FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended May 10, 1997, or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to ________.
Commission file number 1-10714
AUTOZONE, INC.
(Exact name of registrant as specified in its charter)
Nevada 62-1482048
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
123 South Front Street
Memphis, Tennessee 38103
(Address of principal executive offices) (Zip Code)
(901) 495-6500
Registrant's telephone number, including area code
(not applicable)
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter periods that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.
Common Stock, $.01 Par Value -151,000,793 shares as of June 20, 1997.
AUTOZONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MAY 10, 1997 AUG. 31, 1996
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $4,838 $3,904
Accounts receivable 22,435 15,466
Merchandise inventories 750,569 555,894
Prepaid expenses 28,195 19,225
Deferred income taxes 18,147 18,608
------- -------
Total current assets 824,184 613,097
Property and equipment:
Property and equipment 1,224,666 1,061,166
Less accumulated depreciation and (244,522) (198,292)
amortization --------- --------
980,144 862,874
Other assets:
Cost in excess of net assets acquired 16,760 17,187
Deferred income taxes 4,424 2,938
Other assets 1,522 2,301
------ ------
22,706 22,426
---------- ----------
$1,827,034 $1,498,397
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $467,799 $401,309
Accrued expenses 127,524 104,909
Income taxes payable 13,731 12,260
Revolving credit agreements - 94,400
-------- --------
Total current liabilities 609,054 612,878
Long-term debt 209,700 -
Other liabilities 17,752 19,937
Stockholders' equity 990,528 865,582
---------- ----------
$1,827,034 $1,498,397
========== ==========
See Notes to Condensed Consolidated Financial Statements.
AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
TWELVE WEEKS ENDED THIRTY-SIX WEEKS ENDED
MAY 10, 1997 MAY 4, 1996 MAY 10, 1997 MAY 4, 1996
Net sales $637,895 $524,175 $1,745,052 $1,413,042
Cost of sales, including warehouse
and delivery expenses 368,920 308,644 1,008,823 828,322
Operating, selling, general and
administrative expenses 192,200 155,099 548,339 425,467
------- ------- ------- -------
Operating profit 76,775 60,432 187,890 159,253
Interest expense-net 2,672 727 5,955 727
------- ------ ------- -------
Income before income taxes 74,103 59,705 181,935 158,526
Income taxes 28,000 22,100 68,450 58,800
------- ------- -------- -------
Net income $46,103 $37,605 $113,485 $99,726
======= ======= ======== =======
Net income per share $.30 $.25 $.74 $.66
==== ==== ==== ====
Average shares outstanding, including
common stock equivalents 152,602 151,541 152,389 150,508
======= ======= ======= =======
See Notes to Condensed Consolidated Financial Statements.
AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
THIRTY-SIX WEEKS ENDED
MAY 10, 1997 MAY 4, 1996
Cash flows from operating activities:
Net Income $113,485 $99,726
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 53,598 41,540
Net increase in merchandise inventories (194,675) (134,034)
Net increase in current liabilities 90,576 74,917
Other - net (18,424) (3,544)
------- ------
Net cash provided by operating activities 44,560 78,605
Cash flows from investing activities:
Cash outflows for property
and equipment, net (170,387) (183,181)
Cash flows from financing activities:
Net proceeds from debt 115,300 84,272
Proceeds from sale of Common Stock, including 11,461 14,431
related tax benefit ------- ------
Net cash provided by financing activities 126,761 98,703
------- ------
Net increase/(decrease) in cash and cash equivalents 934 (5,873)
Cash and cash equivalents at beginning of period 3,904 6,411
Beginning cash balance of pooled entity - 4,244
------ ------
Cash and cash equivalents at end of period $4,838 $4,782
====== ======
See Notes to Condensed Consolidated Financial Statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A--Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the thirty-six weeks ended May 10, 1997, are not necessarily
indicative of the results that may be expected for the fiscal year ending
August 30, 1997. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-K
for the year ended August 31, 1996.
NOTE B--INVENTORIES
Inventories are stated at the lower of cost or market using the last-
in, first-out (LIFO) method. An actual valuation of inventory under the
LIFO method can be made only at the end of each year based on the inventory
levels and costs at that time. Accordingly, interim LIFO calculations must
necessarily be based on management's estimates of expected year-end
inventory levels and costs.
NOTE C--DEBT
During December 1996, the Company executed an agreement with a group
of banks for a $275 million five-year unsecured revolving credit facility
to replace the existing revolving credit agreements. The rate of interest
payable under the agreement is a function of the London Interbank Offered
Rate (LIBOR), or the lending bank's base rate (as defined in the
agreement), or a competitive bid rate, at the option of the Company. At
May 10, 1997, the Company's borrowings under this agreement were $209.7
million and the weighted average interest rate was 5.8%. The unsecured
revolving credit agreement contains a covenant limiting the amount of debt
the Company may incur relative to its total capitalization. Based on the
terms of the Company's new five-year credit facility, amounts outstanding
under the revolving credit facility have been classified as long-term.
On March 27, 1997, the Company acquired a negotiated rate unsecured
revolving credit agreement totaling $25 million which extends until March
26, 1998. There were no amounts outstanding under this agreement as of
May 10, 1997.
NOTE D--CONTINGENCIES
The Company is a defendant in a purported class action entitled "Jack
Elliot and Greg Dobson, on behalf of themselves and all others similarly
situated, vs. AutoZone, Inc., and AutoZone Stores, Inc.," Civil Action No.
11416, Circuit Court for Roane County, Tennessee, filed on or about May 9,
1997. AutoZone Stores, Inc., is a wholly-owned subsidiary of the Company.
In an ex parte proceeding held prior to service of the complaint upon the
Company, and without notice to the Company, on May 14, 1997, the judge
entered an order conditionally certifying a class of all persons and
entities in 25 states in which the Company does business who purchased
automotive batteries from any AutoZone or AutoZone retail store location at
any time during the period May 5, 1990, to the present. At an appropriate
time, the Company intends to move the court to either decertify the class
or vacate or amend the conditional class certification order. In their
complaint, which is similar to class action complaints filed against
several other retailers of aftermarket automotive batteries, the plaintiffs
allege that the Company sold "old", "used", or "out of warranty" automotive
batteries to customers as if the batteries were new, and purports to state
causes of action for unfair or deceptive acts or practices, breaches of
contract, breaches of duty of good faith and fair dealing, intentional
misrepresentation, fraudulent concealment, civil conspiracy, and unjust
enrichment. The plaintiffs are seeking an accounting of all moneys
wrongfully received by the Company, compensatory and punitive damages,
along with plaintiffs' costs. The Company believes the claims are without
merit and intends to vigorously defend this action.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
TWELVE WEEKS ENDED MAY 10, 1997, COMPARED TO
TWELVE WEEKS ENDED MAY 4, 1996
Net sales for the twelve weeks ended May 10, 1997 increased by $113.7
million, or 21.7%, over net sales for the comparable period of fiscal 1996.
This increase was due to a comparable store sales increase of 7%, (which
was primarily due to sales growth in the Company's newer stores and the
added sales of the Company's commercial program), and increases in net
sales for stores opened since the beginning of fiscal 1996. At May 10,
1997 the Company had 1,578 stores in operation compared with 1,298 stores
at May 4, 1996.
Gross profit for the twelve weeks ended May 10, 1997, was $269.0
million, or 42.2% of net sales, compared with $215.5 million, or 41.1% of
net sales, during the comparable period for fiscal 1996. The increase in
the gross profit percentage was due primarily to higher gross margins for
commodity products such as oil, Freon and antifreeze, lower distribution
costs, and to a lower commercial gross margin in the prior year.
Operating, selling, general and administrative expenses for the twelve
weeks ended May 10, 1997 increased by $37.1 million over such expenses for
the comparable period for fiscal 1996, and increased as a percentage of net
sales from 29.6% to 30.1%. The increase in the expense ratio was due
primarily to an increase in net advertising costs.
The Company's effective income tax rate was 37.8% of pre-tax income
for the twelve weeks ended May 10, 1997 and 37.0% for the twelve weeks
ended May 4, 1996.
THIRTY-SIX WEEKS ENDED MAY 10, 1997, COMPARED TO
THIRTY-SIX WEEKS ENDED MAY 4, 1996
Net sales for the thirty-six weeks ended May 10, 1997 increased by
$332.0 million, or 23.5%, over net sales for the comparable period of
fiscal 1996. This increase was due to a comparable store sales increase of
8%, (which was primarily due to sales growth in the Company's newer stores
and the added sales of the company's commercial program), and increases in
net sales for stores opened since the beginning of fiscal 1996.
Gross profit for the thirty-six weeks ended May 10, 1997, was $736.2
million, or 42.2% of net sales, compared with $584.7 million, or 41.4% of
net sales, during the comparable period for fiscal 1996. The increase in
the gross profit percentage was due primarily to improved gross margin in
commodities, such as oil, Freon and antifreeze, lower distribution costs,
and the added sales of higher margin ALLDATA products.
Operating, selling, general and administrative expenses for the
thirty-six weeks ended May 10,1997 increased by $122.9 million over such
expenses for the comparable period for fiscal 1996, and increased as a
percentage of net sales from 30.1% to 31.4%. The increase in the expense
ratio was due primarily to costs of the Company's commercial program and to
operating costs of ALLDATA.
The Company's effective income tax rate was 37.6% of pre-tax income
for the thirty-six weeks ended May 10, 1997 and 37.1% for the thirty-six
weeks ended May 4, 1996.
LIQUIDITY AND CAPITAL RESOURCES
For the thirty-six weeks ended May 10, 1997, net cash of $44.6 million
was provided by the Company's operations versus $78.6 million for the
comparable period of fiscal year 1996. The comparative decrease in cash
provided by operations is due primarily to increased inventory
requirements.
Capital expenditures for the thirty-six weeks ended May 10, 1997 were
$170.4 million. The Company anticipates that capital expenditures for
fiscal 1997 will be approximately $300 to $325 million. Year-to-date, the
Company opened 155 net new stores and 15 stores that replaced existing
stores. The Company expects to open more than 300 new stores and
approximately 18 replacement stores during fiscal 1997.
The Company anticipates that it will rely on internally generated funds
to support a majority of its capital expenditures and working capital
requirements; the balance of such requirements will be funded through
borrowings. The Company has an unsecured revolving credit agreement with a
group of banks providing for borrowings in an aggregate maximum amount of
$275 million. At May 10, 1997, the Company had borrowings outstanding under
the credit agreement of $209.7 million. On March 27, 1997, the Company
acquired a short-term unsecured revolving credit agreement totaling $25
million. There were no amounts outstanding under this agreement as of May
10, 1997.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a defendant in a purported class action entitled "Jack
Elliot and Greg Dobson, on behalf of themselves and all others similarly
situated, vs. AutoZone, Inc., and AutoZone Stores, Inc.," Civil Action No.
11416, Circuit Court for Roane County, Tennessee, filed on or about May 9,
1997. AutoZone Stores, Inc., is a wholly-owned subsidiary of the Company.
In an ex parte proceeding held prior to service of the complaint upon the
Company, and without notice to the Company, on May 14, 1997, the judge
entered an order conditionally certifying a class of all persons and
entities in 25 states in which the Company does business who purchased
automotive batteries from any AutoZone or AutoZone retail store location at
any time during the period May 5, 1990, to the present. At an appropriate
time, the Company intends to move the court to either decertify the class
or vacate or amend the conditional class certification order. In their
complaint, which is similar to class action complaints filed against
several other retailers of aftermarket automotive batteries, the plaintiffs
allege that the Company sold "old", "used", or "out of warranty" automotive
batteries to customers as if the batteries were new, and purports to state
causes of action for unfair or deceptive acts or practices, breaches of
contract, breaches of duty of good faith and fair dealing, intentional
misrepresentation, fraudulent concealment, civil conspiracy, and unjust
enrichment. The plaintiffs are seeking an accounting of all moneys
wrongfully received by the Company, compensatory and punitive damages, along
with plaintiffs' costs. The Company believes the claims are without merit and
intends to vigorously defend this action.
The Company is also a party to various claims and lawsuits arising in
the ordinary course of business, which it does not believe that such claims
and lawsuits, singularly or in the aggregate, will have a material adverse
effect on its business, properties, results of operations, financial
condition or prospects.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
3.1 Articles of Incorporation of AutoZone, Inc. Incorporated by
reference to Exhibit 3.1 to the Form 10-K for the fiscal year ended August
27, 1994.
3.2 Amendment to Articles of Incorporation of AutoZone, Inc., dated
December 16, 1993, to increase its authorized shares of common stock to
200,000,000. Incorporated by reference to Exhibit 3.2 to the Form 10-K for
the fiscal year ended August 27, 1994.
3.3 By-laws of AutoZone, Inc. Incorporated by reference to Exhibit
3.2 to the February 1992 Form S-1.
4.1 Form of Common Stock Certificate. Incorporated by reference to
Exhibit 4.1 to Pre-Effective Amendment No. 2 to the February 1992 Form S-1.
4.2 Registration Rights Agreement, dated as of February 18, 1987, by
and among Auto Shack, Inc. and certain stockholders. Incorporated by
reference to Exhibit 4.9 to the Form S-1 Registration Statement filed by
the Company under the Securities Act (No. 33-39197), (the "April 1991
Form S-1").
4.3 Amendment to the Registration Rights Agreement dated as of August
1, 1993. Incorporated by reference to Exhibit 4.1 to the Form S-3
Registration Statement filed by the Company under the Securities Act (No.
33-67550).
10.1 MANAGEMENT CONTRACT OR COMPENSATORY PLAN OR ARRANGEMENT.
-------------------------------------------------------
Agreement between J. R. Hyde, III, and AutoZone, Inc. and its subsidiaries,
dated March 18, 1997.
11.1 Statement re: Computation of earnings per share.
27.1 Financial Data Schedule. (SEC Use Only)
(b) Reports on Form 8-K
During the twelve weeks ended May 10, 1997, the Company filed a report on
Form 8-K dated March 18, 1997, stating:
On March 18, 1997, J. R. Hyde, III, chairman of AutoZone announced his
retirement as chairman. Mr. Hyde remains an active director and major
shareholder. Johnston C. Adams, Jr., previously Chief Executive Officer
and President, was elected Chairman and Chief Executive Officer. Timothy
D. Vargo, previously Vice Chairman and Chief Operating Officer, was
elected President and Chief Operating Officer. Mr. Adams and Mr. Vargo
are also members of the board of directors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AUTOZONE, INC.
By: /S/ ROBERT J. HUNT
---------------------------
Robert J. Hunt
Executive Vice President and
Chief Financial Officer-Customer Satisfaction
(Principal Financial Officer)
By: /S/ MICHAEL E. BUTTERICK
---------------------------
Michael E. Butterick
Vice President, Controller-Customer Satisfaction
(Principal Accounting Officer)
Dated: June 23, 1997
EXHIBIT 10.1
03/17/97 1:44 PM
AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, that J.R. Hyde, III ("Hyde") and
AutoZone, Inc., a Nevada corporation, and its subsidiaries (collectively
"AZO") for and in consideration of the promises, undertakings and benefits
set out in this Agreement as of March 18, 1997 agree as follows:
1. EFFECTIVE DATE. Hyde resigns as an employee and Chairman of AZO
as of March 18, 1997 (the "Effective Date"). Notwithstanding, Hyde shall
remain a member of the Board of Directors of AZO subject to election,
resignation, and replacement in the same manner as other members of the
Board of Directors.
2. RELEASE. Except for the obligations of AZO and Hyde undertaken
pursuant to the terms of this Agreement, Hyde and AZO each release and
forever discharge the other and their respective employees, agents,
subsidiaries, predecessors, successors, affiliates, heirs, and assigns from
all claims of whatsoever nature and the right to receive compensation from
such claims, growing out of or in any way directly or indirectly connected
with the employment relationship between Hyde and AZO, included but not
limited to:
A. Breach of any express or implied term or condition of employment;
B. Any other causes of action under any federal, state or local law,
rule or regulation, including but not limited to claims under any
worker's compensation law, the Age Discrimination in Employment
Act (as amended), the Older Workers' Benefit Protection Act, the
Civil Rights Act of 1991, the Civil Rights Act of 1964 (as
amended), the Civil Rights Act of 1866, the Americans with
Disabilities Act of 1990, the Family and Medical Leave Act of
1993, and/or the Tax Reform Act of 1986 (as amended); and/or
C. Any right to receive any monetary damages or liability payments
from any actions at law or in equity filed on his behalf with
regard to his employment with or arising out of or relating to
his employment with AZO.
3. RECISION. AZO's offer as described in this Agreement will remain
open and effective for twenty-one (21) days from the Effective Date. Hyde
may elect to accept or reject this offer within that time period. If Hyde
does nothing within the twenty-one (21) day period, the offer shall be
deemed withdrawn by AZO. If Hyde does sign the Agreement within the
twenty-one (21) day period, Hyde will have seven (7) days following the
date he signed this Agreement to change his mind and revoke the Agreement
in writing. Therefore, this Agreement will not be in effect until seven
(7) days have passed following the date Hyde signs this Agreement.
4. BENEFITS. In consideration of the release granted by Hyde and
the other obligations undertaken by Hyde pursuant to this Agreement, AZO
agrees to provide, subject only to the limitations contained in this
Agreement, the following benefits in his favor (the "Benefits"):
A. Any vacation pay accrued as of the Effective Date;
B. A prorated bonus for AZO's 1997 fiscal year based on the period
from September 1, 1996, to the Effective Date. Such bonus shall
be in accordance with the bonus plan previously approved by the
Compensation Committee of AZO's Board of Directors and will be
paid after the end of AZO's 1997 fiscal year when the bonuses of
all other executive officers of AZO are paid;
C. For the period beginning on the Effective Date and ending five
years later, AZO shall pay Hyde an annual amount equal to three
hundred sixty thousand dollars ($360,000) in bi-weekly payments
of thirteen thousand eight hundred forty-six dollars and 15/100
($13,846.15), to be paid as and when AZO pays its regular
employees. As used in this Agreement, the term "bi-weekly" shall
mean once every two weeks.
D. Health and dental insurance during the period of time beginning
on the Effective Date and ending on the date that Hyde ceases to
receive payments pursuant to Section 3. C. of this Agreement as
if Hyde were still employed by AZO, and thereafter the coverage
as required by law.
HYDE UNDERSTANDS AND AGREES THAT THE ONLY SALARY OR BENEFITS (OTHER
THAN SUCH COMPENSATION HE MAY RECEIVE AS A NON-EMPLOYEE DIRECTOR OF AZO) HE
WILL RECEIVE FROM AZO ARE SET FORTH HEREIN, AND THAT ALL OTHER SALARY OR
BENEFITS HE IS PRESENTLY RECEIVING FROM AZO, INCLUDING BUT NOT LIMITED TO
LIFE INSURANCE, LONG TERM DISABILITY COVERAGE, SHORT TERM DISABILITY
COVERAGE AND STOCK PURCHASE PLAN, SHALL BE AND ARE TERMINATED AS OF THE
EFFECTIVE DATE. TIME IN SERVICE UNDER THE AUTOZONE, INC., ASSOCIATES
PENSION PLAN SHALL CEASE TO ACCRUE AS OF THE EFFECTIVE DATE.
The parties understand that applicable local, state, and federal tax
and appropriate insurance premium deductions and withholdings will be made
from all of the appropriate payments.
The parties further understand and agree that this Agreement shall not
diminish or adversely affect in any way Hyde's retirement benefits under
the AutoZone, Inc. Associates' Pension Plan, except that payment of
Benefits in no way increases the vesting period for retirement benefits nor
does it have any effect on the computation of retirement benefits which
shall be as provided for pursuant to the AutoZone, Inc. Associates' Pension
Plan.
5. NON-COMPETE. Hyde further agrees that he will not, for the
period commencing on the Effective Date and ending on the date five years
later, be engaged in or concerned with, directly or indirectly, any
business related to or involved in the retail sale of auto parts to "DIY"
customers, or the wholesale or retail sale of auto parts to commercial
installers in any state or area in which AZO operates now or shall operate
during the term of the non-compete agreement (herein called "Competitor"),
as an employee, consultant, beneficial or record owner, partner, joint
venturer, officer or agent of the Competitor. Notwithstanding, an
investment by Hyde in an investment partnership or mutual fund whereby Hyde
does not own more than five (5%) percent of such partnership or fund and
does not or have the right to exercise investment control, shall not be
considered a breach of this Section 5.
The parties acknowledge and agree that the time, scope, geographic
area and other provisions of this Non-Compete section have been
specifically negotiated by sophisticated commercial parties and
specifically hereby agree that such time, scope, geographic area and other
provisions are reasonable under the circumstances. The parties further
agree that if, at any time, despite the express agreement of the parties
hereto, Hyde violates the provisions of this Non-Compete section and fails
to cure such violation within thirty days after him receipt of notice of
such violation from AZO, and if AZO attempts to enforce this Agreement and
a court of competent jurisdiction holds that any portion of this Non-
Compete section is unenforceable for any reason, AZO may cease paying any
further Benefits. In the event of breach by Hyde of any provision of this
Non-Compete section Hyde acknowledges that such breach will cause
irreparable damage to AZO, the exact amount of which will be difficult or
impossible to ascertain, and that remedies at law for any such breach will
be inadequate. Accordingly, AZO shall be entitled, in addition to any
other rights or remedies existing in its favor, to obtain, without the
necessity for any bond or other security, specific performance and/or
injunctive relief in order to enforce, or prevent breach of any such
provision and AZO shall be entitled to the remedies set forth in the
section entitled "Remedies". Further, Hyde agrees not to hire, for himself
or any other entity, encourage anyone or entity to hire, or entice away
from AZO any full time employee of AZO during the term of this non-compete
agreement other than current administrative personnel in the Chairman's
office.
6. CONFIDENTIALITY AND AZO PROPERTY. Unless otherwise required by
law, Hyde shall hold in confidence any proprietary or confidential
information obtained by him during his employment with AZO, which shall
include, but not be limited to, information regarding AZO's present and
future business plans, systems, operations and personnel. Confidential
information shall not include information: (a) publicly disclosed by
AutoZone; (b) rightfully received by Hyde from a third party without
restrictions on disclosure or use; (c) approved for release or disclosure
by AutoZone; or (d) produced or disclosed pursuant to applicable laws,
regulation or court order. Hyde acknowledges that all such confidential or
proprietary information is and shall remain the sole property of AZO and
all embodiments of such information shall remain with or be returned to
AZO.
7. AZO PROPERTY. Hyde agrees to return to AZO any and all property
of AZO within a reasonable time after the Effective Date. AZO acknowledges
that it is in possession of certain art belonging to Hyde and agrees to
return such art upon request by Hyde. During such time as such art is in
possession of AZO, AZO agrees to continue to take the same care as it is
currently taking to safeguard such art. AZO agrees to insure such art
while it is in the possession for such amounts as Hyde and AZO shall
mutually agree upon it being agreed that the current insurance is
sufficient until otherwise notified in writing by Hyde. AZO and Hyde agree
that should any damage occur to such art while it is in the possession,
AZO's liability to Hyde shall be limited to the insurance proceeds
recovered by AZO.
8. COMPLETE AGREEMENT. This Agreement contains the entire agreement
between the parties concerning the matters covered herein and integrates
and merges all prior understandings, discussions and negotiations. No
other agreements, oral or written, relating to the subject matter contained
herein shall be binding upon or enforceable against any of the parties.
This Agreement and the documents executed pursuant to it may be amended
only in a writing signed by authorized representatives of the parties. No
provision of this Agreement or any document executed pursuant to it may be
waived except in a writing signed by authorized representatives of the
parties.
This Agreement shall be governed and construed by the laws of the
State of Tennessee, without regard to its choice of law rules. The parties
agree that the only proper venue for any dispute under this Agreement shall
be in the state or federal courts located in Shelby County, Tennessee.
9. SEVERABILITY. The sections of this Agreement are intended to be
severable. If any section or provision of this Agreement shall be held to
be unenforceable by any court of competent jurisdiction, this Agreement
shall be modified to the minimum extent necessary to be enforceable, or if
such modification is not possible, then this Agreement shall be construed
as though such section or provision had not been included. If any section
or provision of this Agreement shall be subject to two constructions, one
of which would render such section or provision invalid, then such section
or provision shall be given that construction that would render it valid.
10. REMEDIES. In the event of breach by Hyde of any provision of this
Agreement, Hyde acknowledges that such breach will cause irreparable damage
to AZO, the exact amount of which will be difficult or impossible to
ascertain, and that remedies at law for any such breach will be inadequate.
Accordingly, AZO shall be entitled, in addition to any other rights or
remedies existing in its favor, to obtain, without the necessity for any
bond or other security, specific performance and/or injunctive relief to
enforce, or prevent breach of any such provision. In the event Hyde
breaches this Agreement in any way and fails to cure such breach within
thirty (30) days of receipt by Hyde of notice of such breach from AZO, any
unpaid Benefits shall immediately terminate. AZO shall have the right, but
not the obligation, to exercise any of its remedies under this Agreement or
any that may be allowed by law in the event of a breach of this Agreement.
Any such remedies available to AZO shall be cumulative, not exclusive. of
this Agreement. Any such remedies available to Hyde shall be cumulative,
not exclusive.
11. FURTHER ASSURANCES. Hyde warrants and represents to AZO that he
has returned to AZO all keys, documents, and other property of AZO. Should
Hyde fail or refuse to return any AZO property, AZO shall be entitled to
exercise its rights under "REMEDIES," in addition to any rights that AZO
may have by law.
The parties agree to execute on or after the date of the execution of
this Agreement any and all reasonable additional documents as requested by
the other or its counsel to effectuate the purposes hereof.
12. NOTICES. All notices shall be deemed received three days after
it is sent by certified mail, return receipt requested, or when actually
received by hand-delivery or overnight courier. All notices shall be sent
to:
To AutoZone: General Counsel
Legal Department
AutoZone, Inc.
123 South Front Street
Memphis, TN 38103-3607
To Hyde: P. O. Box 1152
Memphis, TN 38101-1152
IN WITNESS WHEREOF, the respective parties execute this Agreement.
AUTOZONE, INC.
By: /S/ J.C. ADAMS, JR. /S/ J.R. HYDE, III
--------------------- -------------------
J. R. Hyde, III
Title: CHAIRMAN & CEO
3/18/97
Date
By: /S/ HARRRY L. GOLDSMITH
-----------------------
Title: SVP
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE WEEKS ENDED THIRTY-SIX WEEKS ENDED
MAY 10, 1997 MAY 4, 1996 MAY 10, 1997 MAY 4, 1996
PRIMARY:
Average shares outstanding 150,879 148,670 150,548 147,831
Net effect of dilutive stock options,
based on the treasury stock
method, using average
fair market value 1,723 2,871 1,841 2,677
------- ------- ------- -------
Total shares used in computation 152,602 151,541 152,389 150,508
------- ------- -------- -------
Net income $46,103 $37,605 $113,485 $99,726
------- ------- -------- -------
Per share amount $0.30 $0.25 $0.74 $0.66
====== ====== ====== =====
Fully diluted:
Average shares outstanding 150,879 148,670 150,548 147,831
Net effect of dilutive stock options,
based on the treasury stock method,
using higher of average or ending
fair market value 1,723 3,750 1,841 4,151
------- ------- ------- -------
Total shares used in computation 152,602 152,420 152,389 151,982
------- ------- ------- -------
Net income $46,103 $37,605 $113,485 $99,726
------- ------- -------- -------
Per share amount $0.30 $0.25 $0.74 $0.66
====== ===== ===== =====
5
1000
9-MOS
AUG-30-1997
MAY-10-1997
4838
0
22435
0
750569
824184
1224666
244522
1827034
609054
0
0
0
1510
989018
1827034
1745052
1745052
1008823
1008823
548339
0
5955
181935
68450
113485
0
0
0
113485
.74
.74
