EXHIBIT 1.2
AUTOZONE, INC.
(a Nevada corporation)
Debt Securities
TERMS AGREEMENT
May 29, 2003
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 $200,000,000 aggregate principal amount
of its senior debt securities (such securities also being hereinafter referred
to as the "Underwritten Securities"). Each provision of the Underwriting
Agreement dated May 29, 2003 among the Company, Citigroup Global Markets Inc.
and SunTrust Capital Markets, Inc. is hereby incorporated by reference herein in
its entirety and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provision had been set forth in full herein. Unless
otherwise defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined. 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
- ----------- --------------------------
Citigroup Global Markets Inc.................................................... $ 60,000,000
SunTrust Capital Markets, Inc................................................... 60,000,000
Banc of America Securities LLC.................................................. 10,760,000
Fleet Securities, Inc........................................................... 10,760,000
J.P. Morgan Securities Inc...................................................... 10,760,000
Merrill Lynch, Pierce Fenner & Smith............................................ 10,760,000
Incorporated
Wachovia Securities, Inc........................................................ 10,760,000
Banc One Capital Markets, Inc................................................... 2,620,000
BNP Paribas Securities Corp..................................................... 2,620,000
BNY Capital Markets, Inc........................................................ 2,620,000
Credit Lyonnais Securities (USA) Inc............................................ 2,620,000
Fifth Third Securities, Inc..................................................... 2,620,000
FTN Financial Securities Corp................................................... 2,620,000
McDonald Investments Inc........................................................ 2,620,000
Morgan Keegan & Company, Inc.................................................... 2,620,000
NatCity Investments, Inc........................................................ 2,620,000
U.S. Bancorp Piper Jaffray Inc.................................................. 2,620,000
-------------
Total........................................................................... $ 200,000,000
=============
The Underwritten Securities shall have the following terms:
Title: 4.375% Senior Notes due 2013
Ranking: Senior and unsecured
Ratings: Baa2/BBB+
Aggregate principal amount: $200,000,000
Denominations: $1,000 and integral multiples of $1,000
Currency of payment: U.S. Dollars
Interest rate or formula: 4.375%
Interest payment dates: June 1 and December 1
Regular record dates: May 15 and November 15
Stated maturity date: June 1, 2013
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
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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 0.20%. The terms of these
redemption provisions (including defined terms)
will be as set forth in the Prospectus Supplement
dated the date 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
Securities: 3(j) of the Underwriting Agreement
Type of offering: Fixed price offering
Initial public offering 99.17% of the principal amount, plus accrued
price per Underwritten interest, if any, from June 3, 2003
Security:
Purchase price per 98.52% of principal amount, plus accrued interest,
Underwritten Security if any, from June 3, 2003. The selling concession
payable by Underwriters: shall be 0.40% and the reallowance concession
shall be 0.25%, in each case of the principal
amount of the Underwritten Securities
Form: One registered note in global form
Other terms and conditions: The Underwriters hereby agree to reimburse, at the
Closing Time, the Company for expenses incurred by
the Company in connection with the offering of the
Underwritten Securities of $100,000
Closing Time and location: 10:00 A.M. (New York City time), on June 3, 2003,
at the offices of Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York, 10017
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Please accept this offer no later than 4:30 P.M. (New York
City time) on May 29, 2003 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Michael Eck
--------------------------------
Authorized Signatory
SUNTRUST CAPITAL MARKETS, INC.
By: /s/ James J. Stathis
--------------------------------
Authorized Signatory
Acting on behalf of themselves and the other
several named Underwriters.
Accepted:
AUTOZONE, INC.
By: /s/ Michael Archbold
-------------------------------
Name: Michael Archbold
Title: Senior Vice President and
Chief Financial Officer
By: /s/ James A. Cook III
-------------------------------
Name: James A. Cook III
Title: Vice President and Treasurer
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