AutoZone Inc. STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT
Exhibit
10.2
2006
STOCK OPTION PLAN
STOCK
OPTION
GRANT NOTICE AND
STOCK
OPTION
AGREEMENT
AutoZone,
Inc., a Nevada corporation (the “Company”),
pursuant
to its 2006 Stock Option Plan (the “Plan”),
hereby
grants to the holder listed below (“Participant”)
an
option
(the “Option”)
to
purchase that number of shares of the Company’s common stock, par value $.01
(“Stock”)
set
forth below.
This
Option is subject to all of the terms and conditions set forth herein, in the
Stock Option Agreement attached hereto as Exhibit
A
(the
“Stock
Option Agreement”)
and
the
Plan, which are incorporated herein by reference. All capitalized terms used
in
this Grant Agreement, but not defined, shall have the meanings provided in
the
Plan.
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Participant:
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[__]
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Grant
Date:
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[__]
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Exercise
Price per Share:
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$
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[__]
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Total
Number of Shares Subject to the Option:
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[__]
Shares
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Expiration
Date:
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[__]
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Type
of Option:
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o
Incentive
Stock
Option
o
Non-Qualified
Stock Option
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Vesting
Schedule:
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The
Option granted under this Agreement shall vest and become exercisable
in
four (4) cumulative installments as follows:
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(i)
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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
Grant
Date.
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(ii)
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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
Grant Date.
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(iii)
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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
Grant
Date.
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(iv)
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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
Grant Date.
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By
his or
her signature, Participant agrees to be bound by the terms and conditions of
the
Plan, the Stock Option Agreement and this Grant Notice. 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. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Plan or relating to the
Option.
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AUTOZONE,
INC.
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PARTICIPANT
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By:
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By:
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Print
Name:
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Print
Name:
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Title:
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Address:
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Address:
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EXHIBIT
A
TO STOCK OPTION GRANT NOTICE
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 Participant an option under the Company’s 2006
Stock Option Plan (the “Plan”) to purchase the number of shares of Stock
indicated in the Grant Notice.
ARTICLE
I.
GENERAL
1.1 Defined
Terms. Wherever the following terms are used in this Agreement they shall have
the meanings specified below, unless the context clearly indicates otherwise.
Capitalized terms not specifically defined herein shall have the meanings
specified in the Plan and the Grant Notice.
(a) “Administrator”
shall mean the Board or the Committee responsible for conducting the general
administration of the Plan in accordance with Article 8 of the Plan.
(b) “Termination
of Employment” shall mean the time when the employee-employer relationship
between Participant and the Company or any Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding terminations where there is a simultaneous reemployment or continuing
employment of Participant by the Company or any Subsidiary. The Administrator,
in its absolute discretion, shall determine the effect of all matters and
questions relating to Termination of Employment, including, but not by way
of
limitation, the question of whether a particular leave of absence constitutes
a
Termination of Employment; provided, however, that, if this Option is an
Incentive Stock Option, unless otherwise determined by the Administrator in
its
sole discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.
1.2 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.
ARTICLE
II.
GRANT
OF
OPTION
2.1 Grant
of
Option. In consideration of Participant’s past and/or continued employment with
the Company or a Subsidiary 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 Participant the Option to purchase any part
or
all of an aggregate of the number of shares of Stock set forth in the Grant
Notice, upon the terms and conditions set forth in the Plan, the Grant Notice
and this Agreement. The Option shall be a Non-Qualified Stock Option or an
Incentive Stock Option, as designated in the Grant Notice and, in the case
of an
Incentive Stock Option, as permitted by law.
2.2 Exercise
Price. The exercise price of the shares of Stock subject to the Option shall
be
as set forth in the Grant Notice, provided, however, that the price per share
of
the shares of Stock subject to the Option shall not be less than 100% of the
Fair Market Value of a share of Stock on the Grant Date. Notwithstanding the
foregoing, if this Option is designated as an Incentive Stock Option and
Participant owns (within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company
or
any “subsidiary corporation” of the Company or any “parent corporation” of the
Company (each within the meaning of Section 424 of the Code), the price per
share of the shares of Stock subject to the Option shall not be less than 110%
of the Fair Market Value of a share of Stock on the Grant Date.
2.3 Consideration
to the Company. In consideration of the grant of the Option by the Company,
Participant agrees to render faithful and efficient services to the Company
and
its Subsidiaries, as applicable. Nothing in the Plan, the Grant Notice or this
Agreement shall confer upon Participant any right to continue in the employ
or
service of the Company or any Subsidiary 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 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
a
Subsidiary and Participant.
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ARTICLE
III.
PERIOD
OF
EXERCISABILITY
3.1 Commencement
of Exercisability.
(a) Subject
to any limitations contained in this Stock Option Agreement, the Option shall
become vested and be exercisable in such amounts and at such times as are set
forth in the Grant Notice. Notwithstanding the exercise dates set forth in
the
Grant Notice, the Option shall become immediately exercisable on the date of
Participant’s death.
(b) No
portion of the Option which has not become vested and exercisable as of
Participant’s Termination of Employment shall thereafter become vested and
exercisable.
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
pursuant to Section 3.3 below; provided, however, that no Option which has
not
vested and become exercisable as of the date of a Participant’s Termination of
Service shall thereafter vest and become exercisable.
3.3 Expiration
of Option. The Option shall be forfeited and cancelled and may not be exercised
to any extent by anyone after the first to occur of the following
events:
(a) The
tenth
anniversary of the Grant Date;
(b) If
this
Option is designated as an Incentive Stock Option and, at the time the Option
was granted, Participant owned (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or any “subsidiary corporation” of the Company or any “parent
corporation” of the Company (each within the meaning of Section 424 of the
Code), the fifth anniversary of the Grant Date;
(c) The
expiration of thirty days from the date of Participant’s Termination of Services
unless such Termination of Services occurs by reason of Participant’s death or
termination by the Company for cause;
(d) The
expiration of one year from the date of Participant’s Termination of Services by
reason of Participant’s death; and
(e) The
commencement of business on the date of Participant’s Termination of Services by
the Company for cause.
3.4 Special
Tax Consequences. 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 Stock with respect to which Incentive Stock Options, including
the
Option, are exercisable for the first time by Participant in any calendar year
exceeds $100,000, the Option and such other options shall instead constitute
Non-Qualified Stock Options to the extent necessary to comply with the
limitations imposed by Section 422(d) of the Code. 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 Section 5.2(b) below, during the
lifetime of Participant, only Participant may exercise the Option or any portion
thereof. After the death of Participant, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable under Section
3.3
above, be exercised by Participant’s personal representative or by any person
empowered to do so under the deceased Participant’s will or under
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 above.
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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 Administrator) of
each
of the following prior to the time when the Option or such portion thereof
becomes unexercisable under Section 3.3 above:
(a) An
exercise notice in a form specified by the Administrator, stating that the
Option or portion thereof is thereby exercised, such notice complying with
all
applicable rules established by the Administrator;
(b) The
receipt by the Company of full payment for the shares of Stock with respect
to
which the Option or portion thereof is exercised, including payment of any
applicable withholding taxes, which may be in one or more of the forms of
consideration permitted under Section 4.4 below;
(c) Any
other
written representations as may be required in the Administrator’s sole
discretion to evidence compliance with any applicable law, rule or regulation;
and
(d) If
the
Option or portion thereof is exercised pursuant to Section 4.1 above by any
person or persons other than Participant, appropriate proof of the right of
such
person or persons to exercise the Option, as determined in the sole discretion
of the Administrator.
Notwithstanding
any of the foregoing, the Company shall have the right to specify all conditions
of the manner of exercise, which conditions may vary and which may be subject
to
change from time to time in the sole discretion of the
Administrator.
4.4 Method
of
Payment. The Administrator shall determine the method(s) by which the exercise
price of the Option may be paid including, without limitation: (a) cash, (b)
shares of Stock having a Fair Market Value on the date of delivery equal to
the
aggregate exercise price of the Option or exercised portion thereof, including
shares of Stock that would otherwise be issuable or transferable upon exercise
of the Option, and/or (c) other property acceptable to the Administrator
(including through the delivery of a notice that the Participant has placed
a
market sell order with a broker with respect to shares of 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; provided that payment of such
proceeds is then made to the Company, at such time as may be required by the
Company, but not later than the settlement of such sale), and the methods by
which shares of Stock shall be delivered or deemed to be delivered to
Participants.
4.5 Conditions
to Issuance of Share of Stock. The shares of Stock deliverable upon the exercise
of the Option, or any portion thereof, may be either previously authorized
but
unissued shares of Stock or issued shares of Stock which have then been
reacquired by the Company. The Company shall not be required to issue or deliver
any shares of Stock purchased upon the exercise of the Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The
admission of such shares of Stock to listing on all stock exchanges on which
such Stock is then listed;
(b) The
completion of any registration or other qualification of such shares of Stock
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
Administrator shall, in its sole discretion, deem necessary or
advisable;
(c) The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its sole discretion,
determine to be necessary or advisable;
(d) The
receipt by the Company of full payment for such shares of Stock, including
payment of any applicable withholding tax, which may be in one or more of the
forms of consideration permitted under Section 4.4 above; and
(e) The
lapse
of such reasonable period of time following the exercise of the Option as the
Administrator may from time to time establish for reasons of administrative
convenience.
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
Stock
purchasable upon the exercise of any part of the Option unless and until such
shares of 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 Stock are issued, except as provided in Section 7.1 of the Plan.
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ARTICLE
V.
OTHER
PROVISIONS
5.1 Administration.
The Administrator shall have the power to interpret the Plan, the Grant Notice
and this Option Agreement and to adopt such rules for the administration,
interpretation and application of the Plan, the Grant Notice and this Option
Agreement 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 Participant, the
Company and all other interested persons. No member of the Committee or the
Board or any delegate thereof shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
the
Grant Notice or this Option Agreement.
5.2 Option
Not Transferable.
(a) Subject
to Section 5.2(b), no right or interest of Participant in the Option may be
pledged, encumbered, or hypothecated to or in favor of any party other than
the
Company or a Subsidiary, or shall be subject to any lien, obligation, or
liability of Participant to any other party other than the Company or a
Subsidiary. Except as otherwise provided by the Administrator, the Option shall
not be assigned, transferred, or otherwise disposed of by Participant other
than
by will or the laws of descent and distribution.
(b) After
the
death of Participant, any exercisable portion of the Option may, prior to the
time when the Option becomes unexercisable under Section 3.3 above, be exercised
by Participant’s personal representative or by any person empowered to do so
under the deceased Participant’s will or under then-applicable laws of descent
and distribution.
5.3 Adjustments.
Participant acknowledges that the Option is subject to modification and
termination upon the occurrence of certain events as provided in this Agreement
and in Article 7 of the Plan.
5.4 Notices.
Any notice to be given in connection with the this Agreement to the Company
shall be addressed to the Company in care of the Secretary of the Company at
the
address given beneath the signature of the Company’s authorized officer on the
Grant Notice, and any notice to be given to Participant shall be addressed
to
Participant at the most current address on file with the Company’s Human
Resources department. By a notice given pursuant to this Section 5.4, either
party may hereafter designate a different address for notices to be given to
that party. Any notice which is required to be given to Participant shall,
if
Participant is then deceased, be given to the person entitled to exercise his
or
her Option pursuant to Section 4.1 above. Any notice shall be deemed duly given
on the date hand-delivered, on the day following deposit with a reputable
overnight carrier, or two days after such notice is sent by certified mail
(return receipt requested), in any case, to the addresses specified
herein.
5.5 Captions.
Captions are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
5.6 Governing
Law; Severability. The laws of the State of Nevada shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement without reference to the conflicts of laws principles
thereof.
5.7 Conformity
to Securities Laws. Participant acknowledges that the Plan and the Option are
intended to conform to the extent necessary with all applicable federal, state,
local and foreign securities laws and any and all official interpretations,
regulations and rules promulgated thereunder. 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 conforms to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and the Option
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
5.8 Amendments,
Suspension and Termination. Participant acknowledges that the Plan and the
Option are subject to amendment, suspension and/or termination as provided
in
Article 10 of the Plan.
5.9 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 Section 5.2 above, this Agreement shall be binding
upon Participant and his or her heirs, executors, administrators, successors
and
assigns.
5.10 Notification
of Disposition. If this Option is designated as an Incentive Stock Option,
Participant shall give prompt notice to the Company of any disposition or other
transfer of any shares of Stock acquired under this Agreement if such
disposition or transfer is made (a) within two years after the applicable Grant
Date, or (b) within one year after Participant exercises the Option. 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 Participant in such disposition or other
transfer.
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5.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if Participant is subject to Section 16 of the Exchange Act, then the Plan, the Grant notice 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
5.12 Not
a
Contract of Employment. Nothing in this Agreement or in the Plan shall confer
upon Participant any right to continue to serve as an employee or other service
provider of the Company or any of its Subsidiaries.
5.13 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 Participant
with respect to the subject matter hereof.
5.14 Section
409A. Without limiting the generality of Section 1.2 above, Section 11.14 of
the
Plan regarding Code Section 409A is hereby expressly incorporated by reference
into this Agreement.
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