<PAGE>
FILED PURSUANT TO RULE 424(A)
REGISTRATION NO. 333-58565
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 10, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY , 1998)
$200,000,000
[AUTOZONE, INC. LOGO]
% DEBENTURES DUE ,
-----------
AutoZone, Inc. (the "Company") will issue % Debentures due ,
(the "Debentures"), offered hereby (the "Offering") in the principal
amount of $200,000,000. Interest on the Debentures is payable semi-annually on
and of each year, beginning , 1999. The
Debentures may not be redeemed prior to maturity.
The Debentures will be represented by one or more Global Debentures
(collectively, the "Global Debentures") registered in the name of the nominee
of The Depository Trust Company ("DTC"), which will act as the Depositary Bank.
Interests in the Global Debenture will be evidenced only by, and transfers
thereof will be effected only through, records maintained by the Depositary
Bank and its participants. See "Description of Debentures--Book-Entry System."
Except as described in the Prospectus, Debentures in definitive form will not
be issued. Settlement for the Debentures will be made in immediately available
funds. All payments of principal and interest will be made by the Company in
immediately available funds. See "Description of Debentures--Same-Day Funds
Settlement and Payment."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture......................... % % %
- ------------------------------------------------------------------------------
Total................................. $ $ $
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $ .
-----------
The Debentures are offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and reject any orders in whole or in part. It is expected that
delivery of the Debentures will be made through the book-entry facilities of
DTC on or about , 1998.
-----------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS
-----------
The date of this Prospectus Supplement is July , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
DEBENTURES. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information included elsewhere in this Prospectus Supplement and the
accompanying Prospectus or incorporated herein by reference. This Prospectus
Supplement contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Exchange Act of 1934, as amended (the "Exchange Act"). Such
statements are indicated by words or phrases such as "anticipate," "estimate,"
"project," "believes" and similar words or phrases. Such statements are based
on current expectations and are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected. All references to
the "Company" shall mean AutoZone, Inc. and its consolidated subsidiaries,
unless the context indicates otherwise.
THE COMPANY
AutoZone, Inc. (the "Company") is the nation's leading specialty retailer of
automotive parts and accessories, focusing primarily on "Do-It-Yourself"
customers. The Company began operations in 1979 and, at May 9, 1998, operated
2,001 AutoZone stores in 38 states. Each AutoZone store carries an extensive
automotive aftermarket product line, including new and remanufactured
automotive hard parts, such as alternators, starters, water pumps, brake shoes
and pads, carburetors, clutches and engines; maintenance items, such as oil,
antifreeze, transmission, brake and power steering fluids, engine additives,
protectants and waxes; and accessories, such as car stereos and floor mats.
Each AutoZone store carries parts for domestic and foreign cars, vans and light
trucks. AutoZone stores also have a commercial sales program which provides
commercial credit and prompt delivery of parts and other products to local
repair garages, dealers and service stations. The program was offered in
1,323 AutoZone stores at May 9, 1998. The Company does not perform automotive
repairs or installations.
In addition, the Company sells heavy duty truck parts and accessories through
its 43 TruckPro stores and automotive diagnostic and repair information
software through its ALLDATA subsidiary.
The Company is dedicated to a marketing and merchandising strategy to provide
customers with superior service, value and parts selection at conveniently
located, well-designed stores. The Company has implemented this strategy
primarily through knowledgeable and motivated store personnel trained to
emphasize prompt and courteous customer service, through an everyday low price
policy and by maintaining an extensive product line with an emphasis on
automotive hard parts. The Company's stores are generally situated in high-
visibility locations and provide a distinctive merchandise presentation in an
attractive store environment.
The Company's executive offices are located at 123 South Front Street,
Memphis, Tennessee 38103, and its telephone number is (901) 495-6500. The
Company is a Nevada corporation.
RECENT DEVELOPMENTS
In February 1998, ADAP, Inc. ("Auto Palace") became a wholly owned subsidiary
of the Company in a transaction accounted for as a purchase. The acquisition
added 112 automotive parts and accessories stores in the Northeast.
In May 1998, the Company acquired the assets and liabilities of TruckPro,
L.P., including the servicemark "TruckPro," in a transaction accounted for as a
purchase. The 43 TruckPro stores in 14 states specialize in the sale of heavy
duty truck parts.
S-3
<PAGE>
Additionally, in June 1998, the Company acquired Chief Auto Parts Inc.
("Chief") for approximately $280 million, including the assumption of
approximately $205 million of indebtedness. As of June 28, 1998, Chief operated
560 auto parts stores primarily in California and Texas. The purchase of Chief
significantly increased the Company's penetration in markets in California by
expanding its store count from 14 to over 400 in that state. This presence
coupled with expected buying, distribution, advertising and administration
synergies should allow AutoZone to pass savings to customers while increasing
average sales per acquired store. The Company intends to convert the Chief
stores to the AutoZone store name.
S-4
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial and other operating
information of the Company. The selected financial information for the five
fiscal years during the period ended August 30, 1997, have been derived from
the audited financial statements of the Company, which in the case of the three
most recent fiscal years are incorporated by reference in the Company's Annual
Report on Form 10-K for the fiscal year ended August 30, 1997 (the "1997 Form
10-K") and are incorporated by reference herein. The selected financial data
for the thirty-six weeks ended May 10, 1997 and May 9, 1998 is derived from its
unaudited financial statements and includes, in the opinion of the Company's
management, all adjustments necessary to present fairly the data for such
periods. The results for the thirty-six weeks ended May 9, 1998 are not
necessarily indicative of the results to be expected for the 52 weeks ending
August 29, 1998 or for any future interim period. This data should be read in
conjunction with the separate financial statements and notes thereto,
incorporated by reference herein.
<TABLE>
<CAPTION>
THIRTY-SIX
FISCAL YEAR ENDED AUGUST(1) WEEKS ENDED
---------------------------------------------------------- ----------------------
1993 1994 1995 1996 1997 MAY 10, MAY 9,
(52 WEEKS) (52 WEEKS) (52 WEEKS) (53 WEEKS) (52 WEEKS) 1997 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND SELECTED OPERATING DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............... $1,216,793 $1,508,029 $1,808,131 $2,242,633 $2,691,440 $1,745,052 $2,026,032
Cost of sales, including
warehouse
and delivery expenses.. 731,971 886,068 1,057,033 1,307,638 1,559,296 1,008,823 1,180,830
Operating, selling,
general
and administrative
expenses............... 344,060 431,219 523,440 666,061 810,793 548,339 618,015
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating profit........ 140,762 190,742 227,658 268,934 321,351 187,890 227,187
Interest income
(expense)--net......... 2,473 2,244 623 (1,969) (8,843) (5,955) (9,747)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income
taxes.................. 143,235 192,986 228,281 266,965 312,508 181,935 217,440
Income taxes............ 56,300 76,600 89,500 99,800 117,500 68,450 81,600
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income.............. $ 86,935 $ 116,386 $ 138,781 $ 167,165 $ 195,008 $ 113,485 $ 135,840
========== ========== ========== ========== ========== ========== ==========
Weighted average shares
for
basic earnings per
share.................. 142,590 144,754 146,189 148,476 150,726 150,548 152,042
Effect of dilutive stock
options................ 5,018 3,972 3,113 2,762 1,809 1,841 1,907
---------- ---------- ---------- ---------- ---------- ---------- ----------
Adjusted weighted
average shares
for diluted earnings
per share.............. 147,608 148,726 149,302 151,238 152,535 152,389 153,949
========== ========== ========== ========== ========== ========== ==========
Basic earnings per
share(2)............... $ 0.61 $ 0.80 $ 0.95 $ 1.13 $ 1.29 $ 0.75 $ 0.89
========== ========== ========== ========== ========== ========== ==========
Diluted earnings per
share(2)............... $ 0.59 $ 0.78 $ 0.93 $ 1.11 $ 1.28 $ 0.74 $ 0.88
========== ========== ========== ========== ========== ========== ==========
OTHER FINANCIAL DATA:
Cash flows from
operating activities... $ 116,976 $ 128,277 $ 180,068 $ 174,155 $ 177,547 $ 44,560 $ 147,267
EBITDA(3)............... 162,772 223,808 276,007 332,475 399,172 241,488 289,670
SELECTED OPERATING
DATA(4):
Number of stores (at
period end)............ 783 933 1,143 1,423 1,728 1,578 2,001
Total store square
footage
(at period
end)(000s)(5).......... 4,839 5,949 7,480 9,437 11,611 10,525 13,457
Percentage increase in
square footage(5)...... 20% 23% 26% 26% 23% 12% 16%
Average net sales per
store (000s)(5)........ $ 1,666 $ 1,758 $ 1,742 $ 1,702 $ 1,691 $ 1,151 $ 1,075
Average net sales per
store
square foot(5)......... $ 274 $ 280 $ 269 $ 258 $ 253 $ 173 $ 160
Percentage increase in
comparable
store net sales(6)..... 9% 9% 6% 6% 8% 8% 4%
BALANCE SHEET DATA (AT
PERIOD END):
Current assets.......... $ 378,467 $ 424,402 $ 447,822 $ 613,097 $ 778,802 $ 824,184 $ 853,279
Current liabilities..... 286,136 339,029 417,549 612,878 592,452 609,054 634,639
Working capital......... 92,331 85,373 30,273 219 186,350 215,130 218,640
Total assets............ 696,547 882,102 1,111,778 1,498,397 1,884,017 1,827,034 2,210,688
Total debt.............. 4,458 4,252 13,503 94,400 198,400 209,700 338,000
Stockholders' equity.... 396,613 528,377 684,710 865,582 1,075,208 990,528 1,224,724
</TABLE>
(Footnotes on following page)
S-5
<PAGE>
(Footnotes to table from prior page)
- --------
(1) The Company's fiscal year consists of 52 or 53 weeks ending on the last
Saturday in August.
(2) Basic and diluted earnings per share are presented in accordance with the
provisions of Statement of Financial Accounting Standards No. 128 ("SFAS
128"), "Earnings Per Share" ("EPS"). The Company adopted the provisions of
SFAS 128 in the quarter ended February 14, 1998. This statement replaced
the calculation of primary and fully diluted EPS with basic and diluted
EPS. Basic EPS is computed as net earnings divided by the weighted-average
number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur from common shares issuable through
stock-based compensation including stock options. The EPS amounts in the
1997 Form 10-K are presented in accordance with Accounting Principles Board
Opinion No. 15, "Earnings Per Share." The EPS amounts presented in the 1997
Form 10-K are equivalent to diluted EPS. Basic EPS does not vary materially
from diluted EPS for any period presented in the 1997 Form 10-K.
(3) EBITDA represents earnings before income taxes plus interest expense,
depreciation and amortization. While EBITDA should not be construed as a
substitute for income or as a better indicator of liquidity than cash flows
from operating activities (both of which are determined in accordance with
generally accepted accounting principles), it is included herein to provide
additional information with respect to the ability of the Company to meet
its future debt service, capital expenditures and working capital
requirements.
(4) Does not include the impact of TruckPro stores acquired in May 1998.
(5) Total store square footage is based on the Company's standard store formats
including normal selling, office, stockroom and receiving space, but
excluding excess space not utilized in a store's operations. Average net
sales per store and average net sales per store square foot are based on
the average of beginning and ending number of stores and store square
footage and are not weighted to take into consideration the actual dates of
store openings or expansions. For fiscal 1996, average net sales per store
and average net sales per store square foot have been adjusted to exclude
net sales for the fifty-third week.
(6) Comparable store net sales data is calculated based on the change in net
sales of all stores opened as of the beginning of the preceding full fiscal
year. Increases for fiscal 1996 have been adjusted to exclude the effect of
the fifty-third week in fiscal 1996.
S-6
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of May
9, 1998 and as adjusted to give effect to the issuance of the Debentures
offered hereby and the application of the net proceeds (estimated to be $198.3
million) therefrom as described under "Use of Proceeds."
<TABLE>
<CAPTION>
MAY 9, 1998
---------------------
AS
ACTUAL ADJUSTED
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt....................................... $ -- $ --
Long-term debt:
Senior credit facilities(1)......................... 338,000 139,700
Debentures.......................................... -- 200,000
---------- ----------
Total long-term debt.............................. $ 338,000 $ 339,700
========== ==========
Stockholders' equity:
Preferred Stock, par value $.01 per share; 1,000,000
shares authorized; no shares issued................ $ -- $ --
Common Stock, par value $.01 per share; 200,000,000
shares authorized; 152,658,339 shares
outstanding(2)..................................... 1,527 1,527
Additional paid-in capital.......................... 263,517 263,517
Retained earnings................................... 959,680 959,680
---------- ----------
Total stockholders' equity........................ $1,224,724 $1,224,724
---------- ----------
Total capitalization.............................. $1,562,724 $1,564,424
========== ==========
</TABLE>
- --------
(1) For a description of the senior credit facilities (the "Senior Credit
Facilities"), see Note D to Consolidated Financial Statements incorporated
by reference in the 1997 Form 10-K and Note C to Condensed Consolidated
Financial Statements included in the Form 10-Q for the quarter ended May
9, 1998, each of which is incorporated herein by reference. Subsequent to
May 9, 1998, the Company assumed Chief's debt and incurred additional
borrowings under its Senior Credit Facilities to fund the acquisition of
Chief. Net proceeds from the Offering will be used for general corporate
purposes, and pending such application, will be used to pay down
borrowings under the Senior Credit Facilities. See "Prospectus Supplement
Summary--Recent Developments" and "Use of Proceeds."
(2) Excludes 10,060,198 shares of Common Stock underlying stock options
outstanding at May 9, 1998 at an average exercise price of $22.39 per
share.
USE OF PROCEEDS
The net proceeds from the Offering will be used for general corporate
purposes, and pending such application, will be used to pay down borrowings
under the Senior Credit Facilities. The Senior Credit Facilities include a
five-year unsecured revolving credit facility, which extends until December
2001, with a rate of interest calculated as a function of the London Interbank
Offered Rate (LIBOR), or the lending bank's base rate, or a competitive bid
rate, at the option of the Company (the "Revolver"). At May 9, 1998, all of
the Company's borrowings were under the Revolver and totaled $338 million with
a weighted average interest rate of 5.8%. See "Capitalization" and Note D to
Consolidated Financial Statements incorporated by reference in the 1997 Form
10-K and Note C to Condensed Consolidated Financial Statements included in the
Form 10-Q for the quarter ended May 9, 1998, each of which is incorporated
herein by reference for a description of the Senior Credit Facilities.
S-7
<PAGE>
BUSINESS
INTRODUCTION
AutoZone, Inc. (the "Company") is the nation's leading specialty retailer of
automotive parts and accessories, primarily focusing on "Do-It-Yourself" ("D-
I-Y") customers. The Company began operations in 1979 and at May 9, 1998,
operated 2,001 AutoZone stores in 38 states. Each AutoZone store carries an
extensive automotive aftermarket product line, including new and re-
manufactured automotive hard parts, such as alternators, starters, water
pumps, brake shoes and pads, carburetors, clutches and engines; maintenance
items, such as oil, antifreeze, transmission, brake and power steering fluids,
engine additives, protectants and waxes; and accessories, such as car stereos
and floor mats. AutoZone stores carry parts for domestic and foreign cars,
vans and light trucks. AutoZone stores also have a commercial sales program
which provides commercial credit and prompt delivery of parts and other
products to local repair garages, dealers and service stations. This program
was offered in 1,323 of AutoZone stores at May 9, 1998. AutoZone does not
perform automotive repairs or installations.
In addition, the Company sells heavy duty truck parts and accessories
through its 43 TruckPro stores and automotive diagnostic and repair
information software through its ALLDATA subsidiary.
The Company is dedicated to a marketing and merchandising strategy to
provide customers with superior service, value and parts selection at
conveniently located, well-designed stores. The Company has implemented this
strategy primarily with knowledgeable and motivated store personnel trained to
emphasize prompt and courteous customer service, through an everyday low price
policy and by maintaining an extensive product line with an emphasis on
automotive hard parts. AutoZone stores are generally situated in high-
visibility locations and provide a distinctive merchandise presentation in an
attractive store environment.
At May 9, 1998, AutoZone stores were in the following 38 states:
<TABLE>
<S> <C> <C> <C> <C> <C>
Alabama............... 78 Kentucky........... 53 Oklahoma........... 61
Arizona............... 66 Louisiana.......... 72 Pennsylvania....... 36
Arkansas.............. 40 Maryland........... 7 Rhode Island....... 12
California............ 14 Massachusetts...... 52 South Carolina..... 50
Colorado.............. 36 Michigan........... 49 Tennessee.......... 108
Connecticut........... 20 Mississippi........ 62 Texas.............. 270
Delaware.............. 1 Missouri........... 78 Utah............... 20
Florida............... 105 Nevada............. 7 Vermont............ 1
Georgia............... 99 New Hampshire...... 10 Virginia........... 40
Illinois.............. 68 New Mexico......... 24 West Virginia...... 13
Indiana............... 91 New York........... 34 Wisconsin.......... 8
Iowa.................. 13 North Carolina..... 88 Wyoming............ 3
Kansas................ 41 Ohio............... 171
-----
Total.............. 2,001
=====
</TABLE>
MARKETING AND MERCHANDISING STRATEGY
The Company's marketing and merchandising strategy is to provide customers
with superior service, value and parts selection at conveniently located,
well-designed stores. Key elements of this strategy are as follows:
Customer Service
The Company believes that D-I-Y customers place a significant value on
customer service. As a result, the Company emphasizes customer service as the
most important element in its marketing and merchandising strategy. The
Company attempts to promote a corporate culture which "always puts customers
first" and emphasizes knowledgeable and courteous service. To do so, the
Company employs parts personnel with technical expertise to advise customers
regarding the correct part type and application, utilizes a wide range of
training
S-8
<PAGE>
methods to educate and motivate its store personnel, and provides store
personnel with significant opportunities for promotion and incentive
compensation. Customer service is enhanced by proprietary electronic parts
catalogs which assist in the selection of parts; free testing of starters,
alternators, batteries, and sensors and actuators; and liberal return and
warranty policies. The Company also has a satellite system for all its stores
which, among other things, enables the Company to speed up credit card and
check approval processes and locate parts at neighboring AutoZone stores.
AutoZone stores generally open at 8 a.m. and close between 8 and 10 p.m. (with
some open to midnight) Monday through Saturday and typically open at 9 a.m.
and close between 6 and 7 p.m. on Sunday.
ALLDATA has developed a database system that provides comprehensive and up-
to-date automotive diagnostic, service and repair information which it markets
to professional repair shops.
Product Selection
AutoZone stores offer a wide selection of automotive parts and other
products designed to cover a broad range of specific vehicle applications,
carrying between 17,000 and 21,000 stock keeping units ("SKUs"). Each AutoZone
store carries the same basic product line with some regional differences based
on climate, demographics and age and type of vehicle registration. The
Company's "flexogram" program enables the Company to tailor its hard parts
inventory to the makes and models of the automobiles in each store's trade
area. In addition to brand name products, AutoZone stores sell a number of
products, including batteries and engines, under the "AutoZone" and "Duralast"
names and a selection of automotive hard parts, including starters,
alternators, water pumps, brakes, and filters, under its private label names.
In addition to products stocked in stores, AutoZone stores offer a range of
products, consisting principally of automotive hard parts, through the Express
Parts program, which provides air-freight delivery of lower turnover products
to AutoZone stores.
Pricing
The Company employs an everyday low price strategy and attempts to be the
price leader in hard parts categories. Management believes that its prices
overall compare favorably to those of its competitors.
Commercial Sales Program
The commercial sales program in AutoZone stores provides credit and prompt
delivery of parts and other products to local repair garages, dealers and
service stations. At May 9, 1998, this program was offered in 1,323 AutoZone
stores. Commercial customers generally pay the same everyday low prices for
parts and other products as paid by the Company's D-I-Y customers.
Store Design and Visual Merchandising
The Company seeks to design and build stores with a high visual impact.
AutoZone stores are designed to have an industrial "high tech" appearance by
utilizing colorful exterior signage, exposed beams and ductwork, and brightly
lighted interiors. Merchandise in stores is attractively displayed, typically
utilizing diagonally placed gondolas for maintenance and accessory products as
well as specialized shelving for batteries and, in many stores, oil products.
The Company employs a uniform ("planogrammed") store layout system to promote
consistent merchandise presentation in all of its stores. In-store signage and
special displays are used extensively to aid customers in locating merchandise
and promoting products.
S-9
<PAGE>
Store Development and Expansion Strategy
The following table sets forth the AutoZone store development activities
during the past five fiscal years:
<TABLE>
<CAPTION>
FISCAL YEAR THIRTY SIX
------------------------------- WEEKS ENDED
1993 1994 1995 1996 1997 MAY 9, 1998
---- ---- ----- ----- ----- -----------
<S> <C> <C> <C> <C> <C> <C>
Beginning Stores.................. 678 783 933 1,143 1,423 1,728
New Stores........................ 107 151 210 280 308 274
Replaced Stores(1)................ 20 20 29 31 17 9
Closed Stores(1).................. (22) (21) (29) (31) (20) (10)
--- --- ----- ----- ----- -----
Ending Stores..................... 783 933 1,143 1,423 1,728 2,001
=== === ===== ===== ===== =====
</TABLE>
- --------
(1) Replaced stores are either relocations or conversions of existing smaller
stores to larger formats. Closed stores include replaced stores.
The Company opened 305 net new stores in fiscal 1997, representing an
increase in total square footage from fiscal 1996 of approximately 23%. For
the thirty-six week period ended May 9, 1998, including Auto Palace stores,
the Company opened 273 net new stores. Excluding the acquisition of Chief, the
Company expects to add approximately 450 new stores in fiscal 1998 including
stores acquired through the Auto Palace and TruckPro acquisitions.
At May 9, 1998, the Company operated 43 TruckPro stores in 14 states.
The Company believes that expansion opportunities exist both in markets
which it does not currently serve and in markets where it can achieve a larger
presence for both AutoZone and TruckPro stores. The Company attempts to obtain
high visibility sites in high traffic locations and undertakes substantial
research prior to entering new markets. Key factors in selecting new site and
market locations include population, demographics, vehicle profile and number
and strength of competitors' stores. The Company generally seeks to open new
stores within or contiguous to existing market areas and attempts to cluster
development in new urban markets in a relatively short period of time in order
to achieve economies of scale in advertising and distribution costs. The
Company may also expand its operations through acquisitions of existing stores
from third parties. The Company regularly evaluates potential acquisition
candidates, in new as well as existing market areas.
AutoZone's net sales have grown significantly in the past several years,
increasing from $1,217 million in fiscal 1993 to $2,691 million in fiscal
1997. The continued growth and financial performance of the Company will be
dependent, in large part, upon management's ability to open new stores on a
profitable basis in existing and new markets and also upon its ability to
continue to increase sales in existing stores. There can be no assurance the
Company will continue to be able to open and operate new stores on a timely
and profitable basis, will be able to successfully integrate into its
operations stores that it acquires from third parties or will continue to
attain increases in comparable store sales.
S-10
<PAGE>
STORE OPERATIONS
Store Formats
Substantially all AutoZone stores are based on standard store formats
resulting in generally consistent appearance, merchandising and product mix.
Although the smaller store formats were generally used by the Company for its
earlier stores, the Company has increasingly used larger format AutoZone
stores starting with its 8,100 square foot store introduced in 1987, its 6,600
square foot store introduced in 1991 and its 7,700 square foot store
introduced in 1993. In fiscal 1998, the 6,600 square foot and larger store
formats are expected to account for more than 85% of new and replacement
stores. Total AutoZone store space as of May 9, 1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF TOTAL STORE
AUTOZONE STORE FORMAT AUTOZONE STORES SQUARE FOOTAGE(1)
--------------------- --------------- -----------------
<S> <C> <C>
8,100 sq. ft. ............................. 253 2,049,300
7,700 sq. ft. ............................. 459 3,534,300
6,600 sq. ft. ............................. 784 5,174,400
5,400 sq. ft. ............................. 485 2,619,000
4,000 sq. ft. ............................. 20 80,000
----- ----------
Total.................................... 2,001 13,457,000
===== ==========
</TABLE>
- --------
(1) Total store square footage is based on standard AutoZone store formats,
including normal selling, office, stockroom and receiving space, but
excluding excess space not utilized in a store's operations.
Approximately 85% to 90% of each AutoZone store's square footage is selling
space, of which approximately 30% to 40% is dedicated to automotive parts
inventory. The parts inventory area is fronted by a counter staffed by
knowledgeable parts personnel and equipped with proprietary electronic parts
catalogs. The remaining selling space contains gondolas for accessories,
maintenance items, including oil and air filters, additives and waxes, and
other parts together with specifically designed shelving for batteries and, in
many stores, oil products.
As of May 9, 1998, approximately three quarters of the AutoZone stores were
freestanding, with the balance principally located within strip shopping
centers. Freestanding large format stores typically have parking for
approximately 45 to 50 cars on a lot of approximately 3/4 to one acre. The
Company's 5,400 and 4,000 square foot stores typically have parking for
approximately 25 to 40 cars and are usually located on a lot of approximately
1/2 to 3/4 acre.
The average Chief store is substantially smaller in square footage than the
typical AutoZone store. At June 28, 1998, Chief operated 560 stores averaging
4,133 square feet.
Store Personnel and Training
While subject to fluctuation based on seasonal volumes and actual store
sales, the 4,000, 5,400 and 6,600 square foot AutoZone stores typically employ
9 to 18 persons, including a manager and an assistant manager, and the larger
stores typically employ 9 to 20 persons. The Company generally hires personnel
with prior automotive experience. Although the Company relies primarily on on-
the-job training, it also provides formal training programs, which include
regular store meetings on specific sales and product issues, standardized
training manuals and a specialist program under which store personnel can
obtain Company certification in several areas of technical expertise. The
Company supplements training with frequent store visits by management.
The Company provides financial incentives to store managers through an
incentive compensation program and through participation in the Company's
stock option plan. In addition, the Company's growth has provided
opportunities for the promotion of qualified employees. Management believes
these opportunities are an important factor in the Company's ability to
attract, motivate and retain quality personnel.
S-11
<PAGE>
The Company supervises its AutoZone stores through area advisors, who
supervise approximately five to six stores each and who report to district
managers. District managers, who supervise approximately 45 to 50 stores each,
in turn, report to seven regional managers. Purchasing, merchandising,
advertising, accounting, cash management, store development, systems
technology and support and other support functions are centralized in the
Company's store support center in Memphis, Tennessee. The Company believes
that such centralization enhances consistent execution of the Company's
merchandising and marketing strategy at the store level.
Store Automation
In order to assist store personnel in providing a high level of customer
service, all AutoZone stores have proprietary electronic parts catalogs that
provide parts information based on the make, model and year of an automobile.
The catalog display screens are placed on the hard parts inventory counter so
that both employees and customers can view the screen. In addition, the
Company's satellite system enables the stores to speed up credit card and
check approval processes and locate parts at neighboring AutoZone stores.
All AutoZone stores utilize the Company's computerized Store Management
System, which includes optical character recognition scanning and point-of-
sale data collection terminals. The Store Management System provides
productivity benefits, including lower administrative requirements and
improved personnel scheduling at the store level, as well as enhanced
merchandising information and improved inventory control. The Company believes
the Store Management System also enhances customer service through faster
processing of transactions and simplified warranty and product return
procedures.
PURCHASING AND DISTRIBUTION
Merchandise is selected and purchased for all stores at the Company's store
support center in Memphis. No one class of product accounts for as much as 10%
of the Company's total sales. In fiscal 1997, the Company purchased products
from approximately 300 suppliers and no single supplier accounted for more
than 7% of the Company's total purchases. During fiscal year 1997, the
Company's ten largest suppliers accounted for approximately 33% of the
Company's purchases. The Company generally has few long-term contracts for the
purchase of merchandise. Management believes that the Company's relationships
with suppliers are excellent. Management also believes that alternative
sources of supply exist, at similar cost, for substantially all types of
product sold.
Substantially all of the Company's merchandise is shipped by vendors to the
Company's distribution centers. Orders are typically placed by stores on a
weekly basis with orders shipped from the warehouse in trucks operated by the
Company on the following day.
COMPETITION
The Company competes principally in the D-I-Y and, more recently, the
commercial automotive and heavy duty truck parts aftermarkets. Although the
number of competitors and the level of competition experienced by the
Company's stores varies by market area, the automotive and heavy duty truck
parts aftermarkets are highly fragmented and generally very competitive. The
Company believes that the largest share of the automotive aftermarket is held
by independently owned jobber stores which, while principally selling to
wholesale accounts, have significant D-I-Y sales. The Company also competes
with other automotive specialty retailing chains and, in certain product
categories, such as oil and filters, with discount and general merchandise
stores. The principal competitive factors which affect the Company's business
are store location, customer service, product selection and quality and price.
While the Company believes that it competes effectively in its various
geographic areas, certain of its competitors have substantial resources or
have been operating longer in particular geographic areas.
TRADEMARKS
The Company has registered several service marks and trademarks in the
United States Patent and Trademark office, including its service mark
"AutoZone" and its trademarks "AutoZone," "Duralast,"
S-12
<PAGE>
"Valucraft," "Ultra Spark," "Deutsch," "Albany," "Alldata" and "TruckPro." The
Company believes that the "AutoZone" service mark and trademarks have become
an important component in its merchandising and marketing strategy.
EMPLOYEES
As of May 9, 1998, the Company employed approximately 33,000 persons,
approximately 24,000 of whom were employed full-time. Approximately 86% of the
Company's employees were employed in stores or in direct field supervision,
approximately 7% in distribution centers and approximately 7% in store support
functions.
Chief has a collective bargaining agreement with respect to approximately 20
truck drivers and yard employees at its Ontario, California, distribution
center. The Company has never experienced any material labor disruption.
Management believes that its labor relations are generally good.
LEGAL PROCEEDINGS
Chief, a wholly owned subsidiary of the Company, is a defendant in a class
action entitled "Doug Winfrey, et al. on their own behalf and on behalf of a
class and all others similarly situated, v. Chief Auto Parts Inc. et al.,"
filed in The Superior Court of California, County of San Joaquin on August 22,
1995 and then transferred to The Superior Court of California, County of San
Francisco on October 26, 1995. The Superior Court denied the plaintiff's
motion for class certification on December 7, 1996. On February 6, 1998, the
Court of Appeal reversed the Superior Court's order denying class
certification. No substantive proceedings regarding the merits of this lawsuit
have yet occurred.
The plaintiffs allege that Chief had a policy and practice of denying hourly
employees in California mandated rest periods during their scheduled hours of
work. The plaintiffs are seeking damages, restitution, disgorgement of
profits, statutory penalties, declaratory relief, injunctive relief,
prejudgment interest, and reasonable attorneys fees, expenses and costs.
Management is unable to predict the outcome of this lawsuit at this time. The
Company believes that the potential damages recoverable by any single
plaintiff against Chief are minimal. However, if the plaintiff class were to
prevail on all their claims, the amount of damages could be substantial. Chief
is vigorously defending against this action.
The Company currently and from time to time is involved in various other
legal proceedings incidental to the conduct of its business. Although the
amount of liability that may result from these proceedings cannot be
ascertained, the Company does not currently believe that, in the aggregate,
they will result in liabilities material to the Company's financial condition
or results of operations.
S-13
<PAGE>
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to in the Prospectus as "Debt Securities") supplements, and
to the extent inconsistent therewith replaces, the description of the general
terms and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made.
GENERAL
The Debentures are to be issued under an Indenture, dated as of , 1998
(the "Senior Indenture"), between the Company and The First National Bank of
Chicago, as trustee (the "Trustee").
The Debentures will be issued in fully registered book-entry form without
coupons and in denominations of $1,000 and integral multiples thereof. The
Company does not intend to apply for the listing of the Debentures on a
national securities exchange.
The following statements relating to the Debentures and the Senior Indenture
are summaries of certain provisions thereof and are subject to the detailed
provisions of the Senior Indenture, to which reference is hereby made for a
complete statement of such provisions. The summary description of the Senior
Indenture is also contained in the Prospectus.
The Debentures will be unsecured senior obligations of the Company, will
mature on , will be limited to $200 million aggregate principal amount
and will bear interest at the rate set forth on the cover page of this
Prospectus Supplement from date of issuance, payable semi-annually on each
and , commencing , 1999 to the persons in whose names the
Debentures are registered at the close of business on the immediately
preceding each or the immediately preceding each .
Interest will be computed on the basis of a 360-day year composed of twelve
30-day months. Payments of principal and interest to owners of book-entry
interests (as described below) are expected to be made in accordance with the
procedures of DTC and its participants in effect from time to time. The
Debentures may not be redeemed prior to maturity.
BOOK-ENTRY SYSTEM
It is expected that the Debentures initially will be represented by one or
more Global Debentures in definitive fully registered form without coupons and
will be deposited with, or on behalf of, DTC and registered in the name of
Cede & Co., as the nominee of DTC. Except under the circumstances described in
the Prospectus under the caption "Description of Debt Securities--Global Debt
Securities," the Debentures will not be issuable in definitive form. Unless
and until they are exchanged in whole or in part for the individual Debentures
represented thereby, any interests in the Global Debenture may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of
DTC to DTC or another nominee of DTC or by DTC or any nominee of DTC to a
successor depository or any nominee of such successor. See "Description of
Debt Securities--Global Debt Securities" in the Prospectus.
DTC has advised the Company and the Underwriters as follows: DTC is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange,
S-14
<PAGE>
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly. The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission (the "Commission").
SAME-DAY FUNDS SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters (as defined
below in "Underwriting") in immediately available funds. All payments of
principal and interest in respect of Debentures in book-entry form will be
made by the Company in immediately available funds to the accounts specified
by DTC.
CONCERNING THE TRUSTEE
The First National Bank of Chicago will be the trustee under the Senior
Indenture. The Company uses an affiliate of the Trustee as transfer agent for
its Common Stock, and it maintains deposit accounts and conducts other banking
transactions with the Trustee and its affiliates in the ordinary course of
business. The First National Bank of Chicago is one of a group of lenders
under the Company's Revolver.
S-15
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement") between the Company and the underwriters named below
(the "Underwriters"), the Company has agreed to sell to each of the
Underwriters, and each of the Underwriters has severally agreed to purchase,
the respective principal amount of the Debentures set forth opposite its name
below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................... $
Donaldson, Lufkin & Jenrette Securities Corporation............
Lehman Brothers Inc. ..........................................
------------
Total.......................................................... $200,000,000
============
</TABLE>
In the Purchase Agreement, the Underwriters have severally agreed, subject
to the terms and conditions set forth therein, to purchase all of the
Debentures offered hereby if any of the Debentures are purchased. The
Underwriters have advised the Company that they propose initially to offer the
Debentures to the public at the public offering price set forth on the cover
page of this Prospectus Supplement, and to certain dealers at such price less
a concession not in excess of . % of the principal amount. The Underwriters
may allow, and such dealers may reallow, a discount not in excess of . % of
the principal amount of the Debentures to certain other dealers. After the
initial public offering, the public offering price, concession and discount
may be changed.
The Debentures are a new issue of securities with no established trading
market. The Company currently has no intention to list the Debentures on any
securities exchange. The Company has been advised by the Underwriters that,
following the completion of the Offering, the Underwriters presently intend to
make a market in the Debentures, as permitted by applicable laws and
regulations. The Underwriters, however, are under no obligation to do so and
may discontinue any market-making at any time without notice and at the sole
discretion of the Underwriters. No assurance can be given as to the liquidity
of the trading market for the Debentures.
In order to facilitate the offering of the Debentures, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price
of the Debentures.
Until the distribution of the Debentures is completed, the rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Debentures. As an exemption to these
rules, the Underwriters are permitted to engage in certain transactions that
stabilize the price of the Debentures. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Debentures. If the Underwriters create a short position in the Debentures in
connection with this offering (i.e., if they sell more Debentures than are set
forth on the cover page of this Prospectus Supplement), the Underwriters may
reduce that short position by purchasing Debentures in the open market. In
general, purchases of a security for the purpose of stabilization or to reduce
a short position could cause the price of the security to be higher than it
might be in the absence of such purchases.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Debentures. In
addition, neither the Company nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act or to contribute
to payments the Underwriters may be required to make in respect thereof.
S-16
<PAGE>
LEGAL MATTERS
The validity of the Debentures offered hereby will be passed upon for the
Company by Latham & Watkins, Los Angeles, California, and certain other legal
matters with respect to the Debentures offered hereby will be passed upon for
the Company by Schreck Morris, Las Vegas, Nevada. The validity of the
Debentures offered hereby will be passed upon for the Underwriters by Brown &
Wood LLP, New York, New York. Brown & Wood LLP may rely on Schreck Morris with
respect to all matters of Nevada law. Certain partners of Latham & Watkins,
members of their families, related persons and others, own or have an indirect
interest in less than 1% of the Common Stock of the Company. Such persons do
not have the power to vote or dispose of such shares of Common Stock.
S-17
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 10, 1998
PROSPECTUS
AUTOZONE, INC.
$400,000,000
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK,
DEBT WARRANTS, EQUITY WARRANTS AND UNITS
-----------
AutoZone, Inc. (the "Company"), directly or through agents, dealers or
underwriters designated from time to time, may offer, issue and sell, in one or
more series or issuances, up to $400,000,000 in the aggregate of (a) secured or
unsecured debt securities (the "Debt Securities") of the Company, in one or
more series, which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"), (b) shares of preferred stock of the Company, par value $.01 per
share (the "Preferred Stock"), in one or more series, (c) shares of common
stock of the Company, par value $.01 per share (the "Common Stock"), (d)
warrants to purchase Debt Securities (the "Debt Warrants"), (e) warrants to
purchase Common Stock or Preferred Stock (the "Equity Warrants" and together
with the Debt Warrants, the "Warrants") or (f) units consisting of two or more
of the foregoing securities (the "Units"), each on terms to be determined at
the time of sale. The Debt Securities may be issued as exchangeable and/or
convertible Debt Securities exchangeable for or convertible into shares of
Common Stock or Preferred Stock. The Preferred Stock may also be exchangeable
for and/or convertible into shares of Common Stock or another series of
Preferred Stock. The Debt Securities, the Preferred Stock, the Common Stock,
the Warrants and the Units are collectively referred to herein as the
"Securities." When a particular series of Securities is offered, a supplement
to this Prospectus (each, a "Prospectus Supplement") will be delivered with
this Prospectus. The Prospectus Supplement will set forth the terms of the
offering and sale of the offered Securities.
The Common Stock is traded on the New York Stock Exchange under the symbol
"AZO." Any Common Stock sold pursuant to a Prospectus Supplement will be listed
on the New York Stock Exchange. On July 2, 1998, the last reported sale price
of the Common Stock on the New York Stock Exchange was $33.5625 per share. The
Company has not yet determined whether any of the Debt Securities, Preferred
Stock, Warrants or Units offered hereby will be listed on any exchange or over-
the-counter market. If the Company decides to seek listing of any such
Securities, the Prospectus Supplement relating thereto will disclose such
exchange or market.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Securities will be sold directly by the Company, through agents, dealers
or underwriters as designated from time to time, or through a combination of
such methods. If agents of the Company or any dealers or underwriters are
involved in the sale of the Securities, the names of such agents, dealers or
underwriters and any applicable commissions or discounts will be set forth in
the applicable Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements with agents, dealers and underwriters.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by the applicable Prospectus Supplement.
-----------
The date of this Prospectus is July , 1998.
<PAGE>
CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including any documents that are incorporated by reference
as set forth in "Information Incorporated by Reference," contains forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are
indicated by words or phrases such as "anticipate," "estimate," "project,"
"believe," and similar words or phrases. Such statements are subject to
certain risks, uncertainties or assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated or projected.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act with respect to the Securities offered hereby. This Prospectus
does not contain all of the information set forth in the Registration
Statement, part of which has been omitted in accordance with the rules and
regulations of the Commission. For further information about the Company and
the Securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated therein. Statements made in this Prospectus as to the contents of
any agreement or other document referred to herein are qualified by reference
to the copy of such agreement or other document filed as an exhibit to the
Registration Statement or such other document, each such statement being
qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files periodic reports, proxy statements and
other information with the Commission. The Registration Statement, including
the exhibits thereto, as well as such reports and other information filed by
the Company with the Commission, can be inspected, without charge, and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington D.C., 20549; 7 World Trade Center,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the
Commission, and certain of the Company's filings are available at such web
site. Copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Reports and other information concerning the Company can
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
2
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended August
30, 1997 ("1997 Form 10-K");
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
November 22, 1997 and February 14, 1998 and the Company's Quarterly Report
on Form 10-Q/A for the quarter ended May 9, 1998;
(3) the Company's Current Reports on Form 8-K dated March 18, 1997, May
11, 1998 and June 29, 1998; and
(4) all other documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and before the termination of the offering, which shall be
deemed to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is incorporated
or deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The earnings per share ("EPS") amounts in the 1997 Form 10-K and the Form
10-Q for the quarter ended November 22, 1997 are presented in accordance with
Accounting Principles Board Opinion No. 15 "Earnings Per Share" ("APB 15"),
which was superceded with the adoption of Statement of Financial Accounting
Standards No. 128 "Earnings Per Share" ("SFAS 128"), initially adopted for the
quarterly period ended February 14, 1998. The presentation of EPS in the 1997
Form 10-K and Form 10-Q for the quarter ended November 22, 1997 incorporated
herein by reference have not been restated to conform to the provisions of
SFAS 128, as the presentation does not vary materially from the APB 15
presentation.
This Prospectus may not be used to consummate sales of offered Securities
unless accompanied by a Prospectus Supplement. The delivery of this Prospectus
together with a Prospectus Supplement relating to particular offered
Securities in any jurisdiction shall not constitute an offer in the
jurisdiction of any other Securities covered by this Prospectus.
The Company will provide without charge to each person (including any
beneficial owner) to whom this Prospectus is delivered, upon request, copies
of any documents incorporated into this Prospectus by reference (other than
exhibits incorporated by reference into such document). Requests for documents
should be submitted to AutoZone, Inc., Attention: Investor Relations, 123
South Front Street, Memphis, Tennessee 38103 (telephone (901) 495-7185). The
information relating to the Company contained in this Prospectus does not
purport to be comprehensive and should be read together with the information
contained in the documents incorporated or deemed to be incorporated by
reference herein.
3
<PAGE>
THE COMPANY
The Company was organized in 1979 and is the nation's leading specialty
retailer of automotive parts and accessories, focusing primarily on "Do-It-
Yourself" customers. Each AutoZone store carries an extensive automotive
aftermarket product line, including new and remanufactured automotive hard
parts, such as alternators, starters, water pumps, brake shoes and pads,
carburetors, clutches and engines; maintenance items, such as oil, antifreeze,
transmission, brake and power steering fluids, engine additives, protectants
and waxes; and accessories, such as car stereos and floor mats. AutoZone
stores carry parts for domestic and foreign cars, vans and light trucks.
AutoZone stores also have a commercial sales program which provides commercial
credit and prompt delivery of parts and other products to local repair
garages, dealers and service stations. The Company does not perform automotive
repairs or installations.
In addition, the Company sells heavy duty truck parts through its TruckPro
stores and automotive diagnostic and repair information software through its
ALLDATA subsidiary.
The Company is dedicated to a marketing and merchandising strategy to
provide customers with superior service, value and parts selection at
conveniently located, well-designed stores. The Company has implemented this
strategy primarily through knowledgeable and motivated store personnel trained
to emphasize prompt and courteous customer service, through an everyday low
price policy and by maintaining an extensive product line with an emphasis on
automotive hard parts. The Company's stores are generally situated in high-
visibility locations and provide a distinctive merchandise presentation in an
attractive store environment.
The Company's executive offices are located at 123 South Front Street,
Memphis, Tennessee 38103, and its telephone number is (901) 495-6500. The
Company is a Nevada corporation.
References in this Prospectus to the "Company" refer to AutoZone, Inc. and
its consolidated subsidiaries unless the context otherwise requires.
4
<PAGE>
USE OF PROCEEDS
Except as otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of Securities offered hereby will be used for general corporate
purposes, which may include the reduction of outstanding indebtedness, working
capital increases, acquisitions or capital expenditures. Pending the
application of the net proceeds, the Company may invest such proceeds in
short-term, interest-bearing instruments or other investment-grade securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated:
<TABLE>
<CAPTION>
THIRTY-SIX
FISCAL YEAR ENDED WEEKS ENDED
-----------------------------------------------------------------------
AUGUST 28, AUGUST 27, AUGUST 26, AUGUST 31, AUGUST 30, MAY 10, MAY 9,
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ---------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
20.1 26.3 30.2 23.0 15.9 14.0 12.3
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. Earnings consist of income before income taxes plus
fixed charges less capitalized interest. Fixed charges consist of interest on
all indebtedness, amortization of debt issuance costs and the interest portion
of rent expense.
GENERAL DESCRIPTION OF SECURITIES
The Company directly or through agents, dealers or underwriters designated
from time to time, may offer, issue and sell, together or separately, up to
$400,000,000 in the aggregate of (a) secured or unsecured debt securities (the
"Debt Securities") of the Company, in one or more series, which may be either
senior debt securities (the "Senior Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities"), (b) shares of preferred stock
of the Company, par value $0.01 per share (the "Preferred Stock"), in one or
more series, (c) shares of common stock of the Company, par value $0.01 per
share (the "Common Stock"), (d) warrants to purchase Debt Securities (the
"Debt Warrants"), (e) warrants to purchase Common Stock or Preferred Stock
(the "Equity Warrants" and together with the Debt Warrants, the "Warrants") or
(f) units consisting of two or more of the foregoing securities (the "Units"),
each on terms to be determined at the time of sale. The Debt Securities may be
issued as exchangeable and/or convertible Debt Securities exchangeable for or
convertible into shares of Common Stock or Preferred Stock. The Preferred
Stock may also be exchangeable for and/or convertible into shares of Common
Stock or another series of Preferred Stock. The Debt Securities, the Preferred
Stock, the Common Stock, the Warrants and the Units are collectively referred
to herein as the "Securities." When a particular series of Securities is
offered, a supplement to this Prospectus (each, a "Prospectus Supplement")
will be delivered with this Prospectus. The Prospectus Supplement will set
forth the terms of the offering and sale of the offered Securities.
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement,
and the extent, if any, to which such general provisions do not apply to the
Debt Securities so offered, will be described in the Prospectus Supplement
relating to such Debt Securities.
The Senior Debt Securities will be issued under an indenture (the "Senior
Indenture") and the Subordinated Debt Securities will be issued under an
indenture (the "Subordinated Indenture"). Unless the context otherwise
requires, each of the Senior Indenture and the Subordinated Indenture is
referred to herein as the "Indenture." Each of the Indentures shall be entered
into between the Company and a trustee (the "Trustee"). The terms of the Debt
Securities will include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (the "TIA") as
in effect on the date of the Indenture. The Debt Securities will be subject to
all such terms, and potential purchasers of the Debt Securities are referred
to the Indenture and the TIA for a statement thereof. The following summary of
certain provisions of the Indenture does not purport to be complete and is
qualified in its entirety by reference to the Indenture, including the
definitions therein of certain terms used below. A copy of the proposed form
of Indenture has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. As used under this caption, unless the
context otherwise requires, "Offered Debt Securities" shall mean the Debt
Securities offered by this Prospectus and an accompanying Prospectus
Supplement.
At May 9, 1998, the Company and its subsidiaries had no secured indebtedness
outstanding (excluding capital leases) and the Company had approximately $338
million of Senior Indebtedness (as defined below) outstanding. At May 9, 1998,
the Company's subsidiaries had no indebtedness outstanding (excluding capital
leases).
GENERAL
The Indenture will provide for the issuance of Debt Securities in series and
will not limit the principal amount of Debt Securities which may be issued
thereunder. (Section 301). In addition, except as provided under "Certain
Other Covenants" or in the Prospectus Supplement relating to such Debt
Securities, the Indenture will not limit the amount of additional indebtedness
the Company may incur.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Offered Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of the Offered Debt
Securities; (2) whether the Offered Debt Securities are Senior Debt Securities
or Subordinated Debt Securities or any combination thereof; (3) the price or
prices (expressed as a percentage of the aggregate principal amount thereof)
at which the Offered Debt Securities will be issued; (4) any limit upon the
aggregate principal amount of the Offered Debt Securities; (5) the date or
dates on which the principal of the Offered Debt Securities is payable; (6)
the rate or rates (which may be fixed or variable) at which the Offered Debt
Securities will bear interest, if any, or the manner in which such rate or
rates are determined; (7) the date or dates from which any such interest will
accrue, the interest payment dates on which any such interest on the Offered
Debt Securities will be payable and the record dates for the determination of
holders to whom such interest is payable; (8) the place or places where the
principal of and any interest on the Offered Debt Securities will be payable;
(9) the obligation of the Company, if any, to redeem, repurchase or repay the
Offered Debt Securities in whole or in part pursuant to any sinking fund or
analogous provisions or at the option of the holders and the price or prices
at which and the period or periods within which and the terms and conditions
upon which the Offered Debt Securities shall be redeemed, repurchased or
repaid pursuant to such obligation; (10) the denominations in which any
Offered Debt Securities will be issuable, if other than denominations of U.S.
$1,000 and any integral multiple thereof; (11) if other than the principal
amount thereof, the portion of the principal amount of the Offered Debt
Securities of the series which will be payable upon declaration of the
acceleration of the maturity thereof; (12) any addition to or change in the
covenants which apply to the Offered Debt Securities; (13) any addition to or
change in the Events of Default with respect to the Offered Debt Securities;
(14) whether the Offered Debt
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Securities will be issued in whole or in part in global form, the terms and
conditions, if any, upon which such global Offered Debt Securities may be
exchanged in whole or in part for other individual securities, and the
depositary for the Offered Debt Securities; (15) the terms and conditions, if
any, upon which the Offered Debt Securities shall be exchanged for or
converted into Common Stock or Preferred Stock; (16) the nature and terms of
the security for any secured Offered Debt Securities; (17) the form and terms
of any guarantee of the Offered Debt Securities; (18) if the principal amount
payable at the stated maturity of any of such Offered Debt Securities will not
be determinable as of any one or more dates prior to the stated maturity, the
amount which will be deemed to be such principal amount as of any such date
for any purpose, including the principal amount thereof which will be due and
payable upon any maturity other than the stated maturity or which will be
deemed to be outstanding as of any such date (or, in any such case, the manner
in which such deemed principal amount is to be determined); (19) if
applicable, that such Offered Debt Securities, in whole or any specified part,
are defeasible pursuant to the provisions of the Indenture described under "--
Defeasance and Covenant Defeasance--Defeasance and Discharge" or "--Defeasance
and Covenant Defeasance--Covenant Defeasance", or under both such captions;
(20) whether the Offered Debt Securities will be listed on any securities
exchange or included in any other market or quotation or trading system; (21)
any trustee or fiscal or authenticating or payment agent, issuing and paying
agent, transfer agent or registrar or any other person or entity to act in
connection with such Offered Debt Securities for or on behalf of the holders
thereof or the Company or an affiliate; and (22) any other terms of the
Offered Debt Securities which terms shall not be inconsistent with the
provisions of the Indenture.
Debt Securities may be issued at a discount from their principal amount
("Original Issue Discount Securities"). Federal income tax considerations and
other special considerations applicable to any such Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Debt Securities may be issued in bearer form, with or without coupons.
Federal income tax considerations and other special considerations applicable
to bearer securities will be described in the applicable Prospectus
Supplement.
STATUS OF DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Company.
The obligations of the Company pursuant to Subordinated Debt Securities will
be subordinate in right of payment to all Senior Indebtedness of the Company.
With respect to any series of Subordinated Debt Securities, "Senior
Indebtedness" of the Company will be defined to mean the principal of, and
premium, if any, and any interest (including interest accruing subsequent to
the commencement of any proceeding for the bankruptcy or reorganization of the
Company under any applicable bankruptcy, insolvency or similar law now or
hereafter in effect) and all other monetary obligations of every kind or
nature due on or in connection with (a) all indebtedness of the Company
(including Senior Debt Securities) whether heretofore or hereafter incurred
(i) for borrowed money or (ii) in connection with the acquisition by the
Company or a subsidiary of the Company of assets other than in the ordinary
course of business, for the payment of which the Company is liable directly or
indirectly by guarantee, letter of credit, obligation to purchase or acquire
or otherwise, or the payment of which is secured by a lien, charge or
encumbrance on assets acquired by the Company, (b) amendments, modifications,
renewals, extensions and deferrals of any such indebtedness, and (c) any
indebtedness issued in exchange for any such indebtedness (clauses (a) through
(c) hereof being collectively referred to herein as "Debt"); provided, however,
that the following will not constitute Senior Indebtedness with respect to
Subordinated Debt Securities: (1) any Debt as to which, in the instrument
evidencing such Debt or pursuant to which such Debt was issued, it is expressly
provided that such Debt is subordinate in right of payment to all Debt of the
Company not expressly subordinated to such Debt; and (2) any Debt of the Company
in respect of Subordinated Debt Securities and any Debt which by its terms
refers explicitly to the Subordinated Debt Securities and states that such Debt
shall not be senior in right of payment.
No payment pursuant to the Subordinated Debt Securities may be made unless
all amounts of principal, premium, if any, and interest then due on all
applicable Senior Indebtedness of the Company shall have been
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paid in full or if there shall have occurred and be continuing beyond any
applicable grace period a default in any payment with respect to any such
Senior Indebtedness, or if there shall have occurred any event of default with
respect to any such Senior Indebtedness permitting the holders thereof to
accelerate the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. (Subordinated Indenture,
Section 1401). However, the Company may make payments pursuant to the
Subordinated Debt Securities if a default in payment or an event of default
with respect to the Senior Indebtedness permitting the holder thereof to
accelerate the maturity thereof has occurred and is continuing and judicial
proceedings with respect thereto have not been commenced within a certain
number of days of such default in payment or event of default. Upon any
distribution of the assets of the Company upon dissolution, winding-up,
liquidation or reorganization, the holders of Senior Indebtedness of the
Company will be entitled to receive payment in full of principal, premium, if
any, and interest (including interest accruing subsequent to the commencement
of any proceeding for the bankruptcy or reorganization of the Company under
any applicable bankruptcy, insolvency or similar law now or hereafter in
effect) before any payment is made on the Subordinated Debt Securities. By
reason of such subordination, in the event of insolvency of the Company,
holders of Senior Indebtedness of the Company may receive more, ratably, and
holders of the Subordinated Debt Securities having a claim pursuant to the
Subordinated Debt Securities may receive less, ratably, than the other
creditors of the Company. Such subordination will not prevent the occurrence
of any event of default (an "Event of Default") in respect of the Subordinated
Debt Securities.
If the Company offers Debt Securities, the applicable Prospectus Supplement
will set forth the aggregate amount of outstanding indebtedness, if any, as of
the most recent practicable date that by the terms of such Debt Securities
would be senior to such Debt Securities. The applicable Prospectus Supplement
will also set forth any limitation on the issuance by the Company of any
additional Senior Indebtedness.
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged for
or converted into shares of Common Stock or Preferred Stock will be set forth
in the Prospectus Supplement relating thereto. (Senior Indenture, Article 14;
Subordinated Indenture, Article 15).
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, payment
of principal, premium, if any, and any interest on the Debt Securities will be
payable, and the exchange of and the transfer of Debt Securities will be
registerable, at the office of the Trustee or at any other office or agency
maintained by the Company for such purpose subject to the limitations of the
Indenture. (Sections 305 and 1002). Unless otherwise indicated in the
applicable Prospectus Supplement, the Debt Securities will be issued in
denominations of U.S. $1,000 or integral multiples thereof. No service charge
will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge imposed in connection therewith.
(Sections 302 and 305).
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities (the "Global Securities") that will be deposited with a
depositary (the "Depositary") or its nominee identified in the applicable
Prospectus Supplement. In such a case, one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of outstanding Debt Securities of the series to
be represented by such Global Security or Securities. Each Global Security
will be deposited with such Depositary or nominee or a custodian therefor and
will bear a legend regarding the restrictions on exchanges and registration of
transfer thereof referred to below and any such other matters as may be
provided for pursuant to the applicable Indenture.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be transferred to, or registered or
exchanged for Debt Securities registered in the name of, any person or entity
other than the Depositary for such Global Security or any nominee of such
Depositary, and no such transfer
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may be registered, unless (i) the Depositary has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Security or
has ceased to be qualified to act as such as required by the applicable
Indenture, (ii) the Company executes and delivers to the Trustee an order that
such Global Security shall be so transferable, registerable and exchangeable,
and such transfers shall be registerable, or (iii) there shall exist such
circumstances, if any, as may be described in the applicable Prospectus
Supplement. All Debt Securities issued in exchange for a Global Security or
any portion thereof will be registered in such names as the Depositary may
direct. (Section 303).
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. The Company expects that
the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on
behalf of the Depositary for such Global Security, the Depositary will credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Security to the
accounts of institutions that have accounts with such Depositary or its
nominee ("participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Security will be limited to participants
or persons that may hold interests through participants. Ownership of
beneficial interests by participants in such Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificate form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificate form and will not be
considered the holders thereof for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture. If
the Company requests any action of holders or if an owner of a beneficial
interest in such Global Security desires to give any notice or take any action
a holder is entitled to give or take under the Indenture, the Depositary will
authorize the participants to give such notice or take such action, and
participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Notwithstanding any other provisions to the contrary in the Indenture, the
rights of the beneficial owners of the Debt Securities to receive payment of
the principal and premium, if any, of and interest on such Debt Securities, on
or after the respective due dates expressed in such Debt Securities, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
beneficial owners.
Principal of and any interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
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OPTIONAL REDEMPTION
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities will be redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of such Debt Securities or (ii) as determined by an
Independent Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon 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, in each case,
accrued interest thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus %.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Debt Securities to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Debt Securities.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such Business Day, (A) the
Reference Treasury Dealer Quotations for such redemption date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (B) if
the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation and
Lehman Brothers Inc. and their respective successors; provided, however, that
if any of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Debt Securities to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date, interest will cease to accrue on the Debt Securities or
portions thereof called for redemption.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture will provide that the Company may not consolidate with or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its property or assets to any person in
one or more related transactions unless, among other things, (a) the Company
is the surviving corporation or the entity or the person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a
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corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia; (b) the person formed by or
surviving any such consolidation or merger (if other than the Company) or the
entity or person to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made assumes all the obligations of the
Company under the Debt Securities and the Indenture; and (c) immediately prior
to and after giving effect to the transaction, no Event of Default shall have
occurred and be continuing. (Section 801). Notwithstanding the foregoing, any
subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the Company.
CERTAIN OTHER COVENANTS
Limitation on Liens
With respect to any series of Debt Securities, the Senior Indenture will
provide that the Company will not, and will not permit any of its subsidiaries
to, create, incur, issue, assume or guarantee any Debt of the Company or any
of its subsidiaries secured by a Lien (other than Permitted Liens) upon any
Property, or upon shares of Capital Stock or evidence of Debt issued by any of
the Company's subsidiaries and owned by the Company or by any other subsidiary
of the Company, owned by the Company on the date of issuance of such Debt
Securities, without making effective provision to secure all of the Senior
Debt Securities, equally and ratably with any and all other Debt thereby
secured, so long as such Debt shall be so secured.
Certain Definitions
The Senior Indenture defines the following terms used in this Section
(Senior Indenture, Section 101):
"Capital Stock" means the capital stock of every class whether now or
hereafter authorized, regardless of whether such capital stock shall be
limited to a fixed sum or percentage with respect to the rights of the holders
thereof to participate in dividends and in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of such
corporation.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) of the Company
and its consolidated subsidiaries after deducting therefrom (a) all current
liabilities (excluding any Debt for money borrowed having a maturity of less
than 12 months from the date of the most recent consolidated balance sheet of
the Company but which by its terms is renewable or extendible beyond 12 months
from such date at the option of the borrower) and (b) all goodwill, trade
names, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent consolidated balance sheet of
the Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
"Lien" means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, security interest, lien, encumbrance or other security
arrangement of any kind or nature on or with respect to such Property.
"Permitted Liens" means:
(i) Liens (other than Liens created or imposed under ERISA) for taxes,
assessments or governmental changes or levies not yet due or Liens for
taxes being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established
(and as to which the Property subject to any such Lien is not yet subject
to foreclosure, sale or loss on account thereof);
(ii) statutory Liens of landlords and Liens of mechanics, materialmen and
suppliers and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary course of
business, provided that any such Liens which are material secure only
amounts not yet due and payable or, if due and payable, are unfiled and no
other action has been taken to enforce the same or are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
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(iii) Liens (other than Liens created or imposed under ERISA) incurred or
deposits made by the Company and its subsidiaries in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) Liens in connection with attachments or judgments (including
judgment or appeal bonds), provided that the judgments secured shall,
within 30 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
(v) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
(vi) leases or subleases granted to others not interfering in any
material respect with the business of the Company and its subsidiaries
taken as a whole;
(vii) Liens on Property at the time such Property is acquired by the
Company or any of its subsidiaries;
(viii) Liens on Property of any Person at the time such Person becomes a
subsidiary of the Company;
(ix) Liens on receivables from customers sold to third parties pursuant
to credit arrangements in the ordinary course of business;
(x) Liens existing on the date of the Senior Indenture to secure Debt
existing on the date of the Senior Indenture or any extensions, amendments,
renewals, refinancings, replacements or other modifications thereto;
(xi) Liens on any Property created, assumed or otherwise brought into
existence in contemplation of the sale or other disposition of the
underlying Property, whether directly or indirectly, by way of share
disposition or otherwise;
(xii) Liens securing Debt of a subsidiary of the Company to the Company
or to another subsidiary of the Company;
(xiii) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision thereof, to secure partial, progress, advance or other
payments;
(xiv) Liens to secure Debt of joint ventures in which the Company or any
of its subsidiaries has an interest, to the extent such Liens are on
Property of, or equity interests in, such joint ventures; and
(xv) other Liens on Property of the Company and its subsidiaries;
provided that (a) with respect to Property existing as of the date of the
Senior Indenture (including Property acquired to replace Property existing
on the date of the Senior Indenture and Property acquired from the sale or
refinancing of Property existing on the date of the Senior Indenture), the
aggregate fair market value of such Property does not exceed 15% of the
Company's Consolidated Net Tangible Assets or (b) with respect to Property
acquired after the date of the Senior Indenture, such Property shall be
acquired in the ordinary course of business.
"Property" means any building, structure or other facility, together with
the land upon which it is erected and fixtures comprising a part thereof, used
primarily for selling automotive parts and accessories or the warehousing or
distributing of such products, owned or leased by the Company or any
subsidiary of the Company.
Other Covenants
The applicable Prospectus Supplement will describe any material covenants in
respect of a series of Debt Securities. Other than the covenants of the
Company included in the Indenture as described above or as
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described in the applicable Prospectus Supplement, the Debt Securities will
not have the benefit of any covenants that limit or restrict the Company's
business or operations or the incurrence of indebtedness by the Company, and
there are no covenants or other provisions in the Indenture providing for a
put or increased interest or otherwise that would afford holders of Debt
Securities additional protection in the event of a recapitalization
transaction, a change of control of the Company or a highly leveraged
transaction.
EFFECT OF CORPORATE STRUCTURE
The Debt Securities are obligations exclusively of the Company. Because the
operations of the Company are currently conducted through subsidiaries, the
cash flow and the consequent ability to service debt of the Company, including
the Debt Securities, are dependent, in part, upon the earnings of its
subsidiaries and the distribution of those earnings to the Company or upon
loans or other payments of funds by those subsidiaries to the Company. The
subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the Debt
Securities or to make any funds available therefor, whether by dividends,
loans or other payments. In addition, the payment of dividends and the making
of loans and advances to the Company by its subsidiaries may be subject to
statutory or contractual restrictions, are contingent upon the earnings of
those subsidiaries and are subject to various business considerations.
The Debt Securities will be effectively subordinated to all indebtedness and
other liabilities, including current liabilities and commitments under leases,
if any, of the Company's subsidiaries. Any right of the Company to receive
assets of any of its subsidiaries upon liquidation or reorganization of the
subsidiary (and the consequent right of the holders of the Debt Securities to
participate in those assets) will be effectively subordinated to the claims of
that subsidiary's creditors (including trade creditors), except to the extent
that the Company is itself recognized as a creditor of such subsidiary, in
which case the claims of the Company would still be subordinated to any
security interests in the assets of such subsidiary and any indebtedness of
such subsidiary senior to that held by the Company.
NO RESTRICTION ON SALE OR ISSUANCE OF STOCK OF SUBSIDIARIES
The Indentures contain no covenant that the Company will not sell, transfer
or otherwise dispose of any shares of, or securities convertible into, or
options, warrants or rights to subscribe for or purchase shares of, voting
stock of any of its subsidiaries, nor does it prohibit any subsidiary from
issuing any shares of, securities convertible into, or options, warrants or
rights to subscribe for or purchase shares of, voting stock of such
subsidiary.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following will constitute Events of Default under the Indenture with respect
to Debt Securities of any series: (a) failure to pay principal of (or premium,
if any, on) any Debt Security of that series when due and payable at maturity,
upon redemption or otherwise; (b) failure to pay any interest on any Debt
Security of that series when due, and the Default continues for thirty days;
(c) default in the deposit of any mandatory sinking fund payment, when and as
due by the terms of the Securities of that series; (d) the Company fails to
comply with any of its other agreements in the Debt Securities of that series
or in the Indenture with respect to that series and the Default continues for
the period and after the notice provided therein (and described below); (e)
default in the payment of principal when due or resulting in acceleration of
other Debt of the Company where the aggregate principal amount with respect to
which such default or acceleration has occurred exceeds $20 million, providing
that such Event of Default will be cured or waived if the default that
resulted in the acceleration of such other indebtedness is cured or waived or
such indebtedness is discharged; and (f) certain events of bankruptcy,
insolvency or reorganization. A Default under clause (d) or (e) above is not
an Event of Default with respect to a particular series of Debt Securities
until the Trustee or the holders of at least 25% in principal amount of the
then outstanding Debt Securities of that series notify the Company of the
Default and the Company does not cure the Default within sixty days after
receipt of the notice in the event of a Default under clause (d) or fifteen
days after receipt of the notice in the event of a Default under clause (e).
(Section 501). The notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default."
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If an Event of Default with respect to outstanding Debt Securities of any
series (other than an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization) shall occur and be continuing,
either the Trustee or the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series by notice, as provided in the
Indenture, may declare the unpaid principal amount (or, if the Debt Securities
of that series are Original Issue Discount Securities, such lesser amount as
may be specified in the terms of that series) of, and any accrued and unpaid
interest on, all Debt Securities of that series to be due and payable
immediately. However, at any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment
or decree based on such acceleration has been obtained, the holders of a
majority in principal amount of the outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration.
(Section 502). For information as to waiver of defaults, see "Modification and
Waiver" below.
The Indenture will provide that, subject to the duty of the Trustee during
an Event of Default to act with the required standard of care, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such
holders shall have offered to the Trustee reasonable security or indemnity.
(Sections 601 and 603). Subject to certain provisions, including those
requiring security or indemnification of the Trustee, the holders of a
majority in principal amount of the outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Debt Securities of that
series. (Section 512).
The Company will be required to furnish to the Trustee under the Indenture
annually a statement as to the performance by the Company of its obligations
under that Indenture and as to any default in such performance. (Section
1005).
MODIFICATION AND WAIVER
Subject to certain exceptions, the Company and the Trustee may amend the
Indenture or the Debt Securities with the written consent of the holders of a
majority in principal amount of the then outstanding Debt Securities of each
series affected by the amendment with each series voting as a separate class.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series may also waive compliance in a particular instance by
the Company with any provision of the Indenture with respect to the Debt
Securities of that series; provided, however, that without the consent of each
holder of Debt Securities affected, an amendment or waiver may not, among
other things, (i) reduce the percentage of the principal amount of Debt
Securities whose holders must consent to an amendment or waiver; (ii) reduce
the rate or change the time for payment of interest on any Debt Security
(including default interest); (iii) reduce the principal of, premium, if any,
or change the fixed maturity of any Debt Security, or reduce the amount of, or
postpone the date fixed for, redemption or the payment of any sinking fund or
analogous obligation with respect thereto; (iv) make any Debt Security payable
in currency other than that stated in the Debt Security; (v) make any change
in the provisions concerning waivers of Default or Events of Default by
holders or the rights of holders to recover the principal of, premium, if any,
or interest on, any Debt Security; (vi) waive a default in the payment of the
principal of, or interest on, any Debt Security, except as otherwise provided
in the Indenture or (vii) reduce the principal amount of Original Issue
Discount Securities payable upon acceleration of the maturity thereof.
(Sections 901 and 902). The Company and the Trustee may amend the Indenture or
the Debt Securities without notice to or the consent of any holder of a Debt
Security to, among other things: (i) cure any ambiguity, defect or
inconsistency; (ii) comply with the Indenture's provisions with respect to
successor corporations; (iii) comply with any requirements of the Commission
in connection with the qualification of the Indenture under the TIA; (iv)
provide for uncertificated Debt Securities in addition to or in place of
certificated Debt Securities; (v) add to, change or eliminate any of the
provisions of the Indenture in respect of one of more series of Debt
Securities, provided, however, that any such addition, change or elimination
(A) shall neither (1) apply to any Debt Security of any series created prior
to the execution of such amendment and entitled to the benefit of such
provision, nor (2) modify the rights of a holder of any such Debt Security
with respect to such provision, or (B) shall become effective only when there
is no outstanding Debt Security of any series created prior to such amendment
and entitled to the benefit of such
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provision; (vi) make any change that does not adversely affect in any material
respect the interest of any holder; or (vii) establish additional series of
Debt Securities as permitted by the Indenture.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series, by notice to the Company and the Trustee, may waive
an existing Default or Event of Default and its consequences except a Default
or Event of Default in the payment of the principal of (or premium, if any),
or any interest on, any Debt Security with respect to the Debt Securities of
that series or in the payment of any sinking fund installment with respect to
the Securities of that series or in respect of any provision in the Indenture
which cannot be modified or amended without the consent of the holder of each
outstanding Debt Security of such series affected; provided, however, that the
holders of a majority in principal amount of the outstanding Debt Securities
of any series may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration. (Section 513).
DEFEASANCE OF DEBT SECURITIES AND CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
Legal Defeasance. Unless otherwise specified in the applicable Prospectus
Supplement, the Indenture will provide that the Company may be discharged from
any and all obligations in respect of the Debt Securities of any series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, and to maintain paying agencies) upon the deposit
with the Trustee, in trust, of money and/or U.S. government obligations, that,
through the payment of interest and principal in respect thereof in accordance
with their terms, will provide money in an amount sufficient in the opinion of
a nationally recognized firm of independent public accountants to pay and
discharge each installment of principal, premium, if any, and interest, if
any, on and any mandatory sinking fund payments in respect of the Debt
Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. Such
discharge may occur only if, among other things, the Company has received
from, or there has been published by, the United States Internal Revenue
Service a ruling, or, since the date of execution of the Indenture, there has
been a change in the applicable United States federal income tax law, in
either case to the effect that holders of the Debt Securities of such series
will not recognize income, gain or loss for United States federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to United States federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred.
Defeasance of Certain Covenants. Unless otherwise specified in the
applicable Prospectus Supplement, the Indenture will provide that, upon
compliance with certain conditions, the Company may omit to comply with the
restrictive covenants contained in the Indenture, as well as any additional
covenants or Events of Default contained in a supplement to the Indenture, a
Board Resolution or an Officers' Certificate delivered pursuant thereto. The
conditions include: the deposit with the Trustee of money and/or U.S.
government obligations, that, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an
amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay principal, premium, if any, and
interest, if any, on and any mandatory sinking fund payments in respect of the
Debt Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities; and the
delivery to the Trustee of an opinion of counsel to the effect that the
holders of the Debt Securities of such series will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
deposit and related covenant defeasance and will be subject to United States
federal income tax in the same amount and in the same manner and at the same
times as would have been the case if such deposit and related covenant
defeasance had not occurred.
Defeasance and Events of Default. In the event the Company exercises its
option to omit compliance with certain covenants of the Indenture with respect
to any series of Debt Securities and the Debt Securities of such series are
declared due and payable because of the occurrence of any Event of Default,
the amount of money and/or U.S. government obligations on deposit with the
Trustee will be sufficient to pay amounts due on the Debt Securities of such
series at the time of their stated maturity but may not be sufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable for such payments.
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REGARDING THE TRUSTEES
The First National Bank of Chicago is the Trustee under the Senior
Indenture. Notice to the Senior Trustee Bank should be directed to its
Corporate Trust Office, located at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust Administrator.
The First National Bank of Chicago is the Trustee under the Subordinated
Indenture. Notice to the Subordinated Trustee Bank should be directed to its
Corporate Trust Office, located at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust Administrator.
The Indenture and provisions of the TIA incorporated by reference therein
contain certain limitations on the rights of the Trustee, should it become a
creditor of the Company, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim, as security
or otherwise. The Trustee and its affiliates may engage in, and will be
permitted to continue to engage in, other transactions with the Company and
its affiliates; provided, however, that if it acquires any conflicting
interest (as defined in the TIA), it must eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee. The TIA and the Indenture provide that in case an Event of Default
shall occur (and be continuing), the Trustee will be required, in the exercise
of its rights and powers, to use the degree of care and skill of a prudent
person in the conduct of such person's affairs. Subject to such provision, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any of the holders of the Debt
Securities issued thereunder, unless they have offered to the Trustee
indemnity satisfactory to it.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Stock set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Articles of Incorporation and the Amendment to Articles of Incorporation (as
amended, the "Articles of Incorporation") and the certificate of designations
(a "Certificate of Designations") relating to each series of the Preferred
Stock which will be filed with the Commission and incorporated by reference in
the Registration Statement of which this Prospectus is a part at or prior to
the time of the issuance of such series of the Preferred Stock.
GENERAL
The Company has authority to issue 1,000,000 shares of preferred stock, $.01
par value per share ("preferred stock of the Company," which term, as used
herein, includes the Preferred Stock offered hereby). As of June 30, 1998, the
Company had no shares of preferred stock of the Company outstanding.
Prior to issuance of shares of each series, the Board of Directors is
required by the Nevada Revised Statutes Chapter 78 (the "Nevada Code") and the
Articles of Incorporation to adopt resolutions and file a Certificate of
Designation with the Secretary of State of the State of Nevada, fixing for
each such class or series the designations, powers, preferences and rights of
the shares of such class or series and the qualifications, limitations or
restrictions thereon, including, but not limited to, dividend rights, dividend
rate or rates, conversion rights, voting rights, rights and terms of
redemption (including sinking fund provisions), the redemption price or
prices, and the liquidation preferences as are permitted by the Nevada Code.
The Board of Directors could authorize the issuance of shares of Preferred
Stock with terms and conditions which could have the effect of discouraging a
takeover or other transaction which holders of some, or a majority, of such
shares might believe to be in their best interests or in which holders of
some, or a majority, of such shares might receive a premium for their shares
over the then-market price of such shares.
Subject to limitation prescribed by the Nevada Code, the Articles of
Incorporation and the Bylaws of the Company, the Board of Directors of the
Company is authorized without further stockholder action to provide for the
issuance of up to 1,000,000 shares of preferred stock of the Company, in one
or more series, with such voting powers, full or limited, and with such
designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as
shall be stated in the resolution or resolutions providing for the issuance of
a series of such stock adopted, at any time or from time to time, by the Board
of Directors of the Company (as used herein the term "Board of Directors of
the Company" includes any duly authorized committee thereof).
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference
is made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation and stated value per share of such Preferred Stock and the number
of shares offered; (ii) the amount of liquidation preference per share; (iii)
the initial public offering price at which such Preferred Stock will be
issued; (iv) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence
to cumulate, if any; (v) any redemption or sinking fund provisions; (vi) any
conversion or exchange rights; and (vii) any additional voting, dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. The rights of the holders of each series of
the Preferred Stock will be subordinate to those of the Company's general
creditors.
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DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of
funds of the Company legally available therefor, cash dividends on such dates
and at such rates as set forth in, or as are determined by the method
described in, the Prospectus Supplement relating to such series of the
Preferred Stock. Such rate may be fixed or variable or both. Each such
dividend will be payable to the holders of record as they appear on the stock
books of the Company on such record dates, fixed by the Board of Directors of
the Company, as specified in the Prospectus Supplement relating to such series
of Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Preferred Stock. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay any dividend for such period, whether or not
dividends on such series are declared payable on any future dividend payment
dates. Dividends on the shares of each series of Preferred Stock for which
dividends are cumulative will accrue from the date on which the Company
initially issues shares of such series.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as the shares of any series of the Preferred Stock are outstanding, unless (i)
full dividends (including if such Preferred Stock is cumulative, dividends for
prior dividend periods) have been paid or declared and set apart for payment
on all outstanding shares of the Preferred Stock of such series and all other
classes and series of preferred stock of the Company (other than Junior Stock
(as defined below)) and (ii) the Company is not in default or in arrears with
respect to the mandatory or optional redemption or mandatory repurchase or
other mandatory retirement of, or with respect to any sinking or other
analogous funds for, any shares of Preferred Stock of such series or any
shares of any other preferred stock of the Company of any class or series
(other than Junior Stock, the Company may not declare any dividends on any
shares of Common Stock of the Company or any other stock of the Company
ranking as to dividends or distributions of assets junior to such series of
Preferred Stock (the Common Stock and any such other stock being herein
referred to as "Junior Stock"), or make any payment on account of, or set
apart money for, the purchase, redemption or other retirement of, or for a
sinking or other analogous fund for, any shares of Junior Stock or make any
distribution in respect thereof, whether in cash or property or in obligations
of stock of the Company, other than in Junior Stock which is neither
convertible into, nor exchangeable or exercisable for, any securities of the
Company other than Junior Stock.
LIQUIDATION PREFERENCES
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of each series of the Preferred Stock
will be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to the
holders of Common Stock or any other shares of stock of the Company ranking
junior as to such distribution to such series of the Preferred Stock, the
amount set forth in the Prospectus Supplement relating to such series of the
Preferred Stock. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Preferred Stock of any series and any other shares of preferred stock of
the Company (including any other series of the Preferred Stock) ranking as to
any such distribution on a parity with such series of the Preferred Stock are
not paid in full, the holders of the Preferred Stock of such series and of
such other shares of preferred stock of the Company will share ratably in any
such distribution of assets of the Company in proportion to the full
respective preferential amounts to which they are entitled. After payment to
the holders of the Preferred Stock of each series of the full preferential
amounts of the liquidating distribution to which they are entitled, unless
otherwise provided in the applicable Prospectus Supplement, the holders of
each such series of the Preferred Stock will be entitled to no further
participation in any distribution of assets by the Company.
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REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms,
at the times and at the redemption prices set forth in the Prospectus
Supplement relating to such series. Shares of the Preferred Stock redeemed by
the Company will be restored to the status of authorized but unissued shares
of preferred stock of the Company.
In the event that fewer than all of the outstanding shares of a series of
the Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or
pro rata (subject to rounding to avoid fractional shares) as may be determined
by the Company or by any other method as may be determined by the Company in
its sole discretion to be equitable. From and after the redemption date
(unless default is made by the Company in providing for the payment of the
redemption price plus accumulated and unpaid dividends, if any) dividends will
cease to accumulate on the shares of the Preferred Stock called for redemption
and all rights of the holders thereof (except the right to receive the
redemption price plus accumulated and unpaid dividends, if any) will cease.
Unless otherwise specified in the applicable Prospectus Supplement, so long
as any dividends on shares of any series of the Preferred Stock or any other
series of preferred stock of the Company ranking on a parity as to dividends
and distribution of assets with such series of the Preferred Stock are in
arrears, no shares of any such series of the Preferred Stock or such other
series of preferred stock of the Company will be redeemed (whether by
mandatory or optional redemption) unless all such shares are simultaneously
redeemed, and the Company will not purchase or otherwise acquire any such
shares; provided, however, that the foregoing will not prevent the purchase or
acquisition of such shares pursuant to a purchase or exchange offer made on
the same terms to holders of all such shares outstanding.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted into shares of Common Stock, another series of
Preferred Stock or any other Security will be set forth in the Prospectus
Supplement relating thereto. Such terms may include provisions for conversion,
either mandatory, at the option of the holder or at the option of the Company,
in which case the number of shares of Common Stock, the shares of another
series of Preferred Stock or the amount of any other securities to be received
by the holders of Preferred Stock would be calculated as of a time and in the
manner stated in the Prospectus Supplement.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of Preferred Stock, or except as expressly required by the
laws of the State of Nevada or other applicable law, the holders of the
Preferred Stock will not be entitled to vote. Except as indicated in the
Prospectus Supplement relating to a particular series of Preferred Stock, each
such share will be entitled to one vote on matters on which holders of such
series of the Preferred Stock are entitled to vote. However, as more fully
described below under "Depositary Shares," if the Company elects to issue
Depositary Shares representing a fraction of a share of a series of Preferred
Stock, each such Depositary Share will, in effect, be entitled to such
fraction of a vote, rather than a full vote. Because each full share of any
series of Preferred Stock shall be entitled to one vote, the voting power of
such series, on matters on which holders of such series and holders of other
series of preferred stock are entitled to vote as a single class, shall depend
on the number of shares in such series, not the aggregate liquidation
preference or initial offering price of the shares of such series of Preferred
Stock.
DEPOSITARY SHARES
General. The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In the event such
option is exercised, the Company will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus
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Supplement relating to a particular series of Preferred Stock) of a share of a
particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary Bank"). Subject to the terms
of the Deposit Agreement, each owner of a Depositary Share will be entitled,
in proportion to the applicable fraction of a share of Preferred Stock
represented by such Depositary Share, to all the rights and preferences of the
Preferred Stock represented thereby (including dividend, voting, redemption
and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. If Depositary
Shares are issued, copies of the forms of Deposit Agreement and Depositary
Receipt will be incorporated by reference in the Registration Statement of
which this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such documents.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary Bank may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts
but not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will
be exchangeable for definitive Depositary Receipts at the Company's expense.
Withdrawal of Preferred Stock. Upon surrender of the Depositary Receipts to
the Depositary Bank, the owner of the Depositary Shares evidenced thereby is
entitled to delivery at such office of the number of whole shares of Preferred
Stock represented by such Depositary Shares. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of
the number of Depositary Shares representing the number of whole shares of
Preferred Stock to be withdrawn, the Depositary Bank will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares. Owners of Depositary Shares will be entitled to receive
only whole shares of Preferred Stock. In no event will fractional shares of
Preferred Stock (or cash in lieu thereof) be distributed by the Depositary
Bank. Consequently, a holder of a Depositary Receipt representing a fractional
share of Preferred Stock would be able to liquidate his position only by sale
to a third party (in a public trading market transaction or otherwise), unless
the Depositary Shares are redeemed by the Company or converted by the holder.
Dividends and Other Distributions. The Depositary Bank will distribute all
cash dividends or other cash distributions received in respect of the
Preferred Stock to the record holders of Depositary Shares relating to such
Preferred Stock in proportion to the number of such Depositary Shares owned by
such holders.
In the event of a distribution other than in cash, the Depositary Bank will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary Bank determines that it is not
feasible to make such distribution, in which case the Depositary Bank may,
with the approval of the Company, sell such property and distribute the net
proceeds from such sale to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary Bank resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by the
Depositary Bank. The redemption price per Depositary Share will be equal to
the applicable fraction of the redemption price per share payable with respect
to such series of Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary Bank, the Depositary Bank will redeem
as of the same redemption date the number of Depositary Shares representing
the shares of Preferred Stock so redeemed. If fewer than all the Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed will be
selected by lot or pro rata as may be determined by the Depositary Bank.
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Voting the Preferred Stock. Upon receipt of notice of any meeting at which
the holders of Preferred Stock are entitled to vote, the Depositary Bank will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such Preferred Stock. Each record holder
of such Depositary Shares on the record date (which will be the same date as
the record date for the Preferred Stock) will be entitled to instruct the
Depositary Bank as to the exercise of the voting rights pertaining to the
amount of Preferred Stock represented by such holder's Depositary Shares. The
Depositary Bank will endeavor, insofar as practicable, to vote the amount of
Preferred Stock represented by such Depositary Shares in accordance with such
instructions, and the Company will agree to take all action that may be deemed
necessary by the Depositary Bank in order to enable the Depositary Bank to do
so. The Depositary Bank may abstain from voting shares of Preferred Stock to
the extent it does not receive specific instructions from the holders of
Depositary Shares representing such Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary Bank. However, any amendment that materially and adversely
alters the rights of the holders of Depositary Shares will not be effective
unless such amendment has been approved by the holders of at least a majority
of the Depositary Shares then outstanding. The Deposit Agreement may be
terminated by the Company or the Depositary Bank only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution
has been distributed to the holders of Depositary Receipts.
Charges of Depositary Bank. The Company will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Company will pay charges of the Depositary Bank
in connection with the initial deposit of the Preferred Stock and any
redemption of the Preferred Stock. Holders of Depositary Receipts will pay
other transfer and other taxes and governmental charges and such other
charges, including any fee for the withdrawal of shares of Preferred Stock
upon surrender of Depositary Receipts, as are expressly provided in the
Deposit Agreement to be for their accounts.
Miscellaneous. The Depositary Bank will forward to holders of Depository
Receipts all reports and communications from the Company that are delivered to
the Depositary Bank and that the Company is required to furnish to the holders
of Preferred Stock.
Neither the Depositary Bank nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Depositary Bank under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, or
upon information provided by persons presenting Preferred Stock for deposit,
holders of Depositary Receipts or other persons believed to be competent and
on documents believed to be genuine.
Resignation and Removal of Depositary Bank. The Depositary Bank may resign
at any time by delivering to the Company notice of its election to do so, and
the Company may at any time remove the Depositary Bank, any such resignation
or removal to take effect upon the appointment of a successor Depositary Bank
and its acceptance of such appointment. Such successor Depositary Bank must be
appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least
$50,000,000.
21
<PAGE>
DESCRIPTION OF COMMON STOCK
The Company has authority to issue 200,000,000 shares of Common Stock. At
the close of business on June 30, 1998, the Company had outstanding
152,752,056 shares of Common Stock (including 284,987 treasury shares). All
outstanding shares of Common Stock are fully paid and nonassessable.
Each holder of Common Stock is entitled to one vote for each share owned of
record on matters voted upon by stockholders, and a majority vote is required
for all action to be taken by stockholders, except that directors must be
elected by a plurality of votes cast in the election at the annual meeting of
stockholders and, subject to certain limited exceptions, under Nevada law any
director may be removed from office by the vote of stockholders representing
not less than two-thirds of the voting power of the issued and outstanding
Common Stock. In the event of a liquidation, dissolution or winding-up of the
Company, the holders of Common Stock are entitled to share equally and ratably
in the assets of the Company, if any, remaining after the payment of all debts
and liabilities of the Company and the liquidation preference of any
outstanding Preferred Stock. The Common Stock has no preemptive rights, no
cumulative voting rights and no redemption, sinking fund or conversion
provisions.
Holders of Common Stock are entitled to receive dividends if, as, and when
declared by the Board of Directors out of funds legally available therefor,
subject to the dividend and liquidation rights of any Preferred Stock that may
be issued and subject to any dividend restrictions that may be contained in
future credit facilities. No dividend or other distribution (including
redemptions or repurchases of shares of capital stock) may be made if after
giving effect to such distribution, the Company would not be able to pay its
debts as they become due in the usual course of business, or the Company's
total assets would be less than the sum of its total liabilities plus the
amount that would be needed, if the Company were to be dissolved at the time
of distribution to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those receiving
the distribution.
THE NEVADA CODE
The Nevada Code contains provisions restricting the ability of a Nevada
corporation to engage in business combinations with an interested stockholder.
Under the Nevada Code, except under certain circumstances, business
combinations with interested stockholders are not permitted for a period of
three years following the date such stockholder becomes an interested
stockholder. The Nevada Code defines an interested stockholder, generally, as
a person who is the beneficial owner, directly or indirectly, of 10% or more
of the outstanding shares of a Nevada corporation. In addition, the Nevada
Code generally disallows the exercise of voting rights with respect to
"control shares" of an "issuing corporation" held by an "acquiring person,"
unless such voting rights are conferred by a majority vote of the
disinterested stockholders. "Control shares" are those outstanding voting
shares of an issuing corporation which an acquiring person and those persons
acting in association with an acquiring person (i) acquire or offer to acquire
in an acquisition of a controlling interest and (ii) acquire within ninety
days immediately preceding the date when the acquiring person became an
acquiring person. An "issuing corporation" is a corporation organized in
Nevada which has two hundred or more stockholders, at least one hundred of
whom are stockholders of record and residents of Nevada, and which does
business in Nevada directly or through an affiliated corporation. The Nevada
Code also permits directors to resist a change or potential change in control
of the corporation if the directors determine that the change or potential
change is opposed to or not in the best interest of the corporation. As a
result, the Company's Board of Directors may have considerable discretion in
considering and responding to unsolicited offers to purchase a controlling
interest in AutoZone.
22
<PAGE>
DESCRIPTION OF WARRANTS
The Company may issue Warrants to purchase Debt Securities ("Debt
Warrants"), as well as Warrants to purchase Preferred Stock or Common Stock
("Equity Warrants") (together, the "Warrants"). Warrants may be issued
independently or together with any Securities and may be attached to or
separate from such Securities. The Warrants are to be issued under warrant
agreements (each, a "Warrant Agreement") to be entered into between the
Company and a bank or trust company, as warrant agent (the "Warrant Agent"),
all as shall be set forth in the Prospectus Supplement relating to Warrants
being offered pursuant thereto. A copy of the proposed form of Warrant
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants ("Debt
Warrant Certificates"), including the following: (1) the title of such Debt
Warrants; (2) the aggregate number of such Debt Warrants; (3) the price or
prices at which such Debt Warrants will be issued; (4) the designation,
aggregate principal amount and terms of the Debt Securities purchasable upon
exercise of such Debt Warrants, and the procedures and conditions relating to
the exercise of such Debt Warrants; (5) the designation and terms of any
related Debt Securities with which such Debt Warrants are issued, and the
number of such Debt Warrants issued with each such Debt Security; (6) the
date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (7) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant; (8) the date on
which the right to exercise such Debt Warrants will commence, and the date on
which such right will expire; (9) the maximum or minimum number of such Debt
Warrants which may be exercised at any time; (10) information with respect to
book-entry procedures, if any; (11) a discussion of any material federal
income tax considerations; and (12) any other terms of such Debt Warrants and
terms, procedures and limitations relating to the exercise of such Debt
Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the Prospectus Supplement. Prior to the exercise of their Debt Warrants,
holders of Debt Warrants will not have any of the rights of holders of the
Debt Securities purchasable upon such exercise and will not be entitled to
payment of principal of or any premium, if any, or interest on the Debt
Securities purchasable upon such exercise.
EQUITY WARRANTS
The applicable Prospectus Supplement will describe the following terms of
Equity Warrants offered thereby: (1) the title of such Equity Warrants; (2)
the Securities (i.e., Preferred Stock or Common Stock) for which such Equity
Warrants are exercisable; (3) the price or prices at which such Equity
Warrants will be issued; (4) if applicable, the designation and terms of the
Preferred Stock or Common Stock with which such Equity Warrants are issued,
and the number of such Equity Warrants issued with each such share of
Preferred Stock or Common Stock; (5) if applicable, the date on and after
which such Equity Warrants and the related Preferred Stock or Common Stock
will be separately transferable; (6) if applicable, a discussion of any
material federal income tax considerations; and (7) any other terms of such
Equity Warrants, including terms, procedures and limitations relating to the
exchange and exercise of such Equity Warrants.
Holders of Equity Warrants will not be entitled, by virtue of being such
holders, to vote, consent, receive dividends, receive notice as stockholders
with respect to any meeting of stockholders for the election of directors of
the Company or any other matter, or to exercise any rights whatsoever as
stockholders of the Company.
The exercise price payable and the number of shares of Common Stock or
Preferred Stock purchasable upon the exercise of each Equity Warrant will be
subject to adjustment in certain events, including the issuance of a
23
<PAGE>
stock dividend to holders of Common Stock or Preferred Stock or a stock split,
reverse stock split, combination, subdivision or reclassification of Common
Stock or Preferred Stock. In lieu of adjusting the number of shares of Common
Stock or Preferred Stock purchasable upon exercise of each Equity Warrant, the
Company may elect to adjust the number of Equity Warrants. No adjustments in
the number of shares purchasable upon exercise of the Equity Warrants will be
required until cumulative adjustments require an adjustment of at least 1%
thereof. The Company may, at its option, reduce the exercise price at any
time. No fractional shares will be issued upon exercise of Equity Warrants,
but the Company will pay the cash value of any fractional shares otherwise
issuable. Notwithstanding the foregoing, in case of any consolidation, merger,
or sale or conveyance of the property of the Company as an entirety or
substantially as an entirety, the holder of each outstanding Equity Warrant
shall have the right to the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common Stock of Preferred Stock into which such Equity Warrant
was exercisable immediately prior thereto.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Securities at such exercise price as shall in each case be set forth in, or be
determinable as set forth in, the Prospectus Supplement relating to the
Warrants offered thereby. Warrants may be exercised at any time up to the
close of business on the expiration date set forth in the Prospectus
Supplement relating to the Warrants offered thereby. After the close of
business on the expiration date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, forward the Securities
purchasable upon such exercise. If less than all of the Warrants represented
by such warrant certificate are exercised, a new warrant certificate will be
issued for the remaining Warrants.
DESCRIPTION OF UNITS
The Company may issue Units consisting of two or more other constituent
Securities, which Units may be issuable as, and for the period of time
specified therein may be transferable as, a single Security only, as
distinguished from the separate constituent Securities comprising such Units.
Any such Units will be offered pursuant to a Prospectus Supplement which will
(i) identify and designate the title of any series of Units; (ii) identify and
describe the separate constituent Securities comprising such Units; (iii) set
forth the price or prices at which such Units will be issued; (iv) describe,
if applicable, the date on and after which the constituent Securities
comprising the Units will become separately transferable; (v) provide
information with respect to book-entry procedures, if any; (vi) discuss
applicable United States federal income tax considerations relating to the
Units; and (vii) set forth any other terms of the Units and their constituent
Securities.
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<PAGE>
PLAN OF DISTRIBUTION
The Securities may be sold for public offering to underwriters or dealers,
which may be a group of underwriters represented by one or more managing
underwriters, or through such firms or other firms acting alone or through
dealers. The Securities may also be sold directly by the Company or through
agents to investors. The names of any agents, dealers or managing
underwriters, and of any underwriters, involved in the sale of the Securities
in respect of which this Prospectus is being delivered, the applicable agent's
commission, dealer's purchase price or underwriter's discount and the net
proceeds to the Company from such sale will also be set forth in the
Prospectus Supplement.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities and any discounts, concessions
or commissions allowed by underwriters to participating dealers will be set
forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of the
Securities may be deemed to be underwriting discounts and commissions under
the Securities Act.
If any underwriter or underwriters are utilized in the sale of the
Securities, the Company will execute an underwriting agreement or a purchase
agreement with such underwriter or underwriters at the time an agreement for
such sale is reached. The underwriting agreement or purchase agreement will
provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of
Securities will be obligated to purchase all such Securities if any are
purchased. In connection with the sale of Securities, underwriters may be
deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Securities for whom they may act as agent. Underwriters may sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent. Under such
underwriting agreements or purchase agreements, underwriters, dealers and
agents who participate in the distribution of the Securities, may be entitled
to indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act or contribution with respect to payments
that the underwriters, dealers or agents may be required to make in respect
thereof. The underwriter or underwriters with respect to an underwritten
offering of Securities will be set forth in the Prospectus Supplement relating
to such offering and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover of such Prospectus
Supplement.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date or
dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Securities sold
pursuant to Contracts shall not be less nor more than, the respective amounts
stated in such Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but will in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Securities covered by its
Contracts shall not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which such institution is subject and
(ii) if the Securities are being sold to underwriters, the Company shall have
sold to such underwriters the total principal amount of the Securities less
the principal amount thereof covered by Contracts. Agents and underwriters
will have no responsibility in respect of the delivery or performance of
Contracts.
The Securities may or may not be listed on a national securities exchange or
a foreign securities exchange. No assurances can be given that there will be a
market for the Securities.
Certain of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for the Company and its subsidiaries
and the Trustees in the ordinary course of business.
25
<PAGE>
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by Latham & Watkins, Los Angeles, California, and certain other legal
matters with respect to the Securities offered hereby will be passed upon for
the Company by Schreck Morris, Las Vegas, Nevada. Certain partners of Latham &
Watkins, members of their families, related persons and other own or have an
indirect interest in less than 1% of the Common Stock. Such persons do not
have the power to vote or dispose of shares which are indirectly held. The
validity of the Securities offered hereby will be passed upon for any agents
or underwriters by Brown & Wood LLP, New York, New York. Brown & Wood LLP may
rely on Schreck Morris with respect to all matters of Nevada law.
EXPERTS
The financial statements and related schedule of the Company as of August
30, 1997 and August 31, 1996 and for each year in the three-year period ended
August 30, 1997, included or incorporated by reference in the Company's Annual
Report on Form 10-K have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included or incorporated by
reference therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
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<PAGE>
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NO OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THEY RELATE OR AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS NOR ANY SALE
MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Supplement Summary.............................................. S-3
The Company................................................................ S-3
Recent Developments........................................................ S-3
Selected Financial Data.................................................... S-5
Capitalization............................................................. S-7
Use of Proceeds............................................................ S-7
Business................................................................... S-8
Description of Debentures.................................................. S-14
Underwriting............................................................... S-16
Legal Matters.............................................................. S-17
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information....................................................... 2
Information Incorporated by Reference....................................... 3
The Company................................................................. 4
Use of Proceeds............................................................. 5
Ratio of Earnings to Fixed Charges.......................................... 5
General Description of Securities........................................... 5
Description of Debt Securities.............................................. 6
Description of Preferred Stock.............................................. 17
Description of Common Stock................................................. 22
The Nevada Code............................................................. 22
Description of Warrants..................................................... 23
Description of Units........................................................ 24
Plan of Distribution........................................................ 25
Legal Matters............................................................... 26
Experts..................................................................... 26
</TABLE>
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$200,000,000
[AUTOZONE, INC. LOGO]
% DEBENTURES
DUE
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS
JULY , 1998
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