Exhibit 10m
FORM OF
TERMINATION PROTECTION AGREEMENT
FOR CORPORATE EXECUTIVES
THIS AGREEMENT made as of the _______ day of August,
1990, by and between the "Company" (as hereinafter defined)
and ______________ (the "Executive").
WHEREAS, the Board of Directors of the Company (the
"Board") recognizes that the possibility of a "Change in
Control" (as hereinafter defined) exists and that the threat
or the occurrence of a Change in Control can result in
significant distractions of its key management personnel
because of the uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential
and in the best interest of the Company and its stockholders
to retain the services of the Executive in the event of a
threat or occurrence of a Change in Control and to ensure
[his or her] continued dedication and efforts in such event
without undue concern for [his or her] personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in
the employ of the Company and the Employer, particularly in
the event of a threat or the occurrence of a Change in
Control, the Company desires to enter into this Agreement
with the Executive to provide the Executive with certain
benefits in the event [his or her] employment is terminated
as a result of, or in connection with, a Change in Control
and to provide the Executive with the "Gross-Up Payment" (as
hereinafter defined) and certain other benefits whether or
not the Executive's employment is terminated.
NOW, THEREFORE, in consideration of the respective
agreements of the parties contained herein, it is agreed as
follows:
1. Term of Agreement. This Agreement shall commence as
of August 22, 1990 and shall continue in effect until August
22, 1992; provided, however, that commencing on August 22,
1991 and on each August 22 thereafter, the term of this
Agreement shall be automatically extended for one (1) year
unless either the Company or the Executive shall have given
written notice to the other at least ninety (90) days prior
thereto that the term of this Agreement shall not be so
extended; and provided, further, however, that
notwithstanding any such notice by the Company not to extend,
the term of this Agreement shall not expire prior to the
expiration of twenty-four (24) months after the occurrence of
a Change in Control.
2. Definitions.
2.1. Accrued Compensation. For purposes of this
Agreement, "Accrued Compensation" shall mean an amount which
shall include all amounts earned or accrued through the
"Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, and (ii)
reimbursement for reasonable and necessary expenses incurred
by the Executive on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, if
required by applicable law, and (iv) bonuses and incentive
compensation (other than the "Pro Rata Bonus" (as hereinafter
defined)).
2.2. Base Amount. For purposes of this Agreement,
"Base Amount" shall mean the greater of the Executive's
annual base salary (a) at the rate in effect on the
Termination Date or (b) at the highest rate in effect at any
time during the ninety (90) day period prior to the Change in
Control, and shall include all amounts of [his or her] base
salary that are deferred under the qualified and
non-qualified employee benefit plans of the Company.
2.3. Bonus Amount. For purposes of this
Agreement, "Bonus Amount" shall mean the highest annual bonus
paid or payable to the Executive for any fiscal year in
respect of the three (3) full fiscal years ended prior to the
Change in Control.
2.4. Cause. For purposes of this Agreement, a
termination of employment is for "Cause" if the Executive has
been convicted of a felony or the termination is evidenced by
a resolution adopted in good faith by two-thirds of the Board
that the Executive (a) intentionally and continually failed
substantially to perform [his or her] reasonably assigned
duties with the Company (other than a failure resulting from
the Executive's incapacity due to physical or mental illness
or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which
failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance
has been delivered to the Executive specifying the manner in
which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably
and materially injurious to the Company, monetarily or
otherwise; provided, however, that no termination of the
Executive's employment shall be for Cause as set forth in
clause (b) above until (x) there shall have been delivered to
the Executive a copy of a written notice setting forth that
the Executive was guilty of the conduct set forth in clause
(b) and specifying the particulars thereof in detail, and (y)
the Executive shall have been provided an opportunity to be
heard in person by the Board (with the assistance of the
Executive's counsel if the Executive so desires). No act,
nor failure to act, on the Executive's part, shall be
considered "intentional" unless the Executive has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Executive's action or failure to
act was in the best interest of the Company.
2.5. Change in Control. For purposes of this
Agreement, a "Change in Control" shall mean any of the
following events:
(a) An acquisition (other than directly from
the Company) of any voting securities of the Company (the
"Voting Securities") by any "Person" (as the term person is
used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"))
immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of fifteen percent (15%) or more of the
combined voting power of the Company's then outstanding
Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities
which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (1) an employee
benefit plan (or a trust forming a part thereof) maintained
by (x) the Company or (y) any corporation or other Person of
which a majority of its voting power or its equity securities
or equity interest is owned directly or indirectly by the
Company (a "Subsidiary"), (2) the Company or any Subsidiary,
or (3) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined).
(b) The individuals who, as of August 22,
1990, are members of the Board (the "Incumbent Board"), cease
for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination
for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially asssumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company
of:
(1) A merger, consolidation or
reorganization involving the Company, unless
(i) the stockholders of the Company,
immediately before such merger,
consolidation or reorganization, own,
directly or indirectly immediately
following such merger, consolidation
or reorganization, at least sixty percent
(60%) of the combined voting power of the
outstanding voting securities of the
corporation resulting from such merger or
consolidation or reorganization (the
"Surviving Corporation") in substantially
the same proportion as their ownership of
the Voting Securities immediately before
such merger, consolidation or
reorganization,
(ii) the individuals who were members of
the Incumbent Board immediately prior to
the execution of the agreement providing
for such merger, consolidation or
reorganization constitute at least
two-thirds of the members of the board of
directors of the Surviving Corporation,
(iii) no Person (other than the Company,
any Subsidiary, any employee benefit plan
(or any trust forming a part thereof)
maintained by the Company, the Surviving
Corporation or any Subsidiary, or any
Person who, immediately prior to such
merger, consolidation or reorganization
had Beneficial Ownership of fifteen
percent (15%) or more of the then
outstanding Voting Securities) has
Beneficial Ownership of fifteen percent
(15%) or more of the combined voting
power of the Surviving Corporation's then
outstanding voting securities, and
(iv) a transaction described in clauses
(i) through (iii) shall herein be
referred to as a "Non-Control
Transaction";
(2) A complete liquidation or dissolution
of the Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of the
assets of the Company to any Person (other
than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in
this Agreement to the contrary, if the Executive's employment
is terminated following the Effective Date but within one (1)
year prior to a Change in Control and [the Executive
reasonably demonstrates that] such termination (i) was at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
2.6. Company. For purposes of this Agreement, the
"Company" shall mean Tandy Corporation and shall include its
"Successors and Assigns" (as hereinafter defined).
2.7. Disability. For purposes of this Agreement,
"Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform [his
or her] duties with the Company for a period of one hundred
eighty (180) consecutive days and the Executive has not
returned to [his or her] full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
2.8. (a) Good Reason. For purposes of this
Agreement, "Good Reason" shall mean the occurrence after a
Change in Control of any of the events or conditions
described in Subsections (i) through (ix) hereof:
(i) a change in the Executive's status,
title, position or responsibilities (including
reporting responsibilities) which, in the
Executive's reasonable judgment, represents an
adverse change in [his or her] status, title,
position or responsibilities as in effect at any
time within ninety (90) days preceding the date of
the Change in Control or at any time thereafter;
the assignment to the Executive of any duties or
responsibilities which, in the Executive's
reasonable judgment, are inconsistent with such
status, title, position or responsibilities as in
effect at any time within ninety (90) days
preceding the date of the Change in Control or at
any time thereafter; or any removal of the
Executive from or failure to reappoint or reelect
[him or her] to any of [his or her] offices or
positions, except in connection with the
termination of the Executive's employment for
Cause, or as a result of [his or her] death, or by
the Executive other than for Good Reason;
(ii) a reduction in the rate of the
Executive's base salary below the Base Amount or
any failure to pay the Executive any compensation
or benefits to which [he or she] is entitled within
fifteen (15) days of the date notice of such
failure to pay is given to the Company and, in the
case of any annual bonus, within forty-five (45)
days following the end of the fiscal year pursuant
to which such bonus relates;
(iii) a change in the accounting policies or
practices as in effect during the ninety (90) days
preceding the Change in Control or at any time
thereafter which, in the Executive's reasonable
judgment, results in a reduction in [his or her]
earning potential;
(iv) the Company's requiring the Executive to
be based at any place outside a 20-mile radius from
[his or her] place of employment on the day prior
to the Change in Control, except for reasonably
required travel on the Company's business which is
not materially greater than such travel
requirements prior to the Change in Control;
(v) the failure by the Company to
(A) continue in effect (without reduction in
benefit levels, reward opportunities and/or bonus
potential for comparable performance) any material
compensation or benefit plan in which the Executive
was participating at any time within ninety (90)
days preceding the Change in Control or at any time
thereafter including, but not limited to, the plans
listed on Appendix A, unless such plan is replaced
with a plan that provides substantially equivalent
compensation or benefits to the Executive, or
(B) provide the Executive with compensation and
benefits, in the aggregate at least equal (in terms
of benefit levels and/or reward opportunities) to
those provided for under each other employee
benefit plan, program and practice in which the
Executive was participating at any time within
ninety (90) days preceding the Change in Control or
at any time thereafter;
(vi) the insolvency or the filing (by any
party, including the Company) of a petition for
bankruptcy, of the Company, which petition is not
dismissed within sixty (60) days;
(vii) any material breach by the Company of
any provision hereof;
(viii) any purported termination of the
Executive's employment for Cause by the Company
which does not comply with the terms of Section 2.4
hereof; and
(ix) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any
Successor or Assign of the Company, to assume and
agree to perform this Agreement, as contemplated in
Section 6 hereof.
(b) Any event or condition described in this
Section 2.8(a)(i) through (ix) which occurs following the
Effective Date but within one (1) year prior to a Change in
Control but which the Executive reasonably demonstrates (i)
was at the request of a Third Party or (ii) otherwise arose
in connection with, or in anticipation of, a Change in
Control which actually occurs, shall constitute Good Reason
for purposes of this Agreement notwithstanding that it
occurred prior to the Change in Control.
2.9. Notice of Termination. For purposes of this
Agreement, following a Change in Control, "Notice of
Termination" shall mean a written notice of termination from
the Company of the Executive's employment which indicates the
specific termination provision in this Agreement relied upon
and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
2.10. Pro Rata Bonus. For purposes of this
Agreement, "Pro Rata Bonus" shall mean an amount equal to the
Bonus Amount multiplied by a fraction the numerator of which
is the number of days in the fiscal year through the
Termination Date and the denominator of which is 365.
2.11. Successors and Assigns. For purposes of
this Agreement, "Successors and Assigns" shall mean a
corporation or other entity acquiring all or substantially
all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
2.12. Termination Date. For purposes of this
Agreement, "Termination Date" shall mean in the case of the
Executive's death, [his or her] date of death, in the case of
Good Reason, the last day of [his or her] employment, and in
all other cases, the date specified in the Notice of
Termination; provided, however, that if the Executive's
employment is terminated by the Company for Cause or due to
Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of
Termination is given to the Executive, provided that in the
case of Disability the Executive shall not have returned to
the full-time performance of [his or her] duties during such
period of at least 30 days.
3. Termination of Employment.
3.1. If, during the term of this Agreement, the
Executive's employment with the Company shall be terminated
within twenty-four (24) months following a Change in Control,
the Executive shall be entitled to the following compensation
and benefits:
(a) If the Executive's employment with the
Company shall be terminated (1) by reason of the Executive's
death, (2) by the Company for Cause or Disability, or (3) by
the Executive other than for Good Reason and other than
during the 60-day period commencing on the first anniversary
of the date of the occurrence of a Change in Control (the
"Window Period"), the Company shall pay to the Executive the
Accrued Compensation and, if such termination is other than
by the Company for Cause, a Pro Rata Bonus.
(b) If the Executive's employment with the
Company shall be terminated for any reason other than as
specified in Section 3.1(a) or during the Window Period, the
Executive shall be entitled to the following:
(i) the Company shall pay the Executive all
Accrued Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
termination pay and in lieu of any further compensation for
periods subsequent to the Termination Date, in a single
payment an amount (the "Termination Amount") in cash equal to
two times the sum of (A) the Base Amount and (B) the Bonus
Amount;
(iii) for twenty-four (24) months from the
Termination Date (the "Continuation Period"), the Company
shall at its expense continue on behalf of the Executive and
[his or her] dependents and beneficiaries the fringe
benefits, (excluding those benefit plans numbered 1 through 8
inclusive on Appendix A but including an automobile or
automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) and the life insurance, disability, medical,
dental and hospitalization benefits provided (x) to the
Executive at any time during the 90-day period prior to the
Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of
the Company during the Continuation Period; provided,
however, that with respect to any Executive who was entitled
to the use of an automobile provided by the Company within
the ninety (90) day period prior to a Change in Control or at
any time thereafter, the Executive shall be paid a cash
payment equal to the value of the Company provided automobile
to the Executive for the Continuation Period. The coverage
and benefits (including deductibles and contributions by the
Executive, if any) provided in this Section 3.1(b)(iii)
during the Continuation Period shall be no less favorable to
the Executive and [his or her] dependents and beneficiaries,
than the most favorable of such coverages and benefits during
any of the periods referred to in clauses (x) and (y) above.
The Company's obligation hereunder with respect to the
foregoing benefits (except for the automobile or automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) shall
be limited to the extent that the Executive obtains any such
benefits pursuant to a subsequent employer's benefit plans,
in which case the Company may reduce the coverage of any
benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined
benefit plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit
any benefits to which the Executive, [his or her] dependents
or beneficiaries may be entitled under any of the Company's
employee benefit plans, programs or practices following the
Executive's termination of employment, including without
limitation, retiree medical and life insurance benefits;
(iv) the Company shall pay in a single
payment an amount equal to eighty percent (80%) of the
maximum amount the Executive could have contributed under the
Deferred Salary and Investment Plan, Stock Purchase Program
and Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had [he or she] continued in the
employment with the Company during the Continuation Period at
the greater of [his or her] annualized gross salary and wages
as in effect immediately prior to the Change in Control or at
any time thereafter; and
(v) (A) the restrictions on any outstanding
incentive awards (including restricted stock and granted
performance shares or units) granted to the Executive
including, but not limited to, awards granted under the
Company's 1985 Stock Option Plan, or under any other
incentive plan or arrangement shall lapse and such incentive
award shall become 100% vested, all stock options and stock
appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, and all
performance units granted to the Executive shall become 100%
vested and (B) the Executive shall have the right to require
the Company to purchase, for cash, any shares of unrestricted
stock or shares purchased upon exercise of any options, at a
price equal to the fair market value of such shares on the
date of purchase by the Company.
(c) The amounts provided for in Sections
3.1(a) and 3.1(b)(i), (ii), (iii) (only as to the automobile
allowance and the related expenses of public liablity
insurance, collision coverage, repairs and maintenance) and
(iv) shall be paid in a single lump sum cash payment within
five (5) days after the Executive's Termination Date (or
earlier, if required by applicable law).
(d) The Executive shall not be required to
mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no
such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section
3.1(b)(iii).
3.2. (a) The termination pay and termination
benefits provided for in this Section 3 shall be in lieu of
any other severance or termination pay to which the Executive
may be entitled under any Company severance or termination
plan, program, policy or practice.
(b) The Executive's entitlement to any other
compensation or benefits (other than the Pro Rata Bonus and
other than the termination pay and termination benefits as
provided under this Section 3) shall be determined in
accordance with the Company's employee benefit plans
(including, the plans listed on Appendix A) and other
applicable programs, policies and practices then in effect.
4. Notice of Termination. Following a Change in
Control, any purported termination of the Executive's
employment by the Company and/or the Employer shall be
communicated by Notice of Termination to the Executive. For
purposes of this Agreement, no such purported termination
shall be effective without such Notice of Termination.
5. Excise Tax Payments.
(a) In the event that any payment or benefit
(within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code")), to the
Executive or for [his or her] benefit paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of,
[his or her] employment with the Company or a change in
ownership or effective control of the Company or of a
substantial portion of its assets (a "Payment" or
"Payments"), would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the Exeuctive with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive will be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes
(including any interest or penalties, other than interest and
penalties imposed by reason of the Executive's failure to
file timely a tax return or pay taxes shown due on [his or
her] return, imposed with respect to such taxes and the
Excise Tax), including any Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) An initial determination as to whether a
Gross-Up Payment is required pursuant to this Agreement and
the amount of such Gross-Up Payment shall be made at the
Company's expense by an accounting firm selected by the
Company and reasonably acceptable to the Executive which is
designated as one of the five largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm
shall provide its determination (the "Determination"),
together with detailed supporting calculations and
documentation to the Company and the Executive within five
days of the Termination Date if applicable, or such other
time as requested by the Company or by the Executive
(provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax) and if the
Accounting Firm determines that no Excise Tax is payable by
the Executive with respect to a Payment or Payments, it shall
furnish the Executive with an opinion reasonably acceptable
to the Executive that no Excise Tax will be imposed with
respect to any such Payment or Payments. Within ten days of
the delivery of the Determination to the Executive, the
Executive shall have the right to dispute the Determination
(the "Dispute"). The Gross-Up Payment, if any, as determined
pursuant to this Paragraph 5(b) shall be paid by the Company
to the Executive within five days of the receipt of the
Accounting Firm's determination. The existence of the
Dispute shall not in any way affect the Executive's right to
receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination
shall be binding, final and conclusive upon the Company and
the Executive subject to the application of Paragraph 5(c)
below.
(c) As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is
possible that a Gross-Up Payment (or a portion thereof) will
be paid which should not have been paid (an "Excess Payment")
or a Gross-Up Payment (or a portion thereof) which should
have been paid will not have been paid (an "Underpayment").
An Underpayment shall be deemed to have occurred (i) upon
notice (formal or informal) to the Executive from any
governmental taxing authority that the Executive's tax
liability (whether in respect of the Executive's current
taxable year or in respect of any prior taxable year) may be
increased by reason of the imposition of the Excise Tax on a
Payment or Payments with respect to which the Company has
failed to make a sufficient Gross-Up Payment, (ii) upon a
determination by a court, (iii) by reason of determination by
the Company (which shall include the position taken by the
Company, together with its consolidated group, on its federal
income tax return) or (iv) upon the resolution of the Dispute
to the Executive's satisfaction. If an Underpayment occurs,
the Executive shall promptly notify the Company and the
Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing
authority has requested payment, pay to the Executive an
additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's
failure to file timely a tax return or pay taxes shown due on
the Executive's return) imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the Excise Tax
shall not be imposed upon a Payment or Payments (or portion
thereof) with respect to which the Executive had previously
received a Gross-Up Payment. A "Final Determination" shall
be deemed to have occurred when the Executive has received
from the applicable government taxing authority a refund of
taxes or other reduction in the Executive's tax liability by
reason of the Excise Payment and upon either (x) the date a
determination is made by, or an agreement is entered into
with, the applicable governmental taxing authority which
finally and conclusively binds the Executive and such taxing
authority, or in the event that a claim is brought before a
court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all
appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations
with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a
loan by the Company to the Executive and the Executive shall
pay to the Company on demand (but not less than 10 days after
the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of
the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the
date of repayment to the Company.
(d) Notwithstanding anything contained in
this Agreement to the contrary, in the event that, according
to the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
6. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and
shall inure to the benefit of the Company, its Successors and
Assigns and the Company shall require any Successor or Assign
to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment
had taken place.
(b) Neither this Agreement nor any right or
interest hereunder shall be assignable or transferable by the
Executive, [his or her] beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal personal
representative.
7. Fees and Expenses. The Company shall pay all legal
fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they
become due as a result of (a) the Executive's termination of
employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,
but not limited to, any such fees and expenses incurred in
connection with (i) the Dispute and (ii) the Gross-Up Payment
whether as a result of any applicable government taxing
authority proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company under which the
Executive is or may be entitled to receive benefits, and (c)
the Executive's hearing before the Board as contemplated in
Section 2.4 of this Agreement; provided, however, that the
circumstances set forth in clauses (a) and (b) (other than as
a result of the Executive's termination of employment under
circumstances described in Section 2.5(d)) occurred on or
after a Change in Control.
8. Notice. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided
that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing
or future participation in any benefit, bonus, incentive or
other plan or program provided by the Company (except for any
severance or termination policies, plans, programs or
practices) and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive
may have under any other agreements with the Company (except
for any severance or termination agreement). Amounts which
are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Company
shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to
make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or others.
11. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
12. Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING THE EXECUTIVE AND THE
COMPANY WITH RESPECT TO ANY CLAIM OR ASSERTION THAT THE
EXECUTIVE'S EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE, THE
COMPANY HAS THE BURDEN OF PROVING THAT THE EXECUTIVE'S
EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE.
13. Forum. Any suit brought by the Executive under
this Agreement may be brought in the appropriate state or
federal court for Tarrant County, Texas, or for the county
wherein the Executive maintains [his or her] residence. Any
suit brought by the Company under this Agreement may only be
brought in the county wherein the Executive maintains [his or
her] residence unless the Executive consents to suit
elsewhere.
14. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes
all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer and
the Executive has executed this Agreement as of the day and
year first above written.
TANDY CORPORATION
ATTEST: By:_______________________
Name:
Title:
_________________________
Secretary
By:_______________________
[Executive]
APPENDIX A
COMPENSATION AND BENEFIT PLANS
1. Deferred Compensation Plan
2. Deferred Salary and Investment Plan
3. Employee Stock Ownership Plan
4. Salary Continuation Plan
5. Stock Purchase Program
6. Supplemental Stock Program
7. Stock Option plan
8. Post Retirement and Death Benefit Plan
for Selected Executive Employees
FORM OF
TERMINATION PROTECTION AGREEMENT
FOR DIVISION EXECUTIVES
THIS AGREEMENT made as of the day _______ of August,
1990, by and between the "Company" (as hereinafter defined)
and ________________ (the "Executive").
WHEREAS, the Board of Directors of the Company (the
"Board") recognizes that the possibility of a "Change in
Control" (as hereinafter defined) exists and that the threat
or the occurrence of a Change in Control can result in
significant distractions of its key management personnel
because of the uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential
and in the best interest of the Company and its stockholders
to retain the services of the Executive in the event of a
threat or occurrence of a Change in Control and to ensure
[his or her] continued dedication and efforts in such event
without undue concern for [his or her] personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in
the employ of the Company, particularly in the event of a
threat or the occurrence of a Change in Control, the Company
desires to enter into this Agreement with the Executive to
provide the Executive with certain benefits in the event [his
or her] employment is terminated as a result of, or in
connection with, a Change in Control and to provide the
Executive with the "Gross-Up Payment" (as hereinafter
defined) and certain other benefits whether or not the
Executive's employment is terminated.
NOW, THEREFORE, in consideration of the respective
agreements of the parties contained herein, it is agreed as
follows:
1. Term of Agreement. This Agreement shall commence as
of August 22, 1990 and shall continue in effect until August
22, 1992; provided, however, that commencing on August 22,
1991 and on each August 22 thereafter, the term of this
Agreement shall be automatically extended for one (1) year
unless either the Company or the Executive shall have given
written notice to the other at least ninety (90) days prior
thereto that the term of this Agreement shall not be so
extended; and provided, further, however, that
notwithstanding any such notice by the Company not to extend,
the term of this Agreement shall not expire prior to the
expiration of twenty-four (24) months after the occurrence of
a Change in Control.
2. Definitions.
2.1.
Accrued Compensation. For purposes of this Agreement,
"Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the
"Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, and (ii)
reimbursement for reasonable and necessary expenses incurred
by the Executive on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, if
required by applicable law and (iv) bonuses and incentive
compensation (other than the "Pro Rata Bonus" (as hereinafter
defined)).
2.2.
Base Amount. For purposes of this Agreement, "Base Amount"
shall mean the greater of the Executive's annual base salary
(a) at the rate in effect on the Termination Date or (b) at
the highest rate in effect at any time during the ninety (90)
day period prior to the Change in Control, and shall include
all amounts of [his or her] base salary that are deferred
under the qualified and non-qualified employee benefit plans
of the Company.
2.3.
Bonus Amount. For purposes of this Agreement, "Bonus Amount"
shall mean the highest annual bonus paid or payable to the
Executive for any fiscal year in respect of the three (3)
full fiscal years ended prior to the Change in Control.
2.4.
Cause. For purposes of this Agreement, a termination of
employment is for "Cause" if the Executive has been convicted
of a felony or the termination is evidenced by a resolution
adopted in good faith by two-thirds of the Board that the
Executive (a) intentionally and continually failed
substantially to perform [his or her] reasonably assigned
duties with the Company (other than a failure resulting from
the Executive's incapacity due to physical or mental illness
or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which
failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance
has been delivered to the Executive specifying the manner in
which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably
and materially injurious to the Company; provided, however,
that no termination of the Executive's employment shall be
for Cause as set forth in clause (b) above until (x) there
shall have been delivered to the Executive a copy of a
written notice setting forth that the Executive was guilty of
the conduct set forth in clause (b) and specifying the
particulars thereof in detail, and (y) the Executive shall
have been provided an opportunity to be heard in person by
the Board (with the assistance of the Executive's counsel if
the Executive so desires). No act, nor failure to act, on
the Executive's part, shall be considered "intentional"
unless the Executive has acted, or failed to act, with a lack
of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interest
of the Company.
2.5.
Change in Control. For purposes of this Agreement, a "Change
in Control" shall mean any of the following events:
(a) An acquisition (other than directly from
the Company) of any voting securities of the Company (the
"Voting Securities") by any "Person" (as the term person is
used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"))
immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of fifteen percent (15%) or more of the
combined voting power of the Company's then outstanding
Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities
which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (1) an employee
benefit plan (or a trust forming a part thereof) maintained
by (x) the Company or (y) any corporation or other Person of
which a majority of its voting power or its equity securities
or equity interest is owned directly or indirectly by the
Company (a "Subsidiary"), (2) the Company or any Subsidiary,
or (3) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined).
(b) The individuals who, as of August 22,
1990, are members of the Board (the "Incumbent Board"), cease
for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination
for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially asssumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company
of:
(1) A merger, consolidation or
reorganization involving the Company, unless
(i) the stockholders of the
Company, immediately before such merger,
consolidation or reorganization, own,
directly or indirectly immediately
following such merger, consolidation or
reorganization, at least sixty percent
(60%) of the combined voting power of the
outstanding voting securities of the
corporation resulting from such merger or
consolidation or reorganization (the
"Surviving Corporation") in substantially
the same proportion as their ownership of
the Voting Securities immediately before
such merger, consolidation or
reorganization,
(ii) the individuals who were members of
the Incumbent Board immediately prior to
the execution of the agreement providing
for such merger, consolidation or
reorganization constitute at least
two-thirds of the members of the boardof
directors of the Surviving Corporation,
(iii) no Person (other than the Company,
any Subsidiary, any employee benefit plan
(or any trust forming a part thereof)
maintained by the Company, the Surviving
Corporation or any Subsidiary, or any
Person who, immediately prior to such
merger, consolidation or reorganization
had Beneficial Ownership of fifteen
percent (15%) or more of the then
outstanding Voting Securities) has
Beneficial Ownership of fifteen percent
(15%) or more of the combined voting
power of the Surviving Corporation's then
outstanding voting securities, and
(iv) a transaction described in clauses
(i) through (iii) shall herein be
referred to as a "Non-Control
Transaction";
(2) A complete liquidation or
dissolution of the Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of the
assets of the Company to any Person (other
than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in
this Agreement to the contrary, if the Executive's employment
is terminated following the Effective Date but within one (1)
year prior to a Change in Control and [the Executive
reasonably demonstrates that] such termination (i) was at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
2.6. Company. For purposes of this Agreement, the
"Company" shall mean Tandy Corporation and shall include its
"Successors and Assigns" (as hereinafter defined).
2.7. Disability. For purposes of this Agreement,
"Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform [his
or her] duties with the Company for a period of one hundred
eighty (180) consecutive days and the Executive has not
returned to [his or her] full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
2.8. (a) Good Reason. For purposes of this
Agreement, "Good Reason" shall mean the occurrence after a
Change in Control of any of the events or conditions
described in Subsections (i) through (ix) hereof:
(i) a change in the Executive's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Executive's
reasonable judgment, represents an adverse change
in [his or her] status, title, position or
responsibilities as in effect at any time within
ninety (90) days preceding the date of the Change
in Control or at any time thereafter; the
assignment to the Executive of any duties or
responsibilities which, in the Executive's
reasonable judgment, are inconsistent with such
status, title, position or responsibilities as in
effect at any time within ninety (90) days
preceding the date of the Change in Control or at
any time thereafter; or any removal of the
Executive from or failure to reappoint or reelect
[him or her] to any of [his or her] offices or
positions, except in connection with the
termination of the Executive's employment for
Cause, or as a result of [his or her] death, or by
the Executive other than for Good Reason;
(ii) a reduction in the rate of the Executive's
base salary below the Base Amount or any failure to
pay the Executive any compensation or benefits to
which [he or she] is entitled within fifteen (15)
days of the date notice of such failure is given to
the Company and, in the case of any annual bonus,
within forty-five (45) days following the end of
the fiscal year pursuant to which such bonus
relates;
(iii) a change in the accounting policies or
practices as in effect during the ninety (90) days
preceding the Change in Control or at any time
thereafter which, in the Executive's reasonable
judgment, results in a reduction in [his or her]
earning potential;
(iv) the Company's requiring the Executive to be
based at any place outside a 20-mile radius from
[his or her] place of employment on the day prior
to the Change in Control, except for reasonably
required travel on the Company's business which is
not materially greater than such travel
requirements prior to the Change in Control;
(v) the failure by the Company to (A) continue in
effect (without reduction in benefit levels, reward
opportunities and/or bonus potential for comparable
performance) any material compensation or benefit
plan in which the Executive was participating at
any time within ninety (90) days preceding the
Change in Control or at any time thereafter
including, but not limited to, the plans listed on
Appendix A, unless such plan is replaced with a
plan that provides substantially equivalent
compensation or benefits to the Executive, or
(B) provide the Executive with compensation and
benefits, in the aggregate at least equal (in terms
of benefit levels and/or reward opportunities) to
those provided for under each other employee
benefit plan, program and practice in which the
Executive was participating at any time within
ninety (90) days preceding the Change in Control or
at any time thereafter;
(vi) the insolvency or the filing (by any party,
including the Company) of a petition for
bankruptcy, of the Company, which petition is not
dismissed within sixty (60) days;
(vii) any material breach by the Company of any
provision hereof;
(viii) any purported termination of the
Executive's employment for Cause by the Company
which does not comply with the terms of Section 2.4
hereof; and
(ix) the failure of the Company to obtain an
agreement, satisfactory to the Executive, from any
Successor or Assign of the Company, to assume and
agree to perform this Agreement, as contemplated in
Section 6 hereof.
(b) Any event or condition described in this
Section 2.8(a)(i) through (ix) which occurs following the
Effective Date but within one (1) year prior to a Change in
Control but which the Executive reasonably demonstrates (i)
was at the request of a Third Party or (ii) otherwise arose
in connection with, or in anticipation of, a Change in
Control which actually occurs, shall constitute Good Reason
for purposes of this Agreement notwithstanding that it
occurred prior to the Change in Control.
2.9. Notice of Termination. For purposes of this
Agreement, following a Change in Control, "Notice of
Termination" shall mean a written notice of termination from
the Company of the Executive's employment which indicates the
specific termination provision in this Agreement relied upon
and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
2.10. Pro Rata Bonus. For purposes of this
Agreement, "Pro Rata Bonus" shall mean an amount equal to the
Bonus Amount multiplied by a fraction the numerator of which
is the number of days in the fiscal year through the
Termination Date and the denominator of which is 365.
2.11. Successors and Assigns. For purposes of
this Agreement, "Successors and Assigns" shall mean a
corporation or other entity acquiring all or substantially
all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
2.12. Termination Date. For purposes of this
Agreement, "Termination Date" shall mean in the case of the
Executive's death, [his or her] date of death, in the case of
Good Reason, the last day of [his or her] employment, and in
all other cases, the date specified in the Notice of
Termination; provided, however, that if the Executive's
employment is terminated by the Company for Cause or due to
Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of
Termination is given to the Executive, provided that in the
case of Disability the Executive shall not have returned to
the full-time performance of [his or her] duties during such
period of at least 30 days.
3. Termination of Employment.
3.1. If, during the term of this Agreement, the
Executive's employment with the Company shall be terminated
within twenty-four (24) months following a Change in Control,
the Executive shall be entitled to the following compensation
and benefits:
(a) If the Executive's employment with the
Company shall be terminated (1) by reason of the Executive's
death, (2) by the Company for Cause or Disability, or (3) by
the Executive other than for Good Reason and other than
during the 60-day period commencing on the first anniversary
of the date of the occurrence of a Change in Control (the
"Window Period"), the Company shall pay to the Executive the
Accrued Compensation and, if such termination is other than
by the Company for Cause, a Pro Rata Bonus.
(b) If the Executive's employment with the
Company shall be terminated for any reason other than as
specified in Section 3.1(a) or during the Window Period, the
Executive shall be entitled to the following:
(i) the Company shall pay the Executive all
Accrued Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
termination pay and in lieu of any further compensation for
periods subsequent to the Termination Date, in a single
payment an amount (the "Termination Amount") in cash equal to
two times the sum of (A) the Base Amount and (B) the Bonus
Amount;
(iii) for twenty-four (24) months from the
Termination Date (the "Continuation Period"), the Company
shall at its expense continue on behalf of the Executive and
[his or her] dependents and beneficiaries the fringe
benefits, (excluding those benefit plans numbered 1 through 8
inclusive on Appendix A but including an automobile or
automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) and the life insurance, disability, medical,
dental and hospitalization benefits provided (x) to the
Executive at any time during the 90-day period prior to the
Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of
the Company during the Continuation Period; provided,
however, that with respect to any Executive who was entitled
to the use of an automobile provided by the Company within
the ninety (90) day period prior to a Change in Control or at
any time thereafter, the Executive shall be paid a cash
payment equal to the value of the Company provided automobile
to the Executive for the Continuation Period. The coverage
and benefits (including deductibles and contributions by the
Executive, if any) provided in this Section 3.1(b)(iii)
during the Continuation Period shall be no less favorable to
the Executive and [his or her] dependents and beneficiaries,
than the most favorable of such coverages and benefits during
any of the periods referred to in clauses (x) and (y) above.
The Company's obligation hereunder with respect to the
foregoing benefits (except for the automobile or automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) shall
be limited to the extent that the Executive obtains any such
benefits pursuant to a subsequent employer's benefit plans,
in which case the Company may reduce the coverage of any
benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined
benefit plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit
any benefits to which the Executive, [his or her] dependents
or beneficiaries may be entitled under any of the Company's
employee benefit plans, programs or practices following the
Executive's termination of employment, including without
limitation, retiree medical and life insurance benefits;
(iv) the Company shall pay in a single
payment an amount equal to eighty percent (80%) of the
maximum amount the Executive could have contributed under the
Deferred Salary and Investment Plan, Stock Purchase Program
and Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had [he or she] continued in the
employment with the Company during the Continuation Period
the greater of [his or her] annualized gross salary and wages
as in effect immediately prior to the Change in Control or at
any time thereafter; and
(v) (A) the restrictions on any outstanding
incentive awards (including restricted stock and granted
performance shares or units) granted to the Executive
including, but not limited to, awards granted under the
Company's 1985 Stock Option Plan, or under any other
incentive plan or arrangement shall lapse and such incentive
award shall become 100% vested, all stock options and stock
appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, and all
performance units granted to the Executive shall become 100%
vested and (B) the Executive shall have the right to require
the Company to purchase, for cash, any shares of unrestricted
stock or shares purchased upon exercise of any options, at a
price equal to the fair market value of such shares on the
date of purchase by the Company.
(c) The amounts provided for in Sections
3.1(a) and 3.1(b)(i), (ii), (iii) (only as to the automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) and
(iv) shall be paid in a single lump sum cash payment within
five (5) days after the Executive's Termination Date (or
earlier, if required by applicable law).
(d) The Executive shall not be required to
mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no
such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section
3.1(b)(iii).
3.2. (a) The termination pay and termination
benefits provided for in this Section 3 shall be in lieu of
any other severance or termination pay to which the Executive
may be entitled under any Company severance or termination
plan, program, policy or practice.
(b) The Executive's entitlement to any other
compensation or benefits (other than the Pro Rata Bonus and
other than the termination pay and termination benefits as
provided under this Section 3) shall be determined in
accordance with the Company's employee benefit plans
(including, the plans listed on Appendix A) and other
applicable programs, policies and practices then in effect.
3.3. Notwithstanding any other provision of this
Agreement to the contrary, the termination of the Executive's
employment with the Company in connection with the sale,
divestiture or other disposition of a "Division" (as
hereinafter defined) (or part thereof) shall not be deemed to
be a termination of employment of the Executive for purposes
of this Agreement provided the Executive is offered
employment by the purchaser or acquiror of such Division (or
part thereof) and the Company obtains an agreement from such
purchaser or acquiror as contemplated in Section 6(c) and the
Executive shall not be entitled to benefits from the Company
under this Agreement as a result of such sale, divestiture,
or other disposition, or as a result of any subsequent
termination of employment. "Division" shall mean [name of
Division].
4. Notice of Termination. Following a Change in
Control, any purported termination of the Executive's
employment by the Company shall be communicated by Notice of
Termination to the Executive. For purposes of this
Agreement, no such purported termination shall be effective
without such Notice of Termination.
5. Excise Tax Payments.
(a) In the event that any payment or benefit
(within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code")), to the
Executive or for [his or her] benefit paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of,
[his or her] employment with the Company or a change in
ownership or effective control of the Company or of a
substantial portion of its assets (a "Payment" or
"Payments"), would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the Exeuctive with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive will be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes
(including any interest or penalties, other than interest and
penalties imposed by reason of the Executive's failure to
file timely a tax return or pay taxes shown due on [his or
her] return, imposed with respect to such taxes and the
Excise Tax), including any Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) An initial determination as to whether a
Gross-Up Payment is required pursuant to this Agreement and
the amount of such Gross-Up Payment shall be made at the
Company's expense by an accounting firm selected by the
Company and reasonably acceptable to the Executive which is
designated as one of the five largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm
shall provide its determination (the "Determination"),
together with detailed supporting calculations and
documentation to the Company and the Executive within five
days of the Termination Date if applicable, or such other
time as requested by the Company or by the Executive
(provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax) and if the
Accounting Firm determines that no Excise Tax is payable by
the Executive with respect to a Payment or Payments, it shall
furnish the Executive with an opinion reasonably acceptable
to the Executive that no Excise Tax will be imposed with
respect to any such Payment or Payments. Within ten days of
the delivery of the Determination to the Executive, the
Executive shall have the right to dispute the Determination
(the "Dispute"). The Gross-Up Payment, if any, as determined
pursuant to this Paragraph 5(b) shall be paid by the Company
to the Executive within five days of the receipt of the
Accounting Firm's determination. The existence of the
Dispute shall not in any way affect the Executive's right to
receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination
shall be binding, final and conclusive upon the Company and
the Executive subject to the application of Paragraph 5(c)
below.
(c) As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is
possible that a Gross-Up Payment (or a portion thereof) will
be paid which should not have been paid (an "Excess Payment")
or a Gross-Up Payment (or a portion thereof) which should
have been paid will not have been paid (an "Underpayment").
An Underpayment shall be deemed to have occurred (i) upon
notice (formal or informal) to the Executive from any
governmental taxing authority that the Executive's tax
liability (whether in respect of the Executive's current
taxable year or in respect of any prior taxable year) may be
increased by reason of the imposition of the Excise Tax on a
Payment or Payments with respect to which the Company has
failed to make a sufficient Gross-Up Payment, (ii) upon a
determination by a court, (iii) by reason of determination by
the Company (which shall include the position taken by the
Company, together with its consolidated group, on its federal
income tax return) or (iv) upon the resolution of the Dispute
to the Executive's satisfaction. If an Underpayment occurs,
the Executive shall promptly notify the Company and the
Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing
authority has requested payment, pay to the Executive an
additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's
failure to file timely a tax return or pay taxes shown due on
the Executive's return) imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the Excise Tax
shall not be imposed upon a Payment or Payments (or portion
thereof) with respect to which the Executive had previously
received a Gross-Up Payment. A "Final Determination" shall
be deemed to have occurred when the Executive has received
from the applicable government taxing authority a refund of
taxes or other reduction in the Executive's tax liability by
reason of the Excise Payment and upon either (x) the date a
determination is made by, or an agreement is entered into
with, the applicable governmental taxing authority which
finally and conclusively binds the Executive and such taxing
authority, or in the event that a claim is brought before a
court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all
appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations
with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a
loan by the Company to the Executive and the Executive shall
pay to the Company on demand (but not less than 10 days after
the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of
the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the
date of repayment to the Company.
(d) Notwithstanding anything contained in
this Agreement to the contrary, in the event that, according
to the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
6. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and
shall inure to the benefit of the Company and its Successors
and Assigns and the Company shall require any Successor or
Assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
or assignment had taken place.
(b) Neither this Agreement nor any right or
interest hereunder shall be assignable or transferable by the
Executive, [his or her] beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal personal
representative.
(c) In the event that the Division (or part
thereof) is sold, divested, or otherwise disposed of by the
Company subsequent to a Change in Control and the Executive
is offered employment by the purchaser or acquiror thereof,
the Company shall require such purchaser or acquiror to
assume, and agree to perform the Company's obligations under
this Agreement, in the same manner, and to the same extent
that the Company would be required to perform if no such
acquisition or purchase had taken place.
7. Fees and Expenses. The Company shall pay all legal
fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they
become due as a result of (a) the Executive's termination of
employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,
but not limited to, any such fees and expenses incurred in
connection with (i) the Dispute and (ii) the Gross-Up Payment
whether as a result of any applicable government taxing
authority proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company under which the
Executive is or may be entitled to receive benefits, and (c)
the Executive's hearing before the Board as contemplated in
Section 2.4 of this Agreement; provided, however, that the
circumstances set forth in clauses (a) and (b) (other than as
a result of the Executive's termination of employment under
circumstances described in Section 2.5(d)) occurred on or
after a Change in Control.
8. Notice. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided
that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing
or future participation in any benefit, bonus, incentive or
other plan or program provided by the Company (except for any
severance or termination policies, plans, programs or
practices) and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive
may have under any other agreements with the Company (except
for any severance or termination agreement). Amounts which
are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Company
shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to
make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or others.
11. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
12. Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING THE EXECUTIVE AND THE
COMPANY WITH RESPECT TO ANY CLAIM OR ASSERTION THAT THE
EXECUTIVE'S EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE, THE
COMPANY HAS THE BURDEN OF PROVING THAT THE EXECUTIVE'S
EMPLOYMENT WAS PROPERLY TERMINATED FOR CAUSE.
13. Forum. Any suit brought by the Executive under
this Agreement may be brought in the appropriate state or
federal court for Tarrant County, Texas, or for the county
wherein the Executive maintains [his or her] residence. Any
suit brought by the Company under this Agreement may only be
brought in the county wherein the Executive maintains [his or
her] residence unless the Executive consents to suit
elsewhere.
14. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes
all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company caused this Agreement to
be executed by its duly authorized officer and the Executive
has executed this Agreement as of the day and year first
above written.
TANDY CORPORATION
ATTEST: By:__________________________
Name:
Title:
_________________________
Secretary
By:__________________________
[Executive]
APPENDIX A
COMPENSATION AND BENEFIT PLANS
1. Deferred Compensation Plan
2. Deferred Salary and Investment Plan
3. Employee Stock Ownership Plan
4. Salary Continuation Plan
5. Stock Purchase Program
6. Supplemental Stock Program
7. Stock Option plan
8. Post Retirement and Death Benefit Plan
for Selected Executive Employees
FORM OF
TERMINATION PROTECTION AGREEMENT
FOR SUBSIDIARY EXECUTIVES
THIS AGREEMENT made as of the day of August, 1990, by
and among the "Company" (as hereinafter defined) the
"Employer" (as hereinafter defined) and (the "Executive").
WHEREAS, the Board of Directors of the Company (the
"Board") recognizes that the possibility of a "Change in
Control" (as hereinafter defined) exists and that the threat
or the occurrence of a Change in Control can result in
significant distractions of its key management personnel
because of the uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential
and in the best interest of the Company, its stockholders and
the Employer to retain the services of the Executive in the
event of a threat or occurrence of a Change in Control and to
ensure [his or her] continued dedication and efforts in such
event without undue concern for [his or her] personal
financial and employment security; and
WHEREAS, in order to induce the Executive to remain in
the employ of the Employer, particularly in the event of a
threat or the occurrence of a Change in Control, the Company
and the Employer desire to enter into this Agreement with the
Executive to provide the Executive with certain benefits in
the event [his or her] employment is terminated as a result
of, or in connection with, a Change in Control and to provide
the Executive with the "Gross-Up Payment" (as hereinafter
defined) and certain other benefits whether or not the
Executive's employment is terminated.
NOW, THEREFORE, in consideration of the respective
agreements of the parties contained herein, it is agreed as
follows:
1. Term of Agreement. This Agreement shall commence as
of August 22, 1990 and shall continue in effect until August
22, 1992; provided, however, that commencing on August 22,
1991 and on each August 22 thereafter, the term of this
Agreement shall be automatically extended for one (1) year
unless either the Company or the Executive shall have given
written notice to the other at least ninety (90) days prior
thereto that the term of this Agreement shall not be so
extended; and provided, further, however, that
notwithstanding any such notice by the Company not to extend,
the term of this Agreement shall not expire prior to the
expiration of twenty-four (24) months after the occurrence of
a Change in Control.
2. Definitions.
2.1.
Accrued Compensation. For purposes of this Agreement,
"Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the
"Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, and (ii)
reimbursement for reasonable and necessary expenses incurred
by the Executive on behalf of the Employer during the period
ending on the Termination Date, (iii) vacation pay, if
required by applicable law, and (iv) bonuses and incentive
compensation (other than the "Pro Rata Bonus" (as hereinafter
defined))].
2.2.
Base Amount. For purposes of this Agreement, "Base Amount"
shall mean the greater of the Executive's annual base salary
(a) at the rate in effect on the Termination Date or (b) at
the highest rate in effect at any time during the ninety (90)
day period prior to the Change in Control, and shall include
all amounts of [his or her] base salary that are deferred
under the qualified and non-qualified employee benefit plans
of the Company and/or the Employer.
2.3.
Bonus Amount. For purposes of this Agreement, "Bonus Amount"
shall mean the highest annual bonus paid or payable to the
Executive for any fiscal year in respect of the three (3)
full fiscal years ended prior to the Change in Control.
2.4.
Cause. For purposes of this Agreement, a termination of
employment is for "Cause" if the Executive has been convicted
of a felony or the termination is evidenced by a resolution
adopted in good faith by two-thirds of the Board that the
Executive (a) intentionally and continually failed
substantially to perform [his or her] reasonably assigned
duties with the Employer (other than a failure resulting from
the Executive's incapacity due to physical or mental illness
or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which
failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance
has been delivered to the Executive specifying the manner in
which the Executive has failed substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably
and materially injurious to the Company and/or the Employer;
provided, however, that no termination of the Executive's
employment shall be for Cause as set forth in clause (b)
above until (x) there shall have been delivered to the
Executive a copy of a written notice setting forth that the
Executive was guilty of the conduct set forth in clause (b)
and specifying the particulars thereof in detail, and (y) the
Executive shall have been provided an opportunity to be heard
in person by the Board (with the assistance of the
Executive's counsel if the Executive so desires). No act,
nor failure to act, on the Executive's part, shall be
considered "intentional" unless the Executive has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Executive's action or failure to
act was in the best interest of the Company and/or the
Employer.
2.5.
Change in Control. For purposes of this Agreement, a "Change
in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
however, that in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (x) the Company or (y)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Subsidiary"),
(2) the Company or any Subsidiary, or (3) any Person in
connection with a "Non-Control Transaction" (as hereinafter
defined).
(b) The individuals who, as of August 22, 1990,
are members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially asssumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company,
immediately before such merger, consolidation
or reorganization, own, directly or indirectly
immediately following such merger,
consolidation or reorganization, at least
sixty percent (60%) of the combined voting
power of the outstanding voting securities of
the corporation resulting from such merger or
consolidation or reorganization (the
"Surviving Corporation") in substantially the
same proportion as their ownership of the
Voting Securities immediately before such
merger, consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the
execution of the agreement providing for such
merger, consolidation or reorganization
constitute at least two-thirds of the members
of the board of directors of the Surviving
Corporation,
(iii) no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any
trust forming a part thereof) maintained by
the Company, the Surviving Corporation or any
Subsidiary, or any Person who, immediately
prior to such merger, consolidation or
reorganization had Beneficial Ownership of
fifteen percent (15%) or more of the then
outstanding Voting Securities) has Beneficial
Ownership of fifteen percent (15%) or more of
the combined voting power of the Surviving
Corporation's then outstanding voting
securities, and
(iv) a transaction described in clauses (i)
through (iii) shall herein be referred to as a
"Non-Control Transaction";
(2) A complete liquidation or dissolution of
the Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of the
assets of the Company to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in
this Agreement to the contrary, if the Executive's employment
is terminated following the Effective Date but within one (1)
year prior to a Change in Control and [the Executive
reasonably demonstrates that] such termination (i) was at the
request of a third party who has indicated an intention or
taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control (a "Third
Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs,
then for all purposes of this Agreement, the date of a Change
in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the
Executive's employment.
2.6. Company. For purposes of this Agreement, the
"Company" shall mean Tandy Corporation and shall include its
"Successors and Assigns" (as hereinafter defined).
2.7. Disability. For purposes of this Agreement,
"Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform [his
or her] duties with the Employer for a period of one hundred
eighty (180) consecutive days and the Executive has not
returned to [his or her] full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
2.8. Employer. For purposes of this Agreement,
"Employer" shall mean [name of subsidiary].
2.9. (a) Good Reason. For purposes of this
Agreement, "Good Reason" shall mean the occurrence after a
Change in Control of any of the events or conditions
described in Subsections (i) through (ix) hereof:
(i) a change in the Executive's status,
title, position or responsibilities (including
reporting responsibilities) which, in the
Executive's reasonable judgment, represents an
adverse change in [his or her] status, title,
position or responsibilities as in effect at
any time within ninety (90) days preceding the
date of the Change in Control or at any time
thereafter; the assignment to the Executive of
any duties or responsibilities which, in the
Executive's reasonable judgment, are
inconsistent with such status, title, position
or responsibilities as in effect at any time
within ninety (90) days preceding the date of
the Change in Control or at any time
thereafter; or any removal of the Executive
from or failure to reappoint or reelect [him
or her] to any of [his or her] offices or
positions, except in connection with the
termination of the Executive's employment for
Cause, or as a result of [his or her] death,
or by the Executive other than for Good
Reason;
(ii) a reduction in the rate of the
Executive's base salary below the Base Amount
or any failure to pay the Executive any
compensation or benefits to which [he or she]
is entitled within fifteen (15) days of the
date notice of such failure is given to the
Employer and, in the case of any annual bonus,
within forty-five (45) days following the end
of the fiscal year pursuant to which such
bonus relates;
(iii) a change in the accounting policies or
practices as in effect during the ninety (90)
days preceding the Change in Control or at any
time thereafter which, in the Executive's
reasonable judgment, results in a reduction in
[his or her] earning potential;
(iv) the Employer's requiring the Executive
to be based at any place outside a 20-mile
radius from [his or her] place of employment
on the day prior to the Change in Control,
except for reasonably required travel on the
Employer's business which is not materially
greater than such travel requirements prior to
the Change in Control;
(v) the failure by the Company and/or the
Employer to (A) continue in effect (without
reduction in benefit levels, reward
opportunities and/or bonus potential for
comparable performance) any material
compensation or benefit plan in which
the Executive was participating at any time
within ninety (90) days preceding the Change
in Control or at any time thereafter
including, but not limited to, the plans
listed on Appendix A, unless such plan is
replaced with a plan that provides
substantially equivalent compensation or
benefits to the Executive, or (B) provide the
Executive with compensation and benefits, in
the aggregate at least equal (in terms of
benefit levels and/or reward opportunities) to
those provided for under each other employee
benefit plan, program and practice in which
the Executive was participating at any time
within ninety (90) days preceding the Change
in Control or at any time thereafter;
(vi) the insolvency or the filing (by any
party, including the Company) of a petition
for bankruptcy, of the Company, which petition
is not dismissed within sixty (60) days;
(vii) any material breach by the Company
and/or the Employer of any provision hereof;
(viii) any purported termination of the
Executive's employment for Cause by the
Company and/or the Employer which does not
comply with the terms of Section 2.4 hereof;
and
(ix) the failure of the Company and the
Employer to obtain an agreement, satisfactory
to the Executive, from any Successor or Assign
of the Company, to assume and agree to perform
this Agreement, as contemplated in Section 6
hereof.
(b) Any event or condition described in
this Section 2.10(a)(i) through (ix) which occurs following
the Effective Date but within one (1) year prior to a Change
in Control but which the Executive reasonably demonstrates
(i) was at the request of a Third Party or (ii) otherwise
arose in connection with, or in anticipation of, a Change in
Control which actually occurs, shall constitute Good Reason
for purposes of this Agreement notwithstanding that it
occurred prior to the Change in Control.
2.10. Notice of Termination. For purposes of this
Agreement, following a Change in Control, "Notice of
Termination" shall mean a written notice of termination from
the Employer of the Executive's employment which indicates
the specific termination provision in this Agreement relied
upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated.
2.11. Pro Rata Bonus. For purposes of this
Agreement, "Pro Rata Bonus" shall mean an amount equal to the
Bonus Amount multiplied by a fraction the numerator of which
is the number of days in the fiscal year through the
Termination Date and the denominator of which is 365.
2.12. Successors and Assigns. For purposes of
this Agreement, "Successors and Assigns" shall mean a
corporation or other entity acquiring all or substantially
all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
2.13. Termination Date. For purposes of this
Agreement, "Termination Date" shall mean in the case of the
Executive's death, [his or her] date of death, in the case of
Good Reason, the last day of [his or her] employment, and in
all other cases, the date specified in the Notice of
Termination; provided, however, that if the Executive's
employment is terminated by the Employer for Cause or due to
Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of
Termination is given to the Executive, provided that in the
case of Disability the Executive shall not have returned to
the full-time performance of [his or her] duties during such
period of at least 30 days.
3. Termination of Employment.
3.1. If, during the term of this Agreement, the
Executive's employment with the Employer shall be terminated
within twenty-four (24) months following a Change in Control,
the Executive shall be entitled to the following compensation
and benefits:
(a) If the Executive's employment with the
Employer shall be terminated (1) by reason of the Executive's
death, (2) by the Company for Cause or Disability, or (3) by
the Executive other than for Good Reason and other than
during the 60-day period commencing on the first anniversary
of the date of the occurrence of a Change in Control (the
"Window Period"), the Company shall pay to the Executive the
Accrued Compensation and, if such termination is other than
by the Employer for Cause, a Pro Rata Bonus.
(b) If the Executive's employment with the
Employer shall be terminated for any reason other than as
specified in Section 3.1(a) or during the Window Period, the
Executive shall be entitled to the following:
(i) the Company shall pay the Executive all
Accrued Compensation and a Pro-Rata Bonus;
(ii) the Company shall pay the Executive as
termination pay and in lieu of any further compensation for
periods subsequent to the Termination Date, in a single
payment an amount (the "Termination Amount") in cash equal to
two times the sum of (A) the Base Amount and (B) the Bonus
Amount;
(iii) for twenty-four (24) months from the
Termination Date (the "Continuation Period"), the Company
shall at its expense continue on behalf of the Executive and
[his or her] dependents and beneficiaries the fringe
benefits, (excluding those benefit plans numbered 1 through 8
inclusive on Appendix A but including an automobile or
automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) and the life insurance, disability, medical,
dental and hospitalization benefits provided (x) to the
Executive at any time during the 90-day period prior to the
Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of
the Company and/or the Employer during the Continuation
Period; provided, however, that with respect to any Executive
who was entitled to the use of an automobile provided by the
Company and/or the Employer within the ninety (90) day period
prior to a Change in Control or at any time thereafter, the
Executive shall be paid a cash payment equal to the value of
the Company and/or the Employer provided automobile to the
Executive for the Continuation Period. The coverage and
benefits (including deductibles and contributions by the
Executive, if any) provided in this Section 3.1(b)(iii)
during the Continuation Period shall be no less favorable to
the Executive and [his or her] dependents and beneficiaries,
than the most favorable of such coverages and benefits during
any of the periods referred to in clauses (x) and (y) above.
The Company's and/or the Employer's obligation hereunder with
respect to the foregoing benefits (except for the automobile
or automobile allowance and the related expenses of public
liability insurance, collision coverage, repairs and
maintenance) shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent
employer's benefit plans, in which case the Company and/or
the Employer may reduce the coverage of any benefits it is
required to provide the Executive hereunder as long as the
aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder.
This Subsection (iii) shall not be interpreted so as to limit
any benefits to which the Executive, [his or her] dependents
or beneficiaries may be entitled under any of the Company's
and/or the Employer's employee benefit plans, programs or
practices following the Executive's termination of
employment, including without limitation, retiree medical and
life insurance benefits;
(iv) the Company shall pay in a single
payment an amount equal to eighty percent (80%) of the
maximum amount the Executive could have contributed under the
Deferred Salary and Investment Plan, Stock Purchase Program
and Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had [he or she] continued in the
employment with the Employer during the Continuation Period
at the greater of [his or her] annualized gross salary and
wages as in effect immediately prior to the Change in Control
or at any time thereafter; and
(v) (A) the restrictions on any outstanding
incentive awards (including restricted stock and granted
performance shares or units) granted to the Executive
including, but not limited to, awards granted under the
Company's 1985 Stock Option Plan, or under any other
incentive plan or arrangement shall lapse and such incentive
award shall become 100% vested, all stock options and stock
appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, and all
performance units granted to the Executive shall become 100%
vested and (B) the Executive shall have the right to require
the Company to purchase, for cash, any shares of unrestricted
stock or shares purchased upon exercise of any options, at a
price equal to the fair market value of such shares on the
date of purchase by the Company.
(c) The amounts provided for in Sections
3.1(a) and 3.1(b)(i), (ii), (iii) (only as to the automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) and
(iv) shall be paid in a single lump sum cash payment within
five (5) days after the Executive's Termination Date (or
earlier, if required by applicable law).
(d) The Executive shall not be required to
mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no
such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section
3.1(b)(iii).
3.2. (a) The termination pay and termination
benefits provided for in this Section 3 shall be in lieu of
any other severance or termination pay to which the Executive
may be entitled under any Company and/or Employer severance
or termination plan, program, policy or practice.
(b) The Executive's entitlement to any other
compensation benefits (other than the Pro Rata Bonus and
other than the termination pay and termination benefits as
provided in this Section 3) shall be determined in accordance
with the Company's and/or the Employer's employee benefit
plans (including, the plans listed on Appendix A) and other
applicable programs, policies and practices then in effect.
3.3. Notwithstanding any other provision of this
Agreement to the contrary, the termination of the Executive's
employment with the Employer in connection with the sale,
divestiture or other disposition of the Employer (or part
thereof) shall not be deemed to be a termination of
employment of the Executive for purposes of this Agreement
provided the Executive is offered employment by the purchaser
or acquiror of the Employer (or part thereof) and the Company
and the Employer obtain an agreement from such purchaser or
acquiror as contemplated in Section 6(c) and the Executive
shall not be entitled to benefits from the Company under this
Agreement as a result of such sale, divestiture, or other
disposition, or as a result of any subsequent termination of
employment.
4. Notice of Termination. Following a Change in
Control, any purported termination of the Executive's
employment by the Employer shall be communicated by Notice of
Termination to the Executive. For purposes of this
Agreement, no such purported termination shall be effective
without such Notice of Termination.
5. Excise Tax Payments.
(a) In the event that any payment or benefit
(within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code")), to the
Executive or for [his or her] benefit paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of,
[his or her] employment with the Employer or a change in
ownership or effective control of the Company or of a
substantial portion of its assets (a "Payment" or
"Payments"), would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the Exeuctive with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive will be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes
(including any interest or penalties, other than interest and
penalties imposed by reason of the Executive's failure to
file timely a tax return or pay taxes shown due on [his or
her] return, imposed with respect to such taxes and the
Excise Tax), including any Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) An initial determination as to whether a
Gross-Up Payment is required pursuant to this Agreement and
the amount of such Gross-Up Payment shall be made at the
Company's expense by an accounting firm selected by the
Company and reasonably acceptable to the Executive which is
designated as one of the five largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm
shall provide its determination (the "Determination"),
together with detailed supporting calculations and
documentation to the Company and the Executive within five
days of the Termination Date if applicable, or such other
time as requested by the Company or by the Executive
(provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax) and if the
Accounting Firm determines that no Excise Tax is payable by
the Executive with respect to a Payment or Payments, it shall
furnish the Executive with an opinion reasonably acceptable
to the Executive that no Excise Tax will be imposed with
respect to any such Payment or Payments. Within ten days of
the delivery of the Determination to the Executive, the
Executive shall have the right to dispute the Determination
(the "Dispute"). The Gross-Up Payment, if any, as determined
pursuant to this Paragraph 5(b) shall be paid by the Company
to the Executive within five days of the receipt of the
Accounting Firm's determination. The existence of the
Dispute shall not in any way affect the Executive's right to
receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination
shall be binding, final and conclusive upon the Company and
the Executive subject to the application of Paragraph 5(c)
below.
(c) As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is
possible that a Gross-Up Payment (or a portion thereof) will
be paid which should not have been paid (an "Excess Payment")
or a Gross-Up Payment (or a portion thereof) which should
have been paid will not have been paid (an "Underpayment").
An Underpayment shall be deemed to have occurred (i) upon
notice (formal or informal) to the Executive from any
governmental taxing authority that the Executive's tax
liability (whether in respect of the Executive's current
taxable year or in respect of any prior taxable year) may be
increased by reason of the imposition of the Excise Tax on a
Payment or Payments with respect to which the Company has
failed to make a sufficient Gross-Up Payment, (ii) upon a
determination by a court, (iii) by reason of determination by
the Company (which shall include the position taken by the
Company, together with its consolidated group, on its federal
income tax return) or (iv) upon the resolution of the Dispute
to the Executive's satisfaction. If an Underpayment occurs,
the Executive shall promptly notify the Company and the
Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing
authority has requested payment, pay to the Executive an
additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's
failure to file timely a tax return or pay taxes shown due on
the Executive's return) imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the Excise Tax
shall not be imposed upon a Payment or Payments (or portion
thereof) with respect to which the Executive had previously
received a Gross-Up Payment. A "Final Determination" shall
be deemed to have occurred when the Executive has received
from the applicable government taxing authority a refund of
taxes or other reduction in the Executive's tax liability by
reason of the Excise Payment and upon either (x) the date a
determination is made by, or an agreement is entered into
with, the applicable governmental taxing authority which
finally and conclusively binds the Executive and such taxing
authority, or in the event that a claim is brought before a
court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all
appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations
with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a
loan by the Company to the Executive and the Executive shall
pay to the Company on demand (but not less than 10 days after
the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of
the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the
date of repayment to the Company.
(d) Notwithstanding anything contained in
this Agreement to the contrary, in the event that, according
to the Determination, an Excise Tax will be imposed on any
Payment or Payments, the Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
6. Successors; Binding Agreement.
(a) This Agreement shall be binding upon and
shall inure to the benefit of the Company, its Successors and
Assigns and the Employer and the Company shall require any
Successor or Assign to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that
the Company and/or the Employer would be required to perform
it if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or
interest hereunder shall be assignable or transferable by the
Executive, [his or her] beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal personal
representative.
(c) In the event that the Employer (or part
thereof) is sold, divested, or otherwise disposed of by the
Company subsequent to a Change in Control and the Executive
is offered employment by the purchaser or acquiror thereof,
the Company shall require such purchaser or acquiror to
assume, and agree to perform the Company's and the Employer's
obligations under this Agreement, in the same manner, and to
the same extent that the Company and the Employer would be
required to perform if no such acquisition or purchase had
taken place.
7. Fees and Expenses. The Company shall pay all legal
fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they
become due as a result of (a) the Executive's termination of
employment (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination of
employment), (b) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,
but not limited to, any such fees and expenses incurred in
connection with (i) the Dispute and (ii) the Gross-Up Payment
whether as a result of any applicable government taxing
authority proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company and/or the
Employer under which the Executive is or may be entitled to
receive benefits, and (c) the Executive's hearing before the
Board as contemplated in Section 2.4 of this Agreement;
provided, however, that the circumstances set forth in
clauses (a) and (b) (other than as a result of the
Executive's termination of employment under circumstances
described in Section 2.5(d)) occurred on or after a Change in
Control.
8. Notice. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt
requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided
that all notices to the Company and/or the Employer shall be
directed to the attention of the Board with a copy to the
Secretary of the Company. All notices and communications
shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing
thereof, except that notice of change of address shall be
effective only upon receipt.
9. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing
or future participation in any benefit, bonus, incentive or
other plan or program provided by the Company and/or the
Employer (except for any severance or termination policies,
plans, programs or practices) and for which the Executive may
qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreements
with the Company and/or the Employer (except for any
severance or termination agreement). Amounts which are
vested benefits or which the Executive is otherwise entitled
to receive under any plan or program of the Company and/or
the Employer shall be payable in accordance with such plan or
program, except as explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to
make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or others.
11. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the Executive, the Company and the Employer. No waiver by
any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of
this Agreement to be performed by any other party shall be
deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No
agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been
made by any party which are not expressly set forth in this
Agreement.
12. Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING THE EXECUTIVE, THE
COMPANY AND/OR THE EMPLOYER WITH RESPECT TO ANY CLAIM OR
ASSERTION THAT THE EXECUTIVE'S EMPLOYMENT WAS PROPERLY
TERMINATED FOR CAUSE, THE COMPANY AND/OR THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE EXECUTIVE'S EMPLOYMENT WAS
PROPERLY TERMINATED FOR CAUSE.
13. Forum. Any suit brought by the Executive under
this Agreement may be brought in the appropriate state or
federal court for Tarrant County, Texas, or for the county
wherein the Executive maintains [his or her] residence. Any
suit brought by the Company and/or the Employer under this
Agreement may only be brought in the county wherein the
Executive maintains [his or her] residence unless the
Executive consents to suit elsewhere.
14. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
15. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes
all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company and the Employer have
caused this Agreement to be executed by its duly authorized
officers and the Executive has executed this Agreement as of
the day and year first above written.
TANDY CORPORATION
ATTEST: By:___________________________
Name:
Title:
__________________________
Secretary
[NAME OF SUBSIDIARY]
By:_____________________________
Name:
Title:
By:_____________________________
[Executive]
APPENDIX A
COMPENSATION AND BENEFIT PLANS
1. Deferred Compensation Plan
2. Deferred Salary and Investment Plan
3. Employee Stock Ownership Plan
4. Salary Continuation Plan
5. Stock Purchase Program
6. Supplemental Stock Program
7. Stock Option plan
8. Post Retirement and Death Benefit Plan
for Selected Executive Employees