AutoZone 2014 Annual Report Download - page 60

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, Finestone, Graves and Roesel)
AutoZone’s executive officers who do not have written employment agreements, including Messrs. Giles,
Finestone, Graves and Roesel, 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 eight years of service, Mr. Finestone has 12 years of service, Mr. Graves
has 21 years of service and Mr. Roesel has 7 years 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.
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 31,
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
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