SECOND AMENDED AND RESTATED EMPLOYMENT AND NON-COMPETE AGREEMENT

EXHIBIT 10.1

SECOND AMENDED AND RESTATED
EMPLOYMENT AND NON-COMPETE AGREEMENT

THIS AGREEMENT is between AutoZone, Inc., a Nevada corporation and its various subsidiaries (collectively “AutoZone”), and Harry L. Goldsmith, an individual (“Employee”) dated as of December 29, 2008 (“Effective Date”) and is an amendment and restatement of the Amended and Restated Employment and Non-Compete Agreement between Employee and AutoZone, Inc. dated August 31, 1999 (as amended and restated the “Agreement”).

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

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(a) WITHOUT CAUSE. AutoZone may terminate this Agreement without Cause at any time upon notice to Employee and Employee shall cease to be an officer of AutoZone. If the Employee experiences a “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended, and Treasury Regulation Section 1.409A-1(h)) (“Separation from Service”) due to the Employee’s termination by AutoZone without Cause then AutoZone shall promptly pay or provide to the Employee:

(i) Subject to Paragraph 16(c) below, three (3) years of the Employee’s then-current Base Salary, payable in substantially equal installments over the three (3) year period following the date of such Separation from Service (the “Termination Date”) (such three-year period after the Termination Date, the “Continuation Period”) in accordance with AutoZone’s regular payroll practice, which amounts shall be payable on each payroll date on which AutoZone pays salary payments to its officers, beginning with the first such payroll date after the Termination Date (the “First Payroll Date”), and any amounts that would otherwise have been paid pursuant to this Paragraph 8(a)(i) prior to such payroll date shall be paid in a lump-sum on the First Payroll Date;

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(ii) To the extent that the Employee has unvested stock options that would have otherwise vested during the Continuation Period had Employee not experienced a Separation from Service (the “Subject Stock Options”), the vesting of such Subject Stock Options shall accelerate and such Subject Stock Options shall become fully vested on the Termination Date. The Subject Stock Options and all other stock options held by the Employee that vested on or before the Termination Date may be exercised in the manner set forth in the respective stock option agreements until the earlier of the 30 days following the end of the Continuation Period or the maximum term of the respective stock option agreement, without regard to any possible early expiration resulting from the Employee’s termination of employment. Notwithstanding, the Employee’s termination of employment pursuant to this paragraph shall not be considered a “Termination of Employment” pursuant to any stock option agreement for any stock option that would vest during the Continuation Period to cause such stock option to terminate;

(iii) Continuation of medical, dental and vision benefit coverage under a “group health plan” of AutoZone for the benefit of the Employee and/or the Employee’s dependents, for the period beginning on the Termination Date and equal to the sum of (1) the Continuation Period and (2) the period during which the Employee was entitled to elect COBRA coverage as of the Termination Date, initially pursuant to Employee’s COBRA election until the expiration of the maximum COBRA period applicable to Employee;

(iv) Pay to the Employee a lump-sum amount equal, as determined by AutoZone, to three times the total aggregate annual COBRA premium costs for group medical, dental and vision benefit coverage for the Employee and the Employee’s spouse and dependents, in each case, as in effect with respect to each such individual immediately prior to such Separation from Service, which lump-sum payment shall be made six (6) months after the Termination Date. For the avoidance of doubt, the payment described in this Paragraph 8(a)(iv) shall be subject to withholding of any federal, state, local or foreign withholding or other taxes or charges which AutoZone is required to withhold; and

(v) During the Continuation Period, Employee shall not earn any bonus payments. AutoZone shall pay Employee a prorated bonus for the fiscal year which includes the Termination Date calculated based on the period of time elapsed during such fiscal year until the Termination Date and the formula established by the Compensation Committee for officers for that fiscal year. Said bonus shall be paid when other officer bonuses are paid for that fiscal year, but in no event later than the fifteenth day of the third month following the end of such fiscal year.

AutoZone shall have no 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. Each payment under this Paragraph 8(a) shall be treated as a separate payment for purposes of Section 409A (as defined below). To the extent that any reimbursement is received or to be received by Employee, such reimbursements shall be administered consistent with the following additional requirements as set forth in Treasury Regulation section 1.409A-3(i)(1)(iv): (1) Employee’s eligibility for benefits in one taxable year will not affect Employee’s eligibility for benefits in any other taxable year, (2) any reimbursement of eligible expenses will be made on or before the last day of the taxable year following the taxable year in which the expense was incurred, and (3) Employee’s right to benefits is not subject to liquidation or exchange for another benefit.

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(b) WITH CAUSE. AutoZone shall have the right to terminate this Agreement and Employee’s employment with AutoZone for Cause at any time. 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 the willful engagement by the Employee in conduct which is demonstrably or materially injurious to AutoZone, monetarily or otherwise. 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.

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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 paragraph (herein called “Competitor”), as an employee, director, consultant, beneficial or record owner, 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 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 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. This Paragraph 12 shall not apply to a termination by Employee pursuant to Paragraph 10.

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(a) General. To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (together with Department of Treasury regulations and other official guidance issued thereunder, “Section 409A”). Notwithstanding any provision of this Agreement to the contrary, in the event that AutoZone determines in good faith that any compensation or benefits payable under this Agreement may not be either exempt from or compliant with Section 409A, AutoZone shall consult with the Employee and adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (i) preserve the intended tax treatment of the compensation and benefits payable hereunder, to preserve the economic benefits of such compensation and benefits, and/or (ii) to exempt the compensation and benefits payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder; provided, however, that this Paragraph 16 does not, and shall not be construed so as to, create any obligation on the part of AutoZone to adopt any such amendments, policies or procedures or to take any other such actions or to indemnify the Employee for any failure to do so.

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(b) This Agreement shall be administered and interpreted to maximize the short-term deferral exception to Section 409A of the Code, and Employee shall not, directly or indirectly, designate the taxable year of a payment made under this Agreement. The portion of any payment under this Agreement that is paid within the “short-term deferral period” within the meaning of Treasury Regulation Section 1.409A-1(b)(4) shall be treated as a short term deferral and not aggregated with other plans or payments. Any other portion of the payment that does not meet the short term deferral requirement shall, to the maximum extent possible, be deemed to satisfy the exception from Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) for involuntary separation pay and shall not be aggregated with any other payment. Any right to a series of installment payments pursuant to this Agreement is to be treated as a right to a series of separate payments. Any amount that is paid as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4), or within the involuntary separation pay limit under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) shall be treated as a separate payment. Payment dates provided for in this Agreement shall be deemed to incorporate “grace periods” within the meaning of Section 409A of the Code.

(c) Notwithstanding anything to the contrary in this Agreement, no compensation or benefits, including without limitation any severance payments or benefits payable under Paragraph 8 hereof, shall be paid to Employee during the 6-month period following Employee’s Separation from Service if AutoZone determines that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such 6-month period (or such earlier date upon which such amount can be paid under Section 409A of the Code without resulting in a prohibited distribution, including as a result of Employee’s death), AutoZone shall pay Employee a lump-sum amount equal to the cumulative amount that would have otherwise been payable to Employee during such period.

This Paragraph 16(c) shall not apply to that portion of any amounts payable upon a Separation from Service which shall qualify as “involuntary severance” under Section 409A because such amount does not exceed the lesser of (1) two hundred percent (200%) of the Executive’s annualized compensation from the Company for the calendar year immediately preceding the calendar year during which the Separation from Service occurs, or (2) two hundred percent (200%) of the annual limitation amount under Section 401(a)(17) of the Code for the calendar year during which the Separation from Service occurs.

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IN WITNESS WHEREOF, the respective parties execute this Agreement.

AUTOZONE, INC.

Employee

By: /s/ William C. Rhodes, III

/s/ Harry L. Goldsmith

Date: 12-29-08

By: /s/ Timothy W. Briggs
Title: Senior VP, HR

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