<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Tandy Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[TANDY LOGO]
TANDY CORPORATION
100 THROCKMORTON STREET, SUITE 1800
FORT WORTH, TEXAS 76102
MARCH 30, 2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, MAY 18, 2000
10:00 AM
RENAISSANCE WORTHINGTON HOTEL
200 WEST SECOND ST.
FORT WORTH, TEXAS 76102
---------------------------
AGENDA
(1) To elect directors to serve for the ensuing year;
(2) To approve an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock;
(3) To approve an amendment to the Restated Certificate of
Incorporation to change the name of the Company to RadioShack
Corporation;
(4) To approve an amendment to the Compensation Plan for Executive
Officers; and
(5) To transact any other business properly brought before the
meeting or any adjournment of the meeting.
Stockholders of record at the close of business on March 21, 2000, will be
entitled to notice of the meeting and the right to vote at the meeting.
By Order of the Board of Directors
Mark C. Hill
Senior Vice President, Corporate
Secretary and General Counsel
March 30, 2000
Regardless of whether you plan to attend the annual meeting, please COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED. In the
event you decide to attend the meeting, you may, if desired, revoke the proxy
and vote your shares in person.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROXY STATEMENT PAGE
<S> <C> <C>
o ITEM 1 Election of Directors 2
Security Ownership of Certain Beneficial Owners of Company Voting Securities 4
Section 16(a) Beneficial Ownership Reporting Compliance 6
Director Attendance 7
Director Compensation 7
Board Committees 8
Statement on Corporate Governance 10
Audit and Compliance Committee Matters 12
Organization and Compensation Committee Report on Compensation of
Executive Officers 13
Executive Compensation 16
Option Grants in the Last Year 17
Option Exercises in the Last Year and Year-End Option Values 18
Retirement and Deferred Compensation 19
Deferred Compensation Plans and Other Agreements 20
Change in Control Protections 21
Compensation Committee Interlocks and Insider Participation 24
Performance Graph 24
Certain Transactions with Management and Others 25
o ITEM 2 Approval of an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares
of common stock 26
o ITEM 3 Approval of an amendment to the Restated Certificate of
Incorporation to change the name of the Company to
RadioShack Corporation 28
o ITEM 4 Approval of an amendment to the Compensation Plan for
Executive Officers 29
Independent Accountants 30
Voting Rights and Proxy Information 30
Stockholder Proposals and Nominations for Directors for the
2001 Annual Meeting 32
Annual Report 32
Other Matters 33
------------------------------------------------------------------------
o Denotes items to be voted on at the meeting.
</TABLE>
<PAGE> 4
PROXY STATEMENT
TANDY CORPORATION
100 Throckmorton Street, Suite 1800
Fort Worth, Texas 76102
ANNUAL MEETING OF STOCKHOLDERS OF TANDY CORPORATION
TO BE HELD ON THURSDAY, MAY 18, 2000
This Proxy Statement is being furnished to stockholders of Tandy Corporation, a
Delaware corporation, in connection with the solicitation of proxies by the
Board of Directors of the Company from holders of record of the Company's voting
securities as of the close of business on March 21, 2000, for use at the Annual
Meeting of Stockholders of the Company to be held on Thursday, May 18, 2000, at
10:00 a.m. (Central Daylight Savings Time) at the Renaissance Worthington Hotel,
200 West Second Street, Fort Worth, Texas 76102, and at any resumption of the
meeting after adjournment or postponement thereof. This Proxy Statement is first
being mailed to the holders of the Company's voting securities on or about March
30, 2000.
PURPOSES OF THE ANNUAL MEETING
Holders of shares of Company common stock entitled to vote at the Annual Meeting
will be asked to consider and to vote upon the following matters:
I. the election of 11 directors of the Company to serve until the
next annual meeting of stockholders or until their successors
are elected;
II. the approval of an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock;
III. the approval of an amendment to the Restated Certificate of
Incorporation to change the name of the Company to RadioShack
Corporation;
IV. the approval of an amendment to the Compensation Plan for
Executive Officers; and
V. such other business as may properly come before the meeting.
The Board unanimously recommends a vote FOR each of these proposals.
As of the date of this Proxy Statement, the Board knows of no other business
that will come before the Annual Meeting.
<PAGE> 5
ITEM 1
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
All 11 directors are to be elected at the annual meeting to hold office until
the next annual meeting of stockholders and until their successors have been
duly elected and qualified. Currently there are 11 Directors. It is the
intention of the persons named in the accompanying form of proxy card to vote
for the election of all 11 nominees listed below for election as directors of
the Company unless authority to so vote is withheld. All nominees have indicated
their willingness to serve for the ensuing term. If any nominee is unable or
declines to serve as a director at the date of the Annual Meeting, the persons
named in the proxy card have the right to use their discretion to vote for a
substitute.
The nominees for directors of the Company are listed below:
<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION
(2) PUBLICLY HELD COMPANY DIRECTOR
NAME BOARD MEMBERSHIPS AGE SINCE
---- --------------------- --- --------
<S> <C> <C> <C> <C>
Frank J. Belatti (1) Chairman and Chief Executive Officer of AFC 52 1998
Enterprises, Inc. (parent company of Popeye's
Chicken & Biscuits, Church's Chicken, Seattle
Coffee Company and Cinnabon International).
Ronald E. Elmquist (1) Chairman, Chief Executive Officer and President of 53 1997
Keystone Automotive Inc. since June 1998.
Previously President, Global Food Service-
Campbell Soup Company and Corporate Vice
President, Campbell Soup Company from January
1994, to April 1998.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION
(2) PUBLICLY HELD COMPANY DIRECTOR
NAME BOARD MEMBERSHIPS AGE SINCE
---- --------------------- --- --------
<S> <C> <C> <C> <C>
Robert J. Kamerschen (1) Chairman & Chief Executive Officer DIMAC Holdings 64 1999
since October, 1999. Senior Consultant ADVO, Inc.
since June 1999. Previously Chairman ADVO, Inc. from
January 1999 to June 1999 and Chief Executive Officer
ADVO, Inc. from November 1988 to January 1999.
(2) IMS Health, Inc.; Micrografx, Inc. and R. H.
Donnelley Corp.
Lewis F. Kornfeld, Jr. (1) Retired Vice Chairman, Tandy Corporation and 83 1975
Retired President, RadioShack Division.
Jack L. Messman (1) President and Chief Executive Officer of 60 1993
Cambridge Technology Partners, Inc. since July 1999.
Previously Chairman and Chief Executive Officer, Union
Pacific Resources Group Inc. until July, 1999.
Previously President and Chief Executive Officer of
Union Pacific Resources Group Inc. from May 1995, to
October 1996 and President and Chief Executive Officer,
Union Pacific Resources Company from 1991, through May
1995.
(2) Cambridge Technology Partners, Inc.; Novell, Inc.;
Safeguard Scientifics, Inc. and US Data Corporation.
William G. Morton, Jr. (1) Chairman and Chief Executive Officer, Boston 63 1987
Stock Exchange, Inc.
(2) 12 funds managed by Morgan Stanley Dean Witter
Investment Management, Inc.
Thomas G. Plaskett (1) Chairman of the Board, President and CEO, Probex 56 1986
Corp. since November, 1999; Managing Director, Fox Run
Capital Associates and Business Consultant since
November 1991. Vice Chairman, Legend Airlines, Inc.
since June 1997 and Executive Vice President since
September 1999. Previously Chairman Greyhound Lines,
Inc., from March 1995 to March, 1999.
(2) Probex Corporation and Smart & Final Inc.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION
(2) PUBLICLY HELD COMPANY DIRECTOR
NAME BOARD MEMBERSHIPS AGE SINCE
---- --------------------- --- --------
<S> <C> <C> <C> <C>
Leonard H. Roberts (1) Chairman Board of Directors, Tandy Corporation since 51 1997
May 1999; Chief Executive Officer of Tandy Corporation
since January 1999; President, Tandy Corporation since
December 1995; President, RadioShack since July 1993.
Alfred J. Stein (1) Previously Chairman and Chief Executive Officer, 67 1981
VLSI Technology, Inc. until June, 1999.
William E. Tucker (1) Chancellor Emeritus, Texas Christian University 67 1985
since July 1998. Previously Chancellor, Texas
Christian University until June 1998.
(2) Justin Industries, Inc.
Edwina D. Woodbury (1) President, The Chapel Hill Press, Inc. since July 48 1998
1999. Previously, Consultant from January 1999 through
January 2000 and Executive Vice President-Business
Process Redesign, Avon Products, Inc. from February
1998, through December 1998. Senior Vice President,
Chief Financial and Administrative Officer, Avon
Products, Inc. from November 1993, to February 1998.
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
OF COMPANY VOTING SECURITIES
The following table sets forth, as of February 29, 2000, certain information
with respect to the beneficial ownership of the Company's voting securities held
by (i) each current director of the Company, (ii) the Chairman, President and
Chief Executive Officer and the four most highly compensated current Executive
Officers of the Company for the year ended December 31, 1999, (iii) the
Company's current directors and Executive Officers as a group, and (iv) persons
known to the Company to own beneficially more than 5% of any class of the
Company's voting securities, except for the Tandy Fund Trustee, which holds 100%
of the Company's outstanding Series B TESOP Convertible Preferred Stock (the
"TESOP") for the benefit of Tandy Fund participants. On May 25, 1999, the
Company's Board of Directors declared a two-for-one split of the Company's
common stock for stockholders of record at the close of
4
<PAGE> 8
business on June 1, 1999. All references to Company common stock, previously
awarded stock options, restricted stock awards and any other agreements payable
in Company common stock reflect the June 1999 split.
<TABLE>
<CAPTION>
------------------------------------------
Amount and Nature of
Common Stock Beneficially Owned(2)(3)
------------------------------------------
Number of
Shares Right to Common
Beneficially Acquire Percent of Stock Units
Owned (1) Class (4)
------------ -------- ---------- -----------
<S> <C> <C> <C> <C>
DIRECTORS AND OTHER NAMED EXECUTIVE OFFICERS
Frank J. Belatti, Director 500
Ronald E. Elmquist, Director 0 11,999 * -0-
Robert J. Kamerschen, Director 7,000 29,332 * 3,352
Lewis F. Kornfeld, Jr., Director (5) 35,400 548
Jack L. Messman, Director 11,396 15,999 * -0-
William G. Morton, Jr., Director 12,000 31,999 * 10,830
Thomas G. Plaskett, Director 15,404 57,999 * 7,999
Leonard H. Roberts, Chairman, President and Chief 161,639 38,671 * -0-
Executive Officer; President RadioShack 632,720 * 148,083
Alfred J. Stein, Director 16,387
William E. Tucker, Director 32,548 91,999 * 2,118
Edwina D. Woodbury, Director 1,000 91,999 * -0-
David Christopher, Executive Vice President (6) 346,699 11,999 * 2,457
David J. Edmondson, Senior Vice President 5,172 279,228 * 39,829
Dwain H. Hughes, Senior Vice President and 67,248 84,516 * 12,238
Chief Financial Officer (7) 181,960 * 44,915
Robert M. McClure, Senior Vice President-Tandy 59,213
Retail Services 100,058 * 12,082
Directors and Executive Officers as a Group (27 people) 1,076,011
2,138,471 1.72% 384,983
STOCKHOLDERS
(8) AMVESCAP PLC, 1315 Peachtree Street N.E., Atlanta,
Georgia 30309 9,756,016 5.05%
(9) Putnam Investments, Inc., One Post Office Square,
Boston, Massachusetts 02109 17,396,766 9.00%
</TABLE>
- ---------------------------------
* Less than 1%
(1) Shares Executive Officers and directors could acquire by exercising stock
options within 60 days of February 29, 2000.
(2) The address of each director and named executive officer is c/o Tandy
Corporation, 100 Throckmorton Street, Suite 1800, Fort Worth, Texas 76102.
5
<PAGE> 9
(3) Unless otherwise noted, each person has sole investment and voting power
with respect to the shares indicated.
(4) Common stock units are not shares of common stock and have no voting power
and this information is set forth as of December 31, 1999. The units for
directors represent directors fee deferrals and partial Company matches
under the Directors' Unfunded Deferred Compensation Plan. The units for
Executive Officers represent in some cases restricted stock deferrals and
also salary and bonus deferrals and Company partial matches under either or
both the Tandy Corporation Executive Deferred Compensation Plan and the
Tandy Corporation Executive Deferred Stock Plan.
(5) 15,000 shares of Company common stock are owned by a trust of which Mr.
Kornfeld is the sole beneficiary.
(6) Includes 12,000 shares held by Mr. Christopher's spouse.
(7) Includes 32,018 shares held by Mr. Hughes' spouse.
(8) According to Schedule 13G dated February 3, 2000, AMVESCAP PLC, a parent
holding company, and an affiliated group share voting and dispositive
powers over 9,756,016 shares.
(9) According to Amendment No. 1 to Schedule 13G dated February 7, 2000,
Putnam Investments Inc., a Massachusetts corporation and a wholly owned
subsidiary of Marsh & McLennon Companies, Inc., owns Putnam Investment
Management, Inc. and The Putnam Advisory, Inc., mutual funds which hold
joint depositive powers over all the shares. The Trustees of these two
mutual funds have sole voting power over the shares held by the respective
fund, except for The Putnam Advisory, Inc., which shares voting power with
its institutional clients.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States the Company's directors,
Executive Officers and all persons holding 10% or more of Company common stock
are required to report their ownership of the Company's securities and any
changes in that ownership to the Securities and Exchange Commission and the New
York Stock Exchange. Specific due dates for these reports have been established
and the Company is required to report in this Proxy Statement any failure to
file by these dates during the year ended December 31, 1999. These filing
requirements were satisfied by the Company's present directors and Executive
Officers, with the exception of Messrs. Cash, a former director of the Company,
Elmquist, Messman and Morton who inadvertently failed to report the receipt of
deferred stock units under the Tandy Corporation Unfunded Deferred Compensation
Plan for Directors, due to the Company's failure to notify them of such receipt.
All required reports to reflect this receipt have now been filed.
6
<PAGE> 10
DIRECTOR ATTENDANCE
The Board held five meetings during 1999. All nominees for director, after being
elected or appointed to office in 1999, attended at least 75% of the meetings of
the Board and committee meetings of which they were a member. Mr. John V. Roach,
a former Chairman of the Company's Board of Directors, served on the Executive
Committee until his retirement on May 20, 1999 and Mr. James I. Cash served on
the Audit and Compliance Committee and the Organization and Compensation
Committee until his retirement on September 1, 1999.
DIRECTOR COMPENSATION
The following table represents components of non-employee director compensation:
<TABLE>
<CAPTION>
COMPONENTS NOTE COMPENSATION
- ---------- ---- ------------
<S> <C> <C>
Annual Board Retainer 1 $24,000
Annual Option Grant 2 One option to purchase 16,000 shares
Annual Retainer for Committee Chair $2,500
Board Attendance Fee (each in person meeting) $1,000
Board Attendance Fee (each conference call meeting) 3 $250
Committee Attendance Fee (each in person meeting) 3 $500
Committee Attendance Fee (each conference call meeting) 3 $250
Expenses of Attendance Reimbursement of expenses incurred
New Director Grants 20,000 shares of common stock on date the
director attends first board meeting
</TABLE>
- ----------------------
1. Each non-employee director may elect before May 1 of each year to have 50%
or 100% of this annual retainer fee paid in shares of Company common stock.
2. Each non-employee director is automatically granted a non-qualified stock
option to purchase 16,000 shares of Company common stock on the first
business day in September of each year that he or she serves as a director.
The option exercise price of all options granted to non-employee directors
is set at the fair market value of a share of Company common stock. The
options vest in three equal increments on the first, second and third
annual anniversaries of the date of grant.
3. These fees apply if the committee meeting is held more than 24 hours before
or after a board meeting.
7
<PAGE> 11
NEW DIRECTORS
Each new non-employee director also receives a one time grant of an option to
purchase 20,000 shares of Company common stock on the date he or she attends his
or her first Board meeting.
UNFUNDED DEFERRED COMPENSATION PLAN FOR DIRECTORS
Under the Tandy Corporation Unfunded Deferred Compensation Plan for Directors,
non-employee directors may elect to defer payment of all or a specified part of
their annual retainer fees and meeting fees payable for services rendered to the
Company. Interest is credited for fees deferred in cash at the rate of 1% below
the prime rate. If a director elects to defer payment of fees payable in Company
common stock in excess of three years, the Company will make an additional
contribution of 25% of the amount deferred in Company common stock. Upon a
change in control of the Company a director will receive any deferred fees and
the additional Company contribution in a lump sum.
BOARD DIRECTORS COMMITTEES
The Board has four standing committees: the Audit and Compliance Committee; the
Corporate Governance Committee; the Executive Committee and the Organization and
Compensation Committee. Actions taken by any of these Committees are reported to
the Board and the Board receives a copy of the minutes of all Committee
meetings. Membership in each of the committees is as follows:
AUDIT AND COMPLIANCE COMMITTEE EXECUTIVE COMMITTEE
Mr. Elmquist (Chair) Mr. Roberts (Chair)
Mr. Messman Mr. Elmquist
Mr. Plaskett Mr. Kornfeld
Ms. Woodbury Mr. Messman
Mr. Morton
CORPORATE GOVERNANCE COMMITTEE ORGANIZATION AND COMPENSATION COMMITTEE
Mr. Tucker (Chair) Mr. Messman (Chair)
Mr. Belatti Mr. Kamerschen
Mr. Elmquist Mr. Morton
Mr. Kornfeld Mr. Stein
Mr. Plaskett Ms. Woodbury
Mr. Stein
8
<PAGE> 12
AUDIT AND COMPLIANCE COMMITTEE 4 meetings in calendar year 1999
1. Reviews the engagement of the independent accountants;
2. Reviews the scope and timing of the audit of the independent accountants;
3. Reviews the non-audit related services provided by the independent
accountants;
4. Reviews the report of the independent accountants upon completion of its
audit;
5. Reviews the Company's policies and procedures with respect to internal
auditing, accounting and financial controls, and compliance with applicable
laws and ethical business practices;
6. Reviews major litigation and risk management policies and procedures,
including insurance coverages; and
7. Reviews with the independent accountants and management the Company's
policies and procedures with respect to laws and ethical business practices.
EXECUTIVE COMMITTEE 1 meeting in calendar year 1999
Exercises all powers of the Board when it is impractical to assemble the full
Board unless otherwise prohibited by law or involves amending the charter of any
Board Committee.
ORGANIZATION AND COMPENSATION COMMITTEE 6 meetings in calendar year 1999
1. Reviews and makes recommendations to the Board concerning compensation plans
for executive management;
2. Reviews management's appointments and promotions to officer positions; and
3. Approves annual salary increases, bonuses, stock option and restricted stock
awards in accordance with existing applicable plans.
CORPORATE GOVERNANCE COMMITTEE 6 meetings in calendar year 1999
1. Reviews and nominates to the Board candidates to be directors of the Company
and compensation of Board members;
9
<PAGE> 13
2. Approves or denies requests by Company officers to serve on the boards of
outside companies;
3. Recommends to the Board the members and chair persons of all standing
committees;
4. Recommends the duties to be included in the charter of new standing
committees;
5. Assists the independent directors in conducting a self-evaluation of the
effectiveness of the Board and each of its members; and
6. Reviews with management the overall effectiveness of the organization of the
Board and the conduct of the Board's business and makes recommendations to
the Board based on its evaluation.
STATEMENT ON CORPORATE GOVERNANCE
The Board of Directors has for many years followed specific policies regarding
corporate governance. The Board of Directors has incorporated these policies and
procedures into its Statement on Corporate Governance. To obtain a complete
Statement on Corporate Governance, please contact Ms. Carolyn Hoopes, Assistant
Corporate Secretary, 100 Throckmorton Street, Suite 1723, Fort Worth, Texas
76102-2816, Telephone (817) 415-2758 or visit our website at www.Tandy.com. The
following is a summary of the material items of this Statement on Corporate
Governance.
BOARD RESPONSIBILITIES
The principal responsibility of the Board of Directors is as follows:
Promote and act in the best interests of all stockholders of the Company through
careful selection and oversight of executive management including the further
development of compensation plans based on performance. To consider and monitor
the potential impact of Board and executive management decisions on the
Company's stockholders, employees, customers, suppliers, lenders and the
communities in which it operates.
BOARD OVERSIGHT OF MANAGEMENT
1. Evaluate the Chief Executive Officer and other corporate officers annually.
2. Review and approve the broad strategic and financial objectives of the
Company through a collaborative process with executive management.
10
<PAGE> 14
3. Review and approve compensation plans of any officer of the Company who is
paid $100,000 or more per year. The Board believes that compensation plans
should be tied directly to the Company's performance.
4. Review the succession plans for executive management so that continuity in
the operation of the Company can be maintained in the event of untimely
displacement of key management members.
BOARD COMPOSITION
1. The Company's By-Laws provide that the Board of Directors must have at least
three and not more than 14 members.
2. Four standing committees have been established by the Board: Audit and
Compliance Committee, Organization and Compensation Committee, Corporate
Governance Committee and the Executive Committee.
3. New committees may be established by the Board at any time.
BOARD INDEPENDENCE
1. It is the Board's goal that at least 75% of the members of the Board be
independent.
2. Each of the independent directors, in the opinion of the Board, is
independent of management and free from any relationship that would
interfere with the exercise of independent judgment.
3. Only independent directors are eligible to serve as members of the Audit and
Compliance Committee, the Organization and Compensation Committee, and the
Corporate Governance Committee under the applicable rules and regulations of
the Securities and Exchange Commission, the New York Stock Exchange and the
Internal Revenue Service. Each independent director is eligible to serve on
each of these Committees.
DIRECTORS
1. Under the Company's By-Laws, all directors stand for re-election every year.
2. The Board of Directors has exclusive responsibility for selecting its own
members.
11
<PAGE> 15
3. Within three years of their election to the Board, directors are required to
own shares of Company common stock that are at least equal in value to 200%
of the Board of Director's annual retainer fee then in effect.
4. Directors should not stand for re-election after age 70. This policy does
not apply to directors who were over the age of 70 as of January 1, 1998.
AUDIT AND COMPLIANCE COMMITTEE MATTERS
AUDIT AND COMPLIANCE COMMITTEE REPORT
The Audit and Compliance Committee reports as follows with respect to the
Company's 1999 audited financial statements:
o The Committee has reviewed and discussed with the Company's management
the Company's 1999 audited financial statements;
o The Committee has discussed with the independent auditors
(PricewaterhouseCoopers LLP) the matters required to be discussed by
SAS 61 which includes, among other items, matters related to the
conduct of the audit of the Company's financial statements;
o The Committee has received written disclosures and the letter from the
independent auditors required by ISB Standard No. 1 (which relates to
the auditor's independence from the Company and its related entities)
and has discussed with the auditors the auditors' independence from the
Company; and
o Based on review and discussions of the Company's 1999 audited financial
statements with management and discussions with the independent
auditors, the Audit and Compliance Committee recommended to the Board
of Directors that the Company's 1999 audited financial statements be
included in the Company's Annual Report on Form 10-K.
AUDIT AND COMPLIANCE COMMITTEE MEMBERS
Ronald E. Elmquist (Chair) Thomas G. Plaskett
Jack L. Messman Edwina D. Woodbury
12
<PAGE> 16
AUDIT AND COMPLIANCE COMMITTEE CHARTER
The Board of Directors has adopted a written charter for the Audit and
Compliance Committee, a copy of which is attached to this Proxy Statement as
Exhibit A. The Board of Directors reviews and approves changes to the Audit and
Compliance Committee charter annually.
INDEPENDENCE OF AUDIT AND COMPLIANCE COMMITTEE MEMBERS
Mr. Elmquist, Mr. Messman, Mr. Plaskett and Ms. Woodbury, all of whom are
members of the Audit and Compliance Committee, are independent as recently
defined by the applicable New York Stock Exchange's (NYSE) listing standards.
Mr. Messman is President and Chief Executive Officer of Cambridge Technology
Partners, Inc. a supplier to the Company of software products and related
consulting services. The Board of Directors has determined that his relationship
is not material either to the Company or Cambridge Technology Partners, Inc. and
that the relationship does not interfere with Mr. Messman's exercise of
independent judgment.
ORGANIZATION AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Organization and Compensation Committee (the "Committee") is appointed by
the Board of Directors and is composed entirely of independent directors.
COMPENSATION PHILOSOPHY AND OVERALL OBJECTIVES
The Company's executive compensation program is designed to encourage and reward
enhancement of stockholder value. The program focuses on four key objectives:
o Motivate executives toward effective long-term management of the Company;
o Align the interests of management and key employees with stockholders;
o Reward effective ongoing management of the Company; and
o Attract and retain key executives through competitive salary and incentive
plans.
13
<PAGE> 17
ANNUAL INCENTIVE BONUS
Four performance measures are used to determine the incentive bonuses for the
named Executive Officers and the Chief Executive Officer;
o Increase in operating income (before income taxes) over the previous year;
o Increase in earnings per share over the previous year;
o Increase in share price over the previous year; and
o Stock price performance in relation to a similar group of other retail
companies.
BASE SALARY
The Company's executive compensation program includes a competitive base salary
based on a review of pay practices of similar companies as well as the Executive
Officer's past performance and an assessment of his or her ability to contribute
to the Company's progress.
LONG TERM INCENTIVES
The Company's executive compensation program also includes long term incentives,
such as stock options and other types of stock-based awards.
In 1999, the Committee granted an aggregate of 6,061,650 stock options to over
6,400 employees under the Company's 1997 Incentive Stock Plan ("1997 ISP") and
1999 Incentive Stock Plan ("1999 ISP"), including all of the currently serving
named Executive Officers. The amount of options granted to particular officers
was determined by the Committee based on its evaluation of the individual's
performance following consultation with the Chief Executive Officer.
Under the 1997 ISP, the Company may also grant various types of other
stock-based awards, including performance shares, stock appreciation rights,
restricted stock and performance units, to eligible participants in amounts to
be determined by the Committee, subject to the restrictions set forth in the
plan. The 1999 ISP provides only for the grants of non-statutory stock options
and stock appreciation rights. Under the present and any contemplated incentive
stock plans of the Company, all options and awards will only be awarded at their
fair market value on, or on the day before, the date of grant and will not be
repriced.
The Committee believes that stock options are very important in motivating and
rewarding creation of long-term stockholder value. The Committee periodically
has awarded in the past,
14
<PAGE> 18
and plans to award in the future, stock options to a broad spectrum of employees
based on continuing progress of the Company and improvements in individual
performance.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER AND EXECUTIVE OFFICERS
For the year ending December 31, 1999, the compensation of the Chief Executive
Officer and Executive Officers was determined under the compensation plan
approved by the Committee on December 16, 1998, and by the stockholders on May
20, 1999. The bonus factors utilized were increases in the Company's operating
income (before income taxes) over the previous year, increases in the Company's
earnings per share over the previous year, increases in the Company's average
share price during 1999 over 1998's average share price and the Company's stock
price performance in relation to a similar group of other retail companies.
Based on these factors, in 1999, Mr. Roberts received a base salary of $850,000
and a bonus of $850,000 and a grant of options to purchase 325,000 shares of
Company common stock. Mr. Roberts was paid a base salary of $610,000 and a bonus
of $610,000 for the year 1998.
The Committee has developed and approved a 2000 compensation plan for Mr.
Roberts and the other Executive Officers that utilizes the same bonus factors
employed during 1999 but allows an additional bonus. The Company is seeking
approval for an amendment to the Compensation Plan for Executive Officers.
Please see "Approval of An Amendment to The Compensation Plan for Executive
Officers".
POLICY REGARDING INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code generally limits corporate
deductions to $1 million dollars for compensation, except for qualified
performance-based compensation, for compensation paid to a person who on the
last day of fiscal years beginning on or after January 1, 1994, is either the
Chief Executive Officer or among the four most highly compensated officers other
than the Chief Executive Officer.
The Committee does not believe that compensation decisions should be constrained
necessarily by how much compensation is deductible for federal income tax
purposes and as such has not and will not make compensation decisions based
solely on the deductibility of compensation.
ORGANIZATION AND COMPENSATION COMMITTEE
Jack L. Messman, Chairman William G. Morton
Robert J. Kamerschen Alfred J. Stein
Edwina D. Woodbury
15
<PAGE> 19
EXECUTIVE COMPENSATION
The following table reflects the cash and non-cash compensation attributable to
the Chief Executive Officer of the Company and the four other most highly
compensated Executive Officers of the Company for the year ending December 31,
1999.
<TABLE>
<CAPTION>
Summary Compensation Table
---------------------------------------------------------------------
Annual Compensation (1) Long-Term Compensation
------------------------------ ----------------------------------
Name and Restricted Stock All Other
Principal Fiscal Salary Bonus Stock Award Options Compensation
Position Year ($) ($) ($)(2)(3) (#)(4) ($)(5)
--------- ------ ------- ------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Leonard H. Roberts 1999 850,000 850,000 0 325,000 113,789
President and Chief 1998 610,000 610,000 2,949,372 600,000 84,088
Executive Officer; 1997 577,500 306,520 1,966,248 180,000 57,606
President, RadioShack
David Christopher 1999 330,000 330,000 0 100,000 199,856
Executive Vice 1998 308,000 247,953 0 100,000 94,474
President (6)
David J. Edmondson 1999 350,000 350,000 0 140,000 35,564
Senior Vice President(7)
Dwain H. Hughes 1999 360,000 360,000 0 100,000 65,589
Senior Vice President 1998 320,000 320,000 983,124 100,000 79,090
and Chief Financial 1997 280,000 222,252 539,874 66,000 30,462
Officer
Robert M. McClure 1999 350,000 280,000 0 80,000 82,023
Senior Vice President 1998 334,000 226,425 0 80,000 62,488
1997 318,300 188,758 0 60,000 35,311
</TABLE>
- -----------------
(1) Other than restricted stock awards (see #2 and #3 below) for the years
shown, the named Executive Officers did not receive any annual compensation
other than salary and bonus, except for certain perquisites and other personal
benefits. The amounts for perquisites and other personal benefits for the named
Executive Officers are not shown because the aggregate amount of such
compensation, if any, for each of the named Executive Officers during the fiscal
year shown does not exceed the lesser of $50,000 or 10% of total salary and
bonus reported for such officer.
(2) Messrs. Roberts and Hughes were granted awards of restricted stock on May
15, 1997. The awards were 40,000 shares to Mr. Roberts and 12,000 shares to Mr.
Hughes. The awards of restricted stock vest in equal increments annually on the
anniversary date of grant over a three year period, provided the named Executive
Officer is still employed by the Company. Dividends are payable on these shares.
The closing price of a share of Company common stock on December 31, 1999 was
$49.1562.
(3) On October 23, 1998, Mr. Roberts was granted an award of 60,000 shares of
restricted stock. The 60,000 share award will vest in equal increments annually
on the anniversary dates of grant over a three year period. This restricted
16
<PAGE> 20
stock award to Mr. Roberts only vests if he is still employed by the Company. In
addition, Mr. Hughes was granted awards of restricted stock on December 16,
1998, attributable to his performance. This award of 20,000 shares vests in
equal increments annually on the anniversary date of grant over a three year
period; provided Mr. Hughes is still employed by the Company. Dividends are
payable on these shares. The closing price of shares of Company common stock on
December 31, 1999 was $49.1562.
(4) Includes all options granted during the year under the 1997 ISP, regardless
of whether the options are incentive stock options ("ISOs") or non-statutory
stock options ("NSOs"). No restricted stock awards or stock appreciation rights
were granted with these options in 1999.
(5) Includes the Company's contributions allocated to the accounts of the named
Executive Officers participating in the following employee benefit plans: the
Tandy Stock Plan, Tandy Fund, Tandy Employees Supplemental Stock Plan ("SUP"),
Executive Deferred Compensation Plan, Executive Deferred Stock Plan, several
deferred compensation agreements and insurance premiums for life insurance. The
applicable amounts allocated in 1999 to the named Executive Officers in the
Tandy Stock Plan, Tandy Fund, SUP, the deferral plans, deferred agreements and
insurance premiums, respectively, are: $5,136.00, $4,816.00, $2,256.00,
$99,360.00, and $2,221.00 for Mr. Roberts; $5,087.00, $5,130.00, $2,446.00,
$183,918.00 and $3,275.00 for Mr. Christopher; $2,427.00, $935.00, $11,548.00,
$19,425.00 and $1,229.00 for Mr. Edmondson; $19,822.00, $13,949.00, $14,668.00,
$13,320.00 and $3,830.00 for Mr. Hughes; and $16,814.00, $13,949.00, $11,216.00,
$34,337.00 and $5,707.00 for Mr. McClure. Amounts do not include amounts payable
in the event of a change in control of the Company. See "Change in Control
Protections."
(6) Mr. Christopher was appointed by the Board on October 23, 1998, as Executive
Vice President of the Company. Prior to his appointment, Mr. Christopher was
Executive Vice President of the Company's RadioShack division.
(7) Mr. Edmondson was appointed by the Board on October 23, 1998 as Senior Vice
President of Tandy Corporation and Executive Vice President and Chief Operating
Officer of the Company's RadioShack division.
OPTION GRANTS IN THE LAST FISCAL YEAR
Options were granted on July 24, 1999, under the 1997 ISP to the Executive
Officers named in the Executive Compensation table. The potential value of these
options at the specified rates of appreciation is shown in the table below. The
1997 ISP also provides for the grant of restricted stock awards and stock
appreciation rights; however, no restricted stock awards or stock appreciation
rights were granted in 1999 to the named Executive Officers.
<TABLE>
<CAPTION>
% of Total Potential Realizable
Options Exercise Value at Assumed Annual Rates (2)
Name and Granted or Base ---------------------------------
Type of Options To Employees Price Expiration 5% 10%
Option (1) Granted(#) During the Year ($/Share) Date ($) ($)
- ---------- ---------- --------------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leonard H. Roberts 325,000 4.5 48.68 7/24/2009 9,825,552 24,889,878
David Christopher 100,000 1.4 48.68 7/24/2009 3,061,931 7,759,534
</TABLE>
17
<PAGE> 21
<TABLE>
<CAPTION>
% of Total Potential Realizable
Options Exercise Value at Assumed Annual Rates (2)
Name and Granted or Base ---------------------------------
Type of Options To Employees Price Expiration 5% 10%
Option (1) Granted(#) During the Year ($/Share) Date ($) ($)
- ---------- ---------- --------------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
David J. Edmondson 140,000 1.9 48.68 7/24/2009 4,286,703 10,863,347
Dwain H. Hughes 100,000 1.4 48.68 7/24/2009 3,061,931 7,759,534
Robert M. McClure 80,000 1.1 48.68 7/24/2009 2,449,545 6,207,627
</TABLE>
- --------------------
(1) All options shown were granted on July 24, 1999 under the 1997 ISP. These
options vest in annual increments of one-third beginning on July 24, 2000. For
persons who continue to serve as employees of the Company, options expire 10
years from the date of grant. All options were granted at fair market value on
the date of grant and will not be repriced.
(2) The dollar gains under these columns result from calculations assuming 5%
and 10% growth rates as set by the Securities and Exchange Commission and are
not intended to forecast future price appreciation of Company common stock. The
gains reflect a future value based upon growth, compounded annually during the
10-year option period, at these prescribed rates. The Company did not use an
alternative formula for a grant date valuation, an approach which would state
gains at present, and therefore lower, value. The Company is not aware of any
formula which will determine with reasonable accuracy a present value based on
future unknown or volatility factors. Consequently, the potential realizable
value has not been discounted to present value.
OPTION EXERCISES IN THE LAST YEAR AND YEAR-END OPTION VALUES
The following table summarizes individual option exercises during the year ended
December 31, 1999, by each of the named Executive Officers and the year-end
value of the unexercised options. These options were periodically granted
between 1991 and 1998.
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Shares Options at In-The-Money
Acquired on Value Year-End Options at Year-End
Exercise Realized (#) ($)(1)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard H. Roberts 228,096 9,826,546 632,720 1,028,184 21,350,977 18,361,881
David Christopher 144,000 6,486,750 229,728 222,572 9,978,338 3,552,433
David J. Edmondson 27,922 1,490,314 84,516 243,584 2,552,767 2,774,025
Dwain H. Hughes 68,138 2,997,819 181,960 227,526 6,352,468 3,552,433
Robert M. McClure 109,424 3,834,048 100,058 179,238 3,219,015 2,864,557
</TABLE>
- ------------------
(1) For purposes of calculating whether an option was "in-the-money" this chart
uses the December 31, 1999, average of the high and low trading prices on the
New York Stock Exchange (fair market value) for Company common stock of
$49.1562.
18
<PAGE> 22
RETIREMENT AND DEFERRED COMPENSATION
THE PLANS
Under the Salary Continuation Plan for Executive Employees of Tandy Corporation
and its Divisions and Subsidiaries established in 1979, and the Officers
Deferred Compensation Plan established in 1986, the Committee may select
full-time executive employees for participation in these Plans. As of December
31, 1999, a total of 41 executive employees of the Company were participants in
one or both of the Plans. The Plans generally provide for the payment of reduced
benefits following a participant's early retirement between the ages of 55 and
65, full benefits between the ages of 65 and 70, reduced benefits between the
ages of 70 and 75, and for payment of a death benefit to the participant's
designated beneficiary in the event of death prior to age 75 during employment.
All sums due under the Plans are payable in 120 equal monthly installments to
the participant or, in the event of death, to his or her beneficiary. The
payments are general obligations of the Company that are funded in part by life
insurance policies owned by the Company which name the Company as beneficiary.
Under the Plans the Committee determines an amount designated as the "Retirement
Compensation Amount" for each participant. The amount established by the
Committee does not necessarily bear any relationship to the participant's
present compensation, final compensation or years of service. As of December 31,
1999, the benefit payable to participants upon retirement or death during
employment is a function of the "Retirement Compensation Amount" and the age of
the participant at death or retirement, as set out in the following table:
<TABLE>
<CAPTION>
Retirement Compensation Annual Benefit
Amount Age at Date of Retirement or Death
- ----------------------- ----------------------------------------------------------------------
55 (1) 65 to 70 71 (2) 75 (2)
------- -------- ------- ------
<S> <C> <C> <C> <C>
250,000 125,000 250,000 200,000 $ -0-
262,500 131,250 262,500 210,000 -0-
275,000 137,500 275,000 220,000 -0-
737,500 368,750 737,500 590,000 -0-
</TABLE>
- ------------------
(1) Proportionately increases from 50% to 100% between age 55 and age 65.
(2) Proportionately decreases from 100% to 0% between age 70 and age 75.
The Retirement Compensation Amount at death during employment or retirement at
age 65 for the Executive Officers listed in the Executive Compensation table at
December 31, 1999, would have been as follows:
19
<PAGE> 23
<TABLE>
<CAPTION>
Salary
Continuation Deferred
Plan Compensation Plan Total
------------ ----------------- --------
<S> <C> <C> <C>
Leonard H. Roberts $ -0- $737,500 $737,500
David Christopher 100,000 150,000 250,000
David J. Edmondson 162,500 100,000 262,500
Dwain H. Hughes -0- 275,000 275,000
Robert M. McClure 75,000 175,000 250,000
</TABLE>
SPECIAL PROVISIONS OF THE SALARY CONTINUATION PLAN
This Plan provides for payments to be made to certain executive employees in the
event of their voluntary or involuntary termination of employment following a
Change in Control, as defined in a 1984 letter of amendment to the Plan. In the
event of a Change in Control, each executive employee who is subject to such
letter amendment becomes immediately vested at the age 65 benefit level for a
period of three years; and if his or her employment with the Company ceases,
whether voluntarily or involuntarily, during this three year period, he or she
will receive payments equal to the annual retirement benefit at age 65. Payment
is made in 120 equal monthly installments to the participant or to his or her
beneficiary.
SPECIAL PROVISIONS OF THE DEFERRED COMPENSATION PLAN
This Plan provides that, for one year following the occurrence of a Change in
Control, the Plan shall not be terminated or amended in any way, nor shall the
manner in which the Plan is administered be changed in any way which adversely
affects the rights of its participants or beneficiaries. Upon a Change in
Control the provisions of the Deferred Compensation Plan provide that any
benefit due under it shall be (1) offset by any outstanding loan of the
participant, and (2) forfeited if the participant engages in any activity that
is in competition with the Company. Additionally, in the event of a Change in
Control, each participant in this Plan becomes immediately vested at the age 65
benefit level and if the participant's employment is terminated for any reason
following a Change in Control, the Company must make a lump-sum payment equal to
the present value of the age 65 benefit level discounted for interest only
according to a predetermined formula.
EXECUTIVE DEFERRED COMPENSATION PLANS AND OTHER AGREEMENTS
The Tandy Corporation Executive Deferred Compensation Plan and the Tandy
Corporation Executive Deferred Stock Plan which were effective April 1, 1998,
permit Executive employees of the Company to defer, on a pre-tax basis, up to
100% of their base salary and/or bonuses.
20
<PAGE> 24
These plans are distinct from the Deferred Compensation Plan described above.
The major features of these plans are:
o Deferral of the receipt of up to 100% of certain Executive employee's
base salary or bonus;
o Deferral of any restricted stock or NSOs that would otherwise vest;
o Investment of cash deferrals in either Company common stock or mutual
funds;
o Company matching payments on salary and bonus as follows: 12% match on
salary and bonus deferrals in the form of Company common stock and an
additional 25% match on salary or bonus deferrals in the form of Company
common stock if salary and/or bonus deferrals are deferred for more than
five years and are invested in Company common stock;
o Selection of a future distribution date to receive the deferrals and
matches in either a lump sum or annual installment payments not
exceeding 20 years; and
o In the event the Company experiences a Change in Control, these plans
provide that, within two weeks of this event, each Executive employee
participant will be paid the full value of his or her accounts in the
plans in the form of cash or Company common stock of the Company, as the
case may be.
Agreement with Mr. Roberts. Upon Mr. Robert's appointment as Chief Executive
Officer of the Company, the Board of Directors determined that it is in the best
interests of the Company and its stockholders to provide for an orderly
mechanism if Mr. Roberts should leave the employ of the Company. Should Mr.
Roberts involuntarily leave the Company under defined circumstances, the
Agreement provides salary and bonus payments and acceleration of certain stock
awards. In the event Mr. Roberts voluntarily leaves the Company or leaves under
other defined circumstances, Mr. Roberts receives no payments or accelerations
under the Agreement. In no event would Mr. Roberts receive benefits under both
this Agreement and the Termination Protection Agreement described below under
"Change in Control Protections".
CHANGE IN CONTROL PROTECTIONS
In addition to the change in control protections contained in the Salary
Continuation Plan, the Deferred Compensation Plans, the Executive Deferred
Compensation Plan and the
21
<PAGE> 25
Executive Deferred Stock Plan described above in "Retirement and Deferred
Compensation", the Company has implemented the following change in control
protections:
Bonus Guarantee Letter Agreements. The Company currently has letter agreements
(the "Bonus Guarantee Letter Agreements") with all of the currently serving
Executive Officers named in the Executive Compensation table, which provide
that, if they are employed by the Company on the date of a "Change in Control"
(as defined in the Bonus Guarantee Letter Agreements), then for the fiscal year
during which a Change in Control occurs (the "Change in Control Year") they will
receive an annual bonus following a Change in Control at least equal to the
highest annual bonus paid or payable to them in respect of any of the three full
fiscal years ended prior to a Change in Control (i) for the Change in Control
Year, provided the Executive Officer remains in the employment of the Company on
the last day of the Change in Control Year and (ii) for the fiscal year ended
prior to a Change in Control if the amount of their annual bonus for such year
has not yet been determined at the time of the Change in Control. The Bonus
Guarantee Letter Agreements have an initial term of 24 months, subject to
automatic successive one-year extensions unless written notice not to extend is
given by the Company at least 90 days prior to any extension. At December 31,
1999, the Company had issued similar bonus guarantee letters to approximately 52
other officers and employees of the Company providing that in the event of a
Change in Control each such employee would receive a minimum annual bonus
following a Change in Control as provided for in such bonus guarantee letters.
Assuming a Change in Control occurred on the date of this Proxy Statement, all
of the currently serving named Executive Officers were still employed on that
date, and the currently serving named Executive Officers' employment had
terminated on that date, it is estimated that the minimum bonuses payable under
the Bonus Guarantee Letter Agreements would be approximately $850,000 for Mr.
Roberts, $330,000 for Mr. Christopher, $350,000 for Mr. Edmondson, $360,000 for
Mr. Hughes and $280,000 for Mr. McClure.
Benefit Protections. Also, the Board has included change in control protections
in the Tandy Fund, the Tandy Employees Supplemental Stock Program, Tandy Stock
Plan, Post Retirement Death Benefit Plan ("DBP"), 1985 Stock Option Plan, 1993
Incentive Stock Plan, 1997 ISP, 1999 ISP and several other plans. The Tandy Fund
provides that for a period of one year following a "Change in Control," as
defined in such plan, the plan may not be terminated or amended in any way that
would adversely affect the computation or amount of, or entitlement to, the
benefits under the plan. The Supplemental Stock Program and Tandy Stock Plan
contain similar protections and also provide that in the event of a "Change in
Control," as defined in such plans, the Company may not reduce the level of its
contributions to the Supplemental Stock Program and Tandy Stock Plan in effect
immediately prior to the Change in Control. The Tandy Stock Plan additionally
provides that in the event of a Change in Control or a tender offer, other than
an issuer tender offer, the Company shall distribute to each participant in the
Tandy Stock Plan all Company common stock held by the Company which was credited
to the participant's account under the Tandy Stock Plan. The change in
22
<PAGE> 26
control provisions of the 1985 Stock Option Plan, 1993 Incentive Stock Plan,
1997 ISP, 1999 ISP and certain agreements issued under these plans provide that
all outstanding options become immediately vested and exercisable in the event
of a "Change in Control", as defined in such plans.
Termination Protection Agreements. As of December 31, 1999, the Company has
entered into Termination Protection Agreements with all of the currently serving
Executive Officers named in the Executive Compensation table and 3 other
Executive employees. Each of the Agreements (all of which are substantially
similar) have an initial term of two years which is automatically extended for
successive one-year periods unless terminated by either party. If the employment
of any of the Executives is terminated (with certain exceptions) within 24
months following a "Change in Control", as defined in the Agreements, or in
certain other instances in connection with a Change in Control, these Executives
will be entitled to receive certain cash payments (amounts equal to two times
current annual salary and the amount of the bonus guarantee under the Bonus
Guarantee Letter Agreement and an amount equal to the contributions that the
Company would have made to the Tandy Stock Plan, Tandy Fund and SUP over a
24-month period assuming the foregoing salary and bonus guarantee were used to
calculate the Company's contributions), as well as the continuation of fringe
benefits (including life insurance, disability, medical, dental and
hospitalization benefits) for a period of up to 24 months. Additionally, all
restrictions on any outstanding incentive awards, including restricted stock,
will lapse; and such awards will become fully vested, all outstanding stock
options will become fully vested and immediately exercisable, and the Company
will be required to purchase for cash, on demand, any shares of unrestricted
stock and shares purchased upon the exercise of options at the then per-share
fair market value.
The Termination Protection Agreements also provide that the Company shall make
an additional "Gross-Up Payment" (as defined in the Agreements) to the
Executives covered by these Agreements to offset fully the effect of any excise
tax imposed under Section 4999 of the Internal Revenue Code, on any payment made
to any of the Executives arising out of or in connection with the employment of
any of the Executives. In addition, the Company will pay all legal fees and
related expenses incurred by any of the Executives arising out of employment of
any of the Executives or termination of employment under certain circumstances.
Payments Upon A Change In Control. Assuming a Change in Control occurred on the
date of this Proxy Statement, all of the currently serving named Executive
Officers were still employed on that date, and all of the currently serving
named Executive Officers' employment had terminated on that date, the
approximate cash payment that would have been made by virtue of all change in
control protections implemented by the Company (not including the Gross-Up
Payments) to Messrs. Roberts, Christopher, Edmondson, Hughes and McClure would
have been approximately $4,285,000; $1,593,540; $1,801,000; $1,735,910; and
23
<PAGE> 27
$1,513,500, respectively. The amount of the Gross-Up Payment, if any, to be paid
may be substantial and will depend upon numerous factors, including the price
per share of Company common stock and the extent, if any, that payments or
benefits made to the Executives constitute "excess parachute payments" within
the meaning of Section 280G of the Internal Revenue Code.
Rabbi Trust. In connection with the Benefit Protections described above, Bonus
Guarantee Letter Agreements, the Termination Protection Agreements, and several
other plans and agreements, the Company is authorized to enter into a Rabbi
Trust, which is intended to be a grantor trust under Section 671 of the Internal
Revenue Code. The Rabbi Trust may be funded by the Company at any time but is
required to be funded upon a "Threatened Change in Control" or upon a "Change in
Control" (as such terms are defined in the Rabbi Trust) in an amount sufficient
to provide for the payment of all benefits provided under the Benefit
Protections described above, the Bonus Guarantee Letter Agreements, Termination
Protection Agreements and several other plans and agreements. The Rabbi Trust
will also provide funds for litigation on behalf of the participants in such
plans to the extent necessary to ensure their rights thereunder. The Rabbi Trust
will be a trust of which the trust assets will be subject to the claims of the
Company's creditors in the event of the Company's bankruptcy or insolvency.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on Company
common stock against the cumulative total return on the S&P Corporate 500 Stock
Index and the S&P Retail Composite Stock Index (assuming $100 was invested on
December 31, 1994, in Company common stock and in the stocks comprising the S&P
Corporate 500 Stock Index and the S&P Retail Composite Stock Index and also
assuming the reinvestment of all dividends). The S&P Retail Composite Stock
Index, as well as the S&P Corporate 500 Stock Index, include the Company.
The historical stock price performance of Company common stock shown on the
graph below is not necessarily indicative of future price performance.
Any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934
shall not be deemed to incorporate by reference this graph and this graph shall
not otherwise be deemed filed under
24
<PAGE> 28
such Acts. The Company may, however, specifically incorporate this graph by
reference in filings under such Acts.
[FIVE YEAR - CUMULATIVE TOTAL RETURN GRAPH]
<TABLE>
<CAPTION>
DEC - 94 DEC - 95 DEC - 96 DEC - 97 DEC - 98 DEC - 99
<S> <C> <C> <C> <C> <C> <C>
TANDY CORP. 100.00 84.26 90.95 161.52 173.95 417.45
S&P 500 INDEX 100.00 137.59 169.18 225.63 290.11 351.16
S&P RETAIL STORES COMPOSITE INDEX 100.00 111.72 131.87 190.91 308.05 373.47
</TABLE>
CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS
None reportable.
25
<PAGE> 29
ITEM 2
APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
The Board of Directors has approved an amendment to the first sentence of
Article Fourth of the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of common stock the Company is
authorized to issue from 250 million shares to 650 million shares. The Company's
authorized Preferred Stock of one million shares will remain unchanged. The
complete text of the proposed amendment is attached to this Proxy Statement as
Exhibit B.
As of February 29, 2000 approximately 186,372,561 of the Company's 250 million
currently authorized shares of common stock were issued and outstanding. Of the
remaining authorized shares of common stock, approximately 29,067,952 million
were reserved for issuance in connection with the Company's benefit plans.
In 1997 and again in 1999 the Company authorized two-for-one stock splits
following substantial increases in the market value of the Company's common
stock. Should the Board of Directors determine it would be appropriate to
authorize another stock split, the current number of authorized shares that are
not outstanding or reserved is insufficient to complete another two-for-one
stock split. Though there can be no assurance that the Board will declare
another stock split or that the market value of Company's common stock would
justify a stock split, the Board believes, however, that an increase in the
number of shares will provide the Company with the flexibility to effect a stock
split, should the market value of the common stock justify it, without the
expense of a special stockholder's meeting or waiting until the next annual
meeting.
In 1999 the Company acquired AmeriLink Corporation as part of the Company's
strategy to be America's "Home Connectivity Store". As part of this strategy,
and others, the Company may acquire other businesses for this or for other
business reasons. The Company paid for the AmeriLink acquisition with its common
stock and may use its common stock to fund other acquisitions. The proposal to
increase the number of authorized shares will provide the
26
<PAGE> 30
Company flexibility in deciding how to pay for acquisitions and other corporate
transactions such as an equity offering to raise capital and adoption or renewal
of Company benefit plans.
The Board is not proposing the increase in the authorized number of its shares
with the intention of using the shares for anti-takeover purposes. It is
possible, however, that the additional shares could be used (whether or not in
conjunction with the Company's Amended and Restated Shareholders Rights Plan) to
discourage an attempt to acquire or to takeover the Company, but the Company has
no present intention to do so.
If this proposal is approved all or a portion of the newly authorized shares may
be issued without any further stockholder actions and without first offering
these shares to the Company's then existing stockholders for purchase. Any
issuance of these shares, other than on a pro-rata basis to all stockholders,
would reduce each stockholders percentage interest in the Company.
The Company does not have any current plans, agreements or understandings under
which any of the additional shares of the common stock to be authorized would be
issued.
The Board has unanimously adopted this proposed amendment to the Restated
Certificate of Incorporation and directed that the proposed amendment be
submitted to the stockholders of the Company for their approval at the annual
meeting. If approved by the stockholders, this amendment will become effective
upon its filing with the Secretary of State of Delaware.
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<PAGE> 31
ITEM 3
APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE NAME OF THE COMPANY
TO RADIOSHACK CORPORATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE RESTATED CERTIFICATE IF INCORPORATION TO CHANGE THE NAME OF THE COMPANY TO
RADIOSHACK CORPORATION PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
The Board of Directors has approved an amendment to Article First of the
Company's Restated Certificate of Incorporation to change the name of the
Company from Tandy Corporation to RadioShack Corporation The complete text of
the proposed amendment is attached to this Proxy Statement as Exhibit C.
In recent years, the Company has concentrated its focus on retailing activities
at its RadioShack retail locations. In order to accurately reflect this single
focus of the Company and the fact that Tandy Corporation is now RadioShack, the
Board of Directors believes it is in the best interest of the Company and its
stockholders to change the name of the Company to RadioShack Corporation.
This change will enable the Company, and its retailing efforts, to capitalize on
the proven and measurable name and brand identity of RadioShack both at the
corporate and retail levels. Additionally, the Company will be able to utilize
the strength of the RadioShack name across all levels and types of communication
including advertising, marketing, financial and corporate. This utilitization,
in addition to the universal recognition of the RadioShack name, will also
eliminate any confusion between the Tandy corporate name and RadioShack.
The Company's headquarters at Tandy Center, Fort Worth, Texas and related
facilities will continue to bear the Tandy name in recognition of the founding
heritage of RadioShack.
RadioShack Corporation will be well known in the Company's operating
environments as well as engender the confidence that consumers have in
RadioShack, its products and services.
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<PAGE> 32
ITEM 4
APPROVAL OF AN AMENDMENT TO THE COMPENSATION PLAN
FOR EXECUTIVE OFFICERS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE
AMENDMENT TO THE COMPENSATION PLAN FOR EXECUTIVE OFFICERS. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN
THEIR PROXIES.
In order to provide the Executive Officers additional incentive to make and
implement decisions and aggressively pursue courses of action to increase
stockholder value, the Board of Directors has approved an amendment to the
Compensation Plan for the Chief Executive Officer and the Executive Officers.
The current Compensation Plan was approved by stockholders on May 20, 1999.
The Board of Directors is seeking stockholder approval of this amendment in
order that the Company may deduct, under Section 162(m) of the Internal Revenue
Code, compensation in excess of $1 million paid to the Chief Executive Officer
and the four other most highly compensated Executive Officers.
The Committee has approved an amendment to the existing Compensation Plan for
the Executive Officers which increases the amount of bonus that may be earned
from one times to three times an individual Executive Officer's base salary. The
calculation of the components of the bonus will remain the same as under the
current Compensation Plan. Additionally, no other provisions of the previously
approved Compensation Plan for Executive Officers will be amended.
The amended bonus is designed to increase long-term stockholder value by
providing the Executive Officers increased incentive for performance oriented
results.
A favorable vote of a majority of the stockholders present at the meeting in
person or by proxy is required for approval of the amendment to the Compensation
Plan for the Executive Officers. If the amendment is not approved, the Board of
Directors intends to reexamine the bonus of the Company's Compensation Plan for
the Executive Officers, with a view to developing a bonus component of the plan
that maintains the Executive Officers' compensation at competitive levels and
provides appropriate incentives. In any event, the Committee will not be
constrained necessarily by how much compensation is deductible for federal
income tax purposes and as such will not make compensation decisions based
solely on the deductibility of compensation.
29
<PAGE> 33
INDEPENDENT ACCOUNTANTS
The Board has selected PricewaterhouseCoopers LLP, which has audited the
Company's and its predecessor's books annually since 1899, as independent
accountants for 2000. Representatives of PricewaterhouseCoopers LLP are expected
to be present at the Annual Meeting with an opportunity to make a statement
and/or respond to appropriate questions.
VOTING RIGHTS AND PROXY INFORMATION
Only holders of record of shares of the Company's common stock and the Company's
TESOP Stock as of the Annual Meeting Record Date will be entitled to notice of,
and to vote at, the Annual Meeting and at any resumption of the Annual Meeting
after adjournment or postponement thereof. The holders of shares of Company
common stock are entitled to one vote per share (a "Common Stock Vote") on any
matter which may properly come before the Annual Meeting. The holders of TESOP
Stock are entitled to 87.072 Common Stock Votes per share.
As of the Annual Meeting Record Date the total number of Common Stock Votes
represented by the voting securities of the Company entitled to vote were
193,159,504. Specifically, there were 186,873,515 shares of Company common stock
outstanding, representing 186,873,515 Common Stock Votes; and 72,193 shares of
TESOP Stock outstanding, representing 6,285,989 Common Stock Votes.
As of the Annual Meeting Record Date a total of 72,193 shares of TESOP Stock
were held in the Tandy Fund. Each participant in the Tandy Fund is entitled to
direct the Tandy Fund Trustee with respect to the voting of the TESOP Stock
allocated to his or her account. If a participant does not direct the Tandy Fund
Trustee with respect to the voting of the TESOP Stock, the Trustee will vote
such securities in the same proportion as other participants who have directed
the Trustee with respect to allocated shares. The Trustee will also vote all
unallocated TESOP Stock held by the Tandy Fund in such proportion.
The presence, either in person or by properly executed proxy, of the holders of
a majority of the Common Stock Votes as of the Annual Meeting Record Date is
necessary to constitute a quorum at the Annual Meeting. Shares held by holders
who are either present in person or represented by proxy who abstain will be
treated as present for quorum purposes on all matters. For purposes of
determining whether a proposal has received a majority vote, abstentions will be
included in the vote total, with the result that an abstention will have the
same effect as a negative vote. For purposes of determining whether a proposal
has received a majority vote, in instances where brokers are prohibited from
exercising discretionary
30
<PAGE> 34
authority for beneficial holders of Company common stock who have not returned a
proxy (so-called "broker non-votes"), those shares will not be included in the
vote totals and, therefore, will have no effect on the outcome of the vote.
The affirmative vote of a plurality of the Common Stock Votes entitled to vote
and represented in person or by properly executed proxy at the Annual Meeting is
required to approve the election of each of the Company's nominees for election
as a director. With respect to the election of directors, shares that abstain
will be included in the vote total as withholds (i.e., votes against the
Company's nominees for election).
The affirmative vote of a majority of the Common Stock Votes entitled to vote
and represented in person or by properly executed proxy at the Annual Meeting is
required to approve all matters other than the election of directors.
All voting securities that are represented at the Annual Meeting by properly
executed proxies received by the Corporate Secretary prior to or at the Annual
Meeting and not revoked will be voted at the Annual Meeting in accordance with
the instructions indicated in such proxies. If no instructions are indicated,
such proxies will be voted FOR the election of the Board's nominees for election
as directors of the Company, FOR the approval of an Amendment to the Restated
Certificate of Incorporation to increase the number of authorized shares of
common stock, FOR the approval of an amendment to the Restated Certificate of
Incorporation to change the name of the Company to RadioShack Corporation and
FOR the approval of an amendment to the Compensation Plan for Executive
Officers.
Any proxy given under this solicitation may be revoked by the person giving it
at any time before it is voted. Proxies may be revoked by: (i) filing with the
Company, at or before the Annual Meeting, a written notice of revocation bearing
a later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same voting securities and delivering it to the Company at or before the
Annual Meeting; or (iii) attending the Annual Meeting, filing a written
revocation of proxy and voting in person (attendance at the Annual Meeting and
voting will not in and of itself constitute a revocation of a proxy). Any
written notice revoking a proxy or subsequent proxies should be received by mail
or other method of delivery or hand delivered to Tandy Corporation, Attention:
Ms. Carolyn Hoopes, Assistant Corporate Secretary, 100 Throckmorton Street,
Suite 1700, Fort Worth, Texas 76102-2818.
The Company will bear the cost of the solicitation. In addition to solicitation
by mail, the Company will request banks, brokers and other custodian nominees
and fiduciaries to supply proxy material to the beneficial owners of Company
common stock, Restricted Company common stock and TESOP Stock, and will
reimburse them for their expenses in so doing. In addition, the Company may
engage D.F. King & Co., Inc., for a fee anticipated not to exceed $9,000 plus
out-of-pocket expenses, to provide proxy services. Certain directors, officers
and
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<PAGE> 35
other employees of the Company may solicit proxies, without additional
remuneration therefor, by personal interview, mail, telephone, facsimile or
other electronic means.
STOCKHOLDER PROPOSALS AND NOMINATIONS
FOR DIRECTORS FOR THE 2001 ANNUAL MEETING
In order for proposals of stockholders to be considered for inclusion in the
proxy statement for the 2001 Annual Meeting of Stockholders of the Company,
which is now scheduled to be held on May 17, 2001, such proposals must be
received by the Corporate Secretary of the Company by November 30, 2000. With
respect to stockholder proposals for the 2001 Annual Meeting that are not to be
included in the Proxy Statement, these proposals must be received by the
Corporate Secretary not less than 60 nor more than 90 days before the date of
the preceding year's annual meeting, or by March 19, 2001, but no sooner than
February 17, 2001.
Stockholders who wish to nominate persons for election as directors at the 2001
Annual Meeting, which is now scheduled to be held on May 17, 2001, must give
notice of their intention to make a nomination in writing to the Corporate
Secretary of the Company on or before February 17, 2001. Each notice shall set
forth: (a) the name and address of the stockholder who intends to make the
nomination and the name and address of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of record of stock of the
Company 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)
under 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 director of the Company if so elected.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 31, 1999, is
being mailed to stockholders with this Proxy Statement. Stockholders who do not
receive a copy of such Annual Report may obtain a copy without charge by writing
or calling Shareholder Services, Tandy Corporation, 100 Throckmorton Street,
Suite 1700, Fort Worth, Texas 76102-2818, telephone number (817)415-3022.
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<PAGE> 36
OTHER MATTERS
As of the date of this Proxy Statement, management of the Company has no
knowledge of any other business to be presented to the meeting. If other
business is properly brought before the meeting, the persons named in the Proxy
will vote according to their discretion.
TANDY CORPORATION
March 30, 2000 Fort Worth, Texas
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<PAGE> 37
EXHIBIT A
TANDY CORPORATION
AUDIT AND COMPLIANCE COMMITTEE CHARTER
I. Purpose
The Audit and Compliance Committee ("the Committee") will assist the
Board of Directors in fulfilling its oversight responsibilities by
reviewing the Company's internal control systems, audit functions,
financial reporting processes, and methods of monitoring compliance
with regulatory matters and compliance with the Company's Legal and
Ethical Conduct of Business Policies.
II. Composition and Organization of Committee
A. Size of Committee
The Committee shall consist of at least three directors, all of whom
have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company
("Independent").
B. Member Qualifications
1. Each member of the Committee shall be financially
literate, as such qualification is interpreted by the
Board of Directors in its business judgment, or must
become financially literate within a reasonable
period of time after his or her appointment to the
Committee; and
2. At least one member of the Committee shall have
accounting or related financial management expertise,
as the Board of Directors interprets such
qualification in its business judgment.
C. Appointment to Committee
The Board will make the Committee appointments at the
organizational meeting following each Annual Meeting of
Stockholders.
<PAGE> 38
D. Term
Members will be appointed by the Board for a one-year term or
until a successor is appointed and qualified. It is
anticipated that members will be re-appointed to the Committee
and will rotate to another committee every three to four years
so that members may gain experience and provide continuity of
service.
E. Committee Chair
The Committee Chair will be a board member appointed by the
Board. If the Committee Chair is absent from a meeting,
another member of the Committee will act as Chair.
F. Director Independence
1. In addition to the definition of Independent provided
above in II.A., the following shall apply to every
Committee member:
a) Employees:
A director who is an employee (including
non-employee executive officers) of the
Company or any of its affiliates may not
serve on the Committee until three years
following the termination of his or her
employment. In the event the employment
relationship is with a former parent or
predecessor of the Company, a director may
serve on the Committee after three years
following the termination of the
relationship between the Company and the
former parent or predecessor.
b) Business Relationship:
A director (1) who is a partner, controlling
shareholder, or executive officer of an
organization that has a business
relationship with the Company, or (2) who
has a direct business relationship with the
Company (e.g., a consultant) may serve on
the Committee only if the Board of Directors
determines in its business judgment that the
relationship does not interfere with the
director's exercise of independent judgment.
In making a determination regarding the
independence of a director under this
paragraph, the Board of Directors should
consider, among other things, the
materiality of the relationship to the
Company, to the director, and, if
applicable, to the organization with which
the director is affiliated.
2
<PAGE> 39
"Business relationships" may include
commercial, industrial banking, consulting,
legal, accounting and other relationships. A
director can have this relationship directly
with the Company, or the director can be a
partner, officer or employee of an
organization that has such a relationship.
The director may serve on the Committee
without the above-referenced Board of
Directors' determination after three years
following the termination of, as applicable,
either (1) the relationship between the
organization with which the director is
affiliated and the Company, (2) the
relationship between the director and his or
her partnership status, shareholder interest
or executive officer position, or (3) the
direct business relationship between the
director and the Company.
c) Cross Compensation Committee Link
A director who is employed as an executive
of another corporation where any of the
Company's executives serves on that
corporation's compensation committee may not
serve on the Committee.
d) Immediate Family
A director who is an Immediate Family member
(as defined under the current rules of the
NYSE) of an individual who is an executive
officer of the Company or any of its
affiliates cannot serve on the Committee
until three years following the termination
of such employment relationship.
e) Notwithstanding the requirements in the
paragraphs above, one director who is no
longer an employee or who is an Immediate
Family member of a former executive officer
of the Company or its affiliates, but is not
considered independent pursuant to these
provisions due to the three year restriction
period, may be appointed, under exceptional
and limited circumstances, to the Committee
if the Company's Board of Directors
determines in its business judgment that
membership on the Committee by the
individual is required by the best interests
of the Company and its shareholders, and the
Company discloses in the next annual proxy
statement subsequent to such determination,
the nature of the relationship and the
reasons for the determination.
G. Annual Review of Charter
Not less than annually, the Committee shall review this
Charter and recommend to the Board any changes it deems
advisable. At any time, the Board of Directors
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<PAGE> 40
acting on its initiative, or on recommendation of another
Board committee, may amend this Charter. Only the full Board
of Directors may amend this Committee's Charter.
III. Retention of Special Legal, Accounting and other Consultants
A. General
The Committee shall have the authority to retain special
legal, accounting or other consultants to advise the
Committee, including but not limited to, in connection with
any special investigations deemed necessary by the Committee.
The Committee may request any officer or employee of the
Company or the Company's outside counsel or independent
auditor to attend a meeting of the Committee or to meet with
any members of, or consultants to, the Committee.
IV. Review of Company's Internal Control Systems
The responsibilities of the Committee related to review of the
Company's internal control systems include the following:
A. Evaluate whether management is setting the appropriate tone at
the top by communicating the importance of strong internal
controls;
B. Obtain an understanding of internal controls and the
significant risk areas for the Company through discussions
with management, the outside auditors and internal audit; and
C. Periodically review the adequacy of internal controls that
could significantly affect the Company's financial statements
through discussions with management, the outside auditors and
internal audit.
V. Review of Financial Reporting Process
A. General
Review significant accounting and reporting issues, including
recent professional and regulatory announcements, and the
impact on the financial statements.
B. Annual Financial Statements
The Committee shall perform the following:
4
<PAGE> 41
1. Review and obtain an understanding of the scope and
timing of the annual audit as well as the results of
the audit work performed by the outside auditors.
2. Discuss with the outside auditors the matters
required to be discussed by Statement on Auditing
Standards No. 61, as may be modified or supplemented;
3. Prior to filing, review and discuss with management
the Company's audited financial statements and
Management's Discussion and Analysis (MDA) to be
included in Form 10-K; and
4. Based upon the Committee's review and discussion of
the audited financial statements with management and
the outside auditors, recommend to the Board of
Directors whether the audited financial statements
should be included in the Company's Annual Report on
Form 10-K.
C. Interim Financial Statements
The Committee or, at the option of the Committee, the Chair of
the Committee shall perform the following:
1. Obtain an understanding of the extent to which the
outside auditors review quarterly financial
information;
2. Discuss with the outside auditors those matters
required to be discussed by the Statement on Auditing
Standards No. 61, as may be modified or supplemented;
and
3. Review and discuss with management the quarterly
financial statements prior to filing on Form 10-Q.
VI. Relationship with Outside Auditors
A. Outside Auditor Accountability
The outside auditor for the Company is ultimately accountable
to the Board of Directors and the Audit and Compliance
Committee of the Company.
5
<PAGE> 42
B. Authority of Committee
The Committee and the Board of Directors have the ultimate
authority and responsibility to select, evaluate, and, where
appropriate, replace the outside auditor.
C. Outside Auditor's Independence
The Committee shall perform the following:
1. Obtain from the outside auditors on an annual basis,
the written disclosures required under Independence
Standards Board Standard No. 1 regarding any
relationships between the auditors and the Company or
any other relationships that reasonably may be
thought to bear on the auditors' independence;
2. Discuss with the outside auditor the auditor's
independence; and
3. Recommend to the Board of Directors appropriate
action in response to the outside auditors' report to
satisfy itself of the outside auditors' independence.
VII. Relationship with Internal Audit
The Committee's relationship with the Internal Audit function follows:
A. Review the annual plan, activities and organizational
structure of the internal audit function;
B. Review the results of the audits performed by the internal
audit group;
C. Review the qualification of the internal audit function and
concur in the appointment, replacement, reassignment, or
dismissal of the director of internal audit; and
D. Review the effectiveness of the internal audit function.
6
<PAGE> 43
VIII. Monitoring Compliance with Laws and Regulations and Risk Management
Policies and Procedures
The Committee shall monitor compliance with laws and regulations and
the risk management process by performing the following:
A. Obtain an understanding of and periodically review the
Company's policies and procedures designed to promote
compliance with applicable laws and regulations as well as the
Company's Legal and Ethical Conduct of Business Policies
through discussions with management, general counsel and the
internal auditor;
B. Periodically review with management, major litigation and risk
management policies and procedures, including insurance
coverages; and
C. Obtain annual updates from management, general counsel or the
internal auditor regarding compliance.
IX. Meetings
A. Frequency
In conjunction with the Chairman of the Board and the Chief
Executive Officer, the Committee will determine the frequency,
location and time requirements for regularly scheduled
Committee meetings. Any Committee member will have the right
to call a special meeting of the Committee.
B. Notice
At least 12 hours advance notice by phone or in writing will
be given to Committee members.
C. Schedule of Meetings
Insofar as possible, Committee meetings will be scheduled in
conjunction with meetings of the full Board.
D. Agenda
The Committee Chair, in consultation with Committee members,
appropriate members of Executive Management and key Committee
advisors, will develop an advance agenda for all Committee
meetings.
7
<PAGE> 44
E. Non-Committee Member Attendees
The Chairman of the Board, the Chief Executive Officer, Chief
Financial Officer and the Corporate Secretary may be invited
from time to time to meetings to offer information, expertise
and advice as requested by the Committee. The Committee may
also request other members of management, internal auditors
and outside auditors to participate in Committee meetings, as
necessary. Attendance may be by telephone as provided in the
by-laws of the Company.
F. Quorum
A majority of Committee members shall constitute a quorum.
G. Materials
Written materials, including key performance indicators and
measures related to key business and financial risks, shall be
received from management, auditors and others sufficiently in
advance of the meeting to permit meaningful review by
Committee members.
H. Minutes
Minutes of each Committee meeting will be recorded. The
keeping of minutes will be performed by the Corporate
Secretary or by a member of the Committee.
I. Report to the Board of Directors
The Committee Chair shall report on the Committee meeting at
the Board meeting following the Committee meeting.
8
<PAGE> 45
EXHIBIT B
PROPOSED AMENDMENT TO ARTICLE FOURTH OF THE
RESTATED CERTIFICATE OF INCORPORATION OF
TANDY CORPORATION
INCREASE IN AUTHORIZED CAPITAL STOCK
Article FOURTH of the Restated Certificate of Incorporation is proposed to be
amended by revising the first sentence of Article FOURTH to read in its entirety
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."
9
<PAGE> 46
EXHIBIT C
PROPOSED AMENDMENT TO ARTICLE FIRST OF THE
RESTATED CERTIFICATE OF INCORPORATION OF
TANDY CORPORATION
CHANGE OF COMPANY NAME
Article FIRST of the Restated Certificate of Incorporation is proposed to be
amended to read in its entirety as follows:
"FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is RadioShack Corporation."
10
<PAGE> 47
-----------------------------------------------------------------------
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT
Tandy Corporation's 2000 Annual Meeting of Stockholders will be held at
the Renaissance Worthington Hotel, 200 West Second Street, Fort Worth,
Texas 76102, on Thursday, May 18, 2000, at 10:00 a.m. To ensure that
your shares are voted at the meeting, please complete the proxy card,
detach at the perforation and return to the tabulating agent in the
enclosed envelope.
-----------------------------------------------------------------------
DETACH HERE
TANDY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON MAY 18, 2000
The undersigned hereby appoints Leonard H. Roberts, Ronald E.
Elmquist, Jack L. Messman, and William E. Tucker, and each or any of
them, attorneys and proxies of the undersigned, with full power of
substitution, to vote all the shares of common stock of the Company
held by the undersigned at the Annual Meeting of Stockholders of Tandy
Corporation at Fort Worth, Texas on May 18, 2000, or any resumption of
the Annual Meeting after any adjournment thereof, as indicated on this
proxy, and in their discretion on any other matters which may properly
come before the meeting. If no directions are given, this Proxy will
be voted "FOR" Items 1, 2, 3 and 4.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS,
JUST SIGN ON THE REVERSE SIDE - NO BOXES NEED TO BE CHECKED.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Tandy Corporation
100 Throckmorton Street, Suite 1800
Post Office Box 17180
Fort Worth, Texas 76102-0180
<PAGE> 48
DETACH HERE
<TABLE>
<S> <C>
Please mark
[X] your vote as
in this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
1. Election of Directors
NOMINEES: Frank J. Belatti, Ronald E. Elmquist, Robert J. 2. To approve an amendment to the Restated Certificate of
Kamerschen, Lewis F. Kornfeld, Jr., Jack L. Messman, William Incorporation to increase the number of authorized shares of
G. Morton, Jr., Thomas G. Plaskett, Leonard H. Roberts, common stock.
Alfred J. Stein, William E. Tucker, Edwina D. Woodbury.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To approve an amendment to the Restated Certificate of
Incorporation to change the name of the Company to RadioShack
Corporation.
FOR WITHHELD
[ ] ALL [ ] FROM ALL FOR [ ] AGAINST [ ] ABSTAIN [ ]
NOMINEES NOMINEES
4. To approve an amendment to the Executive Officers Compensation
Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- ------------------------------------------------------------------------------------------------------------------------------------
For all nominees except those written on line above
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
Please Sign Exactly as Your Name Appears on
This Proxy, Date and Promptly Return This
Proxy in the Enclosed Envelope.
Signature: Date: Signature: Date:
------------------------------ ------------- ------------------------------ -------------
</TABLE>
