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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, 2000
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 Number: 1-5571
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RADIOSHACK CORPORATION
(Formerly 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.)
100 Throckmorton Street, Suite 1800, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 415-3700
------------------------
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, 2000 was 185,718,906.
Index to Exhibits is on Sequential Page No. 15. Total pages 42.
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
(In millions, except per share amounts) 2000 1999 2000 1999
--------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales and operating revenues $1,023.3 $ 886.7 $2,070.6 $1,776.9
Cost of products sold 489.7 418.7 1,021.0 858.2
-------- -------- -------- --------
Gross profit 533.6 468.0 1,049.6 918.7
-------- -------- -------- --------
Expenses (income):
Selling, general and administrative 377.6 340.7 751.6 680.1
Depreciation and amortization 26.2 21.3 51.9 42.3
Interest income (4.2) (4.6) (8.8) (9.1)
Interest expense 12.4 9.6 21.9 17.9
Restricted stock awards -- -- (1.0) (5.1)
-------- -------- -------- --------
412.0 367.0 815.6 726.1
-------- -------- -------- --------
Income before income taxes 121.6 101.0 234.0 192.6
Provision for income taxes 46.2 39.4 88.9 75.1
-------- -------- -------- --------
Net income 75.4 61.6 145.1 117.5
Preferred dividends 1.3 1.4 2.7 2.8
-------- -------- -------- --------
Net income available to common shareholders $ 74.1 $ 60.2 $ 142.4 $ 114.7
======== ======== ======== ========
Net income available per common share:
Basic $ 0.40 $ 0.31 $ 0.76 $ 0.59
======== ======== ======== ========
Diluted $ 0.38 $ 0.30 $ 0.72 $ 0.56
======== ======== ======== ========
Shares used in computing earnings per
common share:
Basic 187.0 194.0 188.0 194.3
======== ======== ======== ========
Diluted 197.2 204.7 198.1 204.5
======== ======== ======== ========
Dividends declared per common share $ 0.055 $ 0.050 $ 0.11 $ 0.10
======== ======== ======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
June 30, December 31, June 30,
2000 1999 1999
(In millions, except for share amounts) (Unaudited) (Unaudited)
-------------------------------------- --------- -------- --------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 85.9 $ 164.6 $ 43.7
Accounts and notes receivable, less allowance
for doubtful accounts 231.5 286.1 204.6
Inventories, at lower of cost or market 1,047.3 861.4 855.9
Other current assets 82.9 91.2 96.4
-------- -------- --------
Total current assets 1,447.6 1,403.3 1,200.6
Property, plant and equipment, at cost, less
accumulated depreciation 451.6 446.8 433.3
Other assets, net of accumulated amortization 306.7 291.9 292.7
-------- -------- --------
Total assets $2,205.9 $2,142.0 $1,926.6
======== ======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt, including current maturities
of long-term debt $ 408.6 $ 188.9 $ 238.6
Accounts payable 225.9 234.8 161.3
Accrued expenses 238.0 350.8 236.4
Income taxes payable 143.0 150.7 104.8
-------- -------- --------
Total current liabilities 1,015.5 925.2 741.1
-------- -------- --------
Long-term debt, excluding current maturities 317.1 319.4 260.4
Other non-current liabilities 53.0 45.7 36.8
-------- -------- --------
Total other liabilities 370.1 365.1 297.2
-------- -------- --------
Minority interest - RadioShack.com 100.0 -- --
Common stock put options 4.0 21.0 27.4
Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares
authorized
Series A junior participating, 300,000, 300,000
and 100,000 shares designated, respectively,
and none issued -- -- --
Series B convertible (TESOP), 100,000 shares
authorized; 71,200, 72,800 and 74,800 shares
issued, respectively 71.2 72.8 74.8
Common stock, $1 par value, 650,000,000 shares
authorized; 236,033,000, 235,840,000 and
235,840,000 shares issued, respectively 236.0 235.8 235.8
Additional paid-in capital 102.9 82.4 6.4
Retained earnings 1,470.1 1,353.3 1,202.1
Treasury stock, at cost; 50,236,000, 45,113,000
and 42,310,000 shares, respectively (1,147.0) (892.3) (638.2)
Unearned deferred compensation (16.0) (20.5) (25.6)
Accumulated other comprehensive gain (loss) (0.9) (0.8) 5.6
-------- -------- --------
Total stockholders' equity 716.3 830.7 860.9
Commitments and contingent liabilities
-------- -------- --------
Total liabilities and stockholders' equity $2,205.9 $2,142.0 $1,926.6
======== ======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
<CAPTION>
Six Months Ended
June 30,
--------------------
(In millions) 2000 1999
------------ -------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 145.1 $ 117.5
Adjustments to reconcile net income to net cash
(used) provided by operating activities:
Depreciation and amortization 51.9 42.3
Restricted stock awards (1.0) (5.1)
Other items 14.0 14.5
Changes in operating assets and liabilities:
Receivables 70.1 10.1
Inventories (185.9) 56.2
Other current assets (9.0) 9.4
Accounts payable, accrued expenses and income taxes (96.0) (124.9)
-------- --------
Net cash (used) provided by operating activities (10.8) 120.0
-------- --------
Investing activities:
Additions to property, plant and equipment (59.2) (44.4)
Proceeds from sale of property, plant and equipment 1.0 2.6
Investment in securities (30.0) (20.0)
Proceeds from sale of securities 17.4 --
Proceeds from sale of minority interest in RadioShack.com 100.0 --
Other investing activities (2.5) (5.0)
-------- --------
Net cash provided (used) by investing activities 26.7 (66.8)
-------- --------
Financing activities:
Purchases of treasury stock (311.1) (130.2)
Exercise of common stock put options (8.6) --
Proceeds from sale of common stock put options 0.5 2.4
Sales of treasury stock to employee stock plans 27.8 21.8
Proceeds from exercise of stock options 3.7 23.3
Dividends paid (22.6) (21.3)
Changes in short-term borrowings, net 222.6 21.6
Additions to long-term borrowings -- 31.9
Repayments of long-term borrowings (6.9) (23.5)
-------- --------
Net cash used by financing activities (94.6) (74.0)
-------- --------
Decrease in cash and cash equivalents (78.7) (20.8)
Cash and cash equivalents, beginning of period 164.6 64.5
-------- --------
Cash and cash equivalents, end of period $ 85.9 $ 43.7
======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of RadioShack
Corporation ("RadioShack" or the "Company") 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, 2000 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. For further information, refer to the consolidated financial
statements and management's discussion and analysis of results of operations and
financial condition included in the Company's 1999 Annual Report on Form 10-K
for the year ended December 31, 1999.
NOTE 2 - BASIC AND DILUTED EARNINGS PER SHARE
The following schedule is a reconciliation of the numerators and denominators
used in computing the basic and diluted earnings per share calculations for the
three and six months ended June 30, 2000 and 1999, respectively. Basic EPS
excludes the effect of potentially dilutive securities while diluted EPS
reflects the potential dilution that would have occurred if securities or other
contracts to issue common stock were exercised, converted, or resulted in the
issuance of common stock that would have then shared in the earnings of the
entity.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 2000 June 30, 1999
-------------------------------- --------------------------------
Income Shares Per Share Income Shares Per Share
(In millions, except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
-------------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 75.4 $ 61.6
Less: Preferred stock dividends (1.3) (1.4)
-------- --------
Basic EPS
Net income available to common
shareholders 74.1 187.0 $ 0.40 60.2 194.0 $ 0.31
======== ========
Effect of dilutive securities:
Dividends on Series B preferred stock 1.3 1.4
Additional contribution required
for TESOP if preferred stock had
been converted (0.8) 6.2 (1.0) 6.5
Stock options 4.0 4.2
-------- -------- -------- --------
Diluted EPS
Net income available to common
shareholders plus assumed conversions $ 74.6 197.2 $ 0.38 $ 60.6 204.7 $ 0.30
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
-------------------------------- --------------------------------
Income Shares Per Share Income Shares Per Share
(In millions, except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
-------------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 145.1 $ 117.5
Less: Preferred stock dividends (2.7) (2.8)
-------- --------
Basic EPS
Net income available to common
shareholders 142.4 188.0 $ 0.76 114.7 194.3 $ 0.59
======== ========
Effect of dilutive securities:
Dividends on Series B preferred stock 2.7 2.8
Additional contribution required
for TESOP if preferred stock had
been converted (1.7) 6.2 (2.1) 6.6
Stock options 3.9 3.6
-------- -------- -------- --------
Diluted EPS
Net income available to common
shareholders plus assumed conversions $ 143.4 198.1 $ 0.72 $ 115.4 204.5 $ 0.56
======== ======== ======== ======== ======== ========
</TABLE>
NOTE 3 - COMPREHENSIVE INCOME
Comprehensive income for the three months ended June 30, 2000 and 1999 was $75.6
million and $68.3 million, respectively, and comprehensive income for the six
months ended June 30, 2000 and 1999 was $145.0 million and $124.1 million,
respectively.
NOTE 4 - REVOLVING CREDIT FACILITY
In the second quarter of 2000, RadioShack expanded its existing $200.0 million
364-day revolving credit facility to $300.0 million and also extended the
maturity date to June 2001. The terms of the 364-day revolving credit facility
remained similar to the previous facility. RadioShack also has a $300.0 million
five-year revolving credit facility maturing June 2003. The revolving credit
facilities are used as backup for the commercial paper program and may also be
utilized for general corporate purposes.
NOTE 5 - RADIOSHACK.COM, LLC
In October 1999, RadioShack launched its e-commerce enabled website,
www.RadioShack.com. On November 10, 1999, RadioShack and Microsoft Corporation
("Microsoft") formed a limited liability company, RadioShack.com, LLC, for the
purpose of marketing and selling electronics products on the Internet.
RadioShack contributed assets and also extended a royalty-free license for
certain trademarks and service marks to RadioShack.com, LLC and Microsoft
contributed $100.0 million on January 4, 2000. RadioShack owns 100% of the
common units of RadioShack.com, LLC, while Microsoft owns 100% of the preferred
units. RadioShack includes RadioShack.com, LLC in its consolidated financial
statements. RadioShack is entitled to receive 75% of the profits and losses of
RadioShack.com, LLC, while Microsoft will receive 25%; however, the preferred
units have certain liquidation rights, which could affect the allocation of
profits and losses among the partners. The preferred units are convertible into
common units at any time and must be converted in the event of certain capital
transactions. In certain circumstances, Microsoft has the option to require
RadioShack to purchase, and RadioShack has the right to purchase, Microsoft's
units. Also, in the event of liquidation, the preferred units have preferential
rights that could allow Microsoft to recover its initial investment.
NOTE 6 - BUSINESS RESTRUCTURING
In the fourth quarter of 1996, the Company initiated certain restructuring
programs to exit its Incredible Universe business, close 21 unprofitable
Computer City stores and close its 53 remaining McDuff stores. These
restructuring programs were undertaken as a result of the highly competitive
environment in the electronics industry at the time. At December 31, 1999, the
balance in the restructuring reserve was $14.5 million and consisted of
remaining estimated real estate obligations to be paid. During the three and six
months ended June 30, 2000, approximately $0.4 million and $2.1 million,
respectively, were charged against the restructuring reserve. An additional $0.8
million, relating to real estate obligations, was added to the reserve during
the second quarter of 2000, leaving a balance in the reserve of $13.2 million at
June 30, 2000.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION ("MD&A")
FACTORS THAT MAY AFFECT FUTURE RESULTS
With the exception of historical information, the matters discussed in MD&A
contain forward-looking statements that involve various risks and uncertainties
and are indicated by words such as "anticipates," "expects," "believes," "will,"
"should," could," and similar words and phrases. Factors that could cause
RadioShack Corporation's ("RadioShack" or the "Company") actual results to
differ materially from management's projections, forecasts, estimates and
expectations include, but are not limited to, the following:
o changes in the amount and degree of promotional intensity exerted by current
competitors and potential new competition from both retail stores and
alternative methods or channels of distribution, such as e-commerce,
telephone shopping services and mail order;
o changes in general U.S. or regional U.S. economic conditions including, but
not limited to, consumer credit availability, interest rates, inflation,
personal discretionary spending levels and consumer sentiment about the
economy in general;
o the inability to successfully implement, market and execute the
RadioShack.com (SM) website and its coordination with RadioShack retail
outlets;
o the presence or absence of new services or products and product features in
the merchandise categories RadioShack sells and unexpected changes in
RadioShack's actual merchandise sales mix;
o the inability to negotiate and maintain profitable contracts or execute
business plans with providers of such services as cellular and PCS
telephones, direct-to-home satellite, Internet access and high-speed
bandwidth;
o the inability to collect the level of anticipated residual revenues,
commissions and bounties for products and services sold by RadioShack;
o the inability to successfully implement and execute RadioShack's strategic
alliances with either Thomson Multimedia and/or Microsoft Corporation
("Microsoft");
o lack of availability or access to sources of supply inventory (as a large
importer of consumer electronic products from Asia, unfavorable trade
imbalances could negatively affect RadioShack);
o the inability to retain and grow an effective management team in a dynamic
environment or changes in the cost or availability of a suitable work force
to manage and support RadioShack's service-driven operating strategies;
o the imposition of new restrictions or regulations regarding the sale of
products and/or services RadioShack sells or changes in tax rules and
regulations applicable to RadioShack; or
o the adoption rate and market demand for high speed Internet and other
Internet-related services.
The United States retail industry and the specialty retail industry in
particular are dynamic by nature and have undergone significant changes over the
past several years. RadioShack's ability to anticipate and successfully respond
to continuing challenges is key to achieving its expectations.
RESULTS OF OPERATIONS
Net Sales and Operating Revenues
RadioShack's overall sales increased 15.4% to $1,023.3 million for the three
months ended June 30, 2000, compared to $886.7 million in the corresponding
prior year period. Overall sales increased 16.5% to $2,070.6 million for the six
months ended June 30, 2000, compared to $1,776.9 million for the same period in
1999. Comparable store sales increased 8.8% and 10.4% for the second quarter and
six month periods ended June 30, 2000, respectively, when compared to the prior
year second quarter and six month periods. These sales increases for both the
three and six months periods were driven primarily by increased sales of audio
and video equipment, including "direct-to-home" satellite systems and services
("DTH"), as well as by increased sales of personal computers. Management
anticipates that sales growth for the remainder of 2000 will come from a broad
assortment of products and product categories, but primarily from audio and
video products, DTH, and wireless communications.
Sales in the audio and video category increased approximately 48% and 57% during
the three and six months ended June 30, 2000, respectively, when compared to the
same periods ended June 30, 1999. This category benefited from the launch of the
RCA Digital Entertainment Center at RadioShack in June 2000, as well as from
strong sales of DTH during the first six months of 2000.
Sales of communications products increased slightly during the three months
ended June 30, 2000 and increased approximately 5% during the six months ended
June 30, 2000, when compared to the same periods in the prior year. During the
second quarter of 2000, increased unit and dollar sales of PCS telephones were
partially offset by a small decrease in unit and dollar sales of cellular
telephones, as well as by lower sales of other communications products such as
short-wave radios, scanners, CB radios and residential telephones. Unit and
dollar sales of wireless telephones are expected to continue to increase for the
remainder of 2000.
Sales in the personal computers and peripherals category increased approximately
26% and 13% during the three and six months ended June 30, 2000, respectively,
when compared to the corresponding periods in the prior year. The average
selling price of personal computers decreased approximately 10% and 14% during
the three and six months ended June 30, 2000, respectively, when compared to
1999. However, increases in CPU units sold and increases in sales of printers
and peripherals during the first and second quarters of 2000 more than offset
these price reductions.
As of July 31, 2000, approximately 4,000 retail outlets had been fixtured for
the Microsoft Internet Center@RadioShack. Management anticipates that the
remaining fixtures for substantially all of the remaining RadioShack
company-owned stores should be installed by the end of August 2000 and that most
of these retail outlets will be able to demonstrate and sell high-speed Internet
access service by the end of 2000.
Sales in the personal electronics category increased approximately 14% and 10%
for the quarter and six months ended June 30, 2000, respectively, when compared
to the quarter and six months ended June 30, 1999, as a result of increased
sales of electronic gift items.
Sales in the parts, accessories and specialty equipment category increased
approximately 6% and 5% during the three and six month periods ended June 30,
2000, respectively, when compared to the same periods in the prior year, due in
part to increased sales of accessories for personal computers and wireless
communication products. Additionally, an increase in sales of audio accessories
associated with the rollout of the RCA Digital Entertainment Center at
RadioShack contributed to the sales increase in the second quarter.
Sales in the services and other category, which includes residuals and income
from prepaid wireless airtime, repair services and extended service contracts,
increased slightly during the first half of 2000, when compared to the first
half of 1999; but decreased for the quarter ended June 30, 2000, when compared
to the previous year. During the second quarter and first six months of 2000,
increases in residual income and sales of extended service plans were offset by
a decrease in sales of prepaid wireless airtime. Management expects this trend
to continue during the remainder of 2000.
RADIOSHACK RETAIL OUTLETS
June 30, March 31, December 31, June 30,
2000 2000 1999 1999
-------- -------- -------- --------
RadioShack
Company-owned 5,060 5,052 5,087 5,020
Dealer/Franchise 2,073 2,091 2,099 2,007
-------- -------- -------- --------
Total number of retail outlets 7,133 7,143 7,186 7,027
======== ======== ======== ========
Gross Profit
During the second quarter of 2000, gross profit dollars increased 14.0% to
$533.6 million, but decreased 0.7 percentage points to 52.1% of net sales and
operating revenues when compared to the second quarter of 1999. For the six
months ended June 30, 2000, gross profit dollars increased 14.2% to $1,049.6
million, but decreased 1.0 percentage point to 50.7% of net sales and operating
revenues, versus the corresponding period in 1999. These gross profit percentage
decreases were partly due to a shift within RadioShack's product offerings to
increased sales of audio and video products, which have a lower gross margin
than RadioShack overall, and were further impacted by promotional markdowns on
private-label audio and video equipment due to the transition to RCA-branded
equipment during the first and second quarters of 2000. These decreases were
partially offset by an increase in residual income, which has 100% gross margin,
as well as by an increase in the gross profit percentages for the parts,
accessories and specialty equipment category. Management anticipates that gross
profit as a percentage of net sales and operating revenues will continue to
decrease during the remainder of 2000, when compared to the prior year, but at a
lower rate than the first half of 2000.
Selling, General and Administrative Expense
Selling, general and administrative ("SG&A") expense increased by $36.9 million
and $71.5 million, respectively, but decreased as a percent of net sales and
operating revenues by 1.5 and 2.0 percentage points, respectively, for the three
and six months ended June 30, 2000, when compared to the same periods in the
prior year. For the three and six months ended June 30, 2000, rent and payroll
expense increased in dollars, but decreased as a percent of sales and operating
revenues when compared to the same periods in the prior year. The decreases as a
percentage of sales and operating revenues were due primarily to the favorable
effect of increased comparable store sales on the expense rate structure during
the periods. Rent expense increased in dollars for the quarter and six months
ended June 30, 2000, due primarily to lease renewals at slightly higher rates
and retail store expansion. Payroll expense increased in dollars during these
same periods due to retail store expansion and increases in commissions, bonuses
and other incentives resulting from strong comparable store sales and profits.
Advertising expense increased in dollars for the quarter ended June 30, 2000,
but decreased as a percentage of net sales and operating revenues. This dollar
increase related primarily to the launch of the RCA Digital Entertainment Center
at RadioShack in June 2000. Advertising expense, both in dollars and as a
percentage of sales and operating revenues, decreased for the six months ended
June 30, 2000. Management anticipates that RadioShack will continue to obtain
positive leverage in its major expense categories for the remainder of 2000,
dependent upon planned continuous sales growth.
Net Interest Expense
Interest expense, net of interest income, for the three and six months ended
June 30, 2000 was $8.2 million and $13.1 million, versus $5.0 million and $8.8
million for the comparable three and six months in 1999. Interest expense
increased $2.8 million and $4.0 million for the three and six months ended June
30, 2000 versus the three and six months ended June 30, 1999, due to higher
nominal interest rates and higher average short-term debt outstanding relating
primarily to increased inventory levels and share repurchases. Interest expense,
net of interest income, is expected to continue to increase moderately during
the remainder of 2000, when compared to the prior year.
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 quarter of 2000 and 1999
were 38.0% and 39.0%, respectively. The decrease resulted primarily from
improved utilization of foreign tax credits and implementation of certain state
income tax initiatives.
FINANCIAL CONDITION
Cash flow used by operating activities approximated $10.8 million in the six
month period ended June 30, 2000, compared to cash flow provided by operating
activities of $120.0 million in the prior year. This decrease in cash flow was
primarily attributable to a $171.6 million decrease in working capital
components during the six month period ended June 30, 2000. Increases in
inventory and decreases in cash flow related to accrued expenses, primarily
attributable to the payment of accrued bonuses in the first quarter of 2000,
were partially offset by the collection of accounts receivable outstanding at
December 31, 1999. The decrease in cash flow from working capital for the first
six months of 2000 was offset by a $40.8 million increase in net income after
adjustments for non-cash items in the first six months of 2000, when compared to
the first six months of 1999.
Inventory at June 30, 2000 increased $185.9 million or 21.6% since December 31,
1999 and increased $191.4 million or 22.4% since June 30, 1999. The increases
since December 31, 1999 and June 30, 1999 were due primarily to additional audio
and video products related to RadioShack's introduction of the RCA Digital
Entertainment Center at RadioShack in June 2000. Additionally, digital cellular
handsets and DTH inventory increased. These increases were partially offset by a
decrease in residential telephone inventory.
Total accounts receivable at June 30, 2000 decreased $54.6 million or 19.1%
since December 31, 1999 and increased $26.9 million or 13.1% since June 30,
1999. The decrease in accounts receivable since December 31, 1999 was due
primarily to the collection of accounts receivable from service providers
outstanding at year end. The increase since June 30, 1999 related primarily to
the acquisition of AmeriLink on July 30, 1999.
Cash provided by investing activities for the six months ended June 30, 2000 was
$26.7 million, compared to cash used by investing activities of $66.8 million in
the previous year. Investing activities for the six months ended June 30, 2000
included capital expenditures totaling $59.2 million, primarily for retail
expansion and upgrades of information systems and, to a lesser extent, capital
expenditures relating to RadioShack's installation service operations.
Management anticipates that capital expenditure requirements will approximate
$70.0 million to $80.0 million for the remainder of 2000, primarily to support
RadioShack store refurbishments and expansions and, to a lesser extent, enhance
information systems. On January 4, 2000, RadioShack received $100.0 million in
cash from Microsoft, which related to Microsoft's investment in RadioShack.com,
LLC, a limited liability company formed by RadioShack and Microsoft for the
purpose of marketing and selling electronics products on the Internet. Proceeds
from the sale of marketable securities provided $17.4 million in cash, while
RadioShack's investment in DigitalConvergence.:Com Inc., an Internet technology
company, used $30.0 million in cash for the six months ended June 30, 2000.
Cash used by financing activities for the six months ended June 30, 2000 was
$94.6 million, compared to $74.0 million in the previous year. Purchases of
treasury stock required $311.1 million for the six months ended June 30, 2000,
compared to $130.2 million during the same period of 1999. The current year's
stock repurchases were partially funded by a net increase in short-term debt, as
well as by $31.5 million received from the sale of treasury stock to employee
stock plans and from stock option exercises. Dividends used $22.6 million of
cash for the six months ended June 30, 2000, compared to a $21.3 million usage
in the same period of the prior year. In October 1999, RadioShack announced a
10% increase in the quarterly dividend payment from $0.050 per common share to
$0.055 per common share, which impacted the January 19, 2000 and April 20, 2000
dividend payments.
In the second quarter of 2000, RadioShack expanded its existing $200.0 million
364-day revolving credit facility to $300.0 million and also extended the
maturity date to June 2001. The terms of the 364-day revolving credit facility
remained similar to the previous facility. RadioShack also has a $300.0
million five-year revolving credit facility maturing June 2003. The revolving
credit facilities are used as backup for the commercial paper program and may
also be utilized for general corporate purposes.
Cash and equivalents at June 30, 2000 were $85.9 million, compared to $164.6
million at December 31, 1999 and $43.7 million at June 30, 1999. Total debt as a
percentage of total capitalization was 50.3% at June 30, 2000, compared to 38.0%
at December 31, 1999 and 36.7% at June 30, 1999. The increase in the
debt-to-capitalization ratio since December 1999 resulted primarily from a
reduction in RadioShack's stockholders' equity due to the share repurchase
programs, as well as to an increase in short-term borrowings related to
RadioShack's inventory purchases and share repurchase programs. Long-term debt
as a percentage of total capitalization was 22.0% at June 30, 2000, compared to
23.9% at December 31, 1999 and 19.2% at June 30, 1999.
The Board of Directors has authorized management to purchase up to 70.0 million
shares of RadioShack common stock through its two existing share repurchase
programs, of which approximately 68.8 million shares, totaling $1,441.3 million,
had been purchased as of June 30, 2000. During the quarter ended June 30, 2000,
RadioShack repurchased approximately 1.4 million shares for an aggregate cost of
$60.6 million and for the six months ended June 30, 2000, RadioShack repurchased
approximately 5.1 million shares totaling $237.6 million under the programs.
Purchases for either or both of these programs may continue to be made from time
to time in the open market and management expects that funding of these programs
will come primarily from excess free cash flow and short-term borrowings, if
needed, as well as from the sale of treasury stock to employee stock plans.
In connection with the share repurchase program, the Board of Directors has
authorized management to sell up to 2.0 million put options on RadioShack common
stock. RadioShack has sold approximately 1.5 million put options since the
inception of the program and 0.1 million put options remained outstanding at
June 30, 2000 at an exercise price of $39.91. These put options expire in
September 2000. Additionally, at its February 23, 2000 meeting, the Board of
Directors authorized management to supplement the put option program with equity
forwards and increased the number of shares subject to put options and equity
forwards to 4.0 million shares. The Board of Directors also extended the
expiration date for the program to no later than December 31, 2002. Put options
and equity forwards will continue to be executed from time to time in order to
take advantage of attractive share price levels, as determined by management.
The timing and terms of the transactions, including maturities, depend on market
conditions, RadioShack's liquidity and other considerations.
On May 18, 2000, the Company's stockholders voted to approve an amendment to
increase the number of authorized shares of RadioShack common stock from 250.0
million shares to 650.0 million shares. The increase in the number of authorized
shares may be used for general corporate purposes, including future stock
splits, if any, and other transactions.
RECENT EVENTS
On August 1, 2000, RadioShack announced a multi-year cellular wireless telephone
alliance with Verizon Wireless, the nation's largest wireless communications
provider. This strategic alliance will allow over 3,700 company-owned RadioShack
stores to consolidate cellular service offerings with a single supplier, thereby
creating training, marketing, inventory, repair and other supply-chain
synergies. Additionally, RadioShack and Verizon Wireless will create and
implement a "store-within-a-store" concept, which management anticipates
launching in mid-2001. In addition to RadioShack's existing relationship with
Sprint PCS, the Verizon Wireless alliance will allow RadioShack to offer a
second national wireless carrier in a majority of the Company's retail stores.
Additionally, RadioShack plans to continue offering cellular service in its
other retail outlets through various cellular carriers in areas not covered by
Verizon Wireless.
NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") in June 1998, which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. SFAS 133 becomes effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. RadioShack does not use derivatives for
speculative purposes and does not expect the impact of SFAS 133 to be material.
In addition, the SEC issued Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" ("SAB 101") in late 1999. SAB 101 provides
guidance in the recognition, presentation and disclosure of revenue in financial
statements. The SEC recently delayed the date that companies are required to
adopt the provisions of SAB 101 to the fourth quarter of fiscal years beginning
after December 31, 1999. RadioShack is currently analyzing the provisions of SAB
101 and the SEC interpretations, as they relate to the Company's revenue
recognition policies. The impact of the adoption of SAB 101 has not been
determined at this time.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
RadioShack has various claims, lawsuits, disputes with third parties,
investigations and pending actions involving allegations of negligence, product
defects, discrimination, infringement of intellectual property rights, tax
deficiencies, violations of permits or licenses, breach of contract and other
matters against RadioShack and its subsidiaries incident to the operation of its
business. The liability, if any, associated with these matters was not
determinable at June 30, 2000. Although occasional adverse settlements or
resolutions may 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 RadioShack's financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
a) The Company held its Annual Meeting of Stockholders on May 18, 2000.
b) (1) The Company elected directors to serve for the ensuing year. Out of
the 193,159,504 eligible votes, 167,052,045 votes were cast at the
meeting either by proxies solicited in accordance with Regulation 14A or
by security holders voting in person. There were no broker non-votes. In
the case of directors, abstentions are treated as votes withheld and are
included in the table. The tabulation of votes of the matters submitted
to a vote of security holders is set forth below:
VOTES VOTES
NAME OF DIRECTOR FOR WITHHELD
------------------------- ------------- -------------
Frank J. Belatti 162,779,602 4,272,443
Ronald E. Elmquist 162,720,273 4,331,772
Robert J. Kamerschen 162,911,671 4,140,374
Lewis F. Kornfeld, Jr. 163,063,857 3,988,188
Jack L. Messman 163,360,398 3,691,647
William G. Morton, Jr. 162,900,848 4,151,197
Thomas G. Plaskett 162,531,893 4,520,152
Leonard H. Roberts 163,348,081 3,703,964
Alfred J. Stein 162,818,454 4,233,591
William E. Tucker 163,126,377 3,925,668
Edwina D. Woodbury 162,894,617 4,157,428
(2) The stockholders voted to approve an amendment to the Restated
Certificate of Incorporation to increase the number of authorized shares
of common stock:
FOR AGAINST ABSTAIN
--- ------- -------
137,350,090 28,672,260 1,029,695
(3) The stockholders voted to approve an amendment to the Restated
Certificate of Incorporation to change the name of the Company to
RadioShack Corporation:
FOR AGAINST ABSTAIN
--- ------- -------
160,748,502 4,943,380 1,360,163
(4) The stockholders voted to approve an amendment to the Compensation Plan
for Executive Officers:
FOR AGAINST ABSTAIN
--- ------- -------
143,001,123 20,694,693 3,356,229
ITEM 5. OTHER INFORMATION
On May 18, 2000, the Company's stockholders approved changing the name of the
Company from Tandy Corporation to RadioShack Corporation. The trading symbol on
the New York Stock Exchange for the Company's common stock was changed from
"TAN" to "RSH" effective May 31, 2000. In addition, the CUSIP number for the
Company's common stock is now 750438 10 3.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits Required by Item 601 of Regulation S-K.
A list of the exhibits required by Item 601 of Regulation S-K and
filed as part of this report is set forth in the Index to Exhibits on
page 15, which immediately precedes such exhibits.
b) Reports on Form 8-K.
On May 18, 2000, the Company announced that its stockholders had
approved changing the name of the Company from Tandy Corporation to
RadioShack Corporation. The Form 8-K was filed on May 18, 2000.
<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.
RadioShack Corporation
(Registrant)
Date: August 11, 2000 By /s/ Richard L. Ramsey
-----------------------
Richard L. Ramsey
Vice President and Controller
(Authorized Officer)
Date: August 11, 2000 /s/ Dwain H. Hughes
-----------------------
Dwain H. Hughes
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
RADIOSHACK CORPORATION
INDEX TO EXHIBITS
Exhibit
Number Description
3a* Certificate of Amendment of Restated Certificate of Incorporation
dated May 18, 2000.
3b* RadioShack Corporation Bylaws Amended and Restated as of July 22,
2000.
10a* Second Amendment to Revolving Credit Agreement (Facility A) dated
as of June 22, 2000 among RadioShack Corporation, the Lenders
listed therein, the Bank of America, N.A., as Agent, Citibank,
N.A., as Syndication Agent, The Bank of New York, as
Documentation Agent, Fleet National Bank, as Managing Agent, and
First Union National Bank and Bank One NA, as Co-Agents, amending
the Revolving Credit Agreement (Facility A) dated as of June 25,
1998 (filed as Exhibit 4n to RadioShack's Form 10Q filed on
August 13, 1998).
10b* Second Amendment to Revolving Credit Agreement (Facility B) dated
as of June 22, 2000 among RadioShack Corporation, the Lenders
listed therein, Bank of America, N.A., as Agent, Citibank, N.A.,
as Syndication Agent, The Bank of New York, as Documentation
Agent, Fleet National Bank, as Managing Agent, and First Union
National Bank and Bank One, NA, as Co-Agents, amending the
Revolving Credit Agreement (Facility B) dated as of June 25, 1998
(filed as Exhibit 4o to RadioShack's Form 10Q filed on August 13,
1998).
11* Statement of Computation of Ratios of Earnings to Fixed Charges.
27.1* Financial Data Schedule.
----------------------------
* filed with this report
<PAGE>
EXHIBIT 3a
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
Tandy Corporation, a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation unanimously adopted
resolutions authorizing proposed amendments to the Restated Certificate of
Incorporation of the Corporation, declaring said amendments to be advisable, and
directed that said amendments be submitted to the stockholders of the
Corporation for their consideration at the annual meeting of stockholders on May
18, 2000. Such resolutions declared it advisable that Article First of the
Restated Certificate of Incorporation be amended so as to be and read as
follows:
"FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is RadioShack Corporation";
and that the first sentence of Article Fourth of the Restated Certificate of
Incorporation be amended so as to be and read as follows:
"FOURTH: The total number of shares which the Corporation shall have
authority to issue is six hundred fifty-one million (651,000,000) of
which one million (1,000,000) shares without par value shall be
Preferred Stock and six hundred fifty million (650,000,000) shares of
the par value of one dollar ($1.00) per share shall be Common Stock."
SECOND: That thereafter, pursuant to resolutions of its Board of Directors, a
majority of the outstanding stock of the Corporation entitled to vote thereon
voted in favor of the amendments, either in person or by proxy, at the annual
meeting of stockholders of the Corporation on May 18, 2000.
THIRD: That said amendments were duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
DATED: May 18, 2000.
By: /s/ Leonard H. Roberts
------------------------------
Leonard H. Roberts
Chairman, President and Chief Executive Officer
ATTEST:
By: /s/ Mark C. Hill
---------------------------------
Mark C. Hill, Corporate Secretary
STATE OF TEXAS
COUNTY OF TARRANT
Be it remembered that on this 18 day of May, 2000, personally came before me,
Debbie Cheak, a notary public in and for the county and state aforesaid, Leonard
H. Roberts, Chairman, President and Chief Executive Officer of Tandy
Corporation, the corporation described in and which executed the foregoing
certificate, known to me personally to be such, and he, the said Leonard H.
Roberts, as such Chairman, President and Chief Executive Officer, duly executed
the said certificate before me and acknowledged the said certificate to be his
act and deed and the act and deed of said corporation and the facts stated
therein are true; that the signature of the Chairman, President and Chief
Executive Officer of said corporation to the foregoing certificate is in the
handwriting of the said Chairman, President and Chief Executive Officer of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and
year aforesaid.
/s/ Debbie Cheak
----------------------------------
Notary Public in and for the State of Texas
MY COMMISSION EXPIRES: 6/17/00
---------
<PAGE>
EXHIBIT 3b
RADIOSHACK CORPORATION BYLAWS
AMENDED AND RESTATED AS OF
JULY 22, 2000
ARTICLE I
OFFICES
SECTION 1. Registered Office. The Registered office of the Corporation in the
State of Delaware shall be located in the City of Wilmington, County of New
Castle, State of Delaware, and the name of the resident agent in charge thereof
shall be The Corporation Trust Company.
SECTION 2. Other Offices. The principal office shall be at 100 Throckmorton
Street, Suite 1800, Fort Worth, Texas. The Corporation may also have offices at
other places as the Board of Directors may from time to time appoint or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meeting. All meetings of the stockholders for the election
of directors shall be held at such place within or without the State of Delaware
as the Board of Directors may designate, provided that at least ten (10) days'
notice must be given to the stockholders entitled to vote thereat of the place
so fixed. Until the Board of Directors shall designate otherwise the annual
meeting of stockholders and the election of directors shall take place at the
office of the Corporation at 100 Throckmorton Street, Suite 1800, Fort Worth,
Texas. Meetings of stockholders for any other purpose may be held at such place
and time as shall be stated in the notice of the meeting.
SECTION 2. Annual Meetings. The annual meeting of the stockholders shall be held
on the Third Thursday in May of each year, if not a legal holiday, and if a
legal holiday, then on the next business day following, at 10:00 A.M., or on
such other date and at such other time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting. At such
annual meetings the stockholders shall elect a Board of Directors by a plurality
vote and shall transact such other business as may properly be brought before
the meeting.
SECTION 3. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or the Certificate
of Incorporation, may be called by the Chairman of the Board or the President,
and shall be called by the Secretary at the request in writing of a majority of
the Board of Directors. Such request shall state the purpose or purposes of the
proposed meeting.
SECTION 4. Notice. Written or printed notice of every meeting of stockholders,
annual or special, stating the time and place thereof, and, if a special
meeting, the purpose or purposes in general terms for which the meeting is
called, shall not be less than ten (10) days before such meeting and shall be
served upon or mailed to each stockholder entitled to vote thereat, at his
address as it appears upon the books of the Corporation or, if such stockholder
shall have filed with the Secretary of the Corporation a written request that
notices intended for him be mailed to some other address, then to the address
designated in such request. Additionally, any notice to stockholders given by
the Corporation shall be effective if given by a form of electronic transmission
consented to by the stockholder to whom the notice is given. Any such consent
shall be revocable by the stockholder by written notice to the Secretary of the
Corporation.
SECTION 5. Quorum. Except as otherwise provided by law or by the Certificate of
Incorporation, the presence in person or by proxy at any meeting of stockholders
of the holders of a majority of the shares of the capital stock of the
Corporation issued and outstanding and entitled to vote thereat shall be
requisite and shall constitute a quorum. If, however, such majority shall not be
represented at any meeting of the stockholders regularly called, the holders of
a majority of the shares present in person or by proxy and entitled to vote
thereat shall have power to adjourn the meeting to another time, or to another
time and place, without notice other than announcement of adjournment at the
meeting, and there may be successive adjournments for like cause and in like
manner until the requisite amount of shares entitled to vote at such meeting
shall be represented. At such adjourned meeting at which the requisite amount of
shares entitled to vote thereat shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
SECTION 6. Votes. Proxies. At each meeting of stockholders every stockholder
shall have one vote for each share of capital stock entitled to vote which is
registered in his name on the books of the Corporation on the date on which the
transfer books were closed, if closed, or on the date set by the Board of
Directors for the determination of stockholders entitled to vote at such
meeting. At each such meeting every stockholder shall be entitled to vote in
person, or may authorize another person or persons to act for him by a proxy
which is in writing or transmitted as permitted by law, including without
limitation, electronically, via telegram, internet, interactive voice response
system, or other means of electronic transmission executed or authorized by such
stockholder or his attorney-in-fact, but no proxy shall be voted after three
years from its date, unless the proxy provides for a longer period. Any proxy
transmitted electronically shall set forth such information from which it can be
determined that such electronic transmission was authorized by the stockholder.
At all meetings of the stockholders, a quorum being present, all matters shall
be decided by majority vote of the shares of stock entitled to vote held by
stockholders present in person or by proxy, except as otherwise required by the
Certificate of Incorporation or the laws of the State of Delaware. Unless so
directed by the chairman of the meeting, or required by the laws of the State of
Delaware, the vote thereat on any question need not be by ballot.
On a vote by ballot, each ballot shall be signed by the stockholder voting, or
in his name by his proxy, if there be such proxy, and shall state the number of
shares voted by him and the number of votes to which each share is entitled. On
a vote by ballot, the chairman shall appoint two inspectors of election, who
shall first take and subscribe an oath or affirmation faithfully to execute the
duties of inspector at such meeting with strict impartiality and according to
the best of their ability and who shall take charge of the polls and after the
balloting shall make a certificate of the result of the vote taken; but no
director or candidate for the office of director shall be appointed as such
inspector.
SECTION 7. Stock List. At least ten (10) days before every election of
directors, a complete list of stockholders entitled to vote at such election,
arranged in alphabetical order, with the residence of each and the number of
voting shares held by each shall be prepared by the Secretary. Such list shall
be open at the place where the election is to be held for said ten (10) days, to
the examination of any stockholder entitled to vote at that election and shall
be produced and kept at the time and place of election during the whole time
thereof, and subject to the inspection of any stockholder who may be present.
SECTION 8. Notice of Stockholder Proposals.
(a) At an annual meeting of the stockholders, only such business shall
be conducted, and only such proposals shall be acted upon, as shall have
been brought before the annual meeting (i) by, or at the direction of,
the Board of Directors or (ii) by any stockholder of record of the
Corporation who complies with the notice procedures set forth in this
Section 8 of these Bylaws. For a proposal to be properly brought before
an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a stockholder's notice must be delivered to, or mailed and
received at, the principal executive offices of the Corporation not less
than sixty (60) days nor more than ninety (90) days prior to the
scheduled annual meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however, that if
less than seventy (70) days' notice or prior public disclosure of the
date of the scheduled annual meeting is given or made, notice by the
stockholder to be timely must be so delivered or received not later than
the close of business on the tenth (10th) day following the earlier of
the day on which such notice of the date of the scheduled annual meeting
was mailed or the day on which such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before the annual meeting (i) a brief
description of the proposal desired to be brought before the annual
meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the Corporation's
books, of the stockholder proposing such business and any other
stockholders known by such stockholder to be supporting such proposal,
(iii) the class and number of shares of the Corporation's stock which
are beneficially owned by the stockholder on the date of such
stockholder notice and by any other stockholders known by such
stockholder to be supporting such proposal on the date of such
stockholder notice, and (iv) any financial interest of the stockholder
in such proposal.
(b) If the presiding officer of the annual meeting determines that a
stockholder proposal was not made in accordance with the terms of this
Section 8, he shall so declare at the annual meeting and any such
proposal shall not be acted upon at the annual meeting.
(c) This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, directors and
committees of the Board of Directors, but, in connection with such
reports, no business shall be acted upon at such annual meeting unless
stated, filed and received as herein provided.
(d) Any stockholder seeking to bring a proposal before an annual meeting
of the Corporation shall continue to be subject, to the extent
applicable, to the requirements of Section 14(a) of the Securities Act
of 1934, as amended, and the regulations thereunder, as well as the
requirements of this Section 8.
ARTICLE III
DIRECTORS
SECTION 1. Number. The business and property of the Corporation shall be
conducted and managed by a Board of Directors consisting of not less than three
(3) or more than fourteen (14) members.
The Board of Directors of the Corporation shall initially be composed of three
(3) directors, but the Board may at any time by resolution increase or decrease
the number of directors to not more than fourteen (14) or less than three (3).
The vacancies resulting from any such increase in the Board of Directors, or an
increase resulting from an amendment of this Section, shall be filled as
provided in Section 3 of this ARTICLE III.
SECTION 2. Term of Office. Except as otherwise provided by law such director
shall hold office until the next annual meeting of stockholders, and until his
successor is duly elected and qualified or until his earlier death or
resignation.
SECTION 3. Vacancies. If any vacancy shall occur among the directors, or if the
number of directors shall at any time be increased, the directors in office,
although less than a quorum, by a majority vote may fill the vacancies or newly
created directorships, or any such vacancies or newly created directorships may
be filled by the stockholders at any meeting. When one or more directors shall
resign from the Board of Directors, effective at a future date, a majority of
the directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each director so
chosen shall hold office as herein provided in the filling of other vacancies.
SECTION 4. Meetings. Meetings of the Board of Directors shall be held at such
place within or without the State of Delaware as may from time to time be fixed
by resolution of the Board of Directors or by the Chairman of the Board, or the
CEO as may be specified in the notice or waiver of notice of any meeting. A
regular meeting of the Board of Directors may be held without notice immediately
following the annual meeting of stockholders at the place where such annual
meeting is held. Regular meetings of the Board may also be held without notice
at such time and place as shall from time to time be determined by resolution of
the Board of Directors.
Special meetings of the Board of Directors may be called by the Chairman of the
Board, the CEO or the Secretary and shall be called by the Secretary on the
written request of two members of the Board of Directors. Notice of any special
meeting shall be given to each director at least (a) twelve (12) hours before
the meeting by telephone or by being personally delivered or transmitted
electronically, via telegram, facsimile, internet or other means of electronic
transmission or (b) three (3) days before the meeting if delivered by mail to
the director's residence or usual place of business. Such notice shall be deemed
to be delivered when deposited in the United States mail so addressed, with
postage prepaid, or when transmitted if sent electronically, via telegram,
facsimile, internet or other means of electronic transmission. Neither the
business to be transacted at, nor the purpose of, any special meeting of the
Board of Directors needs to be specified in the notice or waiver of notice of
such meeting.
Members of the Board of Directors may participate in a meeting of such Board by
means of conference telephone or similar communication equipment or by other
means provided all persons participating in the meeting can hear each other, and
participation in the meeting pursuant hereto shall constitute presence in person
at such meeting.
Any director may waive notice of any meeting by a writing signed by the director
entitled to the notice and filed with the minutes or corporate records. The
attendance at or participation of the director at a meeting shall constitute
waiver of notice of such meeting, unless the director at the beginning of the
meeting or promptly upon his arrival objects to holding the meeting or
transacting business at the meeting.
SECTION 5. Quorum. A majority, but not less than two (2), of the directors shall
constitute a quorum for the transaction of business. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting from time to time without notice other
than announcement of the adjournment at the meeting, and at such adjourned
meeting at which a quorum is present any business may be transacted which might
have been transacted at the meeting as originally notified.
SECTION 6. Compensation. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors, a fixed sum for attendance
at each meeting of the Board of Directors and/or a stated fee as director. No
such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of the Executive
Committee and/or of other committees may be allowed like compensation and
reimbursement of expenses for attending committee meetings.
SECTION 7. Chairman. From its members, the Board of Directors will elect a
chairman to preside over meetings of the shareholders and of the Board. The
Chairman may simultaneously serve as any Officer of the Corporation set forth in
Article V. The Board may elect one or more Vice Chairmen. In the absence of the
Chairman or a Vice Chairman, if any, the Board shall designate a person to
preside at such meetings. The director's fee of the Chairman and the Vice
Chairman, if any, will be set by the Board.
SECTION 8. Director Nominations. Nominations for the election of directors may
be made by the Board of Directors or by the Corporate Governance Committee
appointed by the Board of Directors or by any stockholder entitled to vote in
the election of directors generally. However, any stockholder entitled to vote
in the election of directors generally may nominate one or more persons for
election as directors at a meeting only if written notice of such stockholder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (i) with respect to an election to be held at an
annual meeting of stockholders, ninety (90) days prior to the first anniversary
date of the immediately preceding annual meeting, and (ii) with respect to an
election to be held at a special meeting of stockholders for the election of
directors, the close of business on the tenth (10th) day following the date on
which notice of such meeting is first given to stockholders. Each such notice
shall set forth: (a) the name and address of the stockholder who intends to make
the nomination and of the person or persons to be nominated: (b) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (d) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission as then in
effect; and (e) the consent of each nominee to serve as a director of the
Corporation if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
SECTION 9. Director Stock Ownership in the Corporation. Each director elected or
appointed to the Board of Directors shall own shares of common stock of the
Corporation. On and after the third annual anniversary of a director's election
or appointment to the Board of Directors, each director shall own shares of
common stock of the Corporation having a fair market value of not less than 200%
of the amount of the Board of Directors' annual retainer as then in effect.
ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. Executive Committee. The Board of Directors may, by resolution passed
by a majority of the whole Board, appoint an Executive Committee of two (2) or
more members, to serve during the pleasure of the Board of Directors, to consist
of such directors as the Board of Directors may from time to time designate. The
Chairman of the Executive Committee shall be designated by the Board of
Directors.
SECTION 2. Procedure. The Executive Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall determine the
number of its members constituting a quorum for the transaction of business, and
shall prescribe its own rules of procedure, no change in which shall be made
save by a majority vote of its members. Members of the Executive Committee or
any other committee may participate in a meeting of such Committee by means of
conference telephone or similar communication equipment or by other means
provided all persons participating in the meeting can hear each other, and
participation in the meeting pursuant hereto shall constitute presence in person
at such meeting.
SECTION 3. Powers. During the intervals between the meetings of the Board of
Directors, the Executive Committee shall possess and may exercise all the powers
of the Board of Directors in the management and direction of the business and
affairs of the Corporation, to the extent permitted by law.
SECTION 4. Minutes. The Executive Committee shall keep regular minutes of its
proceedings and all action by the Executive Committee shall be reported to the
Board of Directors at its next meeting. Such action shall be subject to review
by the Board of Directors, provided that no rights of third parties shall be
affected by such review.
SECTION 5. Other Committees. From time to time the Board of Directors, by the
affirmative vote of a majority of the whole Board of Directors, may appoint
other committees for any purpose or purposes, and such committees shall have
such powers as shall be conferred by the resolution of appointment, and as shall
be permitted by law.
ARTICLE V
OFFICERS
SECTION 1. Officers. The Board of Directors shall elect, as officers, a Chief
Executive Officer ("CEO"), a President, a Treasurer and a Secretary, and in
their discretion one or more of the following officers: Executive Vice
Presidents, Senior Vice Presidents, Vice Presidents, Assistant Secretaries, and
Assistant Treasurers. Such officers shall be elected annually by the Board of
Directors at its first meeting following the annual meeting of stockholders, and
each shall hold office until the corresponding meeting of the Board of Directors
in the next year and until his successor shall have been duly elected and
qualified, or until he shall have died or resigned or shall have been removed in
the manner provided herein. The powers and duties of two or more offices may be
exercised and performed by the same person, except the offices of CEO and
Secretary.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors at any regular or special meeting.
SECTION 3. Chief Executive Officer. The Chief Executive Officer shall be the
chief executive officer (CEO) of the Corporation. Subject to the direction of
the Board of Directors, he shall have and exercise direct charge of and general
supervision over the business and affairs of the Corporation and shall perform
such other duties as may be assigned to him from time to time by the Board of
Directors.
SECTION 4. President. The President shall perform such duties as the Board of
Directors may prescribe. In the absence or disability of the CEO, the President
shall perform and exercise the powers of the CEO. In addition, the President
shall perform such duties as from time to time may be delegated to him by the
CEO.
SECTION 5. Executive Vice Presidents. The Executive Vice Presidents shall
perform such duties as the Board of Directors may prescribe. In the absence or
disability of the CEO and President, the Executive Vice Presidents in the order
of their seniority or in such order as may be specified by the Board of
Directors, shall perform the duties of CEO. In addition, the Executive Vice
Presidents shall perform such duties as may from time to time be delegated to
them by the CEO.
SECTION 6. Senior Vice Presidents. The Senior Vice Presidents shall perform such
duties as the Board of Directors may prescribe. In the absence or disability of
the CEO, President, and the Executive Vice Presidents, the Senior Vice
Presidents in the order of their seniority or in such other order as may be
specified by the Board of Directors, shall perform the duties and exercise the
powers of the President. In addition, the Senior Vice Presidents shall perform
such duties as from time to time may be delegated to them by the CEO.
SECTION 7. Vice Presidents. The Vice Presidents shall perform such duties as the
Board of Directors may prescribe. In the absence or disability of the CEO,
President, the Executive Vice Presidents and the Senior Vice Presidents, the
Vice Presidents in the order of their seniority or in such other order as may be
specified by the Board of Directors, shall perform the duties and exercise the
powers of the President. In addition, the Vice Presidents shall perform such
duties as may from time to time be delegated to them by the CEO.
SECTION 8. Treasurer. The Treasurer shall have charge of and be responsible for
all funds, securities, receipts and disbursements of the Corporation, and shall
deposit, or cause to be deposited, in the name of the Corporation, all moneys or
other valuable effects in such banks, trust companies or other depositaries as
shall, from time to time, be selected by the Board of Directors; he may endorse
for collection on behalf of the Corporation, checks, notes and other
obligations; he may sign receipts and vouchers for payments made to the
Corporation; singly or jointly with another person as the Board of Directors may
authorize, he may sign checks of the Corporation and pay out and dispose of the
proceeds under the direction of the Board of Directors; he shall cause to be
kept correct books of account of all the business and transactions of the
Corporation, shall see that adequate audits thereof are currently and regularly
made, and shall examine and certify the accounts of the Corporation; he shall
render to the Board of Directors, the Executive Committee, the Chairman of the
Board, the Vice Chairman, the CEO or to the President, whenever requested, an
account of the financial condition of the Corporation; he may sign with the
Chairman of the Board, the Vice Chairman of the Board, the CEO, the President or
a Vice President, certificates of stock of the Corporation; and, in general,
shall perform all the duties incident to the office of a treasurer of a
Corporation, and such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of their
seniority shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties as the CEO, or the Board of Directors shall prescribe.
SECTION 10. Secretary. The Secretary shall keep the minutes of all meetings of
the stockholders and of the Board of Directors in books provided for the
purpose; he shall see that all notices are duly given in accordance with the
provisions of law and these Bylaws; he shall be custodian of the records and of
the corporate seal or seals of the Corporation; he shall see that the corporate
seal is affixed to all documents, the execution of which, on behalf of the
Corporation, under its seal, is duly authorized and when the seal is so affixed
he may attest the same; he may sign, with the Chairman of the Board, the Vice
Chairman, the CEO, the President or a Vice President, certificates of stock of
the Corporation; and in general he shall perform all duties incident to the
office of a secretary of a corporation, and such other duties as from time to
time may be assigned to him by the Board of Directors or the CEO.
SECTION 11. Assistant Secretaries. The Assistant Secretaries in order of their
seniority shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties as the CEO, or the Board of Directors shall prescribe.
SECTION 12. Subordinate Officers. The Board of Directors may appoint such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
SECTION 13. Compensation. The Board of Directors shall have power to fix the
compensation of all officers of the Corporation. It may authorize any officer,
upon whom the power of appointing subordinate officers may have been conferred,
to fix the compensation of such subordinate officers.
SECTION 14. Removal. Any officer of the Corporation may be removed, with or
without cause, by a majority vote of the Board of Directors at a meeting
called for that purpose.
SECTION 15. Bonds. The Board of Directors may require any officer of the
Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his duties, with one or more sureties and in such amounts as may
be satisfactory to the Board of Directors.
ARTICLE VI
CERTIFICATES OF STOCK
SECTION 1. Form and Execution of Certificates. The interest of each stockholder
of the Corporation shall be evidenced by a certificate or certificates for
shares of stock in such form as may be prescribed from time to time by law and
by the Board of Directors. The certificates of stock of each class and series
now authorized or which may hereafter be authorized by the Certificate of
Incorporation shall be consecutively numbered and signed by either the Chairman
of the Board or the CEO or the President or a Vice President together either
with the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer of the Corporation, and may be countersigned and registered in such
manner as the Board of Directors may prescribe, and shall bear the corporate
seal or a printed or engraved facsimile thereof. Where any such certificate is
signed by a transfer agent or transfer clerk and by a registrar, the signatures
of any such Chairman of the Board, CEO, President, Vice President, Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary upon such certificate may
be facsimiles engraved or printed. The signatures by a transfer agent or
transfer clerk and by a registrar may be either in facsimile form or manual
form. In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall have been placed upon, such certificate or
certificates shall have ceased to be such, whether because of death, resignation
or otherwise, before such certificate or certificates shall have been issued and
delivered, such certificate or certificates may nevertheless be issued and
delivered with the same effect as if such officer or officers had not ceased to
be such at the date of its issue and delivery.
SECTION 2. Transfer of Shares. The shares of the stock of the Corporation shall
be transferred on the books of the Corporation by the holder thereof in person
or by his attorney lawfully constituted, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof or
guaranty of the authenticity of the signature as the Corporation or its agents
may reasonably require. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person whether or not
it shall have express or other notice thereof, except as otherwise expressly
provided by law.
SECTION 3. Closing of Transfer Books and Record Dates. The Board of Directors
may in its discretion prescribe in advance a period not exceeding sixty (60)
days prior to the date of any meeting of the stockholders or prior to the last
day on which the consent or dissent of stockholders may be effectively expressed
for any purpose without a meeting, during which no transfer of stock on the
books of the Corporation may be made; or in lieu of prohibiting the transfer of
stock, may fix in advance a time not more than sixty (60) days prior to the date
of any meeting of stockholders or prior to the last day on which the consent or
dissent of stockholders may be effectively expressed for any purpose without a
meeting, as the time as of which stockholders entitled to notice of and to vote
at such a meeting or whose consent or dissent is required or may be expressed
for any purpose, as the case may be, shall be determined; and all persons who
were holders of record of voting stock at such time and no others shall be
entitled to notice of and to vote at such meeting or to express their consent or
dissent, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any record date fixed as aforesaid. The Board of
Directors may also, in its discretion, fix in advance a date not exceeding sixty
(60) days preceding the date fixed for the payment of any dividend or the making
of any distribution, or for the delivery of evidence of rights, or evidences of
interests arising out of any issuance, change, conversion or exchange of capital
stock, as a record date for the determination of the stockholders entitled to
receive or participate in any such dividend, distribution, rights or interests,
notwithstanding any transfer of any stock on the books of the Corporation after
any record date fixed as aforesaid, or, at its option, in lieu of so fixing a
record date, may prescribe in advance a period not exceeding sixty (60) days
prior to the date for such payment, distribution or delivery during which no
transfer of stock on the books of the Corporation may be made.
SECTION 4. Lost or Destroyed Certificates. In case of the loss or destruction of
any outstanding certificate of stock, a new certificate may be issued upon the
following conditions:
The owner of said certificate shall file with the Secretary of the Corporation
an affidavit giving the facts in relation to the ownership, and in relation to
the loss or destruction of said certificate, stating its number and the number
of shares represented thereby; such affidavit to be in such form and contain
such statements as shall satisfy the Chairman of the Board and Secretary that
said certificate has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so satisfied, the
Chairman of the Board and Secretary shall require such owner to file with the
Secretary a bond in such penal sum and in such form as they may deem advisable,
and with a surety or sureties approved by them, to indemnify and save harmless
the Corporation from any claim, loss, damage or liability which may be
occasioned by the issuance of a new certificate in lieu thereof, or if they deem
it appropriate, to waive the requirement to secure a bond with a surety. Upon
such bond being so filed, a new certificate for the same number of shares shall
be issued to the owner of the certificate so lost or destroyed; and the transfer
agent and registrar of stock, if any, shall countersign and register such new
certificate upon receipt of a written order signed by the said Chairman of the
Board and Secretary, and thereupon the Corporation will save harmless said
transfer agent and registrar in the premises. The CEO or the President or any
Vice President may act hereunder in the stead of the Chairman of the Board, and
an Assistant Secretary in the stead of the Secretary. In case of the surrender
of the original certificate, in lieu of which a new certificate has been issued,
or the surrender of such new certificate, for cancellation, the bond of
indemnity given as a condition of the issue of such new certificate may be
surrendered. A new certificate may be issued without requiring any bond when in
the judgment of the Board of Directors it is proper to do so.
ARTICLE VII
CHECKS, NOTES, ETC.
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors.
SECTION 2. Execution of Contracts, Assignments, etc. All contracts, agreements,
endorsements, assignments, transfers, stock powers, or other instruments (except
as provided in Sections 1 and 3 of this Article VII) shall be signed by the CEO,
the President, any Executive Vice President, Senior Vice President, or Vice
President and by the Secretary or any Assistant Secretary or the Treasurer or
any Assistant Treasurer, or by such other officer or officers, agent or agents,
as shall be thereunto authorized from time to time by the Board of Directors.
SECTION 3. Execution of Proxies. The Chairman of the Board, the CEO, President,
any Executive Vice President, or Senior Vice President or Vice President of the
Corporation may authorize from time to time the signature and issuance of
proxies to vote upon shares of stock of other companies standing in the name of
the Corporation. All such proxies shall be signed in the name of the Corporation
by the Chairman of the Board, the CEO, President, any Executive Vice President,
Senior Vice President or Vice President and by the Secretary or an Assistant
Secretary.
ARTICLE VIII
WAIVERS AND CONSENTS
SECTION 1. Waivers. Whenever under the provisions of any law or under the
provisions of the Certificate of Incorporation of the Corporation or these
Bylaws, the Corporation, or the Board of Directors or any committee thereof, is
authorized to take any action after notice to stockholders or the directors or
the members of such committee, or after the lapse of a prescribed period of
time, such action may be taken without notice and without the lapse of any
period of time if, at any time before or after such action be completed, such
requirements be waived in writing by the person or persons entitled to said
notice or entitled to participate in the action to be taken, or, in the case of
a stockholder, by his attorney thereunto authorized.
SECTION 2. Consents. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee of the Board of Directors may be
taken without a meeting, if prior to such action a written consent thereto is
signed by all members of the Board of Directors or of such committee as the case
may be, and such written consent is filed with the minutes of proceedings of the
Board of Directors or of such committee.
ARTICLE IX
DIVIDENDS AND RESERVE FUNDS
SECTION 1. Dividends. Except as otherwise provided by law or by the Certificate
of Incorporation, the Board of Directors may declare dividends out of the
surplus of the Corporation at such times and in such amounts as it may from time
to time designate.
SECTION 2. Reserve Funds. Before crediting net profits to the surplus in any
year, there may be set aside out of the net profits of the Corporation for that
year such sum or sums as the Board of Directors from time to time in its
absolute discretion may deem proper as a reserve fund or funds to meet
contingencies or for equalizing dividends or for repairing or maintaining any
property of the Corporation or for such other purpose as the Board of Directors
shall deem conducive to the interests of the Corporation.
ARTICLE X
INSPECTION OF BOOKS
The Board of Directors shall determine from time to time whether, and if allowed
when and under what conditions and regulations, the accounts and books of the
Corporation (except such as may by statute be specifically open to inspection)
or any of them shall be open to the inspection of the stockholders; and the
stockholders' rights in this respect are and shall be restricted and limited
accordingly.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall end on the thirty first day of December
each year, unless another date shall be fixed by resolution of the Board of
Directors. After such date is fixed, it may be changed for future fiscal years
at any time or from time to time by further resolution of the Board of
Directors.
ARTICLE XII
SEAL
The corporate seal shall be circular in form and shall contain the name of the
Corporation, the state of incorporation, and the words "Corporate Seal".
ARTICLE XIII
AMENDMENTS
SECTION 1. By Stockholders. These Bylaws may be amended by a majority vote of
the stock entitled to vote and present or represented at any annual or special
meeting of the stockholders at which a quorum is present or represented, if
notice of the proposed amendment shall have been contained in the notice of the
meeting.
SECTION 2. By Directors. Except as otherwise specifically provided in the
Bylaws, if any, adopted by the stockholders, these Bylaws may be amended by the
affirmative vote of a majority of the Board of Directors, at any regular meeting
or special meeting thereof, if notice of the proposed amendment shall have been
contained in the notice of such meeting. If any Bylaw regulating an impending
election of directors is adopted or amended or repealed by the Board of
Directors, there shall be set forth in the notice of the next meeting of the
stockholders for the election of directors the Bylaws so adopted or amended or
repealed together with a concise statement of the changes made.
ARTICLE XIV
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS
The Corporation shall indemnify and reimburse each person, and his heirs,
executors or administrators, who is made or is threatened to be made a party to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he was or is a director, officer,
employee or agent of the Corporation or was or is serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation,
partnership, joint venture, trust, or other enterprise, against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement,
actually or reasonably incurred by him in connection with such action, suit or
proceeding and shall advance the expenses incurred by any officer or director in
defending any such action, suit or proceeding to the full extent permitted by
Section 145 of the General Corporation Law of the State of Delaware as it may be
amended or supplemented from time to time. Such right of indemnification or
advancement of expenses of any such person shall not be deemed exclusive of any
other rights to which he may be entitled under any statute, bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office.
The foregoing provisions of this Article XIV shall be deemed to be a contract
between the Corporation and each person who serves in any capacity specified
therein at any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought based in whole or in part
upon any such state of facts.
<PAGE>
EXHIBIT 10a
SECOND AMENDMENT TO
REVOLVING CREDIT AGREEMENT
(FACILITY A)
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (Facility A) (this "Second
Amendment"), dated as of June 22, 2000, is entered into among RADIOSHACK
CORPORATION (formerly known as Tandy Corporation), a Delaware corporation (the
"Company"), the Lenders listed on the signature pages hereof (the "Lenders"),
CITIBANK, N.A., as Syndication Agent for the Lenders (in such capacity, the
"Syndication Agent"), THE BANK OF NEW YORK, as Documentation Agent for the
Lenders (in such capacity, the "Documentation Agent"), FLEET NATIONAL BANK, as
Managing Agent for the Lenders (in such capacity, the "Managing Agent"), FIRST
UNION NATIONAL BANK and BANK ONE, NA, as Co-Agents for the Lenders (in such
capacity, the "Co-Agents"), and BANK OF AMERICA, N.A. (formerly known as
NationsBank, N.A.), as Agent for the Lenders (in such capacity, the "Agent").
BACKGROUND
A. The Company, certain of the Lenders, the Syndication Agent, the Documentation
Agent, the Managing Agent, the Co-Agents and the Agent are parties to that
certain Revolving Credit Agreement (Facility A), dated as of June 25, 1998, as
amended by that certain First Amendment to Revolving Credit Agreement (Facility
A), dated as of June 24, 1999 (said Revolving Credit Agreement (Facility A), as
amended, the "Credit Agreement"; the terms defined in the Credit Agreement and
not otherwise defined herein shall be used herein as defined in the Credit
Agreement).
B. The Company, the Lenders, the Syndication Agent, the Documentation Agent, the
Managing Agent, the Co-Agents and the Agent desire to (i) make certain
amendments to the Credit Agreement and (ii) add certain new Lenders thereto (the
"New Lenders").
NOW, THEREFORE, in consideration of the covenants, conditions and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are all hereby acknowledged, the Company, the
Lenders, the Syndication Agent, the Documentation Agent, the Managing Agent, the
Co-Agents and the Agent covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definition of "Co-Agents" set forth in Section 1.1 of the Credit
Agreement is hereby amended to read as follows:
"Co-Agents" means, collectively, First Union National Bank and Bank
One, N.A., and any successors thereto.
(b) The definition of "Commitment" set forth in Section 1.1 of the
Credit Agreement is hereby amended to read as follows:
"'Commitment' means, with respect to each Lender, the amount set forth
beneath the name of such Lender on the signature pages hereof or on the
signature pages to any amendment to this Agreement (or, as to any Person
who becomes a Lender after the Execution Date, on the signature page of
the Assignment and Acceptance executed by such Person), as such amount
may be permanently terminated or reduced from time to time pursuant to
Section 2.9 or Section 7.1, and as such amount may be increased or
decreased from time to time by assignment or assumption pursuant to
Section 9.3. The Commitment of each Lender shall automatically and
permanently terminate on the Maturity Date."
(c) The definition of "Maturity Date" set forth in Section 1.1 of the
Credit Agreement is hereby amended to read as follows:
"'Maturity Date' means June 21, 2001, or the earlier of
termination of the Commitments pursuant to Section 7.1."
(d) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Consolidated EBITDA" thereto in proper alphabetical order to read
as follows:
"'Consolidated EBITDA' means, for any period, for the Company and its
Subsidiaries, calculated on a consolidated basis, the sum of (without
duplication) the following: (a) Pretax Net Income (excluding therefrom,
to the extent included in determining Pretax Net Income, any items of
extraordinary gain, including net gains on the sale of assets other than
asset sales in the ordinary course of business, and adding thereto, to
the extent included in determining Pretax Net Income, any items of
extraordinary loss, including net losses on the sale of assets other
than asset sales in the ordinary course of business), plus (b) to the
extent included in determining Pretax Net Income, interest expense
(including interest expense in respect of Capital Leases), plus (c) to
the extent included in determining Pretax Net Income, depreciation and
amortization and other non-cash charges, minus (d) to the extent
included in determining Pretax Net Income, non-cash credits."
(e) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Consolidated Funded Debt" thereto to read as follows:
"'Consolidated Funded Debt' means, at any date, for the Company and its
Subsidiaries on a consolidated basis, the sum of (without duplication)
the following: (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations to pay the deferred purchase price of
property or services, except trade accounts payable in the ordinary
course of business and (d) all rentals in respect of Capital Leases."
(f) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Managing Agent" thereto to read as follows:
"Managing Agent" means Fleet National Bank, and any successors
thereto.
(g) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Pretax Net Income" in proper alphabetical order to read as
follows:
"'Pretax Net Income' means, for any period, net income (or loss) before
taxes of the Company and its Subsidiaries, on a consolidated basis for
such period taken as a single accounting period, excluding, however, net
income (or loss) attributable to any Person (other than the Borrower or
any of its Subsidiaries) in which the Borrower or any of its
Subsidiaries has a minority investment interest, except to the extent of
the amount of cash dividends or other cash distributions actually paid
to the Borrower or such Subsidiary by such other Person."
(h) Section 1.1 of the Credit Agreement is hereby amended by deleting
the following defined terms therefrom: "Consolidated Senior Indebtedness",
"Short-Term Indebtedness", "Stockholders Equity", and "Subordinated
Indebtedness".
(i) Exhibit 6.3 to the Credit Agreement is hereby amended to be in the
form of Exhibit 6.3 attached to this Second Amendment.
(j) Section 6.9 of the Credit Agreement is hereby amended to read as
follows:
"Section 6.9 Consolidated Funded Debt to Consolidated EBITDA
Ratio. The Company will not permit the ratio of (a) Consolidated Funded
Debt as of the end of any fiscal quarter to (b) Consolidated EBITDA for
the four consecutive fiscal quarter period ending as of the end of such
fiscal quarter, to be more than 3.0 to 1."
(k) Section 9.12 of the Credit Agreement is hereby amended to read as
follows:
Section 9.12 No Duties of Syndication Agent, Documentation Agent,
Managing Agent or Co-Agents. The Company and the Lenders acknowledge
that the Syndication Agent, the Documentation Agent, the Managing Agent
and the Co-Agents shall have no duties, responsibilities or liabilities
in their respective capacities as Syndication Agent, Documentation
Agent, Managing Agent and Co-Agents.
(l) The Commitment of each (i) New Lender is the amount beside such New
Lender's name on the signature pages hereof and (ii) each Lender which is not a
New Lender is hereby amended or reaffirmed to be the amount indicated beside
each such Lender's name on the signature pages hereof.
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Company represents and warrants that,
as of the date hereof and after giving effect to the amendments contemplated
by the foregoing Section 1:
(a) the representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct on and as of the date hereof
as made on and as of such date;
(b) no event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) the Company has full power and authority to execute and deliver this
Second Amendment, the Note payable to the order of each New Lender
(collectively, the "New Notes"), the replacement Note payable to the order of
each Lender whose Commitment has been amended pursuant to this Second Amendment
(collectively, the "Replacement Notes"), and the Credit Agreement, as amended
hereby, the New Notes, the Replacement Notes and this Second Amendment
constitute the legal, valid and binding obligations of the Company, enforceable
in accordance with their respective terms, except as enforceability may be
limited by applicable debtor relief laws and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and except as rights to indemnity may be limited by federal or state
securities laws;
(d) neither the execution, delivery and performance of this Second
Amendment, the New Notes, the Replacement Notes or the Credit Agreement, as
amended hereby, nor the consummation of any transactions contemplated herein or
therein, will conflict with any law, rule or regulation, the articles of
incorporation or bylaws of the Company, or any indenture, agreement or other
instrument to which the Company or any of its property is subject; and
(e) no authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person, is required for the
execution, delivery or performance by the Company of this Second Amendment, the
New Notes or the Replacement Notes.
3. CONDITIONS OF EFFECTIVENESS. This Second Amendment shall be effective
as of June 22, 2000, subject to the following:
(a) the Agent shall have received counterparts of this Second Amendment
executed by each of the Lenders;
(b) the Agent shall have received counterparts of this Second Amendment
executed by the Company;
(c) the Agent shall have received a certified resolution of the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Second Amendment, the New Notes and the Replacement Notes;
(d) the Agent shall have received an opinion of counsel to the Company,
in form and substance satisfactory to the Agent, with respect to the matters set
forth in Sections 2(c), (d) and (e) of this Second Amendment;
(e) the Agent shall have received a duly executed (i) New Note for each
New Lender and (ii) Replacement Note for each Lender whose Commitment is being
amended by this Second Amendment;
(f) the Agent shall have received from the Company (i) for each Lender
which is not a New Lender a fee in an amount equal to (A)(1) the product of
0.02% and (2) the amount of the Commitment of such Lender (prior to any increase
in such Commitment provided for in this Second Amendment) plus (B)(1) the
product of 0.04% and (2) the amount of the increase of the Commitment of such
Lender, if any, provided for in this Second Amendment and (ii) for the account
of each New Lender a fee in an amount equal to (A) the product of 0.04% and (B)
the amount of the Commitment for such New Lender; and
(g) the Agent shall have received, in form and substance satisfactory to
the Agent and its counsel, such other documents, certificates and instruments as
the Agent shall require.
4. PURCHASE BY LENDERS. Simultaneously with the satisfaction of
conditions of effectiveness set forth in Section 3 hereof, each Lender shall
purchase or sell (as the case may be), without recourse, an amount of Loans
outstanding such that after giving effect to this Second Amendment, the amount
of each Lender's Commitment under the Credit Agreement which has been utilized
shall be pro rata among the Lenders in the proportions that their respective
Commitments bear to the Total Commitment. The parties hereto agree that the
provisions of Section 9.3 of the Credit Agreement shall not be applicable to the
addition of the New Lenders pursuant to this Second Amendment.
5. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as amended by this Second
Amendment.
(b) The Credit Agreement, as amended by this Second Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
6. COSTS, EXPENSES AND TAXES. The Company agrees to pay on demand all
reasonable costs and expenses of the Agent in connection with the preparation,
reproduction, execution and delivery of this Second Amendment and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for the Agent with respect thereto
and with respect to advising the Agent as to its rights and responsibilities
under the Credit Agreement, as amended by this Second Amendment).
7. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute but one and the same
instrument.
8.GOVERNING LAW: BINDING EFFECT. This Second Amendment shall be governed
by and construed in accordance with the laws of the State of Texas (without
regard to principles of conflicts of law) and the United States of America, and
shall be binding upon the Company, the Syndication Agent, the Documentation
Agent, the Managing Agent, each Co-Agent, the Agent, and each Lender and their
respective successors and assigns.
9. HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Second Amendment for any other purpose.
10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as the date first above written.
RADIOSHACK CORPORATION
By: /s/
-------------------------
Martin Moad
Treasurer
BANK OF AMERICA, N.A., as Agent and as a Lender
Commitment: $30,000,000
By: /s/
-------------------------
Name:
Title:
CITIBANK, N.A., as Syndication Agent and as a Lender
Commitment: $27,500,000.00
By: /s/
-------------------------
Name:
Title:
THE BANK OF NEW YORK, as Documentation Agent and as
a Lender
Commitment: $27,500,000
By: /s/
-------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, as Co-Agent and as a
Lender
Commitment: $20,000,000
By: /s/
-------------------------
Name:
Title:
FLEET NATIONAL BANK, as Managing Agent and as a
Lender
Commitment: $25,000,000
By: /s/
-------------------------
Name:
Title:
BANK ONE, NA, as Co-Agent and as a Lender
Commitment: $20,000,000
By: /s/
-------------------------
Name:
Title:
NATIONAL CITY BANK
Commitment: $17,500,000
By: /s/
-------------------------
Name:
Title:
SUNTRUST BANK
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
FIFTH THIRD BANK
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
WELLS FARGO BANK, N.A.
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
HIBERNIA NATIONAL BANK
Commitment: $7,000,000
By: /s/
-------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
FIRST HAWAIIAN BANK
Commitment: $10,000,000
By: /s/
-------------------------
Name:
Title:
KBC BANK N.V., NEW YORK BRANCH
Commitment: $21,000,000
By: /s/
-------------------------
Name:
Title:
FIRSTAR BANK, N.A.
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
BANCA NAZIONALE DEL LAVORO S.p.A.
Commitment: $13,500,000
By: /s/
-------------------------
Name:
Title:
By: /s/
-------------------------
Name:
Title:
<PAGE>
(Exhibit 6.3)
Investments as of June, 2000
Unpaid balance of secured Real Estate Notes taken in $7,774,359.00
connection with the sale of real property and secured
by the property sold. (two notes with maturities of
twelve to forty-seven months from the date of this
Agreement.)
Unpaid balance of notes taken in connection with sale $2,692,913.00
of fixtures in various Incredible Universe locations
secured by the property sold. (Six notes with
maturities of up to 26 months from the date of this
Agreement.)
Unpaid balance of notes taken in connection with sale $2,893,068.00
of leasehold properties. (One note with maturity of
20 years.)
Investment in Common Stock of Northpoint Communications $6,031,920.00
Group
Investment in Preferred Stock of DIGITAL $30,000,000.00
CONVERGENCE.:COM, INC.
Investment made as part of a community effort to
provide low income housing, including a note maturing
on 9-30-2022, and a limited partnership interest.
Note Amount $ 330,000.00
Ltd. Partnership $1,598,375.00
Total Investments $51,320,635.00
<PAGE>
EXHIBIT 10b
SECOND AMENDMENT TO
REVOLVING CREDIT AGREEMENT
(FACILITY B)
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (Facility B) (this "Second
Amendment"), dated as of June 22, 2000, is entered into among RADIOSHACK
CORPORATION (formerly known as Tandy Corporation), a Delaware corporation (the
"Company"), the Lenders listed on the signature pages hereof (the "Lenders"),
CITIBANK, N.A., as Syndication Agent for the Lenders (in such capacity, the
"Syndication Agent"), THE BANK OF NEW YORK, as Documentation Agent for the
Lenders (in such capacity, the "Documentation Agent"), FLEET NATIONAL BANK, as
Managing Agent for the Lenders (in such capacity, the "Managing Agent"), FIRST
UNION NATIONAL BANK and BANK ONE, NA, as Co-Agents for the Lenders (in such
capacity, the "Co-Agents"), and BANK OF AMERICA, N.A. (formerly known as
NationsBank, N.A.), as Agent for the Lenders (in such capacity, the "Agent").
BACKGROUND
A. The Company, certain of the Lenders, the Syndication Agent, the
Documentation Agent, the Managing Agent, the Co-Agents and the Agent are parties
to that certain Revolving Credit Agreement (Facility B), dated as of June 25,
1998, as amended by that certain First Amendment to Revolving Credit Agreement
(Facility B), dated as of June 24, 1999 (said Revolving Credit Agreement
(Facility B), as amended, the "Credit Agreement"; the terms defined in the
Credit Agreement and not otherwise defined herein shall be used herein as
defined in the Credit Agreement).
B. The Company, the Lenders, the Syndication Agent, the Documentation
Agent, the Managing Agent, the Co-Agents and the Agent desire to make certain
amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are all hereby acknowledged, the Company, the
Lenders, the Syndication Agent, the Documentation Agent, the Managing Agent, the
Co-Agents and the Agent covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definition of "Co-Agents" set forth in Section 1.1 of the Credit
Agreement is hereby amended to read as follows:
"Co-Agents" means, collectively, First Union National Bank and Bank
One, N.A., and any successors thereto.
(b) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Consolidated EBITDA" thereto in proper alphabetical order to read
as follows:
"'Consolidated EBITDA' means, for any period, for the Company and its
Subsidiaries, calculated on a consolidated basis, the sum of (without
duplication) the following: (a) Pretax Net Income (excluding therefrom,
to the extent included in determining Pretax Net Income, any items of
extraordinary gain, including net gains on the sale of assets other than
asset sales in the ordinary course of business, and adding thereto, to
the extent included in determining Pretax Net Income, any items of
extraordinary loss, including net losses on the sale of assets other
than asset sales in the ordinary course of business), plus (b) to the
extent included in determining Pretax Net Income, interest expense
(including interest expense in respect of Capital Leases), plus (c) to
the extent included in determining Pretax Net Income, depreciation and
amortization and other non-cash charges, minus (d) to the extent
included in determining Pretax Net Income, non-cash credits."
(c) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Consolidated Funded Debt" thereto to read as follows:
"'Consolidated Funded Debt' means, at any date, for the Company and its
Subsidiaries on a consolidated basis, the sum of (without duplication)
the following: (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations to pay the deferred purchase price of
property or services, except trade accounts payable in the ordinary
course of business and (d) all rentals in respect of Capital Leases."
(d) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Managing Agent" thereto to read as follows:
"Managing Agent" means Fleet National Bank, and any successors
thereto.
(e) Section 1.1 of the Credit Agreement is hereby amended by adding the
defined term "Pretax Net Income" in proper alphabetical order to read as
follows:
"'Pretax Net Income' means, for any period, net income (or loss) before
taxes of the Company and its Subsidiaries, on a consolidated basis for
such period taken as a single accounting period, excluding, however, net
income (or loss) attributable to any Person (other than the Borrower or
any of its Subsidiaries) in which the Borrower or any of its
Subsidiaries has a minority investment interest, except to the extent of
the amount of cash dividends or other cash distributions actually paid
to the Borrower or such Subsidiary by such other Person."
(f) Section 1.1 of the Credit Agreement is hereby amended by deleting
the following defined terms therefrom: "Consolidated Senior Indebtedness",
"Short-Term Indebtedness","Stockholders Equity", and Subordinated Indebtedness".
(g) Exhibit 6.3 to the Credit Agreement is hereby amended to be in the
form of Exhibit 6.3 attached to this Second Amendment.
(h) Section 6.9 of the Credit Agreement is hereby amended to read as
follows:
"Section 6.9 Consolidated Funded Debt to Consolidated EBITDA Ratio. The
Company will not permit the ratio of (a) Consolidated Funded Debt as of
the end of any fiscal quarter to (b) Consolidated EBITDA for the four
consecutive fiscal quarter period ending as of the end of such fiscal
quarter, to be more than 3.0 to 1."
(i) Section 9.12 of the Credit Agreement is hereby amended to read as
follows:
Section 9.12 No Duties of Syndication Agent, Documentation Agent,
Managing Agent or Co-Agents. The Company and the Lenders acknowledge
that the Syndication Agent, the Documentation Agent, the Managing Agent
and the Co-Agents shall have no duties, responsibilities or liabilities
in their respective capacities as Syndication Agent, Documentation
Agent, Managing Agent and Co-Agents.
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Company represents and warrants that, as of
the date hereof and after giving effect to the amendments contemplated by the
foregoing Section 1:
(a) the representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct on and as of the date hereof
as made on and as of such date;
(b) no event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) the Company has full power and authority to execute and deliver this
Second Amendment, and the Credit Agreement, as amended hereby, and this Second
Amendment constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable debtor relief laws and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law) and except as rights to indemnity may be limited by federal or state
securities laws;
(d) neither the execution, delivery and performance of this Second
Amendment or the Credit Agreement, as amended hereby, nor the consummation of
any transactions contemplated herein or therein, will conflict with any law,
rule or regulation, the articles of incorporation or bylaws of the Company, or
any indenture, agreement or other instrument to which the Company or any of its
property is subject; and
(e) no authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person, is required for the
execution, delivery or performance by the Company of this Second Amendment.
3. CONDITIONS OF EFFECTIVENESS.This Second Amendment shall be effective
as of June 22, 2000, subject to the following:
(a) the Agent shall have received counterparts of this Second Amendment
executed by the Required Lenders;
(b) the Agent shall have received counterparts of this Second Amendment
executed by the Company;
(c) the Agent shall have received a certified resolution of the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Second Amendment;
(d) the Agent shall have received an opinion of counsel to the Company,
in form and substance satisfactory to the Agent, with respect to the matters set
forth in Sections 2(c), (d) and (e) of this Second Amendment; and
(e) the Agent shall have received, in form and substance satisfactory to
the Agent and its counsel, such other documents, certificates and instruments as
the Agent shall require.
4. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as amended by this Second
Amendment.
(b) The Credit Agreement, as amended by this Second Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
5. COSTS, EXPENSES AND TAXES. The Company agrees to pay on demand all
reasonable costs and expenses of the Agent in connection with the preparation,
reproduction, execution and delivery of this Second Amendment and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for the Agent with respect thereto
and with respect to advising the Agent as to its rights and responsibilities
under the Credit Agreement, as amended by this Second Amendment).
6. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute but one and the same
instrument.
7. GOVERNING LAW: BINDING EFFECT. This Second Amendment shall be
governed by and construed in accordance with the laws of the State of Texas
(without regard to principles of conflicts of law) and the United States of
America, and shall be binding upon the Company, the Syndication Agent, the
Documentation Agent, the Managing Agent, each Co-Agent, the Agent, and each
Lender and their respective successors and assigns.
8. HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Second Amendment for any other purpose.
9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as the date first above written.
RADIOSHACK CORPORATION
By: /s/
-------------------------
Martin Moad
Treasurer
BANK OF AMERICA, N.A., as Agent and as a Lender
By: /s/
-------------------------
Name:
Title:
CITIBANK, N.A., as Syndication Agent and as a Lender
By: /s/
-------------------------
Name:
Title:
THE BANK OF NEW YORK, as Documentation Agent and as
a Lender
By: /s/
-------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, as Co-Agent and as a
Lender
By: /s/
-------------------------
Name:
Title:
FLEET NATIONAL BANK, as Managing Agent and as a
Lender
By: /s/
-------------------------
Name:
Title:
BANK ONE, NA, as Co-Agent and as a Lender
By: /s/
-------------------------
Name:
Title:
NATIONAL CITY BANK
By: /s/
-------------------------
Name:
Title:
SUNTRUST BANK
By: /s/
-------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By: /s/
-------------------------
Name:
Title:
FIFTH THIRD BANK
By: /s/
-------------------------
Name:
Title:
WELLS FARGO BANK, N.A.
By: /s/
-------------------------
Name:
Title:
HIBERNIA NATIONAL BANK
By: /s/
-------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/
-------------------------
Name:
Title:
FIRST HAWAIIAN BANK
By: /s/
-------------------------
Name:
Title:
PNC BANK, N.A.
By: /s/
-------------------------
Name:
Title:
<PAGE>
(Exhibit 6.3)
Investments as of June, 2000
Unpaid balance of secured Real Estate Notes taken in $7,774,359.00
connection with the sale of real property and secured
by the property sold. (two notes with maturities of
twelve to forty-seven months from the date of this
Agreement.)
Unpaid balance of notes taken in connection with sale $2,692,913.00
of fixtures in various Incredible Universe locations
secured by the property sold. (Six notes with
maturities of up to 26 months from the date of this
Agreement.)
Unpaid balance of notes taken in connection with sale $2,893,068.00
of leasehold properties. (One note with maturity of
20 years.)
Investment in Common Stock of Northpoint Communications $6,031,920.00
Group
Investment in Preferred Stock of DIGITAL $30,000,000.00
CONVERGENCE.:COM, INC.
Investment made as part of a community effort to provide
low income housing, including a note maturing
on 09-30-2022, and a limited partnership interest.
Note Amount $330,000.00
Ltd. Partnership $1,598,375.00
Total Investments $51,320,635.00
<PAGE>
EXHIBIT 11
<TABLE>
RADIOSHACK CORPORATION
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------
(In millions, except ratios) 2000 1999 2000 1999
---------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Net income $ 75.4 $ 61.6 $ 145.1 $ 117.5
Plus provision for income taxes 46.2 39.4 88.9 75.1
-------- ------- -------- --------
Income before income taxes 121.6 101.0 234.0 192.6
-------- ------- -------- --------
Fixed charges:
Interest expense and amortization of debt discount 12.4 9.6 21.9 17.9
Amortization of issuance expense 0.3 0.2 0.5 0.4
Appropriate portion (33 1/3%) of rentals 17.7 16.9 35.3 33.7
-------- ------- -------- --------
Total fixed charges 30.4 26.7 57.7 52.0
-------- ------- -------- --------
Earnings before income taxes and fixed charges $ 152.0 $ 127.7 $ 291.7 $ 244.6
======== ======= ======== ========
Ratio of earnings to fixed charges 5.00 4.78 5.06 4.70
======== ======= ======== ========
Ratio of Earnings to Fixed Charges and Preferred
Dividends:
Total fixed charges, as above $ 30.4 $ 26.7 $ 57.7 $ 52.0
Preferred dividends 1.3 1.4 2.7 2.8
-------- ------- -------- --------
Total fixed charges and preferred dividends $ 31.7 $ 28.1 $ 60.4 $ 54.8
======== ======= ======== ========
Earnings before income taxes and fixed charges $ 152.0 $ 127.7 $ 291.7 $ 244.6
======== ======= ======== ========
Ratio of earnings to fixed charges and preferred
dividends 4.79 4.54 4.83 4.46
======== ======= ======== ========
</TABLE>
