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, 1996
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, 1996 was 59,466,704.
Index to Exhibits is on Sequential Page No. 18.
Total pages 101.
<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) 1996 1995 1996 1995
---------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales and operating revenues $ 1,352,863 $ 1,185,047 $ 2,799,792 $ 2,411,669
Cost of products sold 878,867 739,278 1,834,129 1,519,321
----------- ----------- ----------- -----------
Gross profit 473,996 445,769 965,663 892,348
----------- ----------- ----------- -----------
Expenses:
Selling, general and administrative 401,518 365,126 815,445 738,836
Depreciation and amortization 26,963 22,153 52,314 44,455
Provision for restructuring cost 25,500 -- 25,500 --
Impairment of long-lived assets -- -- 26,033 --
Interest income (3,663) (8,430) (7,473) (31,832)
Interest expense 8,887 5,190 16,017 15,850
----------- ----------- ----------- -----------
459,205 384,039 927,836 767,309
----------- ----------- ----------- -----------
Income before income taxes 14,791 61,730 37,827 125,039
Provision for income taxes 5,492 23,766 14,048 48,140
----------- ----------- ----------- -----------
Net income 9,299 37,964 23,779 76,899
Preferred dividends 1,571 1,631 3,176 3,298
----------- ----------- ----------- -----------
Net income available to common
shareholders $ 7,728 $ 36,333 $ 20,603 $ 73,601
=========== =========== =========== ===========
Net income available per average common
and common equivalent share $ 0.13 $ 0.55 $ 0.34 $ 1.10
=========== =========== =========== ===========
Average common and common
equivalent shares outstanding 61,011 66,240 61,189 67,189
=========== =========== =========== ===========
Dividends declared per common share $ 0.20 $ 0.18 $ 0.40 $ 0.36
=========== =========== =========== ===========
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, December 31, June 30,
(In thousands, except share amounts) 1996 1995 1995
------------------------------------ ----------- ----------- -----------
<S> <C> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 140,093 $ 143,498 $ 80,566
Accounts and notes receivable, less
allowance for doubtful accounts 266,568 320,588 300,245
Inventories, at lower of cost or market 1,487,271 1,511,984 1,359,690
Other current assets 63,008 72,175 80,864
----------- ----------- -----------
Total current assets 1,956,940 2,048,245 1,821,365
Property, plant and equipment, at cost,
less accumulated depreciation 603,586 577,720 536,590
Other assets, net of accumulated amortization 87,944 96,098 172,571
----------- ----------- -----------
$ 2,648,470 $ 2,722,063 $ 2,530,526
=========== =========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt, including current
maturities of long-term debt $ 374,461 $ 189,861 $ 153,984
Accounts payable 342,604 365,131 286,947
Accrued expenses 235,386 321,939 227,391
Income taxes payable 45,612 82,978 12,160
----------- ----------- -----------
Total current liabilities 998,063 959,909 680,482
----------- ----------- -----------
Long-term debt and capital leases,
excluding current maturities 107,261 140,813 148,863
Other non-current liabilities 19,423 20,006 20,057
----------- ----------- -----------
Total other liabilities 126,684 160,819 168,920
----------- ----------- -----------
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
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 104,480 102,819 95,672
Retained earnings 2,329,532 2,332,120 2,223,124
Foreign currency translation effects (3,173) (1,094) 3,788
Common stock in treasury, at cost, 25,544,000,
23,918,000 and 20,191,000 shares, respectively (1,041,899) (963,301) (768,262)
Unearned deferred compensation related to TESOP (50,862) (54,854) (58,843)
----------- ----------- -----------
Total stockholders' equity 1,523,723 1,601,335 1,681,124
Commitments and contingent liabilities
----------- ----------- -----------
$ 2,648,470 $ 2,722,063 $ 2,530,526
=========== =========== ===========
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) 1996 1995
-------------- ---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 23,779 $ 76,899
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for restructuring cost 25,500 --
Impairment of long-lived assets 26,033 --
Depreciation and amortization 52,314 44,455
Provision for credit losses and bad debts 649 11,304
Other items 1,793 1,868
Changes in operating assets and liabilities:
Sale of credit card portfolios -- 342,822
Receivables 57,132 115,651
Inventories 24,713 130,557
Other current assets 1,482 (3,662)
Accounts payable, accrued expenses and income taxes (173,516) (385,588)
---------- ----------
Net cash provided by operating activities 39,879 334,306
---------- ----------
Investing activities:
Additions to property, plant and equipment (86,639) (97,100)
Proceeds from sale of property, plant and equipment 1,624 2,696
Other investing activities (5,765) 1,805
---------- ----------
Net cash used by investing activities (90,780) (92,599)
---------- ----------
Financing activities:
Purchase of treasury stock (105,106) (288,193)
Sale of treasury stock to employee stock purchase program 22,785 25,170
Proceeds from exercise of stock options 6,772 13,401
Dividends paid, net of taxes (26,692) (37,475)
Changes in short-term borrowings, net 150,763 (25,377)
Additions to long-term borrowings 1,324 1,706
Repayments of long-term borrowings (2,350) (56,006)
---------- ----------
Net cash provided (used) by financing activities 47,496 (366,774)
---------- ----------
Decrease in cash and short-term investments (3,405) (125,067)
Cash and short-term investments, beginning of period 143,498 205,633
---------- ----------
Cash and short-term investments, end of period $ 140,093 $ 80,566
========== ==========
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, 1996 are not necessarily indicative
of the results that may be expected for the year ending
December 31, 1996. 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, 1995.
NOTE 2-RESTRUCTURING CHARGES
On May 21, 1996, the Company announced a restructuring plan
for its Incredible Universe division which includes an
overhead reduction plan, the closing of two stores and costs
for the abandonment of certain real estate sites held for new
store development. A streamlining of the division's overhead
costs will include the elimination of approximately 20
non-selling positions per store, reorganization of some
central unit functions, and a significant change in
advertising strategy. The two stores located in Potomac
Mills, Virginia and Charlotte, North Carolina, were closed in
the second quarter of 1996 due to inadequate sales volumes.
The Company incurred a pre-tax charge of approximately
$25,500,000 which relates primarily to future lease
obligations, disposition of fixed assets, certain termination
costs associated with employees as well as inventory
markdowns associated with liquidation sales. The components
of this restructuring charge and an analysis of the amounts
charged against the reserve are outlined in the following
table:
<TABLE>
<CAPTIONS>
Charges
Original Through Balance
(In thousands) Reserve 6/30/96 6/30/96
-------------- ---------- ---------- ----------
<S> <C> <C> <C>
Real estate obligations $ 10,750 $ (376) $ 10,374
Disposal of fixed assets 8,000 (970) 7,030
Inventory impairment 2,574 (500) 2,074
Termination benefits 2,500 (1,793) 707
Other 1,676 (755) 921
---------- ---------- ----------
Total $ 25,500 $ (4,394) $ 21,106
========== ========== ==========
</TABLE>
Sales and operating revenues associated with the two closed
stores were approximately $21,054,000 for the six months
ended June 30, 1996. Operating losses associated with the
two store operations approximated $4,525,000 for the six
months ended June 30, 1996.
The Company will continue to monitor the operating results of
this division and will take appropriate action if the
division's results of operations do not materially improve.
These actions may include a further restructuring including
store closures of under-performing locations, further
streamlining of personnel, alliances with non-related
retailers to increase traffic in the stores and further
changes in advertising strategies and employee compensation.
Management is optimistic that its current restructuring
strategy will improve this division's operations; however,
there can be no assurance that it will be successful.
NOTE 3-PAYMENT OF AST NOTE
On July 12, 1996, the Company received $60,000,000 in cash
and $30,000,000 in AST Research Inc. ("AST") common stock as
final payment of a $90,000,000 note payable from AST to the
Company. The approximately 4,500,000 shares of AST common
stock Tandy owns represent approximately 7.8% of the
outstanding common stock of AST. This common stock was
issued to Tandy as partial payment of AST's obligation under
a promissory note dated July 12, 1993. This note was payable
to the Company pursuant to the terms of the Agreement for
Purchase and Sale of Assets dated June 30, 1993.
On June 11, 1996, AST filed a Registration Statement on Form
S-3 with the Securities and Exchange Commission ("SEC") to
register the common stock issued to the Company under the
Securities Act of 1933. As of August 12, 1996, such
Registration had not yet been declared effective by the SEC;
however, the shares received are non-restricted and fully
tradable.
Depending on a variety of factors, including market
conditions and prices, the Company might dispose of some or
all of its shares of AST common stock. The disposition of
the shares of common stock may be effected from time to time
in one or more transactions. In connection with its
ownership of the common stock, the Company may from time to
time, at its sole discretion, engage in hedging transactions
with broker/dealers or other financial institutions. The AST
common stock is subject to mark to market adjustments for
each reporting period based upon its current market value.
Based on the common stock price of $5.00 at August 12, 1996,
the market value of the AST common stock approximated
$22,500,000. Pursuant to FAS 115, the Company would
recognize an unrealized loss of approximately $7,500,000 from
its recorded value at August 12, 1996.
NOTE 4-IMPAIRMENT OF ASSETS
In March 1995, the Financial Accounting Standards Board (the
"FASB") issued Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" ("FAS 121"),
which is effective for fiscal years beginning after December
15, 1995. Effective January 1, 1996, the Company adopted FAS
121 which requires that long-lived assets (primarily
property, plant and equipment and goodwill) held and used by
an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the net book value of
the asset may not be recoverable. An impairment loss is
recognized if the sum of the expected future cash flows
(undiscounted and before interest) from the use of the asset
is less than the net book value of the asset. The amount of
the impairment loss will be measured as the difference
between the net book value of the assets and the estimated
fair value of the related assets.
Upon adoption in the first quarter of 1996, the Company
recorded an initial pre-tax impairment loss of approximately
$26,033,000 to conform with this statement, primarily as a
result of grouping assets at their lowest level of cash flows
to determine impairment as required by this statement. This
charge provided for the writedown of certain intangibles,
adjustment to market valuation of foreign real estate and the
revaluation of selected retail fixed assets. Whenever events
or changes in circumstances occur, the Company will review
long-lived assets for impairment pursuant to FAS 121.
NOTE 5-SHARE REPURCHASE PROGRAM
On December 18, 1995, the Company announced that its Board of
Directors had authorized management to purchase up to
5,000,000 shares of its common stock in addition to shares
required for employee plans. These purchases are in addition
to the share repurchase program which began in August 1994
and concluded in December 1995, under which the Company
repurchased 12,500,000 shares. Purchases will be made from
time to time in the open market, and it is expected that
funding of the program will come from operating cash flow and
existing borrowing facilities. During the quarter and the
six months ended June 30, 1996, the Company repurchased
approximately 715,000 and 1,757,000 shares under the program,
respectively. No purchases were made during 1995 under this
new program.
NOTE 6-CONTINGENCY
The IRS Dallas office had previously referred certain issues
in the Company's 1987 tax return to the IRS National Office.
The issues involved the private letter rulings issued by the
IRS in connection with the spin-off of InterTAN Inc.
("InterTAN") and certain other tax matters. On June 20,
1996, the IRS notified the Company that it would no longer
challenge the private letter ruling issued in connection with
the InterTAN spin-off. The IRS is, however, continuing to
challenge certain other tax matters associated with the
separation of InterTAN from the Company. Management believes
that these other tax matters should not have a material
impact on the Company's financial condition.
The Company was a defendant in a consolidated action titled
O'Sullivan Industries Holdings, Inc. Securities Litigation,
----------------------------------------------------------
which was commenced in 1994 before the United States District
Court for the Western District of Missouri. The Court on
July 2, 1996, approved the settlement of this litigation and
entered a Final Judgment thereby resolving this entire
litigation. The Company had previously reserved for the
financial impact of the settlement. The settlement did not
have a material adverse effect on its results of operations,
financial condition or cash flows.
NOTE 7-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, 1996, 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, 1996, the Company would have to pay approximately
$3,542,000 to terminate the interest rate swaps in place.
This amount was obtained from the counterparties and
represents the estimated 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,
1996, the weighted average interest rate of the floating rate
obligations being hedged was 5.9%, and the weighted average
interest rate of the fixed rate obligations imposed by the
swap agreements was 7.7%. 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 8-RELATIONS WITH INTERTAN
Summarized in the tables below are the amounts recognized by
the Company at June 30, 1996 and 1995, and for the periods
ended June 30, 1996 and 1995, in relation to its agreements
with InterTAN. The Company purchased the notes at a
discount, and InterTAN has an obligation to pay the gross
amount of the notes.
<TABLE>
<CAPTIONS>
Balance at June 30,
--------------------------
(In thousands) 1996 1995
-------------- ---------- ----------
<S> <C> <C>
Gross amount of notes $ 31,311 $ 48,361
Discount 10,198 14,193
---------- ----------
Net amount of notes $ 21,113 $ 34,168
========== ==========
Current portion of notes $ 4,692 $ 4,445
Non-current portion of notes 16,421 29,723
Other current receivables 4,496 3,704
---------- ----------
$ 25,609 $ 37,872
========== ==========
</TABLE>
<TABLE>
<CAPTIONS>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
(In thousands) 1996 1995 1996 1995
-------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales and commission income $ 1,811 $ 2,116 $ 3,607 $ 4,465
========== ========== ========== ==========
Interest income $ 769 $ 1,030 $ 1,697 $ 2,029
Accretion of discount 966 1,053 1,963 2,150
---------- ---------- ---------- ----------
$ 1,735 $ 2,083 $ 3,660 $ 4,179
========== ========== ========== ==========
Royalty income $ 259 -- $ 534 --
========== ========== ========== ==========
</TABLE>
Through July 1996 InterTAN has met all of its payment
obligations to Tandy. On May 17, 1996, InterTAN paid the
full principal amount of the Series B Note and the accrued
interest on the B Note to May 16, 1996, pursuant to an
agreement signed between InterTAN and Tandy on May 16, 1996.
The principal of the B Note approximated $10,000,000 and was
originally due on August 25, 1996. Nothing has come to the
attention of management which would indicate that InterTAN
would not be able to meet its payment obligations pursuant to
these debt agreements. See the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 for further
information.
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 it to believe that the
ultimate resolution of this review would impair InterTAN's
ability to meet its obligations to Tandy.
Effective July 1, 1996, the Company extended the license
agreements which allow InterTAN to use Tandy Corporation
trade names in designated countries for revenue-based
royalty. The trade names covered by the agreement include
Tandy (the U.K.), Tandy Electronics (Australia) and Radio
Shack (Canada). The previous agreement would have expired on
June 30, 2000. The agreement was extended to June 30, 2006,
with automatic annual extensions to June 30, 2010. The
license agreements may be terminated with five years prior
written notice by either party.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
With the exception of historical information, the matters
discussed herein are forward-looking statements that involve
risks and uncertainties including, but not limited to,
economic conditions including consumer installment debt
levels and interest rate fluctuations, product demand,
competitive products and pricing, availability of products,
inventory risks due to shifts in market demand, the
regulatory and trade environment including future changes, if
any, of national minimum wage legislation and other risks
indicated in filings with the Securities and Exchange
Commission such as the Company's most recent Form 10-K.
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) 1996 1995 (Decrease) 1996 1995 (Decrease)
-------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Radio Shack $ 682,136 $ 680,885 (1) 0.2% $1,390,701 $1,343,954 (1) 3.5%
Incredible Universe 194,140 132,330 46.7 414,393 266,083 55.7
Computer City 460,038 352,078 30.7 959,695 730,641 31.4
---------- ---------- ---------- ----------
1,336,314 1,165,293 14.7 2,764,789 2,340,678 18.1
Tandy Name Brand (closed) (18) (219) NM (38) 28,131 NM
Other sales 16,567 19,973 (17.1) 35,041 42,860 (18.2)
---------- ---------- ---------- ----------
$1,352,863 $1,185,047 14.2% $2,799,792 $2,411,669 16.1%
========== ========== ========== ==========
(1) Restated to include the 73 Tandy Name Brand retail units which remained open in 1995.
NM Not meaningful.
</TABLE>
Retail operations had 14.7% and 18.1% sales gains for the
three and six-month periods ended June 30, 1996. Tandy
Corporation's overall comparable store sales results for U.S.
and Canadian operations were a decrease of 0.7% for the
quarter and an increase of 0.9% for the six-month period.
RadioShack comparable store sales results for the three and
six-month periods ended June 30, 1996, decreased 1.7% and
increased 1.8%, respectively. The prior year comparable
quarter revenue was aided by strong cellular phone sales,
especially in the California market area, as certain laws
were enacted which greatly increased consumer demand in these
market areas. Sales of audio/video products were weak during
the second quarter of 1996. Core RadioShack categories such
as batteries and parts and accessories experienced sales
increases for the six-month period. Digital satellite system
sales could be positively impacted by fall advertising
campaigns and the alliance with PrimeStar(R), an operator of
small-dish satellites. Monitored security provided by
ADT(R), a home security firm, will be available in all
RadioShack(SM) stores by the end of the third quarter.
Computer City had comparable store sales gains of 2.8% and
1.4% for the quarter and six-month period. Sales of
peripherals, software and accessories increased, while sales
of computers were flat due in part to slow sales of
non-MS-DOS machines. Comparable store sales for the third
quarter will be challenged as Windows(R)95 was introduced in
the third quarter of 1995. Sales results have been positive
from the commission sales plan, low price guarantee, focus on
in-stock rate and overall customer service. By the end of
the third quarter, joint selling should commence under the
alliance with EDS(R) which is geared toward improving
corporate and institutional sales.
Same-store sales for the quarter and six-month period at
Incredible Universe decreased 4.8% and 5.2%, respectively.
The strongest categories in the second quarter of 1996 were
appliances, small office/home office computer products and
satellite systems. Incredible Universe has launched a new
marketing campaign focused on the theme "It's Worth the
Drive. Guaranteed."(SM) This campaign includes emphasis on
competitive pricing with a 110% low price guarantee, broad
selection of products, and a high level of product
demonstration. Also see Restructuring Charges below for a
further discussion of material changes being implemented at
Incredible Universe to improve its results of operations.
<TABLE>
RETAIL OUTLETS
--------------
<CAPTIONS>
June 30, March 31, December 31, September 30, June 30, March 31,
1996 1996 1995 1995 1995 1995
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RadioShack
Company owned 4,869 4,840 4,831 4,787 4,709 4,671
Dealer/Franchise 1,950 1,954 2,005 2,017 2,017 2,015
Computer City 103 101 99 86 78 73
Incredible Universe 16 18 17 14 10 9
----- ----- ----- ----- ----- -----
Total Number of Stores 6,938 6,913 6,952 6,904 6,814 6,768
===== ===== ===== ===== ===== =====
</TABLE>
It is anticipated that during calendar 1996 RadioShack will
open, net of closings, approximately 100-120 company-owned
stores. Computer City plans to open about 15 units, plus
additional stores within Incredible Universe. Incredible
Universe closed two units in May 1996 and will open two new
units in 1996, one of which opened in the first quarter,
resulting in no net increase in the number of stores in 1996.
Gross Profit
Gross profit as a percent of net sales was 35.0% during the
three months ended June 30, 1996 as compared to 37.6% during
the corresponding 1995 period. For the six months ended June
30, 1996 and 1995, the gross profit percentages were 34.5%
and 37.0%, 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 because they operate at lower margins. In the
second quarter of 1996, Computer City and Incredible Universe
accounted for approximately 48.4% of consolidated sales,
compared to 40.9% in the second quarter of 1995. For the six
months ended June 30, 1996 and 1995, Computer City and
Incredible Universe accounted for approximately 49.1% and
41.3% of consolidated sales, respectively. RadioShack's
gross margin for the quarter and six-month period increased
slightly in comparison with the prior year periods. The
increase is due to increased sales of higher-margin core
products such as batteries and parts and accessories and to a
lower proportion of the lower-margin cellular products in the
sales mix in 1996, as compared to 1995. Computer City's
gross margin increased 1.2 and 0.8 percentage points as
compared to the second quarter and six-month period of 1995,
respectively. The increases are due to a higher percentage
of service-related business and sales of peripherals and
software in 1996 as compared to 1995. Gross margin at
Incredible Universe decreased 2.6 and 1.6 percentage points
in the second quarter and six-month period, respectively, due
to an increase in the relative percentage of lower margin
computer sales the chain is experiencing and to lower pricing
which supports the 110% low price guarantee.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses as a
percent of sales and operating revenues for the second
quarter of 1996 declined 1.1 percentage points in comparison
with the second quarter of 1995 and declined 1.5 percentage
points in comparison with the six months ended June 30, 1995.
The rate of decrease in SG&A as a percent of sales has slowed
this quarter due primarily to the softer sales volumes.
Company-wide cost reduction programs have been put into place
to reduce expenses. All major expense categories, including
advertising, rent, payroll and utilities, were lower as a
percent of sales for the first six months in 1996 as compared
with the same prior year period. 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, consolidated advertising costs increased
$10,664,000, or 11.1%, during the six months ended June 30,
1996 in comparison with the prior year period. Payroll
expenses increased $43,525,000, or 13.8%, during the
six-month period in 1996, in comparison with the prior year
period, because of the Company's retail store expansions. As
a result of the Company selling the private label credit card
portfolios at the end of the first quarter in 1995, bad debt
expense decreased significantly in the first six months of
1996 as compared to that of the prior year. The Company
expects SG&A expenses as a percent of sales to continue to
decrease over the remainder of the fiscal year as Computer
City and Incredible Universe, which operate at lower relative
costs than consolidated Tandy Corporation, become more
significant portions of the Company's total business.
Restructuring Charges
On May 21, 1996, the Company announced a restructuring plan
for its Incredible Universe division which includes an
overhead reduction for all stores, the closing of two stores
and costs for the abandonment of certain real estate sites
held for new store development. A streamlining of the
division's overhead costs will include the elimination of
approximately 20 non-selling positions per store,
reorganization of certain central unit functions and a
significant change in advertising strategy.
The two stores located in Potomac Mills, Virginia and
Charlotte, North Carolina, were closed due to inadequate
sales volume. The change in marketing strategy will include
more emphasis on the "It's Worth the Drive. Guaranteed."
theme. This campaign includes emphasis on competitive
pricing with a 110% low price guarantee, broad selection, and
a high level of product demonstration. The Company has
recognized a pre-tax restructuring charge of approximately
$25,500,000 in the quarter ended June 30, 1996, primarily
related to future lease obligations of the closed stores,
certain termination costs associated with employees,
disposition of furniture, fixtures and equipment as well as
inventory markdowns associated with liquidation sales. The
components of this restructuring charge and an analysis of
the amount charged against the reserve are outlined in the
following table:
<TABLE>
<CAPTIONS>
Charges
Original Through Balance
(In thousands) Reserve 6/30/96 6/30/96
-------------- ---------- ---------- ----------
<S> <C> <C> <C>
Real estate obligations $ 10,750 $ (376) $ 10,374
Disposal of fixed assets 8,000 (970) 7,030
Inventory impairment 2,574 (500) 2,074
Termination benefits 2,500 (1,793) 707
Other 1,676 (755) 921
---------- ---------- ----------
Total $ 25,500 $ (4,394) $ 21,106
========== ========== ==========
</TABLE>
Sales and operating revenues associated with the two closed
stores were approximately $21,054,000 for the six months
ended June 30, 1996. Operating losses associated with the
two store operations approximated $4,525,000 for the six
months ended June 30, 1996.
The Company will continue to monitor the operating results of
this division and will take appropriate action if the
division's results of operations do not materially improve.
These actions may include a further restructuring including
store closures of under-performing locations, further
streamlining of personnel, alliances with non-related
retailers to increase traffic in the stores and further
changes in advertising strategies and employee compensation.
Management is optimistic that its current restructuring
strategy will improve this division's operations; however,
there can be no assurance that it will be successful.
Impairment of Assets
In March 1995, the Financial Accounting Standards Board (the
"FASB") issued Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" ("FAS 121"),
which is effective for fiscal years beginning after December
15, 1995. Effective January 1, 1996, the Company adopted FAS
121 which requires that long-lived assets (primarily
property, plant and equipment and goodwill) held and used by
an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the net book value of
the asset may not be recoverable. An impairment loss is
recognized if the sum of the expected future cash flows
(undiscounted and before interest) from the use of the asset
is less than the net book value of the asset. The amount of
the impairment loss will be measured as the difference
between the net book value of the assets and the estimated
fair value of the related assets.
Upon adoption in the first quarter of 1996, the Company
recorded an initial pre-tax impairment loss of approximately
$26,033,000 to conform with this statement, primarily as a
result of grouping assets at their lowest level of cash flows
to determine impairment as required by this statement. This
charge provided for the writedown of certain intangibles,
adjustment to market valuation of foreign real estate and the
revaluation of selected retail fixed assets. Whenever events
or changes in circumstances occur, the Company will review
long-lived assets for impairment pursuant to FAS 121.
Accounting for Stock-Based Compensation
In October 1995, the FASB issued FAS No. 123, "Accounting for
Stock-Based Compensation" ("FAS 123"), which is effective for
fiscal years beginning after December 15, 1995. Effective
January 1, 1996, the Company adopted FAS 123 which
establishes financial accounting and reporting standards for
stock-based employee compensation plans. The pronouncement
defines a fair value based method of accounting for an
employee stock option or similar equity instrument and
encourages all entities to adopt that method of accounting
for all of their employee stock option compensation plans.
However, it also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value
based method of accounting as prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees" ("APB 25"). Entities electing to remain with
the accounting in APB 25 must make pro forma disclosures of
net income and earnings per share as if the fair value based
method of accounting defined in FAS 123 had been applied.
The Company will continue to account for stock-based employee
compensation plans under the intrinsic method pursuant to APB
25 and will make the disclosures in its footnotes as required
by FAS 123. Stock options issued for stock-based employee
compensation plans in the second quarter of 1996 were not
material.
Net Interest Income
Interest income for the quarter ended June 30, 1996 decreased
$4,767,000 from $8,430,000 in the second quarter of 1995.
Interest income for the six months ended June 30, 1996
decreased $24,359,000 from $31,832,000 in the comparable
prior year period. These decreases are due to the sale of
the Company's credit card portfolios in the first quarter of
1995 and increased utilization of cash for the ongoing share
repurchase program and capital expenditures related to new
stores. Interest expense increased $3,697,000 for the
quarter ended June 30, 1996 in comparison with the same prior
year period because of increased average short-term borrowing
levels.
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 1996 and 1995
were 37.1% and 38.5%, respectively. The decrease is due
primarily to the favorable resolution of a foreign tax issue.
The IRS Dallas office had previously referred certain issues
in the Company's 1987 tax return to the IRS National Office.
The issues involved the private letter rulings issued by the
IRS in connection with the spin-off of InterTAN Inc.
("InterTAN") and certain other tax matters. On June 20,
1996, the IRS notified the Company that it would no longer
challenge the private letter ruling issued in connection with
the InterTAN spin-off. The IRS is, however, continuing to
challenge certain other tax matters associated with the
separation of InterTAN from the Company. Management believes
that these other tax matters should not have a 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. During 1995,
the Preferred Equity Redemption Convertible Stock ("PERCS")
mandatorily converted into common stock. As a result, 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.
The prior year quarter and year-to-date weighted average
share calculations included approximately 11,816,000 common
shares relating to the conversion of the PERCS into common
stock on March 10, 1995. 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 generated less cash in
the six-month period ended June 30, 1996 as compared with the
same period of the prior year. This change relates primarily
to the sale of the credit card portfolios in 1995.
Cash used by investing activities for the six-month period
ended June 30, 1996 includes property, plant and equipment
additions related to fixtures required for new RadioShack
stores and the Company's expansion of its Computer City and
Incredible Universe store formats. Management anticipates
that capital expenditure requirements will approximate
$65,000,000 to $75,000,000 for the remainder of 1996,
primarily to support retail expansion, refurbishments and
other capital expenditures such as updated point of sale and
other information systems.
Cash provided by financing activities for the six-month
period ended June 30, 1996 includes an increase in seasonal
short-term debt. In 1995 the Company utilized funds received
from the sale of the credit card portfolios and thus seasonal
debt resources were employed less than what has been
necessary in 1996. Cash used by financing activities includes
the repurchase of common stock under the new share repurchase program,
authorized on December 18, 1995. Repayments of long-term
borrowings in 1995 included the $45,000,000 of 8.69% senior
notes and 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 expansion is being funded through operating leases.
Cash and short-term investments at June 30, 1996 were
$140,093,000 as compared to $143,498,000 at December 31, 1995
and $80,566,000 at June 30, 1995. Total debt as a percentage
of total capitalization was 24.0% at June 30, 1996, compared
to 17.1% at December 31, 1995 and 15.3% at June 30, 1995.
Long-term debt as a percentage of total capitalization was
5.4% at June 30, 1996 compared to 7.3% at December 31, 1995
and 7.5% at June 30, 1995. The debt-to-capitalization ratios
could increase as Tandy continues to repurchase shares under
the existing authorization and fund new store openings and
other capital expenditures.
During the second quarter of 1996, Tandy renewed and
increased its revolving credit facility with a syndicate of
18 banks. The facility now totals $500,000,000, $200,000,000
of which is a one-year facility maturing June 1997, with the
remaining $300,000,000 in a five-year facility maturing June
2001. The revolving credit facility is used as a backup for
the commercial paper program.
On December 18, 1995, the Company announced that its Board of
Directors had authorized management to purchase up to
5,000,000 shares of its common stock in addition to shares
required for employee plans. Purchases will be made from
time to time in the open market, and it is expected that
funding of the program will come from operating cash flow and
existing borrowing facilities. During the quarter and six
months ended June 30, 1996, the Company repurchased
approximately 715,000 and 1,757,000 shares under the program,
respectively. No purchases were made during calendar 1995
under this new program.
Inventory
Compared to June 30, 1995, total inventories at June 30, 1996
increased $127,581,000 or 9.4%. The increase in total
inventory levels included additional inventory to support new
RadioShack, Computer City and Incredible Universe stores,
offset by an overall reduction in Radio Shack inventory as a
result of an inventory reduction program. 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, 1995 61,727 $1,601,335
Foreign currency translation adjustments, net of deferred taxes -- (2,079)
Sale of treasury stock to employee plans 527 22,785
Purchase of treasury stock (2,385) (106,840)
Exercise of stock options 203 7,778
Director stock payments 2 108
Restricted stock awards 27 1,099
Repurchase of preferred stock -- (1,867)
Preferred stock dividends, net of tax -- (2,064)
TESOP deferred compensation earned -- 3,992
Common stock dividends -- (24,303)
Net income -- 23,779
------- ----------
Balance at June 30, 1996 60,101 $1,523,723
======= ==========
</TABLE>
InterTAN Update
Summarized in the tables below are the amounts recognized by
the Company at June 30, 1996 and 1995, and for the periods
ended June 30, 1996 and 1995, in relation to its agreements
with InterTAN. The Company purchased the notes at a
discount, and InterTAN has an obligation to pay the gross
amount of the notes.
<TABLE>
<CAPTIONS>
Balance at June 30,
--------------------------
(In thousands) 1996 1995
-------------- ---------- ----------
<S> <C> <C>
Gross amount of notes $ 31,311 $ 48,361
Discount 10,198 14,193
---------- ----------
Net amount of notes $ 21,113 $ 34,168
========== ==========
Current portion of notes $ 4,692 $ 4,445
Non-current portion of notes 16,421 29,723
Other current receivables 4,496 3,704
---------- ----------
$ 25,609 $ 37,872
========== ==========
</TABLE>
<TABLE>
<CAPTIONS>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
(In thousands) 1996 1995 1996 1995
-------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales and commission income $ 1,811 $ 2,116 $ 3,607 $ 4,465
========== ========== ========== ==========
Interest income $ 769 $ 1,030 $ 1,697 $ 2,029
Accretion of discount 966 1,053 1,963 2,150
---------- ---------- ---------- ----------
$ 1,735 $ 2,083 $ 3,660 $ 4,179
========== ========== ========== ==========
Royalty income $ 259 -- $ 534 --
========== ========== ========== ==========
</TABLE>
Through July 1996 InterTAN has met all of its payment
obligations to Tandy. On May 17, 1996, InterTAN paid the
full principal amount of the Series B Note and the accrued
interest on the B Note to May 16, 1996, pursuant to an
agreement signed between InterTAN and Tandy on May 16, 1996.
The principal of the B Note approximated $10,000,000 and was
originally due on August 25, 1996. Nothing has come to the
attention of management which would indicate that InterTAN
would not be able to meet its payment obligations pursuant to
these debt agreements. See the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 for further
information.
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 it to believe that the
ultimate resolution of this review would impair InterTAN's
ability to meet its obligations to Tandy.
Effective July 1, 1996, the Company extended the license
agreements which allow InterTAN to use Tandy Corporation
trade names in designated countries for revenue-based
royalty. The trade names covered by the agreement include
Tandy (the U.K.), Tandy Electronics (Australia) and Radio
Shack (Canada). The previous agreement would have expired on
June 30, 2000. The agreement was extended to June 30, 2006,
with automatic annual extensions to June 30, 2010. The
license agreements may be terminated with five years prior
written notice by either party.
Payment of AST Note
On July 12, 1996, the Company received $60,000,000 in cash
and $30,000,000 in AST Research Inc. ("AST") common stock as
final payment of a $90,000,000 note payable from AST to the
Company. The approximately 4,500,000 shares of AST common
stock Tandy owns represent approximately 7.8% of the
outstanding common stock of AST. This common stock was
issued to Tandy as partial payment of AST's obligation under
a promissory note dated July 12, 1993. This note was payable
to the Company pursuant to the terms of the Agreement for
Purchase and Sale of Assets dated June 30, 1993.
On June 11, 1996, AST filed a Registration Statement on Form
S-3 with the Securities and Exchange Commission ("SEC") to
register the common stock issued to the Company under the
Securities Act of 1933. As of August 12, 1996, such
Registration had not yet been declared effective by the SEC;
however, the shares received are non-restricted and fully
tradable.
Depending on a variety of factors, including market
conditions and prices, the Company might dispose of some or
all of its shares of AST common stock. The disposition of
the shares of common stock may be effected from time to time
in one or more transactions. In connection with its
ownership of the common stock, the Company may from time to
time, at its sole discretion, engage in hedging transactions
with broker/dealers or other financial institutions. The AST
common stock is subject to mark to market adjustments for
each reporting period based upon its current market value.
Based on the common stock price of $5.00 at August 12, 1996,
the market value of the AST common stock approximated
$22,500,000. Pursuant to FAS 115, the Company would
recognize an unrealized loss of approximately $7,500,000 from
its recorded value at August 12, 1996.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company was a defendant in a consolidated action titled
O'Sullivan Industries Holdings, Inc. Securities Litigation,
----------------------------------------------------------
which was commenced in 1994 before the United States District
Court for the Western District of Missouri. The Court on
July 2, 1996, approved the settlement of this litigation and
entered a Final Judgment thereby resolving this entire
litigation. The Company had previously reserved for the
financial impact of the settlement and, therefore, the
settlement has not had a material adverse effect on its
results of operations or financial condition.
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 June 30, 1996. 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 16, 1996,
the Company elected directors to serve for the ensuing year.
Out of the 62,771,378 eligible votes, 54,929,914 votes were
cast at the meeting either by proxies solicited in accordance
with Schedule 14A or by security holders voting in person.
There were 5,466,305 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:
NOMINEES FOR DIRECTORS
----------------------
VOTES VOTES
DIRECTORS FOR WITHHELD
--------- ---------- ---------
James I. Cash, Jr. 54,490,634 439,280
Donna R. Ecton 54,244,619 685,295
Lewis F. Kornfeld, Jr. 54,181,574 748,340
Jack L. Messman 54,499,366 430,548
William G. Morton, Jr. 54,506,221 423,693
Thomas G. Plaskett 54,284,661 645,253
John V. Roach 54,150,441 779,473
Alfred J. Stein 54,484,161 445,753
William E. Tucker 54,156,519 773,397
Jesse L. Upchurch 54,512,595 417,319
John A. Wilson 54,495,243 434,671
<PAGE>
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 18, which
immediately precedes such exhibits.
b) Reports on Form 8-K.
There were no Form 8-K reports filed during the
quarter ended June 30, 1996.
<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 12, 1996 By /s/ Richard L. Ramsey
-------------------------------
Richard L. Ramsey
Vice President and Controller
(Authorized Officer)
Date: August 12, 1996 /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 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
January 1, 1996 (filed as Exhibit 3b to
Tandy's Form 10-K filed on March 28, 1996,
Accession No. 0000096289-96-000004 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 First Amendment to the Revolving Credit
Agreement between Tandy Corporation and
Texas Commerce Bank as Agent for sixteen
other banks, dated as of May 26, 1995
(Facility A) (filed as Exhibit 4c to
Tandy's Form 10-K filed on March 28,
1996, Accession No. 0000096289-96-000004
and incorporated herein by reference).
4d First Amendment to the Revolving Credit
Agreement between Tandy Corporation and
Texas Commerce Bank as Agent for sixteen
other banks, dated as of May 26, 1995
(Facility B) (filed as Exhibit 4d to
Tandy's Form 10-K filed on March 28,
1996, Accession No. 0000096289-96-000004
and incorporated herein by reference).
4e Second Amendment to the Revolving Credit
Agreement between Tandy Corporation and
Texas Commerce Bank as Agent for sixteen
other banks, dated as of May 24, 1996
(Facility A) 22
4f Second Amendment to the Revolving Credit
Agreement between Tandy Corporation and
Texas Commerce Bank as Agent for
eighteen banks, dated as of June 28,
1996 (Facility B) 45
4g Third Amendment to the Revolving Credit
Agreement between Tandy Corporation and
Texas Commerce Bank as Agent for
eighteen banks, dated as of June 28,
1996 (Facility A) 74
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 28, 1996, Accession No.0000096289-
96-000004 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 (filed as
Exhibit 10j to Tandy's Form 10-Q filed on
August 14, 1995, Accession No. 0000096289-
95-000016 and incorporated herein by reference).
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* First Restated Trust Agreement Tandy Employees
Supplemental Stock Program through Amendment
No. IV dated January 1, 1996 (filed as
Exhibit 4d to Tandy's Form 10-K filed on
March 28, 1996, Accession No. 0000096289-
96-000004 and incorporated herein by reference).
10m* Forms of Termination Protection Agreements
for (i) Corporate Executives, (ii) Division
Executives, and (iii) Subsidiary Executives
(filed as Exhibit 10m to Tandy's Form 10-Q
filed on August 14, 1995, Accession No.
0000096289-95-000016 and incorporated
herein by reference).
10n* Tandy Corporation Termination Protection
Plans for Executive Employees of Tandy
Corporation and its Subsidiaries (i) the
Level I and (ii) Level II Plans (filed as
Exhibit 10n filed on August 14, 1995,
Accession No. 0000096289-95-000016 to
and incorporated herein by reference).
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 28,
1996, Accession No. 0000096289-96-000004
and incorporated herein by reference).
11 Statement of Computation of Earnings
per Share 100
12 Statement of Computation of Ratios of
Earnings to Fixed Charges 101
27 Financial Data Schedule
_______________________
* Each of these exhibits is a "management contract or
compensatory plan, contract, or arrangement".
<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 10Q 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-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 140,093
<SECURITIES> 0
<RECEIVABLES> 266,568
<ALLOWANCES> 0
<INVENTORY> 1,487,271
<CURRENT-ASSETS> 1,956,940
<PP&E> 603,586
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,648,470
<CURRENT-LIABILITIES> 998,063
<BONDS> 107,261
0
100,000
<COMMON> 85,645
<OTHER-SE> 1,338,078
<TOTAL-LIABILITY-AND-EQUITY> 2,648,470
<SALES> 2,799,792
<TOTAL-REVENUES> 2,799,792
<CGS> 1,834,129
<TOTAL-COSTS> 1,834,129
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,544
<INCOME-PRETAX> 37,827
<INCOME-TAX> 14,048
<INCOME-CONTINUING> 23,779
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,779
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
EXHIBIT 4e
SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT (FACILITY A)
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY A) (this
"Amendment") dated as of May 24, 1996 is among TANDY CORPORATION, a
---------
Delaware corporation (the "Company"), and the banks and other financial
-------
institutions listed on the signature pages under the heading Banks
("Banks"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as agent (in such
-----
capacity, the "Agent") for the Banks.
-----
PRELIMINARY STATEMENT
---------------------
(a) The Company, certain of the Banks, BARCLAYS BANK PLC ("Barclays")
--------
and the Agent entered into a Revolving Credit Agreement (FACILITY A) (the
"Original Credit Agreement") dated as of May 27, 1994.
-------------------------
(b) The Company, the Banks, Barclays and the Agent entered into the
Agreement and First Amendment To Revolving Credit Agreement (FACILITY A)
("First Amendment") dated as of May 26, 1995 modifying the Original Credit
---------------
Agreement (the Original Credit Agreement as amended by the First Amendment
being the "Credit Agreement"), which inter alia added CITICORP USA, INC.
----------------
("Citicorp"), and COMMERZBANK AKTIENGELLSCHAFT, ATLANTA AGENCY
--------
("Commerzbank"), as Banks under the Credit Agreement, retired Barclays as a
-----------
Bank thereunder, modified the Commitment amount for each Bank and amended
the definition of "Maturity Date".
(c) There are no outstanding loan balances or any advances owed by the
Company to any of the Banks pursuant to the Credit Agreement.
(d) The Company has requested that the definition of the term
"Maturity Date" be amended.
(e) All capitalized terms defined in the Credit Agreement and not
otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Company, the Banks and the Agent
hereby agree as follows:
SECTION 1. Amendment to Section 1.01 of the Credit Agreement. The
-------------------------------------------------
definition of the term "Maturity Date" contained in Section 1.01 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"'Maturity Date' means July 31, 1996, or the earlier termination of
the Commitments pursuant to Section 7.01."
------------
SECTION 2. Conditions to Effectiveness. This Amendment shall become
---------------------------
effective when, and only when, the following conditions have been
fulfilled:
(a) the Company and the Banks shall have executed a counterpart of
this Amendment;
(b) the Agent shall have executed a counterpart of this Amendment and
shall have received counterparts of this Amendment executed by the Company
and the Banks; and
(c) the Agent shall have received from the Company a certificate of
the Secretary or Assistant Secretary of the Company certifying that
attached thereto is (i) a true and complete copy of the general borrowing
resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of the Credit Agreement, as amended
hereby, and (ii) the incumbency and specimen signature of each officer of
the Company executing this Amendment.
SECTION 3. Representations and Warranties True; No Default or Event
--------------------------------------------------------
of Default. The Company hereby represents and warrants to the Agent and
----------
the Banks that after giving effect to the execution and delivery of this
Amendment (a) the representations and warranties set forth in the Credit
Agreement are true and correct on the date hereof as though made on and as
of such date and (b) no Default or Event of Default has occurred and is
continuing.
SECTION 4. Reference to the Credit Agreement and Effect on the Notes.
---------------------------------------------------------
(a) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "herein" or words of
like import shall mean and be a reference to the Credit Agreement, as
amended and affected hereby.
(b) Upon the effectiveness of this Amendment, each reference in the
Notes to "the Credit Agreement" shall mean and be a reference to the Credit
Agreement, as amended and affected hereby.
(c) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement and the Notes to the "Maturity Date" shall mean and be a
reference to such term as modified pursuant to Section 1.
---------
(d) The Credit Agreement and the Notes, as amended and affected
hereby, shall remain in full force and effect and are hereby ratified and
confirmed.
SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE
BANKS AND THE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
SECTION 6. Descriptive Headings. The section headings appearing in
--------------------
this Amendment have been inserted for convenience only and shall be given
no substantive meaning or significance whatever in construing the terms and
provisions of this Amendment.
SECTION 7. FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT
------------------------------
(INCLUDING THE EXHIBITS AND SCHEDULE THERETO), AS AMENDED HEREBY, THE
NOTES, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS, CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND
COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF.
SECTION 8. Execution in Counterparts. This Amendment may be executed
-------------------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed effective as of the date first stated herein, by their
respective officers thereunto duly authorized.
TANDY CORPORATION
By: /s/ Loren K. Jensen
------------------------------
Name: Loren K. Jensen
Title: Vice President-Treasurer
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Agent
By: /s/ B.B. Wuthrich
------------------------------
Name: B.B. Wuthrich
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$15,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ W. Thomas Barnett
------------------------------
Name: W. Thomas Barnett
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$15,000,000 THE BANK OF NEW YORK
By: /s/ Charlotte Sohn
------------------------------
Name: Charlotte Sohn
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$7,500,000 BANK ONE, TEXAS, N.A.
By: /s/ John D. Hudgens
------------------------------
Name: John D. Hudgens
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$10,000,000 THE BANK OF TOKYO TRUST COMPANY
By: /s/ J. Bruce Meredith
------------------------------
Name: J. Bruce Meredith
Title: Senior Vice President
and Manager
<PAGE>
Commitment: Banks
---------- -----
$7,500,000 THE CHASE MANHATTAN BANK, N.A.
By: /s/ Ellen L. Gertzog
------------------------------
Name: Ellen L. Gertzog
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$15,000,000 CONTINENTAL BANK N.A.
By: /s/
------------------------------
Name:
Title:
REPLACED BY COMBINED
BANK OF AMERICA
<PAGE>
Commitment: Banks
---------- -----
$15,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert Ivosevich
------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$10,000,000 THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Judith C. E. Kelly
------------------------------
Name: Judith C. E. Kelly
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$7,500,000 FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Jane W. Workman
------------------------------
Name: Jane W. Workman
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$10,000,000 MELLON BANK, N.A.
By: /s/ Marc T. Kennedy
------------------------------
Name: Marc T. Kennedy
Title: Assistant Vice President
<PAGE>
Commitment: Banks
---------- -----
$15,000,000 NATIONAL WESTMINSTER BANK, Plc
New York Branch
By: /s/ Marilyn A. Windsor
------------------------------
Name: Marilyn A. Windsor
Title: Vice President
NATIONAL WESTMINSTER BANK, Plc
Nassau Branch
By: /s/ Marilyn A. Windsor
------------------------------
Name: Marilyn A. Windsor
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$15,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Todd Shipley
------------------------------
Name: Todd Shipley
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$10,000,000 SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Louis P. Laville, III
------------------------------
Name: Louis P. Laville, III
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$7,500,000 THE SUMITOMO BANK, LIMITED
HOUSTON AGENCY
By: /s/ Harumitsu Seki
------------------------------
Name: Harumitsu Seki
Title: General Manager
<PAGE>
Commitment: Banks
---------- -----
$20,000,000 TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ B.B. Wuthrich
------------------------------
Name: B.B. Wuthrich
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$10,000,000 TORONTO DOMINION (TEXAS), INC.
By: /s/ Diane Bailey
------------------------------
Name: Diane Bailey
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$5,000,000 CITICORP USA, INC.
By: /s/ Marjorie Futornick
------------------------------
Name: Marjorie Futornick
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$5,000,000 COMMERZBANK, AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By: /s/ Andreas K. Bremer
------------------------------
Name: Andreas K. Bremer
Title: Senior Vice President & Manager
By: /s/ Harry P. Yergey
------------------------------
Name: Harry P. Yergey
Title: Vice President
<PAGE>
EXHIBIT 4f
AGREEMENT AND SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT (FACILITY B)
THIS AGREEMENT AND SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
(FACILITY B) (this "Amendment") dated as of June 28, 1996 is among TANDY
---------
CORPORATION, a Delaware corporation (the "Company"), the Retiring
-------
Bank (as defined below), the banks and other financial institutions listed
on the signature pages under the heading Banks including the New Banks (as
defined below) (collectively, the "Banks"), and TEXAS COMMERCE BANK
-----
NATIONAL ASSOCIATION, as agent (in such capacity, the "Agent") for the
-----
Banks.
PRELIMINARY STATEMENT
---------------------
(a) The Company, certain of the Banks, BARCLAYS BANK PLC ("Barclays"),
--------
the Retiring Banks and the Agent entered into a Revolving Credit Agreement
(Facility B) (the "Original Credit Agreement") dated as of May 27, 1994.
-------------------------
(b) The Company, certain of the Banks, the Retiring Bank, Barclays and
the Agent entered into the Agreement and First Amendment To Revolving
Credit Agreement (Facility B) ("First Amendment") dated as of May 26, 1995
---------------
modifying the Original Credit Agreement (the Original Credit Agreement, as
amended by the First Amendment, being the "Credit Agreement") by inter alia
----------------
adding CITICORP USA, INC. ("Citicorp"), and COMMERZBANK AKTIENGELLSCHAFT,
--------
ATLANTA AGENCY ("Commerzbank"), as Banks under the Credit Agreement,
-----------
retiring Barclays as a Bank thereunder and modifying the Commitment amount
for each Bank.
(c) There are no outstanding loan balances or any advances owed by the
Company to any of the Banks pursuant to the Credit Agreement.
(d) The Company has requested that certain provisions of the Credit
Agreement be amended, that the Total Commitment be increased from
$200,000,000 to $300,000,000 and that each of the Banks have a Commitment
equal to the amount shown opposite its signature on the signature pages
hereof.
(e) THE CHASE MANHATTAN BANK, N.A. (the "Retiring Bank"), no longer
--------------
wishes to be a party to the Credit Agreement, and each of UNION BANK OF
SWITZERLAND and THE SAKURA BANK, LIMITED (collectively, the "New Banks"),
---------
wishes to become a party to the Credit Agreement as amended hereby.
(f) All capitalized terms defined in the Credit Agreement and not
otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Company, the Banks, the Retiring
Bank and the Agent hereby agree as follows:
SECTION 1. Amendment to Section 1.01 of the Credit Agreement. The
-------------------------------------------------
definitions of the terms "Applicable Fee Percentage", "Applicable Margin"
and "Maturity Date" contained in Section 1.01 of the Credit Agreement are
hereby amended in their entirety to read as follows:
"'Applicable Fee Percentage' means, on any date, the applicable
percentage set forth below based upon the ratings applicable on such date
to the Company's senior, unsecured, non-credit-enhanced long term
indebtedness for borrowed money ("Index Debt"):
Applicable Fee
Category 1 Percentage
---------- ----------
A or higher by S&P; and .0800
A2 or higher by Moody's
Category 2
----------
Lower than A and equal to or .1000
greater than BBB+ by S&P; and
Lower than A2 and equal to or
greater than Baa1 by Moody's
Category 3
----------
BBB by S&P; and .1250
Baa2 by Moody's
Category 4
----------
BBB - or lower by S&P; or .1875
Baa3 or lower by Moody's
For purposes of the foregoing: (a) if neither Moody's nor S&P shall have in
effect a rating for Index Debt, then both such rating agencies will be
deemed to have established ratings for Index Debt in Category 4; (b) if
only one of Moody's and S&P shall have in effect a rating for Index Debt,
the Company and the Banks will negotiate in good faith to agree upon
another rating agency to be substituted by an amendment to this Agreement
for the rating agency which shall not have a rating in effect, and pending
the effectiveness of such amendment the Applicable Fee Percentage will be
determined by reference to the available rating; (c) if the ratings
established or deemed to have been established by Moody's and S&P shall
fall within different Categories, the Applicable Fee Percentage shall be
determined by reference to the superior (or numerically lower) Category;
and (d) if any rating established or deemed to have been established by
Moody's or S&P shall be changed (other than as a result of a change in the
rating system of either Moody's or S&P), such change shall be effective as
of the date on which such change is first announced by the rating agency
making such change. Each change in the Applicable Fee Percentage shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next
such change. If the rating system of either Moody's or S&P shall change
prior to the Maturity Date, the Company and the Banks shall negotiate in
good faith to amend the references to specific ratings in this definition
to reflect such changed rating system." .
"'Applicable Margin' means, on any date, with respect to Eurodollar
Loans, Certificate of Deposit Loans or Alternate Base Rate Loans, as the
case may be, the applicable spreads set forth below based upon the ratings
applicable on such date to the Index Debt.
Eurodollar Certificate of Deposit Alternate Rate
Category 1 Loan Spread Loan Spread Loan Spread
---------- ----------- ----------- -----------
A or higher by S&P; and .1700% .3000% 0%
A2 or higher by Moody's
Category 2
----------
Lower than A and equal to or .2000% .3250% 0%
greater than BBB+ by S&P; and
Lower than A2 and equal to or
greater than Baa1 by Moody's
Category 3
----------
BBB by S&P; and .2750% .4000% 0%
Baa2 by Moody's
Category 4
----------
BBB - or lower by S&P; or .4375% .5625% 0%
Baa3 or lower by Moody's
For purposes of the foregoing: (a) if neither Moody's nor S&P shall have in
effect a rating for Index Debt, then both such rating agencies will be
deemed to have established ratings for Index Debt in Category 4; (b) if
only one of Moody's and S&P shall have in effect a rating for Index Debt,
the Company and the Banks will negotiate in good faith to agree upon
another rating agency to be substituted by an amendment to this Agreement
for the rating agency which shall not have a rating in effect, and pending
the effectiveness of such amendment the Applicable Margin will be
determined by reference to the available rating; (c) if the ratings
established or deemed to have been established by Moody's and S&P shall
fall within different Categories, the Applicable Margin shall be determined
by reference to the superior (or numerically lower) Category; and (d) if
any rating established or deemed to have been established by Moody's or S&P
shall be changed (other than as a result of a change in the rating system
of either Moody's or S&P), such change shall be effective as of the date on
which such change is first announced by the rating agency making such
change. Each change in the Applicable Margin shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the
rating system of either Moody's or S&P shall change prior to the Maturity
Date, the Company and the Banks shall negotiate in good faith to amend the
references to specific ratings in this definition to reflect such changed
rating system.".
"'Maturity Date' means June 26, 2001, or the earlier termination of
the Commitments pursuant to Section 7.01.".
------------
SECTION 2. Amendment to Section 6.10 of the Credit Agreement. Section
-------------------------------------------------
6.10 of the Credit Agreement is hereby amended in its entirety to read as
follows:
"The Company will not permit its Consolidated Tangible Net Worth to be
less than $1,000,000,000.".
SECTION 3. Commitment of Banks. Effective as of the date hereof,
-------------------
each of the Banks shall have a Commitment equal to the amount shown
opposite its signature on the signature pages hereof (such Bank's
"New Commitment").
--------------
SECTION 4. Conditions to Effectiveness. This Amendment shall become
---------------------------
effective when, and only when, the following conditions have been
fulfilled:
(a) the Company and the Banks shall have executed a counterpart of
this Amendment;
(b) the Agent shall have executed a counterpart of this Amendment and
shall have received counterparts of this Amendment executed by the Company
and the Banks;
(c) the Agent shall have received a Note dated of even date herewith
executed by the Company and payable to the order of each New Bank; and
(d) the Agent shall have received from the Company a certificate of
the Secretary or Assistant Secretary of the Company certifying that
attached thereto is (i) a true and complete copy of the general borrowing
resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of the Credit Agreement, as amended
hereby, and (ii) the incumbency and specimen signature of each officer of
the Company executing this Amendment.
SECTION 5. Representations and Warranties True; No Default or Event
--------------------------------------------------------
of Default. The Company hereby represents and warrants to the Agent and the
----------
Banks that after giving effect to the execution and delivery of this
Amendment (a) the representations and warranties set forth in the Credit
Agreement are true and correct on the date hereof as though made on and as
of such date and (b) no Default or Event of Default has occurred and is
continuing.
SECTION 6. Reference to the Credit Agreement and Effect on the Notes.
---------------------------------------------------------
(a) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "herein" or words of
like import shall mean and be a reference to the Credit Agreement, as
amended and affected hereby.
(b) Upon the effectiveness of this Amendment, each reference in the
Notes to "the Credit Agreement" shall mean and be a reference to the Credit
Agreement, as amended and affected hereby.
(c) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement and the "Notes to the Applicable Fee Percentage",
"Applicable Margin" and "Maturity Date" shall mean and be a reference to
such terms as modified pursuant to Section 1.
---------
(d) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement and the Notes to a Bank's "Commitment" shall mean and be a
reference to such Bank's New Commitment.
(e) Upon the effectiveness of this Amendment, the Retiring Bank shall
cease to be a Bank and to have any obligation to the Company under the
Credit Agreement and under the Credit Agreement as amended hereby, and the
Company shall have no further obligations to the Retiring Bank under the
Credit Agreement and under the Credit Agreement as amended hereby, except
under any indemnities contained in the Credit Agreement as amended hereby
that expressly provide that they survive the termination of the Credit
Agreement.
(f) The Credit Agreement and the Notes, as amended and affected
hereby, shall remain in full force and effect and are hereby ratified and
confirmed.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE
BANKS AND THE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
SECTION 8. Descriptive Headings. The section headings appearing in
--------------------
this Amendment have been inserted for convenience only and shall be given
no substantive meaning or significance whatever in construing the terms and
provisions of this Amendment.
SECTION 9. FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT
------------------------------
(INCLUDING THE EXHIBITS AND SCHEDULE THERETO), AS AMENDED HEREBY, THE
NOTES, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS, CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND
COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF.
SECTION 10. Execution in Counterparts. This Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed effective as of the date first stated herein, by their
respective officers thereunto duly authorized.
TANDY CORPORATION
By: /s/ Loren K. Jensen
------------------------------
Name: Loren K. Jensen
Title: Vice President-Treasurer
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Agent
By: /s/ B.B. Wuthrich
------------------------------
Name: B.B. Wuthrich
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 21,000,000.00 BANK OF AMERICA ILLINOIS, as successor to
Bank of America National Trust and Savings
Association
By: /s/ W. Thomas Barnett
------------------------------
Name: W. Thomas Barnett
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 21,000,000.00 THE BANK OF NEW YORK
By: /s/ Charlotte Sohn
------------------------------
Name: Charlotte Sohn
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 BANK ONE, TEXAS, N.A.
By: /s/ John D. Hudgens
------------------------------
Name: John D. Hudgens
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 BANK OF TOKYO - MITSUBISHI TRUST
COMPANY, SUCCESSOR BY MERGER TO
THE BANK OF TOKYO TRUST COMPANY
By: /s/ M. R. Marron
------------------------------
Name: M. R. Marron
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 21,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert Ivosevich
------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Judith C. E. Kelly
------------------------------
Name: Judith C. E. Kelly
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Jane W. Workman
------------------------------
Name: Jane W. Workman
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 21,000,000.00 MELLON BANK, N.A.
By: /s/ Marc T. Kennedy
------------------------------
Name: Marc T. Kennedy
Title: Assistant. Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 NATIONAL WESTMINSTER BANK, Plc
By: /s/ Marilyn A. Windsor
------------------------------
Name: Marilyn A. Windsor
Title: Vice President
NATIONAL WESTMINSTER BANK, Plc
Nassau Branch
By: /s/ Marilyn A. Windsor
------------------------------
Name: Marilyn A. Windsor
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 21,000,000.00 NATIONSBANK OF TEXAS, N.A.
By: /s/ Todd Shipley
------------------------------
Name: Todd Shipley
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Louis P. Laville, III
------------------------------
Name: Louis P. Laville, III
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 THE SUMITOMO BANK, LIMITED
HOUSTON AGENCY
By: /s/ Harumitsu Seki
------------------------------
Name: Harumitsu Seki
Title: General Manager
<PAGE>
Commitment: Banks
---------- -----
$ 25,500,000.00 TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ B.B. Wuthrich
------------------------------
Name: B.B. Wuthrich
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 TORONTO DOMINION (TEXAS), INC.
By: /s/ David G. Parker
------------------------------
Name: David G. Parker
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 21,000,000.00 CITICORP USA, INC.
By: /s/ Marjorie Futornick
------------------------------
Name: Marjorie Futornick
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 COMMERZBANK, AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By: /s/ A. K. Bremer
------------------------------
Name: A. K. Bremer
Title: Senior Vice President
By: /s/ E. Kagerer
------------------------------
Name: E. Kagerer
Title: Assistant Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 UNION BANK OF SWITZERLAND,
New York Branch
By: /s/ Michael J Ahearn
------------------------------
Name: Michael J. Ahearn
Title: Managing Director
By: /s/ Freddy Imholz
------------------------------
Name: Freddy Imholz
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 13,500,000.00 THE SAKURA BANK, LIMITED
By: /s/ Akira Hara
------------------------------
Name: Akira Hara
Title: General Manager
<PAGE>
Retiring Bank
-------------
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Ellen L. Gertzog
------------------------------
Name: Ellen L. Gertzog
Title: Vice President
<PAGE>
EXHIBIT 4g
THIRD AMENDMENT
TO
REVOLVING CREDIT AGREEMENT (FACILITY A)
THIS THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY A)
(this "Amendment") dated as of June 28, 1996 is among TANDY
---------
CORPORATION, a Delaware corporation (the "Company"), the Retiring Bank
-------
(as defined below), and the banks and other financial institutions
listed on the signature pages under the heading Banks including the New
Banks (as defined below) (collectively, the "Banks"), and TEXAS
-----
COMMERCE BANK NATIONAL ASSOCIATION, as agent (in such capacity, the
"Agent") for the Banks.
-----
PRELIMINARY STATEMENT
---------------------
(a) The Company, certain of the Banks, BARCLAYS BANK PLC
("Barclays"), the Retiring Bank and the Agent entered into a Revolving
--------
Credit Agreement (Facility A) (the "Original Credit Agreement") dated
-------------------------
as of May 27, 1994.
(b) The Company, certain of the Banks, the Retiring Bank, Barclays
and the Agent entered into the Agreement and First Amendment To Revolving
Credit Agreement (Facility A) ("First Amendment") dated as of May 26, 1995
---------------
modifying the Original Credit Agreement by inter alia adding CITICORP
USA, INC. ("Citicorp"), and COMMERZBANK AKTIENGELLSCHAFT, ATLANTA
--------
AGENCY ("Commerzbank"), as Banks under the Credit Agreement, retiring
-----------
Barclays as a Bank thereunder, modifying the Commitment amount for each
Bank and amending the definition of "Maturity Date".
(c) The Company, certain of the Banks, the Retiring Bank, and the
Agent entered into the Second Amendment to Revolving Credit Agreement
(Facility A) (the "Second Amendment") dated as of May 24, 1996
----------------
modifying the Original Credit Agreement, as amended by the First
Amendment, by further amending the definition of Maturity Date (the
Original Credit Agreement as amended by the First Amendment and the
Second Amendment being the "Credit Agreement").
----------------
(d) There are no outstanding loan balances or any advances owed
by the Company to any of the Banks pursuant to the Credit Agreement.
(e) The Company has requested certain provisions of the Credit
Agreement be amended, and that each of the Banks have a Commitment
equal to the amount shown opposite its signature on the signature
pages hereof.
(f) THE CHASE MANHATTAN BANK, N.A. (the "Retiring Bank"), no longer
-------------
wishes to be a party to the Credit Agreement and each of UNION BANK OF
SWITZERLAND and THE SAKURA BANK, LIMITED (collectively, the "New Banks"),
---------
wishes to become a party to the Credit Agreement as amended hereby.
(g) All capitalized terms defined in the Credit Agreement and not
otherwise defined herein shall have the same meanings herein as in the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the Company, the Banks, the
Retiring Bank and the Agent hereby agree as follows:
SECTION 1. Amendment to Section 1.01 of the Credit Agreement. The
-------------------------------------------------
definitions of the terms "Applicable Fee Percentage", "Applicable
Margin" and "Maturity Date" contained in Section 1.01 of the Credit
Agreement are hereby amended in their entirety to read as follows:
"'Applicable Fee Percentage' means, on any date, .07%.".
"'Applicable Margin' means, on any date, with respect to Eurodollar
Loans, .23%; Certificate of Deposit Loans, .355%; and Alternate Base
Rate Loans, 0%.".
"'Maturity Date' means June 26, 1997, or the earlier termination
of the Commitments pursuant to Section 7.01.".
------------
SECTION 2. Amendment to Section 6.10 of the Credit Agreement.
-------------------------------------------------
Section 6.10 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"The Company will not permit its Consolidated Tangible Net Worth
to be less than $1,000,000,000.".
SECTION 3. Commitment of Banks. Effective as of the date hereof,
-------------------
each of the Banks shall have a Commitment equal to the amount shown
opposite its signature on the signature pages hereof (such Bank's
"New Commitment").
--------------
SECTION 4. Conditions to Effectiveness. This Amendment shall become
---------------------------
effective when, and only when, the following conditions have been
fulfilled:
(a) the Company and the Banks shall have executed a counterpart of
this Amendment;
(b) the Agent shall have executed a counterpart of this Amendment and
shall have received counterparts of this Amendment executed by the Company
and the Banks;
(c) the Agent shall have received a Note dated of even date
herewith executed by the Company and payable to the order of each New
Bank; and
(d) the Agent shall have received from the Company a certificate of
the Secretary or Assistant Secretary of the Company certifying that
attached thereto is (i) a true and complete copy of the general
borrowing resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of the Credit
Agreement, as amended hereby, and (ii) the incumbency and specimen
signature of each officer of the Company executing this Amendment.
SECTION 5. Representations and Warranties True; No Default or Event
--------------------------------------------------------
of Default. The Company hereby represents and warrants to the Agent and
----------
the Banks that after giving effect to the execution and delivery of this
Amendment (a) the representations and warranties set forth in the Credit
Agreement are true and correct on the date hereof as though made on and as
of such date and (b) no Default or Event of Default has occurred and is
continuing.
SECTION 6. Reference to the Credit Agreement and Effect on the Notes.
---------------------------------------------------------
(a) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "herein" or words of
like import shall mean and be a reference to the Credit Agreement, as
amended and affected hereby.
(b) Upon the effectiveness of this Amendment, each reference in the
Notes to "the Credit Agreement" shall mean and be a reference to the
Credit Agreement, as amended and affected hereby.
(c) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement and the Notes to the "Applicable Fee Percentage",
"Applicable Margin" and "Maturity Date" shall mean and be a reference to
such terms as modified pursuant to Section 1.
---------
(d) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement and Notes to a Bank's "Commitment" shall mean and be a
reference to such Bank's New Commitment.
(e) Upon the effectiveness of this Amendment, the Retiring Bank shall
cease to be a Bank and to have any obligation to the Company under the
Credit Agreement and under the Credit Agreement as amended hereby, and
the Company shall have no further obligations to the Retiring Bank
under the Credit Agreement and under the Credit Agreement as amended
hereby, except under any indemnities contained in the Credit Agreement
as amended hereby that expressly provide that they survive the
termination of the Credit Agreement.
(f) The Credit Agreement and the Notes, as amended and affected
hereby, shall remain in full force and effect and are hereby ratified
and confirmed.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY,
THE BANKS AND THE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
SECTION 8. Descriptive Headings. The section headings appearing in
--------------------
this Amendment have been inserted for convenience only and shall be given
no substantive meaning or significance whatever in construing the terms
and provisions of this Amendment.
SECTION 9. FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT
------------------------------
(INCLUDING THE EXHIBITS AND SCHEDULE THERETO), AS AMENDED HEREBY, THE
NOTES, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS, CONSTITUTE A
"LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS
AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF.
SECTION 10. Execution in Counterparts. This Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed effective as of the date first stated herein, by their
respective officers thereunto duly authorized.
TANDY CORPORATION
By: /s/ Loren K. Jensen
------------------------------
Name: Loren K. Jensen
Title: Vice President-Treasurer
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Agent
By: /s/ B.B. Wuthrich
------------------------------
Name: B.B. Wuthrich
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 14,000,000.00 BANK OF AMERICA ILLINOIS, as successor to
Bank of America National Trust and Savings
Association
By: /s/ W. Thomas Barnett
------------------------------
Name: W. Thomas Barnett
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 14,000,000.00 THE BANK OF NEW YORK
By: /s/ Charlotte Sohn
------------------------------
Name: Charlotte Sohn
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 BANK ONE, TEXAS, N.A.
By: /s/ John D. Hudgens
------------------------------
Name: John D. Hudgens
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, SUCCESSOR BY MERGER
TO THE BANK OF TOKYO TRUST COMPANY
By: /s/ M. R. Marron
------------------------------
Name: M. R. Marron
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 14,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert Ivosevich
------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Judith C. E. Kelly
------------------------------
Name: Judith C. E. Kelly
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Jane W. Workman
------------------------------
Name: Jane W. Workman
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 14,000,000.00 MELLON BANK, N.A.
By: /s/ Marc T. Kennedy
------------------------------
Name: Marc T. Kennedy
Title: Assistant Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 NATIONAL WESTMINSTER BANK, Plc
By: /s/ Marilyn A. Windsor
------------------------------
Name: Marilyn A. Windsor
Title: Vice President
NATIONAL WESTMINSTER BANK, Plc
Nassau Branch
By: /s/ Marilyn A. Windsor
------------------------------
Name: Marilyn A. Windsor
Title: Vice President
Commitment: Banks
---------- -----
$ 14,000,000.00 NATIONSBANK OF TEXAS, N.A.
By: /s/ Todd Shipley
------------------------------
Name: Todd Shipley
Title: Senior Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Louis P. Laville, III
------------------------------
Name: Louis P. Laville, III
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 THE SUMITOMO BANK, LIMITED
HOUSTON AGENCY
By: /s/ Harumitsu Seki
------------------------------
Name: Harumitsu Seki
Title: General Manager
<PAGE>
Commitment: Banks
---------- -----
$ 17,000,000.00 TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ B.B. Wuthrich
------------------------------
Name: B.B. Wuthrich
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 TORONTO DOMINION (TEXAS), INC.
By: /s/ David G. Parker
------------------------------
Name: David G. Parker
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 14,000,000.00 CITICORP USA, INC.
By: /s/ Marjorie Futornick
------------------------------
Name: Marjorie Futornick
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 COMMERZBANK, AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By: /s/ A. Bremer
------------------------------
Name: A. Bremer
Title: Senior Vice President
By: /s/ E. Kagerer
------------------------------
Name: E. Kagerer
Title: Assistant Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 UNION BANK OF SWITZERLAND
By: /s/ Michael J Ahearn
------------------------------
Name: Michael J. Ahearn
Title: Managing Director
By: /s/ Freddy Imholz
------------------------------
Name: Freddy Imholz
Title: Vice President
<PAGE>
Commitment: Banks
---------- -----
$ 9,000,000.00 THE SAKURA BANK, LIMITED
By: /s/ Akira Hara
------------------------------
Name: Akira Hara
Title: General Manager
<PAGE>
Retiring Bank
-------------
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Ellen L. Gertzog
------------------------------
Name: Ellen L. Gertzog
Title: Vice President
<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) 1996 1995 1996 1995
- ---------------------------------------- ---------- ---------- ---------- ----------
<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 $ 9,299 $ 37,964 $ 23,779 $ 76,899
Less dividends on preferred stock:
Series B (1,571) (1,631) (3,176) (3,298)
---------- ---------- ---------- ----------
Net income available to common
shareholders for primary earnings per share $ 7,728 $ 36,333 $ 20,603 $ 73,601
========== ========== ========== ==========
Weighted average number of common shares outstanding 60,565 65,763 60,851 62,216
Weighted average number of $2.14 depositary shares,
representing Series C preferred stock, treated as
common stock due to mandatory conversion (c) -- -- -- 4,505
Weighted average number of common shares issuable
under stock option plans, net of assumed treasury stock
repurchases at average market prices 446 477 338 468
---------- ---------- ---------- ----------
Weighted average number of common and common
equivalent shares outstanding 61,011 66,240 61,189 67,189
========== ========== ========== ==========
Net income available per average
common and common equivalent share $ 0.13 $ 0.55 $ 0.34 $ 1.10
========== ========== ========== ==========
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 shareholders $ 7,728 $ 36,333 $ 20,603 $ 73,601
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 (b) 1,631 (b) 3,298
Less additional contribution that would have been required
for the TESOP if Series B preferred stock had been converted (b) (938) (b) (1,870)
---------- ---------- ---------- ----------
Net income available per common and
common equivalent share, as adjusted $ 7,728 $ 37,026 $ 20,603 $ 75,029
========== ========== ========== ==========
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 61,011 66,240 61,189 67,189
Adjusted to reflect assumed exercise of stock
options as of the beginning of the period (b) 164 175 197
Adjustment to reflect assumed conversion of Series B preferred
stock to common stock as of the beginning of the period (b) 1,915 (b) 1,926
---------- ---------- ---------- ----------
Weighted average number of common and common
equivalent shares outstanding, as adjusted 61,011 68,319 61,364 69,312
========== ========== ========== ==========
Fully diluted net income available per average
common and common equivalent share $ 0.13 $ 0.54 $ 0.34 $ 1.08
========== ========== ========== ==========
(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) For the three and six months ended June 30, 1996, these items are anti-dilutive and thus are omitted from the
calculation.
(c) The amount in 1995 represents the pro rata portion of the Series C preferred stock outstanding prior to their
conversion effective March 10, 1995.
</TABLE>
<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
<CAPTIONS>
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- --------------------------
(In thousands, except ratios) 1996 1995 1996 1995
- ----------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Net income $ 9,299 $ 37,964 $ 23,779 $ 76,899
Plus provision for income taxes 5,492 23,766 14,048 48,140
---------- ---------- ---------- ----------
Income before income taxes 14,791 61,730 37,827 125,039
---------- ---------- ---------- ----------
Fixed charges:
Interest expense and amortization of
debt discount 8,887 5,190 16,017 15,850
Amortization of issuance expense 62 134 125 203
Appropriate portion (33 1/3%) of rentals 19,357 17,227 39,152 34,975
---------- ---------- ---------- ----------
Total fixed charges 28,306 22,551 55,294 51,028
---------- ---------- ---------- ----------
Earnings before income taxes and
fixed charges $ 43,097 $ 84,281 $ 93,121 $ 176,067
========== ========== ========== ==========
Ratio of earnings to fixed charges 1.52 3.74 1.68 3.45
========== ========== ========== ==========
Ratio of Earnings to Fixed Charges and
Preferred Dividends:
Total fixed charges, as above $ 28,306 $ 22,551 $ 55,294 $ 51,028
Preferred dividends 1,571 1,631 3,176 8,122
---------- ---------- ---------- ----------
Total fixed charges and preferred dividends $ 29,877 $ 24,182 $ 58,470 $ 59,150
========== ========== ========== ==========
Earnings before income taxes, fixed
charges and preferred dividends $ 43,097 $ 84,281 $ 93,121 $ 176,067
========== ========== ========== ==========
Ratio of earnings to fixed charges and
preferred dividends 1.44 3.49 1.59 2.98
========== ========== ========== ==========
</TABLE>
