AutoZone 2010 Annual Report Download - page 29

the date it vests, is exercised, is distributed or expires, as determined by the Administrator. Dividend
equivalents may be converted to cash or additional shares of our common stock subject to limitations as may
be determined by the Administrator.
Stock Payments. A stock payment is a payment in the form of shares of our common stock or an option
or other right to purchase shares, as part of a bonus, deferred compensation or other arrangement. The number
or value of shares of any stock payment will be determined by the Administrator and may be based on the
achievement of performance criteria or other specific criteria determined by the Administrator. Except as
otherwise determined by the Administrator, shares underlying a stock payment which is subject to a vesting
schedule or other conditions will not be issued until those conditions have been satisfied. Stock payments may,
but are not required to, be made in lieu of cash compensation otherwise payable to any individual who is
eligible to receive awards.
Deferred Stock. Deferred stock is a right to receive shares of our common stock in the future. The
number of shares of any deferred stock award will be determined by the Administrator and may be based on
the achievement of performance or other specific criteria on a specified date or dates or over any period or
periods determined by the Administrator. Except as otherwise determined by the Administrator, shares
underlying a deferred stock award which is subject to a vesting schedule or other conditions set by the
Administrator will not be issued until those conditions have been satisfied. Deferred stock may constitute or
provide for a deferral of compensation, subject to Section 409A of the Code and there may be certain tax
consequences if the requirements of Section 409A of the Code are not met.
Restricted Stock Units. A restricted stock unit provides for the issuance of our common stock at a future
date upon the satisfaction of specific conditions. The Administrator will specify in an award agreement the
dates or conditions under which the restricted stock units will become fully vested and nonforfeitable, and
may specify other conditions to vesting as it deems appropriate. The Administrator will also specify, or permit
the holder to elect, the conditions and dates upon which the shares underlying the restricted stock units will be
issued, which may not be earlier than the date as of which the restricted stock units vest and which conditions
and dates will be subject to compliance with Section 409A of the Code. Restricted stock units may be paid in
cash, shares or both, as determined by the Administrator. On the distribution dates, AutoZone will transfer to
the participant one unrestricted, fully transferable share of our common stock (or the fair market value of one
share in cash) for each restricted stock unit scheduled to be paid out on such date and not previously forfeited.
The Administrator may specify in the award agreement a purchase price to be paid by the participant for such
shares of our common stock. Restricted stock units may constitute or provide for a deferral of compensation,
subject to Section 409A of the Code and there may be certain tax consequences if the requirements of
Section 409A of the Code are not met.
Stock Appreciation Rights. A stock appreciation right (“SAR”) entitles its holder, upon exercise, to
receive from us an amount equal to the difference between the exercise price of the SAR and the fair market
value of a share of AutoZone common stock on the exercise date, multiplied by the number of shares with
respect to which the SAR is being exercised, subject to any limitations imposed by the Administrator. The
exercise price per share will be set by the Administrator, but may not be less than 100% of the fair market
value on the date the SAR is granted. The Administrator will also determine the vesting period of the SAR.
Stock appreciation rights may be exercised as determined by the Administrator but may not have a term
extending beyond the date that is ten years and one day after the date of grant. Payment of a SAR may be in
cash, shares or a combination of both, as determined by the Administrator. The Plan prohibits, without
stockholder approval: (i) the amendment of SARs to reduce the exercise price, and (ii) the replacement of a
SAR with cash or any other award when the price per share of the SAR exceeds the fair market value of the
underlying shares.
Performance Share Awards. Performance share awards are rights to receive a number of shares of
common stock or the cash value of such shares based on the attainment of specified performance goals or
other criteria determined by the Administrator.
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