AutoZone Board Approves Stockholder Rights Plan
22 March 2000
AutoZone Board Approves Stockholder Rights Plan
MEMPHIS, Tenn., March 21 AutoZone, Inc. ,
announced today that its Board of Directors has declared a dividend
distribution of one Preferred Share Purchase Right on each outstanding share
of AutoZone common stock. Subject to limited exceptions, the Rights will be
exercisable if a person or group acquires 15% or more of AutoZone's common
stock or announces a tender offer for 15% or more of the common stock. Under
certain circumstances, each Right will entitle stockholders to buy one one-
thousandth of a share of AutoZone's newly created Series A Junior
Participating Preferred Stock at an exercise price of $125. AutoZone's Board
will be entitled to redeem the Rights at $.001 per Right at any time before a
person has acquired 15% or more of the outstanding common stock.
The Rights are designed to assure that all AutoZone stockholders receive
fair and equal treatment in the event of any proposed takeover and to guard
against partial tender offers, open market accumulations and other abusive
tactics to gain control of AutoZone without paying all stockholders a control
premium. The Rights are not being distributed in response to any specific
effort to acquire control of AutoZone. They do not prevent a takeover, but
should encourage anyone seeking to acquire AutoZone to negotiate with its
Board of Directors prior to attempting a takeover. Initially, the Rights will
automatically attach to AutoZone's common stock and will not be transferable
separately.
If a person acquires 15% or more of AutoZone's common stock, each Right
will entitle its holder to purchase, at the Right's then-current exercise
price, a number of AutoZone's common shares having a market value at that time
of twice the Right's exercise price. Rights held by a person who acquires 15%
or more of the outstanding common stock will become void and will not be
exercisable to purchase shares at the bargain purchase price. If AutoZone is
acquired in a merger or other business combination transaction which has not
been approved by the Board of Directors, each Right will entitle its holder to
purchase, at the Right's then-current exercise price, a number of the
acquiring company's common shares having a market value at that time of twice
the Right's exercise price.
The dividend distribution to establish the new Rights Plan will be payable
to stockholders of record on April 14, 2000. The Rights will expire in ten
years. The Rights distribution is not taxable to stockholders.
Further details of the Rights plan will be mailed to all AutoZone
stockholders.
Separately, the Board of Directors has also amended AutoZone's Bylaws to
require that any action of the stockholders be taken only at an annual or
special stockholders meeting, and that special meetings may only be called by
the Chairman, the President, or a majority of the members of the Board of
Directors.
AutoZone sells auto and light truck parts, chemicals and accessories
through 2,837 AutoZone stores in 40 states in the U.S. plus the District of
Columbia and 11 AutoZone stores in Mexico. AutoZone also sells heavy-duty
truck parts through 47 TruckPro stores in 14 states, and automotive diagnostic
and repair software through ALLDATA and diagnostic and repair information
through alldatadiy.com.