Exhibit 10.2
Date: July 6, 2006
Price: $13.82
INCENTIVE STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
(OFFICER)
     THIS AGREEMENT, made as of the 6th day of July 2006 (the “Grant Date”),
between RadioShack Corporation, a Delaware corporation (the “Company”), and the
person named (the “Optionee”) on the Notice of Grant of Non-Qualified Stock
Options and Option Agreement (the “Notice”) attached hereto, the provisions of
which are incorporated herein by reference;
     WHEREAS, the Company and Optionee have entered into an Employment Agreement
dated July 6, 2006 (“Employment Agreement”);
     WHEREAS, the Company has adopted the 1997 Incentive Stock Plan, as
identified on the Notice (the “Plan”) in order to provide an additional
incentive to certain officers of the Company and its Subsidiaries; and
     WHEREAS, the Committee responsible for administration of the Plan has
determined to grant an option to the Optionee as provided herein;
     NOW, THEREFORE, the parties hereto agree as follows:
     1. Grant of Option.
     1.1 The Company hereby grants to the Optionee the right and option (the
“Option”) to purchase all or any part of the amount of whole shares of common
stock, par value $1.00, of the Company (“Shares”) set forth on the Notice(s)
subject to, and in accordance with, the terms and conditions set forth in this
Agreement.
     1.2 No portion of this Option is intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code and shall be so construed.
     1.3 This Option is granted pursuant to the Plan. Notwithstanding, this
Agreement shall be construed in accordance and consistent with, and subject to,
the provisions of the Plan (the provisions of which are incorporated herein by
reference) and, except as otherwise expressly set forth herein, the capitalized
terms used in this Agreement shall have the same definitions as set forth in the
Plan.
     2. Purchase Price. The price at which the Optionee shall be entitled to
purchase Shares upon the exercise of the Option shall be $13.82 per Share (the
“Purchase Price”).
     3. Duration of Option. The Option shall be exercisable to the extent and in
the manner provided in Section 4 hereof for a period of seven (7) years from the
Grant Date (the “Exercise Term”); provided, however, that the Option may be
earlier terminated as provided in Section 6 hereof.
     4. Exercisability of Option. Unless otherwise provided in this Agreement or
the Plan, the Option shall entitle the Optionee to purchase, in whole at any
time or in part from time to time 125,000 of the Shares subject to the Option on
the first anniversary of the Grant Date, an additional 125,000 of the Shares
subject to the Option on the second anniversary of the Grant Date, an additional
125,000 of the Shares subject to the Option on the third anniversary of the
Grant Date, and an additional 125,000 Shares subject to the Option on the fourth
anniversary of the Grant Date, and each such right of purchase

 

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shall be cumulative and shall continue, provided that Optionee is continuously
employed by the Company on such vesting date for such installment to so vest.
     5. Manner of Exercise and Payment.
     5.1 Subject to the terms and conditions of this Agreement and the Plan, the
Option shall be exercised by timely delivery of written notice in person, by
facsimile, electronic means, or by certified mail return receipt requested, to
such person, entity and location as may be designated by the Corporate Secretary
of the Company. Such notice shall state that the Optionee is electing to
exercise the Option and the number of Shares in respect of which the Option is
being exercised and shall be signed or authorized by the person or persons
exercising the Option. If requested by the Committee, such person or persons
shall (i) deliver this Agreement to the Corporate Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii) provide satisfactory
proof as to the right of such person or persons to exercise the Option. As used
in Section 5, “delivery” means the notice and payment for the Options must be
received by the Company, or its specified designee, prior to expiration of the
Option as provided in Section 6.1 hereof.
     5.2 The notice of exercise described in Section 5.1 shall be accompanied by
the full Purchase Price for the Shares in respect of which the Option is being
exercised, in cash or by certified check, or, in the discretion of the
Committee, in whole or in part, by transferring Shares to the Company having a
Fair Market Value on the day preceding the date of exercise equal to the cash
amount for which such Shares are substituted.
     5.3 Upon timely receipt of notice of exercise and full payment for the
Shares in respect of which the Option is being exercised, the Company shall,
subject to the terms of the Plan, take such action as may be necessary to effect
the transfer to the Optionee of the number of Shares as to which such exercise
was effective.
     5.4 The Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to any Shares subject to the Option until
(i) the Option shall have been exercised pursuant to the terms of this Agreement
and the Optionee shall have paid the full Purchase Price for the number of
Shares in respect of which the Option was exercised, and (ii) the Company shall
have issued and delivered the Shares to the Optionee or to a broker approved by
the Company, whereupon the Optionee shall have full voting and other ownership
rights with respect to such Shares.
     6. Expiration of Option.
     6.1 This Option shall expire and become null and void upon the happening of
whichever of the following events shall first occur:
     (a) expiration of three (3) months after the Optionee ceases to be employed
by the Company and all of its Subsidiaries for any reason other than termination
for one of the reasons set forth below in Section 6.1(b), (c) or (d) or
expiration of this Option pursuant to Section 6.1(e) of this Agreement;
     (b) expiration of three (3) years since the Optionee’s (i) termination of
employment by reason of death; or (ii) termination of employment by reason of
Disability (as defined in the Termination Protection Agreement for Corporate
Executives between the Company and the Optionee); or (iii) involuntary
termination by the Company without Cause or voluntary termination of employment
by Optionee for Good Reason (each as defined in the Employment Agreement) at any
time at or after the earlier to occur of (x) the second anniversary of the Grant
Date or (y) the date that Optionee attains age 55; or (iv) voluntary termination
of employment by Optionee without Good Reason at any time at or after the fourth
anniversary of the Grant Date provided that Optionee had then attained age 55;
     (c) expiration of one (1) year since the Optionee’s involuntary termination
by the Company without Cause or voluntary termination of employment by Optionee
for Good Reason at any time on or

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before the earlier to occur of (x) the second anniversary of the Grant Date or
(y) the date that Optionee attains age 55;
     (d) the first anniversary of the Optionee’s termination of employment
following a Change in Control (as defined in Section 7 hereof); or
     (e) the Exercise Term expires.
     Except as provided in Section 6.2 below, only those portions of this Option
exercisable as of the date of termination of the Optionee’s employment may be
exercised.
     In the event of the Optionee’s death, the Option shall be exercisable, to
the extent provided in the Plan and this Agreement, by the legatee or legatees
under the Optionee’s will, or by the Optionee’s legal representatives or
distributees and such person or persons shall be substituted for the Optionee
each time the Optionee is referred to herein.
     6.2 The provisions of Section 4 of this Agreement to the contrary
notwithstanding:
     (a) upon the Optionee’s death or the termination of the Optionee’s
employment by the Company without Cause or by the Optionee for Good Reason or
due to Optionee’s Disability, a number of unvested Shares of this Option shall
become immediately vested and exercisable, until the expiration of the period
provided in Section 6.1 above, equal to (i) 250,000 Shares in the event of such
a termination occurring on or before the first anniversary of the Grant Date and
(ii) 500,000 shares in the event of such a termination occurring after the first
anniversary of the Grant Date; and
     (b) upon any Change in Control of the Company this Option shall become
exercisable as provided below in Section 7.
     7. Effect of Change in Control.
     7.1 Notwithstanding anything contained in this Agreement to the contrary,
in the event of a Change in Control of the Company, the Option shall be treated
as follows:
     (a) If such Change in Control occurs prior to the first anniversary of the
Grant Date, 250,000 of the Shares subject to this Option will become fully
vested and exercisable. The unvested portion of the Option on the date of the
Change in Control will be forfeited and immediately cancelled upon the
occurrence of such Change in Control.
     (b) If such Change in Control occurs on or after the first anniversary of
the Grant Date, 500,000 of the Shares subject to this Option will become fully
vested and exercisable.
     7.2 In such event under Section 7.1, the Optionee will be permitted to
surrender for cancellation within 60 days after such Change in Control, the
Nonqualified Stock Option or any portion of the Nonqualified Stock Option which
is then vested and exercisable, to the extent not yet exercised, and the
Optionee will be entitled to receive a cash payment in an amount equal to the
excess, if any, of (a) the greater of (i) the Fair Market Value, on the date
preceding the date of the surrender, of the Shares constituting the Nonqualified
Stock Option or portion of the Nonqualified Stock Option surrendered which is
vested and exercisable, or (ii) the Adjusted Fair Market Value of the Shares
constituting the Nonqualified Stock Option or the portion of the Nonqualified
Stock Option surrendered which is vested and exercisable, over (b) the aggregate
Purchase Price for such Shares constituting the Nonqualified Stock Option or
portion of the Nonqualified Stock Option surrendered which is vested and
exercisable.
     7.3 For the purposes under this Agreement, “Change in Control” shall have
the meaning set forth in the Termination Protection Agreement for Corporate
Executives between the Company and the

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Optionee, except that any such transaction constituting a management buy-out
that is led by the Optionee shall not be a “Change in Control” under this
Option.
     8. Nontransferability. The Option shall not be transferable other than by
will or by the laws of descent and distribution. During the lifetime of the
Optionee, the Option shall be exercisable only by the Optionee or the Optionee’s
legal representative.
     9. No Right to Continued Employment. Nothing in this Agreement or the Plan
shall be interpreted or construed to confer upon the Optionee any right with
respect to continuance of employment by the Company, nor shall this Agreement or
the Plan(s) interfere in any way with the right of the Company to terminate the
Optionee’s employment at any time.
     10. Adjustments. In the event of a Change in Capitalization (other than
resulting from the receipt of consideration by the Company or its shareholders
including, without limitation, receipt of an investment of capital or a
third-party merger transaction), the Committee shall equitably adjust the number
and class of Shares or other stock or securities such that the Optionee shall be
in the same economic position with respect to the Option before and after such
Change in Capitalization (e.g. in the case of a two-for-one stock split, the
option shall be adjusted to cover twice the number of shares at one-half the
Purchase Price per share). Notwithstanding the foregoing, in the event of a
Change in Capitalization resulting from the receipt of consideration by the
Company or its shareholders including, without limitation, receipt of an
investment of capital or a third-party merger transaction, the Committee shall
make such equitable adjustment, consistent with the treatment of other senior
executives, as it determines to be appropriate in good faith in its sole
discretion. The Committee’s adjustment shall be made in accordance with the
provisions of the Plan, including, without limitation, Section 12 of the Plan,
and shall be effective and final, binding and conclusive for all purposes of the
Plan and this Agreement.
     11. Effect of Certain Transactions. Subject to Section 7 hereof, upon the
effective date of (a) the liquidation or dissolution of the Company or (b) a
merger or consolidation of the Company (a “Transaction”), the Option shall
continue in effect in accordance with its terms and the Optionee shall be
entitled to receive in respect of all Shares subject to the Option, upon
exercise of the Option, the same number and kind of stock, securities, cash,
property or other consideration that each holder of Shares was entitled to
receive in the Transaction.
     12. Withholding of Taxes. The Company shall have the right to deduct from
any distribution of cash to the Optionee, an amount equal to the federal, state
and local income taxes and other amounts as may be required by law to be
withheld (the “Withholding Taxes”) with respect to the Option. If the Optionee
is to experience a taxable event in connection with the receipt of Shares
pursuant to an Option exercise, the Optionee shall pay the Withholding Taxes to
the Company prior to the issuance, or release from escrow, of such Shares. In
satisfaction of the obligation to pay Withholding Taxes to the Company, the
Optionee may make a written election, which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the Shares then
issuable to the Optionee having an aggregate Fair Market Value, on the date
preceding the date of such issuance, equal to the Withholding Taxes.
     13. Optionee Bound by the Plan. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all the terms and provisions
thereof. The Optionee hereby acknowledges receipt of one or more Prospectuses
for the Plan.
     14. Modification of Agreement. This Agreement may be modified, amended,
suspended or terminated, and any terms or conditions may be waived, but only by
a written instrument executed by the parties hereto.
     15. Severability. Should any provision of this Agreement be held by a court
of competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.

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     16. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the state of
Texas without giving effect to the conflicts of law principles thereof.
     17. Successors in Interest. This Agreement shall inure to the benefit of
and be binding upon any Successor Corporation. This Agreement shall inure to the
benefit of the Optionee’s legal representatives. All obligations imposed upon
the Optionee and all rights granted to the Company under this Agreement shall be
final, binding and conclusive upon the Optionee’s heirs, executors,
administrators, personal representatives and successors.
     18. Resolution of Disputes. Any dispute or disagreement which may arise
under, or as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined in accordance
with the Employment Agreement.
     19. Entire Agreement. This Agreement, together with the documents
incorporated herein by reference, represents the entire agreement between the
parties with respect to the subject matter hereof and this Agreement may not be
modified by any oral or written agreement unless same is in writing, signed by
both parties and has been approved by the Committee.
[Signature Page Follows]

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date and year first written above.

            RADIOSHACK CORPORATION
      By:   /s/ Thomas G. Plaskett         Its: Presiding Director             
  OPTIONEE
      /s/ Julian C. Day       Julian C. Day           

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