EXHIBIT 10.5
AGREEMENT AND MUTUAL RELEASE
KNOW ALL MEN BY THESE PRESENTS, that Xxxxxxxx X. Xxxxx ("Xxxxx") and
AutoZone, Inc., a Nevada corporation and its direct and indirect
subsidiaries (collectively "AZO") for and in consideration of the promises,
undertakings and benefits set out in this Agreement and Mutual Release
("Agreement") as of September 1, 1999 agree as follows:
1. EFFECTIVE DATE. Xxxxx resigns as an officer of AZO of as of
August 28, 1999 ("Effective Date") but shall remain an employee of AZO on
leave of absence until September 1, 2004 ("Termination Date"). During the
period from the Effective Date until the Termination Date, Xxxxx shall be
on leave of absence but shall make himself available to consult and advise
AZO when reasonably requested by the CEO, or COO of AZO, or an officer
designated by such persons.
2. RELEASE. Except for the obligations undertaken pursuant to the
terms of this Agreement, Xxxxx releases and forever discharges AZO and its
employees, agents, subsidiaries, predecessors, successors, affiliated
companies, heirs and assigns from any and all claims of whatsoever nature
and the right to receive compensation from such claims, growing out of or
in any way directly or indirectly connected with the employment
relationship between Xxxxx and AZO, included but not limited to:
A. Breach of any express or implied term or condition of employment;
B. Any other causes of action under any federal, state or local law,
rule or regulation, including but not limited to claims under the
Age Discrimination in Employment Act (as amended), the Older
Workers' Benefit Protection Act, the Civil Rights Act of 1991,
the Civil Rights Act of 1964 (as amended), the Civil Rights Act
of 1866, the Americans with Disabilities Act of 1990, the Family
and Medical Leave Act of 1993, and/or the Tax Reform Act of 1986
(as amended); and/or
A. Except with respect to Xxxxx'x rights as provided in this
Agreement, any right to receive any monetary damages or liability
payments from any actions at law or in equity filed on his behalf
with regard to his employment with or arising out of or relating
to his employment with AZO.
(IT IS IMPORTANT THAT YOU, XX. XXXXX, READ AND UNDERSTAND THE TERMS OF
THIS AGREEMENT IN FULL AND THAT IF YOU DECIDE TO SIGN IT, THAT YOU DO SO
KNOWINGLY AND VOLUNTARILY. WE SUGGEST YOU CONSULT AN ATTORNEY ABOUT THIS
AGREEMENT AND YOUR RIGHTS BEFORE SIGNING IT. YOU WILL NOT waive or give up
any rights to claims you may have against AZO that may arise AFTER the date
that you sign this Agreement.
Although we encourage you to seek advice of counsel concerning your
rights and will be happy to answer questions about our offer, the offer is
not negotiable. In other words, you may accept the offer as stated or
reject the offer and receive the benefits to which you are entitled by
law).
3. RECISION. AZO's offer as described in this Agreement will remain
open and effective for twenty-one (21) days from September 1, 1999. Xxxxx
may elect to accept or reject this offer within that time period. If Xxxxx
does nothing within the twenty-one (21) day period, the offer shall be
deemed withdrawn by AZO.
If Xxxxx does sign the Agreement within the twenty-one (21) day
period, Xxxxx will have seven (7) days following the date he signed this
Agreement to change his mind and revoke the Agreement in writing.
Therefore, this Agreement will not be in effect until seven (7) days have
passed following the date Xxxxx signs this Agreement.
4. BENEFITS. In consideration of the release granted by and the
services to be provided by Xxxxx and the other obligations undertaken by
Xxxxx pursuant to this Agreement, AZO agrees to confer the following
Benefits in his favor:
A. For the period beginning on the Effective Date and ending on
the Termination Date, Xxxxx shall receive compensation of five
thousand one hundred forty-six and 15/100 dollars ($5,146.15) bi-
weekly As used in this Agreement "bi-weekly" shall mean once
every two weeks.
B. Any vacation pay accrued as of the Effective Date;
C. Except as set forth under Remedies below, all rights and duties
in connection with the stock options agreements entered into by
AZO and Xxxxx ("Stock Option Agreements") shall be govern by
those agreements. Notwithstanding, in the event Xxxxx breaches
this Agreement in any respect, he shall forfeit the right to
exercise any then unexercised stock options at or after the time
of the breach.
D. For the period beginning on the Effective Date and ending the
earlier of (i) the Termination Date or (ii) receipt of Coverage
(as such term is defined below) from another employer, continued
health and dental insurance which shall be the same coverage and
at the same cost to Xxxxx as such coverage would be if Xxxxx was
not on leave of absence (excluding life and disability insurance)
("Coverage") And after that time Xxxxx shall be entitled to
receive such coverage for such time as is required by law.
E. Any unreimbursed expenses incurred on or prior to the Effective
Date if such expenses would have been reimbursed under normal AZO
policies.
F. For the 1999 fiscal year, Xxxxx shall receive a bonus calculated
in accordance with the bonus formula previously established for
the 1999 fiscal year which bonus shall be paid when AZO pays
officer bonuses for fiscal year 1999.
The stock options exercisable for AZO common stock currently held by
Xxxxx shall continue to vest in accordance with their current vesting
schedules and Xxxxx'x leave of absence shall not constitute a "Termination
of Employment" for purposes of the applicable Non-Qualified Stock Option
Agreements. Such Stock Option agreements shall continue to be govern by
the terms and conditions contained in such agreements.
XXXXX UNDERSTANDS AND AGREES THAT THE ONLY BENEFITS HE WILL RECEIVE
FROM AZO ARE SET FORTH ABOVE, AND THAT ALL OTHER BENEFITS HE IS PRESENTLY
RECEIVING FROM AZO, INCLUDING BUT NOT LIMITED TO LIFE INSURANCE, LONG TERM
DISABILITY COVERAGE AND EMPLOYEE STOCK PURCHASE PLAN, SHALL BE TERMINATED
AS OF THE EFFECTIVE DATE.
The parties understand that applicable local, state, and federal tax
deductions and withholdings will be made from all of the appropriate
payments and exercises of stock options. The parties further understand
and agree that payment of Benefits in no way increases the vesting period
for retirement benefits nor does it have any effect on the computation of
retirement benefits.
6. NON-COMPETE. Xxxxx further agrees that he will not, for the
period beginning on the date of execution of this Agreement and ending on
the Termination Date, be engaged in or concerned with, directly or
indirectly, any business related to or involved in the wholesale or retail
sale or distribution of auto parts and accessories, chemicals, or motor
oil, operating in the automobile aftermarket in any state or geographical
area in which AZO operates now or shall operate during the term of the non-
compete agreement (herein called "Competitor"), as an employee, consultant,
beneficial or record owner (other than as an owner of less than 1% of the
issued and outstanding voting securities of an entity whose voting
securities are traded on a national securities exchange or reported on the
NASDAQ Stock Market's National Market System), partner, joint venturer,
officer or agent of the Competitor.
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. The parties further
agree that if, at any time, despite the express agreement of the parties
hereto, a court of competent jurisdiction holds that any portion of this
Non-Compete section is unenforceable for any reason in an action brought by
or on behalf of Xxxxx, or against Xxxxx, Xxxxx shall forfeit any
unexercised option rights, vested or not vested, connected to the Stock
Option Agreements.
Further, Xxxxx agrees not to hire, for himself or any other entity,
encourage anyone or entity to hire, or entice away from AZO any employee of
AZO during the term of this non-compete agreement.
In the event of breach by Xxxxx of any provision of this Paragraph 6
"NON-COMPETE", Xxxxx acknowledges that such breach will cause irreparable
damage to AZO, 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, AZO 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 and AZO shall be
entitled to the remedies set forth in the section entitled "Remedies".
7. CONFIDENTIALITY. Unless otherwise required by law, Xxxxx shall
hold in confidence any proprietary or confidential information obtained by
him during his employment with AZO, which shall include, but not be limited
to, information regarding AZO's present and future business plans, systems,
operations and personnel matters. Further, Xxxxx agrees to keep
confidential the terms and contents of this Agreement, and, unless required
by law, will not display, discuss, or make public in any way the terms of
this Agreement or the contents of this document. The parties agree that
neither will take any action detrimental to the other and that neither will
criticize nor disparage the other and/or any affiliates, subsidiaries,
employees, agents, heirs, predecessors, successors or assigns.
Notwithstanding the above, Xxxxx may inform his attorney, accountant and
spouse of the terms of this Agreement so long as that third party agrees to
keep such information confidential.
8. COMPLETE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the matters covered herein and is
intended to integrate and merge all prior understandings, discussions and
negotiations. No other agreements, oral or written, relating to the
subject matter contained herein shall be binding upon or enforceable
against any of the parties. This Agreement and the documents executed
pursuant to it may be amended only in a writing signed by authorized
representatives of the parties. No provision of this Agreement or any
document executed pursuant to it may be waived except in a writing signed
by authorized representatives of the parties.
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 Shelby County, Tennessee.
9. SEVERABILITY. The sections of this Agreement are intended to be
severable. If any section or provision of this Agreement shall be held to
be unenforceable by any court of competent jurisdiction, this Agreement
shall be modified to the minimum extent necessary to be enforceable, or if
such modification is not possible, then this Agreement shall be construed
as though such section or provision had not been included in it. If any
section or provision of this Agreement shall be subject to two
constructions, one of which would render such section or provision invalid,
then such section or provision shall be given that construction that would
render it valid.
10. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND OBLIGATIONS. The
representations, warranties, and obligations of the parties pursuant to
this Agreement shall survive the execution hereof and this Agreement shall
continue to be binding upon and enforceable against each of the parties,
their successors, heirs, executors, and assigns. The rights and benefits
of Xxxxx hereunder shall inure to the benefit of his heirs and estate and
after Xxxxx'x death, his estate shall have the right to receive the
Benefits as are required by law, and to the extent allowed by their terms,
shall have the rights set forth in the Stock Option Agreements.
Notwithstanding, all payments provided for hereunder shall cease at the
death of Xxxxx.
11. REMEDIES. Xxxxx acknowledges and agrees that any remedy at law
for a breach of any obligation herein may be inadequate and that AZO shall
be entitled to any and all equitable relief, including, but not limited to,
injunctive relief. In the event Xxxxx breaches this Agreement in any way,
any unpaid Benefits shall immediately terminate and Xxxxx shall forfeit any
then unexercised option rights.
In addition, the parties agree to execute on or after the date of the
execution of this Agreement any and all reasonable additional documents as
requested by the other or its counsel to effectuate the purposes hereof.
IN WITNESS WHEREOF, the respective parties execute this Agreement.
AUTOZONE, INC.
By: /s/ Xxxx X. Xxxxx, Xx. /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Title: CEO
------- October 18, 1999
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Date
By: /s/ Xxxxx X. Xxxxxxxxx
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Title: Sr. V.P.
