Exhibit 10.1

 

 

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Jamere Jackson

 

August 5, 2020

 

Dear Mr. Jackson:

 

Please accept this letter as a personal invitation to join our team and an
official offer of at-will employment as Executive Vice President, Chief
Financial Officer, Customer Satisfaction of AutoZone, Inc. (“AutoZone” or
“Company”) in our Memphis, TN office, reporting to Bill Rhodes, Chairman and
Chief Executive Officer, Customer Satisfaction. Your election to the Executive
Vice President, Chief Financial Officer, Customer Satisfaction position will
take place on or about September 12, 2020 and will be effective upon your
commencement of employment.

 

Base Salary

Your base salary will be $700,000 annually. Future adjustments in base salary,
if any, are generally recommended by the Chief Executive Officer and approved by
the Compensation Committee of the AutoZone Board of Directors in conjunction
with our annual performance review process.

 

Signing Bonus

Upon your commencement of employment with AutoZone, you will receive a
$1,200,000 signing bonus. This signing bonus will be paid in the first pay
period following the date you commence employment with AutoZone. If you
voluntarily terminate your employment with AutoZone, or if AutoZone terminates
your employment for Cause (as defined in the Non-Compete Agreement, as defined
below), in each case prior to your second-year anniversary of the payout date,
you will be required to repay the signing bonus in full.

 

Short-Term (or Annual) Incentive Compensation

In addition to your base salary, AutoZone offers incentive compensation under
the AutoZone Management Incentive Plan (“MIP”). You will be eligible to
participate in the MIP for fiscal year 2021 and each year thereafter that the
MIP is offered, provided you are otherwise eligible for the MIP in accordance
with its terms. Your 2021 target will be $525,000, which is 75% of your salary,
prorated for time in position.

 

Long-Term Incentive Plan

Upon your commencement of employment with AutoZone or shortly thereafter, you
will receive: (i) one-time sign-on long-term incentive award consisting of 2,962
time-based non-qualified stock options having a grant date value of $1,000,000
(as of today), which will vest ratably over four years (1/4 will vest on each
anniversary of the award); and (ii) a 2021 long-term incentive award consisting
of time-based non-qualified stock options following the annual process,
consistent with other Executive Vice President grants with an “Expectations
Consistently Met” rating, with an estimated grant date value of $2,280,000
(dependent upon market price at grant) having a total grant date estimated value
of $3,280,000.

 

The long-term incentive awards described above will be governed by the Amended
and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan, the related plan
documents and the participant award agreements. The actual number of shares
granted will be determined using the closing price of AutoZone stock on the
grant date, rounded up to the next whole share. Your long-term incentive award
for future years will be established by recommendation from the Chief Executive
Officer and approved by the Compensation Committee of the AutoZone Board of
Directors in conjunction with our annual performance review process.

 

Employee Benefits

You will have the opportunity to participate in such group medical, dental, life
and disability insurance plans, retirement and savings plans, and other fringe
benefit programs as are available generally to employees of the Company, and as
may be amended from time-to-time.

 

401(k) and Executive Deferred Compensation Plan

The 401(k) plan allows for contributions up to IRS limits with a Company match
of 100% of the first 3% of your compensation that you contribute to the Plan,
and 50% of the next 2% of your compensation that you contribute.

 

 

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In addition, under the Executive Deferred Compensation plan, officers may defer
up to 25% of base salary and 75% of bonus compensation. The Company will credit
your balance with a Company match of 100% of the first 3% of your compensation
that you defer to the Plan, and 50% of the next 2% of your compensation that you
contribute, less the IRS annual limit. Participants may select among various
mutual funds in which to invest their deferral accounts. Participants may elect
to receive distribution of their deferral accounts at retirement or starting in
a specific further year of choice before or after anticipated retirement (but
not later than the year in which the participant reaches age 75.)

 

Employee and Executive Stock Purchase Plans

AutoZone maintains the Seventh Amended and Restated AutoZone, Inc. Employee
Stock Purchase Plan (“Employee Stock Purchase Plan”) which enables all employees
to purchase AutoZone common stock at a discount, subject to IRS-determined
limitations. Based on IRS rules, we limit the annual purchases in the Employee
Stock Purchase Plan to no more than $15,000, and no more than 10% of eligible
compensation. To support and encourage stock ownership by our executives,
AutoZone also established a non-qualified stock purchase plan. The AutoZone,
Inc. Sixth Amended and Restated Executive Stock Purchase Plan (“Executive Stock
Purchase Plan”) permits participants to acquire AutoZone common stock in excess
of the purchase limits contained in AutoZone’s Employee Stock Purchase Plan.
Because the Executive Stock Purchase Plan is not required to comply with the
requirements of Section 423 of the Internal Revenue Code of 1986, as amended, it
has a higher limit on the percentage of a participant’s compensation that may be
used to purchase shares (25%) and places no dollar limit on the amount of a
participant’s compensation that may be used to purchase shares under the plan.

 

The Executive Stock Purchase Plan operates in a similar manner to the
tax-qualified Employee Stock Purchase Plan, in that it allows executives to
contribute after-tax compensation for use in making quarterly purchases of
AutoZone common stock. Options are granted under the Executive Stock Purchase
Plan each calendar quarter and consist of two parts: a restricted share option
and an unvested share option. Shares are purchased under the restricted share
option at 100% of the closing price of AutoZone stock at the end of the calendar
quarter (i.e., not at a discount), and a number of shares are issued under the
unvested share option at no cost to the executive, so that the total number of
shares acquired upon exercise of both options is equivalent to the number of
shares that could have been purchased with the contributions at a price equal to
85% of the stock price at the end of the quarter. The unvested shares are
subject to forfeiture if the executive does not remain with the company for one
year after the grant date. After one year, the shares vest, and the executive
owes taxes based on the share price on the vesting date (unless a so-called
83(b) election was made on the date of grant).

 

Other Perquisites

 

Executive Physical Program. The Executive Physical Program is offered through
the Mayo Clinic at any of three Mayo Clinic sites located in Scottsdale, AZ
Jacksonville, FL or Rochester, MN. A thorough, comprehensive, and customized
one, two or three-day itinerary of exams and tests are tailored to your specific
needs. The team of physicians will review and update medications and
immunizations, including those needed for international travel, provide a
lifestyle assessment covering nutrition, tobacco use, personal safety and other
indicators of disease risk. You will receive unhurried time with your personal
Executive Health physician to review your test results, address your questions
and prepare a strategy to optimize your health. In addition, your personal
executive health physician at the Mayo Clinic will perform a preventive health
assessment including a comprehensive medical history review and physical exam,
which include a full range of preventive screening tests for early detection of
cancer, heart disease and other serious health conditions including
cardiovascular counseling.

 

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.

 

 

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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,
until age 65. 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.

 

Charitable Contributions. AutoZone will match donations up to $50,000 for
qualified charities for Executive Vice Presidents.

 

Paid Time Off and Holidays

Your annual paid time off entitlement will be four (4) weeks paid time off. Paid
Time Off is based on 120 days after the anniversary of your start date.
Additionally, AutoZone presently observes certain paid holidays.

 

Relocation Benefits

You will be eligible to receive the following Tier IV relocation benefits,
provided that you sign the Relocation Expense Reimbursement Agreement:

 

·Miscellaneous Allowance in the amount of $10,000. The Miscellaneous Allowance
is not grossed up for tax purposes.

 

·Temporary living for up to a maximum of 90 days will be provided for you and
your family. Appropriate accommodations will be determined by Brookfield GRS.
This is an additional 30 days from our normal program.

 

·Please see the attached Relocation Benefit Summary for additional details on
this benefit.

 

Equity Ownership Guidelines

Consistent with the goal of driving long-term value creation for shareholders,
the Company’s equity ownership guidelines require equity ownership by our
executive officers. Qualifying holdings include AutoZone stock owned directly,
AutoZone shares held indirectly and reportable as beneficial holdings, unvested
AutoZone shares acquired via the Executive Stock Purchase Plan and 60% of vested
stock options (based on “after tax in-the-money” value.) Covered executives must
attain the specified minimum level within five (5) years of the executive’s
placement into a covered position. Fifty (50) percent of net shares acquired
through incentive compensation plans (through the exercise of stock options)
must be retained if an executive has not satisfied the target. Executives are
not permitted to pledge their AutoZone equity and are not permitted to hedge or
otherwise invest in derivatives involving AutoZone stock.

 

All Executive Vice Presidents currently have a three times base salary equity
ownership requirement.

 

Non-Competition, Non-Solicitation, Non-Disclosure and Assignment of Inventions
Agreement

This offer is conditioned upon you executing the enclosed Non-Competition,
Non-Solicitation Non-Disclosure & Assignment of Inventions Agreement
(“Non-Compete Agreement”).

 

Director and Officer Questionnaire

A copy of our Director and Officer Questionnaire is attached. Please complete
the questionnaire and return the same to me as soon as possible, as certain of
the information is required to be filed with the United States Securities and
Exchange Commission. In addition, we will need certain information, including a
Power of Attorney, for SEC filings. We will request SEC CIK code and password
from the Securities and Exchange Commission on your behalf.

 

Cell Phone Allowance

You will be provided a bi-weekly cell phone allowance in the amount of $41.54.
This is equivalent to $1,080.04 annually and is intended to cover the additional
time and data usage under our “bring your own device” approach.

 

 

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Contingency Matters

This offer and your continued employment with AutoZone are contingent upon the
following:

 

·Action by the Compensation Committee of AutoZone’s Board of Directors of
AutoZone to elect you to the positions identified above and to approve your
compensation;

 

·In accordance with the Federal Immigration Reform and Control Act of 1986, you
are required to provide AutoZone with verification of your identity and
eligibility to work in the United States; and

 

·Submitting to and successfully completing all pre-employment assessments
including a drug screen, background check, our Director and Officer
Questionnaire, and execution and delivery of the Non-Compete Agreement.

 

The benefits and perquisites described above are subject to review and
modification by the Compensation Committee or by AutoZone when those changes are
applicable to all employees.

 

If you have any questions regarding this offer, please contact me at
901-495-6532. Should you accept, you must also complete and return the attached
Non-Compete Agreement to me via e-mail to Rick.Smith@AutoZone.com.

 

With your acceptance, you confirm that you are not currently bound by or subject
to any confidentiality or non-competition agreement with a previous employer
that you have not previously disclosed to us and, if in writing, provided a copy
to us.

 

AutoZone’s onboarding process is administered through an online application
called Taleo. Once we receive your signed offer letter, you will receive an
e-mail from Taleo with details to set up your username and password. Please
log-on to Taleo to complete your profile, post-offer employment questionnaire
and background check release forms. Until these forms have been completed, we
cannot initiate your mandatory pre-employment assessments. If you experience any
problems using Taleo, please send an email to onboarding@AutoZone.com or contact
David Orabone at 901-495-7383.

 

Confidentiality

This letter is confidential, and its contents are intended solely for review by
you and your counsel. You should not disclose, and you will advise your counsel
not to disclose, this letter’s contents or the fact of its existence to any
third party without our prior written consent. You understand that action by the
board of AutoZone to elect you as an officer may require a public announcement
by the Company. Except as may be required by law or stock exchange rule, the
disclosure of this offer and your acceptance, if any, to any third party other
than your counsel and our representatives subject to an appropriate
confidentiality obligation, will be mutually agreed upon and coordinated.

 

Sincerely,

 

Richard C. Smith

Senior Vice President, Human Resources, Customer Satisfaction

 

I Accept/ Reject (circle) the Company’s offer of employment and the terms and
conditions set forth herein:

 

/s/ Jamere Jackson  08-08-2020 Name  Date