Terms Agreement, dated October 16, 2002
EX-1.2 4 g78771exv1w2.txt TERMS AGREEMENT, DATED OCTOBER 16, 2002 EXHIBIT 1.2 AUTOZONE, INC. (a Nevada corporation) Debt Securities TERMS AGREEMENT October 16, 2002 To: AutoZone, Inc. 123 South Front Street Memphis, Tennessee 38103 Ladies and Gentlemen: We understand that AutoZone, Inc., a Nevada corporation (the "Company"), proposes to issue and sell $300,000,000 aggregate principal amount of its senior debt securities (such securities also being hereinafter referred to as the "Underwritten Securities"). Subject to the terms and conditions set forth or incorporated by reference herein, the underwriters named below (the "Underwriters") offer to purchase, severally and not jointly, the principal amount of Underwritten Securities opposite their names set forth below at the purchase price set forth below. Principal Amount Underwriter of Underwritten Securities - ----------- -------------------------- J.P. Morgan Securities Inc. ................................ $ 90,000,000 Merrill Lynch, Pierce Fenner & Smith ....................... 90,000,000 Incorporated Banc of America Securities LLC ............................. 16,140,000 Fleet Securities, Inc. ..................................... 16,140,000 Salomon Smith Barney Inc. .................................. 16,140,000 SunTrust Capital Markets, Inc. ............................. 16,140,000 Wachovia Securities, Inc. .................................. 16,140,000 Banc One Capital Markets, Inc. ............................. 3,930,000 BNP Paribas Securities Corp. ............................... 3,930,000 BNY Capital Markets, Inc. .................................. 3,930,000 Bear, Stearns & Co. Inc. ................................... 3,930,000 Fifth Third Securities, Inc. ............................... 3,930,000 First Tennessee Securities Corporation, .................... 3,930,000 a Subsidiary of First Tennessee Bank, N.A. Goldman, Sachs & Co. ....................................... 3,930,000 McDonald Investments Inc. .................................. 3,930,000 Morgan Keegan & Company, Inc. .............................. 3,930,000 NatCity Investments, Inc. .................................. 3,930,000 ------------ Total ...................................................... $300,000,000 ============
The Underwritten Securities shall have the following terms: Title: 5.875% Senior Notes due 2012 Ranking:. Senior and unsecured Ratings:. Baa2/BBB+ Aggregate principal amount: $300,000,000 Denominations: $1,000 and integral multiples of $1,000 Currency of payment: U.S. Dollars Interest rate or formula: 5.875% Interest payment dates: April 15 and October 15 Regular record dates: April 1 and October 1 Stated maturity date: October 15, 2012 Redemption provisions: The Underwritten Securities will be redeemable, in whole at any time or in part from time to time, at the option of the Company, at a redemption price equal to accrued and unpaid interest on the principal amount being redeemed to the redemption date, plus the greater of (i) 100% of the principal amount of such Underwritten Securities; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on such Underwritten Securities (not including any portion of such payments of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 0.35%. The terms of these redemption provisions (including defined terms) will be as set forth in the Prospectus Supplement dated the hereof relating to the Underwritten Securities. Sinking fund requirements: None Conversion provisions: None Listing requirements: None Restriction on sale of Until the Closing Time in accordance with Section 3(j) of the Underwriting Agreement. Securities: Type of offering: Fixed price offering
2 Initial public offering price 99.755% of the principal amount, plus accrued interest, if any, per Underwritten Security: from October 21, 2002. Purchase price per 99.105% of principal amount, plus accrued interest, if any, from Underwritten Security October 21, 2002. The selling concession shall be 0.400% and the payable by Underwriters: reallowance concession shall be 0.250%, in each case of the principal amount of the Underwritten Securities. Form: One registered note in global form Other terms and conditions: Notwithstanding Sections 5(e) and 5(f) of the Underwriting Agreement, Ernst & Young LLP shall deliver a single "comfort letter" in accordance with such Section 5(e) at the Date of Delivery (and not the date hereof), which letter shall be in form and substance satisfactory to the Representatives. Closing Time and location: 10:00 A.M. (New York City time), on October 21, 2002, at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York, 10017
3 Please accept this offer no later than 5:30 P.M. (New York City time) on October 16, 2002 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, J.P. MORGAN SECURITIES INC. By: /s/ Carl J. Mehldau Jr. ----------------------------------------------- Authorized Signatory MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ A. Scott Lemone ------------------------------------------------ Authorized Signatory Acting on behalf of themselves and the other several named Underwriters. Accepted: AUTOZONE, INC. By:/s/ Michael G. Archibold ----------------------------------------- Name: Michael G. Archibold Title: Senior Vice President & Chief Financial Officer By:/s/ James A. Cook, III --------------------------------- Name: James A. Cook, III Title: Vice President & Treasurer 4
