EXHIBIT 1.2
EXECUTION VERSION
AUTOZONE, INC.
(A NEVADA CORPORATION)
DEBT SECURITIES
TERMS AGREEMENT
June 8, 2006
To: AutoZone, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We understand that Auto Zone, Inc., a Nevada corporation (the "Company"),
proposes to issue and sell $200,000,000 aggregate principal amount of its senior
debt securities (the "Underwritten Securities"). Each provision of the
Underwriting Agreement dated June 8, 2006 among the Company, ▇.▇. ▇▇▇▇▇▇
Securities Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated is hereby
incorporated by reference herein in its entirety and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provision had been
set forth in full herein. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. Subject to the terms
and conditions set forth or incorporated by reference herein, the underwriters
named below (the "Underwriters") offer to purchase , severally and not jointly,
the principal amount of Underwritten Securities opposite their names set forth
below at the purchase price set forth below.
Principal Amount of
Underwriters Underwritten Securities
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.......................... $ 60,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ................................................ $ 60,000,000
Banc of America Securities LLC.............................................. $ 10,000,000
Citigroup Global Markets Inc. .............................................. $ 10,000,000
SunTrust Capital Markets, Inc. ............................................. $ 10,000,000
Wachovia Capital Markets, LLC .............................................. $ 10,000,000
BNY Capital Markets, Inc.................................................... $ 4,000,000
BNP Paribas Securities Corp. ............................................... $ 4,000,000
Calyon Securities (USA) Inc................................................. $ 4,000,000
Comerica Securities, Inc.................................................... $ 4,000,000
Fifth Third Securities, Inc................................................. $ 4,000,000
First Tennessee Securities Corp............................................. $ 4,000,000
Keybanc Capital Markets, a Division of McDonald Investments Inc............. $ 4,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc................................................ $ 4,000,000
NatCity Investments, Inc.................................................... $ 4,000,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.......................................................... $ 4,000,000
------------
Total $200,000,000
============
The Underwritten Securities shall have the following terms:
Title: 6.95% Senior Notes due 2016.
Ranking: Senior Unsecured.
Ratings: BBB+ (S&P) / Baa2 (▇▇▇▇▇'▇).
Aggregate principal amount: $200,000,000.
Denominations: Integral Multiples of $1,000
Currency of payment: U.S. Dollars.
Interest rate or formula: 6.95% per annum.
Interest payment dates: Semi-annually on each June 15 and December 15, commencing on December 15, 2006
Regular record dates: June 1 and December 1.
Stated maturity date: June 15, 2016.
Redemption provisions: At any time, in whole or in part, at a make-whole call equal to the greater of
(i) 100% of the principal amount of the notes to be redeemed or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest discounted to the redemption date, on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months), at a rate equal to the
Adjusted Treasury Rate plus 35 basis points, as determined in good faith by
the Company.
Sinking fund requirements: None.
Conversion provisions: None.
Listing requirements: None.
Restriction on sale of
Underwritten Securities: Until the Closing Time in accordance with Section 3(j) of the Underwriting
Agreement.
Type of offering: Fixed price offering
Initial public offering price
per Underwritten Security: 99.658% of the principal amount, plus accrued interest, if any, from June 13,
2006.
Purchase price per
Underwritten Security
payable by Underwriters: 99.008% of principal amount, plus accrued interest, if any, from
June 13, 2006. The selling concession shall be 0.200% and the reallowance
concession shall be 0.200%, in each case of the principal amount of the
Underwritten Securities.
Form: One registered note in global form.
Closing Time and location: 10:00 A.M. (New York City time), on June 13, 2006, at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
Applicable Time: 3:30 p.m. (Eastern time) on June 8, 2006 or such time as agreed by the Company
and the Representatives.
Final Term Sheet: Attached as Annex I.
Please accept this offer no later than 5:00 P.M. (New York City time)
on June 8, 2006 by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
Very truly yours,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ Happy ▇▇▇▇▇▇▇▇
-----------------------------------
Name: Happy ▇▇▇▇▇▇▇▇
Title: Vice President
Acting on behalf of themselves and the
other named Underwriters.
Accepted:
AUTOZONE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ III
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ III
Title: Vice President and Controller
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President,
General Counsel and Secretary
