form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported): June 26, 2008 (June 25,
2008)
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AUTOZONE,
INC.
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(Exact
name of registrant as specified in its charter)
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Nevada
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1-10714
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62-1482048
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(State
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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123
South Front Street, Memphis, Tennessee 38103
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(Address
of principal executive offices) (Zip Code)
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(901)
495-6500
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(Registrant's
telephone number, including area code)
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(not
applicable)
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(former
name or former address, if changed since last
report)
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Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following
provisions:
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry
into a Material Definitive Agreement.
On
June 25, 2008, AutoZone, Inc. (the "Company") and ESL Investments, Inc. entered
into an Agreement (the "Agreement"), setting forth certain understandings and
agreements regarding the voting by ESL Investments, Inc., on behalf of itself
and its affiliates (collectively, "ESL"), of certain shares of common stock, par
value $0.01 per share, of the Company (the "Common Stock") and related matters.
As of June 24, 2008, ESL was the beneficial holder of 22,928,783 shares of
Common Stock, representing approximately 36.2% of the outstanding Common
Stock. The Agreement was announced by press release issued by the
Company on June 26, 2008.
Under
the terms of the Agreement, ESL has agreed to vote all shares of Common Stock
owned by ESL in excess of certain thresholds (whether as a result of share
repurchases by the Company or additional purchases of shares by ESL) on matters
proposed from time to time for a stockholder vote, in the same proportion as
shares not owned by ESL are actually voted. For an initial period ending after
the annual meeting of stockholders of the Company held to elect directors
following the conclusion of the Company's fiscal year ending on August 29, 2009,
the applicable percentage threshold is 40% of the then outstanding Common
Stock. Thereafter, so long as the Agreement remains in effect, the
applicable percentage threshold is 37.5%. Shares owned by ESL under
the applicable threshold have no voting limitations. As part of the
Agreement, the Company has agreed not to take actions, including the adoption of
a stockholder rights plan, to prevent future purchase of Company shares by
ESL.
In
the Agreement, ESL has also agreed, among other things, that ESL generally will
not dispose or agree to dispose of any shares of Common Stock to a third party
at a price above the then prevailing market price per share, without taking
appropriate steps to ensure that the purchaser of such shares simultaneously
provides all other holders of Common Stock with an opportunity to dispose of a
number of shares (representing, for each Company stockholder, the same
proportion of owned shares of Common Stock as ESL proposes to dispose of) in
such transaction on the same terms and conditions, including price per share, as
ESL. In addition, ESL has agreed that it would not pursue in the future a
transaction resulting in the acquisition of all or substantially all of the
shares of Common Stock not owned by ESL, without following certain procedures,
including consideration and recommendation of the transaction by a committee of
independent, disinterested directors unaffiliated with ESL, unless the
transaction is structured as tender offer meeting certain requirements, followed
by a merger at the same price if the tender offer is successful.
Under
the terms of the Agreement, the Company has agreed to take appropriate actions,
once candidates are identified, to add three new members to the Board of
Directors of the Company (the "Board"). As reflected in the
Agreement, it is the intent of the parties that such additions shall occur as
promptly as practicable, but in no event later than the annual meeting of
stockholders of the Company held to elect directors following the conclusion of
the Company’s fiscal year ending on August 30, 2008. One candidate, reasonably
acceptable to ESL, will be identified by an independent search agency retained
by the Company pursuant to a previously initiated search. Two
additional directors will be appointed from candidates identified by ESL,
including
candidates who are reasonably acceptable to ESL suggested by other directors of
the Company. These two candidates may, at ESL's discretion, be
officers of ESL and its affiliated investment entities. All three
candidates must be reasonably acceptable to both ESL and a majority of the
members of the Nominating and Corporate Governance Committee of the Board and be
"independent" under the Company's corporate governance principles and the rules
of the NYSE.
Following
the addition of these new directors, the size of the Board will increase to 12,
although after considering, among other things, ESL's views regarding
the size of the Board, it is the Company's expectation that the Board's size
would be reduced to 10 at the 2008 Annual Meeting of Stockholders. The changes
in the membership of the Board to achieve the reduction would be reviewed by the
Nominating and Corporate Governance Committee in connection with the addition of
the new directors and recommended to the Board. During the
negotiations regarding the Agreement, ESL shared its perspective that three of
the current directors, the Chairman, Earl G. Graves, Jr. and Theodore W. Ullyot,
be included among the directors re-nominated at the 2008 Annual
Meeting.
The
Company has also agreed to use its commercially reasonable efforts to achieve,
no later than February 14, 2009, the last day of the Company's second quarter of
the Company's 2009 fiscal year, an adjusted debt/EBITDAR ratio (as such term is
used in the Company's quarterly earnings report) of at least 2.5:1. If the
Company has not achieved the targeted adjusted debt/EBITDAR ratio referenced
above by the end of the second quarter of fiscal year 2009, the voting
limitations described in the second paragraph of this Item 1.01 will be
suspended until such time as the targeted adjusted debt/EBITDAR ratio is
achieved.
The
Agreement, by its terms, will continue in effect until the earliest of (a) the
date upon which the shares of Common Stock owned by ESL, in the aggregate,
constitute less than 25% of the outstanding shares of Common Stock, (b) the date
upon which the shares of Common Stock owned by ESL exceeds 50% of the then
outstanding shares of Common Stock, provided that ESL has
acquired subsequent to the date of the Agreement additional shares representing
above 10% of the then outstanding shares and (c) the date upon which the parties
(which, in the case of the Company, have been authorized by at least two
directors representing a majority of the independent and disinterested members
of the Board unaffiliated with ESL) mutually agree in writing that this
Agreement and all of its provisions shall no longer be in effect. Termination of
this Agreement pursuant to clause (b) above shall not affect ESL's obligations
described under the third paragraph in this Item 1.01.
The
foregoing description is not complete and is qualified in its entirety by
reference to the Agreement, which is filed as Exhibit 10.1 and is incorporated
by reference.
Item
5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
The information set forth under Item
1.01 is incorporated by reference.
Item
9.01.
Financial Statements and Exhibits
(d)
Exhibits
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Exhibit
No.
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Description
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10.1
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Agreement,
dated as of June 25, 2008, between AutoZone, Inc. and ESL Investments,
Inc.
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99.1
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Press
Release dated June 26, 2008
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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AUTOZONE,
INC.
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Dated:
June 26, 2008
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By:
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/s/ Harry L.
Goldsmith |
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Name:
Harry L. Goldsmith
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Title:
Executive Vice President, Secretary and General
Counsel
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.1
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Agreement,
dated as of June 25, 2008, between AutoZone, Inc. and ESL Investments,
Inc.
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99.1
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Press
Release dated June 26, 2008
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