Exhibit 10.38





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	 	 	 	 
	 

	 	 	 	 	 	 






 


 









 







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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