Stock Option Agreement Agreement




Exhibit 10.1

 
NON-QUALIFIED STOCK OPTION AGREEMENT

(AUTOZONE OPTIONEE)


 
            This
NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), dated as of-------,
is made by and between AutoZone, Inc., a Nevada corporation (the "Company"),
and the person identified as the "Optionee" on Schedule I, an employee
of the Company ("Optionee") (together, the "Parties").

 



RECITALS


           
A.        The Company wishes to carry
out the AutoZone, Inc. Second Amended and Restated 1996 Stock Option Plan
(the "Plan") (the terms of which are hereby incorporated by reference and
made a part of this Agreement).


           
B.        The Compensation Committee
of the Company's Board of Directors has determined that it would be to
the advantage and best interest of the Company and its stockholders to
grant the Non-Qualified Option provided for herein to Optionee and has
advised the Company thereof and instructed the undersigned officers to
issue said Option.


           
In order to implement the following and in consideration of the mutual
covenants contained herein and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the Parties do hereby agree
as follows:


ARTICLE I

DEFINITIONS


            Whenever
the following terms are used in this Agreement they shall have the meaning
specified below unless the context clearly indicates to the contrary. 
Whenever the context so indicates, the masculine pronoun shall include
the feminine and neuter, and the singular the plural.


Section
1.01 - Affiliate


           
"Affiliate" shall mean any Subsidiary and any limited partnership of which
the Company or any Subsidiary is the general partner.


Section
1.02 - Cause


           
"Cause" shall mean the willful engagement by the Optionee in conduct which
is demonstrably or materially injurious to the Employer, monetarily or
otherwise.  For this purpose, no act or failure to act by the Optionee
shall be considered "willful" unless done, or omitted to be done, by the
Optionee not in good faith and without reasonable belief that his action
or omission was in the best interest of the Employer.


Section
1.03 - Committee


           
"Committee" shall mean the Compensation Committee of the Company's Board
of Directors which has been appointed to administer the Plan.


Section
1.04 - Common Stock


           
"Common Stock" shall mean shares of the Company's common stock, $.01 par
value per share.


Section
1.05 - Corporate Transaction


           
"Corporate Transaction" shall mean any of the following stockholder-approved
transactions to which the Company is a party:


                       
(a)        a merger or consolidation
in which the Company is not the surviving entity, except for a transaction
the principal purpose of which is to change the State in which the Company
is incorporated, from a holding company or effect a similar reorganization
as to form whereupon this Plan and all Awards are assumed by the successor
entity:





                       
(b)        the sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company,
in complete liquidation or dissolution of the Company in a transaction
not covered by the exceptions to clause (a), above; or





                       
(c)        any reverse merger in which
the Company is the surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred or issued to a person
or persons different from those who held such securities immediately prior
to such merger.




Section
1.06 - Duly Endorsed


 

           "Duly
Endorsed" shall mean duly endorsed by the person or persons in whose name
a stock certificate is registered in blank or accompanied by a duly executed
stock assignment separate from certificate with the signature(s) thereon
guaranteed by a commercial bank or trust company or a member of a national
securities exchange or a member of the National Association of Securities
Dealers.





Section
1.07 - Employer
          "Employer" shall
mean the Company, or any Affiliate, whichever at the time employs the Optionee.



 

Section 1.08 - Option


 

           "Option"
shall mean the non-qualified option or options to purchase Common Stock
granted under this Agreement.


 

Section 1.09 - Option Stock


 

       "Option Stock" shall mean all
shares of Common Stock acquired by Optionee pursuant to the exercise of
this Option or any portion hereof.


 

Section 1.10 - Permanent Disability


 

           Optionee
shall be deemed to have a "Permanent Disability" hereunder when the majority
of the Board of Directors of the Employer shall, in good faith, so determine.


 

Section 1.11 - Public Offering


 

           "Public
Offering" shall mean the sale of any shares of Common Stock, or any securities
convertible into or exercisable or exchangeable for shares of Common Stock,
to the public pursuant to an effective underwritten registration statement
filed under the Securities Act of 1933, as amended.


 

Section 1.12 - Secretary


 

           "Secretary"
shall mean the Secretary of the Company.


 

Section 1.13 - Subsidiary


 

           "Subsidiary"
shall mean any corporation in an unbroken chain of corporations beginning
with the Company if each of the corporations other than the last corporation
in the unbroken chain then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.


 

Section 1.14 - Termination of Employment


 

           
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Employer is terminated for any
reason, including, but not by way of limitation, a termination for Permanent
Disability or by resignation, discharge with or without Cause, death or
retirement, but excluding any termination where there is a simultaneous
reemployment by the Employer.  The Committee, in its absolute discretion,
shall determine the effect of all other matters and questions relating
to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
with or without Cause, and all questions of whether particular leaves of
absence constitute Termination of Employment.


ARTICLE II
GRANT OF OPTION


Section 2.01 - Grant of Option


           
For good and valuable consideration, on the date hereof the Company irrevocably
grants to the Optionee the option or options to purchase the number of
shares of its $.01 par value Common Stock set forth on Schedule I attached
hereto upon the terms and conditions set forth in this Agreement.


Section
2.02 - Purchase Price


           
The purchase price of the shares of Common Stock covered by the Option
shall be the applicable amount per share without commission or other charge
as set forth for the Option in Schedule I attached hereto.


Section
2.03 - Adjustments in Option


           
In the event that the outstanding shares of Common Stock subject to the
Option are changed into or exchanged for a different number or kind of
shares or other securities of the Company, or of another corporation, by
reason of merger, consolidation, recapitalization, reclassification, stock
split, stock dividend or combination of shares, the Committee shall make
an appropriate and equitable adjustment in the number and kind of shares
as to which the Option, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. 
Such adjustment in the Option shall be made without change in the aggregate
price applicable to the unexercised portion of the Option (except for any
change in the aggregate price resulting from rounding-off of share quantities
or prices) and with any necessary corresponding adjustment in the option
price per share.  Any such adjustment made by the Committee shall
be final and binding upon the Optionee, the Company and all other interested
persons.


ARTICLE III

PERIOD OF EXERCISABILITY



Section
3.01 - Commencement of Exercisability


           
The Option shall become exercisable as of the applicable Exercise Dates
set forth on Schedule I hereto. Notwithstanding the Exercise Dates set
forth on Schedule I, the Option shall become immediately exercisable on
the date of Optionee's death.


Section
3.02 - Duration of Exercisability


           
The Option, once it becomes exercisable pursuant to Section 3.01, shall
remain exercisable until it becomes unexercisable under Section 3.03.


Section
3.03 - 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 of ten (10)
years and one (1) day from the date hereof; or


 

                      
(b)        The time of the Optionee's
Termination of Employment unless such Termination of Employment results
from Optionee's death, Permanent Disability, voluntary termination, involuntary
termination without Cause or retirement from the Company at the Optionee's
normal retirement age as set forth in the AutoZone, Inc. Associate's Pension
Plan, as it may be amended from time to time; or





                       
(c)        The expiration of thirty
(30) days from the date of the Optionee's Termination of Employment by
reason of Optionee's Permanent Disability, voluntary termination or involuntary
termination without Cause, unless the Optionee dies within said thirty-day
period; or





                       
(d)        The expiration of one (1)
year from the date of the Optionee's death; or





                       
(e)        The effective date of either
the merger or consolidation of the Company with or into another corporation
(except a wholly-owned subsidiary of the Company), or the acquisition by
another corporation or person of all or substantially all of the Company's
assets or 80% or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Committee waives
this provision in connection with such transaction.  At least ten
(10) days prior the effective date of such merger, consolidation, exchange,
acquisition, liquidation or dissolution, the Committee shall give the Optionee
notice of such event if the Option has then neither been fully exercised
nor become unexercisable under this Section 3.03.




Section
3.04 - Reduction In or Expiration of Option In Event of Demotion


 

           In the
event that the Optionee is assigned to a position in the Company or an
Affiliate, which, as determined by the Committee in good faith, pays a
lower salary or involves less responsibility than the Optionee's position
with the Company on the date of grant, the Committee may, in its sole discretion,
reduce the number of shares of Common Stock subject to this Option or terminate
the entire Option in accordance with Section 3.03 as if the Optionee's
employment were terminated for Cause.


ARTICLE IV
EXERCISE OF OPTIONS


Section 4.01 - Person Eligible to Exercise


           
During the lifetime of the Optionee, only the Optionee may exercise the
Option or any portion thereof.  After the death of the Optionee, any
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.03, be exercised by his personal
representative or by any person empowered to do so under the Optionee's
will or under the then applicable laws of descent and distribution.


Section
4.02 - Manner of Exercise


           
The Option, or any exercisable portion thereof, may be exercised solely
by delivery to the Secretary or his designee of all of the following prior
to the time when the Option or such portion becomes unexercisable under
Section 3.03:


                       
(a)        Notice in writing signed
by the Optionee or the other person then entitled to exercise the Option
or portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established
by the Committee; and
                       
(b)          (i)   
Full payment (in cash or by check) for the shares with respect to which
such Option or portion is exercised; or

                                     
(ii)        Delivery of a notice that
the Optionee has placed a market sell order with a broker approved by the
Company 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 option exercise price; or

                                     
(iii)        A combination of the consideration
provided in the foregoing subparagraphs (i) and (ii); and

                       
(c)        Full payment in cash to the
Company of all amounts which, under federal, state or local law, it is
required to withhold upon exercise of the Option; and

                       
(d)        In the event the Option or
portion thereof shall be exercised pursuant to Section 4.01 by any person
or persons other than the Optionee, appropriate proof of the right of such
person or persons to exercise the Option.





Section
4.03 - Conditions to Issuance of Stock Certificates


 

           The shares
of Option Stock may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. 
Such shares shall be fully paid and nonassessable.  The Company shall
not be required to issue or deliver any certificate or certificates for
shares of Option Stock prior to fulfillment of all of the following conditions:



                       
(a)        The admission of such shares
to listing on all stock exchanges on which such class of stock is then
listed; and
                       
(b)        The completion of any registration
or other qualification of such shares under any state or federal law or
under rulings or regulations of the Securities and Exchange Commission
or of any other governmental regulatory body, which the Committee shall,
in its absolute discretion, determine to be necessary or advisable; and

                       
(c)        The receipt of any approval
or other clearance from any state or federal governmental agency which
the Committee shall, in its absolute discretion, determine to be necessary
or advisable; and

                       
(d)        Full payment as stated under
Section 4.02(b) for the Option exercised; and

                       
(e)        The payment to the Employer
of all amounts which, under federal, state or local law, it is required
to withhold upon exercise of the Option; and

                       
(f)        The lapse of such reasonable
period of time following the exercise of the Option as the Committee may
from time to time establish for reasons of administrative convenience.





Section
4.04 - 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 purchasable upon
the exercise of any part of the Option unless and until certificates representing
such shares shall have been issued by the Company to such holder.


 

Section 4.05 - Number of Shares Exercised


 

           Optionee
shall not exercise the Option to purchase fewer than one hundred (100)
shares of Option Stock at a time, unless the vested portion is less than
100 shares, in which event the Optionee shall exercise the right to purchase
all vested Options at the time of exercise.


ARTICLE V
TRANSFER AND OTHER RESTRICTIONS



Section
5.01 - Rule 144


           
If the Company shall have filed a registration statement pursuant to the
requirements of Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or engaged in a Public Offering, the Company will
file the reports required to be filed by it under the Act and the Exchange
Act and the rules and regulations adopted by the Securities and Exchange
Commission ("SEC") thereunder, to the extent required from time to time
to enable the Optionee to sell shares of Option Stock without registration
under the Act within the limitations of the exemptions provided by (i)
Rule 144 under the Act, as such Rule may be amended from time to time,
or (ii) any similar rule or regulation hereafter adopted by the SEC. Notwithstanding
anything contained in this Section 5.01, the Company may deregister under
Section 12 of the Exchange Act if it is then permitted to do so pursuant
to the Exchange Act and the rules and regulations thereunder.


Section
5.02 - Rule 144 Sales


           
If any of the Option Stock is to be disposed of in accordance with Rule
144 under the Act or otherwise, the Optionee shall promptly notify the
Company of such intended disposition and shall deliver to the Company at
or prior to the time of such disposition such documentation as the Company
may reasonably request in connection with such sale and, in the case of
a disposition pursuant to Rule 144, shall deliver to the Company an executed
copy of any notice on Form 144 required to be filed with the SEC.


Section
5.03 - Resales Prohibited During Public Offerings


           
Optionee agrees that if any shares of the capital stock of the Company
are offered to the public pursuant to an effective registration statement
under the Act, that upon the written request of the Company, Optionee will
not effect any public sale or distribution of any of the Option Stock not
covered by such registration statement within a period beginning seven
days prior to and ending 120 days after the effective date of such registration
statement.


ARTICLE VI

OTHER PROVISIONS


Section 6.01 - Administration


           
The Committee 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 or revoke any
such rules.  All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons.  No member
of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or this Agreement.


Section
6.02 - Option Not Transferable


           
Neither the Option nor any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, 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) and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that
this Section 6.02 shall not prevent transfers by will or by the applicable
laws of descent and distribution.


Section
6.03 - Shares to Be Reserved


           
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient
to satisfy the requirements of this Agreement.


Section
6.04 - Notices


           
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary and any notice
to be given to the Optionee shall be addressed to him at the address given
on Schedule I hereof.  By a notice given pursuant to this Section
6.04, 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
Optionee shall, if the Optionee is then deceased, be given to the Optionee's
personal representative if such representative has previously informed
the Company of his status and address by written notice under this Section
6.04.  Any notice shall have been deemed duly given when enclosed
in a properly sealed envelope or wrapper addressed as aforesaid, deposited
(with postage prepaid) in a post office or branch post office regularly
maintained by the United States Postal Service.


Section
6.05 - Titles


           
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.


Section
6.06 - Binding Effect


           
The provisions of this Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective heirs, legal representatives,
successors and assigns.  In the case of a transferee permitted under
Section 6.02 hereof, such transferee shall be deemed the Optionee hereunder
for purposes of obtaining the benefits or enforcing the rights of Optionee
hereunder; provided, however, that no transferee shall derive any rights
under this Agreement unless and until such transferee has delivered to
the Company a valid undertaking and becomes bound by the terms of this
Agreement.


Section
6.07 - Amendment


           
Except as otherwise stated in this Agreement, this Agreement may be amended
only be a written instrument signed by the Parties which specifically states
that it is amending this Agreement.


Section
6.08 - Applicable Law


           
The laws of the State of Nevada shall govern the interpretation, validity
and performance of the terms of this Agreement, regardless of the law that
might be applied under principles of conflicts of law.


Section
6.09 -Adjustment of Options


                       
(a)        Subject to Section 6.09(c),
in the event that the Committee determines that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or the
disposition of all or substantially all of the assets of the Company (including,
but not limited to, a Corporate Transaction), or exchange of Common Stock
or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Committee's sole discretion, affects
the Common Stock such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or enlargement of the benefits
intended to be made available under the Plan or with respect to an Option,
then the Committee shall, in such manner as it may deem equitable, adjust
any or all of the number and kind of shares of Common Stock subject to
this Option, or the grant or exercise price with respect to this Option.


 

                      
(b)        Subject to Section 6.09(c),
in the event of any Corporate Transaction or other transaction or event
described in Section 6.09(a) or any unusual or nonrecurring transactions
or events affecting the Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate, or of changes in applicable
laws, regulations, or accounting principles, the Committee in its discretion
may take any one or more of the following actions whenever the Committee
determines that such action is appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available with respect to the Option, to facilitate such transactions or
events, or to give effect to such changes in laws, regulations or principles:






                       
(i)        In its sole and absolute
discretion, and on such terms and conditions as it deems appropriate, the
Committee may provide by action taken prior to the occurrence of such transaction
or event and either automatically or upon the Optionee's request, for either
the purchase of any Option for an amount of cash equal to the amount that
could have been attained upon the exercise of such Option or realization
of the Optionee's rights had such Option been currently exercisable or
payable or fully vested or the replacement of such Option with other rights
or property selected by the Committee in its sole discretion;


 

                      
(ii)        In its sole and absolute
discretion, the Committee may provide by action taken prior to the occurrence
of such transaction or event that the Option cannot be exercised after
such event;


                       
(iii)        In its sole and absolute
discretion, and on such terms and conditions as it deems appropriate, the
Committee may provide, by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, Option shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in Section 3.01;


                       
(iv)        In its sole and absolute
discretion, and on such terms and conditions as it deems appropriate, the
Committee may provide, by action taken prior to the occurrence of such
transaction or event, that upon such event, such Option be assumed by the
successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards covering
the stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments in the number and kind of shares
and prices; or





                       
(v)        In its sole and absolute
discretion, and on such terms and conditions as it deems appropriate, the
Committee may make adjustments in the number and type of shares of Common
Stock subject to the Option.




                       
c)        No adjustment or action described
in this Section 6.09 or in any other provision of this Agreement shall
be authorized to the extent that such adjustment or action would cause
the Option to fail to so qualify under Section 162(m), as the case may
be, or any successor provisions thereto.  Furthermore, no such adjustment
or action shall be authorized to the extent such adjustment or action would
result in short-swing profits liability under Section 16 of the Exchange
Act or violate the exemptive conditions of Rule 16b-3.


 

                      
(d)        The number of shares of Common
Stock subject to any Option or the vesting thereof shall always be rounded
to the nearest whole number.




Section
6.10 - Optionee's Employment by Employer


 

           Nothing
contained in this Agreement or in any other agreement entered into by the
Company and the Optionee contemporaneously with the execution of this Agreement
(i) obligates the Employer to employ Optionee in any capacity whatsoever,
or (ii) prohibits or restricts the Employer from terminating the employment
of the Optionee at any time or for any reason whatsoever, with or without
cause, and the Optionee hereby acknowledges and agrees that neither the
Company nor any other person has made any representations or promises whatsoever
to the Optionee concerning the Optionee's employment or continued employment
by the Employer.





           
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto by their signatures on the following Schedule I.