AutoZone 2010 Annual Report Download - page 13

How many shares must be present to constitute a quorum for the Meeting?
Holders of a majority of the shares of the voting power of the Company’s stock must be present in person
or by proxy in order for a quorum to be present. If a quorum is not present at the scheduled time of the
Annual Meeting, we may adjourn the Meeting, without notice other than announcement at the Meeting, until a
quorum is present or represented. Any business which could have been transacted at the Meeting as originally
scheduled can be conducted at the adjourned meeting.
Are there any agreements with stockholders concerning the Annual Meeting?
ESL Investments, Inc. and its affiliates (collectively, “ESL”), entered into an agreement with AutoZone
dated as of June 25, 2008 (the “ESL Agreement”), in which ESL agreed to appear at each meeting of the
stockholders of the Company and at each adjournment or postponement thereof, or otherwise cause all shares
of AutoZone common stock owned by ESL to be counted as present for the purpose of establishing a quorum.
ESL also agreed to vote its shares of AutoZone common stock in excess of 37.5% of the then-outstanding
common stock in the same proportion as shares not owned by ESL are actually voted.
Under the terms of the ESL Agreement, the Company agreed to take certain actions with regard to the
size and composition of the Board of Directors, including considering the potential appointment to the Board
of two directors identified by ESL who were reasonably acceptable to a majority of the members of the
Nominating and Corporate Governance Committee of the Board and were “independent” under the Company’s
Corporate Governance Principles and the rules of the New York Stock Exchange. William C. Crowley and
Robert R. Grusky were identified by ESL and were appointed to the Board in accordance with the ESL
Agreement and were re-elected by AutoZone’s stockholders at AutoZone’s 2008 and 2009 Annual Meetings.
Both Messrs. Crowley and Grusky have been nominated for re-election at this Annual Meeting.
The ESL Agreement will continue in effect until the earliest of (a) the date upon which the common
stock owned by ESL constitutes less than 25% of the then-outstanding shares of AutoZone common stock,
(b) the date upon which the common stock owned by ESL exceeds 50% of the then-outstanding shares of
AutoZone common stock, provided ESL has acquired additional shares representing above 10% of the then-
outstanding shares subsequent to the date of the ESL Agreement, and (c) the date upon which the parties
mutually agree in writing to terminate the ESL Agreement.
As of October 18, 2010, ESL was the beneficial holder of 15,495,882 shares of common stock,
representing approximately 34.7% of the outstanding common stock. See “Security Ownership of Certain
Beneficial Owners” on page 27 for more information about ESL’s ownership of AutoZone common stock.
THE PROPOSALS
PROPOSAL 1 — Election of Directors
Ten directors will be elected at the Annual Meeting to serve until the annual meeting of stockholders in
2011. Directors are elected by a plurality, so the ten persons nominated for director and receiving the most
votes will be elected. Pursuant to AutoZone’s Corporate Governance Principles, however, any nominee for
director who receives a greater number of votes “withheld” from his or her election than votes “for” such
election is required to tender his or her resignation for consideration by the Nominating and Corporate
Governance Committee of the Board. The Nominating and Corporate Governance Committee will recommend
to the Board the action to be taken with respect to such resignation.
Abstentions and broker non-votes have no effect on the election of directors. “Broker non-votes” are
shares held by banks or brokers on behalf of their customers that are represented at the Meeting but are not
voted. Due to recent regulatory changes, holders of such shares must instruct the bank or broker holding the
shares how to vote in the election of directors (Proposal 1), or no votes will be cast on their behalf, resulting
in broker non-votes.
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Proxy