AutoZone, Inc. Director Compensation Program
DIRECTOR COMPENSATION PROGRAM
(Effective January 1, 2020)
ARTICLE 1. PURPOSE
The purpose of this document is to set forth the general terms and conditions applicable to the AutoZone, Inc. Director Compensation Program (as amended, the “Program”) established by the Board of Directors of AutoZone Inc. (the “Company”) pursuant to the Company’s 2020 Omnibus Incentive Award Plan (the “Plan”). The Program is intended to carry out the purposes of the Plan and provide a means to reinforce objectives for sustained long-term performance and value creation by awarding each Non-Employee Director of the Company with stock awards, subject to the restrictions and other provisions of the Program and the Plan. The Program shall be effective as of January 1, 2020 (the “Effective Date”).
ARTICLE 2. DEFINITIONS
|2.3||“Plan Year” shall mean a calendar year. The first Plan Year shall be calendar year|
RETAINERS; RESTRICTED STOCK UNITS
|(a)||Subject to Section 3.1(d), effective as of January 1, 2020, Non-Employee|
Directors will become entitled to receive annual retainers in the following amounts, pro-rated for any partial fiscal year:
|(i)||With respect to each Non-Employee Director, $225,000 (the|
|(ii)||With respect to the Lead Director, $30,000;|
|(iii)||With respect to the Audit Committee Chairman, $25,000;|
|(iv)||With respect to the Compensation Committee Chairman, $20,000;|
|(v)||With respect to the Nominating/Corporate Governance Committee|
Chairman, $15,000; and
Each of (ii) - (vi) is referred to as an “Additional Fee” and, together with the Annual Retainer, the “Director Compensation”.
|3.2||Terms of Restricted Stock Units.|
|(ii)||solely on the date of such Non-Employee Director’s Separation from|
If a Non-Employee Director does not affirmatively make a payment election (or fails to make a timely election) with respect to the Restricted Stock Units, then such Restricted Stock Units will be settled in Common Stock on the earlier to occur of the fifth (5th) anniversary of the Retainer Date or the date of the Non-Employee Director’s Separation from Service.
|(ii)||such subsequent election may not take effect until at least twelve|
(12) months after the date on which the election is made;
Any date on which a Non-Employee Director timely elects to defer payment of the Restricted Stock Units, in accordance with Section 409A of the Code and this Section 3.2(d), is referred to as a “Deferred Payment Date.”
shall be credited, as of the dividend payment date, with dividend equivalents equal to the amount of the dividends which would have been payable to such holder if the holder held a number of shares of Common Stock equal to the number of vested Restricted Stock Units so deferred. Such dividend equivalents shall be deemed reinvested in the Common Stock on the dividend payment date and shall be paid by the Company in shares of Common Stock on the Deferred Payment Date. Such dividend equivalents shall constitute Dividend Equivalents under Section 9.1 of the Plan.
(ii) by applicable laws of descent and distribution, (iii) pursuant to a DRO.
Notwithstanding any provision of this Program to the contrary, in the event that following the grant of any Restricted Stock Units, the Committee determines that any Award does or may violate any of the requirements of Code Section 409A, the Committee may adopt such amendments to the Program and any affected Award or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Program and any such Award from the application of Code Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Code Section
409A; provided, however, that this paragraph shall not create an obligation on the part of the Committee to adopt any such amendment, policy or procedure or take any such other action. Notwithstanding anything in this Program or any deferral election form to the contrary, with respect to any Non-Employee Director who is a “specified employee” at the time of such Non- Employee Director’s Separation from Service, the payment of such Non-Employee Director’s Restricted Stock Units upon such Separation from Service shall, to the extent that such distribution upon a Separation from Service would be a prohibited distribution under Section 409A(a)(2)(b)(i) of the Code, be delayed until the date which is six months and one day after the date on which such Separation from Service occurs (or, if earlier, the date of the Non-Employee Director’s death).