plan or termination of employment has
occurred under paragraphs 5 or 6.
(b) Option Price Defined. The option price per share of the Stock (the
"Option Price") to be paid by each Participant on each exercise of the Option
shall be an amount equal to the lesser of (y) 85% of the fair market value of
the Stock on the Date of Grant or (z) 85% of the fair market value of the
Stock on the Date of Exercise. The fair market value of the Stock as of a
given date shall be: (i) the closing price of the Stock on the principal
exchange on which the Stock is then trading, if any, on such date, or, if the
Stock was not traded on such date, then on the next preceding trading day
during which a sale occurred; or (ii) if such Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, (1) the last
sales price (if the Stock is then listed as a National Market Issue under the
NASD National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the Stock on such
date as reported by NASDAQ or such successor quotation system; or (iii) if
such Stock is not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the mean between the closing bid and asked prices
for the Stock on such date as determined in good faith by the Committee; or
(iv) if the Stock is not publicly traded, the fair market value established by
the Committee acting in good faith.
(c) Delivery of Share Certificates. Upon the proper completion and
submission of the proper Form to the Company, the Company will deliver to such
Participant a certificate issued in Participant's name for the number of
shares of the Stock with respect to which the Option was exercised and for
which the Option Price has been paid. In the event the Company is required to
obtain from any commission or agency authority to issue any such certificate,
the Company will seek to obtain such authority. The inability of the Company
to obtain from any such commission or agency authority which counsel for the
Company deems necessary for the lawful issuance of any such certificate shall
relieve the Company from liability to any Participant except to return the
amount of the balance in the account in cash.
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5. WITHDRAWAL FROM THE PLAN
(a) General Statement. Any Participant may withdraw from the Plan at any
time. A Participant who wishes to withdraw from the Plan must deliver to the
Company a notice of withdrawal in a Form prepared by the Company. The Company,
as soon as practicable following receipt of a Participant's notice of
withdrawal, will refund to the Participant the amount of the balance in the
account under the Plan. Upon receipt of a Participant's notice of withdrawal
from the Plan, automatically and without any further act on the part of the
Participant, the payroll deduction authorization, any interest in the Plan,
and any Option under the Plan shall terminate.
(b) Participation Following Withdrawal. A Participant who withdraws from the
Plan may participate again in the Plan on the next January 1, April 1, July 1,
or October 1 immediately following the date of withdrawal, or on such other
days as may be determined by the Committee.
6. TERMINATION OF EMPLOYMENT
(a) Termination of Employment Other Than By Retirement or Death. If the
employment of a Participant terminates other than by retirement or death,
participation in the Plan automatically shall terminate as of the date of the
termination of employment. As soon as practicable after such a Participant's
termination of employment, the Company will refund the amount of the balance
in that account under the Plan. Upon a Participant's termination of
employment, any interest in the Plan and any Option under the Plan shall
terminate.
(b) Termination by Retirement. A Participant who retires on a normal
retirement date, or earlier or later with the consent of the Company, may by
written notice to the Company request payment of the balance in the account
under the Plan, in which event the Company shall make such payment as soon as
practicable after receiving such notice; upon receipt of such notice, the
Participant's interest in the Plan and any Option under the Plan shall
terminate. If the Company does not receive such notice prior to the next Date
of Exercise, such Participant's Option will be deemed to have been exercised
on such Date of Exercise.
(c) Termination By Death. If the employment of a Participant is terminated
by Participant's death, the executor of the Participant's will or the
administrator of the Participant's estate by written notice to the Company may
request payment of the balance in the Participant's account under the Plan, in
which event the Company shall make such payment without any interest thereon
as soon as practicable after receiving such notice. Upon receipt of such
notice, the Participant's interest in the Plan and Option under the Plan shall
terminate. If the Company does not receive such notice prior to the next Date
of Exercise, the Participant's Option shall be deemed to have been exercised
on such Date of Exercise.
7. RESTRICTION UPON ASSIGNMENT
No Option or interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of any Participant or any successor in
interest, nor shall any Option be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and attempted disposition thereof shall be
null and void and of no effect; provided, however, that nothing in this
paragraph 7 shall prevent transfers by will or by the applicable laws of
descent and distribution. Except as provided in paragraph 6(c), an Option may
not be exercised to any extent except by the Participant. The Committee may
require the Participant to give the Company prompt notice of any disposition
of shares of stock acquired by exercise of an Option within two years from the
date of granting such Option or one year after the transfer of such shares to
such Participant. The Committee may require that the certificates evidencing
shares acquired by exercise of an Option refer to such requirement to give
prompt notice of disposition.
8. NO RIGHTS OF STOCKHOLDER UNTIL OPTION IS EXERCISED
With respect to shares of the Stock subject to an Option, a Participant
shall not be deemed to be a stockholder of the Company, and shall not have any
of the rights or privileges of a stockholder. A Participant shall have the
rights and privileges of a stockholder of the Company when, but not until, an
Option is exercised.
A-4
9. CHANGES IN THE STOCK; ADJUSTMENTS OF AN OPTION
Whenever any change is made in the Stock or to Options outstanding under the
Plan, by reason of stock dividend or by reason of division, combination or
reclassification of shares, appropriate action will be taken by the Committee
to adjust accordingly the number of shares of the Stock subject to the Plan
and the number and the Option Price of shares of the Stock subject to the
Options outstanding under the Plan.
10. USE OF FUNDS; NO INTEREST PAID
All funds received or held by the Company under the Plan will be included in
the general funds of the Company free of any trust or other restriction and
may be used for any corporate purpose. No interest will be paid to any
Participant or credited to any account under the Plan with respect to such
funds.
11. AMENDMENT OF THE PLAN
The Committee may amend, suspend or terminate the Plan at any time and from
time to time; provided, however, that the provisions in paragraphs 1(e), 1(h),
3(a), 3(d), and 4(b) may not be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder; and provided
further, that approval by the vote of the holders of more than 50% of the
outstanding shares of the Company's Stock entitled to vote shall be required
to amend the Plan (i) to increase the number of shares of Stock available
under the Plan, (ii) to decrease the Option Price below a price computed in
the manner stated in paragraph 4(b), (iii) to materially alter the
requirements for eligibility to participate in the Plan, or (iv) to modify the
Plan in a manner requiring stockholder approval under the Code or Securities
Exchange Act of 1934 ("Exchange Act").
12. ADMINISTRATION BY COMMITTEE; RULES AND REGULATIONS
(a) Administration. The Plan shall be administered by the Compensation
Committee of the Board.
(b) Duties And Powers of Committee. It shall be the duty of the Committee to
conduct the general administration of the Plan in accordance with its
provisions. The Committee shall have the power to interpret the Plan and the
Options and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. The Board shall have no right to exercise any of the
rights or duties of the Committee under the Plan.
(c) Majority Rule. The Committee shall act by a majority of its members in
office. The Committee may act either by vote at a meeting or by a memorandum
or other written instrument signed by a majority of the Committee.
(d) Professional Assistance; Good Faith Actions. The Committee may employ
attorneys, consultants, accountants, appraisers, brokers or other persons. The
Committee, the Company and its officers and directors shall be entitled to
rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon all Participants, the Company and all
other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Options, and all members of the Committee shall be
fully protected by the Company in respect to any such action, determination or
interpretation.
13. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any
Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent or Subsidiary of the Company or to affect the right of the
Company or a Parent or Subsidiary of the Company to terminate the employment
of any person (including any Eligible Employee or Participant) at any time
with or without cause.
A-5
14. MERGER, ACQUISITION OR LIQUIDATION OF THE COMPANY
In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially
all of the Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company, the Date of
Exercise with respect to outstanding Options shall be the business day
immediately preceding the effective date of such merger, consolidation,
acquisition, liquidation or dissolution unless the Committee shall, in its
sole discretion, provide for the assumption or substitution of such Options in
manner complying with Section 424(a) of the Code.
15. TERM; APPROVAL BY STOCKHOLDERS
No Option may be granted during any period of suspension or after
termination of the Plan, and in no event may any Option be granted under the
Plan after December 31, 2002, unless extended by the Board of Directors of the
Company. The Plan will be submitted for the approval of the Company's
stockholders within 12 months after the date of the Board of Directors'
initial adoption of the Plan. The Company shall take such actions with respect
to the Plan as may be necessary to satisfy the requirements of Section 423 of
the Code.
16. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or a Parent or Subsidiary of the
Company. Nothing in this Plan shall be construed to limit the right of the
Company or a Parent or Subsidiary of the Company (a) to establish any other
forms of incentives or compensation for employees of the Company or a Parent
or Subsidiary of the Company or (b) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including,
but not by way of limitation, the grant or assumption of options in connection
with the acquisition, by purchase, lease, merger, consolidation or otherwise,
of the business, stock or assets of any corporation, firm or association.
17. RULE 16b-3 RESTRICTIONS UPON DISPOSITIONS OF STOCK
The Plan is intended to conform to the extent necessary with all provisions
of the Securities Act of 1933, as amended (the "Securities Act"), and the
Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including, without limitation,
Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and Options shall be granted and may be exercised, only in such
a manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and Options granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
18. NOTICES
Any notice to be given under the terms of the Plan to the Company shall be
addressed to the Company in care of its Secretary or any designee and any
notice to be given to a Participant shall be addressed to Participant's last
address as reflected in the Company's records and may be given either in
writing or via electronic communication to the extent permitted by law. By a
notice given pursuant to this paragraph, either party may hereafter designate
a different address for notices to be given. Any notice which is required to
be given to a Participant shall, if the Participant is then deceased, be given
to the Participant's personal representative if such representative has
previously informed the Company of the representative status and address by
notice under this paragraph. Any notice shall have been deemed duly given when
received by the Company or when sent to a Participant by the Company to
Participant's last known mailing address or delivered to an electronic mailbox
accessible by Participant as permitted by law.
19. TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
A-6
AUTOZONE, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF STOCKHOLDERS
P The undersigned hereby appoints Harry L. Goldsmith and Donald R. Rawlins,
and each of them, as proxies, with full power of substitution, to vote all
R shares of common stock of AutoZone, Inc., which the undersigned would be
entitled to vote at the Annual Meeting of AutoZone, Inc., to be held at the
O J.R. Hyde, III, Store Support Center, 123 South Front Street, Memphis,
Tennessee, on Thursday, December 18, 1997, at 10 a.m., and at any and all
X adjournments thereof, on items 1, 2 and 3, as specified herein and such
other matters as may come before the meeting.
Y
Election of (change of address/comments)
Directors, Nominees:
John C. Adams, Jr., Andrew M. Clarkson, _______________________________
N. Gerry House, Robert J. Hunt, J.R.
Hyde, III, James F. Keegan, Michael W. _______________________________
Michelson, John E. Moll, George R.
Roberts, Ronald A. Terry, and Timothy D. _______________________________
Vargo.
_______________________________
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTOR'S RECOMMENDATIONS. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
YOU ARE INVITED
TO ATTEND THE
[LOGO OF AUTOZONE]
ANNUAL MEETING
OF STOCKHOLDERS
DECEMBER 18, 1997
10:00 A.M.
123 SOUTH FRONT STREET
MEMPHIS, TENNESSEE
38103-3607
[MAP APPEARS HERE]
[X] Please mark your | 4631
votes as in this |__
example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR PROPOSALS 2 AND 3.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2 AND 3.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
FOR AGAINST ABSTAIN
2. Approval of Amended and Restated [_] [_] [_]
Employee Stock Purchase Plan.
3. Approval of Independent Auditors. [_] [_] [_]
4. In the discretion of the proxies named herein, upon such other matters as
may properly come before the meeting.
_________________________
- --------------------------------------------------------------------------------
SIGNATURE(S) ___________________________ DATE________ The signer hereby revokes
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS all proxies heretofore
HEREON. JOINT OWNERS SHOULD EACH SIGN. given by the signer to
WHEN SIGNING AS ATTORNEY, EXECUTOR, vote at the meeting or
ADMINISTRATOR, TRUSTEE OR GUARDIAN, any adjournments thereof.
PLEASE GIVE FULL TITLE AS SUCH.
IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
