AutoZone 2010 Annual Report Download - page 73

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Employee for such Performance Period. Following the completion of each Performance Period, the Committee
shall certify in writing whether and the extent to which the applicable Performance Goals have been achieved
for such Performance Period. In determining the amount earned under such Awards, unless otherwise provided
in an Award Agreement, the Committee shall have the right to reduce or eliminate (but not to increase) the
amount payable at a given level of performance to take into account additional factors that the Committee
may deem relevant, including the assessment of individual or corporate performance for the Performance
Period.
5.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable Program or
Award Agreement (and only to the extent otherwise permitted by Section 162(m)(4)(C) of the Code), the
holder of an Award that is intended to qualify as Performance-Based Compensation must be employed by the
Company or an Affiliate throughout the applicable Performance Period. Unless otherwise provided in the
applicable Performance Goals, Program or Award Agreement, a Participant shall be eligible to receive payment
pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such
period are achieved.
5.5 Additional Limitations. Notwithstanding any other provision of the Plan and except as otherwise
determined by the Administrator, any Award which is granted to an Eligible Individual and is intended to
qualify as Performance-Based Compensation shall be subject to any additional limitations imposed under
Section 162(m) of the Code that are requirements for qualification as Performance-Based Compensation, and
the Plan, the Program and the Award Agreement shall be deemed amended to the extent necessary to conform
to such requirements
ARTICLE 6.
GRANTING OF OPTIONS
6.1 Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to
Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine
which shall not be inconsistent with the Plan.
6.2 Qualification of Incentive Stock Options. No Incentive Stock Option shall be granted to any person
who is not an Employee of the Company or any “parent corporation” or “subsidiary corporation” of the
Company (as defined in Sections 424(e) and 424(f) of the Code, respectively). No person who qualifies as a
Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option
conforms to the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under
the Plan may be modified by the Administrator, with the consent of the Participant, to disqualify such Option
from treatment as an “incentive stock option” under Section 422 of the Code. To the extent that the aggregate
fair market value of stock with respect to which “incentive stock options” (within the meaning of Section 422
of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a
Participant during any calendar year under the Plan and all other plans of the Company and any Affiliate
corporation thereof exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the
extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be applied by
taking Options and other “incentive stock options” into account in the order in which they were granted and
the Fair Market Value of stock shall be determined as of the time the respective options were granted. In
addition, to the extent that any Options otherwise fail to qualify as Incentive Stock Options, such Options shall
be treated as Nonqualified Stock Options.
6.3 Option Exercise Price. Except as provided in Section 6.6 hereof, the exercise price per Share
subject to each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market
Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code). In addition, in the case of
Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of
the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code).
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