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FIRST AMENDED AND RESTATED RADIOSHACK CORPORATION OFFICER'S SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Addendum or Modifications

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Title: FIRST AMENDED AND RESTATED RADIOSHACK CORPORATION OFFICER'S SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Governing Law: Texas     Date: 2/24/2009
Industry: Retail (Technology)     Sector: Services

FIRST AMENDED AND RESTATED RADIOSHACK CORPORATION OFFICER'S SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, Parties: radioshack corporation
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Exhibit 10.59

 

FIRST AMENDED AND RESTATED

RADIOSHACK CORPORATION

OFFICER’S SUPPLEMENTAL

EXECUTIVE RETIREMENT PLAN

 

RadioShack Corporation, a Delaware corporation ("RadioShack"), hereby amends and restates, effective as of December 31, 2008, the RadioShack Corporation Officer’s Supplemental Executive Retirement Plan (the “Plan”) in order to satisfy the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Unless otherwise indicated, all “section” or “Code” references are to the Code and the Treasury Regulations related thereto, as may be amended from time to time, promulgated under the authority of the applicable Code section and, in each case, any successor provisions thereto.

 

RadioShack intends that this Plan, as amended and restated, applies solely to compensation earned or vested on or after January 1, 2005, including any earnings thereon, to the extent such compensation was not paid or distributed prior to December 31, 2008.  Further, it is the intent of the RadioShack that this Plan, as amended and restated, shall have no effect whatsoever on any benefits earned and vested on or before December 31, 2004, including any earnings thereon, and the parties intend that such benefits remain exempt from Code section 409A.

 

ARTICLE ONE

 

PURPOSE

 

Section 1.1                                 The purpose of this Plan is to enable RadioShack Corporation and its subsidiaries to provide key executive personnel certain death and retirement benefits.

 

 

ARTICLE TWO

 

DEFINITIONS

 

Section 2.1                                  Beneficiary.   The recipient(s) designated (in accordance with Article Seven) by a Participant in the Plan to whom benefits are payable following his death.

 

Section 2.2                                  Benefit Service Year.   The service that is used to determine a Participant’s Plan Benefit under this Plan.  Each Participant shall be granted one-twelfth of a year of Benefit Services Year for each full or partial calendar month of his employment with RadioShack commencing on the date of his appointment as an officer of RadioShack and ending with the date termination of employment with RadioShack or the cessation of service as an officer of RadioShack, whichever shall first occur.  Determination of Benefit Service Years shall be subject to the following:

 

(i)  Separate years of Participant’s service with RadioShack as an officer shall be aggregated for purposes of determining Benefit Service Years.

 

(ii)  A Participant’s authorized Leave of Absence will not interrupt continuing of employment of a Participant as an officer for purposes of the Plan.

 

Section 2.3                                  Benefit Service Years Credit. A Participant’s Benefit Service Years Credit shall be equal to 2.5% multiplied by the Participant’s Benefit Service Years.  In no event shall a Participant’s Benefit Service Years Credit exceed 50%.

 

 

 

1


 

 

Section 2.4                                  Change in Control .  For purpose of the Plan, a “Change in Control” shall mean any of the following events:

 

(a)           An acquisition (other than directly from RadioShack (the “Company” for purposes of this definition)) 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 (i) 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 voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a “Subsidiary”), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a Non-Control Transaction (as hereinafter defined);

 

(b)           The individuals who, as of January 1, 2006, 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 Plan, 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)           The consummation of:

 

(i)           A merger, consolidation, reorganization or other business combination with or into the Company or in which securities of the Company are issued, unless

 

(A) the stockholders of the Company, immediately before such merger, consolidation, reorganization or other business combination, own directly or indirectly immediately following such merger, consolidation, reorganization or other business combination, at least sixty percent (60%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation, reorganization or other business combination (the “Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation, reorganization or other business combination,

 

(B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, reorganization or other business combination constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the combined voting power of the outstanding voting securities of the Surviving Corporation, or

 

(C) no Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation, reorganization or other business combination was maintained by the Company, the Surviving Corporation, or any Subsidiary, or (iv) any Person who, immediately prior to such merger, consolidation, reorganization or other business combination 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

 

 

 

2


 

 

A transaction described in clauses (A) through (C) shall herein be referred to as a “Non-Control Transaction.”

 

(ii)           A complete liquidation or dissolution of the Company; or

 

(iii)           The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than (i) any such sale or disposition that results in at least fifty percent (50%) of the Company’s assets being owned by one or more subsidiaries or (ii) a distribution to the Company’s stockholders of the stock of a subsidiary or any other assets).

 

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 then outstanding Voting Securities (X) 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 subsection (X)) 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, or (Y) and such Subject Person (1) within fourteen (14) Business  Days (or such greater period of time as may be determined by action of the Board) after such Subject Person would otherwise have caused a Change in Control (but for the operation of this clause (Y)), such Subject Person notifies  the Board that such Subject Person did so inadvertently, and (2) within seven (7) Business Days after such notification (or such greater period of time as may be determined by action of the Board), such Subject Person divests itself of a sufficient number of Voting Securities so that such Subject Person is no longer the Beneficial Owner of more than the permitted amount of the outstanding Voting Securities.

 

Notwithstanding the foregoing, for purposes of Section 5.3 hereof, the second (but not the first) sentence in Section 8.5(a) hereof, and for purposes of Sections 8.5(b) and 8.6 hereof, a Change in Control shall occur with respect to a Participant only upon the occurrence of an event that both (a) constitutes a Change in Control under the above definition and (b) constitutes a change in control event for purposes of Code section 409A.

 

Section 2.5                                  Committee.   The Management Development and Compensation Committee (or any successor committee under any different name) of the Board of Directors of RadioShack.

 

Section 2.6                                  Disability.   A physical or mental condition which, in the sole opinion of the Committee, totally and permanently, prevents a Participant from substantially performing duties for which such Participant is suited to perform either by education or training, or if such Participant is on a Leave of Absence when such condition develops, substantially performing duties for which such Participant is suited to perform either by education or training.  A determination that Disability exists shall be based upon competent medical evidence satisfactory to the Committee.  The date that any person’s Disability occurs shall be deemed to be the date such condition is determined to exist by the Committee.

 

Section 2.7                                  Employee .  A regular full-time executive employee of RadioShack serving as either a RadioShack Corporate, RadioShack Division or RadioShack subsidiary officer.

 

Section 2.8   Highest Average Plan Compensation.   The average annual Plan Compensation earned by the Participant for the five consecutive highest-paid Plan years while a Participant. This average shall be computed by dividing the total of the Participant’s Plan Compensation for such five Plan Years by the number of years in such five Plan Years for which the Participant had Plan Compensation.

 

Section 2.9                                  Leave of Absence.   Any period during which:

 

(a)           an Employee is absent with the prior consent of RadioShack, which consent shall be granted under uniform rules applied to all Employees on a nondiscriminatory basis, but only if such person (i) is an Employee immediately prior to the commencement of such period of authorized absence and resumes employment with

 

 

 

3


 

 

RadioShack not later than the first working day following the expiration of such period of authorized absence or (ii) enters into a contract with RadioShack prior to the absence which provides a right for the Employee to return to work following the Leave of Absence, upon such terms and conditions as RadioShack may provide in its sole discretion.  For purposes of clarification, nothing in this Section 2.9(a) shall obligate or require RadioShack to enter into any contract with any Employee or other person; or

 

(b)           an Employee who is on “qualified military service” as defined under the Uniformed Services Employment and Reemployment Rights Act of 1994, but only if such person is an Employee immediately prior to his qualified military service and resumes employment with RadioShack within the period during which his reemployment rights are guaranteed by law.

 

Section 2.10  Monthly Plan Benefit Amount.   A monthly amount equal to the Participant’s Plan Benefit, as may be adjusted pursuant to Section 5.1(b) or (c) or Sections 5.2, 8.4, or 8.5 divided by 120.

 

Section 2.11                                  Participant.   An Employee who has been selected by the Committee and has accepted a Plan Agreement as provided in Article Three.

 

Section 2.12                                  Plan Agreement.   The agreement between RadioShack and a Participant, entered into in accordance with Article Three, as may be amended from time to time hereunder.

 

Section 2.13                                  Plan Year .  The twelve month period beginning on January 1 and ending December 31, commencing with calendar year January 1, 1998 through December 31, 1998.

 

Section 2.14                                  Plan Benefit.   An amount equal to the Participant’s Benefit Service Years Credit multiplied by the Participant’s Highest Average Plan Compensation multiplied by 10.

 

Section 2.15                                  Plan Compensation .  The Participant’s annual base salary and any annual bonus earned by the Participant during a Plan Year.  Plan Compensation shall include any portion of the Participant’s base salary and bonus that is not includible in taxable income because of a deferral election under any plan maintained by RadioShack.

 

Section 2.16                                  RadioShack.   RadioShack Corporation, a Delaware corporation, and those subsidiary corporations in which RadioShack owns at least  fifty one percent (51%) of the total combined voting power of all classes of stock entitled to vote.

 

Section 2.17                                  RadioShack Subsidiary.   Any corporation in which RadioShack owns at least fifty one percent (51%) of the total combined voting power of all classes of stock entitled to vote.

 

Section 2.18                                  Retirement.   The following classifications of Retirement as referred to in this Plan are as follows:

 

(a)            Early Retirement.   A Participant’s voluntary election to terminate employment, as opposed to an involuntary termination by RadioShack, on or after attaining age fifty five (55) but prior to attaining age sixty-five (65).

 

(b)            Normal Retirement.   A Participant's termination from employment with RadioShack upon attaining age sixty five (65).

 

(c)            Late Retirement.   A Participant's termination from employment with RadioShack after attaining age sixty five (65).”

 

For this purpose, a Participant’s termination from employment will occur on the date of the Participant’s Separation from Service, and notwithstanding anything contained herein to the contrary, the date on which such Separation from Service takes place shall be the date of Retirement.

 

 

 

4


 

 

Section 2.19                                  Separation from Service.   A Participant’s “separation from service” from RadioShack shall fall within the meaning set forth in Code section 409A.

 

 

ARTICLE THREE

 

SELECTION OF PARTICIPANTS AND

AGREEMENT TO PARTICIPATE

 

Section 3.1                                  Existing Participants.   The Plan is in addition to the RadioShack Corporation Officer’s Deferred Compensation Plan, the Salary Continuation Plan for Executive Employees of RadioShack Corporation, the Special Compensation Plan No.1 for RadioShack Corporation Executive Officers, and the Special Compensation Plan No. 2 for RadioShack Corporation Executive Officers (collectively, the “Salary Continuation Plans”).  The Salary Continuation Plans have certain participants who, as of December 31, 2005, have been selected by the Committee, in its sole, absolute and exclusive discretion, to be Plan Participants and to have their benefits transferred from the respective Salary Continuation Plans to the Plan by virtue of new Plan Agreements. Upon execution of new Plan Agreements, these Participants will no longer be participants in their respective Salary Continuation Plans and will be Plan Participants.

 

Section 3.2                                  New Participants.   On and after January 1, 2006, the Committee, in its sole, absolute and exclusive discretion, shall select, from among the key executive employees of RadioShack who are serving as either a RadioShack Corporate, RadioShack Division or a RadioShack Subsidiary officer, candidates for participation in the Plan.

 

 

ARTICLE FOUR

 

NO FUNDING OF PLAN BENEFITS

 

Section 4.1                                 All benefits under the Plan or a Plan Agreement represent an unsecured promise to pay by RadioShack Corporation. The Plan shall be unfunded and the benefits hereunder shall be paid only from the general assets of RadioShack Corporation resulting in the Participants having no greater rights than RadioShack Corporation’s general creditors; provided, however, nothing herein shall prevent or prohibit RadioShack Corporation from establishing a trust or other arrangement for the purpose of providing for the payment of the benefits payable under the Plan or Plan Agreement.

 

 

ARTICLE FIVE

 

BENEFITS PAYABLE TO PARTICIPANTS AND

TO BENEFICIARIES OF PARTICIPANTS

 

Section 5.1                                 Subject to the terms and conditions of the Plan, upon the Retirement of a Participant, RadioShack agrees to pay to Participant a Retirement benefit as follows:

 

(a)            Normal Retirement.   If a Participant retires at the date of Normal Retirement, then RadioShack agrees to pay to Participant or to the designated Beneficiary of Participant in the event of the death of Participant prior to the termination of payment of Normal Retirement benefits hereunder, all from its general assets, an amount equal to such Participant’s Plan Benefit, such sum to be paid as set forth in Section 5.3 hereof.

 

(b)            Early Retirement.   If a Participant retires at a time that constitutes an Early Retirement, then RadioShack agrees to pay to Participant or to the designated Beneficiary of Participant in the event of the death of Participant prior to the termination of payment of Early Retirement benefits hereunder, all from its general assets, an amount equal to such Participant’s Plan Benefit, reduced by five percent (5%) per year for each year that Early Retirement precedes the date of Normal Retirement.  Such year shall be a fiscal year beginning on the date a Participant

 

 

 

5


 

 

attains age fifty-five (55).  Any reduction for a part of a year shall be prorated on a daily basis assuming a 365-day year.  Such amount shall be paid as set forth in Section 5.3 hereof.

 

(c)            Late Retirement.   If a Participant retires at a date that constitutes Late Retirement, then RadioShack agrees to pay to Participant or to the designated Beneficiary of Participant in the event of the death of Participant prior to the termination of payment of Late Retirement benefits hereunder, all from its general assets, an amount equal to such Participant’s Plan Benefit, reduced by a percentage determined as follows:

 

Age on Date of

 

Percent of Reduction

Late Retirement

 

of Plan Benefit Amount

 

 

 

66

 

0%

67

 

0%

68

 

0%

69

 

0%

70

 

0%

71

 

20%

72

 

40%

73

 

60%

74

 

80%

75

 

100%

 

The percent of reduction of a Participant’s Plan Benefit shall be measured on a fiscal


 
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