CIRCUIT CITY STORES INC, PRE 14A, 1999-04-19

CIRCUIT CITY STORES INC
PRE 14A, 1999-04-19
RADIO, TV & CONSUMER ELECTRONICS STORES

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )

Check the appropriate box:

(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

CIRCUIT CITY STORES, INC.
(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

(X) No fee required

( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

( ) Fee paid previously with preliminary materials.

( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule, or Registration Statement No.:

3) Filing Party:

4) Date Filed:

<PAGE>
CIRCUIT CITY STORES, INC.

9950 MAYLAND DRIVE
RICHMOND, VIRGINIA 23233

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

JUNE 15, 1999

TO THE HOLDERS OF CIRCUIT CITY STORES, INC. -- CIRCUIT CITY GROUP COMMON
STOCK AND CIRCUIT CITY STORES, INC. -- CARMAX GROUP COMMON STOCK:

The annual meeting of shareholders of Circuit City Stores, Inc. will be held at
The Jefferson Hotel, Franklin and Adams Streets, Richmond, Virginia, on Tuesday,
June 15, 1999, at 10:00 a.m., Eastern Daylight Time, for the following purposes:

1. To elect four directors to three-year terms and one director to a two-year
term;

2. To consider and vote upon a proposal to approve an amendment to the Company's
Amended and Restated Articles of Incorporation that would:

(a) increase the authorized Common Stock from 350,000,000 to 525,000,000
shares, and
(b) designate the additional 175,000,000 shares as Circuit City
Stores, Inc. - Circuit City Group Common Stock

3. To consider and vote upon a proposal to amend the 1994 Stock Incentive Plan;

4. To consider and vote upon two shareholder proposals; and

5. To transact such other business as may properly come before the meeting or
any adjournments thereof.

Only holders of record of shares of Circuit City Group Common Stock or
CarMax Group Common Stock at the close of business on April 30, 1999, will be
entitled to vote at the meeting and any adjournments thereof.

Whether or not you plan to attend the meeting, please fill in, date, sign and
return the enclosed proxy promptly in the return envelope provided. You are
cordially invited to attend the meeting.

By Order of the Board of Directors

MICHAEL T. CHALIFOUX, SECRETARY

May 12, 1999

<PAGE>

PROXY STATEMENT

This Proxy Statement, mailed to holders of Circuit City Group Common
Stock and CarMax Group Common Stock on or about May 12, 1999, is furnished in
connection with the solicitation by Circuit City Stores, Inc. of proxies in the
accompanying form for use at the annual meeting of shareholders to be held on
June 15, 1999, and at any adjournments thereof. A copy of the annual report of
the Company for the fiscal year ended February 28, 1999, is being mailed to you
with this Proxy Statement.

In addition to the solicitation of proxies by mail, the Company's
officers and regular employees, without compensation other than regular
compensation, may solicit proxies by telephone, telegraph, electronic means and
personal interview. The Company also has retained Morrow & Co., Inc. of New
York, New York, to assist in the solicitation of proxies of shareholders whose
shares are held in street name by brokers, banks and other institutions at an
approximate cost of $6,000 plus out-of-pocket expenses. The Company will bear
the cost of all solicitation.

Participants in the 1984 Circuit City Stores, Inc. Employee Stock
Purchase Plan will receive proxy-soliciting material for the shares of Circuit
City Group Common Stock held on each participant's behalf by Merrill Lynch and
Company, Inc., as service provider for the Plan. Participants in the 1997
Employee Stock Purchase Plan for CarMax Group Employees also will receive
proxy-soliciting material for the shares of CarMax Group Common Stock held on
each participant's behalf by Merrill Lynch, as service provider for the Plan.
Those proxies should be returned, properly executed, in the envelope provided.
Merrill Lynch will vote returned proxies in accordance with the participants'
instructions. If a participant does not return his or her proxy, Merrill Lynch
will have discretionary power to vote such shares in accordance with New York
Stock Exchange rules.

On April 30, 1999, the date for determining shareholders entitled to
vote at the meeting, _________ shares of Circuit City Group Common Stock and
__________ shares of CarMax Group Common Stock were outstanding and entitled to
vote. References to "Common Stock" in this Proxy Statement refer to the Circuit
City Group Common Stock and the CarMax Group Common Stock, collectively. The
holders of both series of Common Stock will vote together as a single group at
the meeting. In addition, the holders of Circuit City Group Common Stock will
vote as a separate voting group on the proposal to amend the Articles of
Incorporation. Each outstanding share of Circuit City Group Common Stock
entitles the holder thereof to one vote; each outstanding share of CarMax Group
Common Stock entitles the holder thereof to _____ votes; the total number of
votes which shareholders may cast at the meeting, based on shares outstanding on
the record date, is ____________. The voting rights of the CarMax Group Common
Stock have been determined from the recent market values of each series of the
Company's Common Stock in accordance with the formula set forth in the Company's
Articles of Incorporation.

Any shareholder giving a proxy may revoke it at any time before it is
voted by delivering another proxy or written notice of revocation to the
Company's Secretary. A proxy, if executed and not revoked, will be voted for the
election of the nominees for director named herein, for the proposal to amend
the Articles of Incorporation, for the proposal to amend the 1994 Stock
Incentive Plan, and against the shareholder proposals set forth herein, unless
it contains specific instructions to the contrary, in which event it will be
voted in accordance with such instructions.

A majority of the total votes entitled to be cast on matters to be
considered at the meeting constitutes a quorum. If a share is represented for
any purpose at the meeting, it is deemed to be present for quorum purposes and
for all other matters as well. Abstentions and shares held of record by a broker
or its nominee ("Broker Shares") that are voted on any matter are included in
determining the number of votes present or represented at the meeting. Broker
Shares that are not voted on any matter at the meeting will not be included in
determining whether a quorum is present at such meeting.

The election of each nominee for director requires the affirmative vote
of the holders of the shares representing a plurality of the votes cast in the
election of directors. Votes that are withheld and Broker Shares that are not
voted in the election of directors will not be included in determining the
number of votes cast and, therefore, will have no effect on the election of
directors. The affirmative vote of a majority of the votes that all shareholders
are entitled to cast and the affirmative vote of a majority of the votes that
shareholders of Circuit City Group Common Stock are entitled to cast are
required to amend the Articles of Incorporation. Actions on all other matters to
come before the meeting, including the proposal to amend the 1994 Stock
Incentive Plan and the shareholder proposals, require that the votes cast in
favor of the action exceed the votes cast against it. Abstentions and Broker
shares that are not voted are not considered cast either for or against a
matter. They will have the effect of a vote against the proposal to amend the
Articles of Incorporation, but will have no effect on the outcome of all other
matters to come before the meeting.

<PAGE>

ITEM ONE -- ELECTION OF DIRECTORS

The Company's Board of Directors presently consists of 12 directors, who
are divided into three classes with staggered terms. The terms of Hugh G.
Robinson, Walter J. Salmon, Mikael Salovaara and John W. Snow as directors of
the Company will expire at the time of the annual meeting of shareholders. James
F. Hardymon was appointed by the Board to serve as a director effective October
1998 until the next annual meeting of shareholders. The Company recommends the
reelection of Messrs. Hardymon, Robinson, Salovaara, and Snow to three-year
terms. The Company recommends the reelection of Mr. Salmon to a two-year term.
Mr. Salmon is nominated for a two-year term to comply with the requirements of
the Company's Articles of Incorporation that the classes of directors be as
nearly equal in size as possible.

Although all the nominees have indicated their willingness to serve if
elected, if at the time of the meeting any nominee is unable to or unwilling to
serve, shares represented by properly executed proxies will be voted at the
discretion of the persons named therein for such other person as the Board may
designate.

Information, including their business experience for the past five
years, about the nominees for election as directors and about other directors of
the Company whose terms of office do not expire this year appears below.

NOMINEES FOR ELECTION TO THREE-YEAR TERMS

JAMES F. HARDYMON, 64, retired as Chairman of Textron, Inc. in
January 1999. Mr. Hardymon joined Textron, Inc., a global,
multi-industry company with core businesses of aircraft,
automotive, industrial and finance, in 1989 as President and
Chief Operating Officer. He became Chief Executive Officer in
1992 and assumed the title of Chairman in 1993. He is a
director of Air Products and Chemicals, Inc.; Fleet Financial
Group, Inc.; Championship Auto Racing Teams, Inc.; Lexmark
International, Inc. and Schneider, S.A. He has been a director
of the Company since October 1998.

HUGH G. ROBINSON, 66, Chairman and Chief Executive Officer,
The Tetra Group, a consulting firm that provides construction
management and business development services, since 1989. Mr.
Robinson is a retired Major General from the United States
Army. He is a director of A.H. Belo Corporation, TU Electric
and Guaranty Federal Savings Bank. He has been a director of
the Company since 1995.

MIKAEL SALOVAARA, 45, Partner, Greycliff Partners, since 1991.
Mr. Salovaara was a Limited Partner of The Blackstone Group
L.P. from 1994 to 1996. The principal business of The
Blackstone Group L.P. and Greycliff Partners is merchant
banking. He has been a director of the Company since 1995.

JOHN W. SNOW, 59, Chairman, President and Chief Executive
Officer, CSX Corporation, a transportation company. Mr. Snow
was elected President and Chief Executive Officer in 1989 and
added the title of Chairman in 1991. He is a director of
Johnson & Johnson, GTE Corporation and USX Corporation. He has
been a director of the Company since 1996.

NOMINEE FOR ELECTION TO TWO-YEAR TERM

WALTER J. SALMON, 68, Stanley Roth Senior Professor of
Retailing, Emeritus, Harvard Business School. Mr. Salmon
became the Stanley Roth Senior Professor of Retailing in 1980
and added the title of emeritus in 1997. Mr. Salmon is a
director of Hannaford Bros. Company; Luby's Cafeterias, Inc.;
The Neiman Marcus Group; Harrah's Entertainment, Inc.; The
Quaker Oats Company; Cole National Corporation and PetsMart,
Inc. He has been a director of the Company since 1992.

<PAGE>

DIRECTORS WHOSE TERMS DO NOT EXPIRE THIS YEAR

MICHAEL T. CHALIFOUX, 52, Executive Vice President, Chief
Financial Officer and Secretary of the Company. Mr. Chalifoux
joined the Company in 1983 as Corporate Controller and was
elected Vice President and Chief Financial Officer in 1988. He
became Senior Vice President and Chief Financial Officer in
1990, Secretary in 1993 and an Executive Vice President in
1998. He has been a director of the Company since 1991. His
present term will expire in 2000.

RICHARD N. COOPER, 64, Professor of Economics at Harvard
University since 1981. He is a director of the Phoenix Home
Mutual Life Insurance Co., the Warburg-Pincus Funds and the
CNA Corporation. He has been a director of the Company since
1983. His present term will expire in 2001.

BARBARA S. FEIGIN, 61, consultant to Grey Advertising, Inc.,
the principal business of which is advertising and marketing
communications, where she served as Executive Vice President
and Worldwide Director of Strategic Services from 1983 to
February 1999. She is a director of VF Corporation. She has
been a director of the Company since 1994. Her present term
will expire in 2000.

ROBERT S. JEPSON, JR., 56, Chairman and Chief Executive
Officer of Jepson Associates, Inc., a private investment
company, and Chairman of the Board and Chief Executive Officer
of Jepson Vineyards, Ltd. Until 1999, Mr. Jepson also served
as Chairman of the Board and Chief Executive Office of Kuhlman
Corporation. He has been a director of the Company since 1997.
His present term will expire in 2001.

RICHARD L. SHARP, 52, Chairman of the Board and Chief
Executive Officer of the Company. Mr. Sharp joined the Company
as an Executive Vice President in 1982. He was President of
the Company from June 1984 to March 1997 and became Chief
Executive Officer in 1986 and Chairman of the Board in 1994.
He is a director of Fort James Corporation and Flextronics
International, Ltd. He has been a director of the Company
since 1983. His present term will expire in 2001.

EDWARD VILLANUEVA, 64, financial consultant since 1987. In
addition, Mr. Villanueva served as acting President and Chief
Financial Officer of Richfood Holdings, Inc., a wholesale food
distributor, from January 1990 to May 1990 and August 1990,
respectively. He is a director of Richfood Holdings, Inc. Mr.
Villanueva was employed by the Company from 1967 to 1987. He
has been a director of the Company since 1978. His present
term will expire in 2000.

ALAN L. WURTZEL, 65, Vice Chairman of the Board of the
Company. Mr. Wurtzel joined the Company in 1966, was elected
President in 1970 and served as Chief Executive Officer from
1972 to 1986. He also served as Chairman of the Board from
1984 until 1994, when he became Vice Chairman. He is a
director of Dollar Tree Stores, Inc. He has been a director of
the Company since 1966. His present term will expire in 2001.

<PAGE>

BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information about the equity securities
of the Company beneficially owned as of February 28, 1999, by (i) each executive
officer named in the Summary Compensation Table; (ii) each director or nominee
for director of the Company; (iii) directors and executive officers as a group;
and (iv) each person who is known by the Company to own beneficially more than 5
percent of the outstanding shares of Circuit City Group Common Stock or CarMax
Group Common Stock. Unless otherwise noted, each shareholder has sole voting
power and sole investment power with respect to securities beneficially owned.

Shares of Shares of
Circuit City Group Circuit City Group CarMax Group
Option Shares Which Common Stock Common Stock
May Be Acquired Beneficially Owned Percent Beneficially Owned Percent
Within 60 Days After as of of as of of
Name February 28, 1999 February 28, 1999(1) Series February 28, 1999 Series
---- ----------------- -------------------- ------ ----------------- -------
<S> <C> <C> <C> <C> <C>
NAMED EXECUTIVE OFFICERS

Richard L. Sharp** 469,000 1,402,801 % 0 *
W. Alan McCollough 129,500 237,572 (3)(4) * 0 *
Richard S. Birnbaum 168,000 298,785 (3) * 0 *
Michael T. Chalifoux** 137,000 270,966 (3) * 0 *
John A. Fitzsimmons 40,500 81,000 (3) * 0 *

DIRECTORS/DIRECTOR NOMINEES

Richard N. Cooper 9,563 37,337 * 0 *
Barbara S. Feigin 3,684 5,484 * 0 *
James F. Hardymon 0 0 * 0 *
Robert S. Jepson, Jr. 0 10,000 * 0 *
Hugh G. Robinson 2,166 2,166 * 0 *
Walter J. Salmon 9,147 17,747 * 0 *
Mikael Salovaara 2,469 8,469 * 0 *
John W. Snow 0 2,800 * 0 *
Edward Villanueva 3,984 200,904 (5) * 0 *
Alan L. Wurtzel 9,563 299,437 (6) * 0 *

All directors, director nominees
and executive officers as a group
(22 persons) 1,224,576 3,303,085 (3)(7) % 521,333 (2) %

BENEFICIAL OWNERS OF MORE THAN 5%

Brinson Partners, Inc. N/A 8,230,077 (8) % N/A
209 South LaSalle
Chicago, IL 60604

FMR Corp. N/A 5,755,958 (9) % N/A
82 Devonshire Street
Boston, MA 02109

J.P. Morgan & Co., Incorporated N/A 7,371,466 (10) % N/A
60 Wall Street
New York, NY 10260

American Variable Insurance-
Series-Growth Income Fund N/A N/A 1,300,000 (11) %
333 South Hope Street
Los Angeles, CA 90071

Capital Research and
Management Company N/A N/A 2,200,000 (11) %
333 South Hope Street
Los Angeles, CA 90071

The Equitable Companies Incorporated N/A N/A 10,537,370 (12) %
1290 Avenue of the Americas
New York, NY 10104

</TABLE>

- ------------
* Less than 1 percent of Class, based on the total number of shares of Circuit
City Group Common Stock and CarMax Group Common Stock outstanding on April
30, 1999.

** Messrs. Sharp and Chalifoux are also directors of the Company.

<PAGE>

(1) Includes the shares of Circuit City Group Common Stock that could be
acquired through exercise of stock options within 60 days after February 28,
1999.

(2) Includes the shares of CarMax Group Common Stock that could be acquired
through the exercise of stock options within 60 days after February 28,
1999.

(3) Includes restricted shares of Circuit City Group Common Stock as follows:
Mr. McCollough 37,875; Mr. Birnbaum 30,375; Mr. Chalifoux 30,375; Mr.
Fitzsimmons 30,375; and 83,351 awarded to other executive officers. See the
Summary Compensation Table on page ___.

(4) Includes 100 shares held by Mr. McCollough's daughter. Mr. McCollough
disclaims beneficial ownership of such 100 shares.

(5) Includes 16,600 shares held by Mr. Villanueva as trustee of trusts for the
benefit of his children. Mr. Villanueva disclaims beneficial ownership of
such 16,600 shares.

(6) Includes 90,000 shares held by Mr. Wurtzel as trustee of trusts for the
benefit of his children, 169,874 shares held by Alan Wurtzel Revocable Trust
and 30,000 shares held by Alan Wurtzel Charitable Remainder Unitrust. Mr.
Wurtzel disclaims beneficial ownership of all the aforementioned shares.

(7) Beneficial ownership is disclaimed for a total of 320,774 shares.

(8) Information concerning the Circuit City Group Common Stock beneficially
owned by Brinson Partners, Inc. as of December 31, 1998, was obtained from a
Schedule 13G dated February 11, 1999. According to this filing, Brinson
Partners, an investment adviser registered under the Investment Adviser Act
of 1940, has shared voting power and shared dispositive power for the
8,230,077 shares, but disclaims beneficial ownership of any shares. The
filing indicates that UBS AG, the parent company of Brinson Partners, also
has shared voting power and shared dispositive power for the 8,230,077
shares, but disclaims beneficial ownership of any shares. The Company has
been informed that no account managed by Brinson Partners, Inc., holds more
than 5 percent of Circuit City Group Common Stock.

(9) Information concerning the Circuit City Group Common Stock beneficially
owned by FMR Corp. as of December 31, 1998, was obtained from a Schedule 13G
dated February 12, 1999. FMR is a parent holding company. Members of the
Edward C. Johnson 3d family may be deemed members of a group that controls
FMR. The Schedule 13G indicates that the 5,755,958 shares beneficially owned
include: (i) 5,689,400 shares or ____percent of the outstanding shares of
Circuit City Group Common Stock beneficially owned by Fidelity Management &
Research Company ("Fidelity"), a registered investment adviser and a
wholly-owned subsidiary of FMR Corp., as a result of acting as investment
adviser to various registered investment companies (the "Fidelity Funds");
and (ii) 66,558 shares or ___ percent of the outstanding shares of Circuit
City Group Common Stock beneficially owned by Fidelity Management Trust
Company, a bank and a wholly-owned subsidiary of FMR Corp. (the "Fidelity
Trust") as a result of its serving as investment manager of institutional
accounts (the "Institutional Accounts"). According to the Schedule 13G, each
of FMR, Mr. Johnson, and Fidelity Funds has sole dispositive power over the
Fidelity Funds' shares, but neither FMR nor Mr. Johnson has sole power to
vote these shares, a power which resides with the Fidelity Funds' Boards of
Trustees. Each of FMR and Mr. Johnson has sole dispositive power and voting
power over the 66,558 shares beneficially owned by Fidelity Trust.

(10)Information concerning the Circuit City Group Common Stock beneficially
owned by J.P. Morgan & Co., Inc. as of December 31, 1998, was obtained from
a Schedule 13G dated February 22, 1999. The Company is informed that no
account managed by J.P. Morgan & Co., Inc. or its affiliates owns 5 percent
or more of Circuit City Group Common Stock. The filing indicates that of the
7,371,466 shares beneficially owned, J.P. Morgan & Co., Inc. has sole voting
power for 5,885,307 shares, shared voting power for 820 shares, sole
dispositive power for 7,367,706 shares and shared dispositive power for
2,460 shares.

(11)Information concerning the CarMax Group Common Stock beneficially owned as
of December 31, 1998, by Capital Research and Management Company and
American Variable Insurance Series-Growth-Income Fund was obtained from a
Schedule 13G dated February 11, 1999. According to this filing, Capital
Research and Management Company, an investment adviser registered under the
Investment Adviser Act of 1940, has sole dispositive power for 2,200,000
shares or ___ percent of the outstanding shares of CarMax Group Common Stock
and no voting power for the shares. American Variable Insurance
Series-Growth-Income Fund, an investment company registered under the
Investment Company Act of 1940, which is advised by Capital Research and
Management Company, has sole voting power for 1,300,000 of the 2,200,000
shares or ___ percent of the outstanding shares of CarMax Group Common Stock
and no dispositive power for any of the 2,200,000 shares.

<PAGE>

(12)Information concerning the CarMax Group Common Stock beneficially owned by
The Equitable Companies Incorporated as of December 31, 1998, was obtained
from a Schedule 13G dated February 16, 1999, filed by Equitable Companies;
AXA, which beneficially owns a majority interest in Equitable Companies; and
the Mutuelles AXA, as a group which controls AXA. According to this filing,
the interest of one entity, Alliance Capital Management L.P., an investment
adviser registered under the Investment Adviser Act of 1940, amounted to
9,740,870 shares or ___ percent of the outstanding shares of CarMax Group
Common Stock. The filing indicates that of the 10,537,370 shares
beneficially owned, The Equitable Companies Incorporated has sole voting
power for 1,057,515 shares, shared voting power for 9,472,200 shares, sole
dispositive power for 10,533,370 shares and shared dispositive power for
4,000 shares.

CERTAIN INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors held six meetings during the fiscal year ended
February 28, 1999. No director attended less than 75 percent of the aggregate
number of meetings of the Board and of the committees on which he or she served
except Robert S. Jepson, Jr., who attended 67 percent. Mr. Jepson was unable to
attend several meetings because of his involvement in the negotiations of the
sale of Kuhlman Corporation where he was Chairman and Chief Executive Officer.

The Audit Committee is composed of Edward Villanueva, Chairman, Richard
N. Cooper, Barbara S. Feigin and Hugh G. Robinson. Four meetings were held
during the fiscal year ended February 28, 1999. The functions of this Committee
include making recommendations to the Board regarding the selection of
independent auditors, conferring with the independent auditors and reviewing the
scope and results of their work as well as the fees therefor, reviewing the
Company's internal controls and internal audit procedures and approving the
nature and scope of non-audit services performed by the Company's independent
auditors as well as the fees therefor.

The Compensation and Personnel Committee is composed of John W. Snow,
Chairman, James F. Hardymon, Robert S. Jepson, Jr., Walter J. Salmon and Mikael
Salovaara. Five meetings were held during the fiscal year ended February 28,
1999. The functions of this Committee include reviewing, evaluating and
approving the amount, design, and implementation of compensation programs for
officers and key personnel, making awards under and administering the Company's
stock incentive programs, reviewing and making recommendations with respect to
senior management organization and reviewing the Company's programs for
attracting and compensating management personnel at lower and middle levels.

The Pension Investment Committee is composed of Mikael Salovaara,
Chairman, Richard N. Cooper, Hugh G. Robinson, Edward Villanueva and Alan L.
Wurtzel. Two meetings were held during the fiscal year ended February 28, 1999.
The functions of this Committee include establishing the funding policy of the
Employees' Retirement Plan of Circuit City Stores, Inc. (the Pension Plan),
appointing Pension Plan investment managers and allocating Pension Plan assets
among managers for investment, employing accountants and actuaries for the
Pension Plan, making recommendations to the Board concerning the appointment or
removal of the Trustee for the Pension Plan, recommending investment objectives
to be followed by the Trustee and investment managers and monitoring the
performance of the Trustee and Pension Plan investment managers. This Committee
also may make recommendations concerning investments to the Trustee and the
investment managers.

The Nominating and Governance Committee is composed of Alan L. Wurtzel,
Chairman, Barbara S. Feigin, James F. Hardymon, Robert S. Jepson, Jr., Walter J.
Salmon and John W. Snow. One meeting was held during the fiscal year ended
February 28, 1999. The functions of this Committee include reviewing significant
corporate governance issues and recommending changes to the Board as
appropriate, recommending candidates for election as directors and reviewing and
recommending policies with regard to the size and composition of the Board. The
Committee considers nominees for the Board recommended by the Company's
shareholders.

In accordance with the Company's Bylaws, a shareholder who is interested
in nominating a person to the Board should submit to the Secretary of the
Company written notice of his or her intent to make such nomination. Such notice
must be given either by personal delivery or by United States mail, postage
prepaid, not later than 120 days in advance of the annual meeting, or with
respect to a special meeting of shareholders for the election of directors, the
close of business on the seventh day following the date on which notice of such
meeting is first given to shareholders. The contents of such notice must be as
specified in the Company's Bylaws, a copy of which may be obtained by any
shareholder who directs a written request for the same to the Secretary of the
Company.

<PAGE>

COMPENSATION OF EXECUTIVE OFFICERS

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. The table below sets forth for the years
ended February 28, 1999, 1998 and 1997, the annual and long-term compensation
for services in all capacities to the Company and its subsidiaries of those
persons who at February 28, 1999, were the Company's Chief Executive Officer and
the other four most highly compensated executive officers of the Company other
than the CEO. The only stock appreciation rights (SARs) granted were Change of
Control SARs (described on page____), which were granted in connection with each
of the options. No free-standing SARs have been granted. All of the following
long-term compensation awards are Circuit City Group Common Stock awards. No
CarMax Group Common Stock awards were granted to the Company's CEO and other
four most highly compensated executive officers through fiscal year 1999.

Long-Term
Annual Compensation Compensation Awards
------------------- -------------------

Restricted Securities
Stock Underlying
Name and Fiscal Salary Bonus Awards (3) Options/SARs
Principal Position Year $ $ $ #
------------------ ------- ------ ------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Richard L. Sharp 1999 944,911 1,235,000 0 95,000
Chairman of the Board and 1998 854,757 630,000 0 83,000
Chief Executive Officer 1997 712,988 177,500 0 1,100,000 (4)

W. Alan McCollough 1999 644,911 633,750 0 0
President and 1998 600,809 252,000 1,612,844 (2) 0
Chief Operating Officer 1997 428,967 37,188 796,875 (1) 170,000

Richard S. Birnbaum 1999 587,988 442,500 0 0
Executive Vice President 1998 551,527 192,500 1,293,469 (2) 20,000
Operations 1997 524,450 65,000 0 160,000

Michael T. Chalifoux 1999 562,219 431,250 0 0
Executive Vice President, 1998 492,154 175,000 1,293,469 (2) 84,000
Chief Financial Officer 1997 437,130 38,063 0 120,000
and Secretary

John A. Fitzsimmons 1999 527,604 393,750 0 0
Senior Vice President 1998 505,911 175,000 1,293,469 (2) 84,000
Administration 1997 489,450 42,438 0 120,000

</TABLE>

(1) Mr. McCollough was awarded 25,000 shares of restricted stock on February 20,
1997, in connection with his promotion to President and Chief Operating
Officer. The amount in the above table is based on the closing price for
Circuit City Group Common Stock on the date of the award, which was $31.875.
The stock will vest in even increments on April 20, 2000; April 20, 2001;
and April 20, 2002. Dividends are paid on restricted stock during the
restricted period.

(2) On December 9, 1997, Mr. McCollough was awarded 50,500 shares of restricted
stock, and Mr. Birnbaum, Mr. Chalifoux and Mr. Fitzsimmons were each awarded
40,500 shares of restricted stock. The amount in the above table is based on
the closing price for Circuit City Group Common Stock on the date of the
award, which was $31.9375. The stock will vest at the end of seven years
with provisions for accelerated vesting based upon performance. Performance
criteria are based on a total return on Circuit City Group Common Stock
compared against a peer group consisting of publicly traded consumer
electronics companies. Based on the Company's comparative performance in
fiscal 1999, 25 percent of the awards vested. Based on the Company's
comparative performance, the maximum the awards may vest is 40 percent in
fiscal 2000 and 35 percent in fiscal 2001. Dividends are paid on restricted
stock during the restricted period.

<PAGE>

(3) The number and value of each executive officer's restricted stock holdings
at the end of the fiscal year ended February 28, 1999, based on a February
26, 1999, closing price for the Circuit City Group Common Stock of $54.25
were as follows: Mr. McCollough: 37,875 shares with a total value of
$2,054,719; and Mr. Birnbaum, Mr. Fitzsimmons and Mr. Chalifoux: 30,375
shares each with a value of $1,647,844 each.

(4) In fiscal 1997, Mr. Sharp was granted a special long-term option of
1,000,000 shares of Circuit City Group Common Stock, which was designed to
promote and reward extraordinary long-term performance by the Company
through Mr. Sharp's leadership. Mr. Sharp must stay with the Company for at
least five years to obtain the benefit of the option, which will expire six
years from the date of grant. The exercise price for the option was $59,
which was twice the trading price range of the Circuit City Group Common
Stock when the option was granted. Therefore, the option will only have
value if the Circuit City Group Common Stock more than doubles in price
within six years of the grant.

OPTIONS GRANTS IN LAST FISCAL YEAR. The table below sets forth for the
fiscal year ended February 28, 1999, the grants of Circuit City Group Common
Stock options to the executive officers named in the Summary Compensation Table.
No SARs were granted in connection with these options.

Potential Realization Value
Number of at Assumed Annual Rates of
Securities % of Total Stock Price Appreciation
Underlying Options for Option Term
Options Granted to Exercise Expiration ---------------
Granted Employees Price (1) Date 5% 10%
---------- ----------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Sharp 95,000 15.05% $42.25 04/14/06 $1,947,097 $4,634,636
W. Alan McCollough 0 0 - - 0 0
Richard S. Birnbaum 0 0 - - 0 0
Michael T. Chalifoux 0 0 - - 0 0
John A. Fitzsimmons 0 0 - - 0 0
</TABLE>

(1) The exercise price for all of the options is the fair market value of the
Circuit City Group Common Stock on the date of grant.

AGGREGATED OPTIONS/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE
TABLE. The following table sets forth information concerning Circuit City Group
Common Stock option exercises and fiscal year-end option/SAR values as of
February 28, 1999, for the executive officers named in the Summary Compensation
Table. The only SARs outstanding were Change of Control SARs (described on page
___).

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
February 28, 1999 February 28, 1999
Number of ----------------- -----------------
Shares Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Sharp 233,610 $9,722,236 388,500 1,239,000 $12,109,281 $4,596,313
W. Alan McCollough 33,478 1,378,552 95,000 143,500 2,801,969 3,582,094
Richard S. Birnbaum 44,456 1,807,692 152,000 143,000 4,758,250 3,525,813
Michael T. Chalifoux 50,158 2,088,449 117,500 166,500 3,430,500 3,981,281
John A. Fitzsimmons 90,750 2,653,828 21,000 166,500 44,938 3,981,281

</TABLE>

<PAGE>

PENSION PLAN/BENEFIT RESTORATION PLAN. The following table illustrates
estimated annual retirement benefits payable under the Company's defined benefit
pension plan (the "Pension Plan") to persons in specified compensation and years
of service classifications.

ESTIMATED* ANNUAL PENSION FOR REPRESENTATIVE YEARS
OF CREDITED SERVICE
---------------------------------------------------------------------
HIGHEST CONSECUTIVE
FIVE-YEAR AVERAGE
COMPENSATION 15 20 25 30 35
------------ ------ ------- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
$ 500,000.................. 109,277 145,702 182,128 218,553 254,979
$ 750,000.................. 165,527 220,702 275,878 331,053 386,229
$1,000,000.................. 221,777 295,702 369,628 443,553 517,479
$1,250,000.................. 278,027 370,702 463,378 556,053 648,729
$1,500,000.................. 334,277 445,702 557,128 668,553 779,979
$1,750,000.................. 390,527 520,702 650,878 781,053 911,229
$2,000,000.................. 446,777 595,702 744,628 893,553 1,042,479
$2,250,000.................. 503,027 670,702 838,378 1,006,053 1,173,729
$2,500,000.................. 559,277 745,702 932,128 1,118,553 1,304,979
$2,750,000.................. 615,527 820,702 1,025,878 1,231,053 1,436,229
$3,000,000.................. 671,677 895,702 1,119,628 1,343,553 1,567,479

</TABLE>

* The Internal Revenue Code limits the annual retirement benefits that may be
paid from, and the amount of compensation that may be recognized by, the
Pension Plan. For 1999, these limits are $130,000 and $160,000, respectively.

The Pension Plan covers employees who satisfy certain age and service
requirements. Benefits are based on a designated percentage of the average of
compensation for the five highest of the last 10 consecutive years of
employment, weighted according to years of credited service, and integrated with
Social Security covered compensation. For Pension Plan purposes, compensation of
participants includes base pay, bonuses, overtime and commissions and excludes
amounts realized under any employee stock purchase plan or stock incentive plan.
For Pension Plan purposes, compensation for those individuals listed in the
Summary Compensation Table is substantially the same as the amounts listed under
the Salary and Bonus headings.

For purposes of the Pension Plan, credited years of past and future
service for Messrs. Sharp, McCollough, Birnbaum, Chalifoux and Fitzsimmons will
be 29, 28, 45, 29 and 21 years, respectively, at age 65.

To maintain compensation competitiveness and to create a retirement
program that restores benefits for the Company's more senior executives who are
affected by Internal Revenue Code limits on benefits provided under the
Company's Pension Plan, the Company implemented a retirement benefit restoration
plan in fiscal year 1999. Subject to an annual limit, the benefit restoration
plan and the Pension Plan together provide benefits to all employees affected by
the Internal Revenue Code limits at approximately the same percentage of
compensation as for other employees. The named executive officers participate in
this plan.

REPORT OF COMPENSATION AND PERSONNEL COMMITTEE

COMPENSATION PHILOSOPHY

The Compensation and Personnel Committee, which is composed entirely of
outside independent directors, reviews, evaluates and approves the amount,
design and implementation of the Company's compensation system for executive
officers. The Committee believes that corporate performance and, in turn,
shareholder value will be best enhanced by a compensation system that supports
and reinforces the Company's key operating and strategic goals while aligning
the financial interests of the Company's executive officers with those of the
shareholders. The Company utilizes both short-term and long-term incentive
compensation programs to achieve these objectives. Executive officer incentive
compensation programs are tied to Company-wide achievement of annual financial
goals and the market value of the Company's stock. The Committee believes that
the use of Company-wide performance in setting goals promotes a unified vision
for senior management and creates common motivation among the executives. For
other salaried employees, the incentive compensation program is also tied to
divisional, departmental or store business goals and, in some cases, individual
performance.

For the Company's 1999 fiscal year, the Committee made its compensation
decisions based on a review of the Company's 1998 fiscal year performance, on
the Company's budget and other projections for the 1999 fiscal year and on the
Company's performance in comparison to certain of its competitors. In addition,
the Committee had the benefit of an evaluation of the structure of the Company's
compensation practices in comparison to industry standards, performed during the
1998 fiscal year by a nationally known independent compensation consultant. The
Company is subject to Internal Revenue Code provisions that may limit the income
tax deductibility of certain forms of compensation paid to the executive
officers named in the Summary Compensation Table that precedes this report.
These provisions allow full deductibility of certain types of performance-based
compensation. The Company's compensation practices, to the extent practicable,
provide the maximum deductibility for compensation payments. Payments under the
Annual Performance-Based Bonus Plan and awards under the Stock Incentive Plans
qualify for deductibility under these provisions of the Internal Revenue Code.

<PAGE>

COMPONENTS OF THE EXECUTIVE COMPENSATION PROGRAM

The Company's compensation program for executive officers consists
generally of three components: base salary, an annual performance-based cash
bonus and long-term stock incentives. In making compensation decisions, the
Committee considers the recommendations of the chief executive officer and
generally compares the compensation of the Company's executive officers with
compensation of officers at certain other retail companies. Periodically, as it
deems necessary, the Committee will also utilize the services of a compensation
consultant to assist in its evaluation.

The Committee generally compares various short- and long-term
performance measures, including total shareholder return, return on average
shareholders' equity, sales, net income and earnings per share for the Company
and other companies with which it competes for executive talent. The Committee
has not established any particular level at which overall compensation will be
set in respect to the compensation peer group. The Committee believes that the
total compensation of the named executive officers is supported by the Company's
competitive comparisons on the short- and long-term performance factors and is
appropriate given the Company's overall performance. The individual elements of
the executive compensation program are addressed below.

ANNUAL SALARY

Each year, the Committee establishes salaries for executive officers.
Such salaries are based on proposals submitted by the Company's Chief Executive
Officer for annual salary for the executive officers other than himself. The
Committee believes that the 1999 salaries for executive officers are appropriate
and that the salaries also provide for a large percentage of total compensation
to be at risk under the incentive programs. In evaluating individual executive
officers, the Committee may also consider, among other factors, (1) a
qualitative evaluation of the individual executive officer's performance
provided by the CEO, (2) the job responsibilities of the individual executive,
including changes in those responsibilities, and (3) the Company's performance
in relation to its target financial goals for the prior fiscal year.

ANNUAL PERFORMANCE-BASED BONUS

All salaried employees are eligible to receive cash bonuses under the
Annual Performance-Based Bonus Plan established each year by the Committee and
approved by the Board of Directors. The Bonus Plan is designed to motivate the
Company's employees to achieve the Company's annual operating and financial
goals. The Bonus Plan allows the Committee to establish performance goals based
on pretax earnings, earnings per share or both. The goals for the Bonus Plan are
established with the purpose of continuing the Company's record of superior
performance in comparison with its competitors.

For the 1999 fiscal year, the Bonus Plan measured the Company's
achievement of its target financial goals for EPS. The target EPS goal was
established early in the fiscal year as part of the Company's budgeting process
and was approved by the Committee. Consistent with the Committee's compensation
philosophy of tying a large percentage of total compensation to performance, the
potential maximum bonus of each executive officer was a significant percentage
of that individual's salary for the year. For the 1999 fiscal year, the target
bonus amounts ranged from 50 percent of base salary, in the case of less senior
executive officers, to 100 percent of base salary, in the case of the CEO. These
target bonus percentages were the same as for the 1998 fiscal year.

The amount of bonus payments depends upon the extent to which the
Company achieves its target financial goals for the year. For the 1999 fiscal
year, if the Company did not achieve 85 percent of the goal, no bonuses would be
paid. For performance above the target, an additional bonus would be paid with a
maximum bonus of 150 percent of the target bonus.

The Company's performance for the 1999 fiscal year was earned at the
maximum level and was paid at 150 percent.

LONG-TERM INCENTIVE COMPENSATION

Grants under the Company's Stock Incentive Plans provide long-term
incentive compensation and are a significant component of total compensation.
These programs are a part of the Company's performance-based incentive
compensation rewarding officers as total shareholder value increases. For
executive officers and other officers, grants under the Stock Incentive Plans
are made in the form of nonqualified stock options and restricted stock. Grants
based on Circuit City Group Common Stock are used for officers whose duties are
principally for the Circuit City Group and CarMax Group Common Stock for
officers whose duties are principally for the CarMax Group.

<PAGE>

The Committee considers stock-based grants to be an important means of
ensuring that executive officers have a continuing incentive to increase the
long-term return to shareholders and the value of the Company's stock.
Stock-based grants also aid in retention of executives.

Stock options generally vest and become exercisable ratably over a
period of four years from the date of grant and may be exercised within eight
years of the date of grant. The number of stock options to be granted to a
particular executive officer is determined by the Committee. The Committee
primarily uses a formula based on an individual's target bonus for the fiscal
year and the market price of the Company's stock, as well as the results of
compensation surveys to determine the appropriate grant size. Because the value
of stock options is entirely a function of increases in the value of the
Company's stock, the Committee believes that this component of the Company's
compensation arrangement closely aligns the interests of the executive officers
with those of the Company's shareholders.

During fiscal year 1998, the Committee, on advice of the compensation
consultant, instituted an additional long-term incentive program for senior
management using restricted stock under the Stock Incentive Plan. The program
provides for vesting at the end of a seven-year period. Accelerated vesting of
the stock is based on the Company's total shareholder return on Circuit City
Group Common Stock measured against the performance of a peer group. Based on
the Company's comparative performance, 25 percent of the awards vested in fiscal
1999.

OTHER MATTERS

CHIEF EXECUTIVE OFFICER'S COMPENSATION

The Committee determined the compensation of Richard L. Sharp, the
Company's Chairman and CEO, for the 1999 fiscal year in a manner consistent with
the guidelines and policies described above. The Committee approved an increase
in Mr. Sharp's salary based upon a review of his performance. The Committee kept
Mr. Sharp's performance bonus target at 100 percent of salary. Mr. Sharp's bonus
was based upon the performance of the total Company including all of the
subsidiaries. Mr. Sharp received a stock option grant for the 1999 fiscal year
under the same formula as described above. Mr. Sharp did not receive a
restricted stock grant under the long-term incentive program.

In establishing Mr. Sharp's compensation, the Committee has compared his
compensation with the compensation of the CEOs of the compensation peer group in
relation to the relative performance of the Company with respect to the
compensation peer group. For setting Mr. Sharp's fiscal 1999 compensation, the
Committee also considered the Company's performance during the 1998 fiscal year
and the competitive environment. The Committee recognizes Mr. Sharp's leadership
skills in assembling and developing a strong management team and guiding the
Company through its significant growth during the last decade.

The Committee believes that the structure of incentives to Mr. Sharp is
currently appropriate for Mr. Sharp's continuing role as Chairman and CEO in the
overall operations of the Company, his role in the continuing development of the
Circuit City and CarMax Presidents and his unique contributions to the Company's
diverse businesses.

The Committee believes that Mr. Sharp's actual compensation for the 1999
fiscal year was appropriate in light of all of the above considerations.

COMPENSATION AND PERSONNEL COMMITTEE

John W. Snow, Chairman
James F. Hardymon
Robert S. Jepson, Jr.
Walter J. Salmon
Mikael Salovaara

<PAGE>

PERFORMANCE GRAPHS

TOTAL RETURN TO SHAREHOLDERS

Fiscal Year 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
CIRCUIT CITY GROUP
COMMON STOCK 100.00 114.31 157.21 166.52 206.62 291.16
S&P 500 INDEX 100.00 107.36 144.62 182.45 246.32 294.93
S&P RETAIL STORES
COMPOSITE 100.00 91.57 101.07 124.39 190.29 279.59

</TABLE>

TOTAL RETURN TO SHAREHOLDERS

2/4/97 2/28/97 2/28/98 2/28/99
<S> <C> <C> <C> <C>
CARMAX GROUP
COMMON STOCK 100.00 91.48 42.05 20.46
S&P 500 INDEX 100.00 100.20 135.27 161.97
S&P RETAIL STORES
COMPOSITE 100.00 107.21 164.01 240.97

</TABLE>

<PAGE>

EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS

The Company has employment agreements with each of the executive
officers named in the Summary Compensation Table. Generally, these agreements
provide for annual salary review and participation in the Company's bonus, stock
incentive and other employee benefit programs. They also provide for
continuation of base salary for specified periods following termination by the
Company without cause (two years in the case of Mr. Sharp, one year for the
other named executive officers). In such circumstances, the agreements also
generally provide that the employee will be paid any bonus to which he would
otherwise be entitled for that year, such bonus to be prorated if termination
occurs in the first six months of the year. The salary continuation generally
extends for another year if the termination without cause follows a change of
control. The Company's salary continuation obligation will decrease by up to 50
percent if the individual secures alternative employment; however, no decrease
will occur if the termination is related to a change of control. In addition, if
the employee voluntarily terminates the employment relationship within one year
following a change of control, the employee will be entitled to continuation of
base salary for a specified period of time (two years in the case of Mr. Sharp,
one year for the other named executive officers) and potential payment of a
bonus as indicated above. Each agreement contains provisions confirming the
employee's obligation to maintain the confidentiality of proprietary information
and not to compete with the Company for a specified period of time after the
termination of his employment. The agreement with Mr. Birnbaum became effective
in 1983. The agreement with Mr. Fitzsimmons became effective in 1988. The
agreements with Messrs. Sharp and Chalifoux became effective in 1986 and 1989,
respectively. The agreement with Mr. McCollough became effective in 1995. The
current base salaries of Messrs. Sharp, McCollough, Birnbaum, Chalifoux and
Fitzsimmons under their employment agreements are $950,000, $650,000, $590,000,
$575,000, and $525,000, respectively.

The named executive officers have been granted SARs in connection with
the stock options granted to them under the Company's stock incentive plans. The
options also provide for accelerated vesting in the event of a change of
control. The SARs are Change of Control SARs that may only be exercised in the
event of a change of control. Upon exercise of the SAR and the surrender of the
related option, the holder is entitled to receive cash from the Company in the
amount of the spread between the option exercise price and the market value of
the Common Stock at the time of exercise, which value is determined by a formula
designed to take into account the effect of the change of control. As of
February 28, 1999, all outstanding Common Stock options and SARs relate to
Circuit City Group Common Stock.

COMPENSATION OF DIRECTORS

Directors who are not employees receive compensation of $6,250 per
calendar quarter, plus $1,000 for attendance at each Board meeting and $500 for
attendance at each committee meeting. Directors who serve as committee chairmen
receive additional annual compensation of $2,000. Mr. Wurtzel and employees who
are also directors do not receive directors' fees.

Directors who are not full-time employees of the Company also receive
awards under the 1989 Non-Employee Directors Stock Option Plan. Stock option
grants under the 1989 Plan are automatic and relate to both Circuit City Group
Common Stock and CarMax Group Common Stock. Every year on the date of the annual
meeting of the Company's shareholders, stock options are automatically granted
to each eligible director. If elected on a date other than the annual meeting
date, a director also may be entitled to a grant at that time depending on the
amount of time between the election and the next annual meeting. The options
generally become exercisable three years after the date of the grant. The 1989
Plan provides that the number of shares of Circuit City Group Common Stock and
CarMax Group Common Stock subject to the options is determined under a formula
that gives each director an aggregate exercise price of $75,000. The options are
divided between the Circuit City Group Common Stock and the CarMax Group Common
Stock based on the relative market value of the two series. The exercise price
of the option is the last reported sale price per share for the series on the
New York Stock Exchange (or the exchange on which such shares are then traded)
on the date of grant, or, if the shares did not trade on the date of grant, on
the last day before the date of grant on which such shares traded. A like number
of Change of Control SARs are automatically granted in connection with each
stock option grant.

On June 16, 1998, nine directors who are not full-time employees were
each granted 355 CarMax Group Common Stock options at an option price of $8.813
per share and 1,573 Circuit City Group Common Stock options at an option price
of $45.687 per share. James F. Hardymon joined the Board of Directors in October
1998 and was granted 512 CarMax Group Common Stock options at an option price of
$4.00 per share and 2,236 Circuit City Group Common Stock options at an option
price of $32.625 per share. These grants were under the 1989 Plan.

Mr. Wurtzel, who formerly was employed by the Company as Chief Executive
Officer, had an agreement with the Company relating to the cessation of his
employment by the Company. Under the agreement, the Company agreed to pay Mr.
Wurtzel the lump sum of $56,565 plus $11,275 in monthly installments from
February 1996 to September 1998. He also received annual perquisites valued at
approximately $65,000. Mr. Wurtzel also executed a noncompete and
confidentiality agreement that was effective during the term of the agreement.

<PAGE>

SECTION 16(a) COMPLIANCE

Section 16(a) of the Securities Exchange Act requires the Company's
officers, directors and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange
Commission. Officers, directors and greater than 10 percent shareholders are
required by regulation to furnish the Company with copies of all Forms 3, 4 and
5 they file.

Based solely on the Company's review of the copies of such forms it has
received and written representations from certain reporting persons that they
were not required to file Form 5 for specified fiscal years, the Company
believes that all its officers, directors and any greater than 10 percent
beneficial owners complied with all of the filing requirements applicable to
them with respect to transactions during the fiscal year ended February 28,
1999, with the exception of one Form 3 which was filed late for James F.
Hardymon, Director, when he joined the Board of Directors in October 1998.

ITEM TWO - PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK AND TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK DESIGNATED
AS CIRCUIT CITY GROUP COMMON STOCK

The Board has unanimously approved, and recommends to the shareholders
that they adopt, an amendment which will (i) amend Article III(A) of the
Company's Articles of Incorporation ("Articles") to increase the authorized
Common Stock from 350,000,000 shares to 525,000,000 shares and (ii) amend
Article V(B)(1) of the Articles to increase the number of shares designated as
Circuit City Group Common Stock from 175,000,000 to 350,000,000 shares.

Of the 350,000,000 currently authorized shares of Common Stock, as of
__________, ______ shares were outstanding and ______ shares were reserved for
issuance under the Company's stock incentive and employee stock purchase plans.
A balance of ______ authorized but unissued shares of Common Stock remained
available and unreserved for future use. The additional shares of Common Stock
for which authorization is sought would be a part of the existing class of
Common Stock and the existing series of Circuit City Group Common Stock. If and
when issued, the additional shares would have the same rights and privileges as
the shares of Circuit City Group Common Stock presently outstanding. No holder
of Common Stock has any preemptive rights to acquire additional shares of the
Common Stock.

PURPOSE AND EFFECT OF AMENDMENT

The Board has approved and is recommending the increase primarily to
fund a two-for-one stock split (in the form of a 100 percent stock dividend) of
the Circuit City Group Common Stock which the Board is considering for fiscal
year 2000. In addition, the Board believes that the increase in the number of
shares of authorized Circuit City Group Common Stock would benefit the Company
and its shareholders by giving the Company added flexibility in its corporate
planning and in responding to developments in the Company's business, including
possible financing and acquisition transactions, additional stock splits or
dividends and other general corporate purposes and will allow Circuit City Group
Common Stock to be issued without the expense and delay of a special
shareholders' meeting.

In the event the Board approves the stock split, the Board will adjust
the per share liquidation units of the Circuit City Group Common Stock or the
CarMax Group Common Stock as appropriate to avoid dilution in the aggregate,
relative liquidation rights of the two series, as required under the Articles of
Incorporation. Currently, each share of Circuit City Group Common Stock has one
liquidation unit and each share of CarMax Group Common Stock has 0.5 of a
liquidation unit. The future voting rights of the holders of the CarMax Group
Common Stock would adjust automatically pursuant to the Articles of
Incorporation based on changes in the relative per share market prices of the
two series. Neither the increase in authorized shares of Circuit City Group
Common Stock nor a stock split would have an effect on the number of shares of
CarMax Group Common Stock that are issuable with respect to the retained
interest held by the Circuit City Group in the CarMax Group.

Unless otherwise required by applicable law or regulation, the
additional shares of Circuit City Group Common Stock will be issuable without
further authorization by vote or consent of the shareholders and on such terms
and for such consideration as may be determined by the Board. However, the New
York Stock Exchange, on which the Circuit City Group Common Stock is listed,
currently requires shareholder approval as a prerequisite to listing shares in
several instances, including acquisition transactions, where the present or
potential issuance of shares could result in an increase of 20 percent or more
in the number of shares of Common Stock outstanding.

<PAGE>

The Board could use the additional shares of Circuit City Group Common
Stock to discourage an attempt to change control of the Company. However, the
Board has no present intention of issuing any shares of Circuit City Group
Common Stock for such purposes and Item Two is not being recommended in response
to any specific effort of which the Company is aware to obtain control of the
Company.

VOTE REQUIRED

Adoption of Item Two requires the affirmative vote of a majority of the
votes that all shareholders are entitled to cast and the affirmative vote of a
majority of the votes that shareholders of Circuit City Group Common Stock are
entitled to cast.

THE BOARD BELIEVES THAT ADOPTION OF THE AMENDMENT TO THE ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY TO
525,000,000 SHARES AND DESIGNATE THE ADDITIONAL 175,000,000 SHARES AS CIRCUIT
CITY GROUP COMMON STOCK IS IN THE BEST INTEREST OF ALL SHAREHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT.

ITEM THREE - PROPOSAL TO AMEND THE 1994 STOCK INCENTIVE PLAN

INTRODUCTION

In 1999, the Board of Directors of the Company approved, subject to
shareholder approval, an amendment to the Company's 1994 Stock Incentive Plan.
The amendment is summarized below:

AMENDMENT TO THE PLAN

The amendment to the Plan increases the number of shares of Circuit City
Group Common Stock reserved for issuance thereunder from 5,500,000 to 8,500,000
shares and the number of shares of CarMax Group Common Stock reserved for
issuance thereunder from 5,700,000 shares to 7,700,000 shares.

REASONS FOR THE AMENDMENT

At the end of fiscal year 1999, 749,729 shares of Circuit City Group
Common Stock and 433,810 shares of CarMax Group Common Stock remained available
for grants under the Plan. The additional shares will enable the continuation of
the Company's policy of providing incentive awards in the form of stock options,
stock appreciation rights or restricted stock to selected employees. Awards are
made in Circuit City Group Common Stock for Circuit City employees and CarMax
Group Common Stock for CarMax employees. These incentive awards provide a means
for selected employees to increase their personal financial interest in the
Company, thereby stimulating the efforts of these employees and strengthening
their desire to remain with the Company.

PRINCIPAL FEATURES OF THE PLAN

The principal features of the Plan are summarized below. The summary is
qualified by reference to the actual provisions of the Plan, a copy of which is
available to any shareholder or incentive award recipient upon written request
to the Company.

The Plan authorizes incentive awards in the form of stock options, stock
appreciation rights or restricted stock. All present and future employees of the
Company are eligible to receive incentive awards under the Plan. No more than
1,500,000 shares of Common Stock may be allocated to awards granted to any
employee during any single calendar year.

The Compensation and Personnel Committee of the Board of Directors
administers the Plan and has the complete discretion to determine when to grant
incentive awards, which eligible employees will receive incentive awards,
whether the award will be an option, stock appreciation right or restricted
stock, whether stock appreciation rights will be attached to options, and the
number of shares to be allocated to each incentive award. The Committee may
impose conditions on the exercise of options and stock appreciation rights and
upon the transfer of restricted stock received under the Plan and may impose
such other restrictions and requirements as it may deem appropriate.

Options to purchase shares of Common Stock granted under the Plan may be
incentive stock options or nonstatutory stock options. The option price of
Common Stock may not be less than 100 percent (or, in the case of an incentive
stock option granted to a 10 percent shareholder, 110 percent) of the fair
market value of the Common Stock on the date of the option grant. The value of
incentive stock options, based on the exercise price that can be exercisable for
the first time in any calendar year, is limited to $100,000.

Options may only be exercised at such times as specified by the
Committee, provided, however, that incentive stock options may be exercised only
within the periods permitted by the Internal Revenue Code. No option may be
exercised by a person subject to section 16(b) of the Exchange Act within the
first six months from the date it is granted (except in the case of an optionee
who becomes disabled or dies or in the case of an option that becomes
exercisable as a result of a change of control).

<PAGE>

If the option so provides, an optionee exercising an option may pay the
purchase price in cash; by causing shares of Common Stock to be withheld from
the option shares; by delivering shares of the same series of Common Stock as
the shares to which the option relates; by delivering a promissory note or by
delivering an exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Company the amount of sale or loan proceeds from the
option shares to pay the exercise price. The Plan authorizes the Committee to
include a "reload" feature in options granted under the Plan.

The Committee may award stock appreciation rights under the Plan either
with or without related options. When the stock appreciation right is
exercisable, the holder may surrender to the Company all or a portion of the
unexercised stock appreciation right and receive in exchange an amount equal to
the difference between (i) the fair market value on the date of exercise of the
Common Stock covered by the surrendered portion of the stock appreciation right
and (ii) the exercise price of the Common Stock under the related option or, if
not related to an option, the fair market value of such Common Stock on the date
the stock appreciation right was awarded. The Company's obligation arising upon
exercise of a stock appreciation right may be paid in the series of Common Stock
to which the right relates or in cash, or in any combination of the two, as the
Committee may determine.

Restricted stock issued pursuant to the Plan is subject to the following
general restrictions: (i) no shares may be sold, transferred, pledged, or
otherwise encumbered or disposed of until the restrictions have lapsed or been
removed under the provisions of the Plan, and (ii) if a holder of restricted
stock ceases to be employed by the Company, any shares of restricted stock on
which the restrictions have not lapsed or been otherwise removed will be
forfeited. The Committee may impose further restrictions on restricted stock
awards, including additional events of forfeiture.

Unless otherwise provided in the terms of the award, no options or stock
appreciation rights and no shares of restricted stock (during the applicable
period of restriction) may be sold, transferred, pledged, or otherwise disposed
of, other than by will or by the laws of descent and distribution and all rights
granted to a participant under the Plan shall be exercisable during his or her
lifetime only by such participant, or his or her guardians or legal
representatives. Upon the death of a participant, his or her personal
representative or beneficiary may exercise the rights under the Plan.

The Board of Directors may amend the Plan in such respects as it deems
advisable provided that if and to the extent required by the Internal Revenue
Code, no change will be made that increases the total number of shares of Common
Stock reserved for issuance under the Plan, expands the class of persons
eligible to receive awards or materially increases the benefits accruing to
participants under the Plan, unless such change is approved by the shareholders
of the Company.

FEDERAL INCOME TAX CONSEQUENCES

An employee does not incur federal income tax when granted a
nonstatutory stock option, an incentive stock option, a stock appreciation right
or restricted stock.

Upon exercise of a nonstatutory option or a stock appreciation right, an
employee generally will recognize ordinary compensation income, which is subject
to income tax withholding by the Company, equal to the difference between the
fair market value of the Common Stock on the date of the exercise and the option
price. When an employee exercises an incentive stock option, the employee
generally will not recognize income, unless the employee is subject to the
alternative minimum tax.

An employee may deliver shares of Common Stock instead of cash to
acquire shares under an incentive stock option or nonstatutory stock option
without having to recognize taxable gain (except in some cases with respect to
statutory option stock) on any appreciation in value of the shares delivered.
Statutory option stock is stock acquired upon the exercise of incentive stock
options.

In general, an employee who has received shares of restricted stock will
include in gross income as compensation income an amount equal to the fair
market value of the shares of restricted stock at the time the restrictions
lapse or are removed. Such amount will be included in income the tax year in
which such event occurs.

The Committee has authority under the Plan to adopt procedures to give a
participant the right to deliver already owned shares of the same series of
Common Stock as the shares to which the award relates or to have a portion of
the shares that would otherwise be acquired under an award withheld to cover tax
liabilities. An employee will recognize taxable gain or loss on the already
owned shares delivered to cover tax liabilities as if the shares had been sold
for their fair market value.

The Company usually will be entitled to a business expense deduction at
the time and in the amount that the recipient of an incentive award recognizes
ordinary compensation income in connection therewith. No deduction is allowed in
connection with an incentive stock option, unless the employee disposes of
Common Stock received upon exercise in violation of the holding period
requirements. Moreover, there can be circumstances when the Company may not be
entitled to a deduction for certain transfers of Common Stock or payments to an
employee upon the exercise of an incentive award that has been accelerated as a
result of a change of control. This summary of federal income tax consequences
of incentive awards granted under the Plan does not purport to be complete.
State, local and foreign income taxes also may be applicable to the transactions
described above.

<PAGE>

VOTE REQUIRED

The amendment to the Plan will be approved if the votes cast in favor of
approval of the amendment at the annual meeting exceed the votes cast against
approval.

THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE AMENDMENT TO THE
1994 STOCK INCENTIVE PLAN IS IN THE BEST INTEREST OF ALL SHAREHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE FOR THE AMENDMENT TO THE 1994 STOCK INCENTIVE
PLAN.

ITEM FOUR - SHAREHOLDER PROPOSAL REGARDING A REPORT ON EMPLOYMENT PRACTICES

The Company's Board of Directors recommends that shareholders vote
AGAINST the following shareholder proposal. An institutional shareholder, The
Congregation of the Passion, has submitted the following supporting statement
and shareholder proposal:

SHAREHOLDER PROPOSAL

Equal employment is a key issue for shareholders. The bipartisan Glass
Ceiling Commission Study released in 1995 explains that a positive diversity
record has a positive impact on the bottomline. This study is important for
shareholders because it shows how many corporations in the United States select
for advancement from less than 50 percent of the total talent available in our
work force.
o Women and minorities comprise 57 percent of the work force, yet represent only
3 percent of executive management positions.
o Women who were awarded more than half of all master degrees represent less
than 4 percent of senior-level management positions.
These statistics show the limits placed on selecting the most talented people
for top management positions.

Workplace discrimination has created a significant burden for
shareholders. Recently, companies including Shoney's Incorporated, Denny's and
Hughes Aircraft have posted multi-million dollar losses as a result of settling
various discrimination lawsuits. In 1996 Texaco settled the largest racial
discrimination lawsuit in U.S. history, costing a reported $170 million to the
company and stockholders. Texaco's public image was tarnished and the company
faced a consumer boycott. In 1998 Smith Barney agreed to spend $15 million on
diversity programs to settle a case brought by plaintiffs charging sexual
harassment. The high cost of litigation, potential loss of government contracts,
and the financial consequences of a damaged corporate image resulting from
discrimination allegations make this issue a high priority for stakeholders.

More than 150 major employers publicly report on work force diversity to
their shareholders. Primary examples are Disney/ABC Commitment Report, USAir
Affirming Workplace Diversity Report, Intel Diversity Report, Monsanto Diversity
Report, and Texaco Diversity Report. These companies and many others regularly
provide reports describing diversity progress and challenges. Often companies
will also include this information in their annual reports.

RESOLVED: Shareholders request our company prepare a report at reasonable
cost, which should exclude confidential information. This report shall be made
available to shareholders and employees four months from the date of the annual
meeting and shall include:

1. A chart identifying employees by sex and race in each of the nine major
EEOC defined job categories for 1996, 1997 and 1998, listing actual
numbers and percentages in each category.

2. A summary description of any Affirmative Action policies and programs to
improve performance, including job categories where women and persons of
color are underutilized. This description should include any policies
and programs specifically oriented toward increasing the number of
managers who are qualified females and/or belonging to ethnic minority
groups, summarizing the current numbers of persons by race and gender in
management.

3. A general description of how our company publicizes its affirmative
actions policies and programs to merchandise suppliers and service
providers.

4. A description of any policies and programs directing the purchase of
goods and services to minority and/or female owned business enterprises.

5. A report on any material litigation in which the company is involved
concerning race, gender or the physically challenged.

<PAGE>

BOARD OF DIRECTORS' STATEMENT IN OPPOSITION

The Company's Board of Directors and management strongly endorse, and
enforce, equal opportunity in all phases of the Company's relationships with
shareholders, employees, customers and vendors. As Richard L. Sharp, the
Company's Chief Executive Officer, stated at the 1997 annual meeting, "First and
foremost, and let there be no mistake about this, this is a company, this is a
management team . . . that is committed to nondiscriminatory practices."

The Board believes that the Company's business decisions must be
untainted by consideration of any impermissible factors not directly related to
individual merit, mutual respect and value to the shareholders. The future of
the Company depends on the success of all of its business relationships,
especially those with its employees.

The guiding principle of the Company's human resources philosophy is its
longstanding commitment to treat all applicants and employees with respect. The
Company clearly states its equal employment opportunity policy in its
recruitment advertisements and its application material and widely publicizes
the policy and practice among its employees. The employee handbook, as well as
prominent postings in all Company locations, describes in detail the requirement
of "Treating Each Other with Respect." Circuit City firmly believes that the
workplace must be free from disrespect and discrimination. It will not tolerate
offensive behavior. This commitment goes far beyond the legal standards
prohibiting workplace discrimination and sets a much higher standard for
workplace behavior at the Company.

In the execution of this philosophy, the Company maintains extensive
avenues of internal communication to encourage open and honest dialog with its
employees and to provide them with effective mechanisms to bring any concerns to
the attention of their immediate managers, human resources or senior management.
Further, the Company requires all of its managers to participate in and
successfully complete training on both the applicable legal requirements and the
Company's higher "respect" standard for fairly and consistently selecting and
managing our workforce. Also, the Company makes every effort to stimulate
interest among the broadest base of qualified internal and external applicants
to fuel our continuing rapid growth, while maintaining our high performance
standards. Those efforts include specific recruitment strategies directed at
minority student populations.

Based on discussions between the proponent and senior company
management, the Board believes this proposal is motivated to some degree by
publicity surrounding employment discrimination litigation in 1996 involving the
promotion practices at the Company's headquarters. The Board recognizes that the
plaintiffs' success on 3 out of 50 claims and total monetary award of less than
$300,000 was widely reported. However, less publicity surrounded the September
1998 decision of the United States Court of Appeals for the Fourth Circuit,
which vacated substantially all of the decisions adverse to the Company,
including sweeping injunctive relief, punitive damages and the pattern and
practice finding. Only $16,700 in compensatory damages for two plaintiffs and
the sole court-ordered promotion remained in effect. The Board believes the
appellate decision vindicates the Company and more than justifies its support of
management's decision to vigorously defend the case. Contrary to attempted
characterization by the plaintiffs, the appellate decision is not predicated on
legal technicalities. Rather, it highlights the plaintiffs' low degree of
success and insufficient evidence, under correct legal standards, to support
either a conclusion of widespread disparate treatment or punitive damages. The
Board is adamant that any, even isolated, incidence of discrimination is
deplorable and unacceptable in our Company. It is also proud of the Company's
equal employment record and continues to believe that the shareholders'
interests are served by vigorous defense of meritless claims.

Considered against this factual background, the Board believes the
proposal is unnecessary and inappropriate. In the Board's view, the proposal
also demonstrates a lack of knowledge about the Company's business and
misapprehends both required and legally permissible practices by the Company.
The Board is informed that private employers, which are not government
contractors and are not subject to court-ordered remedial action for past
discrimination, may not legally make employment or contracting decisions based
upon considerations of race and gender. This is true regardless of whether the
decision impermissibly favors or disfavors a protected group.

Circuit City is not a government contractor and is not subject to
court-ordered remedial action for past discrimination. Many of the employers
referenced in the proposal do fall into at least one of these categories,
requiring them to make certain business decisions on the basis of race and/or
gender. As such, no valid comparison can be made between Circuit City and these
other companies. Thus, Circuit City does not have, and cannot legally maintain,
the affirmative action policies and programs of the type the proposal asks us to
describe. The Board reiterates its commitment and direction that management
continue to make employment and contracting decisions based on qualification and
merit, without regard to race, gender or other protected characteristics.

The proposal also seeks publication of a report that the Company
prepares and files on a confidential basis with governmental authorities. While
these reports in fact illustrate the Company's commitment to equal opportunity,
the Board does not believe that public dissemination of these reports will
promote the goal of equal employment opportunity in any meaningful way.
Furthermore, in order to obtain consistent statistical information across all
categories of employers, the government requires the Company to report the
information in artificial categories that do not accurately reflect either the
business or the practices of the Company. As a result, the information in the
reports is potentially susceptible to misinterpretation. Accordingly, disclosure
of this sensitive information, which is protected by federal law, would not be
in the interests of shareholders.

<PAGE>

Finally, the proposal requests disclosure of material employment-related
litigation. The Company already is obligated under SEC rules to make disclosure
of material litigation of all kinds. Employment-related litigation is not
excluded from this disclosure and already is reported as required. For this
reason, the Board believes that the proposal is duplicative and unnecessary.

In summary, the Board believes that the proposal is unnecessary in most
respects and, in other respects, is potentially harmful to the Company and not
in the best interests of the shareholders.

VOTE REQUIRED

The shareholder proposal will be approved if the votes cast in favor of
approval of the proposal at the annual meeting exceed the votes cast against
approval.

THE BOARD RECOMMENDS A VOTE AGAINST THIS SHAREHOLDER PROPOSAL.

ITEM FIVE - SHAREHOLDER PROPOSAL REGARDING BOARD COMPOSITION

The Company's Board of Directors recommends that shareholders vote
AGAINST the following shareholder proposal. An institutional shareholder,
General Board of Pension and Health Benefits of the United Methodist Church, has
submitted the following supporting statement and shareholder proposal:

SHAREHOLDER PROPOSAL

Employees, customers, and stockholders reflect a greater diversity of
backgrounds than ever before. We believe that the board composition of major
corporations should reflect the people in the workforce and marketplace of the
Twenty-first Century if our company is going to remain competitive.

The Department of Labor's 1995 Glass Ceiling Commission reported ("Good
for Business: Making Full Use of the Nation's Human Capital") that diversity and
inclusiveness in the workplace positively impact the bottom line. A Covenant
Fund report of S&P 500 companies revealed that ". . .firms that succeed in
shattering their own glass ceiling racked up stock-market records that were
nearly 2.5 times better than otherwise-comparable companies."

The Investor Responsibility Research Center (IRRC) reports that in 1996,
representation at senior management levels was only at 12 percent for the over
39,000 companies required to submit the EEO-1 Report. The Glass Ceiling
Commission reported that companies select from only half of the available talent
within the U.S. workforce.

If we are to be prepared for the 21st Century, we must learn how to
compete in an increasingly diverse global marketplace, by promoting and
selecting the best qualified people regardless of race, gender or physical
challenge. Sun Oil's CEO Robert Campbell stated (Wall Street Journal, 8/12/96):
"Often what a woman or minority person can bring to the board is some
perspective a company has not had before -- adding some modern-day reality to
the deliberation process. Those perspectives are of great value, and often
missing from an all white, male gathering. They can also be inspirational to the
company's diverse workforce."

We believe that the judgment and perspectives of a more diverse board
will improve the quality of corporate decision-making. A growing proportion of
stockholders is attaching value to board inclusiveness, since the board is
responsible for representing shareholder interests. The Teachers Insurance and
Annuity Association and College Retirement Equities Fund, the largest U.S.
institutional investor, recently issued a set of corporate governance guidelines
which included a call for "diversity of directors by experience, sex, age and
race."

We therefore urge our company to enlarge its search for qualified board
members.

RESOLVED: Shareholders request that

1. The company make available to shareholders, at reasonable expense, a
report four months from the date of the annual meeting, which
includes a description of:

a. Efforts to encourage diversified representation on the board;

b. Criteria for board qualification;

c. The process for selecting board nominees, and board committee
members;

<PAGE>

d. A public statement committing the company to a policy of board
inclusiveness, with a program of steps to be taken and the
time line expected to move in that direction.

2. The Board Nominating Committee make a greater effort to locate
qualified women and persons of color as candidates for nomination to
the board.

BOARD OF DIRECTOR'S STATEMENT IN OPPOSITION

This proposal is essentially the same as one made in 1998 by this
shareholder and another proponent. It received less than 11 percent favorable
vote in 1998. However, under the SEC's rules, the Company is required to include
the proposal again this year.

The Company's Board of Directors embraces and concurs with the principle
that diversity in all respects both strengthens its membership and increases its
effectiveness. The goals advanced by the proposal have been and will continue to
be achieved by the current selection process and criteria for Board membership.
Thus, the Board believes the proposal is unnecessary. The shareholder would
appear to concur, having been publicly quoted as follows in a report prepared on
the 1998 proposal by the Investor Responsibility Research Center:

"We're aware of diversity on the board and commend the company
for being ahead of many large companies in this regard," Vidette
Bullock-Mixon of the General Board of Pensions and the United
Methodist Church.

The Board strives to select for its membership highly qualified
individuals who are dedicated to advancing the interests of the Company's
shareholders. When vacancies on the Board occur, the Nominating and Governance
Committee seeks individuals who, based on their background and other
qualifications, can promote this goal in conjunction with the other members of
the Board. The Committee actively seeks nominees who will bring the diverse
talents, experiences and perspectives to the Board's deliberations. The Board
believes that, over the years, this approach has brought together a broad
spectrum of Board members whose collective input has served shareholders well.
The current members of the Board include chief executives, senior officers and
board members of major public companies, representing retail and other
industries; academic standouts in macroeconomics and retailing; individuals
known for their leadership qualities; and individuals with significant
experience in advertising, corporate finance and other major aspects of the
Company's business.

Approximately seventeen percent of the current board members are members
of racial or gender minorities. Today's Board of 12 members includes a woman and
an African-American. The Board both desires and appreciates this specific
diversity. However, it has set neither requirements nor limits on diversity. It
believes that the Company and its shareholders are best served by a focus on the
overall qualifications of Board members and their individual contributions to
the Board as a whole, rather than by specific numeric goals for race, gender or
any other category.

The proposal seeks information on how Board and committee members are
chosen. The Nominating and Governance Committee looks to the Board as a whole,
as well as outside consultants, to suggest prospective Board members. It will
also consider suggestions from shareholders who may submit suggestions by letter
or under the formal procedures outlined on page ____ of the Proxy Statement.
Once elected to the Board, directors serve on committees based on their
particular expertise and experience as well as their own expressed preferences.

The shareholder proposal seeks to require the Board to select candidates
for the Board on the basis of race and gender. The proposal requests a
step-by-step, timeline approach to a selection process that does not lend itself
to a strict procedure. However, the proponents have no basis to believe the
current diverse Board will not continue to draw prospective members from the
broadest possible pool of candidates. Shareholders will not be benefited by
abandoning the talents and experience of existing Board members in pursuit of
arbitrary numeric goals.

In the Board's view, the shareholder proposal is unnecessary because its
purpose has been and will continue to be accomplished without restricting or
limiting the selection of directors. The best interests of the Company and its
shareholders are served by the existing selection process and criteria.

VOTE REQUIRED

The shareholder proposal will be approved if the votes cast in favor of
approval of the proposal at the annual meeting exceed the votes cast against
approval.

THE BOARD RECOMMENDS A VOTE AGAINST THIS SHAREHOLDER PROPOSAL.

<PAGE>

RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

KPMG LLP served during the Company's fiscal year ended February 28,
1999, as the Company's independent certified public accountants and has been
selected as the Company's independent certified public accountants for the
current fiscal year. Representatives of KPMG LLP will be present at the meeting
of the Company's shareholders. Such representatives will have the opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.

OTHER BUSINESS

If any other business properly comes before the meeting, your proxy may
be voted by the persons named in it in such manner as they deem proper.

At this time the Company does not know of any other business that will
be presented to the meeting.

PROPOSALS BY SHAREHOLDERS FOR PRESENTATION
AT THE 2000 ANNUAL MEETING

Section 1.3 of the Company's Bylaws provides that, in addition to other
applicable requirements, for business to be properly brought before an annual
meeting by a shareholder, the shareholder must give timely written notice to the
Secretary or an Assistant Secretary at the principal office of the Company. Any
such notice must be received (i) on or after February 1st and before March 1st
of the year in which the meeting will be held, if clause (ii) is not applicable,
or (ii) not less than 90 days before the date of the meeting if the date for
such meeting prescribed in the Bylaws has been changed by more than 30 days. The
shareholder's notice shall set forth (i) the name and address, as they appear on
the Company's stock transfer books, of the shareholder, (ii) the class and
number of shares of stock of the Company beneficially owned by the shareholder,
(iii) a representation that the shareholder is a shareholder of record at the
time of the giving of the notice and intends to appear in person or by proxy at
the meeting to present the business specified in the notice, (iv) a brief
description of the business desired to be brought before the meeting, including
the complete text of any resolutions to be presented and the reasons for wanting
to conduct such business and (v) any interest that the shareholder may have in
such business. The proxies will have discretionary authority to vote on any
matter that properly comes before the meeting if the shareholder has not
provided timely written notice as required by the Bylaws.

Proposals that any shareholder desires to have included in the proxy
statement for the 2000 annual meeting of shareholders must be received by the
Company no later than January 12, 2000.

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED FEBRUARY 28, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
MAY BE OBTAINED BY ANY SHAREHOLDER AFTER MAY 31, 1999, FREE OF CHARGE, UPON
WRITTEN REQUEST TO OFFICE OF THE CORPORATE SECRETARY, CIRCUIT CITY STORES, INC.,
9950 MAYLAND DRIVE, RICHMOND, VIRGINIA 23233, OR BY CALLING (804) 527-4022.

By Order of the Board of Directors

Michael T. Chalifoux, SECRETARY

May 12, 1999

<PAGE>

CIRCUIT CITY STORES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 15, 1999

The undersigned, having received the Annual Report to the Shareholders and the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement dated
May 12, 1999, hereby appoints Richard L. Sharp and Robert L. Burrus, Jr., and
each of them, proxies, with full power of substitution, and hereby authorizes
them to represent and vote the shares of Circuit City Group Common Stock and
CarMax Group Common Stock of Circuit City Stores, Inc. (the "Company"), which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of the Company to be held on Tuesday, June 15, 1999, at
10:00 a.m., Eastern Daylight Time, and any adjournment thereof, and especially
to vote as set forth below.

<TABLE>

1. ELECTION OF DIRECTORS
<S> <C> <C>
DIRECTORS
RECOMMEND [ ] FOR all nominees listed for the terms set [ ] WITHHOLD AUTHORITY to vote
A VOTE FOR forth in the Proxy Statement for all nominees listed
ITEMS 1, 2
& 3 NOMINEES: James F. Hardymon, Hugh G. Robinson, Walter J. Salmon, Mikael Salovaara, John W.
Snow

</TABLE>

TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.

- --------------------------------------------------------------------------------

2. Approval of the amendment to the Articles of Incorporation to
increase the authorized Common Stock from 350,000,000 to
525,000,000 shares and to designate the additional 175,000,000
shares as Circuit City Group Common Stock.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approval of the amendment of the 1994 Stock Incentive Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. Shareholder proposal regarding a report on employment
practices (described in the proxy statement).
DIRECTORS
RECOMMEND [ ] FOR [ ] AGAINST [ ] ABSTAIN
A VOTE AGAINST
ITEMS 4 & 5 5. Shareholder proposal regarding board composition (described in
the proxy statement).

[ ] FOR [ ] AGAINST [ ] ABSTAIN

6. In their discretion the proxies are authorized to vote upon
such other business as may properly come before the meeting and
any adjournments thereof.

IF YOU SPECIFY A CHOICE AS TO THE ACTION TO BE TAKEN ON AN ITEM, THIS PROXY WILL
BE VOTED IN ACCORDANCE WITH SUCH CHOICE. IF YOU DO NOT SPECIFY A CHOICE, IT WILL
BE VOTED FOR THE NAMED NOMINEES IN THE PROXY STATEMENT AND FOR ITEMS 2 AND 3 AND
AGAINST ITEMS 4 AND 5.

Any proxy or proxies previously given for the meeting are revoked.

Dated: , 1999

---------------------------------
(Signature)

---------------------------------
(Signature if held jointly)
Please sign exactly as the name
appears hereon.

[ ] I plan to attend the meeting.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.