Exhibit 10.1
[Form of Letter Agreement for Retention Award]
________, 2007
[Associate's name and address]
Dear [____________]:
Congratulations! The Compensation and Personnel Committee of the Board of
Directors (the "Committee") has awarded you a special cash retention award (the
"Award") subject to the terms of this Award letter. The purpose of this Award is
to reward, motivate and retain management personnel who are key to the Company's
turnaround efforts and long term success. To accept this Award, please sign the
enclosed copy of this letter, and return it as indicted in item 6 below.
Subject to the requirements and limitations set forth in this Award letter,
your Award, Award Date, and Vesting Dates are as follows:
Total Cash Retention Award: [total amount]
Award Date: January 1, 2008
Vesting Dates Vesting %
January 1, 2009 50%
January 1, 2010 33%
January 1, 2011 17%
For purposes of this Award letter, "Company" means Circuit City Stores,
Inc. or a parent or subsidiary of Circuit City Stores, Inc. within the meaning
of section 424(e) and (f) of the Internal Revenue Code of 1986, as amended.
Your right to receive the portion of your Award corresponding to the above
Vesting Dates is contingent on (i) your agreeing to the terms of this Award by
signing and returning the enclosed copy of this letter, and (ii) your remaining
continuously employed on a full-time active basis with the Company through and
including the corresponding Vesting Date. If you satisfy these requirements, the
portion of your Award that becomes vested will be paid to you in a single lump
sum cash payment within 75 days following the Vesting Date. Your right to this
Award is not contingent on corporate or individual performance.
Forfeiture. If prior to becoming fully vested in your Award, (i) your
employment with the Company terminates for any reason other than your death or
permanent disability, or (ii) your employment status with the Company changes to
part-time, or (iii) you retire from the Company, then the unvested portion of
your Award will be forfeited as of the date of your termination, change in
status, or retirement, as the case may be.
1
If your employment with the Company terminates on or before a Vesting Date
because you die or become permanently disabled, then the portion of your Award
scheduled to vest on such Vesting Date will vest as of the date of your death or
termination for disability (assuming you otherwise meet the requirements under
this Award letter), and any portion of your Award that would have vested on a
subsequent Vesting Date will be forfeited. For example, if your employment
terminates under these circumstances on or before January 1, 2009, the portion
of your Award scheduled to vest on that date will vest, and any portion that
would have vested on a subsequent Vesting Date will be forfeited.
The Committee will determine whether a permanent disability exists for
purposes of the foregoing, and such determination will be conclusive and
binding.
Other terms relevant to this Award letter are set forth below.
1. Modification. The Committee may unilaterally modify the terms of this
Award letter after the Award Date provided that your consent is obtained with
respect to any modification that would be detrimental to your rights hereunder,
except that your consent will not be required to the extent any such
modification is to comply with applicable law.
2. Change of Control. If you remain continuously employed on a full-time
active basis with the Company through and including the date on which a Change
of Control of the Company occurs, then notwithstanding any provision herein to
the contrary, any restrictions hereunder on your outstanding Award shall lapse
as of such date. For this purpose, "Change of Control" has the meaning set forth
in the Circuit City Stores, Inc. 2003 Stock Incentive Plan, as amended and
restated, effective December 14, 2006.
3. Withholding Taxes. On the Vesting Date, you will have taxable income
equal to the amount of your vested Award, and the Company will withhold the
amount of taxes required to be withheld or paid.
4. Interpretation. The interpretation and construction of any provision or
term of this Award letter by the Committee will be final and conclusive. The
terms of this Award letter and all actions taken hereunder will be governed by
the laws of the Commonwealth of Virginia, without regard to the conflict of law
provisions of any jurisdiction.
5. Miscellaneous.
a. This Award letter is the entire agreement between you and the
Company concerning the Award granted hereunder. If you are a party to an
Employment Agreement with the Company, you agree that in the case of a conflict
between the Employment Agreement and this Award letter, the terms of this Award
letter will control.
b. Nothing in this Award letter confers any right to continued employment
with the Company, or affects the Company's right to terminate an associate's
employment at any time, with or without notice, and with or without cause.
2
c. The Company has no obligation to contribute any assets to a trust or
other entity or otherwise to segregate any assets, or maintain separate accounts
for the purpose of satisfying the Award obligation hereunder.
6. Acceptance of this Award. In order for your Award to become effective,
you must accept it by signing and returning the enclosed copy of this Award
letter as soon as possible but in no event later than [date that is 15 days
after the award letter is distributed], 2008 to:
[contact name and address]
Your signature will also constitute your agreement to the terms and
conditions contained in this letter.
Sincerely,
Senior Vice President
Human Resources
ACCEPTED:
Associate Signature
Printed Name
Date
3
