Exhibit 10n
TANDY CORPORATION
TERMINATION PROTECTION PLAN
"LEVEL I"
WHEREAS, the "Board" of the "Company" (as those terms
are hereinafter defined) recognizes that the possibility of a
future "Change in Control" (as hereinafter defined) exists
and that the threat or occurrence of a Change in Control
could result in significant distractions to its employees
because of the uncertainties inherent in such a situation;
and
WHEREAS, the Board has determined that it is essential
and in the best interest of the Company, its stockholders and
the Employer to retain the services of certain of its
employees in the event of a threat or the occurence of a
Change in Control of the Company and to ensure their
continued dedication and efforts in such event without undue
concern for their employment and personal financial security.
NOW, THEREFORE, in order to fulfill these purposes, the
following is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
1.0 As of the Effective Date, the Company hereby
establishes the Tandy Corporation Termination Protection Plan
Level I (the "Plan") as set forth in this document.
ARTICLE II
DEFINITIONS
As used herein the following words and phrases shall
have the following respective meanings for purposes of the
Plan unless the context clearly indicates otherwise.
2.1 Accrued Compensation. "Accrued Compensation" shall
mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter
defined) but not paid as of the Termination Date including
(i) base salary, (ii) reimbursement for reasonable and
necessary expenses incurred by the "Participant" (as
hereinafter defined) on behalf of the Employer during the
period ending on the Termination Date, (iii) vacation pay as
required by law, and (iv) bonuses and incentive compensation
(other than the "Pro Rata Bonus" (as hereinafter defined)).
2.2 Base Amount. "Base Amount" shall mean the greater
of the Participant's annual base salary (a) at the rate in
effect on the Termination Date or (b) at the highest rate in
effect at any time during the ninety (90) day period prior to
the Change in Control, and shall include all amounts of the
Participant's base salary that are deferred under the
Employer's qualified and non-qualified employee benefit
plans.
2.3 Board. "Board" shall mean the Board of Directors
of the Company.
2.4 Bonus Amount. "Bonus Amount" shall mean the
highest annual bonus paid or payable to the Participant for
any fiscal year in respect of the three (3) full fiscal years
ended prior to the Change in Control.
2.5 Cause. The Participant's Employer may terminate
the Participant's employment for "Cause" if the Participant
(a) has been convicted of a felony, (b) failed substantially
to perform his or her reasonably assigned duties with his or
her Employer (other than a failure resulting from his or her
incapacity due to physical or mental illness), or (c) has
intentionally engaged in conduct which is demonstrably and
materially injurious to the Company and/or Employer. No act,
or failure to act, on the Paricipant's part, shall be
considered "intentional" unless the Participant has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Participant's action or failure to
act was in the best interest of the Company and/or Employer.
2.6 Change in Control. "Change in Control" shall mean
the occurrence during the "Term" (as hereinafter defined) of
any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (a) the Company or (b)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Company
Subsidiary"), (2) the Company or any Company Subsidiary, or
(3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(b) The individuals who, as of August 22, 1990,
are members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the
Program, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or reorganization
involving the Company, unless
(i) the stockholders of the Company,
immediately before such merger, consolidation or
reorganization, own, directly or indirectly
immediately following such merger, consolidation or
reorganization, at least sixty percent (60%) of the
combined voting power of the outstanding voting
securities of the corporation resulting from such
merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution
of the agreement providing for such merger,
consolidation or reorganization constitute at least
two-thirds of the members of the board of directors
of the Surviving Corporation,
(iii) no Person (other than the Company and
its Company Subsidiaries, any employee benefit plan
(or any trust forming a part thereof) maintained by
the Company, the Surviving Corporation or any
Company Subsidiary, or any Person who, immediately
prior to such merger, consolidation or
reorganization had Beneficial Ownership of fifteen
percent (15%) or more of the then outstanding
Voting Securities) has Beneficial Ownership of
fifteen percent (15%) or more of the combined
voting power of the Surviving Corporation's then
outstanding voting securities, and
(iv) a transaction described in clauses (i)
through (iii) shall herein be referred to as a
"Non-Control Transaction";
(2) A complete liquidation or dissolution of
the Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of the
assets of the Company to any Person (other than a
transfer to a Company Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in the Plan
to the contrary, if the Participant's employment is
terminated during the Term but within one (1) year prior to a
Change in Control and the Participant reasonably demonstrates
that such termination (i) was at the request of a third party
who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control and who effectuates
a Change in Control (a "Third Party") or (ii) otherwise
occurred in connection with, or in anticipation of, a Change
in Control which actually occurs, then for all purposes of
the Plan, the date of a Change in Control with respect to the
Participant shall mean the date immediately prior to the date
of such termination of the Participant's employment.
2.7 Company. "Company" shall mean Tandy Corporation
and shall include its "Successors and Assigns" (as
hereinafter defined).
2.8 Disability. "Disability" shall mean a physical or
mental infirmity which impairs the Participant's ability to
substantially perform his or her duties with his or her
Employer for a period of one hundred eighty (180) consecutive
days and the Participant has not returned to his or her full
time employment prior to the Termination Date as stated in
the "Notice of Termination" (as hereinafter defined).
2.9 Effective Date. "Effective Date" shall be August
22, 1990.
2.10 Eligible Employee. "Eligible Employee" shall mean
those employees whose names are listed on Schedule A attached
hereto.
2.11 Employer. "Employer" shall mean the Company or
its divisions or its "Subsidiaries" (as hereinafter defined)
with whom the Eligible Employee is employed.
2.12 (a) Good Reason. "Good Reason" shall mean the
occurrence after a Change in Control of any of the events or
conditions described in Subsections (i) through (iv) hereof:
(i) a reduction in the rate of the
Participant's base salary below the Base Amount or
any failure to pay the Participant any
compensation or benefits to which he or
she is entitled within fifteen (15) days of the
date notice of such failure to pay is given to the
Employer and, in the case of any annual bonus,
within forty-five (45) days following the end of
the fiscal year to which such bonus relates;
(ii) the Employer's requiring him or her to
be based at any place outside a 20-mile radius
from his or her place of employment on the day
prior to the Change in Control, except for
reasonably required travel on the Employer's
business which is not materially greater than such
travel requirements prior to the Change in
Control;
(iii) the failure by the Employer to
(A) continue in effect (without reduction in
benefit levels, reward opportunities and/or bonus
potential for comparable performance) any material
compensation or benefit plan in which the
Participant was participating at any time within
ninety (90) days preceding the Change in Control or
at any time thereafter including but not limited
to, the plans listed on Schedule B, unless such
plan is replaced with a plan that provides
substantially equivalent compensation or benefits
to the Participant, or (B) provide the Participant
with compensation and benefits, in the aggregate at
least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under
each other employee benefit plan, program and
practice in which the Participant was participating
at any time within ninety (90) days preceding the
Change in Control or at any time thereafter; and
(iv) the failure of the Company and/or the
Employer to obtain an agreement from any Successor
or Assign of the Company, to assume and agree to
perform the Plan, as contemplated in Section
7.1 hereof.
(b) Any event or condition described in this
Section 2.12(a)(i) through (iv) which occurs during the Term
but within one (1) year prior to a Change in Control but
which the Participant reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with or in anticipation of a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of the Plan notwithstanding that it occurred prior
to the Change in Control.
2.13 Notice of Termination. Following a Change in
Control, "Notice of Termination" shall mean a notice of
termination of the Participant's employment from the Employer
which indicates the specific termination provision in the
Plan relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Participant's employment under the
provision so indicated.
2.14 Participant. "Participant" shall mean an Eligible
Employee who satisfies the requirements of Section 3.1 and
who has not ceased to be a Participant pursuant to Section
3.2.
2.15 Pro-Rata Bonus. "Pro-Rata Bonus" shall mean the
Bonus Amount multiplied by a fraction, the numerator of which
is the number of days in the Company's fiscal year through
and including the Participant's Termination Date and the
denominator of which is 365.
2.16 Subsidiary or Subsidiaries. "Subsidiary" or
"Subsidiaries" shall mean any corporation in which the
Company owns, directly or indirectly, 50% or more of the
total voting power of the corporation's outstanding voting
securities and any other corporation designated by the Board
as a Subsidiary.
2.17 Successors and Assigns. "Successors and Assigns"
as used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of
the Company (including the Plan) whether by operation of law
or otherwise.
2.18 Term. "Term" shall mean the period of time the
Plan remains effective as provided in Section 8.1.
2.19 Termination Date. "Termination Date" shall mean
in the case of the Participant's death, his or her date of
death, in the case of Good Reason, his or her last day of
employment and in all other cases, the date specified in the
Notice of Termination; provided, however, if the
Participant's employment is terminated by the Employer for
Cause or due to Disability, the date specified in the Notice
of Termination shall be at least 30 days from the date the
Notice of Termination is given to the Participant; provided,
further, however, that in the case of Disability the
Participant shall not have returned to the full-time
performance of his or her duties during such period of at
least 30 days.
ARTICLE III
ELIGIBILITY
3.1 Participation. Each employee shall become a
Participant in the Plan immediately upon becoming an Eligible
Employee.
3.2 Duration of Participation. A Participant shall
cease to be a Participant in the Plan if he or she ceases to
be an Eligible Employee of the Employer at any time prior to
a Change in Control. A Participant entitled to receive any
amounts set forth in this Plan shall remain a Participant in
the Plan until all amounts he or she is entitled to have been
paid to him or her.
ARTICLE IV
TERMINATION BENEFITS
4.1 Payment of Accrued Compensation. In the event that
a Participant's employment with his or her Employer is
terminated following a Change in Control during the Term (a)
by reason of the Participant's death, (b) by his or her
Employer for Cause or Disability, or (c) by the Participant
without Good Reason, the Executive shall be entitled to
receive and the Company shall pay, his or her Accrued
Compensation and, if such termination is other than by his or
her Employer for Cause, a Pro Rata Bonus.
4.2 Payment in Event of Certain Terminations of
Employment. In the event that a Participant's employment
with his or her Employer is terminated following a Change in
Control during the Term by the Participant or by his or her
Employer for any reason other than as specified in Section
4.1, the Participant shall be entitled to receive under the
Plan:
(a) a cash payment equal to the sum of:
(i) his or her Accrued Compensation and Pro
Rata Bonus,
(ii) his or her Base Amount, and
(iii) his or her Bonus Amount;
(b) for a period of twelve (12) months beginning
on the Participant's Termination Date (the "Continuation
Period"), the Company shall at its expense continue on behalf
of the Participant and his or her dependents and
beneficiaries the fringe benefits (excluding those benefit
plans numbered 1 through 8 inclusive on Schedule B but
including an Employer-provided automobile or automobile
allowance and the related expenses of public liability
insurance, collision coverage, repairs and maintenance) and
life insurance, disability, medical, dental and
hospitalization benefits provided (i) to the Participant any
time during the 90-day period prior to the Change in Control
or at any time thereafter or (ii) to other similarly situated
employees who continue in the employ of the Company and/or
the Employer during the Continuation Period; provided,
however, that with respect to any Participant who was
entitled to the use of an automobile provided by his or her
Employer within the ninety (90) day period prior to a Change
in Control or at anytime thereafter, he or she shall be paid
a cash payment equal to the value to him or her for the
Continuation Period of the Employer-provided automobile. The
coverage and benefits (including deductibles, costs and
contributions by the Participant, if any) provided in this
Section 4.2(b) during the Continuation Period shall be no
less favorable to the Participant and his or her dependants
and beneficiaries than the most favorable of such coverages
and benefits during any of the periods referred to in clauses
(i) and (ii) above. The obligation hereunder with respect to
the foregoing benefits (except for the automobile or
automobile allowance) shall be limited if the Participant
obtains any such benefits pursuant to a subsequent employer's
benefit plans, in which case the Employer (or the Company, as
the case may be) may reduce the coverage of any benefits it
is required to provide the Participant hereunder as long as
the aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Participant than the
coverages and benefits required to be provided hereunder.
This Subsection (b) shall not be interpreted so as to limit
any benefits to which the Participant, his or her dependents
or beneficiaries may be entitled under any of the Company's
or the Employer's employee benefit plans, programs or
practices following his or her termination of employment,
including without limitation, retiree medical and life
insurance benefits;
(c) the Company shall pay in a single payment an
amount equal to eighty percent (80%) of the maximum amount
the Participant could have contributed under the Deferred
Salary and Investment Plan, Stock Purchase Program and
Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had he or she continued in employment
with the Employer during the restructure period at the
greater of his or her annualized gross salary and wages as in
effect immediately prior to the Change in Control or at any
time thereafter; and
(d) The amounts provided for in Sections 4.1,
4.2(a), 4.2(b) (only as to the automobile allowance and the
related expenses of public liability insurance, collision
coverage, repairs and maintenance) and 4.2(c) shall be paid
in a single lump sum cash payment within five (5) days after
the Participant's Termination Date (or earlier, if required
by applicable law).
4.3 Mitigation. The Participant shall not be required
to mitigate the amount of any payment provided for in the
Plan by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Participant in any
subsequent employment.
4.4 Termination Pay. The payments and benefits
provided for in Section 4.2(a)(ii) and (iii) shall reduce the
amount of any cash severance or termination pay payable to
the Participant under any other Employer severance or
termination plan, program, policy or practice.
4.5 Other Benefits. The Participant's entitlement to
any other compensation or benefits (other than the Pro Rata
Bonus) shall be determined in accordance with the Employer's
employee benefit plans (including, the plans listed on
Schedule B) and other applicable programs, policies and
practices then in effect.
ARTICLE V
TERMINATION OF EMPLOYMENT
5.1 Notice of Termination Required. Following a Change
in Control, any purported termination of the Participant's
employment by the Employer shall be communicated by Notice of
Termination to the Participant. For purposes of the Plan, no
such purported termination shall be effective without such
Notice of Termination.
ARTICLE VI
LIMITATION ON PAYMENTS BY THE COMPANY
6.1 Excise Tax Limitation.
(a) Notwithstanding anything contained in the Plan
to the contrary, to the extent that the payments and benefits
provided under the Plan and benefits provided to, or for the
benefit of, the Participant under any other Employer plan or
agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise
tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
Payments shall be reduced (but not below zero) if and to the
extent that a reduction in the Payments would result in the
Participant retaining a larger amount, on an after-tax basis
(taking into account federal, state and local income taxes
and the Excise Tax), than if the Participant received all of
the Payments (such reduced amount is hereinafter referred to
as the "Limited Payment Amount"). Unless the Participant
shall have given prior written notice specifying a different
order to the Company to effectuate the Limited Payment
Amount, the Company shall reduce or eliminate the Payments,
by first reducing or eliminating those payments or benefits
which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order
beginning with payments or benefits which are to be paid the
farthest in time from the "Determination" (as hereinafter
defined). Any notice given by the Participant pursuant to
the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement
governing the Participant's rights and entitlements to any
benefits or compensation.
(b) An initial determination as to whether the
Payments shall be reduced to the Limited Payment Amount
pursuant to the Plan and the amount of such Limited Payment
Amount shall be made by an accounting firm at the Company's
expense selected by the Company which is designated as one of
the five (5) largest accounting firms in the United States
(the "Accounting Firm"). The Accounting Firm shall provide
its determination (the "Determination"), together with
detailed supporting calculations and documentation to the
Company and the Participant within five (5) days of the
Termination Date if applicable, or such other time as
requested by the Company or by the Participant (provided the
Participant reasonably believes that any of the Payments may
be subject to the Excise Tax) and if the Accounting Firm
determines that no Excise Tax is payable by the Participant
with respect to a Payment or Payments, it shall furnish the
Participant with an opinion reasonably acceptable to the
Participant that no Excise Tax will be imposed with respect
to any such Payment or Payments. Within ten (10) days of the
delivery of the Determination to the Participant, the
Participant shall have the right to dispute the Determination
(the "Dispute"). If there is no Dispute, the Determination
shall be binding, final and conclusive upon the Company and
the Participant subject to the application of Paragraph
6.1(c) below.
(c) As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is
possible that the Payments to be made to, or provided for the
benefit of, the Participant either have been made or will not
be made by the Company which, in either case, will be
inconsistent with the limitations provided in Section 6(a)
(hereinafter referred to as an "Excess Payment" or
"Underpayment", respectively). If it is established pursuant
to a final determination of a court or an Internal Revenue
Service (the "IRS") proceeding which has been finally and
conclusively resolved, that an Excess Payment has been made,
such Excess Payment shall be deemed for all purposes to be a
loan to the Participant made on the date the Participant
received the Excess Payment and the Participant shall repay
the Excess Payment to the Company on demand (but not less
than ten (10) days after written notice is received by the
Participant) together with interest on the Excess Payment at
the "Applicable Federal Rate" (as defined in Section 1274(d)
of the Code) from the date of the Participant's receipt of
such Excess Payment until the date of such repayment. In the
event that it is determined by (i) the Accounting Firm, the
Company (which shall include the position taken by the
Company, or together with its consolidated group, on its
federal income tax return) or the IRS, (ii) pursuant to a
determination by a court, or (iii) upon the resolution to the
Participant's satisfaction of the Dispute, that an
Underpayment has occurred, the Company shall pay an amount
equal to the Underpayment to the Participant within ten (10)
days of such determination or resolution together with
interest on such amount at the Applicable Federal Rate from
the date such amount would have been paid to the Participant
until the date of payment.
ARTICLE VII
SUCCESSORS AND ASSIGNS
7.1 Successors and Assigns.
(a) The Plan shall be binding upon and shall inure
to the benefit of the Company and the Employer. The Company
and the Employer shall require any Successor or Assign to
expressly assume and agree to perform the Plan in the same
manner and to the same extent that the Company and/or the
Employer would be required to perform it if no such
succession or assignment had taken place.
(b) Neither the Plan nor any right or interest
hereunder shall be assignable or transferable by the
Participant, his or her beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution; provided, however, that the Plan shall inure to
the benefit of and be enforceable by the Participant's legal
personal representative.
7.2 Sale of Business or Assets. Notwithstanding
anything contained in the Plan to the contrary, if a
Participant's employment with his or her Employer is
terminated in connection with the sale, divestiture or other
disposition of any Subsidiary or division of the Company (or
part thereof) such termination shall not be a termination of
employment of the Participant for purposes of the Plan and
the Participant shall not be entitled to benefits from the
Company under the Plan as a result of such sale, divestiture,
or other disposition, or as a result of any subsequent
termination of employment, provided that (a) the Participant
is offered employment by the purchaser or acquiror of such
Subsidiary or division (or part thereof) and (b) the Company
obtains an agreement from such purchaser or acquiror to
perform the Company's and/or Employer's obligations under the
Plan, in the same manner, and to the same extent that the
Company and/or the Employer would be required to perform if
no such purchase or acquisition had taken place. In such
circumstances, the purchaser or acquiror shall be solely
responsible for providing any benefits payable under the Plan
to any such Participant.
ARTICLE VIII
TERM, AMENDMENT AND PLAN TERMINATION
8.1 Term. The Plan shall continue in effect for a
period of two (2) years commencing on the Effective Date and
shall be automatically extended for one (1) year on the first
anniversary of the Effective Date and on each anniversary of
the Effective Date thereafter unless the Company shall have
delivered a written notice to each Participant at least
ninety (90) days prior to any extension that the Plan shall
not be so extended; provided, however, that if a Change in
Control occurs while the Plan is in effect, the Plan shall
not end prior to the expiration of two (2) years following
the Change in Control.
8.2 Amendment and Termination. Subject to Section 8.1,
the Plan may be terminated or amended in any respect by
resolution adopted by two-thirds (2/3) of the members of the
Incumbent Board and Schedule A may be amended to (x) add
Eligible Employees at any time (y) prior to a Change in
Control, to eliminate any Eligible Employee by reason of his
or her demotion in position by any duly authorized officer of
the Company; provided, however, that no such amendment or
termination of the Plan or Schedule A during the Term may be
made (a) if such amendment or termination would adversely
affect any right of an Eligible Employee who became an
Eligible Employee (except as provided in clause (y) above)
prior to the later of (i) the date of adoption of any such
amendment or termination, or (ii) the effective date of any
such amendment or termination, (b) at the request of a Third
Party, or (c) otherwise in connection with, or in
anticipation of, a Change in Control; and provided, further,
however, that the Plan no longer shall be subject to
amendment, change, substitution, deletion, revocation or
termination in any respect whatsoever following a Change in
Control.
8.3 Form of Amendment. The form of any amendment or
termination of the Plan shall be a written instrument signed
by a duly authorized officer or officers of the Company,
certifying that the amendment or termination has been
approved by the Board in accordance with Section 8.2.
ARTICLE IX
MISCELLANEOUS
9.1 Contractual Right. Upon and after a Change in
Control, each Participant shall have a fully vested,
nonforfeitable contractual right, enforceable against the
Company, to the benefits provided for under Sections 4.1, 4.2
and 4.3 of the Plan upon satisfaction of the applicable
conditions specified in those Sections.
9.2 Employment Status. Prior to a Change in Control,
each Eligible Employee shall continue in his or her status as
an employee-at-will and the Plan does not constitute a
contract of employment or impose on the Employer any
obligation to (a) retain the Participant, (b) make any
payments upon termination of employment, (c) change the
status of the Participant's employment or (d) change any
employment policies of the Employer.
9.3 Notice. For the purposes of the Plan, notices and
all other communications provided for in the Plan (including
the Notice of Termination) shall be in writing and shall be
deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the
Company and/or the Employer shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9.4 Non-exclusivity of Rights. Except as provided in
Section 4.4, nothing in the Plan shall prevent or limit the
Participant's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided
by the Company and/or the Employer for which the Participant
may qualify, nor shall anything herein limit or reduce such
rights as the Participant may have under any other agreements
with the Company and/or the Employer. Amounts which are
vested benefits or which the Participant is otherwise
entitled to receive under any plan or program of the Company
and/or the Employer shall be payable in accordance with such
plan or program, except as explicitly modified by the Plan.
No additional compensation provided under any benefit or
compensation plans to the Participant shall be deemed to
modify or otherwise affect the terms of the Plan or any of
the Participant's entitlements hereunder.
9.5 Settlement of Claims. The Company's obligation to
make the payments provided for in the Plan and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including without limitation, any set-off,
counterclaim, recoupment, defense or other right which the
Company and/or Employer may have against the Participant or
others.
9.6 Trust. All benefits under the Plan shall be paid
by the Company. The Plan shall be unfunded and the benefits
hereunder shall be paid only from the general assets of the
Company; provided, however, notwithstanding anything
contained in the Plan to the contrary, nothing herein shall
prevent or prohibit the Company from establishing a trust or
other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan.
9.7 Waiver or Discharge. No provision of the Plan may
be waived or discharged unless such waiver or discharge is
agreed to in writing and signed by the Participant, the
Employer and the Company. No waiver by either the Company,
the Employer or any Participant at any time of any breach by
either the Company, the Employer or any Participant of, or
compliance with, any condition or provision of the Plan to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
9.8 Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THE PLAN SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING A PARTICIPANT, THE
COMPANY AND/OR THE EMPLOYER WITH RESPECT TO ANY CLAIM OR
ASSERTION THAT THE PARTICIPANT'S EMPLOYMENT WAS PROPERLY
TERMINATED FOR CAUSE, THE COMPANY AND/OR THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE PARTICIPANT'S EMPLOYMENT WAS
PROPERLY TERMINATED FOR CAUSE.
9.9 Validity and Severability. The invalidity or
unenforceability of any provision of the Plan shall not
affect the validity or enforceability of any other provision
of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Legal Fees. Following a Change in Control, the
Company shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel)
incurred by the Participant as they become due as a result of
(a) the Participant's termination of employment (including
all such fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), or (b) the
Participant's seeking to obtain or enforce any right or
benefit provided by the Plan (including any such fees and
expenses incurred in connection with the Dispute) or by any
other plan or arrangement maintained by the Company and/or
Employer under which the Participant is or may be entitled to
receive benefits; provided however, that the circumstances
set forth in clauses (a) and (b) (other than as a result of
the Participant's termination of employment under
circumstances described in Section 2.6(d)) occurred on or
after a Change in Control; provided, further, however, in the
event a court finally determines that the claim by the
Participant for which legal fees were incurred and paid by
the Company pursuant to this Section 9.10 was frivilous, the
Company shall be reimbursed by the Participant for any legal
fees paid under this Section 9.10 in respect of such
frivilous claim.
9.11 Forum. Any suit brought by a Participant under
the Plan may be brought in the appropriate state or federal
court for Tarrant County, Texas, or for the county wherein
the Participant maintains his or her residence. Any suit
brought by the Company and/or Employer under the Plan may
only be brought in the county wherein the Participant
maintains his or her residence, unless the Participant
consents to suit elsewhere.
SCHEDULE A
[To come]
SCHEDULE B
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
TANDY CORPORATION
TERMINATION PROTECTION PLAN
"LEVEL II"
WHEREAS, the "Board" of the "Company" (as those terms
are hereinafter defined) recognizes that the possibility of a
future "Change in Control" (as hereinafter defined) exists
and that the threat or occurrence of a Change in Control
could result in significant distractions to its employees
because of the uncertainties inherent in such a situation;
and
WHEREAS, the Board has determined that it is essential
and in the best interest of the Company, its stockholders and
the "Employer" (as hereinafter defined) to retain the
services of certain of its employees in the event of a threat
or the occurence of a Change in Control and to ensure their
continued dedication and efforts in such event without undue
concern for their employment and personal financial security.
NOW, THEREFORE, in order to fulfill these purposes, the
following is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
1.0 As of the Effective Date, the Company hereby
establishes the Tandy Corporation Termination Protection Plan
Level II (the "Plan") as set forth in this document.
ARTICLE II
DEFINITIONS
As used herein the following words and phrases shall
have the following respective meanings for purposes of the
Plan unless the context clearly indicates otherwise.
2.1 Accrued Compensation. "Accrued Compensation" shall
mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter
defined) but not paid as of the Termination Date including
(i) base salary, (ii) reimbursement for reasonable and
necessary expenses incurred by the "Participant" (as
hereinafter defined) on behalf of the Employer during the
period ending on the Termination Date, (iii) vacation pay as
required by law, and (iv) bonuses and incentive compensation
(other than the "Pro Rata Bonus" (as hereinafter defined)).
2.2 Base Amount. "Base Amount" shall mean the greater
of the Participant's annual base salary (a) at the rate in
effect on the Termination Date or (b) at the highest rate in
effect at any time during the ninety (90) day period prior to
the Change in Control, and shall include all amounts of the
Participant's base salary that are deferred under the
Employer's qualified and non-qualified employee benefit
plans.
2.3 Board. "Board" shall mean the Board of Directors
of the Company.
2.4 Bonus Amount. "Bonus Amount" shall mean the
highest annual bonus paid or payable to the Participant for
any fiscal year in respect of the three (3) full fiscal years
ended prior to the Change in Control.
2.5 Cause. The Participant's Employer may terminate
the Participant's employment for "Cause" if the Participant
(a) has been convicted of a felony, (b) failed substantially
to perform his or her reasonably assigned duties with his or
her Employer (other than a failure resulting from his or her
incapacity due to physical or mental illness), or (c) has
intentionally engaged in conduct which is demonstrably and
materially injurious to the Company and/or Employer. No act,
or failure to act, on the Participant's part, shall be
considered "intentional" unless the Participant has acted, or
failed to act, with a lack of good faith and with a lack of
reasonable belief that the Participant's act or failure to
act was in the best interest of the Company and/or Employer.
2.6 Change in Control. "Change in Control" shall mean
the occurrence during the "Term" (as hereinafter defined) of
any of the following events:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of
fifteen percent (15%) or more of the combined voting power of
the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (1) an employee benefit plan (or a trust
forming a part thereof) maintained by (a) the Company or (b)
any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is
owned directly or indirectly by the Company (a "Company
Subsidiary"), (2) the Company or any Company Subsidiary, or
(3) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined).
(b) The individuals who, as of August 22, 1990,
are members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the Board;
provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the
Program, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially 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 and
its Company Subsidiaries, any employee benefit plan
(or any trust forming a part thereof) maintained by
the Company, the Surviving Corporation or any
Company Subsidiary, or any Person who, immediately
prior to such merger, consolidation or
reorganization had Beneficial Ownership of fifteen
percent (15%) or more of the then outstanding
Voting Securities) has Beneficial Ownership of
fifteen percent (15%) or more of the combined
voting power of the Surviving Corporation's then
outstanding voting securities, and
(iv) a transaction described in clauses (i)
through (iii) shall herein be referred to as a
"Non-Control Transaction";
(2) A complete liquidation or dissolution of
the Company; or
(3) An agreement for the sale or other
disposition of all or substantially all of the
assets of the Company to any Person (other than a
transfer to a Company Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
(d) Notwithstanding anything contained in the Plan
to the contrary, if the Participant's employment is
terminated during the Term but within one (1) year prior to a
Change in Control and the Participant reasonably demonstrates
that such termination (i) was at the request of a third party
who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control and who effectuates
a Change in Control (a "Third Party") or (ii) otherwise
occurred in connection with, or in anticipation of, a Change
in Control which actually occurs, then for all purposes of
the Plan, the date of a Change in Control with respect to the
Participant shall mean the date immediately prior to the date
of such termination of the Participant's employment.
2.7 Company. "Company" shall mean Tandy Corporation
and shall include its "Successors and Assigns" (as
hereinafter defined).
2.8 Disability. "Disability" shall mean a physical or
mental infirmity which impairs the Participant's ability to
substantially perform his or her duties with his or her
Employer for a period of one hundred eighty (180) consecutive
days and the Participant has not returned to his or her full
time employment prior to the Termination Date as stated in
the "Notice of Termination" (as hereinafter defined).
2.9 Effective Date. "Effective Date" shall be August
22, 1990.
2.10 Eligible Employee. "Eligible Employee" shall mean
an individual employed by the Employer whose place of
employment is located primarily in the United States in a
regular full-time salaried position whose annual compensation
(including salary and bonus) is at least $50,000 (other than
those positions set forth on Schedule A) and any individual
set forth on Schedule B. For purposes of this Section 2.10,
an employee's annual compensation shall be determined by his
or her annualized rate of salary in effect immediately prior
to a Change in Control and the bonus paid to the employee in
respect of the fiscal year ended immediately prior to the
Change in Control. Notwithstanding the foregoing, those
employees who are employed in the categories of positions set
forth on Schedule A, any employee covered by a collective
bargaining agreement, any employee who is a party to a
severance or termination protection agreement, or the
Termination Protection Plan Level I, shall not be an
"Eligible Employee" for purposes of the Plan.
2.11 Employer. "Employer" shall mean the Company or
its divisions or its "Subsidiaries" (as hereinafter defined)
with whom the Eligible Employee is employed.
2.12 (a) Good Reason. "Good Reason" shall mean the
occurrence after a Change in Control of any of the events or
conditions described in Subsections (i) through (iii) hereof:
(i) a reduction in the rate of the Participant's
base salary below the Base Amount or any failure to
pay the Participant any compensation or benefits to
which he or she is entitled within fifteen (15)
days of the date notice of such failure to pay is
given to the Employer and, in the case of any
annual bonus, within forty-five (45) days following
the end of the fiscal year to which such bonus
relates;
(ii) the failure by the Employer to (A) continue
in effect (without reduction in benefit levels,
reward opportunities and/or bonus potential for
comparable performance) any material compensation
or benefit plan in which the Participant was
participating at any time within ninety (90) days
preceding the Change in Control or at any time
thereafter including but not limited to, the plans
listed on Schedule C, unless such plan is replaced
with a plan that provides substantially equivalent
compensation or benefits to the Participant, or
(B) provide the Participant with compensation and
benefits, in the aggregate at least equal (in terms
of benefit levels and/or reward opportunities) to
those provided for under each other employee
benefit plan, program and practice in which the
Participant was participating at any time within
ninety (90) days preceding the Change in Control or
at any time thereafter; and
(iii) the failure of the Company and/or the
Employer to obtain an agreement from any Successor
or Assign of the Company, to assume and agree to
perform the Plan, as contemplated in Section
7.1 hereof.
(b) Any event or condition described in this
Section 2.12(a)(i) through (iii) which occurs during the Term
but within one (1) year prior to a Change in Control but
which the Participant reasonably demonstrates (i) was at the
request of a Third Party or (ii) otherwise arose in
connection with or in anticipation of a Change in Control
which actually occurs, shall constitute Good Reason for
purposes of the Plan notwithstanding that it occurred prior
to the Change in Control.
2.13 Notice of Termination. Following a Change in
Control, "Notice of Termination" shall mean a notice of
termination of the Participant's employment from the Employer
which indicates the specific termination provision in the
Plan relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Participant's employment under the
provision so indicated.
2.14 Participant. "Participant" shall mean an Eligible
Employee who satisfies the requirements of Section 3.1 and
who has not ceased to be a Participant pursuant to Section
3.2.
2.15 Pro-Rata Bonus. "Pro-Rata Bonus" shall mean the
Bonus Amount multiplied by a fraction, the numerator of which
is the number of days in the Company's fiscal year through
and including the Participant's Termination Date and the
denominator of which is 365.
2.16 Subsidiary or Subsidiaries. "Subsidiary" or
"Subsidiaries" shall mean any corporation in which the
Company owns, directly or indirectly, 50% or more of the
total voting power of the corporation's outstanding voting
securities and any other corporation designated by the Board
as a Subsidiary.
2.17 Successors and Assigns. "Successors and Assigns"
as used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of
the Company (including the Plan) whether by operation of law
or otherwise.
2.18 Term. "Term" shall mean the period of time the
Plan remains effective as provided in Section 8.1.
2.19 Termination Date. "Termination Date" shall mean
in the case of the Participant's death, his or her date of
death, in the case of Good Reason, his or her last day of
employment, and in all other cases, the date specified in the
Notice of Termination; provided, however, if the
Participant's employment is terminated by the Employer for
Cause or due to Disability, the date specified in the Notice
of Termination shall be at least 30 days from the date the
Notice of Termination is given to the Participant; provided,
further, however, that in the case of Disability the
Participant shall not have returned to the full-time
performance of his or her duties during such period of at
least 30 days.
ARTICLE III
ELIGIBILITY
3.1 Participation. Each employee shall become a
Participant in the Plan immediately upon becoming an Eligible
Employee.
3.2 Duration of Participation. A Participant shall
cease to be a Participant in the Plan if he or she ceases to
be an Eligible Employee of the Employer at any time prior to
a Change in Control. A Participant entitled to receive any
amounts set forth in this Plan shall remain a Participant in
the Plan until all amounts he or she is entitled to have been
paid to him or her.
ARTICLE IV
TERMINATION BENEFITS
4.1 Payment of Accrued Compensation. In the event that
a Participant's employment with his or her Employer is
terminated following a Change in Control during the Term (a)
by reason of the Participant's death, (b) by his or her
Employer for Cause or Disability, or (c) by the Participant
without Good Reason, the Executive shall be entitled to
receive and the Company shall pay, his or her Accrued
Compensation and if such termination is other than by his or
her Employer for Cause, a Pro Rata Bonus.
4.2 Payment in Event of Certain Terminations of
Employment. In the event that a Participant's employment is
terminated following a Change in Control during the Term by
the Participant or by his or her Employer for any reason
other than as specified in Section 4.1, the Participant shall
be entitled to receive under the Plan:
(a) a cash payment equal to the sum of:
(i) his or her Accrued Compensation and Pro
Rata Bonus,
(ii) one-half of his or her Base Amount, and
(iii) one-half of his or her Bonus Amount;
(b) for a period of six months following the
Participant's Termination Date (the "Continuation Period"),
the Company shall at its expense continue on behalf of the
Participant and his or her dependents and beneficiaries the
fringe benefits (excluding those benefit plans numbered 1
through 8 inclusive on Schedule C but including an
Employer-provided automobile or automobile allowance and the
related expenses of public liability insurance, collision
coverage, repairs and maintenance) and life insurance,
disability, medical, dental and hospitalization benefits
provided (i) to the Participant any time during the 90-day
period prior to the Change in Control or at any time
thereafter or (ii) to other similarly situated employees who
continue in the employ of the Company and/or the Employer
during the Continuation Period; provided, however, that with
respect to any Participant who was entitled to the use of an
automobile provided by the Employer within the ninety (90)
day period prior to a Change in Control or at anytime
thereafter, he or she shall be paid a cash payment equal to
the value to him or her for the Continuation Period of the
Employer-provided automobile. The coverage and benefits
(including deductibles, costs and contributions by the
Participant, if any) provided in this Section 4.2(b) during
the Continuation Period shall be no less favorable to the
Participant and his or her beneficiaries than the most
favorable of such coverages and benefits during any of the
periods referred to in clauses (i) and (ii) above. The
obligation hereunder with respect to the foregoing benefits
(except for the automobile or automobile allowance) shall be
limited if the Participant obtains any such benefits pursuant
to a subsequent employer's benefit plans, in which case the
Employer (or the Company, as the case may be) may reduce the
coverage of any benefits it is required to provide the
Participant hereunder as long as the aggregate coverages and
benefits of the combined benefit plans is no less favorable
to the Participant than the coverages and benefits required
to be provided hereunder. This Subsection (b) shall not be
interpreted so as to limit any benefits to which the
Participant, his or her dependents or beneficiaries may be
entitled under any of the Employer's employee benefit plans,
programs or practices following his or her termination of
employment, including without limitation, retiree medical and
life insurance benefits;
(c) the Company shall pay in a single payment an
amount equal to eighty percent (80%) of the maximum amount
the Participant could have contributed under the Deferred
Salary and Investment Plan, Stock Purchase Program and
Supplemental Stock Program as in effect on the date
immediately prior to the Change in Control during the
Continuation Period had he or she continued in employment
with the Employer during the Continuation Period at the
greater of his or her annualized gross salary and wages as in
effect immediately prior to the Change in Control or at any
time thereafter; and
(d) The amounts provided for in Sections 4.1,
4.2(a), 4.2(b) (only as to the automobile allowance and the
related expenses of public liability insurance, collision
coverage, repairs and maintenance) and 4.2(c) shall be paid
in a single lump sum cash payment within five (5) days after
the Participant's Termination Date (or earlier, if required
by applicable law).
4.3 Mitigation. The Participant shall not be required
to mitigate the amount of any payment provided for in the
Plan by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Participant in any
subsequent employment.
4.4 Termination Pay. The payments and benefits
provided for in Section 4.2(a)(ii) and (iii) shall reduce the
amount of any cash severance or termination pay payable to
the Participant under any other Employer severance or
termination plan, program, policy or practice.
4.5 Other Benefits. The Participant's entitlement to
any other compensation or benefits (other than the Pro Rata
Bonus) shall be determined in accordance with the Employer's
employee benefit plans (including, the plans listed on
Schedule C) and other applicable programs, policies and
practices then in effect.
ARTICLE V
TERMINATION OF EMPLOYMENT
5.1 Notice of Termination Required. Following a Change
in Control, any purported termination of the Participant's
employment by the Employer shall be communicated by Notice of
Termination to the Participant. For purposes of the Plan, no
such purported termination shall be effective without such
Notice of Termination.
ARTICLE VI
LIMITATION ON PAYMENTS BY THE COMPANY
6.1 Excise Tax Limitation.
(a) Notwithstanding anything contained in the Plan
to the contrary, to the extent that the payments and benefits
provided under the Plan and benefits provided to, or for the
benefit of, the Participant under any other Employer plan or
agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise
tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
Payments shall be reduced (but not below zero) if and to the
extent necessary so that no Payment to be made or benefit to
be provided to the Participant shall be subject to the Excise
Tax (such reduced amount is hereinafter referred to as the
"Limited Payment Amount"). Unless the Participant shall have
given prior written notice specifying a different order to
the Company to effectuate the Limited Payment Amount, the
Company shall reduce or eliminate the Payments, by first
reducing or eliminating those payments or benefits which are
not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in
time from the Determination (as hereinafter defined). Any
notice given by the Participant pursuant to the preceding
sentence shall take precedence over the provisions of any
other plan, arrangement or agreement governing the
Participant's rights and entitlements to any benefits or
compensation.
(b) An initial determination as to whether the
Payments shall be reduced to the Limited Payment Amount
pursuant to the Plan and the amount of such Limited Payment
Amount shall be made by an accounting firm at the Company's
expense selected by the Company which is designated as one of
the five largest accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed
supporting calculations and documentation to the Company and
the Participant within five (5) days of the Termination Date
ifapplicable, or such other time as requested by the Company
or by the Participant (provided the Participant reasonably
believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no
Excise Tax is payable by the Participant with respect to a
Payment or Payments, it shall furnish the Participant with an
opinion reasonably acceptable to the Participant that no
Excise Tax will be imposed with respect to any such Payment
or Payments. Within ten (10) days of the delivery of the
Determination to the Participant, the Participant shall have
the right to dispute the Determination (the "Dispute"). If
there is no Dispute, the Determination shall be binding,
final and conclusive upon the Company and the Participant
subject to the application of Paragraph 6.1(c) below.
(c) As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is
possible that the Payments to be made to, or provided for the
benefit of, the Participant either have been made or will not
be made by the Company which, in either case, will be
inconsistent with the limitations provided in Section 6(a)
(hereinafter referred to as an "Excess Payment" or
"Underpayment", respectively). If it is established pursuant
to a final determination of a court or an Internal Revenue
Service (the "IRS") proceeding which has been finally and
conclusively resolved, that an Excess Payment has been made,
such Excess Payment shall be deemed for all purposes to be a
loan to the Participant made on the date the Participant
received the Excess Payment and the Participant shall repay
the Excess Payment to the Company on demand (but not less
than ten (10) days after written notice is received by the
Participant) together with interest on the Excess Payment at
the "Applicable Federal Rate" (as defined in Section 1274(d)
of the Code) from the date of the Participant's receipt of
such Excess Payment until the date of such repayment. In the
event that it is determined by (i) the Accounting Firm, the
Company (which shall include the position taken by the
Company, or together with its consolidated group, on its
federal income tax return) or the IRS, (ii) pursuant to a
determination by a court, or (iii) upon the resolution to the
Participant's satisfaction of the Dispute, that an
Underpayment has occurred, the Company shall pay an amount
equal to the Underpayment to the Participant within ten (10)
days of such determination or resolution together with
interest on such amount at the Applicable Federal Rate from
the date such amount would have been paid to the Participant
until the date of payment.
ARTICLE VII
SUCCESSORS AND ASSIGNS
7.1 Successors and Assigns.
(a) The Plan shall be binding upon and shall inure
to the benefit of the Company and the Employer. The Company
and the Employer shall require any Successor or Assign to
expressly assume and agree to perform the Plan in the same
manner and to the same extent that the Company and/or the
Employer would be required to perform it if no such
succession or assignment had taken place.
(b) Neither the Plan nor any right or interest
hereunder shall be assignable or transferable by the
Participant, his or her beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution; provided, however, that the Plan shall inure to
the benefit of and be enforceable by the Participant's legal
personal representative.
7.2 Sale of Business or Assets. Notwithstanding
anything contained in the Plan to the contrary, if a
Participant's employment with his or her Employer is
terminated in connection with the sale, divestiture or other
disposition of any Subsidiary or division of the Company (or
part thereof) such termination shall not be a termination of
employment of the Participant for purposes of the Plan and
the Participant shall not be entitled to benefits from the
Company under the Plan as a result of such sale, divestiture,
or other disposition, or as a result of any subsequent
termination of employment, provided that (a) the Participant
is offered employment by the purchaser or acquiror of such
Subsidiary or division (or part thereof) and (b) the Company
obtains an agreement from such purchaser or acquiror to
perform the Company's and/or the Employer's obligations under
the Plan, in the same manner, and to the same extent that the
Company and/or the Employer would be required to perform if
no such purchase or acquisition had taken place. In such
circumstances, the purchaser or acquiror shall be solely
responsible for providing any benefits payable under the Plan
to any such Participant.
ARTICLE VIII
TERM, AMENDMENT AND PLAN TERMINATION
8.1 Term. The Plan shall continue in effect for a
period of two (2) years commencing on the Effective Date and
shall be automatically extended for one (1) year on the first
anniversary of the Effective Date and on each anniversary of
the Effective Date thereafter unless the Company shall have
delivered a written notice to each Participant at least
ninety (90) days prior to any extension that the Plan shall
not be so extended; provided, however, that if a Change in
Control occurs while the Plan is in effect, the Plan shall
not end prior to the expiration of two (2) years following
the Change in Control.
8.2 Amendment and Termination. Subject to Section 8.1,
the Plan may be terminated or amended in any respect by
resolution adopted by two-thirds (2/3) of the members of the
Incumbent Board and Schedules A and B may be amended to add
Eligible Employees at any time by any duly authorized officer
of the Company; provided, however, that no such amendment or
termination of the Plan during the Term may be made (a) if
such amendment or termination would adversely affect any
right of an Eligible Employee who became an Eligible Employee
prior to the later of (i) the date of adoption of any such
amendment or termination, or (ii) the effective date of any
such amendment or termination, (b) at the request of a Third
Party, or (c) otherwise in connection with, or in
anticipation of, a Change in Control; and provided, further,
however, that the Plan no longer shall be subject to
amendment, change, substitution, deletion, revocation or
termination in any respect whatsoever following a Change in
Control.
8.3 Form of Amendment. The form of any amendment or
termination of the Plan shall be a written instrument signed
by a duly authorized officer or officers of the Company,
certifying that the amendment or termination has been
approved by the Board in accordance with Section 8.2.
ARTICLE IX
MISCELLANEOUS
9.1 Contractual Right. Upon and after a Change in
Control, each Participant shall have a fully vested,
nonforfeitable contractual right, enforceable against the
Company, to the benefits provided for under Sections 4.1, 4.2
and 4.3 of the Plan upon satisfaction of the applicable
conditions specified in those Sections.
9.2 Employment Status. Prior to a Change in Control,
each Eligible Employee shall continue in his or her status as
an employee-at-will and the Plan does not constitute a
contract of employment or impose on the Employer any
obligation to (a) retain the Participant, (b) make any
payments upon termination of employment, (c) change the
status of the Participant's employment or (d) change any
employment policies of the Employer.
9.3 Notice. For the purposes of the Plan, notices and
all other communications provided for in the Plan (including
the Notice of Termination) shall be in writing and shall be
deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses last given by
each party to the other, provided that all notices to the
Company and/or the Employer shall be directed to the
attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that
notice of change of address shall be effective only upon
receipt.
9.4 Non-exclusivity of Rights. Except as provided in
Section 4.4, nothing in the Plan shall prevent or limit the
Participant's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided
by the Company and/or the Employer for which the Participant
may qualify, nor shall anything herein limit or reduce such
rights as the Participant may have under any other agreements
with the Company and/or the Employer. Amounts which are
vested benefits or which the Participant is otherwise
entitled to receive under any plan or program of the Company
and/or the Employer shall be payable in accordance with such
plan or program, except as explicitly modified by the Plan.
No additional compensation provided under any benefit or
compensation plans to the Participant shall be deemed to
modify or otherwise affect the terms of the Plan or any of
the Participant's entitlements hereunder.
9.5 Settlement of Claims. The Company's obligation to
make the payments provided for in the Plan and otherwise to
perform its obligations hereunder shall not be affected by
any circumstances, including without limitation, any set-off,
counterclaim, recoupment, defense or other right which the
Company and/or the Employer may have against the Participant
or others.
9.6 Trust. All benefits under the Plan shall be paid
by the Company. The Plan shall be unfunded and the benefits
hereunder shall be paid only from the general assets of the
Company; provided, however, notwithstanding anything
contained in the Plan to the contrary, nothing herein shall
prevent or prohibit the Company from establishing a trust or
other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan.
9.7 Waiver or Discharge. No provision of the Plan may
be waived or discharged unless such waiver or discharge is
agreed to in writing and signed by the Participant, the
Company and the Employer. No waiver by either the Company,
the Employer or any Participant at any time of any breach by
either the Company, the Employer or any Participant of, or
compliance with, any condition or provision of the Plan to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
9.8 Governing Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THE PLAN SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF; PROVIDED,
HOWEVER, THAT IN ANY ACTION INVOLVING A PARTICIPANT, THE
COMPANY AND/OR THE EMPLOYER WITH RESPECT TO ANY CLAIM OR
ASSERTION THAT THE PARTICIPANT'S EMPLOYMENT WAS PROPERLY
TERMINATED FOR CAUSE, THE COMPANY AND/OR THE EMPLOYER HAS THE
BURDEN OF PROVING THAT THE PARTICIPANT'S EMPLOYMENT WAS
PROPERLY TERMINATED FOR CAUSE.
9.9 Validity and Severability. The invalidity or
unenforceability of any provision of the Plan shall not
affect the validity or enforceability of any other provision
of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Legal Fees. Following a Change in Control, the
Company shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel)
incurred by the Participant as they become due as a result of
(a) the Participant's termination of employment (including
all such fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), or (b) the
Participant's seeking to obtain or enforce any right or
benefit provided by the Plan (including any such fees and
expenses incurred in connection with the Dispute) or by any
other plan or arrangement maintained by the Company and/or
Employer under which the Participant is or may be entitled to
receive benefits; provided however, that the circumstances
set forth in clauses (a) and (b) (other than as a result of
the Participant's termination of employment under
circumstances described in Section 2.6(d)) occurred on or
after a Change in Control; provided, further, however, in the
event a court finally determines that the claim by the
Participant for which legal fees were incurred and paid by
the Company pursuant to this Section 9.10 was frivilous, the
Company shall be reimbursed by the Participant for any legal
fees paid under this Section 9.10 in respect of such
frivilous claim.
9.11 Forum. Any suit brought by a Participant under
the Plan may be brought in the appropriate state or federal
court for Tarrant County, Texas, or for the county wherein
the Participant maintains his or her residence. Any suit
brought by the Company and/or Employer under the Plan may
only be brought in the county wherein the Participant
maintains his or her residence, unless the Participant
consents to suit elsewhere.
SCHEDULE A
[To come]
SCHEDULE B
[To come]
SCHEDULE C
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