Document:

#624417 v10 - eac - autozone ceo employment agt

EXHIBIT 10.1
EMPLOYMENT AND NON-COMPETE AGREEMENT

            THIS
AGREEMENT is between AutoZone, Inc., a Nevada corporation and its various
subsidiaries (collectively "AutoZone"), and Steve Odland, an individual
("Employee"), effective as of January 29, 2001 (the "Effective Date").

For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:

	
Employment. AutoZone agrees to employ Employee and Employee agrees
to remain in the employment of AutoZone, or a subsidiary or affiliate,
until the expiration of the Term or until earlier termination as provided
under this Agreement.

 
	
Term. This Agreement shall be effective as of the Effective Date
and shall continue until the third anniversary of the Effective Date unless
sooner terminated pursuant to Paragraph 13, 14 or 15. The period of employment
under this Paragraph 2 is referred to as the "Term."

 
	
Salary. Employee shall receive a salary from AutoZone as follows:
During the term of this Agreement, Employee shall receive minimum annual
compensation of $650,000, subject to increases as determined by the Compensation
Committee of the Board of Directors ("Base Salary"). The Base Salary amount
shall be paid on a pro-rated basis for all partial years based on a 364-day
year. AutoZone reserves the right to increase the Base Salary above the
amounts stated above in its sole discretion, provided that Employee's first
salary review shall occur as soon as practicable following the end of AutoZone's
2002 fiscal year, consistent with AutoZone's practices for its other senior
executives. All salary shall be paid at the same time and in the same manner
that AutoZone's other senior executives are paid.

 
	
Bonuses.

(a) Annual Bonus. During the term of this Agreement, Employee
shall be entitled to receive an annual bonus (the "Annual Bonus") in an
amount equal to 100% of his Base Salary if the Target (as defined below)
is met and up to a maximum of the lesser of 200% of his Base Salary or
$2,000,000 if the Target is exceeded, subject to and determined in accordance
with policies and procedures established by AutoZone's Compensation Committee
of the Board of Directors which shall be based upon the financial and operational
goals and objectives for the Employee and AutoZone established by the Compensation
Committee for each of AutoZone's fiscal years ("Target") in accordance
with AutoZone's 2000 Executive Incentive Compensation Plan, as amended
from time to time, or its successor plan (the "Incentive Compensation Plan"),
a copy of which is attached hereto as Exhibit A. The Target
is established at the sole discretion of the Compensation Committee of
the Board of Directors and is subject to review and revision at any time
upon notification to the Employee. Notwithstanding the foregoing, for AutoZone's
2001 fiscal year, Employee shall receive an Annual Bonus of not less than
$370,410.96. All bonuses shall be paid at the same time and in the same
manner that AutoZone's other senior executives are paid.

 

(b) Long-Term Bonus. Subject to final approval by AutoZone's
Board of Directors and approval by AutoZone's stockholders of the long-term
incentive plan established by the Compensation Committee of AutoZone's
Board of Directors (the "Long-Term Incentive Plan"), during the term of
this Agreement, Employee shall be entitled to participate in the Long-Term
Incentive Plan in accordance with the terms and conditions thereof and
on the same basis as AutoZone's other senior executives; provided, however,
that for purposes of the initial three year cycle of such plan beginning
on the first day of AutoZone's 2001 fiscal year (the "Initial Cycle"),
Employee shall be treated as if his employment with AutoZone commenced
on the first day of AutoZone's 2001 fiscal year. Employee's participation
in, and all bonuses payable to Employee under, the Long-Term Incentive
Plan shall be subject to and determined in accordance with policies and
procedures established by AutoZone's Compensation Committee of the Board
of Directors which shall be based upon the financial and operational goals
and objectives for the Employee and AutoZone established by the Compensation
Committee for each cycle of the Long-Term Incentive Plan ("Long-Term Target")
in accordance with the Long-Term Incentive Plan. The Long-Term Target is
established at the sole discretion of the Compensation Committee of the
Board of Directors and is subject to review and revision at any time upon
notification to the Employee. All bonuses under the Long-Term Incentive
Plan shall be paid at the same time and in the same manner that AutoZone's
other senior executives are paid.

 

	
Duties. Employee shall serve as Chief Executive Officer of AutoZone,
Inc., performing such duties as AutoZone, Inc.'s Board of Directors may
direct from time to time and as are normally associated with such a position.
In addition, if so elected, Employee shall also serve as Chairman of AutoZone,
Inc.'s Board of Directors. AutoZone may, in its sole discretion, alter,
expand or curtail the services to be performed by Employee or position
held by Employee from time to time, without adjustment in compensation.
Employee shall devote his full time and attention to AutoZone's business.
During the term of this Agreement, Employee shall not engage in any other
business activity that conflicts with his duties with AutoZone, regardless
of whether it is pursued for gain or profit. Employee may, however, invest
his assets in or serve on the Board of Directors of other companies so
long as they do not require Employee's services in the day to day operation
of their affairs and do not violate AutoZone's conflict of interest policy.

 
	
Other Benefits. Other benefits to be received by Employee from AutoZone
shall be the ordinary benefits received by AutoZone's other senior executives,
which may be changed by AutoZone in its sole discretion from time to time,
including, without limitation, Employee Stock Purchase Plan (Section 423
Plan), AutoZone Executive Deferred Compensation Plan, vacation, medical,
dental and vision plans, short-term disability plan, long-term disability
plan, annual physical exam (at AutoZone cost), term life insurance up to
$750,000 (at AutoZone cost) and supplemental term life insurance up to
$250,000 or such increased life insurance limits as may be provided from
time to time.

 
	
Special Payment. Upon the Effective Date, AutoZone shall pay Employee
a one-time special payment in an amount equal to $150,000, subject to such
withholding and other normal employee deductions as may be required by
law.

 
	
Relocation. AutoZone shall reimburse Employee for all reasonable
and actual moving expenses incurred by Employee in connection with his
relocation to Memphis, Tennessee which are properly incurred by him in
accordance with the policies of AutoZone, provided that proper vouchers
are submitted to AutoZone by Employee evidencing such expenses. Without
limitation, such expenses shall include: (a) expenses of periodic travel
between Employee's current primary residence and Memphis, and reasonable
temporary living expenses, for Employee and his family for a period not
to exceed one year from the date of this Agreement, (b) provision for AutoZone
to purchase Employee's current principal residence, no later than the date
Employee closes on his purchase of a replacement residence, at a price
equal to the amount paid by Employee to purchase and improve Employee's
current residence (but in no event exceeding $1,400,000), and all costs
of sale including brokerage commissions, title closing costs and insurance
and recording fees, state and local transfer taxes, and recording fees,
(c) all closing costs to purchase a residence in the Memphis area, including
mortgage application fees, reasonable and customary points (but in no event
exceeding 3 points) for loan origination and mortgage fees, and legal fees,
title insurance and recording fees, state and local transfer taxes, and
inspection fees, (d) provided that such loan is secured by a second mortgage
on Employee's current residence, an interest-free short-term bridge loan
in such amount as is required to cover a down payment on Employee's replacement
residence prior to closing a sale on Employee's current residence, but
in no event shall the amount of any such loan exceed $60,000 or the term
of such loan exceed 90 days, (e) all moving expenses, including packing,
unpacking, storage, transport and full replacement value insurance, and
air travel for Employee and his family, (f) separate transport of two automobiles,
and (g) $10,000 relocation allowance payment for incidentals, including
deposit forfeitures. Notwithstanding the foregoing, if Employee has not
sold his current residence prior to the expiration of ninety (90) days
following the Effective Date, AutoZone may elect to purchase Employee's
current residence pursuant to clause (b) above, provided that Employee
may, upon notice to AutoZone, require AutoZone to purchase his current
residence at any time prior to the expiration of such 90-day period. If
any payment of relocation expenses (other than taxable gain on payments
to purchase Employee's principal residence and other than the relocation
allowance described in clause (g) above) is subject to any federal, state
or local taxes, AutoZone shall pay Employee a Tax Gross-Up Payment with
respect to such taxes. For purposes of this Agreement, a "Tax Gross-Up
Payment" means an amount payable to Employee such that after payment of
such taxes on such amount there remains a balance sufficient to pay the
taxes being reimbursed.

 
	
Attorneys Fees. AutoZone shall promptly pay or reimburse Employee
for all reasonable attorneys fees actually incurred by Employee in the
negotiation, preparation and delivery of this Agreement; provided, however,
that the aggregate amount of AutoZone's obligation under this Paragraph
9 shall not exceed $15,000. Except as otherwise provided herein, each party
hereto shall bear its own costs and attorneys fees.

 
	
Stock Options. Effective as of the fifth (5th) business
day following the date on which AutoZone releases its earnings report for
the second quarter of its 2001 fiscal year, the Compensation Committee
of the Board of Directors of AutoZone shall grant Employee a non-qualified
stock option (the "Option") under AutoZone's stock option plan (the "Option
Plan") to purchase 275,000 shares of common stock of AutoZone (the "Common
Stock"), at a per share exercise price equal to the Fair Market Value (as
defined in the Option Plan) of a share of Common Stock on the date on which
the Option is granted (the "Grant Date"). Subject to Employee's continued
employment by AutoZone, the Option shall vest in cumulative annual installments
of 25% of the shares subject to the Option on each of the first four anniversaries
of the Grant Date, so that the Option shall be fully vested on the fourth
anniversary of the Grant Date. The term of the Option shall be ten (10)
years from the Grant Date. The Option shall be evidenced by a Stock Option
Agreement in substantially the form attached hereto as Exhibit B,
which, together with the Option Plan, shall set forth the terms and conditions
of the Option. Employee shall be considered for possible future annual
or other grants of Options for the first fiscal year in which options are
granted after the Grant Date and each fiscal year thereafter during the
Term, as determined by the Compensation Committee of the Board of Directors
in its discretion based on Employee's performance, consistent with the
treatment of other senior executives of AutoZone.

 
	
Supplemental Pension Plan Service Credit. For all purposes under
AutoZone's Executive Deferred Compensation Plan (a copy of which is on
file with the Securities and Exchange Commission, the "supplemental pension"),
Employee shall be immediately eligible for participation therein and shall
thereupon be credited with four years of defined benefit pension accruals
and vesting service (such that Employee shall be fully vested on the first
anniversary of the Effective Date provided that he is then an employee
of AutoZone or his employment is terminated prior to such date by AutoZone
without Cause or by Employee for Good Reason) for Employee's time in service
with Employee's former employer, including, without limitation, a benefit
accrual equal to such amounts as Employee would have accrued under the
AutoZone tax-qualified pension plan if such plan does not credit Employee
with such prior employer service thereunder.

 
	
Taxes. Employee understands that all salary, bonuses and other benefits
will be subject to reduction for amounts required to be withheld by law
as taxes and otherwise

.
	
Termination by AutoZone or by Employee for Good Reason.

a.  Without Cause or for Good Reason. AutoZone may terminate
this Agreement without Cause, and Employee may terminate this Agreement
for Good Reason, at any time upon notice by the terminating party to the
other party. In such event, Employee shall thereupon resign from AutoZone's
Board of Directors and shall cease to be Chief Executive Officer of AutoZone,
Inc. and Chairman of its Board of Directors, and his employment with AutoZone
shall terminate. In the event of a termination pursuant to this Paragraph
13(a),

 

	
Employee shall receive as soon as practicable after such termination a
lump sum cash amount in immediately available funds equal to his then current
Base Salary for the balance of the fiscal year in which this Agreement
is terminated, plus two (2) times his then prevailing annual Base Salary.
In addition, AutoZone shall pay Employee the following bonus amounts: (A)
Employee's full Annual Bonus for the fiscal year in which this Agreement
is terminated pursuant to this Paragraph 13(a), based on the Targets attained
by AutoZone and Employee for such fiscal year, (B) any unpaid bonus payable
to Employee under the Long-Term Incentive Plan for any cycle completed
prior to the termination date, and (C) if Employee's employment is terminated
pursuant to this Paragraph 13(a) prior to the payment of his bonus with
respect to the Initial Cycle under the Long-Term Incentive Plan, AutoZone
shall pay Employee a pro rated bonus with respect to the Initial Cycle
under the Long-Term Incentive Plan calculated as of the close of the Initial
Cycle based on the period of time elapsed from the date on which the Initial
Cycle began until this Agreement is terminated and the formula established
by the Compensation Committee for officers for the Initial Cycle, provided,
however, that the amount of any bonus payable to Employee under this clause
(C) shall in no event exceed the pro rated portion of 100% of Employee's
Base Salary. Said bonuses shall be paid when other officer bonuses are
paid for that fiscal year or cycle. Except as set forth in the preceding
sentence, Employee shall not be entitled to receive any bonus payments
after the termination of his employment hereunder;

 
	
During the period from the date of termination and ending on the earlier
of (A) the last day of the second full fiscal year following such termination
or (B) the first day on which Employee becomes eligible to participate
in a group health plan of a subsequent employer which provides benefits
comparable to AutoZone's health plan, Employee shall receive health insurance
coverage under AutoZone's health insurance plan on the same terms and conditions
as other senior executive employees of AutoZone; provided, however,
that if Employee is ineligible under the terms of AutoZone's health plan
to continue to be so covered, AutoZone shall provide Employee with substantially
equivalent coverage through other sources or will provide Employee with
a lump-sum payment in such amount that, after all taxes on that amount,
shall be equal to the cost to Employee of providing himself such coverage;

 
	
Upon the date of Employee's termination pursuant to this Paragraph 13(a),
the Option shall automatically be fully vested and exercisable with respect
to all shares subject thereto; and

 
	
If such termination occurs prior to the first anniversary of the Effective
Date, Employee shall thereupon be fully vested in all benefits accrued
by Employee under Employee's supplemental pension as of the date of termination
(including benefit accruals pursuant to Paragraph 11 hereof).

Any provision of Paragraph 8 to the contrary notwithstanding, Employee
shall not be liable for reimbursement of any relocation expenses provided
thereunder. AutoZone shall have no other obligations other than those stated
herein upon the termination of this Agreement and Employee hereby releases
AutoZone from any and all obligations and claims except those as are specifically
set forth herein. Any provision of this Agreement to the contrary notwithstanding,
"Good Reason" shall mean any one of the following events, unless Employee
consents in writing:

 

(1) (I) the material failure of AutoZone to comply with the provisions
of Paragraphs 3 through 11 of this Agreement, (II) any material adverse
change in the status, responsibilities, perquisites of Employee (except,
in the case of perquisites, for across-the-board changes applicable to
all other senior executives), including any actual material adverse change
in status which results from an assignment of this Agreement by AutoZone
pursuant to Paragraph 22 below, (III) approval by AutoZone, Inc.'s Board
of Directors of a transaction (other than a Change of Control) pursuant
to which Employee would cease to be the Chief Executive Officer of AutoZone,
Inc. or the publicly-held successor to AutoZone, Inc., provided that Employee
has provided written notice of termination to the Board of Directors within
60 days following such approval and provided that such termination shall
not be effective until the consummation of such approved transaction, (IV)
any failure to nominate or elect Employee as Chairman of the Board of Directors
of AutoZone, Inc.(or the publicly-held successor to AutoZone, Inc.), (V)
causing or requiring Employee to report to anyone other than the Board
of Directors, (VI) assignment of duties which are materially and adversely
inconsistent with his positions and duties described in this Agreement,
or (VII) any other material breach of the Agreement by AutoZone;
 

provided, that no such act or omission shall constitute Good Reason unless
Employee gives AutoZone 30 days prior written notice (except as provided
in clause (III) of this subparagraph (1)) of such act or omission and AutoZone
fails to cure such act or omission within the 30-day period;
 

(2) The failure of AutoZone to assign this Agreement to a successor to
AutoZone or failure of a successor to AutoZone to explicitly assume and
agree to be bound by the Agreement; or
 

(3) The requiring of Employee to be principally based at any office or
location more than 60 miles from the current corporate offices of AutoZone
in Memphis, Tennessee.
(b)  With Cause. AutoZone shall have the right to terminate
this Agreement and Employee's employment with AutoZone for Cause at any
time by a determination of a majority of the members of the Board of Directors
in good faith. Upon such termination for Cause, Employee shall have no
right to receive any compensation, salary, or bonus and shall immediately
cease to receive any benefits (other than those as may be required pursuant
to the AutoZone Pension Plan or by law) and any stock options shall be
governed by the respective stock option agreements in effect between the
Employee and AutoZone at that time. "Cause" shall mean (i) the willful
engagement by the Employee in conduct which is demonstrably and materially
injurious to AutoZone, monetarily or otherwise, and (ii) if reasonably
capable of being cured, is not cured by the Employee within thirty (30)
days after the Board of Directors provides him with a detailed notice of
the conduct that is considered to be grounds for a determination of Cause.
For this purpose, no act or failure to act by the Employee shall be considered
"willful" unless done, or omitted to be done, by the Employee not in good
faith and without reasonable belief that his action or omission was in
the best interest of AutoZone.

	
Termination by Employee. Employee may terminate this Agreement at
anytime upon written notice to AutoZone. Upon such termination, other than
for Good Reason, Employee's employment shall terminate and Employee shall
cease to receive any further salary, benefits, or bonus, and all stock
options granted shall be governed by the respective stock option agreement(s)
between the Employee and AutoZone.

 

	
Termination by Employee upon a Change of Control. Employee may terminate
this Agreement upon a Change of Control of AutoZone by giving written notice
to AutoZone within sixty (60) days after the occurrence of a Change of
Control. Upon giving such notice to AutoZone, Employee's employment shall
terminate and Employee shall receive such compensation, benefits and other
rights as are provided for a termination by AutoZone without Cause. Except
as set forth in the preceding sentence, Employee shall not be entitled
to receive any payments or benefits under this Agreement upon a termination
of his employment pursuant to this Paragraph 15. Any of the following events
shall constitute a "Change of Control": (a) the acquisition after the date
hereof, in one or more transactions, of beneficial ownership (as defined
in Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as amended
("Exchange Act")), by any person or entity or any group of persons or entities
who constitute a group (as defined in Section 13(d)(3) under the Exchange
Act) of any securities such that as a result of such acquisition such person,
entity or group beneficially owns AutoZone, Inc.'s then outstanding voting
securities representing 51% or more of the total combined voting power
entitled to vote on a regular basis for a majority of the Board of Directors
of AutoZone, Inc. or (b) the sale of all or substantially all of the assets
of AutoZone (including, without limitation, by way of merger, consolidation,
lease or transfer) in a transaction where AutoZone or the beneficial owners
(as defined in Rule 13d-3(a)(1) under the Exchange Act) of capital stock
of AutoZone do not receive (i) voting securities representing a majority
of the total combined voting power entitled to vote on a regular basis
for the board of directors of the acquiring entity or of an affiliate which
controls the acquiring entity or (ii) securities representing a majority
of the total combined equity interest in the acquiring entity, if other
than a corporation; provided however, that the foregoing provisions of
this Paragraph 15 shall not apply to any reorganization, recapitalization
or similar transaction in which all or substantially all of the individuals
and entities who were the beneficial owners of the outstanding voting securities
of AutoZone immediately prior to such transaction respectively continue
to beneficially own, directly or indirectly, the outstanding voting securities
of the surviving entity in such transaction in substantially the same proportions
as their beneficial ownership immediately prior to such transaction.

 

	
Effect of Termination. Any termination of Employee's service as
an officer of AutoZone shall be deemed a termination of Employee's service
on all boards and as an officer of all subsidiaries of AutoZone.

 

	
Non-Compete. Employee agrees that he will not, for the period commencing
on the termination date of this Agreement pursuant to Paragraph 13, 14
or 15 (whichever is applicable) of this Agreement and ending on

 

	
the last day of the second full fiscal year of AutoZone ending after the
fiscal year in which such termination date occurs if either Employee voluntarily
terminates this Agreement (with or without Good Reason) or this Agreement
is terminated by AutoZone for Cause or

 
	
the expiration of the period commencing on the date of termination of Employee's
employment and ending on the last day of the second full fiscal year following
such termination (the "Continuation Period"), if this Agreement is terminated
by AutoZone without Cause,

be engaged in or concerned with, directly or indirectly, any business
related to or involved in the retail sale of auto parts to "DIY" customers,
or the wholesale or retail sale of auto parts to commercial installers
in any state, province, territory or foreign country in which AutoZone
operates now or shall operate during the term set forth in this Non-Compete
section (herein called "Competitor"), as an employee, director, consultant,
beneficial or record owner, partner, joint venturer, officer or agent of
the Competitor, other than the acquisition of not more than a 1% equity
interest in a publicly-traded Competitor; provided, solely for purposes
of excluding any retail business with retail stores that sell automotive
parts and automotive accessories as a minor portion of the retail business
in each of its retail stores from the term "Competitor", any such retail
business engaged in the same business or substantially the same business
as that of AutoZone either directly or through an operating division or
subsidiary of such retail business shall not be deemed to be a "Competitor"
if both (a) the average sales per store per annum of the business or the
average sales per store per annum of any organizational unit, part, subpart,
subsidiary or affiliate of such business from the sale of automotive parts
and automotive accessories (excluding sales at stores which do not sell
automotive parts and automotive accessories ) shall be less than 10% of
the average sales per store per annum of AutoZone for the same year and
(b) the total sales of automotive parts and accessories for any such retail
business (including the sales of automotive parts and automotive accessories
by any organizational unit, part, subpart, subsidiary or affiliate of such
business) shall be, in the aggregate, less than 10% of such business' total
gross sales.
The parties acknowledge and agree that the time, scope, geographic area
and other provisions of this Non-Compete section have been specifically
negotiated by sophisticated commercial parties and specifically hereby
agree that such time, scope, geographic area and other provisions are reasonable
under the circumstances and are in exchange for the obligations undertaken
by AutoZone pursuant to this Agreement.

Further, Employee agrees not to hire, for himself or any other entity,
encourage anyone or entity to hire, or entice away from AutoZone any employee
of AutoZone during the term of this non-compete obligation.

If at any time in a proceeding under or arising out of this Agreement
(or a proceeding brought on behalf of or at the direction of Employee)
a court of competent jurisdiction holds that any portion of this Non-Compete
section is unenforceable for any reason, then Employee shall forfeit his
right to any further salary, bonus, stock option exercises, or benefits
from AutoZone during any Continuation Period.

 

	
Confidentiality. Unless otherwise required by law, Employee shall
hold in confidence any proprietary or confidential information obtained
by him during his employment with AutoZone, which shall include, but not
be limited to, information regarding AutoZone's present and future business
plans, vendors, systems, operations and personnel. Confidential information
shall not include information: (a) publicly disclosed by AutoZone, (b)
rightfully received by Employee from a third party without restrictions
on disclosure, (c) approved for release or disclosure by AutoZone, or (d)
produced or disclosed pursuant to applicable laws, regulation or court
order. Employee acknowledges that all such confidential or proprietary
information is and shall remain the sole property of AutoZone and all embodiments
of such information shall remain with AutoZone. Unless otherwise required
by law, each of AutoZone and Employee shall hold in confidence all matters
regarding the termination of employment of Employee and the conduct of
Employee or the Board of Directors resulting in such termination.

 

	
Breach by Employee. The parties further agree that if, at any time,
despite the express agreement of the parties hereto, Employee violates
the provisions of this Agreement by violating the Non-Compete or Confidentiality
sections, or by failing to perform his obligations under this Agreement,
Employee shall forfeit any unexercised stock options, vested or not vested,
and AutoZone may cease paying any further salary or bonus. In the event
of breach by Employee of any provision of this Agreement, Employee acknowledges
that such breach will cause irreparable damage to AutoZone, the exact amount
of which will be difficult or impossible to ascertain, and that remedies
at law for any such breach will be inadequate. Accordingly, AutoZone shall
be entitled, in addition to any other rights or remedies existing in its
favor, to obtain, without the necessity for any bond or other security,
specific, performance and/or injunctive relief in order to enforce, or
prevent breach of any such provision.

 

	
Death of Employee or Disability. If Employee should die or become
disabled (such that he is no longer capable of performing his duties) during
the term of this Agreement, then all salary and bonuses shall cease as
of the date of his death or disability, all stock options shall be governed
by the terms of the respective stock option agreements, and Employee shall
receive disability or death benefits as may be provided under AutoZone's
then existing policies and procedures related to disability or death of
AutoZone senior executives.

 

	
Waiver. Any waiver of any breach of this Agreement by AutoZone shall
not operate or be construed as a waiver of any subsequent breach by Employee.
No waiver shall be valid unless in writing and signed by an authorized
officer of AutoZone.

 

	
Assignment. Employee acknowledges that his services are unique and
personal. Accordingly, Employee shall not assign his rights or delegate
his duties or obligations under this Agreement. Employee's rights and obligations
under this Agreement shall inure to the benefit of and be binding upon
AutoZone successors and assigns. AutoZone may assign this Agreement to
any wholly-owned subsidiary operating for the use and benefit of AutoZone.

 

	
Entire Agreement. This Agreement contains the entire understanding
of the parties related to the matters discussed herein. It may not be changed
orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge
is sought.

 

	
Jurisdiction. This Agreement shall be governed and construed by
the laws of the State of Tennessee, without regard to its choice of law
rules. The parties agree that the only proper venue for any dispute under
this Agreement shall be in the state or federal courts located in Shelby
County, Tennessee.

 

	
Survival. Paragraphs 13, 15, 17, 18, 19, 24, 27 and 29 of this Agreement
shall survive any termination of this Agreement or Employee's employment
with AutoZone (including, without limitation termination pursuant to Paragraph
13, 14 or 15).

 

	
Notices. All notices hereunder shall be in writing and delivered
by hand, by nationally-recognized delivery service that guarantees overnight
delivery, or by first-class, registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

 

If to AutoZone, to:        
AutoZone, Inc.

                                    
123 South Front Street

                                     
Memphis, TN 38103

                                     
Attention: General Counsel
With copy to:                
Gary Olson, Esq.

                                     
Latham & Watkins

                                     
633 West Fifth Street, Suite 4000

                                     
Los Angeles, CA 90071

If to Employee, to:         
Steve Odland

                                     
c/o AutoZone, Inc.

                                     
123 South Front Street

                                     
Memphis, TN 38103

With copy to:                 
Vedder, Price, Kaufman & Kammholz

                                      
222 North LaSalle Street, Suite 2600

                                      
Chicago, IL 60601

                                      
Attention: Robert J. Stucker

 
Either party may from time to time designate a new address by notice given
in accordance with this Paragraph. Notice shall be effective when actually
received by the addressee.

 

	
Tax Gross-Up Payment. If it shall be finally determined that any
payment to Employee pursuant to this Agreement or any other payment or
benefit from AutoZone, any affiliate, or any other person would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any similar tax payable under any
United States federal, state, local or other law, then Employee shall receive
a Tax Gross-Up Payment with respect to all such excise taxes and similar
taxes (collectively, the "Excise Tax"). An initial determination as to
whether a Tax Gross-Up Payment is required pursuant to this Agreement and
the amount of such Tax Gross-Up Payment shall be made at AutoZone's expense
by a nationally recognized accounting firm selected by AutoZone (the "Accounting
Firm"). The determination by the Accounting Firm (the "Determination")
shall be binding, final and conclusive upon AutoZone and the Employee for
purposes of any dispute between the parties hereto. The parties hereto
shall cooperate with each other in connection with any proceeding or claim
involving any taxing authority under this Paragraph 27 relating to the
existence or amount of any liability for the Excise Tax; provided, however,
that AutoZone shall control all proceedings taken in connection with such
proceeding or claim and shall bear and pay directly all costs, expenses,
and tax penalties and interest incurred in connection with such proceeding
or claim. As a result of uncertainty in the application of Section 4999
of the Code at the time of the initial Determination by the Accounting
Firm, it is possible that the Tax Gross-Up Payment made will have been
an amount less than AutoZone should have paid pursuant to this Paragraph
27 (the "Underpayment") or an amount greater than AutoZone should have
paid pursuant to this Paragraph 27 (the "Overpayment"). In the event that
it is finally determined that an Underpayment exists and the Employee is
required to make a payment of any Excise Tax, the Tax Gross-Up Payment
shall be adjusted accordingly and the shortfall shall be promptly paid
by AutoZone to the Employee or for his benefit. In the event that it is
finally determined that an Overpayment exists and AutoZone paid a Tax Gross-Up
Payment to the Employee in excess of the amount of the Tax Gross-Up Payment
to which he is actually entitled hereunder, such excess shall be promptly
reimbursed by the Employee to AutoZone.

 

	
No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount
of any compensation or benefits provided to the Employee in any subsequent
employment.

 

	
Indemnification. Employee shall be indemnified while serving as
Chief Executive Officer or Chairman of the Board of Directors to the same
extent and in the same manner as other members of the Board of Directors
and senior executives of AutoZone.

 

	
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Counterpart signature pages may
be delivered via facsimile.

 
 

 

IN WITNESS WHEREOF, the respective parties execute this Agreement.

 
	AUTOZONE, INC.	 
	By: /s/ Ronald Terry 

Title: Director	/s/ Steve Odland 

Employee
	 	 
	 	 

EXHIBIT A

AUTOZONE, INC.

AMENDED AND RESTATED

2000 EXECUTIVE INCENTIVE COMPENSATION PLAN

1.  Purpose
            The
AutoZone, Inc. 2000 Executive Incentive Compensation Plan ("Plan") is designed
to provide incentives and rewards to eligible employees of AutoZone, Inc.
(the "Company") and its affiliates who have significant responsibility
for the success and growth of the Company and assist the Company in attracting,
motivating, and retaining key employees on a competitive basis. The Plan
is designed to ensure that the annual bonus paid pursuant to this Plan
to eligible employees of the Company is deductible under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"). This Plan
shall be ratified by the Company's stockholders pursuant to 26 C.F.R. §
1.162-27(e)(4)(vi) at the annual meeting to be held on December 9, 1999,
and shall be effective for the entire 2000 fiscal year. If the stockholders
do not ratify the Plan, the Plan shall not become effective.

2.  Administration of the Plan

            The
Plan shall be administered by the Compensation Committee of the Board of
Directors of the Company ("Committee"). The Committee shall be appointed
by the Board of Directors of the Company and shall consist of at least
two outside directors of the Company that satisfy the requirements of Code
Section 162(m). The Committee shall have the sole discretion and authority
to administer and interpret the Plan in accordance with Code Section 162(m).
The Committee's interpretations of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its stockholders and any person receiving an award under the
Plan.

3.  Eligibility

            The
individuals entitled to participate in the Plan shall be the executive
officers of the Company, as determined by the Committee.

4.  Awards

               
Executive officers as determined by the Committee may be granted annual
incentive awards under this Plan at such times of each year as will satisfy
the requirements of Code Section 162(m), provided, however, that if an
individual becomes an executive officer during a year, an incentive goal
for that individual shall be made for that fiscal year at the time she
or he becomes an executive officer. The Committee may, in its discretion,
grant annual incentive awards to non-executive officers and managers of
the Company outside of this Plan.

            The
annual incentive award to each executive officer shall be based on the
Company, a subsidiary or division, attaining one or more of the following
objective goals as established by the Committee for the fiscal year:

(a)  earnings

(b) earnings per share

(c) sales

(d) market share

(e) revenue

(f) operating or net cash flows

(g) pre-tax profits

(h) earnings before interest and taxes

(i) return on capital

(j) economic value added

(k) return on inventory

(l) EBIT margin

(m) gross profit margin

(n) sales

(o) sales per square foot

(p) comparable store sales

            Different
measures of goal attainment may be set for different plan participants.
The performance goal may be a single goal or a range with a minimum goal
up to a maximum goal, with corresponding increases in the incentive award
up to the maximum award set by the Committee and as may be limited by this
Plan. Such performance goals may disregard, at the Committee's discretion,
the effect of one-time charges and extraordinary events such as asset write-downs,
litigation judgments or settlements, changes in tax laws, accounting principles
or other laws or provisions affecting reported results, accruals for reorganization
or restructuring, and any other extraordinary non-recurring items, acquisitions
or divestitures and any foreign exchange gains or losses. These goals shall
be established by the Committee either by written consent or as evidenced
by the minutes of a meeting at such times as to qualify amounts paid under
this Plan for tax deductible treatment under Code Section 162(m).
            Payment
of an earned award will be made in cash, or at the option of the Committee,
in whole or in part in Company common stock. Upon completion of each fiscal
year, the Committee shall review performance verses the established goal,
and shall certify (either by written consent or as evidenced by the minutes
of a meeting) the specified performance goals achieved for the fiscal year
(if any), and direct which award payments are payable under the Plan, if
any. No payment will be made if the minimum pre-established goals are not
met. The Committee may, in its discretion, reduce or eliminate an individual's
award that would have been otherwise paid. No individual may receive in
any one fiscal year an award under the Plan of an amount greater than the
lesser of (i) 200% of such individual's base salary for that year or (ii)
$2 million.

5.  Miscellaneous Provisions

            (a) 
The Company shall have the right to deduct all federal, state, or local
taxes required by law or Company policy from any award paid.

            (b) 
Nothing contained in this Plan grants to any person any claim or right
to any payments under the Plan. Such payments shall be made at the sole
discretion of the Compensation Committee.

            (c) 
Nothing contained in this Plan or any action taken by the Committee pursuant
to this Plan shall be construed as giving an individual any right to be
retained in the employ of the Company.

            (d) 
The Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets
to assure the payment of any award under the Plan.

            (e) 
The Plan may be amended, subject to the limits of Code Section 162(m),
or terminated by the Committee at any time. However, no amendment to the
Plan shall be effective without prior approval of the Company's stockholders
which would (i) increase the maximum amount that may be paid under the
Plan to any person or (ii) modify the business criteria on which performance
targets are to be based under the Plan.

            (f) 
This Plan shall terminate on the fifth anniversary after the date of ratification
by the Company's stockholders.

EXHIBIT B

NON-QUALIFIED STOCK OPTION AGREEMENT

(AUTOZONE OPTIONEE)

            This
NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), dated as of ____________,
2001, 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. 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 (i) the willful engagement by the Optionee in conduct which
is demonstrably and materially injurious to the Employer, monetarily or
otherwise, and (ii) if reasonably capable of being cured, is not cured
by the Optionee within thirty (30) days after the Board of Directors provides
him with a detailed notice of the conduct that is considered to be grounds
for a determination of Cause. 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 hereof. Notwithstanding the foregoing, the Option shall
become fully exercisable with respect to all shares subject thereto upon
the occurrence of any of the following events: (i) a Termination of Employment
by the Company without Cause, (ii) a Termination of Employment by the Optionee
for Good Reason (as defined in that certain Employment Agreement, effective
as of January 29, 2001, between the Company and the Optionee (the "Employment
Agreement"), or (iii) a Termination of Employment by the Optionee (with
or without Good Reason) within sixty (60) days after the occurrence of
a Change of Control (as defined in the Employment Agreement) of the Company.

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 ninety (90) days from the date of the Optionee's
death; or

(e) Subject to Paragraph 15 of the Employment Agreement, 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.
 
(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) 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

(e) 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) and to Paragraph 13(a) and Paragraph 15 of the
Employment Agreement, 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 (other than the Employment
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.

SCHEDULE I

Name and Address

of Optionee:

 

Steve Odland

«Address1»

 

 

A. Number of shares subject

to Option (Section 2.01):                                     
                       
275,000

B. Purchase Price

(Section 2.02):                                       
                                     
$________

C. Date of Grant:                                       
                                     
____________, 2001

D. Commencement of Exercisability

(Section 3.01(a)):

            The
Options granted under this Agreement shall become exercisable in four (4)
cumulative installments as follows:

            (i)
The first installment shall consist of one-fourth of the shares covered
by the Option and shall become exercisable on the first anniversary of
the date the Option is granted.

            (ii)
The second installment shall consist of one-fourth of the shares covered
by the Option and shall become exercisable on the second anniversary of
the date the Option is granted.

            (iii)
The third installment shall consist of one-fourth of the shares covered
by the Option and shall become exercisable on the third anniversary of
the date the Option is granted.

            (iv)
The fourth installment shall consist of one-fourth of the shares covered
by the Option and shall become exercisable on the fourth anniversary of
the date the Option is granted.

            The
Optionee and AutoZone each agree to be bound by all terms and conditions
of the Non-Qualified Stock Option Agreement dated ____________, 2001, and
this Schedule I to that Agreement.

"Optionee"                                        
                        
AutoZone, Inc.

 

_____________________________________        
By:___________________________

Signature

«SSN»                                      
                                  
By:___________________________

Optionee's Taxpayer IDpromissory note

EXHIBIT 10.2
DEMAND PROMISSORY NOTE

	$51,716.10

Amount	
Memphis, Tennessee

City, State
	
December 8, 2000

Date

FOR VALUE RECEIVED, the Undersigned acknowledges that he is indebted
to the Lender in the amount stated herein and promises to pay on demand
to the order of AUTOZONE, INC., a Nevada corporation, with its principal
place of business at 123 South Front Street, Memphis, Tennessee (the "Lender"),
the principal sum of Fifty-one Thousand Seven Hundred Sixteen and 10/100
Dollars ($51,716.10) together with interest thereon from the date hereof
to maturity at an annual interest rate of 6%, compounded annually.

Said principal sum is due on demand, and in the absence of any demand
is due five years from the date hereof. All installments, prepayments,
and other payments of principal and interest are payable to Lender at 123
South Front Street, Memphis, Tennessee 38103, or at such other place as
the Lender or holder may hereafter and from time to time designate in writing.
Should the Undersigned cease to be employed by Lender prior to this Note
being paid in full, the Undersigned hereby authorizes Lender to apply any
and all amounts of his final payroll check, or any other amounts owed by
Lender to Undersigned or held by Lender for the benefit of the Undersigned,
including, but not limited to, stock options, to be applied to this indebtedness.

This Note may be prepaid, in whole or in part, without penalty at anytime.
At maturity, or upon demand or default or failure to pay any installment
of principal and interest required herein, the entire balance shall be
immediately due and payable. Any remedy of Lender or holder upon default
of the Undersigned shall be cumulative and not exclusive and choice of
remedy shall be at the sole election of Lender or holder. The Undersigned
agrees to pay all costs of collection, including reasonable attorney's
fees, whether or not any suit, civil action, or other proceeding at law
or in equity, is commenced. The Undersigned waives demand, presentment
for payment, protest and notice of protest and nonpayment of this Note
and expressly agrees to remain bound for the payment of principal, interest
and other sums provided for by the terms of this Note, notwithstanding
any extension or extensions of the time of, or for the payment of, said
principal. No delay or omission on the part of the Lender or holder in
exercising any rights shall operate as a waiver of such right. This Note
shall be governed by the laws of the State of Tennessee, and each party
hereto agrees to venue and jurisdiction in the federal and state courts
located in Shelby County, Tennessee.

 

Executed on 12/8/2000.

 

UNDERSIGNED:

/s/ Bruce Clark

Printed Name: Bruce Clark

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