AutoZone 2013 Annual Report Download - page 53

Proxy
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Our Named Executive Officers may receive certain benefits if their employment terminates under specified
circumstances. These benefits derive from Company policies, plans, agreements and arrangements described
below.
Agreement with Mr. Rhodes
In February 2008, Mr. Rhodes and AutoZone entered into an agreement (the “Agreement”) providing that
if Mr. Rhodes’ employment is terminated by the Company without cause, he will receive severance benefits
consisting of an amount equal to 2.99 times his then-current base salary, a lump sum prorated share of any
unpaid annual bonus incentive for periods during which he was employed, and AutoZone will pay the cost of
COBRA premiums to continue his medical, dental and vision insurance benefits for up to 18 months to the
extent such premiums exceed the amount Mr. Rhodes had been paying for such coverage during his
employment. The Agreement further provides that Mr. Rhodes will not compete with AutoZone or solicit its
employees for a three-year period after his employment with AutoZone terminates.
Executive Officer Agreements (Messrs. Giles, Graves and Griffin)
AutoZone’s executive officers who do not have written employment agreements, including Messrs. Giles,
Graves and Griffin, have entered into agreements (“Severance and Non-Compete Agreements”) with the
Company providing that if their employment is involuntarily terminated without cause, and if they sign an
agreement waiving certain legal rights, they will receive severance benefits in the form of salary continuation for
a period of time ranging from 12 months to 24 months, depending on their length of service at the time of
termination. Mr. Giles presently has seven years of service, Mr. Graves has 20 years of service and Mr. Griffin
has one year of service.
Years of Service Severance Period
Less than 2 .......................................................... 12months
2 – less than 5 ........................................................ 18months
5 or more ........................................................... 24months
The executives will also receive a lump sum prorated share of their annual bonus incentive when such
incentives are paid to similarly-situated executives. Medical, dental and vision insurance benefits generally
continue through the severance period up to a maximum of 18 months, with the Company paying the cost of
COBRA premiums to the extent such premiums exceed the amount the executive had been paying for such
coverage. An appropriate level of outplacement services may be provided based on individual circumstances.
The Severance and Non-Compete Agreement further provides that the executive will not compete with
AutoZone or solicit its employees for a two-year period after his or her employment with AutoZone terminates.
Employment Agreement with Mr. Goldsmith
Mr. Goldsmith’s employment agreement (the “Employment Agreement”) was amended and restated on
December 29, 2008, to bring it into compliance with Section 409A of the Internal Revenue Code. The
Employment Agreement originally dated 1999, continues until terminated either by Mr. Goldsmith or by
AutoZone.
If the Employment Agreement is terminated by AutoZone for cause, or by Mr. Goldsmith for any reason,
Mr. Goldsmith will cease to be an employee, and will cease to receive salary, bonus, and other benefits. “Cause”
is defined as the willful engagement in conduct which is demonstrably or materially injurious to AutoZone,
monetarily or otherwise. No act or failure to act will be considered “willful” unless done, or omitted to be done,
not in good faith and without reasonable belief that the action or omission was in the best interest of AutoZone.
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