Exhibit 10.38
Executive Committee Members
AUTOZONE, INC.
2011 EQUITY INCENTIVE AWARD PLAN
STOCK OPTION GRANT NOTICE AND
STOCK OPTION AGREEMENT
AutoZone, Inc., a Nevada corporation (the “Company”), pursuant to its 2011
Equity Incentive Award Plan, as amended from time to time (the “Plan”), hereby
grants to the individual listed below (the “Participant”), an option to purchase
the number of shares of the common stock of the Company (“Common Stock”), set
forth below (the “Option”). This Option is subject to all of the terms and
conditions set forth herein and in the Stock Option Agreement attached hereto as
Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated
herein by reference. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Grant Notice and the Stock
Option Agreement.

     
Participant:
   
 
 
 
 
Grant Date:
   
 
 
 
 
Exercise Price per Share:
  $[                           ] /Share
 
 
Total Exercise Price:
  $ 
 
 
Total Number of Shares Subject to the Option:
  shares
 
 
Expiration Date:
   
 
 
 
 

     
Type of Option:
  o Incentive Stock Option                      o Non-Qualified Stock Option
 
   
Vesting Schedule:
  [To be set forth in individual agreement]
 
   
Termination
  The Option shall terminate on the Expiration Date set forth above or, if
earlier, in accordance with the terms of the Stock Option Agreement.

By his or her signature, the Participant agrees to be bound by the terms and
conditions of the Plan, the Stock Option Agreement and this Grant Notice. The
Participant has reviewed the Stock Option Agreement, the Plan and this Grant
Notice in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Grant Notice and fully understands all provisions of
this Grant Notice, the Stock Option Agreement and the Plan. The Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions arising under the Plan
or relating to the Option.

              AUTOZONE, INC.   PARTICIPANT
 
           
By:
      By:    
 
           
Print Name:
      Print Name:    
 
           
Title:
           
 
           
Address:
  c/o Stock Administration Dept.   Address:    
 
           
 
  123 South Front Street        
 
  Memphis, TN 38103        
 
           

 

 

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EXHIBIT A
TO STOCK OPTION GRANT NOTICE
STOCK OPTION AGREEMENT
Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this
Stock Option Agreement (this “Agreement”) is attached, AutoZone, Inc., a Nevada
corporation (the “Company”), has granted to the Participant an option under the
Company’s 2011 Equity Incentive Award Plan, as amended from time to time (the
“Plan”) to purchase the number of shares of Common Stock indicated in the Grant
Notice.
ARTICLE I.
GENERAL
1.1 Incorporation of Terms of Plan. The Option is subject to the terms and
conditions of the Plan which are incorporated herein by reference. In the event
of any inconsistency between the Plan and this Agreement, the terms of the Plan
shall control.
1.2 Definitions.
(a) “Cause” shall mean the willful engagement by Participant in conduct which is
demonstrably or materially injurious to the Company, monetarily or otherwise.
For this purpose, no act or failure to act by the Participant shall be
considered “willful” unless done, or omitted to be done, by the Participant not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Company.
(b) “Disability” shall mean a determination by the Company that Participant is
“totally disabled,” within its meaning in the Company’s long term disability
plan as in effect from time to time.
(c) “Retirement” shall mean Participant’s retirement at normal retirement age,
defined as the earliest date on which the Participant (i) has attained age 55,
(ii) has completed at least 5 years of full-time service with the Company, and
(iii) the sum of the number of full-time years of service and Participant’s age
equals at least 65.
ARTICLE II.
GRANT OF OPTION
2.1 Grant of Option. In consideration of the Participant’s past and/or continued
employment with or service to the Company or any of its Affiliates and for other
good and valuable consideration, effective as of the Grant Date set forth in the
Grant Notice (the “Grant Date”), the Company irrevocably grants to the
Participant the Option to purchase any part or all of an aggregate of the number
of shares of Common Stock set forth in the Grant Notice, upon the terms and
conditions set forth in the Plan and this Agreement. Unless designated as a
Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive
Stock Option to the maximum extent permitted by law.
2.2 Exercise Price. The exercise price of the shares of Common Stock subject to
the Option shall be as set forth in the Grant Notice, without commission or
other charge; provided, however, that the price per share of the shares of
Common Stock subject to the Option shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the Grant Date. Notwithstanding the
foregoing, if this Option is designated as an Incentive Stock Option and the
Participant is a Greater Than 10% Stockholder as of the Grant Date, the price
per share of the shares of Common Stock subject to the Option shall not be less
than 110% of the Fair Market Value of a share of Common Stock on the Grant Date.

 

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2.3 Consideration to the Company. In consideration of the grant of the Option by
the Company, the Participant agrees to render faithful and efficient services to
the Company or any of its Affiliates. Nothing in the Plan or this Agreement
shall confer upon the Participant any right to continue in the employ or service
of the Company or any of its Affiliates or shall interfere with or restrict in
any way the rights of the Company and its Subsidiaries, which rights are hereby
expressly reserved, to discharge or terminate the services of the Participant at
any time for any reason whatsoever, with or without Cause, except to the extent
expressly provided otherwise in a written agreement between the Company or any
of its Affiliates and the Participant.
ARTICLE III.
PERIOD OF EXERCISABILITY
3.1 Commencement of Exercisability.
(a) Subject to Sections 3.2, 3.3, 5.10 and 5.13 hereof, the Option shall become
vested and exercisable in such amounts and at such times as are set forth in the
Grant Notice.
(b) No portion of the Option which has not become vested and exercisable at the
date of the Participant’s Termination of Service shall thereafter become vested
and exercisable, except as may be otherwise provided by the Administrator or as
set forth in a written agreement between the Company and the Participant.
3.2 Duration of Exercisability. The installments provided for in the vesting
schedule set forth in the Grant Notice are cumulative. Each such installment
which becomes vested and exercisable pursuant to the vesting schedule set forth
in the Grant Notice shall remain vested and exercisable until it becomes
unexercisable under Section 3.3 hereof.
3.3 Expiration of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:
(a) The Expiration Date set forth in the Grant Notice;
(b) If this Option is designated as an Incentive Stock Option and the
Participant is a Greater Than 10% Stockholder as of the Grant Date, the
expiration of five (5) years from the Grant Date;
(c) [Except to the extent set forth in an employment agreement between the
Company and the Participant,] [t]he expiration of ninety (90) days from the date
of the Participant’s Termination of Service for any reason other than (i) death
or Disability, (ii) Retirement or (iii) by the Company for Cause or other than
for Cause;
(d) The expiration of one (1) year from the date of the Participant’s
Termination of Service by reason of the Participant’s death or Disability;
(e) The expiration of the term stated in the Grant Notice following the
Participant’s Termination of Service due to Retirement;
(f) The commencement of business on the date of the Participant’s Termination of
Service by the Company for Cause; or

 

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(g) [Except to the extent set forth in an employment agreement between the
Company and the Participant,] [i]n the event of the Participant’s Termination of
Service by the Company other than for Cause, the expiration of the “Severance
Period” as defined in the Non-Compete and Severance Agreement between the
Participant and the Company (provided, however, that no portion of the Option
which has not vested and become exercisable as of the date of the Participant’s
Termination of Service shall thereafter vest and become exercisable).
The Participant acknowledges that an Incentive Stock Option exercised more that
three (3) months after the Participant’s Termination of Employment, other than
by reason of death or Disability, will be taxed as a Non-Qualified Stock Option.
3.4 Special Tax Consequences. The Participant acknowledges that, to the extent
that the aggregate Fair Market Value (determined as of the time the Option is
granted) of all shares of Common Stock with respect to which Incentive Stock
Options, including the Option, are exercisable for the first time by the
Participant in any calendar year exceeds $100,000, the Option and such other
options shall be Non-Qualified Stock Options to the extent necessary to comply
with the limitations imposed by Section 422(d) of the Code. The Participant
further acknowledges that the rule set forth in the preceding sentence shall be
applied by taking the Option and other “incentive stock options” into account in
the order in which they were granted, as determined under Section 422(d) of the
Code and the Treasury Regulations thereunder.
ARTICLE IV.

EXERCISE OF OPTION
4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(c) and
5.2(d) hereof, during the lifetime of the Participant, only the Participant may
exercise the Option or any portion thereof. After the death of the Participant,
any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3 hereof, be exercised by the
Participant’s personal representative or by any person empowered to do so under
the deceased Participant’s will or under the then-applicable laws of descent and
distribution.
4.2 Partial Exercise. Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at any
time prior to the time when the Option or portion thereof becomes unexercisable
under Section 3.3 hereof. However, the Option shall not be exercisable with
respect to fractional shares.
4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company (or any third party
administrator or other person or entity designated by the Company) of all of the
following prior to the time when the Option or such portion thereof becomes
unexercisable under Section 3.3 hereof:
(a) A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised. The notice shall be signed by the Participant or other person then
entitled to exercise the Option or such portion of the Option;
(b) Full payment of the exercise price and applicable withholding taxes to the
stock administrator of the Company for the shares of Common Stock with respect
to which the Option, or portion thereof, is exercised, in a manner permitted by
Section 4.4 hereof;

 

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(c) Any other written representations or documents as may be required in the
Administrator’s sole discretion to effect compliance with all applicable
provisions of the Securities Act, the Exchange Act, any other federal, state or
foreign securities laws or regulations, the rules of any securities exchange or
automated quotation system on which the shares of Common Stock are listed,
quoted or traded or any other applicable law; and
(d) In the event the Option or portion thereof shall be exercised pursuant to
Section 4.1 hereof by any person or persons other than the Participant,
appropriate proof of the right of such person or persons to exercise the Option.
Notwithstanding any of the foregoing, the Company shall have the right to
specify all conditions of the manner of exercise, which conditions may vary by
country and which may be subject to change from time to time.
4.4 Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Participant:
(a) Cash;
(b) Check;
(c) With the consent of the Administrator, delivery of a written or electronic
notice that the Participant has placed a market sell order with a broker with
respect to shares of Common Stock then issuable upon exercise of the Option, and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the aggregate exercise
price; provided, that payment of such proceeds is then made to the Company upon
settlement of such sale;
(d) With the consent of the Administrator, surrender of other shares of Common
Stock which have been owned by the Participant for such period of time as may be
required by the Administrator in order to avoid adverse accounting consequences
and having a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the shares of Common Stock with respect to which the Option or
portion thereof is being exercised;
(e) With the consent of the Administrator, surrendered shares of Common Stock
issuable upon the exercise of the Option having a Fair Market Value on the date
of exercise equal to the aggregate exercise price of the shares of Common Stock
with respect to which the Option or portion thereof is being exercised; or
(f) With the consent of the Administrator, such other form of legal
consideration as may be acceptable to the Administrator.
4.5 Conditions to Issuance of Stock Certificates. The shares of Common Stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares of Common Stock, treasury
shares of Common Stock or issued shares of Common Stock which have then been
reacquired by the Company. Such shares of Common Stock shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any
certificates or make any book entries evidencing shares of Common Stock
purchased upon the exercise of the Option or portion thereof prior to
fulfillment of the conditions set forth in Section 11.4 of the Plan.
4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any
of the rights or privileges of, a stockholder of the Company in respect of any
shares of Common Stock purchasable upon the exercise of any part of the Option
unless and until such shares of Common Stock shall have been issued by the
Company to such holder (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the shares of Common Stock are issued, except as provided
in Section 13.2 of the Plan.

 

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ARTICLE V.

OTHER PROVISIONS
5.1 Administration. The Administrator shall have the power to interpret the Plan
and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Administrator in good faith shall
be final and binding upon the Participant, the Company and all other interested
persons. No member of the Administrator or the Board shall be personally liable
for any action, determination or interpretation made in good faith with respect
to the Plan, this Agreement or the Option.
5.2 Transferability of Option. Except as otherwise set forth in the Plan:
(a) The Option may not be sold, pledged, assigned or transferred in any manner
other than by will or the laws of descent and distribution or, subject to the
consent of the Administrator, pursuant to a DRO, unless and until the Option has
been exercised and the shares underlying the Option have been issued, and all
restrictions applicable to such shares have lapsed;
(b) The Option shall not be liable for the debts, contracts or engagements of
the Participant or the Participant’s successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, hypothecation,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy) unless and
until the Option has been exercised, and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by Section 5.2(a) hereof; and
(c) During the lifetime of the Participant, only the Participant may exercise
the Option (or any portion thereof), unless it has been disposed of pursuant to
a DRO; after the death of the Participant, any exercisable portion of the Option
may, prior to the time when such portion becomes unexercisable under the Plan or
this Agreement, be exercised by the Participant’s personal representative or by
any person empowered to do so under the deceased Participant’s will or under the
then applicable laws of descent and distribution.
(d) Notwithstanding any other provision in this Agreement, the Participant may,
in the manner determined by the Administrator, designate a beneficiary to
exercise the rights of the Participant and to receive any distribution with
respect to the Option upon the Participant’s death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights pursuant to
the Plan is subject to all terms and conditions of the Plan and this Agreement,
except to the extent the Plan and this Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Administrator. If
the Participant is married or a domestic partner in a domestic partnership
qualified under applicable law and resides in a community property state, a
designation of a person other than the Participant’s spouse or domestic partner,
as applicable, as his or her beneficiary with respect to more than 50% of the
Participant’s interest in the Option shall not be effective without the prior
written consent of the Participant’s spouse or domestic partner. If no
beneficiary has been designated or survives the Participant, payment shall be
made to the person entitled thereto pursuant to the Participant’s will or the
laws of descent and distribution. Subject to the foregoing, a beneficiary
designation may be changed or revoked by the Participant at any time provided
the change or revocation is filed with the Administrator prior to the
Participant’s death.
5.3 Tax Consultation. Participant understands that Participant may suffer
adverse tax consequences as a result of the grant, vesting and/or exercise of
the Option, and/or with the purchase or disposition of the shares of Common
Stock subject to the Option. Participant represents that Participant has
consulted with any tax consultants Participant deems advisable in connection
with the purchase or disposition of such shares and that Participant is not
relying on the Company for any tax advice.

 

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5.4 Adjustments. The Participant acknowledges that the Option is subject to
modification and termination in certain events as provided in this Agreement and
Article 13 of the Plan.
5.5 Notices. Any notice to be given by the Participant under the terms of this
Agreement shall be addressed to the Secretary of the Company (or, in the event
that the Participant is the Secretary of the Company, then to the Company’s
non-executive Chairman of the Board or Lead Director). Any notice to be given to
the Participant shall be addressed to him at his home address on record with the
Company. By a notice given pursuant to this Section 5.5, either party may
hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Participant shall, if Participant is
then deceased, be given to the Participant’s personal representative if such
representative has previously informed the Company of his or her status and
address by written notice under this Section 5.5. Any notice required or
permitted hereunder shall be given in writing and shall be deemed effectively
given upon personal delivery or upon deposit in the United States mail by
certified mail, with postage and fees prepaid, addressed as set forth above or
upon confirmation of delivery by a nationally recognized overnight delivery
service.
5.6 Participant’s Representations. If the shares of Common Stock purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act or any applicable state laws on an effective registration
statement at the time this Option is exercised, the Participant shall, if
required by the Company, concurrently with the exercise of all or any portion of
this Option, make such written representations as are deemed necessary or
appropriate by the Company and/or its counsel.
5.7 Captions. Captions are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
5.8 Governing Law. The laws of the State of Nevada shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.
5.9 Conformity to Securities Laws. The Participant acknowledges that the Plan
and this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, and state securities laws and regulations. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and the Option is
granted and may be exercised, only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
5.10 Amendments, Suspension and Termination. To the extent permitted by the
Plan, this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee or the
Board, provided, however, that, except as may otherwise be provided by the Plan,
no amendment, modification, suspension or termination of this Agreement shall
adversely affect the Option in any material way without the prior written
consent of the Participant.
5.11 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth in this Article 5, this Agreement
shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.

 

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5.12 Notification of Disposition. If this Option is designated as an Incentive
Stock Option, the Participant shall give prompt notice to the Company of any
disposition or other transfer of any shares of Common Stock acquired under this
Agreement if such disposition or transfer is made (a) within two years from the
Grant Date with respect to such shares of Common Stock or (b) within one year
after the transfer of such shares of Common Stock to the Participant. Such
notice shall specify the date of such disposition or other transfer and the
amount realized, in cash, other property, assumption of indebtedness or other
consideration, by the Participant in such disposition or other transfer.
5.13 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if the Participant is subject to
Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
5.14 Not a Contract of Service. Nothing in this Agreement or in the Plan shall
confer upon the Participant any right to continue to serve as an employee or
other service provider of the Company or any of its Affiliates.
5.15 Entire Agreement. The Plan, the Grant Notice and this Agreement (including
all Exhibits thereto) constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and its Affiliates and the Participant with respect to the subject matter
hereof.
5.16 Section 409A. Notwithstanding any other provision of the Plan, this
Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice
shall be interpreted in accordance with the requirements of Section 409A of the
Code (together with any Department of Treasury regulations and other
interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the date hereof,
“Section 409A”). The Administrator may, in its discretion, adopt such amendments
to the Plan, this Agreement or the Grant Notice or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, as the Administrator determines are
necessary or appropriate to comply with the requirements of Section 409A.

 

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