EXHIBIT 10.6
AUTOZONE, INC.
AMENDED AND RESTATED
2000 EXECUTIVE INCENTIVE COMPENSATION PLAN
1. PURPOSE
The AutoZone, Inc. 2000 Executive Incentive Compensation Plan ("Plan")
is designed to provide incentives and rewards to eligible employees of AutoZone,
Inc. (the "Company") and its affiliates who have significant responsibility for
the success and growth of the Company and assist the Company in attracting,
motivating, and retaining key employees on a competitive basis. The Plan is
designed to ensure that the annual bonus paid pursuant to this Plan to eligible
employees of the Company is deductible under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). This Plan shall be ratified by
the Company's stockholders pursuant to 26 C.F.R. ss. 1.162-27(e)(4)(vi) at the
annual meeting to be held on December 9, 1999, and shall be effective for the
entire 2000 fiscal year. If the stockholders do not ratify the Plan, the Plan
shall not become effective.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company ("Committee"). The Committee shall be
appointed by the Board of Directors of the Company and shall consist of at least
two outside directors of the Company that satisfy the requirements of Code
Section 162(m). The Committee shall have the sole discretion and authority to
administer and interpret the Plan in accordance with Code Section 162(m). The
Committee's interpretations of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its stockholders and any person receiving an award under the Plan.
3. ELIGIBILITY
The individuals entitled to participate in the Plan shall be the
executive officers of the Company, as determined by the Committee.
4. AWARDS
Executive officers as determined by the Committee may be granted annual
incentive awards under this Plan at such times of each year as will satisfy the
requirements of Code Section 162(m), provided, however, that if an individual
becomes an executive officer during a year, an incentive goal for that
individual shall be made for that fiscal year at the time she or he becomes an
executive officer. The Committee may, in its discretion, grant annual incentive
awards to non-executive officers and managers of the Company outside of this
Plan.
The annual incentive award to each executive officer shall be based on
the Company, a subsidiary or division, attaining one or more of the following
objective goals as established by the Committee for the fiscal year:
(a) earnings
(b) earnings per share
(c) sales
(d) market share
(e) revenue
(f) operating or net cash flows
(g) pre-tax profits
(h) earnings before interest and taxes
(i) return on capital
(j) economic value added
(k) return on inventory
(l) EBIT margin
(m) gross profit margin
(n) sales
(o) sales per square foot
(p) comparable store sales
Different measures of goal attainment may be set for different plan
participants. The performance goal may be a single goal or a range with a
minimum goal up to a maximum goal, with corresponding increases in the incentive
award up to the maximum award set by the Committee and as may be limited by this
Plan. Such performance goals may disregard, at the Committee's discretion, the
effect of one-time charges and extraordinary events such as asset write-downs,
litigation judgments or settlements, changes in tax laws, accounting principles
or other laws or provisions affecting reported results, accruals for
reorganization or restructuring, and any other extraordinary non-recurring
items, acquisitions or divestitures and any foreign exchange gains or losses.
These goals shall be established by the Committee either by written consent or
as evidenced by the minutes of a meeting at such times as to qualify amounts
paid under this Plan for tax deductible treatment under Code Section 162(m).
Payment of an earned award will be made in cash, or at the option of
the Committee, in whole or in part in Company common stock. Upon completion of
each fiscal year, the Committee shall review performance verses the established
goal, and shall certify (either by written consent or as evidenced by the
minutes of a meeting) the specified performance goals achieved for the fiscal
year (if any), and direct which award payments are payable under the Plan, if
any. No payment will be made if the minimum pre-established goals are not met.
The Committee may, in its discretion, reduce or eliminate an individual's award
that would have been
otherwise paid. No individual may receive in any one fiscal year an award under
the Plan of an amount greater than the lesser of (i) 200% of such individual's
base salary for that year or (ii) $2 million.
5. MISCELLANEOUS PROVISIONS
(a) The Company shall have the right to deduct all federal, state, or
local taxes required by law or Company policy from any award paid.
(b) Nothing contained in this Plan grants to any person any claim or
right to any payments under the Plan. Such payments shall be made at the sole
discretion of the Compensation Committee.
(c) Nothing contained in this Plan or any action taken by the Committee
pursuant to this Plan shall be construed as giving an individual any right to be
retained in the employ of the Company.
(d) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any award under the Plan.
(e) The Plan may be amended, subject to the limits of Code Section
162(m), or terminated by the Committee at any time. However, no amendment to the
Plan shall be effective without prior approval of the Company's stockholders
which would (i) increase the maximum amount that may be paid under the Plan to
any person or (ii) modify the business criteria on which performance targets are
to be based under the Plan.
(f) This Plan shall terminate on the fifth anniversary after the date
of ratification by the Company's stockholders.