Document:

exv10w1

 

Exhibit 10.1

July 6, 2006

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

Latham & Watkins LLP

885 Third Avenue, Suite 1000

New York, NY 10022-4834

Dear Julian:

     Based on our meetings, as well as your meetings with other members of the Board of Directors
of RadioShack Corporation (“RadioShack” or the “Company”), it is my pleasure to extend an offer of
employment with RadioShack, commencing on July 6, 2006 (the “Effective Date”), as its Chief
Executive Officer and Chairman of the Board of Directors of the Company (the “Board”), reporting to
the Board. We are confident that your combination of talent, strategic knowhow, operating skills,
breadth of experience and personal commitment will make the difference we are seeking to lead
RadioShack into the future and that you will be a tremendous addition to the RadioShack team. The
specifics of this employment offer are set forth below. References to “the Executive” refer to
you.

	 	 	 
	Base Salary

	 	Your annual base salary will be $1,000,000, payable
in accordance with the Company’s customary payroll
practices.
	 
	 	 
	Annual Bonus

	 	Your annual target bonus opportunity under the
Company’s annual incentive bonus plan will be equal
to 100% of your then-current base salary, and can
earn up to a maximum bonus equal to 200% of your
then-current base salary. However, your bonus for
2006 will not be less than your target award amount,
prorated for the period of time in 2006 during that
you are employed by the Company.
	 
	 	 
	Stock Options

	 	On the Effective Date, the Company will grant
certain stock options to you, described on
Attachment A hereto (the “Options”), the forms of
which have been separately provided to you.
Commencing in 2007, you will be eligible for further
equity grants as the Board or the Management
Development and Compensation Committee determines in
its sole discretion.
	 
	 	 
	Benefits, Perquisites

	 	You will be eligible to participate in all benefit
plans, and to receive all perquisites, which the
Company provides to its senior executives, in
accordance with the terms thereof; provided that you
will not be eligible to participate in the Company
Officers’ Supplemental Executive Retirement Plan.
You will be entitled to annual paid vacation in
accordance with the Company’s policy applicable to
senior executives, but in no event less than 4 weeks
per calendar year (as prorated for partial years).
You will be entitled to relocation benefits in
accordance with the Company’s relocation program
applicable to senior executives. In addition, the
Company shall pay or reimburse you for commuting
expenses incurred by you during the 24 month-period
commencing on the Effective Date for travel between
your homes in Massachusetts or Montana on the one
hand and the Company headquarters or such other
places as you are required to travel on Company
business on the other hand.

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 2

	 	 	 
	Separation

	 	You will eligible to participate in the Officers’
Severance Program, Benefits Schedule I (CEO), which
will include the obligation to enter into a complete
release of all claims against the Company as a
condition of any severance benefits thereunder, in
which case, the Company will provide a release of
claims against you; provided, the terms “Cause” and
“Good Reason” under your participation in the
Officers’ Severance Program will have the respective
meanings set forth on Attachment B hereto. The
terms of Attachment A will govern the treatment of
the Options upon a termination of your employment.
Your entitlement to severance benefits also will be
subject to your compliance with post-termination
covenants provided under the Agreement on
Nonsolicitation, Confidentiality, Noncompetition and
Intellectual Property (“Covenants”), which has been
separately provided to you.
	 
	 	 
	Termination Protection Agreement
	 
	 	 
	 

	 	You will be eligible to enter into a Termination
Protection Agreement based on the Company’s standard
such form of Agreement for Corporate Executives;
provided, the terms of Attachment A will govern the
treatment of the Options upon a Change in Control
and a termination of your employment on or after a
Change in Control.
	 
	 	 
	Indemnification

	 	The Company will enter into its standard form of
senior executive indemnification agreement,
addressing indemnification rights and directors and
officers liability insurance.
	 
	 	 
	Restrictive Covenants

	 	Upon commencement of employment, you will be
required to enter into the Covenants, providing
confidentiality, nonsolicitation, noncompetition
restrictions and agreements governing the
development and assignment of intellectual property
rights.
	 
	 	 
	Arbitration

	 	Any controversy or claim arising out of or relating
to this letter or the breach of this letter that
cannot be resolved by you and the Company shall be
submitted to arbitration in Fort Worth, Texas in
accordance with the commercial dispute rules and
procedures of the American Arbitration Association,
which arbitration shall be a binding and conclusive
settlement of any such claims or disputes; provided
that the Company shall be entitled to a temporary
injunction for any breach by you of the Covenants,
which is the subject of an arbitration, for the
duration of any arbitration proceeding. You will be
responsible for the first $50,000 that you incur in
attorneys fees, litigation or arbitration costs, and
any other reasonable expenses in connection with
such proceeding (“Arbitration Costs”). The Company
thereafter will advance to you any Arbitration Costs
in excess of $50,000. In the event that any claim
brought by you is determined by the applicable
arbitrator to be frivolous, you will reimburse the
Company for all Arbitration Costs advanced to you in
connection with such claim.
	 
	 	 
	Miscellaneous

	 	The parties will cooperate to coordinate the terms
of your employment to the minimum extent necessary
to satisfy Section 409A of the Internal Revenue
Code. This letter and any dispute hereunder shall
be construed, interpreted and governed in accordance
with the laws of the State of Texas without
reference to

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 3

	 	 	 
	 

	 	rules relating to conflicts of law. Your employment with the Company will at
all times be at-will. Subject to the terms of this letter (including, without
limitation, relating to benefits under the Officers’ Severance Program or the
Termination Protection Agreement), nothing herein will confer upon you any
right to continue in the employment of the Company for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company or you to terminate your employment at any time and for any reason,
with or without Cause.
	 
	 	 
	Legal Fees.

	 	The Company shall pay or reimburse you for all
attorneys’ fees, costs, and any other reasonable
expenses incurred by you in connection with the
negotiation of this letter, the Covenants and the
Options.

     This offer of employment may be executed in one or more counterparts, each of which will be
deemed an original, but all of which will constitute one and the same instrument.

     This is a very exciting time to join RadioShack Corporation. This offer has been approved by
the Board and will remain open for your acceptance until 11:00 p.m. (C.D.T.), July 6, 2006.

     If the foregoing terms and conditions are acceptable and agreed to by you, please sign this
letter where indicated below and return one executed copy to me.

     Welcome to RadioShack Corporation!

	 	 	 	 	 	 	 
	 	 	RadioShack Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas G. Plaskett
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	Name: Thomas G. Plaskett	 	 
	 
	 	 	Title: Presiding Director	 	 

Accepted and Agreed:

	 	 	 
	/s/ Julian C. Day
	 	 
	 

Julian C. Day

	 	 

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 4

ATTACHMENT A

Sign-On Options

     As of the Effective Date, the Company will grant to you the following Options on the terms and
conditions set forth below:

     (1) An option (“Option #1”), granted pursuant to the Company’s 1999 Incentive Stock Plan, as
amended, to purchase 500,000 shares of the Company’s common stock (“Common Stock”), vesting and
becoming exercisable as to 125,000 shares on each of the first 4 anniversaries of the Effective
Date, provided that you are continuously employed by the Company on such vesting date for such
installment to so vest and become exercisable.

     (2) An option (“Option #2”), granted pursuant to the Company’s 2001 Incentive Stock Plan, as
amended (the “2001 Plan”), to purchase 500,000 shares of Common Stock, vesting and becoming
exercisable as to 125,000 shares on each of the first 4 anniversaries of the Effective Date,
provided that you are continuously employed by the Company on such vesting date for such
installment to so vest and become exercisable.

     (3) An option (“Option #3”), granted pursuant to the Company’s 1997 Incentive Stock Plan, as
amended, to purchase 500,000 shares of Common Stock, vesting and becoming exercisable as to 125,000
shares on each of the first 4 anniversaries of the Effective Date, provided that you are
continuously employed by the Company on such vesting date for such installment to so vest and
become exercisable.

     (4) An option (“Option #4”) to purchase 500,000 shares of Common Stock, granted as an
inducement grant not pursuant to any of the Company’s stock incentive plans, which will be
registered via form S-8 and listed in accordance with the rules of the New York Stock Exchange (the
“NYSE”). The option will vest and become exercisable as to 125,000 shares on each of the first 4
anniversaries of the Effective Date, provided that you are continuously employed by the Company on
such vesting date for such installment to so vest and become exercisable (Option #1, Option #2,
Option #3 and Option #4 are sometimes referred to as the “Time Options”).

     (5) An option (the “Performance Option”) to purchase 2,000,000 shares of Common Stock, granted
as an inducement grant not pursuant to any of the Company’s stock incentive plans, which will be
registered via form S-8 and listed in accordance with the rules of the NYSE. The Performance
Option will vest as to 600,000 shares on each of the first and second anniversaries of the
Effective Date and as to 400,000 shares on each of the third and fourth anniversaries of the
Effective Date, provided that you are continuously employed by the Company on such vesting date for
such installment to so vest (such aggregate vested amount applicable on each such anniversary being
the “Time-Vested Amount”); provided further, that the Time-Vested Amount of such option shall not
become exercisable except as follows:

          (i) Upon the attainment of a closing share price of Common Stock of $20 for 15 consecutive
trading days at any time during the option term, the lesser of (A) the Time-Vested Amount and (B) a
total of 666,667 options constituting the Performance Option, shall then become exercisable;

          (ii) Upon the attainment of a closing share price of Common Stock of $25 for 15 consecutive
trading days at any time during the option term, the lesser of (A) the Time-Vested

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 5

Amount and (B) a total of 1,333,333 options constituting the Performance Option, shall then
become exercisable; and

          (iii) Upon the attainment of a closing share price of Common Stock of $30 for 15 consecutive
trading days at any time during the option term, the lesser of (A) the Time-Vested Amount and (B) a
total of 2,000,000 options constituting the Performance Option, shall then become exercisable.

          The conditions provided under Paragraphs 5(i), 5(ii) and 5(iii) are referred to herein as the
“Performance Vesting Requirement.”

     (6) All of the Time Options and the Performance Option will (i) have an exercise price equal
to the fair market value of a share of Common Stock on the Effective Date (determined in accordance
with the applicable incentive stock plan of the Company), (ii) have a term of 7 years, and (iii) be
granted pursuant to and, to the extent not contrary to the terms of this letter, will be subject to
all of the terms and conditions imposed upon awards granted under the applicable incentive stock
plan of the Company; provided, Option #4 and the Performance Option will be subject to all of the
terms and conditions imposed upon awards granted under the 2001 Plan, to the extent not
inconsistent with the terms of this letter agreement, as if granted under such Plan.

     (7) If your employment is involuntarily terminated by the Company without Cause (and other
than due to your Disability) or is voluntarily terminated by you for Good Reason:

          (i) (A) If such termination occurs on or before the first anniversary of the Effective Date,
(x) 50% of the Time Options will become vested and exercisable and (y) the Time-Vested Amount under
the Performance Option will be 1,000,000 shares; and (B) if such termination occurs after the first
anniversary of the Effective Date, (x) 100% of the Time Options will become vested and exercisable
and (y) the Time-Vested Amount under the Performance Option will be 2,000,000 shares;

          (ii) Time Options which had not become vested and exercisable, and the portion of the
Performance Option not constituting a Time-Vested Amount, on or prior to the date of such
termination in accordance with Paragraph 7(i)(A) will be immediately forfeited and cancelled on the
date of termination;

          (iii) The Performance Option will be vested and exercisable only to the extent of the
attainment of the Performance Vesting Requirement, under Paragraph 5, through the last day of the
post-termination exercise period under Paragraph 7(iv), below, subject to the following
modifications of Paragraph 5:

          (A) If the $20 Performance Vesting Requirement under Paragraph 5(i) had not been
attained on or prior to the date of termination, no portion of the Performance Option will
be exercisable and the entire Performance Option will be forfeited upon the date of
termination of employment;

          (B) If the $20 Performance Vesting Requirement under Paragraph 5(i) had been attained
on or prior to the date of termination, the Performance Option will be vested and
exercisable based on the attainment of the Performance Vesting Requirement, under Paragraph
5, through the last day of the post-termination exercise period under Paragraph 7(iv) (or
Paragraph 8(iii) as applies pursuant to Paragraph 8(ii)), below; provided: The number of
option shares that are vested and exercisable from time to time during the post-termination
exercise period will be equal to the lesser of (x) the Time Vested Amount under Paragraph

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 6

7(i)(A)(y) or 7(i)(B)(Y), as applies, as of the date of employment termination and (y)
the sum of (I) 666,667 option shares plus (II) 133,333.33 option shares for each $1.00 (or,
for any amount less than $1.00, such lesser number of option shares as equals the product of
133,333.33 multiplied by the fraction the numerator of which is such fractional dollar
amount and the denominator of which is $1.00) by which the highest Common Stock closing
share price attained for 15 consecutive days through the date of option exercise exceeds
$20, up to a maximum of 2,000,000 vested and exercisable Performance Option shares. No
further performance vesting or exercisability will apply to any portion of the Performance
Option following the exercise of that portion; and

          (iv) The Time Options will be exercisable to the extent vested under Paragraph 7(i) and not
forfeited under Paragraph 7(ii), above, and the Performance Option will be exercisable to the
extent vested under Paragraph 7(i), not forfeited under Paragraph 7(ii) and to the extent of
attainment of the Performance Vesting Requirement under Paragraph 7(iii), above, for: (A) one year
following a date of termination occurring on or prior to the earlier of (I) the second anniversary
of the Effective Date and (II) the date on which you attained age 55, and (B) three years following
a date of termination occurring after the earlier of the foregoing events under (A)(I) and (A)(II).

     (8) If your employment terminates due to your death or Disability:

          (i) The Time Options will become vested and exercisable in accordance with Paragraph 7(i) or
forfeited in accordance with
Paragraph 7(ii);

          (ii) The Performance Option will become vested in a Time-Vested Amount in accordance with
Paragraph 7(i) or forfeited in accordance with Paragraph 7(ii), and vested and exercisable, or
forfeited, in accordance with Paragraph 7(iii), above; and

          (iii) All such Options which become vested and exercisable under Paragraphs 8(i) and 8(ii)
will be exercisable for three years following the date of termination.

          (iv) Time Options which had not become vested and exercisable on or prior to the date of such
termination in accordance with Paragraph 8(i), and the portion of the Performance Option not
constituting a Time-Vested Amount on or prior to the date of such termination under Paragraph 8(i),
will be immediately forfeited and cancelled on the date of termination.

     (9) If your employment is involuntarily terminated by the Company for Cause or you voluntarily
terminate your employment without Good Reason:

          (i) Time Options which had not become vested and exercisable on or prior to the date of such
termination in accordance with Paragraphs 1, 2, 3 and 4, and the portion of the Performance Option
not constituting a Time-Vested Amount on or prior to the date of such termination under Paragraph
5, above, as applies, will be immediately forfeited and cancelled on the date of termination;

          (ii) Time Options which had become vested and exercisable on or prior to the date of such
termination, in accordance with Paragraphs 1, 2, 3 and 4 above, as apply, will be exercisable (A)
for three months following the date of termination, except (B) if a voluntary termination without
Good Reason occurs on or after the fourth anniversary of the Effective Date the vested Time Options
will be exercisable for three years following the date of termination; and

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 7

          (iii) To the extent that the Time-Vested Amount of the Performance Option is greater than
zero, the Performance Option will be exercisable during the applicable exercise period under
Paragraph 9(ii)(A) or (B) only to the extent that the Performance Vesting Requirement under
Paragraph 5 had been attained on the date of exercise.

     (10) In the event of a Change in Control of the Company, any terms and conditions of the
Termination Protection Agreement to the contrary notwithstanding:

          (i) If such Change in Control occurs prior to the first anniversary of the Effective Date, 50%
of each Time Option and 50% of the Performance Option will become immediately vested and
exercisable and all unvested Options will be forfeited and immediately cancelled upon the
occurrence of such Change in Control; and

          (ii) If such Change in Control occurs on or after the first anniversary of the Effective Date,
100% of the Time Options and 100% of the Performance Option will become immediately fully vested
and exercisable.

     (11) For the purposes of this Attachment A, (i) “Cause” and “Good Reason” have the meanings
defined on Attachment B hereto, and (ii) “Change in Control” and “Disability” have the meanings
defined under the Termination Protection Agreement for Corporate Executives; provided, for all
purposes under this Attachment A, a “Change in Control” will not occur as a result of any
management buy-out that is led by you.

 

 

Mr. Julian C. Day

c/o Jed W. Brickner, Esq.

July 6, 2006

Page 8

ATTACHMENT B

Definitions

     “Cause” means:

     (i) The Executive is convicted of a felony or of any crime involving moral turpitude,
dishonesty, fraud, theft or financial impropriety; or

     (ii) A reasonable determination by the Committee (as defined under the Officers Severance
Program) that, (A) the Executive has willfully and continuously failed to perform his duties (other
than such failure resulting from incapacity due to physical or mental illness), after a written
demand for corrected performance is delivered to the Executive which specifically identifies the
manner(s) in which the Executive has not performed his duties and the Executive’s failure to cure
such performance, if curable, within fifteen (15) days following such demand, (B) the Executive has
engaged in illegal conduct, an act of dishonesty, moral turpitude, dishonesty, fraud, theft,
financial impropriety or gross misconduct in each case injurious to the Company by more than a de
minimis amount, or (C) the Executive has materially violated a material provision of the Company’s
Code of Ethics, Financial Code of Ethics, or the Executive’s fiduciary duty to the Company.

     “Good Reason” means:

     (i) any significant adverse reduction in the Executive’s annual cash compensation opportunity
expressed in terms of base salary and target annual bonus which is in effect as of the Effective
Date (and as increased from time to time thereafter), except as part of a general reduction in the
total compensation opportunities of the Company’s senior executives; for purposes of this
definition of Good Reason, a “significant adverse reduction” shall solely mean a reduction of the
Executive’s annual cash compensation opportunity by at least ten percent (10%) taken at one time or
cumulatively after the Effective Date; or

     (ii) the greater than de minimis reduction or material adverse modification of the Executive’s
authority or duties, such as a substantial diminution or adverse modification in the Executive’s
status or responsibilities, from his authorities being exercised and duties being performed by the
Executive as of the Effective Date (and as such authorities and duties may be increased from time
to time after the Effective Date).

Notwithstanding the foregoing, any of the circumstances described above may not serve as a basis
for resignation for “Good Reason” by the Executive unless the Executive has provided written notice
to the Company that such circumstance exists within thirty (30) days of the Executive’s learning of
such circumstance and the Company has failed to cure such circumstance, if curable, within fifteen
(15) days following such notice; and provided further, the Executive did not previously consent in
writing to the action leading to his claim of resignation for “Good Reason.”exv10w2

 

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

 

 

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

- 2 -

 

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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