AutoZone 2010 Annual Report Download - page 60

If the Employment Agreement is terminated by AutoZone without cause, and Mr. Goldsmith experiences
a “separation from service” (within the meaning of Section 409A and related regulations), Mr. Goldsmith will
receive certain benefits for three years after the termination date (the “Continuation Period”). Mr. Goldsmith
will receive his then-current base salary during the Continuation Period, and will receive a prorated bonus for
the fiscal year in which he was terminated, but no bonuses thereafter. Stock options that would have vested
during the Continuation Period will immediately vest on his termination date, and all vested stock options may
be exercised in accordance with the respective stock option agreements until the first to occur of (i) 30 days
after the end of the Continuation Period or (ii) the expiration of the respective stock option agreement, without
regard to any possible early expiration resulting from Mr. Goldsmith’s termination. Medical, dental and vision
benefit coverage under an AutoZone group health plan will continue for a period of time equal to the sum of
Mr. Goldsmith’s maximum COBRA coverage period plus the Continuation Period. Mr. Goldsmith will also
receive a lump sum payment equal to three times the total aggregate annual COBRA premium costs for group
medical, dental and vision benefit coverage for himself and his dependents as in effect immediately prior to
his termination.
Mr. Goldsmith agrees to release AutoZone from any and all obligations other than those set forth in his
Employment Agreement. If Mr. Goldsmith is terminated from his position by AutoZone, or by Mr. Goldsmith
for reasons other than a change in control, then he will be prohibited from competing against AutoZone or
hiring AutoZone employees for a period of time equal to the Continuation Period. “Change in control” in the
Employment Agreement means either the acquisition of a majority of AutoZone’s voting securities by or the
sale of substantially all of AutoZone’s assets to a non-affiliate of the company.
Equity Plans
All outstanding, unvested options granted pursuant to the Stock Option Plans, including those held by the
Named Executive Officers, will vest immediately upon the option holder’s death pursuant to the terms of the
stock option agreements.
Unvested share options under our Executive Stock Purchase Plan, which normally are subject to forfeiture
if a participant’s employment terminates prior to the first anniversary of their acquisition, will vest
immediately if the termination is by reason of the participant’s death, disability, termination by the Company
without cause, or retirement on or after the participant’s normal retirement date. The plan defines “disability,
“cause,” and “normal retirement date.”
Life Insurance
AutoZone provides all salaried employees in active full-time employment in the United States a
company-paid life insurance benefit in the amount of two times annual earnings. “Annual earnings” exclude
stock options but include salary and bonuses received. Additionally, salaried employees are eligible to
purchase additional life insurance subject to insurability above certain amounts. The maximum benefit of the
company-paid and the additional coverage combined is $5,000,000. All of the Named Executive Officers are
eligible for this benefit.
Disability Insurance
All full-time officers at the level of vice president and above are eligible to participate in two executive
long-term disability plans. Accordingly, AutoZone purchases individual disability policies for its executive
officers that pay 70% of the first $7,143 of insurable monthly earnings in the event of disability. Additionally,
the executive officers are eligible to receive an executive long-term disability plan benefit in the amount of
70% of the next $35,714 of insurable monthly earnings to a maximum benefit of $25,000 per month.
AutoZone purchases insurance to cover this plan benefit. These two benefits combined provide a maximum
benefit of $30,000 per month. The benefit payment for these plans may be reduced by deductible sources of
income and disability earnings. Mr. Goldsmith is only covered under the group long-term disability program,
under which he is eligible to receive 70% of monthly earnings to a maximum benefit of $30,000 per month.
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