AutoZone 2013 Annual Report Download - page 54

Proxy
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. Mr. Goldsmith’s 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 (3X) 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’s employment is terminated 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.
On June 12, 2013, Mr. Goldsmith announced that he will be retiring in January 2014.
Equity Plans
All outstanding, unvested stock options, 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.”
Under Mr. Rhodes’ Performance-Based Restricted Stock Units Award Agreement, described on page 26,
any Restricted Stock Units that have been earned (i.e., the performance conditions have been met) but have not
become vested, will become vested and will be paid in shares of AutoZone common stock as soon as practicable
after the date of Mr. Rhodes’ termination of employment by the Company without cause (as defined in the
award agreement) or due to his death or disability. Any Restricted Stock Units which have not been earned as of
the date on which Mr. Rhodes’ employment with AutoZone terminates for any reason shall not become vested.
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
compensation and gains realized from stock option exercises, but include salary and incentive compensation
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
44