EXHIBIT 10.1
03/17/97 1:44 PM
AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, that J.R. Hyde, III ("Hyde") and
AutoZone, Inc., a Nevada corporation, and its subsidiaries (collectively
"AZO") for and in consideration of the promises, undertakings and benefits
set out in this Agreement as of March 18, 1997 agree as follows:
1. EFFECTIVE DATE. Hyde resigns as an employee and Chairman of AZO
as of March 18, 1997 (the "Effective Date"). Notwithstanding, Hyde shall
remain a member of the Board of Directors of AZO subject to election,
resignation, and replacement in the same manner as other members of the
Board of Directors.
2. RELEASE. Except for the obligations of AZO and Hyde undertaken
pursuant to the terms of this Agreement, Hyde and AZO each release and
forever discharge the other and their respective employees, agents,
subsidiaries, predecessors, successors, affiliates, heirs, and assigns from
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 Hyde 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 any
worker's compensation law, 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
C. 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.
3. RECISION. AZO's offer as described in this Agreement will remain
open and effective for twenty-one (21) days from the Effective Date. Hyde
may elect to accept or reject this offer within that time period. If Hyde
does nothing within the twenty-one (21) day period, the offer shall be
deemed withdrawn by AZO. If Hyde does sign the Agreement within the
twenty-one (21) day period, Hyde 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 Hyde signs this Agreement.
4. BENEFITS. In consideration of the release granted by Hyde and
the other obligations undertaken by Hyde pursuant to this Agreement, AZO
agrees to provide, subject only to the limitations contained in this
Agreement, the following benefits in his favor (the "Benefits"):
A. Any vacation pay accrued as of the Effective Date;
B. A prorated bonus for AZO's 1997 fiscal year based on the period
from September 1, 1996, to the Effective Date. Such bonus shall
be in accordance with the bonus plan previously approved by the
Compensation Committee of AZO's Board of Directors and will be
paid after the end of AZO's 1997 fiscal year when the bonuses of
all other executive officers of AZO are paid;
C. For the period beginning on the Effective Date and ending five
years later, AZO shall pay Hyde an annual amount equal to three
hundred sixty thousand dollars ($360,000) in bi-weekly payments
of thirteen thousand eight hundred forty-six dollars and 15/100
($13,846.15), to be paid as and when AZO pays its regular
employees. As used in this Agreement, the term "bi-weekly" shall
mean once every two weeks.
D. Health and dental insurance during the period of time beginning
on the Effective Date and ending on the date that Hyde ceases to
receive payments pursuant to Section 3. C. of this Agreement as
if Hyde were still employed by AZO, and thereafter the coverage
as required by law.
HYDE UNDERSTANDS AND AGREES THAT THE ONLY SALARY OR BENEFITS (OTHER
THAN SUCH COMPENSATION HE MAY RECEIVE AS A NON-EMPLOYEE DIRECTOR OF AZO) HE
WILL RECEIVE FROM AZO ARE SET FORTH HEREIN, AND THAT ALL OTHER SALARY OR
BENEFITS HE IS PRESENTLY RECEIVING FROM AZO, INCLUDING BUT NOT LIMITED TO
LIFE INSURANCE, LONG TERM DISABILITY COVERAGE, SHORT TERM DISABILITY
COVERAGE AND STOCK PURCHASE PLAN, SHALL BE AND ARE TERMINATED AS OF THE
EFFECTIVE DATE. TIME IN SERVICE UNDER THE AUTOZONE, INC., ASSOCIATES
PENSION PLAN SHALL CEASE TO ACCRUE AS OF THE EFFECTIVE DATE.
The parties understand that applicable local, state, and federal tax
and appropriate insurance premium deductions and withholdings will be made
from all of the appropriate payments.
The parties further understand and agree that this Agreement shall not
diminish or adversely affect in any way Hyde's retirement benefits under
the AutoZone, Inc. Associates' Pension Plan, except 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 which
shall be as provided for pursuant to the AutoZone, Inc. Associates' Pension
Plan.
5. NON-COMPETE. Hyde further agrees that he will not, for the
period commencing on the Effective Date and ending on the date five years
later, 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 or 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, partner, joint
venturer, officer or agent of the Competitor. Notwithstanding, an
investment by Hyde in an investment partnership or mutual fund whereby Hyde
does not own more than five (5%) percent of such partnership or fund and
does not or have the right to exercise investment control, shall not be
considered a breach of this Section 5.
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, Hyde violates the provisions of this Non-Compete section and fails
to cure such violation within thirty days after him receipt of notice of
such violation from AZO, and if AZO attempts to enforce this Agreement and
a court of competent jurisdiction holds that any portion of this Non-
Compete section is unenforceable for any reason, AZO may cease paying any
further Benefits. In the event of breach by Hyde of any provision of this
Non-Compete section Hyde 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". Further, Hyde agrees not to hire, for himself
or any other entity, encourage anyone or entity to hire, or entice away
from AZO any full time employee of AZO during the term of this non-compete
agreement other than current administrative personnel in the Chairman's
office.
6. CONFIDENTIALITY AND AZO PROPERTY. Unless otherwise required by
law, Hyde 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. Confidential
information shall not include information: (a) publicly disclosed by
AutoZone; (b) rightfully received by Hyde from a third party without
restrictions on disclosure or use; (c) approved for release or disclosure
by AutoZone; or (d) produced or disclosed pursuant to applicable laws,
regulation or court order. Hyde acknowledges that all such confidential or
proprietary information is and shall remain the sole property of AZO and
all embodiments of such information shall remain with or be returned to
AZO.
7. AZO PROPERTY. Hyde agrees to return to AZO any and all property
of AZO within a reasonable time after the Effective Date. AZO acknowledges
that it is in possession of certain art belonging to Hyde and agrees to
return such art upon request by Hyde. During such time as such art is in
possession of AZO, AZO agrees to continue to take the same care as it is
currently taking to safeguard such art. AZO agrees to insure such art
while it is in the possession for such amounts as Hyde and AZO shall
mutually agree upon it being agreed that the current insurance is
sufficient until otherwise notified in writing by Hyde. AZO and Hyde agree
that should any damage occur to such art while it is in the possession,
AZO's liability to Hyde shall be limited to the insurance proceeds
recovered by AZO.
8. COMPLETE AGREEMENT. This Agreement contains the entire agreement
between the parties concerning the matters covered herein and integrates
and merges 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 in the state or federal courts located in 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. 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. REMEDIES. In the event of breach by Hyde of any provision of this
Agreement, Hyde 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 to
enforce, or prevent breach of any such provision. In the event Hyde
breaches this Agreement in any way and fails to cure such breach within
thirty (30) days of receipt by Hyde of notice of such breach from AZO, any
unpaid Benefits shall immediately terminate. AZO shall have the right, but
not the obligation, to exercise any of its remedies under this Agreement or
any that may be allowed by law in the event of a breach of this Agreement.
Any such remedies available to AZO shall be cumulative, not exclusive. of
this Agreement. Any such remedies available to Hyde shall be cumulative,
not exclusive.
11. FURTHER ASSURANCES. Hyde warrants and represents to AZO that he
has returned to AZO all keys, documents, and other property of AZO. Should
Hyde fail or refuse to return any AZO property, AZO shall be entitled to
exercise its rights under "REMEDIES," in addition to any rights that AZO
may have by law.
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.
12. NOTICES. All notices shall be deemed received three days after
it is sent by certified mail, return receipt requested, or when actually
received by hand-delivery or overnight courier. All notices shall be sent
to:
To AutoZone: General Counsel
Legal Department
AutoZone, Inc.
123 South Front Street
Memphis, TN 38103-3607
To Hyde: P. O. Box 1152
Memphis, TN 38101-1152
IN WITNESS WHEREOF, the respective parties execute this Agreement.
AUTOZONE, INC.
By: /S/ J.C. ADAMS, JR. /S/ J.R. HYDE, III
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J. R. Hyde, III
Title: CHAIRMAN & CEO
3/18/97
Date
By: /S/ HARRRY L. GOLDSMITH
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Title: SVP