CIRCUIT CITY STORES, INC.
NON-EMPLOYEE DIRECTORS DEFERRED COMPENSATION PLAN
1. Purpose. The purpose of this Circuit City Stores, Inc.
Non-Employee Directors Deferred Compensation Plan (the "Plan") is to revise the
deferral program previously adopted by Circuit City Stores, Inc. (the
"Company"), which allowed its non-employee directors to defer the payment of
their annual cash retainers and meeting fees, and to expand the program to allow
for the deferral of annual stock retainers.
2. Definitions. As used in the Plan, the following terms have
the meanings indicated:
(a) "Accounts" means a Participant's Cash Deferral Account and
Stock Unit Account.
(b) "Beneficiary" is the person(s) and/or entity(ies)
designated by a Participant to receive the Participant's Accounts
at the death of the Participant. If no Beneficiary is designated,
or if none of the designated Beneficiary(ies) survive the
Participant, the Beneficiary shall be the Participant's surviving
spouse, for married Participants, or the Participant's estate,
for unmarried participants.
(c) "Board" means the Board of Directors of the Company.
(d) "Cash Deferral Account" means a bookkeeping record
established for each Participant who makes a deferral of cash
Compensation.
(e) "Committee" means the Compensation and Personnel Committee
of the Board.
(f) "Company" means Circuit City Stores, Inc., a Virginia
corporation, or any successor corporation.
(g) "Company Stock" means shares of Circuit City Group Common
Stock or shares of CarMax Group Common Stock. In the event of a
change in the capital structure of the Company (as provided in
Section 8), the shares resulting from such a change shall be
deemed to be Company Stock within the meaning of the Plan.
(h) "Compensation" means the annual retainer and meeting fees
and Company Stock payable to each Eligible Director with respect
to services rendered to the Company as a director during a fiscal
year.
(i) "Effective Date" means August 15, 2000.
(j) "Eligible Director" means a director of the Company who is
not an employee of the Company or a Subsidiary.
(k) "Fair Market Value" means, for any given date, the fair
market value of the Company Stock as of such date, as determined
by the Committee based on the then prevailing prices of the
Company Stock on the exchange on which it generally has the
greatest trading volume.
(l) "Participant" means any Eligible Director who is or may
become (or whose Beneficiaries may become) eligible to receive a
benefit under the Plan by delivering a Deferral Election to the
Company pursuant to Section 4.
(m) "Plan" means this Circuit City Stores, Inc. Non-Employee
Directors Deferred Compensation Plan.
(n) "Rule 16b-3" means Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended. A reference in the
Plan to Rule 16b-3 shall include a reference to any corresponding
subsequent rule or any amendments to Rule 16b-3 enacted after the
Effective Date.
(o) "Stock Unit" means a hypothetical share of Company Stock.
(p) "Stock Unit Account" means the book account established
and maintained for each Participant to record the Stock Units
awarded to a Participant under Section 5 of the Plan. Each Stock
Unit Account shall contain subaccounts for each series of Company
Stock that a Participant elects to defer.
(q) "Subsidiary" means an entity of which the Company owns 50%
or more of the total combined voting power of all classes of
stock.
3. Participation. Participation in the Plan is voluntary. To
participate, an otherwise Eligible Director must delivery a valid Deferral
Election to the Company pursuant to Section 4.
4. Deferral Elections. A Participant may elect to defer the
payment of some or all of the Compensation otherwise payable to him by
completing a deferral election (a "Deferral Election"). A Deferral Election
shall pertain to a Company fiscal year with respect to which Compensation may be
due.
(a) A Deferral Election must specify the applicable amount or
percentage and the type of Compensation the Participant wishes to
defer. A Participant may elect to defer only cash Compensation,
only stock Compensation, or any combination thereof. With respect
to Compensation otherwise payable in Company Stock, the Deferral
Election must specify the applicable amount or percentage of each
series of Company Stock the Participant wishes to defer.
(b) A Deferral Election must specify a schedule for the
payment of the Participant's Accounts.
(c) A Deferral Election must be in writing and must be
delivered to the Secretary of the Company prior to the start of
the fiscal year to which the election pertains, except for a
stock Deferral Election with respect to the Company's fiscal year
ending February 28, 2001, which shall be delivered within 30 days
after the adoption of this Plan by the Board. Any cash Deferral
Election made by a Director prior to the Effective Date with
respect to the Company's fiscal year ending February 28, 2001
shall continue in effect.
(d) A Deferral Election shall be irrevocable in respect to the
fiscal year to which it pertains. A Deferral Election may be made
for a single fiscal year or may be made applicable to all future
fiscal years until revoked. Any revocation shall be effective
with respect to the first fiscal year that begins after the
revocation is made.
5. Stock Unit Accounts. With respect to each share of Company
Stock for which a stock Deferral Election is made, the Company shall credit a
Stock Unit to the appropriate subaccount of the Participant's Stock Unit
Account. A Stock Unit shall be credited when the share of Company Stock
otherwise would have been distributed to the Participant.
(a) The Stock Units credited to each Participant's Stock Unit
Account shall be credited with hypothetical cash dividends equal
to the cash dividends that are declared and paid with respect to
Company Stock. The Company shall determine as of each record date
the amount of cash dividends to be paid with respect to a share
of Company Stock, and on the payment date of such dividend shall
credit an equal amount of hypothetical cash dividends to each
Stock Unit credited to a Participant's Stock Unit Account. The
total hypothetical cash dividends credited to all Stock Units
shall then be converted into Stock Units by dividing such
hypothetical cash dividends by the Fair Market Value of a share
of Company Stock for the last trading day before the day the
Company pays dividends with respect to Company Stock.
(b) The Stock Units credited to the subaccounts of each
Participant's Stock Unit Account shall be credited for any
distributions with respect to the corresponding series of Company
Stock other than cash dividends or stock dividends. The Company
shall determine as of each record date the amount of the
distribution to be paid with respect to a share of Company Stock,
and on the payment date of such distribution shall credit an
equal amount of hypothetical distribution to each Stock Unit
credited to a Participant's Stock Unit Account. The total
hypothetical distribution credited to all Stock Units shall then
be converted into a hypothetical cash amount based on the market
value of such distribution as determined by the Committee. The
hypothetical cash amount shall then be converted into Stock Units
by dividing such hypothetical cash amount by the Fair Market
Value of a share of Company Stock for the last trading day before
the day the Company makes the distribution with respect to
Company Stock.
(c) Each Stock Unit credited to a Participant's Stock Unit
Account shall be deemed to have the same value, from time to
time, as a share of Company Stock. Notwithstanding the foregoing,
Stock Units shall not confer upon Participants any of the rights
associated with Company Stock, including, without limitation, the
right to vote or to receive distributions. Stock Units may not be
sold, assigned, transferred, disposed of, pledged, hypothecated
or otherwise encumbered.
6. Cash Deferral Accounts. For each dollar of cash Compensation
a Participant elects to defer, the Company shall credit an equal deemed amount
to the Participant's Cash Deferral Account. An amount shall be credited to the
Cash Deferral Account when the cash Compensation otherwise would have been
payable to the Participant.
(a) As of the last day of each fiscal year, the Company shall
credit each Participant's Cash Deferral Account with an
additional amount equal to the product of (1) the average daily
balance credited to the Cash Deferral Account during that fiscal
year and (2) a percentage which shall be the average of the five
year Treasury Bill rates in effect on the first business day of
each fiscal quarter during such fiscal year plus 30 basis points.
(b) Interest shall be credited to the Cash Deferral Account
established for the Participant until the entire account balance
has been paid to the Participant.
(c) A Cash Deferral Account shall be established only for
purposes of measuring the Company's obligation to the Participant
and not to segregate assets or to identify assets that may be
used to satisfy the obligation.
7. Distribution of Accounts. The total amount credited to a
Participant's Accounts will become payable to the Participant when he ceases to
serve as a director of the Company upon such payment schedule as the Director
specified in his Deferral Election.
(a) Distributions of amounts credited to a Participant's Cash
Deferral Account shall be made in cash.
(b) When a Participant is entitled to receive payment of the
Participant's Stock Unit Account, the Company shall distribute to
the Participant whole shares of Company Stock equal to the number
of Stock Units to be distributed.
(c) To the extent of undistributed amounts in a Participant's
Accounts at the Participant's death, the Participant's
Beneficiary shall continue to receive payments in the form
elected by the Participant.
(d) The Company reserves the right to accelerate payments or
to make payment of the amounts remaining unpaid in a lump sum.
8. Effect of Stock Dividends and Other Changes in Capital
Structure. Appropriate adjustments shall be made automatically to all Stock Unit
Accounts, and any other relevant provisions of the Plan if there are any changes
in the Company Stock by reason of a stock dividend, stock split, combination of
shares, spin-off, reclassification, recapitalization, merger, consolidation or
other change in the Company's capitalization. Any such adjustments shall neither
enhance nor diminish the rights of a Participant.
9. Accounts Unsecured. Until distributed, all amounts credited
to Participants' Accounts shall be the property of the Company, available for
the Company's use, and subject to the claims of the Company's general creditors.
The rights of any Participant or Beneficiary to distributions under the Plan are
not subject to anticipation, alienation, sale, transfer, assignment, or
encumbrance, and shall not be subject to the debts or liabilities of any
Participant or Beneficiary.
10. Administration of the Plan. The Plan shall be administered by
the Committee.
(a) The Committee shall have the power and complete discretion
to construe, interpret, and administer the Plan. Any decision of
the Committee with respect to the Plan shall be final and
conclusive.
(b) The Committee may adopt rules and regulations for carrying
out the Plan. The Committee may consult with counsel, who may be
counsel to the Company, and shall not incur any liability for
action taken in good faith in reliance upon the advice of
counsel.
(c) A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be
taken by a majority of the members present. Any action may be
taken by a written instrument signed by all of the members, and
any action so taken shall be fully effective as if it had been
taken at a meeting.
11. Amendment and Termination. The Board may terminate the Plan
in whole or in part for any reason at any time, and it may from time to time
make such changes in and additions to the Plan as it may deem appropriate.
Notwithstanding the preceding sentence, the termination of the Plan or any
change or addition to the Plan shall not, without the consent of any Participant
who is adversely affected thereby, alter any amounts previously deferred by the
Participant under the Plan.
12. Rights Under the Plan. Participation in the Plan and the
right to receive Company Stock under the Plan shall not give a Participant any
proprietary interest in the Company, or any Subsidiary or any of their assets,
nor ensure that the Participant will be nominated for election to the Board in
the future.
13. Notice. All notices and other communications required or
permitted to be given under the Plan shall be in writing and shall be deemed to
have been duly given if delivered personally or mailed first class, postage
prepaid, as follows: (a) if to the Company, at its principal business address,
to the attention of the Secretary; (b) if to any Participant, at the last
address of the Participant known to the sender at the time the notice or other
communication is sent.
14. Governing Law/Interpretation. Generally, the Plan shall be
governed by the laws of the Commonwealth of Virginia. The terms of this Plan are
also subject to all present and future rulings of the Securities Exchange
Commission with respect to Rule 16b-3. If any provision of the Plan would cause
the Plan to fail to meet the requirements of Rule 16b-3, then that provision of
the Plan shall be void and of no effect.
