UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File No. 1-5571
TANDY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-1047710
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 One Tandy Center, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(817) 390-3700
N/A
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of the issuer's Common
Stock, $1 par value, on July 31, 1995 was 65,196,873.
Index to Exhibits is on Sequential Page No. 15.
Total pages 104.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
<CAPTIONS>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- --------------------------
(In thousands, except per share amounts) 1995 1994 1995 1994
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales and operating revenues $ 1,185,047 $ 1,009,277 $ 2,411,669 $ 2,001,412
Cost of products sold 739,278 602,103 1,519,321 1,186,884
----------- ----------- ----------- -----------
Gross profit 445,769 407,174 892,348 814,528
----------- ----------- ----------- -----------
Expenses:
Selling, general and administrative 365,126 346,131 738,836 678,051
Depreciation and amortization 22,153 21,052 44,455 41,796
Interest income (8,430) (22,114) (31,832) (45,101)
Interest expense 5,190 6,372 15,850 16,365
----------- ----------- ----------- -----------
384,039 351,441 767,309 691,111
----------- ----------- ----------- -----------
Income before income taxes 61,730 55,733 125,039 123,417
Provision for income taxes 23,766 21,318 48,140 47,207
----------- ----------- ----------- -----------
Net income 37,964 34,415 76,899 76,210
Preferred dividends 1,631 1,607 3,298 3,413
----------- ----------- ----------- -----------
Net income available to common shareholders $ 36,333 $ 32,808 $ 73,601 $ 72,797
=========== =========== =========== ===========
Net income available per average common
and common equivalent share $ 0.55 $ 0.44 $ 1.10 $ 0.96
=========== =========== =========== ===========
Average common and common
equivalent shares outstanding 66,240 75,417 67,189 75,612
=========== =========== =========== ===========
Dividends declared per common share $ 0.18 $ 0.15 $ 0.36 $ 0.30
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
<CAPTIONS>
June 30, Dec. 31, June 30,
(In thousands) 1995 1994 1994
-------------- ----------- ----------- -----------
<S> <C> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 80,566 $ 205,633 $ 278,271
Accounts and notes receivable, less
allowance for doubtful accounts 300,245 769,101 508,612
Inventories, at lower of cost or market 1,359,690 1,504,324 1,212,099
Other current assets 80,864 77,202 118,821
----------- ----------- -----------
Total current assets 1,821,365 2,556,260 2,117,803
Property, plant and equipment, at cost,
less accumulated depreciation 536,590 504,587 489,163
Investment in discontinued operations - - 18,314
Other assets, net of accumulated amortization 172,571 182,927 194,253
----------- ----------- -----------
$ 2,530,526 $ 3,243,774 $ 2,819,533
=========== =========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt, including current
maturities of long-term debt $ 153,984 $ 229,135 $ 95,772
Accounts payable 286,947 582,194 252,271
Accrued expenses 227,391 376,795 294,362
Income taxes payable 12,160 18,026 25,566
----------- ----------- -----------
Total current liabilities 680,482 1,206,150 667,971
----------- ----------- -----------
Long-term debt and capital leases,
excluding current maturities 148,863 153,318 135,748
Other non-current liabilities 20,057 34,095 47,959
----------- ----------- -----------
Total other liabilities 168,920 187,413 183,707
----------- ----------- -----------
Stockholders' equity:
Preferred stock, no par value, 1,000,000
shares authorized
Series A junior participating, 100,000
shares authorized and none issued - - -
Series B convertible, 100,000 shares
authorized and issued 100,000 100,000 100,000
Series C PERCS, 150,000 shares authorized
and issued - 429,982 429,982
Common stock, $1 par value, 250,000,000 shares
authorized with 85,645,000 shares issued 85,645 85,645 85,645
Additional paid-in-capital 95,672 93,357 89,645
Retained earnings 2,223,124 2,176,971 2,066,932
Foreign currency translation effects 3,788 (1,799) 1,288
Common stock in treasury, at cost,
20,191,000, 27,388,000 and 22,221,000
shares, respectively (768,262) (971,611) (738,706)
Unearned deferred compensation related to TESOP (58,843) (62,334) (66,931)
----------- ----------- -----------
Total stockholders' equity 1,681,124 1,850,211 1,967,855
Commitments and contingent liabilities
----------- ----------- -----------
$ 2,530,526 $ 3,243,774 $ 2,819,533
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
<CAPTIONS>
Six Months Ended
June 30,
--------------------------
(In thousands) 1995 1994
-------------- ----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 76,899 $ 76,210
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 44,455 41,796
Provision for credit losses and bad debts 11,304 13,049
Other items 1,868 6,454
Changes in operating assets and liabilities:
Sale of credit card portfolios 342,822 -
Receivables 115,651 103,433
Inventories 130,557 64,766
Other current assets (3,662) (2,199)
Accounts payable, accrued expenses and income taxes (385,588) (97,839)
----------- -----------
Net cash provided by operating activities 334,306 205,670
----------- -----------
Investing activities:
Additions to property, plant and equipment (97,100) (68,916)
Proceeds from sale of property, plant and equipment 2,696 1,058
Proceeds from sale of divested operations - 351,250
Other investing activities 1,805 (2,919)
----------- -----------
Net cash provided (used) by investing activities (92,599) 280,473
----------- -----------
Financing activities:
Purchase of treasury stock (288,193) (50,208)
Sale of treasury stock to employee stock purchase program 25,170 22,752
Proceeds from exercise of stock options 13,401 2,268
Dividends paid, net of taxes (37,475) (37,399)
Redemption of subordinated debentures - (32,431)
Changes in short-term borrowings, net (25,377) (274,420)
Additions to long-term borrowings 1,706 -
Repayments of long-term borrowings (56,006) (51,669)
----------- -----------
Net cash used by financing activities (366,774) (421,107)
----------- -----------
Increase (decrease) in cash and short-term investments (125,067) 65,036
Cash and short-term investments, beginning of period 205,633 213,235
----------- -----------
Cash and short-term investments, end of period $ 80,566 $ 278,271
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to
Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
six months ended June 30, 1995 are not necessarily indicative
of the results that may be expected for the year ending
December 31, 1995. For further information, refer to the
consolidated financial statements and management's discussion
and analysis of results of operations and financial condition
included in Tandy Corporation's ("Tandy" or the "Company")
Form 10-K for the year ended December 31, 1994.
NOTE 2-RELATIONS WITH INTERTAN
As of June 30, 1995 InterTAN Inc. ("InterTAN") owed Tandy an
aggregate of $37,872,000, net of discount. The current
portion of the obligation approximates $8,149,000 and the
non-current portion approximates $29,723,000. During the
quarter and six months ended June 30, 1995, Tandy recognized
$1,054,000 and $2,151,000, respectively, as interest income
from the accretion of discount on the note receivable from
InterTAN which resulted from the purchase of the bank debt at
a discounted price. Tandy recognized accretion of discount
of $933,000 and $1,784,000, respectively, on the note
receivable during the three and six months ended June 30,
1994. Tandy recognized sales to and commission income from
InterTAN of approximately $2,116,000 and $4,465,000 and
interest income of $2,083,000 and $4,179,000 (inclusive of
accretion of discount) during the quarter and six months
ended June 30, 1995, respectively. During the three and six
months ended June 30, 1994, Tandy recognized approximately
$2,906,000 and $14,043,000, respectively, of sales to and
commission income from InterTAN and interest income of
$2,041,000 and $4,014,000 (inclusive of accretion of
discount), respectively. See the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 for further
information.
Through July 1995 InterTAN has met all of its payment
obligations to Tandy. As a result, Tandy management believes
that InterTAN should be able to continue to meet its payment
obligations pursuant to its debt agreements with Tandy.
Canadian tax authorities are reviewing InterTAN's Canadian
subsidiary's 1987-89 tax returns. The Company cannot
determine whether the ultimate resolution of that review will
have an effect on InterTAN's ability to meet its obligations
to Tandy but, at present nothing has come to the attention of
the Company which would lead them to believe that the
ultimate resolution of this review would impair InterTAN's
ability to meet its obligations to Tandy.
NOTE 3-SALE OF CREDIT OPERATIONS
Effective March 30, 1995 the Company completed the sale, at
net book value, of the Radio Shack and Tandy Name Brand
Retail Group ("Tandy Name Brand") (McDuff, VideoConcepts and
The Edge in Electronics) private label credit card accounts
and substantially all accounts receivable to Hurley State
Bank, a subsidiary of SPS Transaction Services, Inc. ("SPS"),
a majority-owned subsidiary of Dean Witter, Discover & Co.
As a result of the transaction, Tandy received $342,822,000
in cash and a deferred payment amount of $49,444,000. The
deferred payment does not bear interest. Principal is paid
monthly with final payment due February 29, 1996. The
Company has discounted the deferred payment by $773,000 to
yield approximately 5% over the eleven month payout period
and, accordingly, the balance of the discounted deferred
payment amount of $20,217,000 is classified as a current
receivable in the accompanying Consolidated Balance Sheet at
June 30, 1995.
As part of the completed sales transaction, Tandy Credit
Corporation ("Tandy Credit") was merged into Hurley
Receivables Corporation ("HRC"), a wholly-owned subsidiary of
SPS, and no longer exists. The merger was necessary in order
to transfer an asset securitization program and approximately
$230,000,000 in customer receivables which backed the
program. HRC assumed the ongoing obligations of the Company
and its affiliates under the asset securitization program.
On March 31, 1995, Tandy Credit filed Post Effective
Amendment No. 2 to its Registration Statement on Form S-3
regarding the termination of the registration of all
remaining unsold medium term notes. The termination was
declared effective as of April 5, 1995. On March 31, 1995,
Tandy Credit also filed Form 15 to de-register Tandy Credit's
common stock and terminate its reporting obligations under
Section 12g-4(a) (1) (i) of the Securities Exchange Act of
1934.
NOTE 4-RESTRUCTURING CHARGES
In December 1994, the Company adopted a business
restructuring plan to close or convert 233 of the 306 Tandy
Name Brand stores. Closed stores included 151 VideoConcepts,
30 McDuff mall stores and 19 McDuff Supercenters.
Approximately 33 other mall stores or McDuff Supercenters
will be converted to Radio Shack or Computer City Express(SM)
stores sometime in 1995. At March 31, 1995 all 233 stores
had been closed. Approximately 57 McDuff stores and 16 The
Edge in Electronics stores remain open and as of January 1,
1995 became part of the Specialty Retail Group of Radio
Shack. A pre-tax charge of $89,071,000 taken in the fourth
quarter of fiscal 1994 related to the closing and conversion
of these stores. The components of the restructuring charge
and an analysis of the amounts charged against the reserve
are outlined in the following table:
<TABLE>
<CAPTIONS>
Charges Charges
Original Through Balance 1/1/95- Balance
(In thousands) Reserve 12/31/94 12/31/94 6/30/95 6/30/95
-------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Lease obligations $ 46,682 $ (1,466) $ 45,216 $ (19,846) $ 25,370
Impairment of fixed assets 17,991 - 17,991 (17,991) -
Inventory impairment 16,600 - 16,600 (15,297) 1,303
Goodwill impairment 4,222 (4,222) - - -
Termination benefits 1,218 - 1,218 (1,218) -
Other 2,358 - 2,358 (1,667) 691
----------- ----------- ----------- ----------- -----------
Total $ 89,071 $ (5,688) $ 83,383 $ (56,019) $ 27,364
=========== =========== =========== =========== ===========
</TABLE>
Sales and operating revenues associated with the closed 233
Tandy Name Brand stores were approximately $28,131,000 and
$123,510,000 for the six months ended June 30, 1995 and 1994,
respectively. In conjunction with this restructuring, Tandy
terminated 1,425 employees, most of whom were store employees
and managers.
NOTE 5-SHARE REPURCHASE PROGRAM
On August 1, 1994, the Company announced that its Board of
Directors authorized management to purchase up to 7,500,000
shares of its common stock in addition to shares required for
employee plans. On December 30, 1994, the Board of Directors
authorized management to increase the share repurchase
program to 12,500,000 shares. At June 30, 1995,
approximately 9,541,000 shares had been repurchased under
this program since inception, and approximately 4,541,000
shares had been repurchased in the six-month period ended
June 30, 1995. Future purchases will be made from time to
time in the open market, and it is expected that funding for
the remainder of the program will come from existing cash and
short-term debt.
NOTE 6-RETIREMENT OF DEBT
In January 1995, the $45,000,000 of 8.69% senior notes which
were outstanding at December 31, 1994 were paid in full.
These senior notes had been outstanding since February 7,
1990. In February 1995, the $6,000,000 of Tandy Credit's
medium-term notes, which were outstanding at December 31,
1994 and were to mature in May and August of 1995, were paid
in full.
NOTE 7-CONTINGENCY
The IRS Dallas field office is reviewing the Company's
1987-1989 tax returns and has referred certain issues to the
IRS National office. The resolution of this matter could
result in additional taxes and interest to the Company
related to the spin-off of InterTAN and raises questions
about the private letter rulings issued by the IRS regarding
the spin-off and certain other tax matters. Although
aggregate additional taxes involved in these transactions
could potentially range from $0 to $27 million, based on the
advice of the Company's independent tax advisors, the Company
believes it would prevail if any tax litigation had to be
instituted. Any ultimate tax assessment would also involve
interest. In any event, the Company believes the ultimate
resolution would have no material impact on the Company's
financial condition.
The Company is a defendant in a consolidated action titled
O'Sullivan Industries Holdings, Inc. Securities Litigation,
----------------------------------------------------------
which was commenced in 1994 and is currently pending before
the United States District Court for the Western District of
Missouri. The plaintiffs seek damages in an unspecified
amount alleging that O'Sullivan's initial public offering
prospectus, certain press releases and other materials
contained material misrepresentations and omissions. They
have also named O'Sullivan, O'Sullivan's officers and
directors, and the underwriters as defendants. Tandy
believes that the lawsuit is totally without merit and is
defending itself vigorously. It further believes that even
though an adverse resolution of the litigation might have a
negative impact on its results of operation in the year of
resolution, resolution will not have a material adverse
effect on its financial condition or liquidity.
NOTE 8-HEDGING AND DERIVATIVE ACTIVITY
The Company enters into interest rate swap agreements to
manage its interest rate exposure by effectively trading
floating interest rates for fixed interest rates. As the
Company has used the swaps to hedge certain obligations with
floating rates, the difference between the floating and fixed
interest rate amounts, based on these swap agreements, is
recorded as income or expense. Through June 30, 1995, the
Company has entered into five swaps with regard to notional
amounts totaling $90,000,000. The swap agreements all expire
during the third quarter of 1999. Prior to 1995 the Company
was not a party to any interest rate swaps. The Board of
Directors has authorized management to enter into interest
rate swaps up to notional amounts not exceeding $250,000,000.
At June 30, 1995, the Company would have to pay approximately
$5,505,000 to terminate the interest rate swaps in place.
This amount was obtained from the counterparties and
represents the fair value of the swap agreements; the amount
is not recognized in the consolidated financial statements.
The Company has no intention of terminating the interest rate
swap agreements at this time. At June 30, 1995, the weighted
average interest rate of the floating rate obligations being
hedged was 6.89%, and the weighted average interest rate of
the fixed rate obligations imposed by the swap agreements was
7.70%. The interest rate swap agreements have been entered
into with major financial institutions which are expected to
fully perform under the terms of the swap agreements.
NOTE 9-PERCS CONVERSION
Tandy announced on January 23, 1995 that it had exercised its
right to call all the issued and outstanding Preferred Equity
Redemption Convertible Stock ("PERCS") for conversion on
March 10, 1995, prior to its mandatory conversion date of
April 15, 1995. For each PERCS depositary share redeemed,
0.787757 Tandy common shares were issued for an aggregate of
approximately 11,816,000 shares. In addition, each PERCS
depositary share received a dividend in cash of $0.321
representing the accrued dividend from January 16, 1995
through the redemption date of March 10, 1995.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Net Sales and Operating Revenues
Net sales and operating revenues for the periods ended June
30 were:
<TABLE>
<CAPTIONS>
Three Months Ended Six Months Ended
June 30, % Increase June 30, % Increase
-------------------------- --------------------------
(In thousands) 1995 1994 (Decrease) 1995 1994 (Decrease)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C><C> <C> <C> <C><C>
Radio Shack $ 680,885 $ 631,352 (1) 7.8 % $ 1,343,954 $ 1,268,992 (1) 5.9 %
Tandy Name Brand (closed) (219) 57,584 - 28,131 123,510 (77.2)
Incredible Universe 132,330 59,196 123.5 266,083 110,189 141.5
Computer City 352,078 241,693 45.7 730,641 453,480 61.1
----------- ----------- ----------- ----------- ----------- -----------
1,165,074 989,825 17.7 2,368,809 1,956,171 21.1
Other Sales 19,973 19,452 2.7 42,860 45,241 (5.3)
----------- ----------- ----------- ----------- ----------- -----------
$ 1,185,047 $ 1,009,277 17.4 % $ 2,411,669 $ 2,001,412 20.5 %
=========== =========== =========== =========== =========== ===========
(1) Restated to include the remaining 73 Tandy Name Brand retail units.
</TABLE>
U.S. and Canadian continuing retail operations had 24.8% and
27.5% sales gains for the three and six-month periods ended
June 30 , 1995. Tandy Corporation's overall comparable store
sales gains for U.S. and Canadian operations approximated
5.6% for the quarter and 6.1% for the six-month period.
Incredible Universe was a key contributor to the sales growth
with same store sales gains of 7.9% and 11.4% for the quarter
and six-month period, respectively. The strongest categories
included computer hardware and software, televisions and
satellite systems. Telephones, cellular phones and accessory
sales were also strong at Incredible Universe during the
quarter. Since June 30, 1994, Incredible Universe has added
five stores, including one which was added in the June 1995
quarter. Incredible Universe operated ten stores as of June
30, 1995 and plans to open an additional seven stores in the
latter half of the year.
Computer City had comparable store sales results of (1.0)%
and 5.5% for the three and six-month periods for U.S. and
Canadian retail sales. Twenty-nine stores have been added to
the Computer City chain since June 30, 1994, including five
which were added in the quarter ended June 30, 1995. As of
June 30, 1995, there were 78 stores open and it is
anticipated that Computer City will add eight new stores in
the third quarter of 1995. By the end of 1995 Computer City
plans to have approximately 100 stores. Sales of Pentium(R)
processor-based computers and multimedia products were strong
at Computer City.
Radio Shack's sales reflected an increase in sales of
consumer electronic products, especially cellular products,
which was partially offset by a decline in computer sales.
As of January 1, 1995, Radio Shack sales include the sales
for Tandy Name Brand Retail Group ("Tandy Name Brand") stores
which were not closed and are now included in the Specialty
Retail Group of Radio Shack. Radio Shack comparable store
sales gains for the three and six-month periods were 7.8% and
5.8%, respectively. At June 30, 1995, Radio Shack had 4,709
company-owned stores, including 73 in the Specialty Retail
Group. The division has had a net increase of 37 Radio
Shack(R) stores since December 30, 1994.
Gross Profit
Gross profit as a percent of net sales was 37.6% during the
three months ended June 30, 1995 as compared to 40.3% during
the corresponding 1994 period. For the six months ended June
30, 1995 and 1994, the gross profit percentages were 37.0%
and 40.7%, respectively. This trend toward lower gross
margins is expected to continue as Computer City(R) and
Incredible Universe(R) stores contribute a larger proportion
of sales as they operate on lower margins. In the second
quarter of 1995, Computer City and Incredible Universe
accounted for approximately 40.9% of consolidated sales
compared to 29.8% in the second quarter of 1994. For the six
months ended June 30, 1995 and 1994, Computer City and
Incredible Universe accounted for approximately 41.3% and
28.2% of consolidated sales, respectively. This mix of
business shift continues to be partially offset by increasing
margins at Radio Shack resulting from the increased emphasis
on sales of core categories, although this increase was less
than the increase seen in 1994.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses as a
percent of sales and operating revenues declined 3.5
percentage points in comparison with the second quarter of
1994 and declined 3.3 percentage points in comparison with
the six months ended June 30, 1994. Most expense categories,
including advertising, rent, payroll and utilities, were
lower as a percent of sales during the three and six months
ended June 30, 1995 as compared with the same prior year
periods. The lower rent and payroll costs as a percent of
sales reflect the lower relative costs associated with the
Company's newer retail formats. As a result of Computer City
and Incredible Universe expansion into new markets and Radio
Shack's new promotional programs consolidated advertising
costs increased $7,859,000 or 8.9% during the six months in
comparison with the prior year period. As a result of the
Company selling the private label credit card portfolios
earlier this year, bad debt expense decreased significantly
in the second quarter as compared to that of the prior year.
The restructuring of the Tandy Name Brand group has reduced
costs in all expense areas this year. The Company expects
SG&A expenses as a percent of sales to continue to decrease
as Computer City and Incredible Universe, which operate at
lower costs than consolidated Tandy Corporation, become more
significant portions of the Company's total business.
Net Interest Income
Interest income for the quarter ending June 30, 1995
decreased $13,684,000 from $22,114,000 to $8,430,000 in the
second quarter of 1994. This decrease is due to the selling
of the Company's credit card portfolios and increased
utilization of cash for the ongoing share repurchase program
and capital expenditures related to new stores. Interest
expense decreased $1,182,000 for the quarter ending June 30,
1995 and remained relatively stable for the six months in
comparison with the same prior year period.
Sale of Credit Operations
In a transaction completed on March 30, 1995, the Company
sold the Radio Shack and Tandy Name Brand (McDuff,
VideoConcepts and The Edge in Electronics) private label
credit card accounts and substantially all accounts
receivable to Hurley State Bank, a subsidiary of SPS
Transaction Services, Inc., a majority-owned subsidiary of
Dean Witter, Discover & Co., resulting in no material gain or
loss. The transaction has impacted the current period and
should impact future periods as follows: (1) SG&A costs
incurred in processing the private label credit card accounts
will be eliminated, (2) no interest income associated with
the credit card accounts will be recorded and (3) customer
service fees earned on the credit card accounts will decline
as the Company's remaining consumer credit balances decrease
during 1995 and 1996.
Restructuring Charges
Sales and operating revenues associated with the closed 233
Tandy Name Brand stores were approximately $28,131,000 and
$123,510,000 for the six months ended June 30, 1995 and 1994,
respectively. In conjunction with this restructuring, Tandy
terminated 1,425 employees, most of whom were store employees
and managers.
Provision for Income Taxes
Provision for income taxes for each quarterly period is based
on the estimate of the annual effective tax rate for the
fiscal year as evaluated at the end of each quarter. The
effective tax rates for the second quarters of 1995 and 1994
were 38.5% and 38.25%, respectively. The increase reflects
shifts of income into states with higher income tax rates
such as California, New York and Ohio.
The IRS Dallas field office is reviewing the Company's
1987-1989 tax returns and has referred certain issues to the
IRS National office. The resolution of this matter could
result in additional taxes and interest to the Company
related to the spin-off of InterTAN and raises questions
about the private letter rulings issued by the IRS regarding
the spin-off and certain other tax matters. Although
aggregate additional taxes involved in these transactions
could potentially range from $0 to $27 million, based on the
advice of the Company's independent tax advisors, the Company
believes it would prevail if any tax litigation had to be
instituted. Any ultimate tax assessment would also involve
interest expense. In any event, the Company believes the
ultimate resolution would have no material impact on the
Company's financial condition.
Earnings Per Share
Net income per average common and common equivalent share is
computed by dividing net income less the Series B convertible
stock dividends by the weighted average common and common
equivalent shares outstanding during the period. As the
Preferred Equity Redemption Convertible Stock ("PERCS")
mandatorily converted into common stock, they were considered
outstanding common stock and the dividends were not deducted
from net income for purposes of calculating net income per
average common and common equivalent share. Current quarter
and year-to-date weighted average share calculations include
approximately 11,816,000 common shares relating to the
conversion of the PERCS into common shares on March 10, 1995.
Per share amounts and the weighted average number of shares
outstanding for the first and second quarters of 1994 also
reflect the PERCS conversion into approximately 11,816,000
common shares. Fully diluted earnings available per common
and common equivalent share are not presented since dilution
is less than 3%.
Cash Flow and Financial Condition
Cash flow from operating activities increased in the
six-month period ended June 30, 1995 as compared with the
same period of the prior year. This increase relates
primarily to the sale of the credit card portfolios and the
reduction of inventories partially offset by a net decrease
in accounts payable, accrued expenses and income taxes.
Cash used by investing activities for the six-month period
ended June 30, 1995 includes property, plant and equipment
additions related to additional fixtures required for new
Radio Shack stores and the Company's expansion of its
Computer City and Incredible Universe store formats.
Management anticipates that capital expenditure requirements
will approximate $100,000,000 for the remainder of 1995,
primarily to support retail expansion. Cash used for
financing activities for the six-month period ended June 30,
1995 includes continued purchases of treasury stock under the
share repurchase program. Repayments of long-term borrowings
includes the $45,000,000 of 8.69% senior notes and Tandy
Credit's medium-term notes of $6,000,000. The Company
believes that its cash flow from operations, cash on hand and
availability under its existing debt facilities are adequate
to fund the planned expansion of its store formats and share
repurchase program. In addition, most of the Company's new
store expenditures are being funded through operating leases.
Cash and short-term investments at June 30, 1995 were
$80,566,000 as compared to $205,633,000 at December 31, 1994
and $278,271,000 at June 30, 1994. Total debt as a
percentage of total capitalization was 15.3% at June 30,
1995, compared to 17.1% at December 31, 1994 and 10.5% at
June 30, 1994. Long-term debt as a percentage of total
capitalization was 7.5% at June 30, 1995 compared to 6.9% at
December 31, 1994 and 6.2% at June 30, 1994. The increases
in debt ratios result primarily from the Company's share
repurchase program described below.
On August 1, 1994, the Company announced that its Board of
Directors authorized management to purchase up to 7,500,000
shares of its common stock in addition to shares required for
employee plans. On December 30, 1994, the Board of Directors
authorized management to increase the share repurchase
program to 12,500,000 shares. At June 30, 1995,
approximately 9,541,000 shares had been repurchased under
this program since inception, and approximately 4,541,000
shares had been repurchased in the six-month period ended
June 30, 1995. Future purchases will be made from time to
time in the open market, and it is expected that funding for
the remainder of the program will come from existing cash and
short-term debt.
Inventory
Compared to June 30, 1994, total inventories at June 30, 1995
have increased $147,591,000 or 12.2%. The increase in total
inventory levels included additional inventory to support new
Computer City and Incredible Universe stores and to support
the sales growth in certain core categories at Radio Shack.
A portion of this increase was offset by decreased inventory
levels at Tandy Name Brand due to the closure of 233 stores
in the quarter ended March 31, 1995. Inventory levels have
decreased 9.6% from the amounts at December 31, 1994
primarily due to seasonal fluctuations and closing of Tandy
Name Brand stores. Inventory is primarily comprised of
finished goods.
<TABLE>
Changes in Stockholders' Equity
<CAPTIONS>
Outstanding
(In thousands) Common Shares Dollars
-------------- ------------- -----------
<S> <C> <C>
Balance at December 31, 1994 58,257 $ 1,850,211
Foreign currency translation adjustments,
net of deferred taxes - 5,587
Sale of treasury stock to employee plans 538 25,170
Purchase of treasury stock (5,519) (260,964)
Exercise of stock options 362 13,401
Repurchase of preferred stock - (1,925)
Preferred stock dividends, net of tax - (2,144)
PERCS dividend - (4,824)
Redemption of PERCS 11,816 -
TESOP deferred compensation earned - 3,491
Common stock dividends - (23,778)
Net income - 76,899
------------- -----------
Balance at June 30, 1995 65,454 $ 1,681,124
============= ===========
</TABLE>
InterTAN Update
As of June 30, 1995 InterTAN Inc. ("InterTAN") owed Tandy an
aggregate of $37,872,000, net of discount. The current
portion of the obligation approximates $8,149,000 and the
non-current portion approximates $29,723,000. During the
quarter and six months ended June 30, 1995, Tandy recognized
$1,054,000 and $2,151,000, respectively, as interest income
from the accretion of discount on the note receivable from
InterTAN which resulted from the purchase of the bank debt at
a discounted price. Tandy recognized accretion of discount
of $933,000 and $1,784,000, respectively, on the note
receivable during the three and six months ended June 30,
1994. Tandy recognized sales to and commission income from
InterTAN of approximately $2,116,000 and $4,465,000 and
interest income of $2,083,000 and $4,179,000 (inclusive of
accretion of discount) during the quarter and six months
ended June 30, 1995, respectively. During the three and six
months ended June 30, 1994, Tandy recognized approximately
$2,906,000 and $14,043,000, respectively, of sales to and
commission income from InterTAN and interest income of
$2,041,000 and $4,014,000 (inclusive of accretion of
discount), respectively. See the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 for further
information.
Through July 1995 InterTAN has met all of its payment
obligations to Tandy. As a result, Tandy management believes
that InterTAN should be able to continue to meet its payment
obligations pursuant to its debt agreements with Tandy.
Canadian tax authorities are reviewing InterTAN's Canadian
subsidiary's 1987-89 tax returns. The Company cannot
determine whether the ultimate resolution of that review will
have an effect on InterTAN's ability to meet its obligations
to Tandy but, at present nothing has come to the attention of
the Company which would lead them to believe that the
ultimate resolution of this review would impair InterTAN's
ability to meet its obligations to Tandy.
Pentium is a trademark of Intel Corporation. Preferred
Equity Redemption Convertible Stock and PERCS are trademarks
of Morgan Stanley & Co., Incorporated, in connection with
their investment banking services. All other trademarks
identified herein are owned or used by Tandy Corporation.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a defendant in a consolidated action titled
O'Sullivan Industries Holdings, Inc. Securities Litigation,
which was commenced in 1994 and is currently pending before
the United States District Court for the Western District of
Missouri. The plaintiffs seek damages in an unspecified
amount alleging that O'Sullivan's initial public offering
prospectus, certain press releases and other materials
contained material misrepresentations and omissions. They
have also named O'Sullivan, O'Sullivan's officers and
directors, and the underwriters as defendants. Tandy
believes that the lawsuit is totally without merit and is
defending itself vigorously. It further believes that even
though an adverse resolution of the litigation might have a
negative impact on its results of operation in the year of
resolution, resolution will not have a material adverse
effect on its financial condition or liquidity.
Tandy has various claims, lawsuits, disputes with third
parties, investigations and pending actions involving
allegations of negligence, product defects, discrimination,
infringement of intellectual property rights, securities
matters, tax deficiencies, violations of permits or licenses,
and breach of contract and other matters against the Company
and its subsidiaries incident to the operation of its
business. The liability, if any, associated with these
matters was not determinable at March 31, 1995. While
certain of these matters involve substantial amounts, and
although occasional adverse settlements or resolutions might
occur and negatively impact earnings in the year of
settlement, it is the opinion of management that their
ultimate resolution will not have a materially adverse effect
on Tandy's financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Annual Meeting of Stockholders held on May 18, 1995,
the Company elected directors to serve for the ensuing year
and voted to approve the Amendment to the Compensation Plan
of the Chief Executive Officer and Amendment to the Tandy
Corporation 1993 Incentive Stock Plan. Out of the 68,131,653
eligible votes, 58,187,538 votes were cast at the meeting
either by proxies solicited in accordance with Schedule 14A
or by security holders voting in person. There were
6,653,953 broker non-votes which are not included in the
following table as they were not treated as being present at
the meeting. In the case of directors, abstentions are
treated as votes withheld and are included in the table. The
tabulation of votes for each nominee is set forth below under
Item No. 1, the Amendment to the Compensation Plan of the
Chief Executive Officer is set forth under Item No. 2 and the
Amendment to the Tandy Corporation 1993 Incentive Stock Plan
is set forth under Item No. 3 below:
Item No. 1
----------
NOMINEES FOR DIRECTORS
----------------------
VOTES VOTES
DIRECTORS FOR WITHHELD
--------- ---------- -------
James I. Cash, Jr. 57,791,038 396,500
Donna R. Ecton 57,754,100 433,438
Lewis F. Kornfeld, Jr. 57,480,941 706,597
Jack L. Messman 57,816,343 371,195
William G. Morton, Jr. 57,475,268 712,270
Thomas G. Plaskett 57,524,759 662,779
John V. Roach 57,512,171 675,367
William T. Smith 57,775,805 411,733
Alfred J. Stein 57,778,375 409,163
William E. Tucker 57,581,222 606,316
Jesse L. Upchurch 57,906,055 281,483
John A. Wilson 57,842,434 345,104
Item No. 2
----------
AMENDMENT TO THE COMPENSATION PLAN OF THE
-----------------------------------------
CHIEF EXECUTIVE OFFICER
-----------------------
FOR AGAINST ABSTAIN
---------- --------- -------
55,384,191 2,275,045 528,302
Item No. 3
----------
AMENDMENT TO THE TANDY CORPORATION 1993 INCENTIVE STOCK PLAN
------------------------------------------------------------
FOR AGAINST ABSTAIN
---------- --------- -------
51,553,141 6,136,024 498,373
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits Required by Item 601 of Regulation S-K.
A list of the exhibits required by Item 601 of
Regulation S-K and filed as part of this report is
set forth in the Index to Exhibits on page 15, which
immediately precedes such exhibits.
b) Reports on Form 8-K.On March 31, 1995, the Company
announced the completion of the sale of its credit
card portfolios. The Radio Shack and Tandy Name
Brand private label credit card portfolios sale to
SPS Transaction Services, Inc., a majority-owned
subsidiary of Dean Witter, Discover & Co., was
consummated on March 30, 1995. The Form 8-K was
filed on April 12, 1995. Pro forma financial
information was included.
No other Form 8-K reports were filed during the quarter ended
June 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
Tandy Corporation
(Registrant)
Date: August 11, 1995 By /s/ Richard L. Ramsey
------------------------------
Richard L. Ramsey
Vice President and Controller
(Authorized Officer)
Date: August 11, 1995 /s/ Dwain H. Hughes
------------------------------
Dwain H. Hughes
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
TANDY CORPORATION
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page No.
2a Agreement for Purchase and Sale of Assets
dated as of June 30, 1993 between AST
Research, Inc., as Purchaser and Tandy
Corporation, TE Electronics Inc., and GRiD
Systems Corporation, as Sellers (without
exhibits) (filed as Exhibit 2 to Tandy's
July 13, 1993 Form 8-K filed on July 27,
1993, Accession No. 0000096289-93-000004
and incorporated herein by reference).
2b Amended and Restated Stock Exchange
Agreement dated February 1, 1994 by and
among O'Sullivan Industries Holdings, Inc.,
and TE Electronics Inc. (filed as Exhibit
2b to Tandy's Form 10-K filed on March 30,
1994, Accession No. 0000096289-94-000029
and incorporated herein by reference).
2c U.S. Purchase Agreement dated January 26,
1994 by and among O'Sullivan Industries
Holdings, Inc., TE Electronics Inc. and the
U.S. Underwriters which included Merrill
Lynch & Co., Wheat First Butcher & Singer,
The Chicago Dearborn Company and Rauscher
Pierce Refsnes, Inc. (filed as Exhibit 2c to
Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
2d International Purchase Agreement dated January
26, 1994 by and among O'Sullivan Industries
Holdings, Inc., TE Electronics Inc. and the
U.S. Underwriters which included Merrill
Lynch International Limited and UBS Limited
(filed as Exhibit 2d to Tandy's Form 10-K
filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated herein
by reference).
2e Acquisition Agreement dated January 18,
1995 between Hurley State Bank, as purchaser
and Tandy Credit Corporation as seller
(without exhibits) (filed as Exhibit (c)
to Tandy's January 18, 1995 Form 8-K filed
on February 2, 1995, Accession No.
0000096289-95-000008 and incorporated
herein by reference).
2e(i) Amendment No. 1 to Acquisition Agreement
dated January 18, 1995 between Tandy Credit
Corporation, Tandy National Bank and Hurley
State Bank (filed as Exhibit 2 to Tandy's
March 30, 1995 Form 8-K filed on April 12,
1995, Accession No. 0000096289-95-000012
and incorporated herein by reference).
2f Agreement and Plan of Merger dated March 30,
1995 by and among, Tandy Corporation, Tandy
Credit Corporation, Hurley State Bank and
Hurley Receivables Corporation (filed as
Exhibit 3 to Tandy's March 30, 1995 Form
8-K filed on April 12, 1995, Accession No.
0000096289-95-000012 and incorporated
herein by reference).
3a(i) Restated Certificate of Incorporation of
Tandy dated December 10, 1982 (filed as
Exhibit 4A to Tandy's 1993 Form S-8 for
the Tandy Corporation Incentive Stock Plan,
Reg. No. 33-51603, filed on November 12,
1993, Accession No. 0000096289-93-000017
and incorporated herein by reference).
3a(ii) Certificate of Amendment of Certificate of
Incorporation of Tandy Corporation dated
November 13, 1986 (filed as Exhibit 4A to
Tandy's 1993 Form S-8 for the Tandy
Corporation Incentive Stock Plan, Reg.
No. 33-51603, filed on November 12,
1993, Accession No. 0000096289-93-000017 and
incorporated herein by reference).
3a(iii) Certificate of Amendment of Certificate
of Incorporation, amending and restating
the Certificate of Designation, Preferences
and Rights of Series A Junior Participating
Preferred Stock dated June 22, 1990 (filed
as Exhibit 4A to Tandy's 1993 Form S-8 for
the Tandy Corporation Incentive Stock Plan,
Reg. No. 33-51603, filed on November 12,
1993, Accession No. 0000096289-93-000017
and incorporated herein by reference).
3a(iv) Certificate of Designations of Series B
TESOP Convertible Preferred dated June 29,
1990 (filed as Exhibit 4A to Tandy's 1993
Form S-8 for the Tandy Corporation Incentive
Stock Plan, Reg. No. 33-51603, filed on
November 12, 1993, Accession No.
0000096289-93-000017 and incorporated
herein by reference).
3a(v) Certificate of Designation, Series C
Conversion Preferred Stock dated February
13, 1992 (filed as Exhibit 4A to Tandy's
1993 Form S-8 for the Tandy Corporation
Incentive Stock Plan, Reg. No. 33-51603,
filed on November 12, 1993, Accession
No. 0000096289-93-000017 and incorporated
herein by reference).
3b Tandy Corporation Bylaws, restated as of
August 4, 1993 (filed as Exhibit 4B to
Tandy's Form S-8 for the Tandy Corporation
Incentive Stock Plan, Reg. No. 33-51603,
filed on November 12, 1993, Accession No.
0000096289-93-000017 and incorporated
herein by reference).
4a Amended and restated Rights Agreement with
the First National Bank of Boston dated
June 22, 1990 for Preferred Share Purchase
Rights (filed as Exhibit 4b to Tandy's Form
10-K filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated
herein by reference).
4b Revolving Credit Agreement between Tandy
Corporation and Texas Commerce Bank,
individually and as Agent for sixteen other
banks, dated as of May 27, 1994 (without
exhibits) (filed as Exhibit 4c to Tandy's
Form 10Q filed on August 15, 1994, Accession
No. 0000096289-94-000039 and incorporated
herein by reference).
4c Continuing Guaranty dated as of June 18,
1991 by Tandy Corporation in favor of
holders of indebtedness issued by Tandy
Credit Corporation that is or may be
publicly traded and is rated by at least
one nationally recognized rating agency
(filed as Exhibit 4e to Tandy's Form 10-K
filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated
herein by reference).
10a* Salary Continuation Plan for Executive
Employees of Tandy Corporation and
Subsidiaries including amendment dated
June 14, 1984 with respect to participation
by certain executive employees, as restated
October 4, 1990 (filed as Exhibit 10a to
Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10b* Form of Executive Pay Plan Letters (filed
as Exhibit 10b to Tandy's Form 10-K filed
on March 30, 1995, Accession No.
0000096289-95-000010 and incorporated
herein by reference).
10c* Post Retirement Death Benefit Plan for
Selected Executive Employees of Tandy
Corporation and Subsidiaries as restated
June 10, 1991 (filed as Exhibit 10c to
Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10d* Tandy Corporation Officers Deferred
Compensation Plan as restated July 10,
1992 (filed as Exhibit 10d to Tandy's
Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10e* Special Compensation Plan No. 1 for Tandy
Corporation Executive Officers, adopted
in 1993 (filed as Exhibit 10e to Tandy's
Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94-000029 and incorporated
herein by reference).
10f* Special Compensation Plan No. 2 for Tandy
Corporation Executive Officers, adopted
in 1993 (filed as Exhibit 10f to Tandy's
Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94-000029 and incorporated
herein by reference).
10g* Special Compensation Plan for Directors
of Tandy Corporation dated November 13,
1986 (filed as Exhibit 10g to Tandy's
Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029
and incorporated herein by reference).
10h* Director Fee Resolution (filed as Exhibit
10h to Tandy's Form 10-K filed on March 30,
1994, Accession No. 0000096289-94-000029
and incorporated herein by reference).
10i* Tandy Corporation 1985 Stock Option Plan
as restated effective August 1990 (filed
as Exhibit 10i to Tandy's Form 10-K filed
on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated
herein by reference).
10j* Tandy Corporation 1993 Incentive Stock Plan
as restated May 18, 1995. 18
10k* Tandy Corporation Officers Life Insurance
Plan as amended and restated effective
August 22, 1990 (filed as Exhibit 10k to
Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10l* Restated Trust Agreement Tandy Employees
Supplemental Stock Program through Amendment
No. III dated March 29, 1993 (filed as
Exhibit 10H to Tandy's Form 10-K/A-4 filed
on September 3, 1993, Accession No.
0000096289-93-000011 and incorporated
herein by reference).
10m* Forms of Termination Protection Agreements
for (i) Corporate Executives, (ii) Division
Executives, and (iii) Subsidiary Executives 38
10n* Tandy Corporation Termination Protection
Plans for Executive Employees of Tandy
Corporation and its Subsidiaries (i) the
Level I and (ii) Level II Plans. 75
10o* Forms of Bonus Guarantee Letter Agreements
with certain Executive Employees of Tandy
Corporation and its Subsidiaries (i)
Formula, (ii) Discretionary, and (iii)
Pay Plan (filed as Exhibit 10o to Tandy's
Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10p* Form of Indemnity Agreement with Directors,
Corporate Officers and two Division Officers
of Tandy Corporation (filed as Exhibit 10p
to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and
incorporated herein by reference).
11 Statement of Computation of Earnings
per Share 102
12 Statement of Computation of Ratio of
Earnings to Fixed Charges 104
27 Financial Data Schedule
_______________________
* Each of these exhibits is a "management contract or
compensatory plan, contract, or arrangement".
<PAGE>
EXHIBIT 10j
TANDY CORPORATION
1993 INCENTIVE STOCK PLAN
(AMENDED AND RESTATED MAY 18, 1995)
1. Purpose.
-------
The purpose of this Plan is to strengthen Tandy Corporation
(the "Company") by providing an incentive to its key
employees, consultants and advisors and directors and thereby
encouraging them to devote their abilities and industry to
the success of the Company's business enterprise. It is
intended that this purpose be achieved by extending to
directors, key employees, consultants and advisors of the
Company and its subsidiaries an added long-term incentive for
high levels of performance and unusual efforts through the
grant of Incentive Stock Options, Nonqualified Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance
Units and Performance Shares (as each term is hereinafter
defined).
2. Definitions.
-----------
For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a
Change in Control, the greater of (i) the highest price per
Share paid to holders of the Shares in any transaction (or
series of transactions) constituting or resulting in a Change
in Control or (ii) the highest Fair Market Value of a Share
during the ninety (90) day period ending on the date of a
Change in Control.
2.2 "Agreement" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an
Option or Award and setting forth the terms and conditions
thereof.
2.3 "Award" means a grant of Restricted Stock, a Stock
Appreciation Right, a Performance Award or any or all of
them.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means the commission of an act of fraud or
intentional misrepresentation or an act of embezzlement,
misappropriation or conversion of assets or opportunities of
the Company or any Subsidiary.
2.6 "Change in Capitalization" means any increase or
reduction in the number of Shares, or any change (including,
but not limited to, a change in value) in the Shares or
exchange of Shares for a different number or kind of shares
or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, issuance of warrants or
rights or debentures, stock dividend, stock split or reverse
stock split, cash dividend, property dividend, combination or
exchange of shares, repurchase of shares, change in corporate
structure or otherwise.
2.7 A "Change in Control" shall mean the occurrence during
the term of the Plan of:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) the Company or (B)
any corporation or other Person of which a majority of its
voting power or its voting equity securities or equity
interest is owned, directly or indirectly, by the Company
(for purposes of this definition, a "Subsidiary"), (ii) the
Company or its Subsidiaries, or (iii) any Person in
connection with a "Non-Control Transaction" (as hereinafter
defined).
(b) The individuals who, as of August 1, 1993, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(i) A merger, consolidation or reorganization
involving the Company, unless
(A) the stockholders of the Company,
immediately before such merger, consolidation or
reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at
least sixty percent (60%) of the combined voting power of the
outstanding voting securities of the corporation resulting
from such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately
before such merger, consolidation or reorganization,
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,
(C) no Person other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, the Surviving
Corporation, or any Subsidiary, or any Person who,
immediately prior to such merger, consolidation or
reorganization had Beneficial Ownership of fifteen percent
(15%) or more of the then outstanding Voting Securities] has
Beneficial Ownership of fifteen percent (15%) or more of the
combined voting power of the Surviving Corporation's then
outstanding voting securities, and
(D) a transaction described in clauses (A)
through (C) shall herein be referred to as a "Non-Control
Transaction";
(ii) A complete liquidation or dissolution of the
Company; or
(iii) An agreement for the sale or other
disposition of all or substantially all of the assets of the
Company to any Person (other than a transfer to a
Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
2.8 "Code" means the Internal Revenue Code of 1986, as
amended.
2.9 "Committee" means the Organization and Compensation
Committee of the Board consisting of at least three (3)
Disinterested Directors appointed by the Board to administer
the Plan and to perform the functions set forth herein.
2.10 "Company" means Tandy Corporation.
2.11 "Director Option" means an Option granted pursuant to
Section 5.
2.12 "Disability" means a physical or mental infirmity which
impairs the Optionee's ability to perform substantially his
or her duties for a period of one hundred eighty (180)
consecutive days.
2.13 "Disinterested Director" means a director of the
Company who is "disinterested" within the meaning of Rule
16b-3 under the Exchange Act.
2.14 "Division" means any of the operating units or
divisions of the Company designated as a Division by the
Committee.
2.15 "Eligible Employee" means any officer or other key
employee or consultant or advisor of the Company or a
Subsidiary designated by the Committee as eligible to receive
Options or Awards subject to the conditions set forth herein.
2.16 "Employee Option" means an Option granted pursuant to
Section 6.
2.17 "Exchange Act" means the Securities Exchange Act of
1934, as amended.
2.18 "Fair Market Value" on any date means the average of
the high and low sales prices of the Shares on such date on
the principal national securities exchange on which such
Shares are listed or admitted to trading, or if such Shares
are not so listed or admitted to trading, the arithmetic mean
of the per Share closing bid price and per Share closing
asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System
or such other market in which such prices are regularly
quoted, or, if there have been no published bid or asked
quotations with respect to Shares on such date, the Fair
Market Value shall be the value established by the Board in
good faith and, in the case of an Incentive Stock Option, in
accordance with Section 422 of the Code.
2.19 "Grantee" means a person to whom an Award has been
granted under the Plan.
2.20 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the
Committee as an Incentive Stock Option.
2.21 "Nonemployee Director" means a director of the Company
who is not an employee of the Company or any Subsidiary.
2.22 "Nonqualified Stock Option" means an Option which is
not an Incentive Stock Option.
2.23 "Option" means a Employee Option, a Director Option, or
either or both of them.
2.24 "Optionee" means a person to whom an Option has been
granted under the Plan.
2.25 "Parent" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the
Code) with respect to the Company.
2.26 "Performance Awards" means Performance Units,
Performance Shares or either or both of them.
2.27 "Performance Cycle" means the time period specified by
the Committee at the time a Performance Award is granted
during which the performance of the Company, a Subsidiary or
a Division will be measured.
2.28 "Performance Shares" means Shares issued or transferred
to an Eligible Employee under Section 10.
2.29 "Performance Unit" means Performance Units granted to
an Eligible Employee under Section 10.
2.30 "Restricted Stock" means Shares issued or transferred
to an Eligible Employee pursuant to Section 9.
2.31 "Retirement" means termination of service as a Director
under circumstances entitling the Director to a retirement
benefit under the Company's Directors Special Compensation
Plan.
2.32 "Stock Appreciation Right" means a right to receive all
or some portion of the increase in the value of the Shares as
provided in Section 8.
2.33 "Plan" means the Tandy Corporation 1993 Incentive Stock
Plan.
2.34 "Shares" means the common stock, par value $1.00 per
share, of the Company.
2.35 "Subsidiary" means any corporation which is a
subsidiary corporation (within the meaning of Section 424(f)
of the Code) with respect to the Company.
2.36 "Successor Corporation" means a corporation, or a
parent or subsidiary thereof within the meaning of Section
424(a) of the Code, which issues or assumes a stock option in
a transaction to which Section 424(a) of the Code applies.
2.37 "Ten-Percent Stockholder" means an Eligible Employee,
who, at the time an Incentive Stock Option is to be granted
to him or her, owns (within the meaning of Section 422(b)(6)
of the Code) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.
3. Administration.
--------------
3.1 The Plan shall be administered by the Committee which
shall hold meetings at such times as may be necessary for the
proper administration of the Plan. No member of the
Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with
respect to this Plan or any transaction hereunder, except for
liability arising from his or her own willful misfeasance,
gross negligence or reckless disregard of his or her duties.
The Company hereby agrees to indemnify each member of the
Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in
connection with defending against, responding to, negotiation
for the settlement of or otherwise dealing with any claim,
cause of action or dispute of any kind arising in connection
with any actions in administering this Plan or in authorizing
or denying authorization to any transaction hereunder.
3.2 Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time
to:
(a) determine those individuals to whom Employee
Options shall be granted under the Plan and the number of
Incentive Stock Options and/or Nonqualified Stock Options to
be granted to each Eligible Employee and to prescribe the
terms and conditions (which need not be identical) of each
Employee Option, including the purchase price per Share
subject to each Employee Option, and make any amendment or
modification to any Agreement consistent with the terms of
the Plan; and
(b) select those Eligible Employees to whom Awards
shall be granted under the Plan and to determine the number
of Stock Appreciation Rights, Performance Units, Performance
Shares, and/or Shares of Restricted Stock to be granted
pursuant to each Award, the terms and conditions of each
Award, including the restrictions or performance criteria
relating to such Performance Units or Performance Shares, the
maximum value of each Performance Unit and Performance Share
and make any amendment or modification to any Agreement
consistent with the terms of the Plan.
3.3 Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time:
(a) to construe and interpret the Plan and the Options
and Awards granted thereunder and to establish, amend and
revoke rules and regulations for the administration of the
Plan, including, but not limited to, correcting any defect or
supplying any omission, or reconciling any inconsistency in
the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable to make the Plan fully
effective, and all decisions and determinations by the
Committee in the exercise of this power shall be final,
binding and conclusive upon the Company, its Subsidiaries,
the Optionees and Grantees and all other persons having any
interest therein;
(b) to determine the duration and purposes for leaves
of absence which may be granted to an Optionee or Grantee on
an individual basis without constituting a termination of
employment or service for purposes of the Plan;
(c) to exercise its discretion with respect to the
powers and rights granted to it as set forth in the Plan; and
(d) generally, to exercise such powers and to perform
such acts as are deemed necessary or advisable to promote the
best interests of the Company with respect to the Plan.
4. Stock Subject to the Plan.
-------------------------
4.1 The maximum number of Shares that may be made the
subject of Options and Awards granted under the Plan is
3,000,000. Upon a Change in Capitalization the maximum
number of Shares shall be adjusted in number and kind
pursuant to Section 12. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued
Shares or out of Shares held in the Company's treasury, or
partly out of each, such number of Shares as shall be
determined by the Board.
4.2 Upon the granting of an Option or an Award, the number
of Shares available under Section 4.1 for the granting of
further Options and Awards shall be reduced as follows:
(a) In connection with the granting of an Option or an
Award (other than the granting of a Performance Unit
denominated in dollars), the number of Shares shall be
reduced by the number of Shares in respect of which the
Option or Award is granted or denominated.
(b) In connection with the granting of a Performance
Unit denominated in dollars, the number of Shares shall be
reduced by an amount equal to the quotient of (i) the dollar
amount in which the Performance Unit is denominated, divided
by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.
4.3 Whenever any outstanding Option or Award or portion
thereof expires, is canceled or is otherwise terminated for
any reason without having been exercised or payment having
been made in respect of the entire Option or Award, the
Shares allocable to the expired, canceled or otherwise
terminated portion of the Option or Award may again be the
subject of Options or Awards granted hereunder.
4.4 Notwithstanding anything contained in this Section 4,
the number of Shares available for Options and Awards at any
time under the Plan shall be reduced to such lesser amount as
may be required pursuant to the methods of calculation
necessary so that the exemptions provided pursuant to Rule
16b-3 under the Exchange Act will continue to be available
for transactions involving all current and future Options and
Awards. In addition, during the period that any Options and
Awards remain outstanding under the Plan, the Committee may
make good faith adjustments with respect to the number of
Shares attributable to such Options and Awards for purposes
of calculating the maximum number of Shares available for the
granting of future Options and Awards under the Plan,
provided that following such adjustments the exemptions
provided pursuant to Rule 16b-3 under the Exchange Act will
continue to be available for transactions involving all
current and future Options and Awards.
5. DIRECTOR PLANS.
--------------
5A. OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS.
----------------------------------------
5A.1 Annual Grant. Director Options shall be granted to
------------
each Nonemployee Director on the first trading day of
September of each year that the Plan is in effect. Each
Director Option granted shall be in respect of 4,000 Shares.
The purchase price of each Director Option shall be as
provided in Section 5A.3 and such Options shall be evidenced
by an Agreement containing such other terms and conditions
not inconsistent with the provisions of this Plan as
determined by the Board; provided, however, that such terms
-------- -------
shall not vary the timing of awards of Director Options,
including provisions dealing with forfeiture or termination
of such Director Options.
5A.2 One Time Grant. Director Options shall be granted to
--------------
each Nonemployee Director elected by the stockholders on May
18, 1995, provided the Plan is approved by the stockholders
of the Company. Each newly appointed or elected Nonemployee
Director who has not previously received a one-time grant
hereunder, shall be granted an option on the date the
Nonemployee Director attends his or her first Company Board
meeting. Each Director Option granted under this section
shall be in respect of 5,000 Shares. The purchase price of
each Director Option shall be as provided in Section 5A.3 and
such Options shall be evidenced by an Agreement containing
such other terms and conditions not inconsistent with the
provisions of this Plan as determined by the Board; provided,
--------
however, that such terms shall not vary the timing of awards
-------
of Director Options, including provisions dealing with
forfeiture or termination of such Director Options.
5A.3 Purchase Price. The purchase price for Shares under
--------------
each Director Option shall be equal to 100% of the Fair
Market Value of such Shares on the trading date immediately
preceding the date of grant.
5A.4 Vesting. Subject to Section 7.4, each Director Option
-------
shall become exercisable with respect to one third (1/3) of
the Shares subject thereto effective as of each of the first,
second and third anniversaries of the grant date; provided,
--------
however, that the Optionee continues to serve as a Director
-------
as of such dates. Notwithstanding the foregoing, if a
Director's service terminates by reason of his death,
Disability or Retirement, all Director Options then held by
the Director shall be fully vested.
5A.5 Duration. Each Director Option shall terminate on the
--------
date which is the tenth anniversary of the grant date, unless
terminated earlier as follows:
(a) If an Optionee's service as a Director terminates
for any reason other than Retirement, Disability, death or
Cause, the Optionee may, for a period of three (3) months
after such termination, exercise his or her Option to the
extent, and only to the extent, that such Option or portion
thereof was vested and exercisable as of the date the
Optionee's service as a Director terminated, after which time
the Option shall automatically terminate in full.
(b) If an Optionee's service as a Director terminates
by reason of the Optionee's Retirement or by resignation or
removal from the Board due to Disability, the Optionee may,
for a period of 12 months after such termination, exercise
his or her Option to the extent, and only to the extent that
such Option or portion thereof was vested and exercisable, as
of the date the Optionee's service as Director terminated,
after which time the Option shall automatically terminate in
full.
(c) If an Optionee's service as a Director terminates
for Cause, the Option granted to the Optionee hereunder shall
immediately terminate in full and no rights thereunder may be
exercised.
(d) If an Optionee dies while a Director or within
three (3) months after termination of service as a Director
as described in clause (a) or (b) of this Section 5A.5, the
Option granted to the Optionee may be exercised at any time
within 12 months after the Optionee's death by the person or
persons to whom such rights under the Option shall pass by
will, or by the laws of descent or distribution, after which
time the Option shall terminate in full.
5B. STOCK PURCHASE FOR DIRECTOR RETAINER FEES.
-----------------------------------------
5B.1 Election to Participate.
-----------------------
(a) First Time Election. All Nonemployee Directors or
-------------------
nominees on May 18, 1995, may file a six month irrevocable
election to participate in this Plan with the Company
Secretary at the 50% or 100% level prior to April 1, 1995,
subject to stockholder approval of this Plan. Such Directors
who elect to participate will be eligible to receive their
Nonemployee Director retainer fee for the period October 1,
1995 through May 31, 1996 in the form of Shares issued on
October 1, 1995. All newly appointed or newly elected
Nonemployee Directors will be eligible to participate in this
Plan by filing a six month irrevocable election to
participate, at the 50% or 100% level, with the Company
Secretary. An election so filed shall become effective on
the first day of the month following the six month
anniversary of the day of the election's receipt by the
Company Secretary and the period shall end on May 31 of the
ensuing year. After the "First Time Election" provided for
in this Section has been made, each Nonemployee Director will
be allowed to change his election annually on or before
November 30 of the prior year as provided for in Section
5B.1(b) below.
(b) Annual Election. Each Nonemployee Director will,
---------------
on or before November 30 of the prior year, shall have the
right to change his election to participate in this Plan by
having 50% or 100% of the Director's retainer fee (i.e.
$24,000) payable under the Director Compensation Plan paid to
him in advance on June 1 for the ensuing year, assuming he is
reelected by the stockholders at the annual meeting. Any
election made under Section 5B.1 (a) or (b) shall continue in
effect until changed during the annual election period which
terminates on November 30 of each year.
5B.2 Payment in Stock. Shares having a value equal to 50%
----------------
of the annual retainer fee (i.e. $12,000) or 100% of the
annual retainer fee (i.e. $24,000) will be paid to each
Director on June 1 of each year in accordance with the
election filed under Section 5B.1(b) hereof. Shares having a
value equal to $1,000 per month (50% election) or $2,000 per
month (100% election) will be paid to each Director on the
first day of the month following the six month anniversary
date of the Company Secretary's receipt of the election
provided under Section 5B.1(a) hereof for the period
beginning on the first day of the month following the six
month anniversary date of the Company Secretary's receipt of
the Director's election and ending on May 31.
5B.3 Fair Market Value. The Fair Market Value for Shares
-----------------
paid to Directors under this Section shall be equal to the
Fair Market Value of such Shares on the first trading day
immediately preceding June 1 of each year under the election
in Section 5B.1(b) and at the Fair Market Value of such
Shares on the first trading day preceding the first day of
the month following the six month anniversary date of the
Company Secretary's receipt of the Nonemployee Director's
irrevocable election in Section 5B.1(a). No fractional Share
will be issued to any Director.
5B.4 Distribution. Shares will be distributed to the
------------
Director as soon as practicable after issuance. Any amount
not used for the acquisition of a Share will be paid to the
Director in cash.
6. Option Grants for Eligible Employees.
------------------------------------
6.1 Authority of Committee. Subject to the provisions of
----------------------
the Plan and to Section 4.1 above, the Committee shall have
full and final authority to select those Eligible Employees
who will receive Options (each an "Employee Option"), the
terms and conditions of which shall be set forth in an
Agreement; provided, however, that no person shall receive
-----------------
any Incentive Stock Options unless he or she is an employee
of the Company, a Parent or a Subsidiary at the time the
Incentive Stock Option is granted.
6.2 Purchase Price. The purchase price or the manner in
--------------
which the purchase price is to be determined for Shares under
each Employee Option shall be determined by the Committee and
set forth in the Agreement; provided, however, that the
-----------------
purchase price per Share under each Incentive Stock Option
shall not be less than 100% of the Fair Market Value of a
Share on the date the Incentive Stock Option is granted (110%
in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and the purchase price per Share
under each Nonqualified Stock Option shall not be less than
the Fair Market Value of a Share on the date the Nonqualified
Stock Option is granted.
6.3 Maximum Duration. Employee Options granted hereunder
----------------
shall be for such term as the Committee shall determine,
provided that an Incentive Stock Option shall not be
exercisable after the expiration of ten (10) years from the
date it is granted (five (5) years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder)
and a Nonqualified Stock Option shall not be exercisable
after the expiration of ten (10) years from the date it is
granted. The Committee may, subsequent to the granting of
any Employee Option, extend the term thereof but in no event
shall the term as so extended exceed the maximum term
provided for in the preceding sentence.
6.4 Vesting. Subject to Section 7.4 hereof, each Employee
-------
Option shall become exercisable in such installments (which
need not be equal) and at such times as may be designated by
the Committee and set forth in the Agreement. To the extent
not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the Employee Option
expires. The Committee may accelerate the exercisability of
any Option or portion thereof at any time.
6.5 Modification or Substitution. The Committee may, in its
----------------------------
discretion, modify outstanding Employee Options or accept the
surrender of outstanding Employee Options (to the extent not
exercised) and grant new Options in substitution for them.
Notwithstanding the foregoing, (i) no modification of an
Employee Option shall adversely alter or impair any rights or
obligations under the Employee Option without the Optionee's
consent, and (ii) no modification or surrender of an
outstanding option and the grant of new options in
substitution for them which results in a Purchase Price (as
defined in Section 6.2 hereof) that is lower than the
Purchase Price of the originally issued Option shall be
effective until authorized by the shareholders of the
Corporation.
7. Terms and Conditions Applicable to All Options.
----------------------------------------------
7.1 Non-transferability. No Option granted hereunder shall
-------------------
be transferable by the Optionee to whom granted otherwise
than by will or the laws of descent and distribution, and an
Option may be exercised during the lifetime of such Optionee
only by the Optionee or his or her guardian or legal
representative. The terms of such Option shall be final,
binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
7.2 Method of Exercise. The exercise of an Option shall be
------------------
made only by a written notice delivered in person or by mail
to the Secretary of the Company at the Company's principal
executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor and otherwise
in accordance with the Agreement pursuant to which the Option
was granted. The purchase price for any Shares purchased
pursuant to the exercise of an Option shall be paid in full
upon such exercise by any one or a combination of the
following: (i) cash or (ii) transferring Shares to the
Company upon such terms and conditions as determined by the
Committee. Notwithstanding the foregoing, the Committee
shall have discretion to determine at the time of grant of
each Employee Option or at any later date (up to and
including the date of exercise) the form of payment
acceptable in respect of the exercise of such Employee
Option. The written notice pursuant to this Section 7.2 may
also provide instructions from the Optionee to the Company
that upon receipt of the purchase price in cash from the
Optionee's broker or dealer, designated as such on the
written notice, in payment for any Shares purchased pursuant
to the exercise of an Option, the Company shall issue such
Shares directly to the designated broker or dealer. Any
Shares transferred to the Company as payment of the purchase
price under an Option shall be valued at their Fair Market
Value on the day preceding the date of exercise of such
Option. If requested by the Committee, the Optionee shall
deliver the Agreement evidencing the Option to the Secretary
of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued
upon exercise of an Option and the number of Shares that may
be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
7.3 Rights of Optionees. No Optionee shall be deemed for
-------------------
any purpose to be the owner of any Shares subject to any
Option unless and until (i) the Option shall have been
exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the Shares to the Optionee or
his designated broker or dealer and (iii) the Optionee's name
or the name of his designated broker or dealer shall have
been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such
Shares.
7.4 Effect of Change in Control. Notwithstanding anything
---------------------------
contained in the Plan or an Agreement to the contrary, in the
event of a Change in Control, (i) all Options outstanding on
the date of such Change in Control shall become immediately
and fully exercisable and (ii) an Optionee will be permitted
to surrender for cancellation within sixty (60) days after
such Change in Control, any Option or portion of an Option to
the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the
excess, if any, of (x) (A) in the case of a Nonqualified
Stock Option, the greater of (1) the Fair Market Value, on
the date preceding the date of surrender, of the Shares
subject to the Option or portion thereof surrendered or (2)
the Adjusted Fair Market Value of the Shares subject to the
Option or portion thereof surrendered or (B) in the case of
an Incentive Stock Option, the Fair Market Value, on the date
preceding the date of surrender, of the Shares subject to the
Option or portion thereof surrendered, over (y) the aggregate
purchase price for such Shares under the Option or portion
thereof surrendered; provided, however, that in the case of
-----------------
an Option granted within six (6) months prior to the Change
in Control to any Optionee who may be subject to liability
under Section 16(b) of the Exchange Act, such Optionee shall
be entitled to surrender for cancellation his or her Option
during the sixty (60) day period commencing upon the
expiration of six (6) months from the date of grant of any
such Option.
8. Stock Appreciation Rights. The Committee may, in its
-------------------------
discretion, either alone or in connection with the grant of
an Option, grant Stock Appreciation Rights in accordance with
the Plan and the terms and conditions of which shall be set
forth in an Agreement. If granted in connection with an
Option, a Stock Appreciation Right shall cover the same
Shares covered by the Option (or such lesser number of Shares
as the Committee may determine) and shall, except as provided
in this Section 8, be subject to the same terms and
conditions as the related Option.
8.1 Time of Grant. A Stock Appreciation Right may be
-------------
granted (i) at any time if unrelated to an Option, or (ii) if
related to an Option, either at the time of grant, or at any
time thereafter during the term of the Option.
8.2 Stock Appreciation Right Related to an Option.
---------------------------------------------
(a) Exercise. Subject to Section 8.6, a Stock
--------
Appreciation Right granted in connection with an Option shall
be exercisable at such time or times and only to the extent
that the related Option is exercisable, and will not be
transferable except to the extent the related Option may be
transferable. A Stock Appreciation Right granted in
connection with an Incentive Stock Option shall be
exercisable only if the Fair Market Value of a Share on the
date of exercise exceeds the purchase price specified in the
related Incentive Stock Option Agreement.
(b) Amount Payable. Upon the exercise of a Stock
--------------
Appreciation Right related to an Option, the Grantee shall be
entitled to receive an amount determined by multiplying (A)
the excess of the Fair Market Value of a Share on the date
preceding the date of exercise of such Stock Appreciation
Right over the per Share purchase price under the related
Option, by (B) the number of Shares as to which such Stock
Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock
Appreciation Right at the time it is granted.
(c) Treatment of Related Options and Stock Appreciation
---------------------------------------------------
Rights Upon Exercise. Upon the exercise of a Stock
--------------------
Appreciation Right granted in connection with an Option, the
Option shall be canceled to the extent of the number of
Shares as to which the Stock Appreciation Right is exercised,
and upon the exercise of an Option granted in connection with
a Stock Appreciation Right or the surrender of such Option,
the Stock Appreciation Right shall be canceled to the extent
of the number of Shares as to which the Option is exercised
or surrendered.
8.3 Stock Appreciation Right Unrelated to an Option. The
-----------------------------------------------
Committee may grant to Eligible Employees Stock Appreciation
Rights unrelated to Options. Stock Appreciation Rights
unrelated to Options shall contain such terms and conditions
as to exercisability (subject to Section 8.6), vesting and
duration as the Committee shall determine, but in no event
shall they have a term of greater than ten (10) years. Upon
exercise of a Stock Appreciation Right unrelated to an
Option, the Grantee shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise
of such Stock Appreciation Right over the Fair Market Value
of a Share on the date the Stock Appreciation Right was
granted, by (B) the number of Shares as to which the Stock
Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock
Appreciation Right at the time it is granted.
8.4 Method of Exercise. Stock Appreciation Rights shall be
------------------
exercised by a Grantee only by a written notice delivered in
person or by mail to the Corporate Secretary or the President
of the Company at the Company's principal executive office,
specifying the number of Shares with respect to which the
Stock Appreciation Right is being exercised. If requested by
the Committee, the Grantee shall deliver the Agreement
evidencing the Stock Appreciation Right being exercised and
the Agreement evidencing any related Option to the Corporate
Secretary or President of the Company who shall endorse
thereon a notation of such exercise and return such Agreement
to the Grantee.
8.5 Form of Payment. Payment of the amount determined under
---------------
Sections 8.2(b) or 8.3 may be made in the discretion of the
Committee, solely in whole Shares in a number determined at
their Fair Market Value on the date preceding the date of
exercise of the Stock Appreciation Right, or solely in cash,
or in a combination of cash and Shares. If the Committee
decides to make full payment in Shares and the amount payable
results in a fractional Share, payment for the fractional
Share will be made in cash. Notwithstanding the foregoing,
no payment in the form of cash may be made upon the exercise
of a Stock Appreciation Right pursuant to Sections 8.2(b) or
8.3 to an officer of the Company or a Subsidiary who is
subject to liability under Section 16(b) of the Exchange Act,
unless the exercise of such Stock Appreciation Right is made
during the period beginning on the third business day and
ending on the twelfth business day following the date of
release for publication of the Company's quarterly or annual
statements of earnings.
8.6 Restrictions. No Stock Appreciation Right or portion
------------
thereof may be exercised before the date six (6) months after
the date it is granted.
8.7 Modification or Substitution. Subject to the terms of
----------------------------
the Plan, the Committee may modify outstanding Awards of
Stock Appreciation Rights or accept the surrender of
outstanding Awards of Stock Appreciation Rights (to the
extent not exercised) and grant new Awards in substitution
for them. Notwithstanding the foregoing, no modification of
an Award shall adversely alter or impair any rights or
obligations under the Agreement without the Grantee's
consent.
8.8 Effect of Change in Control. Notwithstanding anything
---------------------------
contained in this Plan to the contrary, in the event of a
Change in Control, subject to Section 8.6, all Stock
Appreciation Rights shall become immediately and fully
exercisable. Notwithstanding Sections 8.3 and 8.5, upon the
exercise of a Stock Appreciation Right unrelated to an Option
or any portion thereof during the sixty (60) day period
following a Change in Control, the amount payable shall be in
cash and shall be an amount equal to the excess, if any, of
(A) the greater of (x) the Fair Market Value, on the date
preceding the date of exercise, of the Shares subject to
Stock Appreciation Right or portion thereof exercised and (y)
the Adjusted Fair Market Value, on the date preceding the
date of exercise, of the Shares over (B) the aggregate Fair
Market Value, on the date the Stock Appreciation Right was
granted, of the Shares subject to the Stock Appreciation
Right or portion thereof exercised; provided, however, that
-----------------
in the case of a Stock Appreciation Right granted within six
(6) months prior to the Change in Control to any Grantee who
may be subject to liability under Section 16(b) of the
Exchange Act, such Grantee shall be entitled to exercise his
Stock Appreciation Right during the sixty (60) day period
commencing upon the expiration of six (6) months from the
date of grant of any such Stock Appreciation Right.
9. Restricted Stock.
----------------
9.1 Grant. The Committee may grant to Eligible Employees
-----
Awards of Restricted Stock, and may issue Shares of
Restricted Stock in payment in respect of vested Performance
Units (as hereinafter provided in Section 10.2), which shall
be evidenced by an Agreement between the Company and the
Grantee. Each Agreement shall contain such restrictions,
terms and conditions as the Committee may, in its discretion,
determine and (without limiting the generality of the
foregoing) such Agreements may require that an appropriate
legend be placed on Share certificates. Awards of Restricted
Stock shall be subject to the terms and provisions set forth
below in this Section 9.
9.2 Rights of Grantee. Shares of Restricted Stock granted
-----------------
pursuant to an Award hereunder shall be issued in the name of
the Grantee as soon as reasonably practicable after the Award
is granted provided that the Grantee has executed an
Agreement evidencing the Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow
agreement and any other documents which the Committee may
require as a condition to the issuance of such Shares. If a
Grantee shall fail to execute the Agreement evidencing a
Restricted Stock Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement
and any other documents which the Committee may require
within the time period prescribed by the Committee at the
time the Award is granted, the Award shall be null and void.
At the discretion of the Committee, Shares issued in
connection with a Restricted Stock Award shall be deposited
together with the stock powers with an escrow agent (which
may be the Company) designated by the Committee. Unless the
Committee determines otherwise and as set forth in the
Agreement, upon delivery of the Shares to the escrow agent,
the Grantee shall have all of the rights of a stockholder
with respect to such Shares, including the right to vote the
Shares and to receive all dividends or other distributions
paid or made with respect to the Shares.
9.3 Non-transferability. Until any restrictions upon the
-------------------
Shares of Restricted Stock awarded to a Grantee shall have
lapsed in the manner set forth in Section 9.4, such Shares
shall not be sold, transferred or otherwise disposed of and
shall not be pledged or otherwise hypothecated, nor shall
they be delivered to the Grantee.
9.4 Lapse of Restrictions.
---------------------
(a) Generally. Restrictions upon Shares of Restricted
---------
Stock awarded hereunder shall lapse at such time or times and
on such terms and conditions as the Committee may determine,
which restrictions shall be set forth in the Agreement
evidencing the Award.
(b) Effect of Change in Control. Notwithstanding
---------------------------
anything contained in the Plan, unless the Agreement
evidencing the Award provides to the contrary, in the event
of a Change in Control, all restrictions upon any Shares of
Restricted Stock shall lapse immediately and all such Shares
shall become fully vested in the Grantee.
9.5 Modification or Substitution. Subject to the terms of
----------------------------
the Plan, the Committee may modify outstanding Awards of
Restricted Stock or accept the surrender of outstanding
Shares of Restricted Stock (to the extent the restrictions on
such Shares have not yet lapsed) and grant new Awards in
substitution for them. Notwithstanding the foregoing, no
modification of an Award shall adversely alter or impair any
rights or obligations under the Agreement without the
Grantee's consent.
9.6 Treatment of Dividends. At the time the Award of Shares
----------------------
of Restricted Stock is granted, the Committee may, in its
discretion, determine that the payment to the Grantee of
dividends, or a specified portion thereof, declared or paid
on such Shares by the Company shall be (i) deferred until the
lapsing of the restrictions imposed upon such Shares and (ii)
held by the Company for the account of the Grantee until such
time. In the event that dividends are to be deferred, the
Committee shall determine whether such dividends are to be
reinvested in shares of Stock (which shall be held as
additional Shares of Restricted Stock) or held in cash. If
deferred dividends are to be held in cash, there may be
credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion,
may determine. Payment of deferred dividends in respect of
Shares of Restricted Stock (whether held in cash or as
additional Shares of Restricted Stock), together with
interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Shares in respect of
which deferred dividends were paid, and any dividends
deferred (together with any interest accrued thereon) in
respect of any Shares of Restricted Stock shall be forfeited
upon the forfeiture of such Shares.
9.7 Delivery of Shares. Upon the lapse of the restrictions
------------------
on Shares of Restricted Stock, the Committee shall cause a
stock certificate to be delivered to the Grantee with respect
to such Shares, free of all restrictions hereunder.
10. Performance Awards.
------------------
10.1 Performance Objectives. Performance objectives for
----------------------
Performance Awards may be expressed in terms of (i) earnings
per Share, (ii) pre-tax profits, (iii) net earnings or net
worth, (iv) return on equity or assets, (v) any combination
of the foregoing, or (vi) any other standard or standards
deemed appropriate by the Committee at the time the Award is
granted. Performance objectives may be in respect of the
performance of the Company and its Subsidiaries (which may be
on a consolidated basis), a Subsidiary or a Division.
Performance objectives may be absolute or relative and may be
expressed in terms of a progression within a specified range.
Prior to the end of a Performance Cycle, the Committee, in
its discretion, may adjust the performance objectives to
reflect a Change in the Capitalization, a change in the tax
rate or book tax rate of the Company or any Subsidiary, or
any other event which may materially affect the performance
of the Company, a Subsidiary or a Division, including, but
not limited to, market conditions or a significant
acquisition or disposition of assets or other property by the
Company, a Subsidiary or a Division.
10.2 Performance Units. The Committee, in its discretion,
-----------------
may grant Awards of Performance Units to Eligible Employees,
the terms and conditions of which shall be set forth in an
Agreement between the Company and the Grantee. Performance
Units may be denominated in Shares or a specified dollar
amount and, contingent upon the attainment of specified
performance objectives within the Performance Cycle,
represent the right to receive payment as provided in Section
10.2(b) of (i) in the case of Share-denominated Performance
Units, the Fair Market Value of a Share on the date the
Performance Unit was granted, the date the Performance Unit
became vested or any other date specified by the Committee,
(ii) in the case of dollar-denominated Performance Units, the
specified dollar amount or (iii) a percentage (which may be
more than 100%) of the amount described in clause (i) or (ii)
depending on the level of performance objective attainment;
provided, however, that the Committee may at the time a
-----------------
Performance Unit is granted, specify a maximum amount payable
in respect of a vested Performance Unit. Each Agreement
shall specify the number of the Performance Units to which it
relates, the performance objectives which must be satisfied
in order for the Performance Units to vest and the
Performance Cycle within which such objectives must be
satisfied.
(a) Vesting and Forfeiture. A Grantee shall become
----------------------
vested with respect to the Performance Units to the extent
that the performance objectives set forth in the Agreement
are satisfied for the Performance Cycle.
(b) Payment of Awards. Payment to Grantees in respect
-----------------
of vested Performance Units shall be made within sixty (60)
days after the last day of the Performance Cycle to which
such Award relates unless the Agreement evidencing the Award
provides for the deferral of payment, in which event the
terms and conditions of the deferral shall be set forth in
the Agreement. Subject to Section 10.4, such payments may be
made entirely in Shares valued at their Fair Market Value as
of the last day of the applicable Performance Cycle or such
other date specified by the Committee, entirely in cash, or
in such combination of Shares and cash as the Committee in
its discretion, shall determine at any time prior to such
payment; provided, however, that if the Committee in its
-----------------
discretion determines to make such payment entirely or
partially in Shares of Restricted Stock, the Committee must
determine the extent to which such payment will be in Shares
of Restricted Stock and the terms of such Restricted Stock at
the time the Award is granted.
10.3 Performance Shares. The Committee, in its discretion,
------------------
may grant Awards of Performance Shares to Eligible Employees,
the terms and conditions of which shall be set forth in an
Agreement between the Company and the Grantee. Each
Agreement may require that an appropriate legend be placed on
Share certificates. Awards of Performance Shares shall be
subject to the following terms and provisions:
(a) Rights of Grantee. The Committee shall provide at
the time an Award of Performance Shares is made, the time or
times at which the actual Shares represented by such Award
shall be issued in the name of the Grantee; provided,
--------
however, that no Performance Shares shall be issued until the
-------
Grantee has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the discretion of the
Committee, an escrow agreement and any other documents which
the Committee may require as a condition to the issuance of
such Performance Shares. If a Grantee shall fail to execute
the Agreement evidencing an Award of Performance Shares, the
appropriate blank stock powers and, in the discretion of the
Committee, an escrow agreement and any other documents which
the Committee may require within the time period prescribed
by the Committee at the time the Award is granted, the Award
shall be null and void. At the discretion of the Committee,
Shares issued in connection with an Award of Performance
Shares shall be deposited together with the stock powers with
an escrow agent (which may be the Company) designated by the
Committee. Except as restricted by the terms of the
Agreement, upon delivery of the Shares to the escrow agent,
the Grantee shall have, in the discretion of the Committee,
all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive
all dividends or other distributions paid or made with
respect to the Shares.
(b) Non-transferability. Until any restrictions upon
-------------------
the Performance Shares awarded to a Grantee shall have lapsed
in the manner set forth in Sections 10.3(c) or 10.4, such
Performance Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee.
The Committee may also impose such other restrictions and
conditions on the Performance Shares, if any, as it deems
appropriate.
(c) Lapse of Restrictions. Subject to Section 10.4,
---------------------
restrictions upon Performance Shares awarded hereunder shall
lapse and such Performance Shares shall become vested at such
time or times and on such terms, conditions and satisfaction
of performance objectives as the Committee may, in its
discretion, determine at the time an Award is granted.
(d) Treatment of Dividends. At the time the Award of
----------------------
Performance Shares is granted, the Committee may, in its
discretion, determine that the payment to the Grantee of
dividends, or a specified portion thereof, declared or paid
on actual Shares represented by such Award which have been
issued by the Company to the Grantee shall be (i) deferred
until the lapsing of the restrictions imposed upon such
Performance Shares and (ii) held by the Company for the
account of the Grantee until such time. In the event that
dividends are to be deferred, the Committee shall determine
whether such dividends are to be reinvested in shares of
Stock (which shall be held as additional Performance Shares)
or held in cash. If deferred dividends are to be held in
cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum as the Committee,
in its discretion, may determine. Payment of deferred
dividends in respect of Performance Shares (whether held in
cash or in additional Performance Shares), together with
interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Performance Shares in
respect of which the deferred dividends were paid, and any
dividends deferred (together with any interest accrued
thereon) in respect of any Performance Shares shall be
forfeited upon the forfeiture of such Performance Shares.
(e) Delivery of Shares. Upon the lapse of the
------------------
restrictions on Performance Shares awarded hereunder, the
Committee shall cause a stock certificate to be delivered to
the Grantee with respect to such Shares, free of all
restrictions hereunder.
10.4 Effect of Change in Control. Notwithstanding anything
---------------------------
contained in the Plan or any Agreement to the contrary, in
the event of a Change in Control:
(a) With respect to the Performance Units, the Grantee
shall (i) become vested in a percentage of Performance Units
as determined by the Committee at the time of the Award of
such Performance Units and as set forth in the Agreement and
(ii) be entitled to receive in respect of all Performance
Units which become vested as a result of a Change in Control,
a cash payment within ten (10) days after such Change in
Control in an amount as determined by the Committee at the
time of the Award of such Performance Unit and as set forth
in the Agreement.
(b) With respect to the Performance Shares, all
restrictions shall lapse immediately on all or a portion of
the Performance Shares as determined by the Committee at the
time of the Award of such Performance Shares and as set forth
in the Agreement.
(c) The Agreements evidencing Performance Shares and
Performance Units shall provide for the treatment of such
Awards (or portions thereof) which do not become vested as
the result of a Change in Control, including, but not limited
to, provisions for the adjustment of applicable performance
objectives.
10.5 Non-transferability. No Performance Awards shall be
-------------------
transferable by the Grantee otherwise than by will or the
laws of descent and distribution.
10.6 Modification or Substitution. Subject to the terms of
----------------------------
the Plan, the Committee may modify outstanding Performance
Awards or accept the surrender of outstanding Performance
Awards and grant new Performance Awards in substitution for
them. Notwithstanding the foregoing, no modification of a
Performance Award shall adversely alter or impair any rights
or obligations under the Agreement without the Grantee's
consent.
11. Effect of a Termination of Employment. The Agreement
-------------------------------------
evidencing the grant of each Employee Option and each Award
shall set forth the terms and conditions applicable to such
Employee Option or Award upon a termination or change in the
status of the employment of the Optionee or Grantee by the
Company, a Subsidiary or a Division (including a termination
or change by reason of the sale of a Subsidiary or a
Division), as the Committee may, in its discretion, determine
at the time the Employee Option or Award is granted or
thereafter.
12. Adjustment Upon Changes in Capitalization.
-----------------------------------------
(a) In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate
adjustments, if any, to the (i) maximum number and class of
Shares or other stock or securities with respect to which
Options or Awards may be granted under the Plan, (ii) the
number and class of Shares or other stock or securities which
are subject to Director Options issuable under Section 5; and
(iii) the number and class of Shares or other stock or
securities which are subject to outstanding Options or Awards
granted under the Plan, and the purchase price therefor, if
applicable.
(b) Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options
(including any adjustments in the purchase price) shall be
made in such manner as not to constitute a modification as
defined by Section 424(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422 and 424 of the
Code.
(c) Any stock adjustment in the Shares or other stock
or securities subject to outstanding Director Options
(including any adjustments in the purchase price) shall be
made only to the extent necessary to maintain the
proportionate interest of the Optionee and preserve, without
exceeding, the value of such Director Option.
(d) If, by reason of a Change in Capitalization, a
Grantee of an Award shall be entitled to, or an Optionee
shall be entitled to exercise an Option with respect to, new,
additional or different shares of stock or securities, such
new additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance
criteria which were applicable to the Shares subject to the
Award or Option, as the case may be, prior to such Change in
Capitalization.
13. Effect of Certain Transactions. Subject to Sections
------------------------------
7.7, 8.8, 9.4(b) and 10.4, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the Plan and
the Options and Awards issued hereunder shall continue in
effect in accordance with their respective terms and each
Optionee and Grantee shall be entitled to receive in respect
of each Share subject to any outstanding Options or Awards,
as the case may be, upon exercise of any Option or payment or
transfer in respect of any Award, the same number and kind of
stock, securities, cash, property, or other consideration
that each holder of a Share was entitled to receive in the
Transaction in respect of a Share.
14. Termination and Amendment of the Plan. The Plan shall
-------------------------------------
terminate on the day preceding the tenth anniversary of the
date of its adoption by the Board and no Option or Award may
be granted thereafter. The Board may sooner terminate the
Plan and the Board may at any time and from time to time
amend, modify or suspend the Plan; provided, however, that:
(a) No such amendment, modification, suspension or
termination shall impair or adversely alter any Options or
Awards theretofore granted under the Plan, except with the
consent of the Optionee or Grantee, nor shall any amendment,
modification, suspension or termination deprive any Optionee
or Grantee of any Shares which he or she may have acquired
through or as a result of the Plan;
(b) To the extent necessary under Section 16(b) of the
Exchange Act and the rules and regulations promulgated
thereunder or other applicable law, no amendment shall be
effective unless approved by the stockholders of the Company
in accordance with applicable law and regulations; and
(c) The provisions of Section 5 shall not be amended
more often than once every six (6) months, other than to
comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules and
regulations promulgated thereunder.
15. Non-Exclusivity of the Plan. The adoption of the Plan
---------------------------
by the Board shall not be construed as amending, modifying or
rescinding any previously approved incentive arrangement or
as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of
stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in
specific cases.
16. Limitation of Liability. As illustrative of the
-----------------------
limitations of liability of the Company, but not intended to
be exhaustive thereof, nothing in the Plan shall be construed
to:
(i) give any person any right to be granted an
Option or Award other than at the sole discretion of the
Committee;
(ii) give any person any rights whatsoever with
respect to Shares except as specifically provided in the
Plan;
(iii) limit in any way the right of the Company to
terminate the employment of any person at any time; or
(iv) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person
at any particular rate of compensation or for any particular
period of time.
17. Regulations and Other Approvals; Governing Law.
----------------------------------------------
17.1 Except as to matters of federal law, this Plan and the
rights of all persons claiming hereunder shall be construed
and determined in accordance with the laws of the State of
Texas without giving effect to conflicts of law principles.
17.2 The obligation of the Company to sell or deliver Shares
with respect to Options and Awards granted under the Plan
shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or
appropriate by the Committee.
17.3 The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Committee shall
interpret and administer the provisions of the Plan or any
Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall
not affect the validity of the Plan.
17.4 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any
government authority, or to obtain for Eligible Employees
granted Incentive Stock Options the tax benefits under the
applicable provisions of the Code and regulations promulgated
thereunder.
17.5 Each Option and Award is subject to the requirement
that, if at any time the Committee determines, in its
discretion, that the listing, registration or qualification
of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection
with, the grant of an Option or Award or the issuance of
Shares, no Options or Awards shall be granted or payment made
or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been
effected or obtained free of any conditions as acceptable to
the Committee.
17.6 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition
of Shares acquired pursuant to the Plan is not covered by a
then current registration statement under the Securities Act
of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against
transfer to the extent required by the Securities Act of
1933, as amended, and Rule 144 or other regulations
thereunder. The Committee may require any individual
receiving Shares pursuant to an Option or Award granted under
the Plan, as a condition precedent to receipt of such Shares,
to represent and warrant to the Company in writing that the
Shares acquired by such individual are acquired without a
view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration
thereof under said Act or pursuant to an exemption applicable
under the Securities Act of 1933, as amended, or the rules
and regulations promulgated thereunder. The certificates
evidencing any of such Shares shall be appropriately amended
to reflect their status as restricted securities as
aforesaid.
18. Miscellaneous.
-------------
18.1 Multiple Agreements. The terms of each Option or Award
-------------------
may differ from other Options or Awards granted under the
Plan at the same time, or at some other time. The Committee
may also grant more than one Option or Award to a given
Eligible Employee during the term of the Plan, either in
addition to, or in substitution for, one or more Options or
Awards previously granted to that Eligible Employee.
18.2 Withholding of Taxes. (a) The Company shall have the
--------------------
right to deduct from any distribution of cash to any
Director, Optionee or Grantee, an amount equal to the
federal, state and local income taxes and other amounts as
may be required by law to be withheld (the "Withholding
Taxes") with respect to the receipt of any retainer fee,
Option or Award. If a Director, Optionee or Grantee is to
experience a taxable event in connection with the receipt of
Shares pursuant to a payment in stock, Option exercise or
payment of an Award (a "Taxable Event"), the Director,
Optionee or Grantee shall pay the Withholding Taxes to the
Company prior to the issuance, or release from escrow, of
such Shares. In satisfaction of the obligation to pay
Withholding Taxes to the Company, the Director, Optionee or
Grantee may make a written election (the "Tax Election"),
which may be accepted or rejected in the discretion of the
Committee or Company Secretary, as applicable, to have
withheld a portion of the Shares then issuable to him or her
having an aggregate Fair Market Value, on the date preceding
the date of such issuance, equal to the Withholding Taxes,
provided that in respect of a Director, Optionee or Grantee
who may be subject to liability under Section 16(b) of the
Exchange Act either: (i) in the case of a Taxable Event
involving a payment in Stock, Option or an Award (A) the Tax
Election is made at least six (6) months prior to the date of
the Taxable Event and (B) the Tax Election is irrevocable
with respect to all Taxable Events of a similar nature
occurring prior to the expiration of six (6) months following
a revocation of the Tax Election; or (ii) in the case of the
exercise of an Option (A) the Optionee makes the Tax Election
at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten (10) day
period beginning on the third business day and ending on the
twelfth business day following the release for publication of
the Company's quarterly or annual statement of sales and
earnings (a "Window Period") and (C) the Tax Election is made
during the Window Period in which the related Option is
exercised or prior to such Window Period and subsequent to
the immediately preceding Window Period; or (iii) in the case
of a Taxable Event relating to the payment of an Award (A)
the Grantee makes the Tax Election at least six (6) months
after the date the Award was granted and (B) the Tax Election
is made (x) in the case of a Taxable Event occurring within a
Window Period, during the Window Period in which the Taxable
Event occurs, or (y) in the case of a Taxable Event not
occurring within a window period, during the Window Period
immediately preceding the Taxable Event relating to the
Award. Notwithstanding the foregoing, the Committee may, by
the adoption of rules or otherwise, (i) modify the provisions
of this Section 18.2 (other than as regards Director Options)
or impose such other restrictions or limitations on Tax
Elections as may be necessary to ensure that the Tax
Elections will be exempt transactions under Section 16(b) of
the Exchange Act, and (ii) permit Tax Elections to be made at
such other times and subject to such other conditions as the
Committee determines will constitute exempt transactions
under Section 16(b) of the Exchange Act.
(b) If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations
promulgated thereunder, of any Share or Shares issued to such
Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after
the date of the grant or within the one-year period
commencing on the day after the date of transfer of such
Share or Shares to the Optionee pursuant to such exercise,
the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to
the Company at its principal executive office.
(c) The Committee shall have the authority, at the time
of grant of an Employee Option or Award under the Plan or at
any time thereafter, to award tax bonuses to designated
Optionees or Grantees, to be paid upon their exercise of
Employee Options or payment in respect of Awards granted
hereunder. The amount of any such payments shall be
determined by the Committee. The Committee shall have full
authority in its absolute discretion to determine the amount
of any such tax bonus and the terms and conditions affecting
the vesting and payment thereof.
19. Effective Date. The effective date of the Plan shall be
--------------
the date of its adoption by the Board, subject only to the
approval by the affirmative vote of the holders of a majority
of the securities of the Company present, or represented, and
entitled to vote at a meeting of stockholders duly held in
accordance with the applicable laws of the State of Texas
within 12 months of such adoption.
<PAGE>
EXHIBIT 10m
FORM OF
-------
TERMINATION PROTECTION AGREEMENT
--------------------------------
FOR CORPORATE EXECUTIVES
------------------------
THIS AGREEMENT made as of the 18th day of May, 1995, by and
between the "Company" (as hereinafter defined) and
________________________ (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that the possibility of a "Change in Control" (as
hereinafter defined) exists and that the threat or the
occurrence of a Change in Control can result in significant
distractions of its key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in
the best interest of the Company and its stockholders to
retain the services of the Executive in the event of a threat
or occurrence of a Change in Control and to ensure [his or
her] continued dedication and efforts in such event without
undue concern for [his or her] personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the
employ of the Company and the Employer, particularly in the
event of a threat or the occurrence of a Change in Control,
the Company desires to enter into this Agreement with the
Executive to provide the Executive with certain benefits in
the event [his or her] employment is terminated as a result
of, or in connection with, a Change in Control and to provide
the Executive with the "Gross-Up Payment" (as hereinafter
defined) and certain other benefits whether or not the
Executive's employment is terminated.
NOW, THEREFORE, in consideration of the respective agreements
of the parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of
-----------------
May 18, 1995 and shall continue in effect until May 18, 1997;
provided, however, that commencing on May 18, 1996 and on
each May 18 thereafter, the term of this Agreement shall be
automatically extended for one (1) year unless either the
Company or the Executive shall have given written notice to
the other at least ninety (90) days prior thereto that the
term of this Agreement shall not be so extended; and
provided, further, however, that notwithstanding any such
-------- ------- -------
notice by the Company not to extend, the term of this
Agreement shall not expire prior to the expiration of
twenty-four (24) months after the occurrence of a Change in
Control.
2. Definitions.
-----------
2.1. Accrued Compensation. For purposes of this Agreement,
--------------------
"Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the
"Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, and (ii)
reimbursement for reasonable and necessary expenses incurred
the Executive on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, if
required by applicable law, and (iv) bonuses and incentive
compensation (other than the "Pro Rata Bonus" (as hereinafter
defined)).
2.2. Base Amount. For purposes of this Agreement, "Base
-----------
Amount" shall mean the greater of the Executive's annual base
salary (a) at the rate in effect on the Termination Date or
(b) at the highest rate in effect at any time during the
ninety (90) day period prior to the Change in Control, and
shall include all amounts of [his or her] base salary that
are deferred under the qualified and non-qualified employee
benefit plans of the Company.
2.3. Bonus Amount. For purposes of this Agreement, "Bonus
------------
Amount" shall mean the highest annual bonus paid or payable
to the Executive for any fiscal year in respect of the three
(3) full fiscal years ended prior to the Change in Control.
2.4. Cause. For purposes of this Agreement, a termination
-----
of employment is for "Cause" if the Executive has been
convicted of a felony or the termination is evidenced by a
resolution adopted in good faith by two-thirds of the Board
that the Executive (a) intentionally and continually failed
substantially to perform [his or her] reasonably assigned
duties with the Company (other than a failure resulting from
the Executive's incapacity due to physical or mental illness
or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which
failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance
has been delivered to the Executive specifying the manner in
which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably
and materially injurious to the Company, monetarily or
otherwise; provided, however, that no termination of the
-------- -------
Executive's employment shall be for Cause as set forth in
clause (b) above until (x) there shall have been delivered to
the Executive a copy of a written notice setting forth that
the Executive was guilty of the conduct set forth in clause
(b) and specifying the particulars thereof in detail, and (y)
the Executive shall have been provided an opportunity to be
heard in person by the Board (with the assistance of the
Executive's counsel if the Executive so desires). No act,
nor failure to act, on the Executive's part, shall be
considered "intentional" unless the Executive has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Executive's action or failure to
act was in the best interest of the Company.
2.5. Change in Control. For purposes of this Agreement, a
-----------------
"Change in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
--------
however, that in determining whether a Change in Control has
-------
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (x) the Company or (y)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Subsidiary"),
(2) the Company or any Subsidiary, or (3) any Person in
connection with a "Non-Control Transaction" (as hereinafter
defined).
(b) The individuals who, as of May 18, 1995, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
-----------------
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
-------------------------
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger,
consolidation or reorganization, at least sixty percent (60%)
of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such
merger, consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,
(iii) no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or any Person who, immediately
prior to such merger, consolidation or reorganization had
Beneficial Ownership of fifteen percent (15%) or more of the
then outstanding Voting Securities) has Beneficial Ownership
of fifteen percent (15%) or more of the combined voting power
of the Surviving Corporation's then outstanding voting
securities, and
(iv) a transaction described in clauses (i) through
(iii) shall herein be referred to as a "Non-Control
Transaction";
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other disposition
of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is
terminated following the Effective Date but within one (1)
year prior to a Change in Control and [the Executive
reasonably demonstrates that] such termination (i) was at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
2.6. Company. For purposes of this Agreement, the
-------
"Company" shall mean Tandy Corporation and shall include its
"Successors and Assigns" (as hereinafter defined).
2.7. Disability. For purposes of this Agreement,
----------
"Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform [his
or her] duties with the Company for a period of one hundred
eighty (180) consecutive days and the Executive has not
returned to [his or her] full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
2.8. (a) Good Reason. For purposes of this Agreement,
-----------
"Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in
Subsections (i) through (ix) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable
judgment, represents an adverse change in [his or her]
status, title, position or responsibilities as in effect at
any time within ninety (90) days preceding the date of the
Change in Control or at any time thereafter; the assignment
to the Executive of any duties or responsibilities which, in
the Executive's reasonable judgment, are inconsistent with
such status, title, position or responsibilities as in effect
at any time within ninety (90) days preceding the date of the
Change in Control or at any time thereafter; or any removal
of the Executive from or failure to reappoint or reelect [him
or her] to any of [his or her] offices or positions, except
in connection with the termination of the Executive's
employment for Cause, or as a result of [his or her] death,
or by the Executive other than for Good Reason;
(ii) a reduction in the rate of the Executive's
base salary below the Base Amount or any failure to pay the
Executive any compensation or benefits to which [he or she]
is entitled within fifteen (15) days of the date notice of
such failure to pay is given to the Company and, in the case
of any annual bonus, within forty-five (45) days following
the end of the fiscal year pursuant to which such bonus
relates;
(iii) a change in the accounting policies or
practices as in effect during the ninety (90) days preceding
the Change in Control or at any time thereafter which, in the
Executive's reasonable judgment, results in a reduction in
[his or her] earning potential;
(iv) the Company's requiring the Executive to be
based at any place outside a 20-mile radius from [his or her]
place of employment on the day prior to the Change in
Control, except for reasonably required travel on the
Company's business which is not materially greater than such
travel requirements prior to the Change in Control;
(v) the failure by the Company to (A) continue in
effect (without reduction in benefit levels, reward
opportunities and/or bonus potential for comparable
performance) any material compensation or benefit plan in
which the Executive was participating at any time within
ninety (90) days preceding the Change in Control or at any
time thereafter including, but not limited to, the plans
listed on Appendix A, unless such plan is replaced with a
plan that provides substantially equivalent compensation or
benefits to the Executive, or (B) provide the Executive with
compensation and benefits, in the aggregate at least equal
(in terms of benefit levels and/or reward opportunities) to
those provided for under each other employee benefit plan,
program and practice in which the Executive was participating
at any time within ninety (90) days preceding the Change in
Control or at any time thereafter;
(vi) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy, of the
Company, which petition is not dismissed within sixty (60)
days;
(vii) any material breach by the Company of any
provision hereof;
(viii) any purported termination of the Executive's
employment for Cause by the Company which does not comply
with the terms of Section 2.4 hereof; and
(ix) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any Successor
or Assign of the Company, to assume and agree to perform this
Agreement, as contemplated in Section 6 hereof.
(b) Any event or condition described in this Section
2.8(a)(i) through (ix) which occurs following the Effective
Date but within one (1) year prior to a Change in Control but
which the Executive reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with, or in anticipation of, a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of this Agreement notwithstanding that it occurred
prior to the Change in Control.
2.9. Notice of Termination. For purposes of this
---------------------
Agreement, following a Change in Control, "Notice of
Termination" shall mean a written notice of termination from
the Company of the Executive's employment which indicates the
specific termination provision in this Agreement relied upon
and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
2.10. Pro Rata Bonus. For purposes of this Agreement, "Pro
--------------
Rata Bonus" shall mean an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number
of days in the fiscal year through the Termination Date and
the denominator of which is 365.
2.11. Successors and Assigns. For purposes of this
----------------------
Agreement, "Successors and Assigns" shall mean a corporation
or other entity acquiring all or substantially all the assets
and business of the Company (including this Agreement)
whether by operation of law or otherwise.
2.12. Termination Date. For purposes of this Agreement,
----------------
"Termination Date" shall mean in the case of the Executive's
death, [his or her] date of death, in the case of Good
Reason, the last day of [his or her] employment, and in all
other cases, the date specified in the Notice of Termination;
provided, however, that if the Executive's employment is
-----------------
terminated by the Company for Cause or due to Disability, the
date specified in the Notice of Termination shall be at least
30 days from the date the Notice of Termination is given to
the Executive, provided that in the case of Disability the
Executive shall not have returned to the full-time
performance of [his or her] duties during such period of at
least 30 days.
3. Termination of Employment.
-------------------------
3.1. If, during the term of this Agreement, the Executive's
employment with the Company shall be terminated within
twenty-four (24) months following a Change in Control, the
Executive shall be entitled to the following compensation and
benefits:
(a) If the Executive's employment with the Company
shall be terminated (1) by reason of the Executive's death,
(2) by the Company for Cause or Disability, or (3) by the
Executive other than for Good Reason and other than during
the 60-day period commencing on the first anniversary of the
date of the occurrence of a Change in Control (the "Window
Period"), the Company shall pay to the Executive the Accrued
Compensation and, if such termination is other than by the
Company for Cause, a Pro Rata Bonus.
(b) If the Executive's employment with the Company
shall be terminated for any reason other than as specified in
Section 3.1(a) or during the Window Period, the Executive
shall be entitled to the following:
(i) the Company shall pay the Executive all Accrued
Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
termination pay and in lieu of any further compensation for
periods subsequent to the Termination Date, in a single
payment an amount (the "Termination Amount") in cash equal to
two times the sum of (A) the Base Amount and (B) the Bonus
Amount;
(iii) for twenty-four (24) months from the Termination
Date (the "Continuation Period"), the Company shall at its
expense continue on behalf of the Executive and [his or her]
dependents and beneficiaries the fringe benefits, (excluding
those benefit plans numbered 1 through 11 inclusive on
Appendix A but including an automobile or automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) and
the life insurance, disability, medical, dental and
hospitalization benefits provided (x) to the Executive at any
time during the 90-day period prior to the Change in Control
or at any time thereafter or (y) to other similarly situated
executives who continue in the employ of the Company during
the Continuation Period; provided, however, that with respect
-----------------
to any Executive who was entitled to the use of an automobile
provided by the Company within the ninety (90) day period
prior to a Change in Control or at any time thereafter, the
Executive shall be paid a cash payment equal to the value of
the Company provided automobile to the Executive for the
Continuation Period. The coverage and benefits (including
deductibles and contributions by the Executive, if any)
provided in this Section 3.1(b)(iii) during the Continuation
Period shall be no less favorable to the Executive and [his
or her] dependents and beneficiaries, than the most favorable
of such coverages and benefits during any of the periods
referred to in clauses (x) and (y) above. The Company's
obligation hereunder with respect to the foregoing benefits
(except for the automobile or automobile allowance and the
related expenses of public liability insurance, collision
coverage, repairs and maintenance) shall be limited to the
extent that the Executive obtains any such benefits pursuant
to a subsequent employer's benefit plans, in which case the
Company may reduce the coverage of any benefits it is
required to provide the Executive hereunder as long as the
aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit
any benefits to which the Executive, [his or her] dependents
or beneficiaries may be entitled under any of the Company's
employee benefit plans, programs or practices following the
Executive's termination of employment, including without
limitation, retiree medical and life insurance benefits;
(iv) the Company shall pay in a single payment an
amount equal to eighty percent (80%) of the maximum amount
the Executive could have contributed under the Deferred
Salary and Investment Plan, Stock Purchase Program and
Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had [he or she] continued in the
employment with the Company during the Continuation Period at
the greater of [his or her] annualized gross salary and wages
as in effect immediately prior to the Change in Control or at
any time thereafter; and
(v) (A) the restrictions on any outstanding
incentive awards (including restricted stock and granted
performance shares or units) granted to the Executive
including, but not limited to, awards granted under the
Company's 1985 Stock Option Plan, 1993 Incentive Stock Plan,
or under any other incentive plan or arrangement shall lapse
and such incentive award shall become 100% vested, all stock
options and stock appreciation rights granted to the
Executive shall become immediately exercisable and shall
become 100% vested, and all performance units granted to the
Executive shall become 100% vested and (B) the Executive
shall have the right to require the Company to purchase, for
cash, any shares of unrestricted stock or shares purchased
upon exercise of any options, at a price equal to the fair
market value of such shares on the date of purchase by the
Company.
(c) The amounts provided for in Sections 3.1(a) and
3.1(b)(i), (ii), (iii) (only as to the automobile allowance
and the related expenses of public liability insurance,
collision coverage, repairs and maintenance) and (iv) shall
be paid in a single lump sum cash payment within five (5)
days after the Executive's Termination Date (or earlier, if
required by applicable law).
(d) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by
seeking other employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation
or benefits provided to the Executive in any subsequent
employment except as provided in Section 3.1(b)(iii).
3.2. (a) The termination pay and termination benefits
provided for in this Section 3 shall be in lieu of any other
severance or termination pay to which the Executive may be
entitled under any Company severance or termination plan,
program, policy or practice.
(b) The Executive's entitlement to any other
compensation or benefits (other than the Pro Rata Bonus and
other than the termination pay and termination benefits as
provided under this Section 3) shall be determined in
accordance with the Company's employee benefit plans
(including, the plans listed on Appendix A) and other
applicable programs, policies and practices then in effect.
4. Notice of Termination. Following a Change in Control,
---------------------
any purported termination of the Executive's employment by
the Company and/or the Employer shall be communicated by
Notice of Termination to the Executive. For purposes of this
Agreement, no such purported termination shall be effective
without such Notice of Termination.
5. Excise Tax Payments.
-------------------
(a) In the event that any payment or benefit (within
the meaning of Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code")), to the Executive or
for [his or her] benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, [his or her]
employment with the Company or a change in ownership or
effective control of the Company or of a substantial portion
of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties,
other than interest and penalties imposed by reason of the
Executive's failure to file timely a tax return or pay taxes
shown due on [his or her] return, imposed with respect to
such taxes and the Excise Tax), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount
of such Gross-Up Payment shall be made at the Company's
expense by an accounting firm selected by the Company and
reasonably acceptable to the Executive which is designated as
one of the five largest accounting firms in the United States
(the "Accounting Firm"). The Accounting Firm shall provide
its determination (the "Determination"), together with
detailed supporting calculations and documentation to the
Company and the Executive within five days of the Termination
Date if applicable, or such other time as requested by the
Company or by the Executive (provided the Executive
reasonably believes that any of the Payments may be subject
to the Excise Tax) and if the Accounting Firm determines that
no Excise Tax is payable by the Executive with respect to a
Payment or Payments, it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise
Tax will be imposed with respect to any such Payment or
Payments. Within ten days of the delivery of the
Determination to the Executive, the Executive shall have the
right to dispute the Determination (the "Dispute"). The
Gross-Up Payment, if any, as determined pursuant to this
Paragraph 5(b) shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm's
determination. The existence of the Dispute shall not in any
way affect the Executive's right to receive the Gross-Up
Payment in accordance with the Determination. If there is no
Dispute, the Determination shall be binding, final and
conclusive upon the Company and the Executive subject to the
application of Paragraph 5(c) below.
(c) As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that a
Gross-Up Payment (or a portion thereof) will be paid which
should not have been paid (an "Excess Payment") or a Gross-Up
Payment (or a portion thereof) which should have been paid
will not have been paid (an "Underpayment"). An Underpayment
shall be deemed to have occurred (i) upon notice (formal or
informal) to the Executive from any governmental taxing
authority that the Executive's tax liability (whether in
respect of the Executive's current taxable year or in respect
of any prior taxable year) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with
respect to which the Company has failed to make a sufficient
Gross-Up Payment, (ii) upon a determination by a court, (iii)
by reason of determination by the Company (which shall
include the position taken by the Company, together with its
consolidated group, on its federal income tax return) or (iv)
upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall
promptly notify the Company and the Company shall promptly,
but in any event, at least five days prior to the date on
which the applicable government taxing authority has
requested payment, pay to the Executive an additional
Gross-Up Payment equal to the amount of the Underpayment plus
any interest and penalties (other than interest and penalties
imposed by reason of the Executive's failure to file timely a
tax return or pay taxes shown due on the Executive's return)
imposed on the Underpayment. An Excess Payment shall be
deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed
upon a Payment or Payments (or portion thereof) with respect
to which the Executive had previously received a Gross-Up
Payment. A "Final Determination" shall be deemed to have
occurred when the Executive has received from the applicable
government taxing authority a refund of taxes or other
reduction in the Executive's tax liability by reason of the
Excise Payment and upon either (x) the date a determination
is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority,
or in the event that a claim is brought before a court of
competent jurisdiction, the date upon which a final
determination has been made by such court and either all
appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations
with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a
loan by the Company to the Executive and the Executive shall
pay to the Company on demand (but not less than 10 days after
the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of
the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the
date of repayment to the Company.
(d) Notwithstanding anything contained in this
Agreement to the contrary, in the event that, according to
the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
6. Successors; Binding Agreement.
-----------------------------
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Company, its Successors and
Assigns and the Company shall require any Successor or Assign
to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment
had taken place.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the
Executive, [his or her] beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal personal
representative.
7. Fees and Expenses. The Company shall pay all legal fees
-----------------
and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they
become due as a result of (a) the Executive's termination of
employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,
but not limited to, any such fees and expenses incurred in
connection with (i) the Dispute and (ii) the Gross-Up Payment
whether as a result of any applicable government taxing
authority proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company under which the
Executive is or may be entitled to receive benefits, and (c)
the Executive's hearing before the Board as contemplated in
Section 2.4 of this Agreement; provided, however, that the
circumstances set forth in clauses (a) and (b) (other than as
a result of the Executive's termination of employment under
circumstances described in Section 2.5(d)) occurred on or
after a Change in Control.
8. Notice. For the purposes of this Agreement, notices and
------
all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided
that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9. Non-exclusivity of Rights. Nothing in this Agreement
-------------------------
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan
or program provided by the Company (except for any severance
or termination policies, plans, programs or practices) and
for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have
under any other agreements with the Company (except for any
severance or termination agreement). Amounts which are
vested benefits or which the Executive is otherwise entitled
to receive under any plan or program of the Company shall be
payable in accordance with such plan or program, except as
explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to make
--------------------
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or others.
11. Miscellaneous. No provision of this Agreement may be
-------------
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
12. Governing Law. THE VALIDITY, INTERPRETATION,
-------------
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING THE EXECUTIVE AND THE
COMPANY WITH RESPECT TO ANY CLAIM OR ASSERTION THAT THE
EXECUTIVE'S EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE, THE
COMPANY HAS THE BURDEN OF PROVING THAT THE EXECUTIVE'S
EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE.
13. Forum. Any suit brought by the Executive under this
-----
Agreement may be brought in the appropriate state or federal
court for Tarrant County, Texas, or for the county wherein
the Executive maintains [his or her] residence. Any suit
brought by the Company under this Agreement may only be
brought in the county wherein the Executive maintains [his or
her] residence unless the Executive consents to suit
elsewhere.
14. Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability
of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto and supersedes all prior
agreements, if any, understandings and arrangements, oral or
written, between the parties hereto with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive
has executed this Agreement as of the day and year first
above written.
TANDY CORPORATION
ATTEST: By: _______________________
Name:
Title:
___________________________
Secretary
By: _______________________
[Executive]
<PAGE>
APPENDIX A
COMPENSATION AND BENEFIT PLANS
1. Tandy Corporation Officers Deferred Compensation Plan
2. Tandy Employees Deferred Salary and Investment Plan
3. Tandy Employees Stock Ownership Plan
4. Salary Continuation Plan for Executive Employees of Tandy
Corporation and Subsidiaries
5. Tandy Corporation Stock Purchase Program
6. Tandy Employees Supplemental Stock Program
7. Tandy Corporation 1985 Stock Option Plan
8. Post Retirement Death Benefit Plan for Executive
Employees of Tandy Corporation and Subsidiaries
9. Tandy Corporation 1993 Incentive Stock Plan
10. Special Compensation Plan No. 1 for Tandy Corporation
Executive Employees
11. Special Compensation Plan No. 2 for Tandy Corporation
Executive Employees
<PAGE>
FORM OF
______
TERMINATION PROTECTION AGREEMENT
--------------------------------
FOR DIVISION EXECUTIVES
-----------------------
THIS AGREEMENT made as of the 18th day of May, 1995, by and
between the "Company" (as hereinafter defined) and
_______________________________ (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that the possibility of a "Change in Control" (as
hereinafter defined) exists and that the threat or the
occurrence of a Change in Control can result in significant
distractions of its key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in
the best interest of the Company and its stockholders to
retain the services of the Executive in the event of a threat
or occurrance of a Change in Control and to ensure [his or
her] continued dedication and efforts in such event without
undue concern for [his or her] personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the
employ of the Company, particularly in the event of a threat
or the occurrence of a Change in Control, the Company desires
to enter into this Agreement with the Exeuctive to provide
the Executive with certain benefits in the event [his or her]
employment is terminated as a result of, or in connection
with, a Change in Control and to provide the Executive with
the "Gross-Up Payment" (as hereinafter defined) and certain
other benefits whether or not the Executive's employment is
terminated.
NOW, THEREFORE, in consideration of the respective agreements
of the parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of
-----------------
May 18, 1995 and shall continue in effect until May 18, 1997;
provided, however, that commencing on May 18, 1996 and on
each May 18 thereafter, the term of this Agreement shall be
automatically extended for one (1) year unless either the
Company or the Executive shall have given written notice to
the other at least ninety (90) days prior thereto that the
term of this Agreement shall not be so extended; and
provided, further, however, that notwithstanding any such
notice by the Company not to extend, the term of this
Agreement shall not expire prior to the expiration of
twenty-four (24) months after the occurrence of a Change in
Control.
2. Definitions.
-----------
2.1. Accrued Compensation. For purposes of this Agreement,
--------------------
"Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the
"Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, and (ii)
reimbursement for reasonable and necessary expenses incurred
by the Executive on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, if
required by applicable law and (iv)bonuses and incentive
compensation (other than the "Pro Rata Bonus" (as hereinafter
defined)).
2.2. Base Amount. For purposes of this Agreement, "Base
-----------
Amount" shall mean the greater of the Executive's annual base
salary (a) at the rate in effect on the Termination Date or
(b) at the highest rate in effect at any time during the
ninety (90) day period prior to the Change in Control, and
shall include all amounts of [his or her] base salary that
are deferred under the qualified and non-qualified employee
benefit plans of the Company.
2.3. Bonus Amount. For purposes of this Agreement, "Bonus
------------
Amount" shall mean the highest annual bonus paid or payable
to the Executive for any fiscal year in respect of the three
(3) full fiscal years ended prior to the Change in Control.
2.4. Cause. For purposes of this Agreement, a termination
-----
of employment is for "Cause" if the Executive has been
convicted of a felony or the termination is evidenced by a
resolution adopted in good faith by two-thirds of the Board
that the Executive (a) intentionally and continually failed
substantially to perform [his or her] reasonable assigned
duties with the Company (other than a failure resulting from
the Executive's incapacity due to physical or mental illness
or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which
failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance
has been delivered to the Executive specifying the manner in
which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably
and materially injurious to the Company; provided, however,
-----------------
that no termination of the Executive's employment shall be
for Cause as set forth in clause (b) above until (x) there
shall have been delivered to the Executive a copy of a
written notice setting forth that the Executive was guilty of
the conduct set forth in clause (b) and specifying the
particulars thereof in detail, and (y) the Executive shall
have been provided an opportunity to be heard in person by
the Board (with the assistance of the Executive's counsel if
the Executive so desires). No act, nor failure to act, on
the Executive's part, shall be considered "intentional"
unless the Executive has acted, or failed to act, with a lack
of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interest
of the Company.
2.5. Change in Control. For purposes of this Agreement, a
-----------------
"Change in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
---------
however, that in determining whether a Change in Control has
-------
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (x) the Company or (y)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Subsidiary"),
(2) the Company or any Subsidiary, or (3) any Person in
connection with a "Non-Control Transaction" (as hereinafter
defined).
(b) The individuals who, as of May 18, 1995, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
-------------------------
considered a member of the Incumbent Board if such individual
initially asssumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger,
consolidation or reorganization, at least sixty percent (60%)
of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,
(iii) no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or any Person who, immediately
prior to such merger, consolidation or reorganization had
Beneficial Ownership of fifteen percent (15%) or more of the
then outstanding Voting Securities) has Beneficial Ownership
of fifteen percent (15%) or more of the combined voting power
of the Surviving Corporation's then outstanding voting
securities, and
(iv) a transaction described in clauses (i) through
(iii) shall herein be referred to as a "Non-Control
Transaction";
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other disposition
of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is
terminated following the Effective Date but within one (1)
year prior to a Change in Control and [the Executive
reasonably demonstrates that] such termination (i) was at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
2.6. Company. For purposes of this Agreement, the
-------
"Company" shall mean Tandy Corporation and shall include its
"Successors and Assigns" (as hereinafter defined).
2.7. Disability. For purposes of this Agreement,
----------
"Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform [his
or her] duties with the Company for a period of one hundred
eighty (180) consecutive days and the Executive has not
returned to [his or her] full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
2.8. (a) Good Reason. For purposes of this Agreement,
-----------
"Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in
Subsections (i) through (ix) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable
judgment, represents an adverse change in [his or her]
status, title, position or responsibilities as in effect at
any time within ninety (90) days preceding the date of the
Change in Control or at any time thereafter; the assignment
to the Executive of any duties or responsibilities which, in
the Executive's reasonable judgment, are inconsistent with
such status, title, position or responsibilities as in effect
at any time within ninety (90) days preceding the date of the
Change in Control or at any time thereafter; or any removal
of the Executive from or failure to reappoint or reelect [him
or her] to any of [his or her] offices or positions, except
in connection with the termination of the Executive's
employment for Cause, or as a result of [his or her] death,
or by the Executive other than for Good Reason;
(ii) a reduction in the rate of the Executive's
base salary below the Base Amount or any failure to pay the
Executive any compensation or benefits to which [he or she]
is entitled within fifteen (15) days of the date notice of
such failure is given to the Company and, in the case of any
annual bonus, within forty-five (45) days following the end
of the fiscal year pursuant to which such bonus relates;
(iii) a change in the accounting policies or
practices as in effect during the ninety (90) days preceding
the Change in Control or at any time thereafter which, in the
Executive's reasonable judgment, results in a reduction in
[his or her] earning potential;
(iv) the Company's requiring the Executive to be
based at any place outside a 20-mile radius from [his or her]
place of employment on the day prior to the Change in
Control, except for reasonably required travel on the
Company's business which is not materially greater than such
travel requirements prior to the Change in Control;
(v) the failure by the Company to (A) continue in
effect (without reduction in benefit levels, reward
opportunities and/or bonus potential for comparable
performance) any material compensation or benefit plan in
which the Executive was participating at any time within
ninety (90) days preceding the Change in Control or at any
time thereafter including, but not limited to, the plans
listed on Appendix A, unless such plan is replaced with a
plan that provides substantially equivalent compensation or
benefits to the Executive, or (B) provide the Executive with
compensation and benefits, in the aggregate at least equal
(in terms of benefit levels and/or reward opportunities) to
those provided for under each other employee benefit plan,
program and practice in which the Executive was participating
at any time within ninety (90) days preceding the Change in
Control or at any time thereafter;
(vi) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy, of the
Company, which petition is not dismissed within sixty (60)
days;
(vii) any material breach by the Company of any
provision hereof;
(viii) any purported termination of the Executive's
employment for Cause by the Company which does not comply
with the terms of Section 2.4 hereof; and
(ix) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any Successor
or Assign of the Company, to assume and agree to perform this
Agreement, as contemplated in Section 6 hereof.
(b) Any event or condition described in this Section
2.8(a)(i) through (ix) which occurs following the Effective
Date but within one (1) year prior to a Change in Control but
which the Executive reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with, or in anticipation of, a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of this Agreement notwithstanding that it occurred
prior to the Change in Control.
2.9. Notice of Termination. For purposes of this
---------------------
Agreement, following a Change in Control, "Notice of
Termination" shall mean a written notice of termination from
the Company of the Executive's employment which indicates the
specific termination provision in this Agreement relied upon
and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
2.10. Pro Rata Bonus. For purposes of this Agreement, "Pro
--------------
Rata Bonus" shall mean an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number
of days in the fiscal year through the Termination Date and
the denominator of which is 365.
2.11. Successors and Assigns. For purposes of this
----------------------
Agreement, "Successors and Assigns" shall mean a corporation
or other entity acquiring all or substantially all the assets
and business of the Company (including this Agreement)
whether by operation of law or otherwise.
2.12. Termination Date. For purposes of this Agreement,
----------------
"Termination Date" shall mean in the case of the Executive's
death, [his or her] date of death, in the case of Good
Reason, the last day of [his or her] employment, and in all
other cases, the date specified in the Notice of Termination;
provided, however, that if the Executive's employment is
-----------------
terminated by the Company for Cause or due to Disability, the
date specified in the Notice of Termination shall be at least
30 days from the date the Notice of Termination is given to
the Executive, provided that in the case of Disability the
Executive shall not have returned to the full-time
performance of [his or her] duties during such period of at
least 30 days.
3. Termination of Employment.
-------------------------
3.1. If, during the term of this Agreement, the Executive's
employment with the Company shall be terminated within
twenty-four (24) months following a Change in Control, the
Executive shall be entitled to the following compensation and
benefits:
(a) If the Executive's employment with the Company
shall be terminated (1) by reason of the Executive's death,
(2) by the Company for Cause or Disability, or (3) by the
Executive other than for Good Reason and other than during
the 60-day period commencing on the first anniversary of the
date of the occurrence of a Change in Control (the "Window
Period"), the Company shall pay to the Executive the Accrued
Compensation and, if such termination is other than by the
Company for Cause, a Pro Rata Bonus.
(b) If the Executive's employment with the Company
shall be terminated for any reason other than as specified in
Section 3.1(a) or during the Window Period, the Executive
shall be entitled to the following:
(i) the Company shall pay the Executive all Accrued
Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
termination pay and in lieu of any further compensation for
periods subsequent to the Termination Date, in a single
payment an amount (the "Termination Amount") in cash equal to
two times the sum of (A) the Base Amount and (B) the Bonus
Amount;
(iii) for twenty-four (24) months from the
Termination Date (the "Continuation Period"), the Company
shall at its expense continue on behalf of the Executive and
[his or her] dependents and beneficiaries the fringe
benefits, (excluding those benefit plans numbered 1 through 9
inclusive on Appendix A but including an automobile or
automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) and the life insurance, disability, medical,
dental and hospitalization benefits provided (x) to the
Executive at any time during the 90-day period prior to the
Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of
the Company during the Continuation Period; provided,
--------
however, that with respect to any Executive who was entitled
-------
to the use of an automobile provided by the Company within
the ninety (90) day period prior to a Change in Control or at
any time thereafter, the Executive shall be paid a cash
payment equal to the value of the Company provided automobile
to the Executive for the Continuation Period. The coverage
and benefits (including deductibles and contributions by the
Executive, if any) provided in this Section 3.1(b)(iii)
during the Continuation Period shall be no less favorable to
the Executive and [his or her] dependents and beneficiaries,
than the most favorable of such coverages and benefits during
any of the periods referred to in clauses (x) and (y) above.
The Company's obligation hereunder with respect to the
foregoing benefits (except for the automobile or automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) shall
be limited to the extent that the Executive obtains any such
benefits pursuant to a subsequent employer's benefit plans,
in which case the Company may reduce the coverage of any
benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined
benefit plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit
any benefits to which the Executive, [his or her] dependents
or beneficiaries may be entitled under any of the Company's
employee benefit plans, programs or practices following the
Executive's termination of employment, including without
limitation, retiree medical and life insurance benefits;
(iv) the Company shall pay in a single payment an
amount equal to eighty percent (80%) of the maximum amount
the Executive could have contributed under the Deferred
Salary and Investment Plan, Stock Purchase Program and
Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had [he or she] continued in the
employment with the Company during the Continuation Period
the greater of [his or her] annualized gross salary and wages
as in effect immediately prior to the Change in Control or at
any time thereafter; and
(v) (A) the restrictions on any outstanding
incentive awards (including restricted stock and granted
performance shares or units) granted to the Executive
including, but not limited to, awards granted under the
Company's 1985 Stock Option Plan, the Company's 1993
Incentive Stock Plan, or under any other incentive plan or
arrangement shall lapse and such incentive award shall become
100% vested, all stock options and stock appreciation rights
granted to the Executive shall become immediately exercisable
and shall become 100% vested, and all performance units
granted to the Executive shall become 100% vested and (B) the
Executive shall have the right to require the Company to
purchase, for cash, any shares of unrestricted stock or
shares purchased upon exercise of any options, at a price
equal to the fair market value of such shares on the date of
purchase by the Company.
(c) The amounts provided for in Sections 3.1(a) and
3.1(b)(i), (ii), (iii) (only as to the automobile allowance
and the related expenses of public liability insurance,
collision coverage, repairs and maintenance) and (iv) shall
be paid in a single lump sum cash payment within five (5)
days after the Executive's Termination Date (or earlier, if
required by applicable law).
(d) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by
seeking other employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation
or benefits provided to the Executive in any subsequent
employment except as provided in Section 3.1(b)(iii).
3.2. (a) The termination pay and termination benefits
provided for in this Section 3 shall be in lieu of any other
severance or termination pay to which the Executive may be
entitled under any Company severance or termination plan,
program, policy or practice.
(b) The Executive's entitlement to any other
compensation or benefits (other than the Pro Rata Bonus and
other than the termination pay and termination benefits as
provided under this Section 3) shall be determined in
accordance with the Company's employee benefit plans
(including, the plans listed on Appendix A) and other
applicable programs, policies and practices then in effect.
3.3. Notwithstanding any other provision of this Agreement
to the contrary, the termination of the Executive's
employment with the Company in connection with the sale,
divestiture or other disposition of a "Division" (as
hereinafter defined) (or part thereof) shall not be deemed to
be a termination of employment of the Executive for purposes
of this Agreement provided the Executive is offered
employment by the purchaser or acquiror of such Division (or
part thereof) and the Company obtains an agreement from such
purchaser or acquiror as contemplated in Section 6(c) and the
Executive shall not be entitled to benefits from the Company
under this Agreement as a result of such sale, divestiture,
or other disposition, or as a result of any subsequent
termination of employment. "Division" shall mean [name of
Division].
4. Notice of Termination. Following a Change in Control,
---------------------
any purported termination of the Executive's employment by
the Company shall be communicated by Notice of Termination to
the Executive. For purposes of this Agreement, no such
purported termination shall be effective without such Notice
of Termination.
5. Excise Tax Payments.
-------------------
(a) In the event that any payment or benefit (within
the meaning of Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code")), to the Executive or
for [his or her] benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, [his or her]
employment with the Company or a change in ownership or
effective control of the Company or of a substantial portion
of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties,
other than interest and penalties imposed by reason of the
Executive's failure to file timely a tax return or pay taxes
shown due on [his or her] return, imposed with respect to
such taxes and the Excise Tax), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount
of such Gross-Up Payment shall be made at the Company's
expense by an accounting firm selected by the Company and
reasonably acceptable to the Executive which is designated as
one of the five largest accounting firms in the United States
(the "Accounting Firm"). The Accounting Firm shall provide
its determination (the "Determination"), together with
detailed supporting calculations and documentation to the
Company and the Executive within five days of the Termination
Date if applicable, or such other time as requested by the
Company or by the Executive (provided the Executive
reasonably believes that any of the Payments may be subject
to the Excise Tax) and if the Accounting Firm determines that
no Excise Tax is payable by the Executive with respect to a
Payment or Payments, it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise
Tax will be imposed with respect to any such Payment or
Payments. Within ten days of the delivery of the
Determination to the Executive, the Executive shall have the
right to dispute the Determination (the "Dispute"). The
Gross-Up Payment, if any, as determined pursuant to this
Paragraph 5(b) shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm's
determination. The existence of the Dispute shall not in any
way affect the Executive's right to receive the Gross-Up
Payment in accordance with the Determination. If there is no
Dispute, the Determination shall be binding, final and
conclusive upon the Company and the Executive subject to the
application of Paragraph 5(c) below.
(c) As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that a
Gross-Up Payment (or a portion thereof) will be paid which
should not have been paid (an "Excess Payment") or a Gross-Up
Payment (or a portion thereof) which should have been paid
will not have been paid (an "Underpayment"). An Underpayment
shall be deemed to have occurred (i) upon notice (formal or
informal) to the Executive from any governmental taxing
authority that the Executive's tax liability (whether in
respect of the Executive's current taxable year or in respect
of any prior taxable year) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with
respect to which the Company has failed to make a sufficient
Gross-Up Payment, (ii) upon a determination by a court, (iii)
by reason of determination by the Company (which shall
include the position taken by the Company, together with its
consolidated group, on its federal income tax return) or (iv)
upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall
promptly notify the Company and the Company shall promptly,
but in any event, at least five days prior to the date on
which the applicable government taxing authority has
requested payment, pay to the Executive an additional
Gross-Up Payment equal to the amount of the Underpayment plus
any interest and penalties (other than interest and penalties
imposed by reason of the Executive's failure to file timely a
tax return or pay taxes shown due on the Executive's return)
imposed on the Underpayment. An Excess Payment shall be
deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed
upon a Payment or Payments (or portion thereof) with respect
to which the Executive had previously received a Gross-Up
Payment. A "Final Determination" shall be deemed to have
occurred when the Executive has received from the applicable
government taxing authority a refund of taxes or other
reduction in the Executive's tax liability by reason of the
Excise Payment and upon either (x) the date a determination
is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority,
or in the event that a claim is brought before a court of
competent jurisdiction, the date upon which a final
determination has been made by such court and either all
appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations
with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a
loan by the Company to the Executive and the Executive shall
pay to the Company on demand (but not less than 10 days after
the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of
the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the
date of repayment to the Company.
(d) Notwithstanding anything contained in this
Agreement to the contrary, in the event that, according to
the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
6. Successors; Binding Agreement.
-----------------------------
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Company and its Successors and
Assigns and the Company shall require any Successor or Assign
to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment
had taken place.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the
Executive, [his or her] beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal personal
representative.
(c) In the event that the Division (or part thereof) is
sold, divested, or otherwise disposed of by the Company
subsequent to a Change in Control and the Executive is
offered employment by the purchaser or acquiror thereof, the
Company shall require such purchaser or acquiror to assume,
and agree to perform the Company's obligations under this
Agreement, in the same manner, and to the same extent that
the Company would be required to perform if no such
acquisition or purchase had taken place.
7. Fees and Expenses. The Company shall pay all legal fees
-----------------
and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they
become due as a result of (a) the Executive's termination of
employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,
but not limited to, any such fees and expenses incurred in
connection with (i) the Dispute and (ii) the Gross-Up Payment
whether as a result of any applicable government taxing
authority proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company under which the
Executive is or may be entitled to receive benefits, and (c)
the Executive's hearing before the Board as contemplated in
Section 2.4 of this Agreement; provided, however, that the
circumstances set forth in clauses (a) and (b) (other than as
a result of the Executive's termination of employment under
circumstances described in Section 2.5(d)) occurred on or
after a Change in Control.
8. Notice. For the purposes of this Agreement, notices and
------
all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided
that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9. Non-exclusivity of Rights. Nothing in this Agreement
-------------------------
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan
or program provided by the Company (except for any severance
or termination policies, plans, programs or practices) and
for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have
under any other agreements with the Company (except for any
severance or termination agreement). Amounts which are
vested benefits or which the Executive is otherwise entitled
to receive under any plan or program of the Company shall be
payable in accordance with such plan or program, except as
explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to make
--------------------
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or others.
11. Miscellaneous. No provision of this Agreement may be
-------------
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
12. Governing Law. THE VALIDITY, INTERPRETATION,
-------------
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING THE EXECUTIVE AND THE
COMPANY WITH RESPECT TO ANY CLAIM OR ASSERTION THAT THE
EXECUTIVE'S EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE, THE
COMPANY HAS THE BURDEN OF PROVING THAT THE EXECUTIVE'S
EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE.
13. Forum. Any suit brought by the Executive under this
-----
Agreement may be brought in the appropriate state or federal
court for Tarrant County, Texas, or for the county wherein
the Executive maintains [his or her] residence. Any suit
brought by the Company under this Agreement may only be
brought in the county wherein the Executive maintains [his or
her] residence unless the Executive consents to suit
elsewhere.
14. Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability
of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto and supersedes all prior
agreements, if any, understandings and arrangements, oral or
written, between the parties hereto with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the Company caused this Agreement to be
executed by its duly authorized officer and the Executive has
executed this Agreement as of the day and year first above
written.
TANDY CORPORATION
ATTEST: By: ___________________________
Name:
Title:
_________________________
Secretary
By: ___________________________
[Executive]
<PAGE>
APPENDIX A
COMPENSATION AND BENEFIT PLANS
1. Tandy Corporation Officers Deferred Compensation Plan
2. Tandy Employees Deferred Salary and Investment Plan
3. Tandy Employees Stock Ownership Plan
4. Salary Continuation Plan for Executive Employees of Tandy
Corporation and Subsidiaries
5. Tandy Corporation Stock Purchase Program
6. Tandy Employees Supplemental Stock Program
7. Tandy Corporation 1985 Stock Option Plan
8. Post Retirement Death Benefit Plan for Executive
Employees of Tandy Corporation and Subsidiaries
9. Tandy Corporation 1993 Incentive Stock Plan
<PAGE>
FORM OF
-------
TERMINATION PROTECTION AGREEMENT
--------------------------------
FOR SUBSIDIARY EXECUTIVES
-------------------------
THIS AGREEMENT made as of the 18th day of May, 1995, by and
among the "Company" (as hereinafter defined) the "Employer"
(as hereinafter defined) and ____________________ (the
"Executive").
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that the possibility of a "Change in Control" (as
hereinafter defined) exists and that the threat or the
occurrence of a Change in Control can result in significant
distractions of its key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in
the best interest of the Company, its stockholders and the
Employer to retain the services of the Executive in the event
of a threat or occurrence of a Change in Control and to
ensure [his or her] continued dedication and efforts in such
event without undue concern for [his or her] personal
financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the
employ of the Employer, particularly in the event of a threat
or the occurrence of a Change in Control, the Company and the
Employer desire to enter into this Agreement with the
Executive to provide the Executive with certain benefits in
the event [his or her] employment is terminated as a result
of, or in connection with, a Change in Control and to provide
the Executive with the "Gross-Up Payment" (as hereinafter
defined) and certain other benefits whether or not the
Executive's employment is terminated.
NOW, THEREFORE, in consideration of the respective agreements
of the parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of
-----------------
May 18, 1995 and shall continue in effect until May 18, 1997;
provided, however, that commencing on May 18, 1996 and on
-----------------
each May 18 thereafter, the term of this Agreement shall be
automatically extended for one (1) year unless either the
Company or the Executive shall have given written notice to
the other at least ninety (90) days prior thereto that the
term of this Agreement shall not be so extended; and
provided, further, however, that notwithstanding any such
--------------------------
notice by the Company not to extend, the term of this
Agreement shall not expire prior to the expiration of
twenty-four (24) months after the occurrence of a Change in
Control.
2. Definitions.
-----------
2.1. Accrued Compensation. For purposes of this Agreement,
--------------------
"Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the
"Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, and (ii)
reimbursement for reasonable and necessary expenses incurred
by the Executive on behalf of the Employer during the period
ending on the Termination Date, (iii) vacation pay, if
required by applicable law, and (iv) bonuses and incentive
compensation (other than the "Pro Rata Bonus" (as hereinafter
defined))].
2.2. Base Amount. For purposes of this Agreement, "Base
-----------
Amount" shall mean the greater of the Executive's annual base
salary (a) at the rate in effect on the Termination Date or
(b) at the highest rate in effect at any time during the
ninety (90) day period prior to the Change in Control, and
shall include all amounts of [his or her] base salary that
are deferred under the qualified and non-qualified employee
benefit plans of the Company and/or the Employer.
2.3. Bonus Amount. For purposes of this Agreement, "Bonus
------------
Amount" shall mean the highest annual bonus paid or payable
to the Executive for any fiscal year in respect of the three
(3) full fiscal years ended prior to the Change in Control.
2.4. Cause. For purposes of this Agreement, a termination
-----
of employment is for "Cause" if the Executive has been
convicted of a felony or the termination is evidenced by a
resolution adopted in good faith by two-thirds of the Board
that the Executive (a) intentionally and continually failed
substantially to perform [his or her] reasonably assigned
duties with the Employer (other than a failure resulting from
the Executive's incapacity due to physical or mental illness
or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which
failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance
has been delivered to the Executive specifying the manner in
which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably
and materially injurious to the Company and/or the Employer;
provided, however, that no termination of the Executive's
-----------------
employment shall be for Cause as set forth in clause (b)
above until (x) there shall have been delivered to the
Executive a copy of a written notice setting forth that the
Executive was guilty of the conduct set forth in clause (b)
and specifying the particulars thereof in detail, and (y) the
Executive shall have been provided an opportunity to be heard
in person by the Board (with the assistance of the
Executive's counsel if the Executive so desires). No act,
nor failure to act, on the Executive's part, shall be
considered "intentional" unless the Executive has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Executive's action or failure to
act was in the best interest of the Company and/or the
Employer.
2.5. Change in Control. For purposes of this Agreement, a
-----------------
"Change in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
--------
however, that in determining whether a Change in Control has
-------
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (x) the Company or (y)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Subsidiary"),
(2) the Company or any Subsidiary, or (3) any Person in
connection with a "Non-Control Transaction" (as hereinafter
defined).
(b) The individuals who, as of May 18, 1995, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
-----------------
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
-------------------------
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger,
consolidation or reorganization, at least sixty percent (60%)
of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such
merger, consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,
(iii) no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or any Person who, immediately
prior to such merger, consolidation or reorganization had
Beneficial Ownership of fifteen percent (15%) or more of the
then outstanding Voting Securities) has Beneficial Ownership
of fifteen percent (15%) or more of the combined voting power
of the Surviving Corporation's then outstanding voting
securities, and
(iv) a transaction described in clauses (i) through
(iii) shall herein be referred to as a "Non-Control
Transaction";
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other disposition
of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is
terminated following the Effective Date but within one (1)
year prior to a Change in Control and [the Executive
reasonably demonstrates that] such termination (i) was at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
2.6. Company. For purposes of this Agreement, the
-------
"Company" shall mean Tandy Corporation and shall include its
"Successors and Assigns" (as hereinafter defined).
2.7. Disability. For purposes of this Agreement,
----------
"Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform [his
or her] duties with the Employer for a period of one hundred
eighty (180) consecutive days and the Executive has not
returned to [his or her] full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
2.8. Employer. For purposes of this Agreement, "Employer"
--------
shall mean [name of subsidiary].
2.9. (a) Good Reason. For purposes of this Agreement,
-----------
"Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in
Subsections (i) through (ix) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable
judgment, represents an adverse change in [his or her]
status, title, position or responsibilities as in effect at
any time within ninety (90) days preceding the date of the
Change in Control or at any time thereafter; the assignment
to the Executive of any duties or responsibilities which, in
the Executive's reasonable judgment, are inconsistent with
such status, title, position or responsibilities as in effect
at any time within ninety (90) days preceding the date of the
Change in Control or at any time thereafter; or any removal
of the Executive from or failure to reappoint or reelect [him
or her] to any of [his or her] offices or positions, except
in connection with the termination of the Executive's
employment for Cause, or as a result of [his or her] death,
or by the Executive other than for Good Reason;
(ii) a reduction in the rate of the Executive's
base salary below the Base Amount or any failure to pay the
Executive any compensation or benefits to which [he or she]
is entitled within fifteen (15) days of the date notice of
such failure is given to the Employer and, in the case of any
annual bonus, within forty-five (45) days following the end
of the fiscal year pursuant to which such bonus relates;
(iii) a change in the accounting policies or
practices as in effect during the ninety (90) days preceding
the Change in Control or at any time thereafter which, in the
Executive's reasonable judgment, results in a reduction in
[his or her] earning potential;
(iv) the Employer's requiring the Executive to be
based at any place outside a 20-mile radius from [his or her]
place of employment on the day prior to the Change in
Control, except for reasonably required travel on the
Employer's business which is not materially greater than such
travel requirements prior to the Change in Control;
(v) the failure by the Company and/or the Employer
to (A) continue in effect (without reduction in benefit
levels, reward opportunities and/or bonus potential for
comparable performance) any material compensation or benefit
plan in which the Executive was participating at any time
within ninety (90) days preceding the Change in Control or at
any time thereafter including, but not limited to, the plans
listed on Appendix A, unless such plan is replaced with a
plan that provides substantially equivalent compensation or
benefits to the Executive, or (B) provide the Executive with
compensation and benefits, in the aggregate at least equal
(in terms of benefit levels and/or reward opportunities) to
those provided for under each other employee benefit plan,
program and practice in which the Executive was participating
at any time within ninety (90) days preceding the Change in
Control or at any time thereafter;
(vi) the insolvency or the filing (by any party,
including the Company) of a petition for bankruptcy, of the
Company, which petition is not dismissed within sixty (60)
days;
(vii) any material breach by the Company and/or the
Employer of any provision hereof;
(viii) any purported termination of the
Executive's employment for Cause by the Company and/or the
Employer which does not comply with the terms of Section 2.4
hereof; and
(ix) the failure of the Company and the Employer to
obtain an agreement, satisfactory to the Executive, from any
Successor or Assign of the Company, to assume and agree to
perform this Agreement, as contemplated in Section 6 hereof.
(b) Any event or condition described in this Section
2.10(a)(i) through (ix) which occurs following the Effective
Date but within one (1) year prior to a Change in Control but
which the Executive reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with, or in anticipation of, a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of this Agreement notwithstanding that it occurred
prior to the Change in Control.
2.10. Notice of Termination. For purposes of this
---------------------
Agreement, following a Change in Control, "Notice of
Termination" shall mean a written notice of termination from
the Employer of the Executive's employment which indicates
the specific termination provision in this Agreement relied
upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
2.11. Pro Rata Bonus. For purposes of this Agreement, "Pro
--------------
Rata Bonus" shall mean an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number
of days in the fiscal year through the Termination Date and
the denominator of which is 365.
2.12. Successors and Assigns. For purposes of this
----------------------
Agreement, "Successors and Assigns" shall mean a corporation
or other entity acquiring all or substantially all the assets
and business of the Company (including this Agreement)
whether by operation of law or otherwise.
2.13. Termination Date. For purposes of this Agreement,
-----------------
"Termination Date" shall mean in the case of the Executive's
death, [his or her] date of death, in the case of Good
Reason, the last day of [his or her] employment, and in all
other cases, the date specified in the Notice of Termination;
provided, however, that if the Executive's employment is
-----------------
terminated by the Employer for Cause or due to Disability,
the date specified in the Notice of Termination shall be at
least 30 days from the date the Notice of Termination is
given to the Executive, provided that in the case of
Disability the Executive shall not have returned to the
full-time performance of [his or her] duties during such
period of at least 30 days.
3. Termination of Employment.
-------------------------
3.1. If, during the term of this Agreement, the Executive's
employment with the Employer shall be terminated within
twenty-four (24) months following a Change in Control, the
Executive shall be entitled to the following compensation and
benefits:
(a) If the Executive's employment with the Employer
shall be terminated (1) by reason of the Executive's death,
(2) by the Company for Cause or Disability, or (3) by the
Executive other than for Good Reason and other than during
the 60-day period commencing on the first anniversary of the
date of the occurrence of a Change in Control (the "Window
Period"), the Company shall pay to the Executive the Accrued
Compensation and, if such termination is other than by the
Employer for Cause, a Pro Rata Bonus.
(b) If the Executive's employment with the Employer
shall be terminated for any reason other than as specified in
Section 3.1(a) or during the Window Period, the Executive
shall be entitled to the following:
(i) the Company shall pay the Executive all Accrued
Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
termination pay and in lieu of any further compensation for
periods subsequent to the Termination Date, in a single
payment an amount (the "Termination Amount") in cash equal to
two times the sum of (A) the Base Amount and (B) the Bonus
Amount;
(iii) for twenty-four (24) months from the
Termination Date (the "Continuation Period"), the Company
shall at its expense continue on behalf of the Executive and
[his or her] dependents and beneficiaries the fringe
benefits, (excluding those benefit plans numbered 1 through 9
inclusive on Appendix A but including an automobile or
automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) and the life insurance, disability, medical,
dental and hospitalization benefits provided (x) to the
Executive at any time during the 90-day period prior to the
Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of
the Company and/or the Employer during the Continuation
Period; provided, however, that with respect to any Executive
-----------------
who was entitled to the use of an automobile provided by the
Company and/or the Employer within the ninety (90) day period
prior to a Change in Control or at any time thereafter, the
Executive shall be paid a cash payment equal to the value of
the Company and/or the Employer provided automobile to the
Executive for the Continuation Period. The coverage and
benefits (including deductibles and contributions by the
Executive, if any) provided in this Section 3.1(b)(iii)
during the Continuation Period shall be no less favorable to
the Executive and [his or her] dependents and beneficiaries,
than the most favorable of such coverages and benefits during
any of the periods referred to in clauses (x) and (y) above.
The Company's and/or the Employer's obligation hereunder with
respect to the foregoing benefits (except for the automobile
or automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent
employer's benefit plans, in which case the Company and/or
the Employer may reduce the coverage of any benefits it is
required to provide the Executive hereunder as long as the
aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit
any benefits to which the Executive, [his or her] dependents
or beneficiaries may be entitled under any of the Company's
and/or the Employer's employee benefit plans, programs or
practices following the Executive's termination of
employment, including without limitation, retiree medical and
life insurance benefits;
(iv) the Company shall pay in a single payment an
amount equal to eighty percent (80%) of the maximum amount
the Executive could have contributed under the Deferred
Salary and Investment Plan, Stock Purchase Program and
Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had [he or she] continued in the
employment with the Employer during the Continuation Period
at the greater of [his or her] annualized gross salary and
wages as in effect immediately prior to the Change in Control
or at any time thereafter; and
(v) (A) the restrictions on any outstanding
incentive awards (including restricted stock and granted
performance shares or units) granted to the Executive
including, but not limited to, awards granted under the
Company's 1985 Stock Option Plan, 1993 Incentive Stock Plan
or under any other incentive plan or arrangement shall lapse
and such incentive award shall become 100% vested, all stock
options and stock appreciation rights granted to the
Executive shall become immediately exercisable and shall
become 100% vested, and all performance units granted to the
Executive shall become 100% vested and (B) the Executive
shall have the right to require the Company to purchase, for
cash, any shares of unrestricted stock or shares purchased
upon exercise of any options, at a price equal to the fair
market value of such shares on the date of purchase by the
Company.
(c) The amounts provided for in Sections 3.1(a) and
3.1(b)(i), (ii), (iii) (only as to the automobile allowance
and the related expenses of public liability insurance,
collision coverage, repairs and maintenance) and (iv) shall
be paid in a single lump sum cash payment within five (5)
days after the Executive's Termination Date (or earlier, if
required by applicable law).
(d) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by
seeking other employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation
or benefits provided to the Executive in any subsequent
employment except as provided in Section 3.1(b)(iii).
3.2. (a) The termination pay and termination benefits
provided for in this Section 3 shall be in lieu of any other
severance or termination pay to which the Executive may be
entitled under any Company and/or Employer severance or
termination plan, program, policy or practice.
(b) The Executive's entitlement to any other
compensation benefits (other than the Pro Rata Bonus and
other than the termination pay and termination benefits as
provided in this Section 3) shall be determined in accordance
with the Company's and/or the Employer's employee benefit
plans (including, the plans listed on Appendix A) and other
applicable programs, policies and practices then in effect.
3.3. Notwithstanding any other provision of this Agreement
to the contrary, the termination of the Executive's
employment with the Employer in connection with the sale,
divestiture or other disposition of the Employer (or part
thereof) shall not be deemed to be a termination of
employment of the Executive for purposes of this Agreement
provided the Executive is offered employment by the purchaser
or acquiror of the Employer (or part thereof) and the Company
and the Employer obtain an agreement from such purchaser or
acquiror as contemplated in Section 6(c) and the Executive
shall not be entitled to benefits from the Company under this
Agreement as a result of such sale, divestiture, or other
disposition, or as a result of any subsequent termination of
employment.
4. Notice of Termination. Following a Change in Control,
---------------------
any purported termination of the Executive's employment by
the Employer shall be communicated by Notice of Termination
to the Executive. For purposes of this Agreement, no such
purported termination shall be effective without such Notice
of Termination.
5. Excise Tax Payments.
-------------------
(a) In the event that any payment or benefit (within
the meaning of Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code")), to the Executive or
for [his or her] benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, [his or her]
employment with the Employer or a change in ownership or
effective control of the Company or of a substantial portion
of its assets (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties,
other than interest and penalties imposed by reason of the
Executive's failure to file timely a tax return or pay taxes
shown due on [his or her] return, imposed with respect to
such taxes and the Excise Tax), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount
of such Gross-Up Payment shall be made at the Company's
expense by an accounting firm selected by the Company and
reasonably acceptable to the Executive which is designated as
one of the five largest accounting firms in the United States
(the "Accounting Firm"). The Accounting Firm shall provide
its determination (the "Determination"), together with
detailed supporting calculations and documentation to the
Company and the Executive within five days of the Termination
Date if applicable, or such other time as requested by the
Company or by the Executive (provided the Executive
reasonably believes that any of the Payments may be subject
to the Excise Tax) and if the Accounting Firm determines that
no Excise Tax is payable by the Executive with respect to a
Payment or Payments, it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise
Tax will be imposed with respect to any such Payment or
Payments. Within ten days of the delivery of the
Determination to the Executive, the Executive shall have the
right to dispute the Determination (the "Dispute"). The
Gross-Up Payment, if any, as determined pursuant to this
Paragraph 5(b) shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm's
determination. The existence of the Dispute shall not in any
way affect the Executive's right to receive the Gross-Up
Payment in accordance with the Determination. If there is no
Dispute, the Determination shall be binding, final and
conclusive upon the Company and the Executive subject to the
application of Paragraph 5(c) below.
(c) As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that a
Gross-Up Payment (or a portion thereof) will be paid which
should not have been paid (an "Excess Payment") or a Gross-Up
Payment (or a portion thereof) which should have been paid
will not have been paid (an "Underpayment"). An Underpayment
shall be deemed to have occurred (i) upon notice (formal or
informal) to the Executive from any governmental taxing
authority that the Executive's tax liability (whether in
respect of the Executive's current taxable year or in respect
of any prior taxable year) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with
respect to which the Company has failed to make a sufficient
Gross-Up Payment, (ii) upon a determination by a court, (iii)
by reason of determination by the Company (which shall
include the position taken by the Company, together with its
consolidated group, on its federal income tax return) or (iv)
upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall
promptly notify the Company and the Company shall promptly,
but in any event, at least five days prior to the date on
which the applicable government taxing authority has
requested payment, pay to the Executive an additional
Gross-Up Payment equal to the amount of the Underpayment plus
any interest and penalties (other than interest and penalties
imposed by reason of the Executive's failure to file timely a
tax return or pay taxes shown due on the Executive's return)
imposed on the Underpayment. An Excess Payment shall be
deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed
upon a Payment or Payments (or portion thereof) with respect
to which the Executive had previously received a Gross-Up
Payment. A "Final Determination" shall be deemed to have
occurred when the Executive has received from the applicable
government taxing authority a refund of taxes or other
reduction in the Executive's tax liability by reason of the
Excise Payment and upon either (x) the date a determination
is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority,
or in the event that a claim is brought before a court of
competent jurisdiction, the date upon which a final
determination has been made by such court and either all
appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations
with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a
loan by the Company to the Executive and the Executive shall
pay to the Company on demand (but not less than 10 days after
the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of
the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the
date of repayment to the Company.
(d) Notwithstanding anything contained in this
Agreement to the contrary, in the event that, according to
the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
6. Successors; Binding Agreement.
-----------------------------
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Company, its Successors and
Assigns and the Employer and the Company shall require any
Successor or Assign to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that
the Company and/or the Employer would be required to perform
it if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the
Executive, [his or her] beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal personal
representative.
(c) In the event that the Employer (or part thereof) is
sold, divested, or otherwise disposed of by the Company
subsequent to a Change in Control and the Executive is
offered employment by the purchaser or acquiror thereof, the
Company shall require such purchaser or acquiror to assume,
and agree to perform the Company's and the Employer's
obligations under this Agreement, in the same manner, and to
the same extent that the Company and the Employer would be
required to perform if no such acquisition or purchase had
taken place.
7. Fees and Expenses. The Company shall pay all legal fees
-----------------
and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they
become due as a result of (a) the Executive's termination of
employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,
but not limited to, any such fees and expenses incurred in
connection with (i) the Dispute and (ii) the Gross-Up Payment
whether as a result of any applicable government taxing
authority proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company and/or the
Employer under which the Executive is or may be entitled to
receive benefits, and (c) the Executive's hearing before the
Board as contemplated in Section 2.4 of this Agreement;
provided, however, that the circumstances set forth in
-----------------
clauses (a) and (b) (other than as a result of the
Executive's termination of employment under circumstances
described in Section 2.5(d)) occurred on or after a Change in
Control.
8. Notice. For the purposes of this Agreement, notices and
------
all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided
that all notices to the Company and/or the Employer shall be
directed to the attention of the Board with a copy to the
Secretary of the Company. All notices and communications
shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing
thereof, except that notice of change of address shall be
effective only upon receipt.
9. Non-exclusivity of Rights. Nothing in this Agreement
-------------------------
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan
or program provided by the Company and/or the Employer
(except for any severance or termination policies, plans,
programs or practices) and for which the Executive may
qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreements
with the Company and/or the Employer (except for any
severance or termination agreement). Amounts which are
vested benefits or which the Executive is otherwise entitled
to receive under any plan or program of the Company and/or
the Employer shall be payable in accordance with such plan or
program, except as explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to make
--------------------
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or others.
11. Miscellaneous. No provision of this Agreement may be
-------------
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive, the Company and the Employer. No waiver by
any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of
this Agreement to be performed by any other party shall be
deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
No agreement or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have
been made by any party which are not expressly set forth in
this Agreement.
12. Governing Law. THE VALIDITY, INTERPRETATION,
-------------
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING THE EXECUTIVE, THE
COMPANY AND/OR THE EMPLOYER WITH RESPECT TO ANY CLAIM OR
ASSERTION THAT THE EXECUTIVE'S EMPLOYMENT WAS PROPERLY
TERMINATED FOR CAUSE, THE COMPANY AND/OR THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE EXECUTIVE'S EMPLOYMENT WAS
PROPERLY TERMINATED FOR CAUSE.
13. Forum. Any suit brought by the Executive under this
-----
Agreement may be brought in the appropriate state or federal
court for Tarrant County, Texas, or for the county wherein
the Executive maintains [his or her] residence. Any suit
brought by the Company and/or the Employer under this
Agreement may only be brought in the county wherein the
Executive maintains [his or her] residence unless the
Executive consents to suit elsewhere.
14. Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability
of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto and supersedes all prior
agreements, if any, understandings and arrangements, oral or
written, between the parties hereto with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the Company and the Employer have caused
this Agreement to be executed by its duly authorized officers
and the Executive has executed this Agreement as of the day
and year first above written.
TANDY CORPORATION
ATTEST: By: ___________________________
Name:
Title:
_________________________
Secretary
[NAME OF SUBSIDIARY]
By: ___________________________
Name:
Title:
By: ___________________________
[Executive]
<PAGE>
APPENDIX A
COMPENSATION AND BENEFIT PLANS
1. Tandy Corporation Officers Deferred Compensation Plan
2. Tandy Employees Deferred Salary and Investment Plan
3. Tandy Employees Stock Ownership Plan
4. Salary Continuation Plan for Executive Employees of Tandy
Corporation and Subsidiaries
5. Tandy Corporation Stock Purchase Program
6. Tandy Employees Supplemental Stock Program
7. Tandy Corporation 1985 Stock Option Plan
8. Post Retirement Death Benefit Plan for Executive
Employees of Tandy Corporation and Subsidiaries
9. Tandy Corporation 1993 Incentive Stock Plan
<PAGE>
EXHIBIT 10n
TANDY CORPORATION
TERMINATION PROTECTION PLAN
---------------------------
"LEVEL I"
WHEREAS, the "Board" of the "Company" (as those terms are
hereinafter defined) recognizes that the possibility of a
future "Change in Control" (as hereinafter defined) exists
and that the threat or occurrence of a Change in Control
could result in significant distractions to its employees
because of the uncertainties inherent in such a situation;
and
WHEREAS, the Board has determined that it is essential and in
the best interest of the Company, its stockholders and the
Employer to retain the services of certain of its employees
in the event of a threat or the occurrence of a Change in
Control of the Company and to ensure their continued
dedication and efforts in such event without undue concern
for their employment and personal financial security.
NOW, THEREFORE, in order to fulfill these purposes, the
following is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
---------------------
1.0 As of the Effective Date, the Company hereby establishes
the Tandy Corporation Termination Protection Plan Level I
(the "Plan") as set forth in this document.
ARTICLE II
DEFINITIONS
-----------
As used herein the following words and phrases shall have the
following respective meanings for purposes of the Plan unless
the context clearly indicates otherwise.
2.1 Accrued Compensation. "Accrued Compensation" shall mean
--------------------
an amount which shall include all amounts earned or accrued
through the "Termination Date" (as hereinafter defined) but
not paid as of the Termination Date including (i) base
salary, (ii) reimbursement for reasonable and necessary
expenses incurred by the "Participant" (as hereinafter
defined) on behalf of the Employer during the period ending
on the Termination Date, (iii) vacation pay as required by
law, and (iv) bonuses and incentive compensation (other than
the "Pro Rata Bonus" (as hereinafter defined)).
2.2 Base Amount. "Base Amount" shall mean the greater of the
-----------
Participant's annual base salary (a) at the rate in effect on
the Termination Date or (b) at the highest rate in effect at
any time during the ninety (90) day period prior to the
Change in Control, and shall include all amounts of the
Participant's base salary that are deferred under the
Employer's qualified and non-qualified employee benefit
plans.
2.3 Board. "Board" shall mean the Board of Directors of the
-----
Company.
2.4 Bonus Amount. "Bonus Amount" shall mean the highest
------------
annual bonus paid or payable to the Participant for any
fiscal year in respect of the three (3) full fiscal years
ended prior to the Change in Control.
2.5 Cause. The Participant's Employer may terminate the
-----
Participant's employment for "Cause" if the Participant (a)
has been convicted of a felony, (b) failed substantially to
perform his or her reasonably assigned duties with his or her
Employer (other than a failure resulting from his or her
incapacity due to physical or mental illness), or (c) has
intentionally engaged in conduct which is demonstrably and
materially injurious to the Company and/or Employer. No act,
or failure to act, on the Participant's part, shall be
considered "intentional" unless the Participant has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Participant's action or failure to
act was in the best interest of the Company and/or Employer.
2.6 Change in Control. "Change in Control" shall mean the
-----------------
occurrence during the "Term" (as hereinafter defined) of any
of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
--------
however, in determining whether a Change in Control has
-------
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (a) the Company or (b)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Company
Subsidiary"), (2) the Company or any Company Subsidiary, or
(3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(b) The individuals who, as of August 22, 1990, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
-----------------
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the
Program, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
-------------------------
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger,
consolidation or reorganization, at least sixty percent (60%)
of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,
(iii) no Person (other than the Company and its
Company Subsidiaries, any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, the
Surviving Corporation or any Company Subsidiary, or any
Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of fifteen percent
(15%) or more of the then outstanding Voting Securities) has
Beneficial Ownership of fifteen percent (15%) or more of the
combined voting power of the Surviving Corporation's then
outstanding voting securities, and
(iv) a transaction described in clauses (i) through
(iii) shall herein be referred to as a "Non-Control
Transaction";
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other disposition
of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Company Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in the Plan to
the contrary, if the Participant's employment is terminated
during the Term but within one (1) year prior to a Change in
Control and the Participant reasonably demonstrates that such
termination (i) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated
to effect a Change in Control and who effectuates a Change in
Control (a "Third Party") or (ii) otherwise occurred in
connection with, or in anticipation of, a Change in Control
which actually occurs, then for all purposes of the Plan, the
date of a Change in Control with respect to the Participant
shall mean the date immediately prior to the date of such
termination of the Participant's employment.
2.7 Company. "Company" shall mean Tandy Corporation and
-------
shall include its "Successors and Assigns" (as hereinafter
defined).
2.8 Disability. "Disability" shall mean a physical or
----------
mental infirmity which impairs the Participant's ability to
substantially perform his or her duties with his or her
Employer for a period of one hundred eighty (180) consecutive
days and the Participant has not returned to his or her full
time employment prior to the Termination Date as stated in
the "Notice of Termination" (as hereinafter defined).
2.9 Effective Date. "Effective Date" shall be August 22,
--------------
1990.
2.10 Eligible Employee. "Eligible Employee" shall mean
-----------------
those employees whose names are listed on Schedule A attached
hereto.
2.11 Employer. "Employer" shall mean the Company or its
--------
divisions or its "Subsidiaries" (as hereinafter defined) with
whom the Eligible Employee is employed.
2.12 (a) Good Reason. "Good Reason" shall mean the
-----------
occurrence after a Change in Control of any of the events or
conditions described in Subsections (i) through (iv) hereof:
(i) a reduction in the rate of the Participant's
base salary below the Base Amount or any failure to pay the
Participant any compensation or benefits to which he or she
is entitled within fifteen (15) days of the date notice of
such failure to pay is given to the Employer and, in the case
of any annual bonus, within forty-five (45) days following
the end of the fiscal year to which such bonus relates;
(ii) the Employer's requiring him or her to be
based at any place outside a 20-mile radius from his or her
place of employment on the day prior to the Change in
Control, except for reasonably required travel on the
Employer's business which is not materially greater than such
travel requirements prior to the Change in Control;
(iii) the failure by the Employer to (A) continue
in effect (without reduction in benefit levels, reward
opportunities and/or bonus potential for comparable
performance) any material compensation or benefit plan in
which the Participant was participating at any time within
ninety (90) days preceding the Change in Control or at any
time thereafter including but not limited to, the plans
listed on Schedule B, unless such plan is replaced with a
plan that provides substantially equivalent compensation or
benefits to the Participant, or (B) provide the Participant
with compensation and benefits, in the aggregate at least
equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other
employee benefit plan, program and practice in which the
Participant was participating at any time within ninety
(90)days preceding the Change in Control or at any time
thereafter; and
(iv) the failure of the Company and/or the
Employer to obtain an agreement from any Successor or Assign
of the Company, to assume and agree to perform the Plan, as
contemplated in Section 7.1 hereof.
(b) Any event or condition described in this Section
2.12(a)(i) through (iv) which occurs during the Term but
within one (1) year prior to a Change in Control but which
the Participant reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with or in anticipation of a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of the Plan notwithstanding that it occurred prior
to the Change in Control.
2.13 Notice of Termination. Following a Change in Control,
---------------------
"Notice of Termination" shall mean a notice of termination of
the Participant's employment from the Employer which
indicates the specific termination provision in the Plan
relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Participant's employment under the
provision so indicated.
2.14 Participant. "Participant" shall mean an Eligible
-----------
Employee who satisfies the requirements of Section 3.1 and
who has not ceased to be a Participant pursuant to Section
3.2.
2.15 Pro-Rata Bonus. "Pro-Rata Bonus" shall mean the Bonus
--------------
Amount multiplied by a fraction, the numerator of which is
the number of days in the Company's fiscal year through and
including the Participant's Termination Date and the
denominator of which is 365.
2.16 Subsidiary or Subsidiaries. "Subsidiary" or
--------------------------
"Subsidiaries" shall mean any corporation in which the
Company owns, directly or indirectly, 50% or more of the
total voting power of the corporation's outstanding voting
securities and any other corporation designated by the Board
as a Subsidiary.
2.17 Successors and Assigns. "Successors and Assigns" as
----------------------
used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of
the Company (including the Plan) whether by operation of law
or otherwise.
2.18 Term. "Term" shall mean the period of time the Plan
----
remains effective as provided in Section 8.1.
2.19 Termination Date. "Termination Date" shall mean in the
----------------
case of the Participant's death, his or her date of death, in
the case of Good Reason, his or her last day of employment
and in all other cases, the date specified in the Notice of
Termination; provided, however, if the Participant's
-----------------
employment is terminated by the Employer for Cause or due to
Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of
Termination is given to the Participant; provided, further,
-----------------
however, that in the case of Disability the Participant
-------
shall not have returned to the full-time performance of his
or her duties during such period of at least 30 days.
ARTICLE III
ELIGIBILITY
-----------
3.1 Participation. Each employee shall become a Participant
-------------
in the Plan immediately upon becoming an Eligible Employee.
3.2 Duration of Participation. A Participant shall cease to
-------------------------
be a Participant in the Plan if he or she ceases to be an
Eligible Employee of the Employer at any time prior to a
Change in Control. A Participant entitled to receive any
amounts set forth in this Plan shall remain a Participant in
the Plan until all amounts he or she is entitled to have been
paid to him or her.
ARTICLE IV
TERMINATION BENEFITS
--------------------
4.1 Payment of Accrued Compensation. In the event that a
-------------------------------
Participant's employment with his or her Employer is
terminated following a Change in Control during the Term (a)
by reason of the Participant's death, (b) by his or her
Employer for Cause or Disability, or (c) by the Participant
without Good Reason, the Executive shall be entitled to
receive and the Company shall pay, his or her Accrued
Compensation and, if such termination is other than by his or
her Employer for Cause, a Pro Rata Bonus.
4.2 Payment in Event of Certain Terminations of Employment.
------------------------------------------------------
In the event that a Participant's employment with his or her
Employer is terminated following a Change in Control during
the Term by the Participant or by his or her Employer for any
reason other than as specified in Section 4.1, the
Participant shall be entitled to receive under the Plan:
(a) a cash payment equal to the sum of:
(i) his or her Accrued Compensation and Pro Rata
Bonus,
(ii) his or her Base Amount, and
(iii) his or her Bonus Amount;
(b) for a period of twelve (12) months beginning on the
Participant's Termination Date (the "Continuation Period"),
the Company shall at its expense continue on behalf of the
Participant and his or her dependents and beneficiaries the
fringe benefits (excluding those benefit plans numbered 1
through 11 inclusive on Schedule B but including an
Employer-provided automobile or automobile allowance and the
related expenses of public liability insurance, collision
coverage, repairs and maintenance) and life insurance,
disability, medical, dental and hospitalization benefits
provided (i) to the Participant any time during the 90-day
period prior to the Change in Control or at any time
thereafter or (ii) to other similarly situated employees who
continue in the employ of the Company and/or the Employer
during the Continuation Period; provided, however, that with
--------
respect to any Participant who was entitled to the use of an
automobile provided by his or her Employer within the ninety
(90) day period prior to a Change in Control or at anytime
thereafter, he or she shall be paid a cash payment equal to
the value to him or her for the Continuation Period of the
Employer-provided automobile. The coverage and benefits
(including deductibles, costs and contributions by the
Participant, if any) provided in this Section 4.2(b) during
the Continuation Period shall be no less favorable to the
Participant and his or her dependents and beneficiaries than
the most favorable of such coverages and benefits during any
of the periods referred to in clauses (i) and (ii) above.
The obligation hereunder with respect to the foregoing
benefits (except for the automobile or automobile allowance)
shall be limited if the Participant obtains any such benefits
pursuant to a subsequent employer's benefit plans, in which
case the Employer (or the Company, as the case may be) may
reduce the coverage of any benefits it is required to provide
the Participant hereunder as long as the aggregate coverages
and benefits of the combined benefit plans is no less
favorable to the Participant than the coverages and benefits
required to be provided hereunder. This Subsection (b) shall
not be interpreted so as to limit any benefits to which the
Participant, his or her dependents or beneficiaries may be
entitled under any of the Company's or the Employer's
employee benefit plans, programs or practices following his
or her termination of employment, including without
limitation, retiree medical and life insurance benefits;
(c) the Company shall pay in a single payment an amount
equal to eighty percent (80%) of the maximum amount the
Participant could have contributed under the Deferred Salary
and Investment Plan, Stock Purchase Program and Supplemental
Stock Program as in effect on the date immediately prior to
the Change in Control during the Continuation Period had he
or she continued in employment with the Employer during the
restructure period at the greater of his or her annualized
gross salary and wages as in effect immediately prior to the
Change in Control or at any time thereafter; and
(d) The amounts provided for in Sections 4.1, 4.2(a),
4.2(b) (only as to the automobile allowance and the related
expenses of public liability insurance, collision coverage,
repairs and maintenance) and 4.2(c) shall be paid in a single
lump sum cash payment within five (5) days after the
Participant's Termination Date (or earlier, if required by
applicable law).
4.3 Mitigation. The Participant shall not be required to
----------
mitigate the amount of any payment provided for in the Plan
by seeking other employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation
or benefits provided to the Participant in any subsequent
employment.
4.4 Termination Pay. The payments and benefits provided for
---------------
in Section 4.2(a)(ii) and (iii) shall reduce the amount of
any cash severance or termination pay payable to the
Participant under any other Employer severance or termination
plan, program, policy or practice.
4.5 Other Benefits. The Participant's entitlement to any
--------------
other compensation or benefits (other than the Pro Rata
Bonus) shall be determined in accordance with the Employer's
employee benefit plans (including, the plans listed on
Schedule B) and other applicable programs, policies and
practices then in effect.
ARTICLE V
TERMINATION OF EMPLOYMENT
-------------------------
5.1 Notice of Termination Required. Following a Change in
------------------------------
Control, any purported termination of the Participant's
employment by the Employer shall be communicated by Notice of
Termination to the Participant. For purposes of the Plan, no
such purported termination shall be effective without such
Notice of Termination.
ARTICLE VI
LIMITATION ON PAYMENTS BY THE COMPANY
-------------------------------------
6.1 Excise Tax Limitation.
---------------------
(a) Notwithstanding anything contained in the Plan to
the contrary, to the extent that the payments and benefits
provided under the Plan and benefits provided to, or for the
benefit of, the Participant under any other Employer plan or
agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise
tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
Payments shall be reduced (but not below zero) if and to the
extent that a reduction in the Payments would result in the
Participant retaining a larger amount, on an after-tax basis
(taking into account federal, state and local income taxes
and the Excise Tax), than if the Participant received all of
the Payments (such reduced amount is hereinafter referred to
as the "Limited Payment Amount"). Unless the Participant
shall have given prior written notice specifying a different
order to the Company to effectuate the Limited Payment
Amount, the Company shall reduce or eliminate the Payments,
by first reducing or eliminating those payments or benefits
which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order
beginning with payments or benefits which are to be paid the
farthest in time from the "Determination" (as hereinafter
defined). Any notice given by the Participant pursuant to
the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement
governing the Participant's rights and entitlements to any
benefits or compensation.
(b) An initial determination as to whether the Payments
shall be reduced to the Limited Payment Amount pursuant to
the Plan and the amount of such Limited Payment Amount shall
be made by an accounting firm at the Company's expense
selected by the Company which is designated as one of the
five (5) largest accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed
supporting calculations and documentation to the Company and
the Participant within five (5) days of the Termination Date
if applicable, or such other time as requested by the Company
or by the Participant (provided the Participant reasonably
believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no
Excise Tax is payable by the Participant with respect to a
Payment or Payments, it shall furnish the Participant with an
opinion reasonably acceptable to the Participant that no
Excise Tax will be imposed with respect to any such Payment
or Payments. Within ten (10) days of the delivery of the
Determination to the Participant, the Participant shall have
the right to dispute the Determination (the "Dispute"). If
there is no Dispute, the Determination shall be binding,
final and conclusive upon the Company and the Participant
subject to the application of Paragraph 6.1(c) below.
(c) As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that
the Payments to be made to, or provided for the benefit of,
the Participant either have been made or will not be made by
the Company which, in either case, will be inconsistent with
the limitations provided in Section 6(a) (hereinafter
referred to as an"Excess Payment" or "Underpayment",
respectively). If it is established pursuant to a final
determination of a court or an Internal Revenue Service(the
"IRS") proceeding which has been finally and conclusively
resolved, that an Excess Payment has been made, such Excess
Payment shall be deemed for all purposes to be a loan to the
Participant made on the date the Participant received the
Excess Payment and the Participant shall repay the Excess
Payment to the Company on demand (but not less than ten (10)
days after written notice is received by the Participant)
together with interest on the Excess Payment at the
"Applicable Federal Rate" (as defined in Section 1274(d) of
the Code)from the date of the Participant's receipt of such
Excess Payment until the date of such repayment. In the
event that it is determined by (i) the Accounting Firm, the
Company (which shall include the position taken by the
Company, or together with its consolidated group, on its
federal income tax return) or the IRS, (ii) pursuant to a
determination by a court, or (iii) upon the resolution to the
Participant's satisfaction of the Dispute, that an
Underpayment has occurred, the Company shall pay an amount
equal to the Underpayment to the Participant within ten (10)
days of such determination or resolution together with
interest on such amount at the Applicable Federal Rate from
the date such amount would have been paid to the Participant
until the date of payment.
ARTICLE VII
SUCCESSORS AND ASSIGNS
----------------------
7.1 Successors and Assigns.
----------------------
(a) The Plan shall be binding upon and shall inure to
the benefit of the Company and the Employer. The Company and
the Employer shall require any Successor or Assign to
expressly assume and agree to perform the Plan in the same
manner and to the same extent that the Company and/or the
Employer would be required to perform it if no such
succession or assignment had taken place.
(b) Neither the Plan nor any right or interest
hereunder shall be assignable or transferable by the
Participant, his or her beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution; provided, however, that the Plan shall inure to
the benefit of and be enforceable by the Participant's legal
personal representative.
7.2 Sale of Business or Assets. Notwithstanding anything
--------------------------
contained in the Plan to the contrary, if a Participant's
employment with his or her Employer is terminated in
connection with the sale, divestiture or other disposition of
any Subsidiary or division of the Company (or part thereof)
such termination shall not be a termination of employment of
the Participant for purposes of the Plan and the Participant
shall not be entitled to benefits from the Company under the
Plan as a result of such sale, divestiture, or other
disposition, or as a result of any subsequent termination of
employment, provided that (a) the Participant is offered
employment by the purchaser or acquiror of such Subsidiary or
division (or part thereof) and (b) the Company obtains an
agreement from such purchaser or acquiror to perform the
Company's and/or Employer's obligations under the Plan, in
the same manner, and to the same extent that the Company
and/or the Employer would be required to perform if no such
purchase or acquisition had taken place. In such
circumstances, the purchaser or acquiror shall be solely
responsible for providing any benefits payable under the Plan
to any such Participant.
ARTICLE VIII
TERM, AMENDMENT AND PLAN TERMINATION
------------------------------------
8.1 Term. The Plan shall continue in effect for a period of
----
two (2) years commencing on the Effective Date and shall be
automatically extended for one (1) year on the first
anniversary of the Effective Date and on each anniversary of
the Effective Date thereafter unless the Company shall have
delivered a written notice to each Participant at least
ninety (90) days prior to any extension that the Plan shall
not be so extended; provided, however, that if a Change in
-----------------
Control occurs while the Plan is in effect, the Plan shall
not end prior to the expiration of two (2) years following
the Change in Control.
8.2 Amendment and Termination. Subject to Section 8.1, the
-------------------------
Plan may be terminated or amended in any respect by
resolution adopted by two-thirds (2/3) of the members of the
Incumbent Board and Schedule A may be amended to (x) add
Eligible Employees at any time (y) prior to a Change in
Control, to eliminate any Eligible Employee by reason of his
or her demotion in position by any duly authorized officer of
the Company; provided, however,that no such amendment or
-----------------
termination of the Plan or Schedule A during the Term may be
made (a) if such amendment or termination would adversely
affect any right of an Eligible Employee who became an
Eligible Employee (except as provided in clause (y) above)
prior to the later of (i) the date of adoption of any such
amendment or termination, or (ii) the effective date of any
such amendment or termination, (b) at the request of a Third
Party, or (c)otherwise in connection with, or in anticipation
of, a Change in Control; and provided, further, however, that
-----------------
the Plan no longer shall be subject to amendment, change,
substitution, deletion, revocation or termination in any
respect whatsoever following a Change in Control. 8.3 Form of
Amendment. The form of any amendment or termination of the
Plan shall be a written instrument signed by a duly
authorized officer or officers of the Company, certifying
that the amendment or termination has been approved by the
Board in accordance with Section 8.2.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Contractual Right. Upon and after a Change in Control,
-----------------
each Participant shall have a fully vested, nonforfeitable
contractual right, enforceable against the Company, to the
benefits provided for under Sections 4.1, 4.2 and 4.3 of the
Plan upon satisfaction of the applicable conditions specified
in those Sections.
9.2 Employment Status. Prior to a Change in Control, each
-----------------
Eligible Employee shall continue in his or her status as an
employee-at-will and the Plan does not constitute a contract
of employment or impose on the Employer any obligation to (a)
retain the Participant, (b) make any payments upon
termination of employment, (c) change the status of the
Participant's employment or (d) change any employment
policies of the Employer.
9.3 Notice. For the purposes of the Plan, notices and all
------
other communications provided for in the Plan (including the
Notice of Termination) shall be in writing and shall be
deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the
Company and/or the Employer shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9.4 Non-exclusivity of Rights. Except as provided in
-------------------------
Section 4.4, nothing in the Plan shall prevent or limit the
Participant's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided
by the Company and/or the Employer for which the Participant
may qualify, nor shall anything herein limit or reduce such
rights as the Participant may have under any other agreements
with the Company and/or the Employer. Amounts which are
vested benefits or which the Participant is otherwise
entitled to receive under any plan or program of the Company
and/or the Employer shall be payable in accordance with such
plan or program, except as explicitly modified by the Plan.
No additional compensation provided under any benefit or
compensation plans to the Participant shall be deemed to
modify or otherwise affect the terms of the Plan or any of
the Participant's entitlements hereunder.
9.5 Settlement of Claims. The Company's obligation to make
--------------------
the payments provided for in the Plan and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including without limitation, any set-off,
counterclaim, recoupment, defense or other right which the
Company and/or Employer may have against the Participant or
others.
9.6 Trust. All benefits under the Plan shall be paid by the
-----
Company. The Plan shall be unfunded and the benefits
hereunder shall be paid only from the general assets of the
Company; provided, however, notwithstanding anything
-----------------
contained in the Plan to the contrary, nothing herein shall
prevent or prohibit the Company from establishing a trust or
other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan.
9.7 Waiver or Discharge. No provision of the Plan may be
-------------------
waived or discharged unless such waiver or discharge is
agreed to in writing and signed by the Participant, the
Employer and the Company. No waiver by either the Company,
the Employer or any Participant at any time of any breach by
either the Company, the Employer or any Participant of, or
compliance with, any condition or provision of the Plan to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
9.8 Governing Law. THE VALIDITY, INTERPRETATION,
-------------
CONSTRUCTION AND PERFORMANCE OF THE PLAN SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING A PARTICIPANT, THE
COMPANY AND/OR THE EMPLOYER WITH RESPECT TO ANY CLAIM OR
ASSERTION THAT THE PARTICIPANT'S EMPLOYMENT WAS PROPERLY
TERMINATED FOR CAUSE, THE COMPANY AND/OR THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE PARTICIPANT'S EMPLOYMENT WAS
PROPERLY TERMINATED FOR CAUSE.
9.9 Validity and Severability. The invalidity or
-------------------------
unenforceability of any provision of the Plan shall not
affect the validity or enforceability of any other provision
of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Legal Fees. Following a Change in Control, the Company
----------
shall pay all legal fees and related expenses (including the
costs of experts, evidence and counsel) incurred by the
Participant as they become due as a result of (a) the
Participant's termination of employment (including all such
fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), or (b) the
Participant's seeking to obtain or enforce any right or
benefit provided by the Plan (including any such fees and
expenses incurred in connection with the Dispute) or by any
other plan or arrangement maintained by the Company and/or
Employer under which the Participant is or may be entitled to
receive benefits; provided however, that the circumstances
----------------
set forth in clauses (a) and (b) (other than as a result of
the Participant's termination of employment under
circumstances described in Section 2.6(d)) occurred on or
after a Change in Control; provided, further, however, in the
event a court finally determines that the claim by the
Participant for which legal fees were incurred and paid by
the Company pursuant to this Section 9.10 was frivolous, the
Company shall be reimbursed by the Participant for any legal
fees paid under this Section 9.10 in respect of such
frivolous claim.
9.11 Forum. Any suit brought by a Participant under the
-----
Plan may be brought in the appropriate state or federal court
for Tarrant County, Texas, or for the county wherein the
Participant maintains his or her residence. Any suit brought
by the Company and/or Employer under the Plan may only be
brought in the county wherein the Participant maintains his
or her residence, unless the Participant consents to suit
elsewhere.
<PAGE>
SCHEDULE A
[To come]
<PAGE>
SCHEDULE B
COMPENSATION AND BENEFIT PLANS
------------------------------
1. Tandy Corporation Officers Deferred Compensation Plan
2. Tandy Employees Deferred Salary and Investment Plan
3. Tandy Employees Stock Ownership Plan
4. Salary Continuation Plan for Executive Employees of Tandy
Corporation and Subsidiaries
5. Tandy Corporation Stock Purchase Program
6. Tandy Employees Supplemental Stock Program
7. Tandy Corporation 1985 Stock Option Plan
8. Post Retirement Death Benefit Plan for Executive
Employees of Tandy Corporation and Subsidiaries
9. Tandy Corporation 1993 Incentive Stock Plan
10. Special Compensation Plan No. 1 for Tandy Corporation
Executive Employees
11. Special Compensation Plan No. 2 for Tandy Corporation
Executive Employees
<PAGE>
TANDY CORPORATION
TERMINATION PROTECTION PLAN
---------------------------
"LEVEL II"
WHEREAS, the "Board" of the "Company" (as those terms are
hereinafter defined) recognizes that the possibility of a
future "Change in Control" (as hereinafter defined) exists
and that the threat or occurrence of a Change in Control
could result in significant distractions to its employees
because of the uncertainties inherent in such a situation;
and
WHEREAS, the Board has determined that it is essential and in
the best interest of the Company, its stockholders and the
"Employer" (as hereinafter defined) to retain the services of
certain of its employees in the event of a threat or the
occurrence of a Change in Control and to ensure their
continued dedication and efforts in such event without undue
concern for their employment and personal financial security.
NOW, THEREFORE, in order to fulfill these purposes, the
following is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
---------------------
1.0 As of the Effective Date, the Company hereby establishes
the Tandy Corporation Termination Protection Plan Level II
(the "Plan") as set forth in this document.
ARTICLE II
DEFINITIONS
-----------
As used herein the following words and phrases shall have the
following respective meanings for purposes of the Plan unless
the context clearly indicates otherwise.
2.1 Accrued Compensation. "Accrued Compensation" shall mean
--------------------
an amount which shall include all amounts earned or accrued
through the "Termination Date" (as hereinafter defined) but
not paid as of the Termination Date including (i) base
salary, (ii) reimbursement for reasonable and necessary
expenses incurred by the "Participant" (as hereinafter
defined) on behalf of the Employer during the period ending
on the Termination Date, (iii) vacation pay as required by
law, and (iv) bonuses and incentive compensation (other than
the "Pro Rata Bonus" (as hereinafter defined)).
2.2 Base Amount. "Base Amount" shall mean the greater of
-----------
the Participant's annual base salary (a) at the rate in
effect on the Termination Date or (b) at the highest rate in
effect at any time during the ninety (90) day period prior to
the Change in Control, and shall include all amounts of the
Participant's base salary that are deferred under the
Employer's qualified and non-qualified employee benefit
plans.
2.3 Board. "Board" shall mean the Board of Directors of the
-----
Company.
2.4 Bonus Amount. "Bonus Amount" shall mean the highest
------------
annual bonus paid or payable to the Participant for any
fiscal year in respect of the three (3) full fiscal years
ended prior to the Change in Control.
2.5 Cause. The Participant's Employer may terminate the
-----
Participant's employment for "Cause" if the Participant (a)
has been convicted of a felony, (b) failed substantially to
perform his or her reasonably assigned duties with his or her
Employer (other than a failure resulting from his or her
incapacity due to physical or mental illness), or (c) has
intentionally engaged in conduct which is demonstrably and
materially injurious to the Company and/or Employer. No act,
or failure to act, on the Participant's part, shall be
considered "intentional" unless the Participant has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Participant's act or failure to
act was in the best interest of the Company and/or Employer.
2.6 Change in Control. "Change in Control" shall mean
-----------------
the occurrence during the "Term" (as hereinafter defined) of
any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
--------
however, in determining whether a Change in Control has
-------
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (a) the Company or (b)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Company
Subsidiary"), (2) the Company or any Company Subsidiary, or
(3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(b) The individuals who, as of August 22, 1990, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the
Program, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
-------------------------
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger,
consolidation or reorganization, at least sixty percent (60%)
of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members
of the board of directors of the Surviving Corporation,
(iii) no Person (other than the Company and its
Company Subsidiaries, any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, the
Surviving Corporation or any Company Subsidiary, or any
Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of fifteen percent
(15%) or more of the then outstanding Voting Securities) has
Beneficial Ownership of fifteen percent (15%) or more of the
combined voting power of the Surviving Corporation's then
outstanding voting securities, and
(iv) a transaction described in clauses (i) through
(iii) shall herein be referred to as a "Non-ControlTransaction";
(2) A complete liquidation or dissolution of the
Company; or
(3) An agreement for the sale or other disposition
of all or substantially all of the assets of the Company to
any Person (other than a transfer to a Company Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in the Plan
to the contrary, if the Participant's employment is
terminated during the Term but within one (1) year prior to a
Change in Control and the Participant reasonably demonstrates
that such termination (i) was at the request of a third party
who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control and who effectuates
a Change in Control (a "Third Party") or (ii) otherwise
occurred in connection with, or in anticipation of, a Change
in Control which actually occurs, then for all purposes of
the Plan, the date of a Change in Control with respect to the
Participant shall mean the date immediately prior to the date
of such termination of the Participant's employment.
2.7 Company. "Company" shall mean Tandy Corporation and
-------
shall include its "Successors and Assigns" (as hereinafter
defined).
2.8 Disability. "Disability" shall mean a physical or
----------
mental infirmity which impairs the Participant's ability to
substantially perform his or her duties with his or her
Employer for a period of one hundred eighty(180) consecutive
days and the Participant has not returned to his or her full
time employment prior to the Termination Date as stated in
the "Notice of Termination" (as hereinafter defined).
2.9 Effective Date. "Effective Date" shall be August 22,
--------------
1990.
2.10 Eligible Employee. "Eligible Employee" shall mean an
-----------------
individual employed by the Employer whose place of employment
is located primarily in the United States in a regular
full-time salaried position whose annual compensation
(including salary and bonus) is at least $50,000 (other than
those positions set forth on Schedule A) and any individual
set forth on Schedule B. For purposes of this Section 2.10,
an employee's annual compensation shall be determined by his
or her annualized rate of salary in effect immediately prior
to a Change in Control and the bonus paid to the employee in
respect of the fiscal year ended immediately prior to the
Change in Control. Notwithstanding the foregoing, those
employees who are employed in the categories of positions set
forth on Schedule A, any employee covered by a collective
bargaining agreement, any employee who is a party to a
severance or termination protection agreement, or the
Termination Protection Plan Level I, shall not be an
"Eligible Employee" for purposes of the Plan.
2.11 Employer. "Employer" shall mean the Company or its
--------
divisions or its "Subsidiaries" (as hereinafter defined) with
whom the Eligible Employee is employed.
2.12 (a) Good Reason. "Good Reason" shall mean the
-----------
occurrence after a Change in Control of any of the events or
conditions described in Subsections (i) through (iii) hereof:
(i) a reduction in the rate of the Participant's
base salary below the Base Amount or any failure to pay the
Participant any compensation or benefits to which he or she
is entitled within fifteen (15) days of the date notice of
such failure to pay is given to the Employer and, in the case
of any annual bonus, within forty-five (45) days following
the end of the fiscal year to which such bonus relates;
(ii) the failure by the Employer to (A) continue in
effect (without reduction in benefit levels, reward
opportunities and/or bonus potential for comparable
performance) any material compensation or benefit plan in
which the Participant was participating at any time within
ninety (90) days preceding the Change in Control or at any
time thereafter including but not limited to, the plans
listed on Schedule C, unless such plan is replaced with a
plan that provides substantially equivalent compensation or
benefits to the Participant, or (B) provide the Participant
with compensation and benefits, in the aggregate at least
equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other
employee benefit plan, program and practice in which the
Participant was participating at any time within ninety (90)
days preceding the Change in Control or at any time
thereafter; and
(iii) the failure of the Company and/or the
Employer to obtain an agreement from any Successor or
Assign of the Company, to assume and agree to perform the
Plan, as contemplated in Section 7.1 hereof.
(b) Any event or condition described in this Section
2.12(a)(i)through (iii) which occurs during the Term but
within one (1) year prior to a Change in Control but which
the Participant reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with or in anticipation of a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of the Plan notwithstanding that it occurred prior
to the Change in Control.
2.13 Notice of Termination. Following a Change in Control,
---------------------
"Notice of Termination" shall mean a notice of termination of
the Participant's employment from the Employer which
indicates the specific termination provision in the Plan
relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Participant's employment under the
provision so indicated.
2.14 Participant. "Participant" shall mean an Eligible
-----------
Employee who satisfies the requirements of Section 3.1 and
who has not ceased to be a Participant pursuant to Section
3.2.
2.15 Pro-Rata Bonus. "Pro-Rata Bonus" shall mean the Bonus
--------------
Amount multiplied by a fraction, the numerator of which is
the number of days in the Company's fiscal year through and
including the Participant's Termination Date and the
denominator of which is 365.
2.16 Subsidiary or Subsidiaries. "Subsidiary" or
--------------------------
"Subsidiaries" shall mean any corporation in which the
Company owns, directly or indirectly, 50% or more of the
total voting power of the corporation's outstanding voting
securities and any other corporation designated by the Board
as a Subsidiary.
2.17 Successors and Assigns. "Successors and Assigns" as
----------------------
used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of
the Company (including the Plan) whether by operation of law
or otherwise.
2.18 Term. "Term" shall mean the period of time the Plan
----
remains effective as provided in Section 8.1.
2.19 Termination Date. "Termination Date" shall mean in
----------------
the case of the Participant's death, his or her date of
death, in the case of Good Reason,his or her last day of
employment, and in all other cases, the date specified in the
Notice of Termination; provided, however, if the Participant's
-----------------
employment is terminated by the Employer for Cause or due to
Disability,the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of
Termination is given to the Participant; provided,further,
-----------------
however, that in the case of Disability the Participant shall
-------
not have returned to the full-time performance of his or her
duties during such period of at least 30 days.
ARTICLE III
ELIGIBILITY
-----------
3.1 Participation. Each employee shall become a Participant
-------------
in the Plan immediately upon becoming an Eligible Employee.
3.2 Duration of Participation. A Participant shall cease to
-------------------------
be a Participant in the Plan if he or she ceases to be an
Eligible Employee of the Employer at any time prior to a
Change in Control. A Participant entitled to receive any
amounts set forth in this Plan shall remain a Participant in
the Plan until all amounts he or she is entitled to have been
paid to him or her.
ARTICLE IV
TERMINATION BENEFITS
--------------------
4.1 Payment of Accrued Compensation. In the event that
-------------------------------
a Participant's employment with his or her Employer is
terminated following a Change in Control during the Term (a)
by reason of the Participant's death,(b) by his or her
Employer for Cause or Disability, or (c) by the Participant
without Good Reason, the Executive shall be entitled to
receive and the Company shall pay, his or her Accrued
Compensation and if such termination is other than by his or
her Employer for Cause, a Pro Rata Bonus.
4.2 Payment in Event of Certain Terminations of Employment.
------------------------------------------------------
In the event that a Participant's employment is terminated
following a Change in Control during the Term by the
Participant or by his or her Employer for any reason other
than as specified in Section 4.1, the Participant shall been
titled to receive under the Plan:
(a) a cash payment equal to the sum of:
(i) his or her Accrued Compensation and Pro Rata
Bonus,
(ii) one-half of his or her Base Amount, and
(iii) one-half of his or her Bonus Amount;
(b) for a period of six months following the
Participant's Termination Date (the "Continuation Period"),
the Company shall at its expense continue on behalf of the
Participant and his or her dependents and beneficiaries the
fringe benefits (excluding those benefit plans numbered 1
through 11 inclusive on Schedule C but including an
Employer-provided automobile or automobile allowance and the
related expenses of public liability insurance, collision
coverage, repairs and maintenance) and life insurance,
disability, medical, dental and hospitalization benefits
provided(i) to the Participant any time during the 90-day
period prior to the Change in Control or at any time
thereafter or (ii) to other similarly situated employees who
continue in the employ of the Company and/or the Employer
during the Continuation Period; provided, however, that with
-----------------
respect to any Participant who was entitled to the use of an
automobile provided by the Employer within the ninety (90)
day period prior to a Change in Control or at anytime
thereafter, he or she shall be paid a cash payment equal to
the value to him or her for the Continuation Period of the
Employer-provided automobile.The coverage and benefits
(including deductibles, costs and contributions by the
Participant, if any) provided in this Section 4.2(b) during
the Continuation Period shall be no less favorable to the
Participant and his or her beneficiaries than the most
favorable of such coverages and benefits during any of the
periods referred to in clauses (i) and (ii) above. The
obligation hereunder with respect to the foregoing benefits
(except for the automobile or automobile allowance) shall be
limited if the Participant obtains any such benefits pursuant
to a subsequent employer's benefit plans,in which case the
Employer (or the Company, as the case may be) may reduce the
coverage of any benefits it is required to provide the
Participant here under as long as the aggregate coverages and
benefits of the combined benefit plans is no less favorable
to the Participant than the coverages and benefits required
to be provided hereunder. This Subsection (b) shall not be
interpreted so as to limit any benefits to which the
Participant, his or her dependents or beneficiaries may be
entitled under any of the Employer's employee benefit plans,
programs or practices following his or her termination of
employment, including without limitation, retiree medical and
life insurance benefits;
(c) the Company shall pay in a single payment an amount
equal to eighty percent (80%) of the maximum amount the
Participant could have contributed under the Deferred Salary
and Investment Plan, Stock Purchase Program and Supplemental
Stock Program as in effect on the date immediately prior to
the Change in Control during the Continuation Period had he
or she continued in employment with the Employer during the
Continuation Period at the greater of his or her annualized
gross salary and wages as in effect immediately prior to the
Change in Control or at any time thereafter; and
(d) The amounts provided for in Sections 4.1, 4.2(a),
4.2(b) (only as to the automobile allowance and the related
expenses of public liability insurance, collision coverage,
repairs and maintenance) and 4.2(c) shall be paid in a single
lump sum cash payment within five (5) days after the
Participant's Termination Date (or earlier, if required by
applicable law).
4.3 Mitigation. The Participant shall not be required to
----------
mitigate the amount of any payment provided for in the Plan
by seeking other employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation
or benefits provided to the Participant in any subsequent
employment.
4.4 Termination Pay. The payments and benefits provided for
---------------
in Section 4.2(a)(ii) and (iii) shall reduce the amount of
any cash severance or termination pay payable to the
Participant under any other Employer severance or termination
plan, program, policy or practice.
4.5 Other Benefits. The Participant's entitlement to any
--------------
other compensation or benefits (other than the Pro Rata
Bonus) shall be determined in accordance with the Employer's
employee benefit plans (including, the plans listed on
Schedule C) and other applicable programs, policies and
practices then in effect.
ARTICLE V
TERMINATION OF EMPLOYMENT
-------------------------
5.1 Notice of Termination Required. Following a Change in
------------------------------
Control, any purported termination of the Participant's
employment by the Employer shall be communicated by Notice of
Termination to the Participant. For purposes of the Plan, no
such purported termination shall be effective without such
Notice of Termination.
ARTICLE VI
LIMITATION ON PAYMENTS BY THE COMPANY
-------------------------------------
6.1 Excise Tax Limitation.
---------------------
(a) Notwithstanding anything contained in the Plan to
the contrary, to the extent that the payments and benefits
provided under the Plan and benefits provided to, or for the
benefit of, the Participant under any other Employer plan or
agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise
tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
Payments shall be reduced (but not below zero) if and to the
extent necessary so that no Payment to be made or benefit to
be provided to the Participant shall be subject to the Excise
Tax (such reduced amount is hereinafter referred to as the
"Limited Payment Amount"). Unless the Participant shall have
given prior written notice specifying a different order to
the Company to effectuate the Limited Payment Amount, the
Company shall reduce or eliminate the Payments, by first
reducing or eliminating those payments or benefits which are
not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in
time from the Determination (as hereinafter defined). Any
notice given by the Participant pursuant to the preceding
sentence shall take precedence over the provisions of any
other plan, arrangement or agreement governing the
Participant's rights and entitlements to any benefits or
compensation.
(b) An initial determination as to whether the Payments
shall be reduced to the Limited Payment Amount pursuant to
the Plan and the amount of such Limited Payment Amount shall
be made by an accounting firm at the Company's expense
selected by the Company which is designated as one of the
five largest accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed
supporting calculations and documentation to the Company and
the Participant within five (5) days of the Termination Date
if applicable, or such other time as requested by the Company
or by the Participant (provided the Participant reasonably
believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no
Excise Tax is payable by the Participant with respect to a
Payment or Payments, it shall furnish the Participant with an
opinion reasonably acceptable to the Participant that no
Excise Tax will be imposed with respect to any such Payment
or Payments. Within ten (10) days of the delivery of the
Determination to the Participant, the Participant shall have
the right to dispute the Determination (the "Dispute"). If
there is no Dispute, the Determination shall be binding,
final and conclusive upon the Company and the Participant
subject to the application of Paragraph 6.1(c) below.
(c) As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that
the Payments to be made to, or provided for the benefit of,
the Participant either have been made or will not be made by
the Company which, in either case, will be inconsistent with
the limitations provided in Section 6(a) (hereinafter
referred to as an "Excess Payment" or "Underpayment",
respectively). If it is established pursuant to a final
determination of a court or an Internal Revenue Service (the
"IRS") proceeding which has been finally and conclusively
resolved, that an Excess Payment has been made, such Excess
Payment shall be deemed for all purposes to be a loan to the
Participant made on the date the Participant received the
Excess Payment and the Participant shall repay the Excess
Payment to the Company on demand (but not less than ten (10)
days after written notice is received by the Participant)
together with interest on the Excess Payment at the
"Applicable Federal Rate" (as defined in Section 1274(d) of
the Code) from the date of the Participant's receipt of such
Excess Payment until the date of such repayment. In the
event that it is determined by (i) the Accounting Firm, the
Company (which shall include the position taken by the
Company, or together with its consolidated group, on its
federal income tax return) or the IRS, (ii) pursuant to a
determination by a court, or (iii) upon the resolution to the
Participant's satisfaction of the Dispute, that an
Underpayment has occurred, the Company shall pay an amount
equal to the Underpayment to the Participant within ten (10)
days of such determination or resolution together with
interest on such amount at the Applicable Federal Rate from
the date such amount would have been paid to the Participant
until the date of payment.
ARTICLE VII
SUCCESSORS AND ASSIGNS
----------------------
7.1 Successors and Assigns.
----------------------
(a) The Plan shall be binding upon and shall inure to
the benefit of the Company and the Employer. The Company and
the Employer shall require any Successor or Assign to
expressly assume and agree to perform the Plan in the same
manner and to the same extent that the Company and/or the
Employer would be required to perform it if no such
succession or assignment had taken place.
(b) Neither the Plan nor any right or interest
hereunder shall be assignable or transferable by the
Participant, his or her beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution; provided, however, that the Plan shall inure to
the benefit of and be enforceable by the Participant's legal
personal representative.
7.2 Sale of Business or Assets. Notwithstanding anything
--------------------------
contained in the Plan to the contrary, if a Participant's
employment with his or her Employer is terminated in
connection with the sale, divestiture or other disposition of
any Subsidiary or division of the Company (or part thereof)
such termination shall not be a termination of employment of
the Participant for purposes of the Plan and the Participant
shall not be entitled to benefits from the Company under the
Plan as a result of such sale, divestiture, or other
disposition, or as a result of any subsequent termination of
employment, provided that (a) the Participant is offered
employment by the purchaser or acquiror of such Subsidiary or
division (or part thereof) and (b) the Company obtains an
agreement from such purchaser or acquiror to perform the
Company's and/or the Employer's obligations under the Plan,
in the same manner, and to the same extent that the Company
and/or the Employer would be required to perform if no such
purchase or acquisition had taken place. In such
circumstances, the purchaser or acquiror shall be solely
responsible for providing any benefits payable under the Plan
to any such Participant.
ARTICLE VIII
TERM, AMENDMENT AND PLAN TERMINATION
------------------------------------
8.1 Term. The Plan shall continue in effect for a period of
----
two (2) years commencing on the Effective Date and shall be
automatically extended for one (1) year on the first
anniversary of the Effective Date and on each anniversary of
the Effective Date thereafter unless the Company shall have
delivered a written notice to each Participant at least
ninety (90) days prior to any extension that the Plan shall
not be so extended; provided, however, that if a Change in
Control occurs while the Plan is in effect, the Plan shall
not end prior to the expiration of two (2) years following
the Change in Control.
8.2 Amendment and Termination. Subject to Section 8.1, the
-------------------------
Plan may be terminated or amended in any respect by
resolution adopted by two-thirds (2/3) of the members of the
Incumbent Board and Schedules A and B may be amended to add
Eligible Employees at any time by any duly authorized officer
of the Company; provided, however, that no such amendment or
-----------------
termination of the Plan during the Term may be made (a) if
such amendment or termination would adversely affect any
right of an Eligible Employee who became an Eligible Employee
prior to the later of (i) the date of adoption of any such
amendment or termination, or (ii) the effective date of any
such amendment or termination, (b) at the request of a Third
Party, or (c) otherwise in connection with, or in
anticipation of, a Change in Control; and provided, further,
-----------------
however, that the Plan no longer shall be subject to
-------
amendment, change, substitution, deletion, revocation or
termination in any respect whatsoever following a Change in
Control.
8.3 Form of Amendment. The form of any amendment or
-----------------
termination of the Plan shall be a written instrument signed
by a duly authorized officer or officers of the Company,
certifying that the amendment or termination has been
approved by the Board in accordance with Section 8.2.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Contractual Right. Upon and after a Change in Control,
-----------------
each Participant shall have a fully vested, nonforfeitable
contractual right, enforceable against the Company, to the
benefits provided for under Sections 4.1, 4.2 and 4.3 of the
Plan upon satisfaction of the applicable conditions specified
in those Sections.
9.2 Employment Status. Prior to a Change in Control, each
-----------------
Eligible Employee shall continue in his or her status as an
employee-at-will and the Plan does not constitute a contract
of employment or impose on the Employer any obligation to (a)
retain the Participant, (b) make any payments upon
termination of employment, (c) change the status of the
Participant's employment or (d) change any employment
policies of the Employer.
9.3 Notice. For the purposes of the Plan, notices and all
------
other communications provided for in the Plan (including the
Notice of Termination) shall be in writing and shall be
deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the
Company and/or the Employer shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9.4 Non-exclusivity of Rights. Except as provided in
-------------------------
Section 4.4, nothing in the Plan shall prevent or limit the
Participant's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided
by the Company and/or the Employer for which the Participant
may qualify, nor shall anything herein limit or reduce such
rights as the Participant may have under any other agreements
with the Company and/or the Employer. Amounts which are
vested benefits or which the Participant is otherwise
entitled to receive under any plan or program of the Company
and/or the Employer shall be payable in accordance with such
plan or program, except as explicitly modified by the Plan.
No additional compensation provided under any benefit or
compensation plans to the Participant shall be deemed to
modify or otherwise affect the terms of the Plan or any of
the Participant's entitlements hereunder.
9.5 Settlement of Claims. The Company's obligation to make
--------------------
the payments provided for in the Plan and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including without limitation, any set-off,
counterclaim, recoupment, defense or other right which the
Company and/or the Employer may have against the Participant
or others.
9.6 Trust. All benefits under the Plan shall be paid by the
-----
Company. The Plan shall be unfunded and the benefits
hereunder shall be paid only from the general assets of the
Company; provided, however, notwithstanding anything
-----------------
contained in the Plan to the contrary, nothing herein shall
prevent or prohibit the Company from establishing a trust or
other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan.
9.7 Waiver or Discharge. No provision of the Plan may be
-------------------
waived or discharged unless such waiver or discharge is
agreed to in writing and signed by the Participant, the
Company and the Employer. No waiver by either the Company,
the Employer or any Participant at any time of any breach by
either the Company, the Employer or any Participant of, or
compliance with, any condition or provision of the Plan to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
9.8 Governing Law. THE VALIDITY, INTERPRETATION,
-------------
CONSTRUCTION AND PERFORMANCE OF THE PLAN SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING A PARTICIPANT, THE
COMPANY AND/OR THE EMPLOYER WITH RESPECT TO ANY CLAIM OR
ASSERTION THAT THE PARTICIPANT'S EMPLOYMENT WAS PROPERLY
TERMINATED FOR CAUSE, THE COMPANY AND/OR THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE PARTICIPANT'S EMPLOYMENT WAS
PROPERLY TERMINATED FOR CAUSE.
9.9 Validity and Severability. The invalidity or
-------------------------
unenforceability of any provision of the Plan shall not
affect the validity or enforceability of any other provision
of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Legal Fees. Following a Change in Control, the Company
----------
shall pay all legal fees and related expenses (including the
costs of experts, evidence and counsel) incurred by the
Participant as they become due as a result of (a) the
Participant's termination of employment (including all such
fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), or (b) the
Participant's seeking to obtain or enforce any right or
benefit provided by the Plan (including any such fees and
expenses incurred in connection with the Dispute) or by any
other plan or arrangement maintained by the Company and/or
Employer under which the Participant is or may be entitled to
receive benefits; provided however, that the circumstances
----------------
set forth in clauses (a) and (b) (other than as a result of
the Participant's termination of employment under
circumstances described in Section 2.6(d)) occurred on or
after a Change in Control; provided, further, however, in the
--------------------------
event a court finally determines that the claim by the
Participant for which legal fees were incurred and paid by
the Company pursuant to this Section 9.10 was frivolous, the
Company shall be reimbursed by the Participant for any legal
fees paid under this Section 9.10 in respect of such
frivolous claim.
9.11 Forum. Any suit brought by a Participant under the
-----
Plan may be brought in the appropriate state or federal court
for Tarrant County, Texas, or for the county wherein the
Participant maintains his or her residence. Any suit brought
by the Company and/or Employer under the Plan may only be
brought in the county wherein the Participant maintains his
or her residence, unless the Participant consents to suit
elsewhere.
<PAGE>
SCHEDULE A
[To come]
<PAGE>
SCHEDULE B
[To come]
<PAGE>
SCHEDULE C
COMPENSATION AND BENEFIT PLANS
------------------------------
1. Tandy Corporation Officers Deferred Compensation Plan
2. Tandy Employees Deferred Salary and Investment Plan
3. Tandy Employees Stock Ownership Plan
4. Salary Continuation Plan for Executive Employees of Tandy
Corporation and Subsidiaries
5. Tandy Corporation Stock Purchase Program
6. Tandy Employees Supplemental Stock Program
7. Tandy Corporation 1985 Stock Option Plan
8. Post Retirement Death Benefit Plan for Executive
Employees of Tandy Corporation and Subsidiaries
9. Tandy Corporation 1993 Incentive Stock Plan
<PAGE>
<TABLE>
TANDY CORPORATION EXHIBIT 11
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
<CAPTIONS>
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- --------------------------
(In thousands, except per share amounts) 1995 1994 1995 1994
--------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Primary Earnings Per Share
Reconciliation of net income per statements of income to
amounts used in computation of primary earnings per share:
Net income, as reported $ 37,964 $ 34,415 $ 76,899 $ 76,210
Less dividends on preferred stock:
Series B (1,631) (1,607) (3,298) (3,413)
----------- ----------- ----------- -----------
Net income available to common
shareholders for primary earnings per share $ 36,333 $ 32,808 $ 73,601 $ 72,797
=========== =========== =========== ===========
Weighted average number of common shares outstanding 65,763 63,442 62,216 63,547
Weighted average number of $2.14 depositary shares,
representing Series C preferred stock, treated as
common stock due to mandatory conversion (b) - 11,816 4,505 11,816
Weighted average number of common shares issuable
under stock option plans, net of assumed treasury stock
repurchases at average market prices 477 159 468 249
----------- ----------- ----------- -----------
Weighted average number of common and common
equivalent shares outstanding 66,240 75,417 67,189 75,612
=========== =========== =========== ===========
Net income available per average
common and common equivalent share $ 0.55 $ 0.44 $ 1.10 $ 0.96
=========== =========== =========== ===========
Fully Diluted Earnings Per Share (a)
Reconciliation of net income per statements of income to
amounts used in computation of fully diluted earnings per share:
Net income available to common stockholders $ 36,333 $ 32,808 $ 73,601 $ 72,797
Adjustments for assumed conversion of Series B
preferred stock to common stock as of the
beginning of the period:
Plus dividends on Series B preferred stock 1,631 1,607 3,298 3,413
Less additional contribution that would have
been required for the TESOP if Series B
preferred stock had been converted (938) (925) (1,870) (1,955)
----------- ----------- ----------- -----------
Net income available per common and
common equivalent share, as adjusted $ 37,026 $ 33,490 $ 75,029 $ 74,255
=========== =========== =========== ===========
Reconciliation of weighted average number of shares
outstanding to amount used in computation of fully
diluted earnings per share:
Weighted average number of shares outstanding 66,240 75,417 67,189 75,612
Adjustment to reflect assumed exercise of stock
options as of the beginning of the period 164 15 197 16
Adjustment to reflect assumed conversion of
Series B preferred stock to common stock as
of the beginning of the period 1,915 1,981 1,926 2,013
----------- ----------- ----------- -----------
Weighted average number of common and common
equivalent shares outstanding, as adjusted 68,319 77,413 69,312 77,641
=========== =========== =========== ===========
Fully diluted net income available per average
common and common equivalent share $ 0.54 $ 0.43 $ 1.08 $ 0.96
=========== =========== =========== ===========
(a) This calculation is submitted in accordance with Regulation S-K, Item 601(b)(11) although not required by
footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
(b) Prior year has been restated to reflect the conversion of Series C preferred stock to common stock.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 12
TANDY CORPORATION
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- --------------------------
(In thousands, except ratios) 1995 1994 1995 1994
--------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Net income $ 37,964 $ 34,415 $ 76,899 $ 76,210
Plus provision for income taxes 23,766 21,318 48,140 47,207
----------- ----------- ----------- -----------
Income before income taxes 61,730 55,733 125,039 123,417
----------- ----------- ----------- -----------
Fixed charges:
Interest expense and amortization of debt discount 5,190 6,372 15,850 16,365
Amortization of issuance expense 134 62 203 150
Appropriate portion (33 1/3%) of rentals 17,227 17,799 34,975 35,333
----------- ----------- ----------- -----------
Total fixed charges 22,551 24,233 51,028 51,848
----------- ----------- ----------- -----------
Earnings before income taxes and fixed charges $ 84,281 $ 79,966 $ 176,067 $ 175,265
=========== =========== =========== ===========
Ratio of earnings to fixed charges 3.74 3.30 3.45 3.38
=========== =========== =========== ===========
Ratio of Earnings to Fixed Charges and
Preferred Dividends:
Total fixed charges, as above $ 22,551 $ 24,233 $ 51,028 $ 51,848
Preferred dividends 1,631 9,632 8,122 19,463
----------- ----------- ----------- -----------
Total fixed charges and preferred dividends $ 24,182 $ 33,865 $ 59,150 $ 71,311
=========== =========== =========== ===========
Earnings before income taxes, fixed charges
and preferred dividends $ 84,281 $ 79,966 $ 176,067 $ 175,265
=========== =========== =========== ===========
Ratio of earnings to fixed charges and
preferred dividends 3.49 2.36 2.98 2.46
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and consolidated statements of income contained in
Tandy Corporation's second quarter report on Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 80,566
<SECURITIES> 0
<RECEIVABLES> 300,245
<ALLOWANCES> 0
<INVENTORY> 1,359,690
<CURRENT-ASSETS> 1,821,365
<PP&E> 536,590
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,530,526
<CURRENT-LIABILITIES> 680,482
<BONDS> 148,863
<COMMON> 85,645
0
100,000
<OTHER-SE> 1,495,479
<TOTAL-LIABILITY-AND-EQUITY> 2,530,526
<SALES> 2,411,669
<TOTAL-REVENUES> 2,411,669
<CGS> 1,519,321
<TOTAL-COSTS> 1,519,321
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (15,982)
<INCOME-PRETAX> 125,039
<INCOME-TAX> 48,140
<INCOME-CONTINUING> 76,899
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,899
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
</TABLE>
