AutoZone 2008 Annual Report Download - page 19

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Director Nomination Process
What is the Nominating and Corporate Governance Committee’s policy regarding consideration of direc-
tor candidates recommended by stockholders? How do stockholders submit such recommendations?
The Nominating and Corporate Governance Committee’s policy is to consider director candidate
recommendations from stockholders if they are submitted in writing to AutoZone’s Secretary in accordance
with the procedure set forth in Article III, Section 1 of AutoZone’s Fourth Amended and Restated Bylaws
(“Bylaws”), including biographical and business experience information regarding the nominee and other
information required by said Article III, Section 1. Copies of the Bylaws will be provided upon written request
to AutoZone’s Secretary and are also available on AutoZone’s corporate website at www.autozoneinc.com.
What qualifications must a nominee have in order to be recommended by the Nominating and Corporate
Governance Committee for a position on the Board?
The Board believes each individual director should possess certain personal characteristics, and that the
Board as a whole should possess certain core competencies. Such personal characteristics are integrity and
accountability, informed judgment, financial literacy, mature confidence, high performance standards, and
passion. Core competencies of the Board as a whole are accounting and finance, business judgment,
management expertise, crisis response, industry knowledge, international markets, strategy and vision. These
characteristics and competencies are set forth in more detail in AutoZone’s Corporate Governance Principles,
which are available on AutoZone’s corporate website at www.autozoneinc.com.
How does the Nominating and Corporate Governance Committee identify and evaluate nominees for
director?
Prior to each annual meeting of stockholders at which directors are to be elected, the Nominating and
Corporate Governance Committee considers incumbent directors and other qualified individuals as potential
director nominees. In evaluating a potential nominee, the Nominating and Corporate Governance Committee
considers the personal characteristics described above, and also reviews the composition of the full Board to
determine the areas of expertise and core competencies needed to enhance the function of the Board. The
Committee may also consider other factors such as the size of the Board, whether a candidate is independent,
how many other public company directorships a candidate holds, and the listing standards requirements of the
New York Stock Exchange.
The Nominating and Corporate Governance Committee uses a variety of methods for identifying potential
nominees for director. Candidates may come to the attention of the Committee through current Board
members, stockholders or other persons. The Nominating and Corporate Governance Committee may retain a
search firm or other consulting firm from time to time to identify potential nominees. Nominees recommended
by stockholders in accordance with the procedure described above, i.e., submitted in writing to AutoZone’s
Secretary, accompanied by the biographical and business experience information regarding the nominee and
the other information required by Article III, Section 1 of the Bylaws, will receive the same consideration as
the Committee’s other potential nominees.
On June 25, 2008, the Company entered into an Agreement with ESL Investments, Inc. and its affiliates
(“ESL”) in which the parties agreed, among other things, that the Company would take appropriate actions,
once candidates were identified, to add three new members to the Board of Directors as promptly as
practicable, and not later than the Annual Meeting. One candidate, reasonably acceptable to ESL, was to be
identified by The Hollins Group, Inc., an independent search agency retained by the Company, and two
additional directors were to be appointed from candidates identified by ESL. All three candidates had to be
reasonably acceptable to both ESL and a majority of the members of the Nominating and Corporate
Governance Committee of the Board and be “independent” under the Company’s Corporate Governance
Principles and the rules of the New York Stock Exchange.
9
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