AutoZone 2010 Annual Report Download - page 27

The Board of Directors recommends that the stockholders vote FOR the AutoZone, Inc. 2011 Equity
Incentive Award Plan.
The principal features of the Plan are summarized below for the convenience and information of our
stockholders. This description is qualified in its entirety by reference to the Plan, which is attached to this
Proxy Statement as Exhibit A.
What is the AutoZone, Inc. 2011 Equity Incentive Award Plan?
The Plan will allow AutoZone to provide equity-based compensation to our non-employee directors and
employees for their service to AutoZone or our subsidiaries or affiliates. Under the Plan, participants may
receive equity-based compensation in the form of stock options, stock appreciation rights, restricted shares,
restricted share units, dividend equivalents, deferred stock, stock payments, performance share awards and
other incentive awards structured by the Compensation Committee and the Board within parameters set forth
in the Plan. The Plan will allow non-employee directors and employees to participate in the ownership of
AutoZone and is intended to provide compensation, incentives and rewards for superior performance.
Who is eligible to participate in the Plan?
Persons eligible to participate in the Plan include all non-employee members of the Board, which will
consist of nine directors following the Annual Meeting, and approximately 600 officers and employees of
AutoZone and our subsidiaries, as determined by the Administrator of the Plan.
How will the Plan be administered?
The Plan generally will be administered by the Compensation Committee of the Board (which we also
sometimes refer to as the “Administrator” in this narrative). The Compensation Committee consists solely of
non-employee directors, each of whom is an “outside director” within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), a Non-Employee Director as defined in Rule 16b-3
under the Securities Exchange Act of 1934 (the “Exchange Act”), and an “independent director” under the
rules of the New York Stock Exchange. Except with respect to awards granted to our senior executives who
are subject to Section 16 of the Exchange Act or employees who are “covered employees” within the meaning
of Section 162(m) of the Code, the Plan allows the Compensation Committee to delegate the authority to grant
or amend awards under the Plan to a committee of one or more members of the Board or one or more of our
officers. The full Board will conduct the general administration of the Plan with respect to awards granted to
non-employee directors.
The Administrator will have the authority to administer the Plan, including the power to determine
eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of any
vesting restriction, as well as the authority to delegate such administrative responsibilities.
How many shares of AutoZone common stock will be available for awards under the Plan?
The aggregate number of shares of our common stock available for equity grants pursuant to the Plan
will be equal to the number of shares available for issuance under the 2006 Stock Option Plan, the First
Amended and Restated 2003 Director Compensation Plan and the First Amended and Restated 2003 Director
Stock Option Plan as of the Stockholder Approval Date, plus the number of shares underlying awards
outstanding under those plans as of the Stockholder Approval Date that terminate, expire or lapse on or after
such date. AutoZone is not seeking the approval of an increase in the number of shares currently available for
issuance and which may be forfeited under plans previously approved by AutoZone’s stockholders. Subject to
stockholder approval of the Plan, no further shares will be available for issuance pursuant to the Prior Plans,
however any awards under any of the Prior Plans that are outstanding as of such date will continue to be
subject to the terms and conditions of the applicable Prior Plan. The maximum number of shares of common
stock that may be subject to one or more awards granted to any one participant pursuant to the Plan during
any calendar year is 200,000.
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Proxy