EXHIBIT 99.1
1984 CIRCUIT CITY STORES, INC.
EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED AND RESTATED FEBRUARY 17, 1998
The 1984 Circuit City Stores, Inc. Employee Stock Purchase Plan,
effective March 1, 1985 as amended and restated February 17, 1998 (the "Circuit
City Plan") provides eligible employees of Circuit City Stores, Inc., a Virginia
corporation (the "Company"), and certain of its subsidiaries an opportunity to
purchase Circuit City Stores, Inc. -- Circuit City Group Common Stock as
designated in the Amended and Restated Articles of Incorporation of Circuit City
Stores, Inc. ("Circuit City Group Stock") through payroll deductions at prices
below the market.
1. Amount of Stock Subject to the Circuit City Plan. The total number
of shares of Circuit City Group Stock which may be purchased under the Circuit
City Plan shall be 6,500,000, subject to adjustment as provided in Section 11
below. Such shares may be newly issued shares that have been authorized but not
yet issued or may be shares purchased for the Circuit City Plan on the open
market.
2. Eligible Employees. All present and future employees of the Company
and its parent and Subsidiary corporations (as defined below and whether now
existing or hereafter created or acquired) are eligible to participate in the
Circuit City Plan, (as defined in Section 4 below), except (i) employees who
have completed less than one year of Eligibility Service (defined below), (ii)
employees who are subject to Section 16 of the Securities Exchange Act of 1934,
as amended, with respect to securities of the Company, (iii) employees who are
officers of the Company or its Subsidiaries, or (iv) effective April 1, 1997,
employees of the CarMax Group Companies (defined as CarMax, Inc. and its
Subsidiaries). Independent contractors of the Company or its subsidiaries are
not eligible to participate in the Circuit City Plan. Whether an individual is
eligible to participate in the Circuit City Plan shall be determined as of the
first day of the first payroll period for which payroll deductions are to be
made.
For purposes of the Circuit City Plan, "Subsidiary" is any business
entity (including, but not limited to, a corporation, partnership, or limited
liability company) of which a company (the "Parent") directly or indirectly owns
one hundred percent (100%) of the voting interest of the entity unless the
Compensation and Personnel Committee of the Board of Directors of the Company
(the "Committee") determines that the entity should not be considered a
Subsidiary for purposes of the Circuit City Plan. If the Parent owns less than
one hundred percent (100%) of the voting interest of the entity, the entity will
be considered a Subsidiary for purposes of the Circuit City Plan only if the
Committee determines that the entity should be so considered.
For purposes of the Circuit City Plan, "Eligibility Service" means
continuous employment with the Company or any of its Subsidiaries, including
CarMax, Inc. or any of its Subsidiaries, as a regular employee. Determinations
whether an employee is a regular employee and whether an employee has completed
one year of Eligibility Service may be made from time to time by the Committee,
but shall in each instance be uniform in nature and applicable to all persons
similarly situated.
3. Administration of the Circuit City Plan. The Circuit City Plan shall
be administered by the Committee. The Committee shall have all powers necessary
to administer the Circuit City Plan, including the power to construe and
interpret the Circuit City Plan's documents; to decide all questions relating to
an employee's employment status and eligibility to participate in the Circuit
City Plan; to make adjustments to the limitations on payroll deductions set
forth in Section 5 below; to employ such other persons as are necessary for the
proper administration of the Circuit City Plan; and to make all other
determinations necessary or advisable in administering the Circuit City Plan.
Any construction, interpretation, or application of the Circuit City Plan by the
Committee shall be final, conclusive and binding.
The Committee shall appoint an officer or other employee of the
Company or one of its subsidiaries to serve as the Circuit City Plan
Administrator. The Circuit City Plan Administrator shall be responsible for the
general administration of the Circuit City Plan and such other matters as the
Committee deems necessary for the efficient and proper administration of the
Circuit City Plan.
4. Participation in the Circuit City Plan. An eligible employee may
commence or recommence (subject to the provisions of Section 12 below),
participation in the Circuit City Plan effective on any March 1, June 1,
September 1, or December 1 ("Enrollment Dates") by completing and delivering to
the designated individuals in the Company's personnel department, a form
prescribed by the Circuit City Plan Administrator (the "Authorization Form").
The employee must deliver the Authorization Form to the designated individuals
in the Company's personnel department so that it is received at least 10 days
before the desired Enrollment Date. The Authorization Form shall authorize
payroll deductions from the employee's Compensation.
An employee who was a participating employee in the Circuit City
Stores, Inc. Employee Stock Purchase Plan for CarMax Group Employees ("CarMax
Plan") immediately prior to being transferred to employment with the Circuit
City Group Companies (defined as the Company and its Subsidiaries other than the
CarMax Group Companies) may begin participation in the Circuit City Plan as soon
as administratively practicable after receipt by the designated persons of the
employee's Authorization Form.
For purposes of the Circuit City Plan, "Compensation" means all
compensation and commissions (estimated as deemed necessary by the Committee)
before any deductions or withholding and including overtime and bonuses, but
exclusive of all amounts paid as reimbursements of expenses including those paid
as part of commissions. Eligible employees who participate in the Circuit City
Plan are referred to herein as "Participating Employees".
5. Payroll Deductions, Limitations, and Participating Employee
Accounts. A payroll deduction shall be made as a percentage of Compensation
payable to each Participating Employee for each payroll period as specified in
the Participating Employee's Authorization Form. Payroll deductions for each
payroll period shall not be less than 2% nor more than 10% of Compensation for
such payroll period. Payroll deduction specifications may be made in 1/2%
increments.
All payroll deductions shall be credited to an account that a
custodian appointed by the Committee (the "Custodian") shall establish in the
name of each Participating Employee (the "Payroll Deduction Account").
The maximum amount that may be deducted for each Participating
Employee in any one calendar year is $7,500. When a Participating Employee's
aggregate payroll deductions for the calendar year total $7,500, the
Participating Employee's purchases of Circuit City Group Stock and payroll
deductions under the Circuit City Plan shall be suspended for the remainder of
the calendar year. However, the Participating Employee shall continue to be a
participant under the Circuit City Plan unless he or she terminates
participation, and the employee's purchases of Circuit City Group Stock and
payroll deductions will be resumed for the first payroll period of the next
calendar year. For purposes of this Section, "aggregate payroll deductions"
refers to the cumulative year to date deductions made for the employee under the
CarMax Plan and the Circuit City Plan.
6. Changes in Payroll Deductions. A Participating Employee may change
the percentage of his or her payroll deductions, subject to the minimums and
maximum set forth above, effective on any March 1, June 1, September 1 or
December 1, by delivering to the personnel department a new Authorization Form
so that it is received at least 10 days before the effective date of change.
7. Purchase Price. The purchase price ("Purchase Price") for each share
of Circuit City Group Stock, including shares, if any, purchased by dividend
reinvestment, shall be the fair market value of such share on the Purchase Date,
less a discount not to exceed fifteen percent (15%). Such discount is to be
determined from time to time by the Board of Directors.
8. Method of Purchase and Purchase Accounts. The last business day of
each month shall be a Purchase Date. On each Purchase Date, the funds in each
Participating Employee's Payroll Deduction Account shall be applied to the
purchase from the Company of the number of whole shares and fractional interests
in shares of Circuit City Group Stock as such funds can purchase at the Purchase
Price on that Purchase Date, unless the Company notifies the Custodian before
the Purchase Date that a portion of the shares required shall be obtained on the
open market. In the latter event, the Custodian shall apply such portion as the
Company shall direct of the funds in the Payroll Deduction Accounts to the
purchase of whole shares of Circuit City Group Stock on the open market and
shall deliver the remaining funds, if any, to the Company. At the same time, the
Company shall issue to the Custodian for the benefit of the Participating
Employees a sufficient number of shares of Circuit City Group Stock so that the
total number of whole shares and fractional interests in shares acquired by the
Participating Employees as of such Purchase Date shall be the same as would have
been acquired if all such shares had been acquired from the Company. The Company
shall reimburse the Custodian for any expenses incurred by it in effecting the
open market purchases. The shares and fractional interests in shares of Circuit
City Group Stock acquired under the Circuit City Plan shall be credited to a
Purchase Account maintained by the Custodian for each Participating Employee.
Dividends, if any, paid with respect to the Circuit City Group Stock
held in the Purchase Accounts shall be automatically reinvested in Circuit City
Group Stock under the Circuit City Plan. The reinvestment shall be effected
through the crediting of such dividends to the Participating Employees' Payroll
Deduction Accounts on the date such dividends are received by the Custodian. All
funds in the Payroll Deduction Account (from payroll deductions and dividends,
if any) shall be applied to the purchase of shares of Circuit City Group Stock
on the next Purchase Date.
9. Rights as a Shareholder. Participating Employees shall have all the
rights of shareholders with respect to shares of Circuit City Group Stock
acquired under Circuit City Plan, including the right to vote such shares
through the Custodian and receive annual reports, proxy statements and other
documents sent to shareholders of Circuit City Group Stock generally; provided,
however, that so long as such shares are held for a Participating Employee by
the Custodian, if a Participating Employee fails to respond to a request for
instructions with respect to voting so that his or her response is not received
by the Custodian prior to the close of business on the second business day
preceding the deadline for the taking of action with respect to the shares
(whether such action be the voting of such shares, the tendering of such shares
in response to a tender offer or exchange offer or any other action), the
Custodian shall take such action with respect to the shares held for the
Participating Employee on such person's behalf in accordance with the
recommendation of the Company's management. By written notification received by
the Custodian on or before an Enrollment Date, a Participating Employee shall
have the right, as of such Enrollment Date:
(a) to obtain a certificate for the whole shares of Circuit City
Group Stock credited to the Participating Employee's Purchase Account; or
(b) to direct that any whole shares in the Purchase Account be sold,
and that the proceeds, less selling expenses, be remitted to the
Participating Employee.
10. Rights Not Transferable. Rights under the Circuit City Plan are not
transferable by a Participating Employee.
11. Certain Adjustments in the Case of Stock Dividends or Splits. The
Committee shall make appropriate adjustments in the number of shares of Circuit
City Group Stock which may be purchased under the Circuit City Plan if there are
changes in the Circuit City Group Stock by reason of stock dividends, stock
splits, reverse stock splits, recapitalization, merger or consolidation.
12. Termination of Participation in Circuit City Plan. A Participating
Employee may at any time and for any reason terminate participation in the
Circuit City Plan by written notification of withdrawal delivered to the
designated individuals in the Company's personnel department.
With the exception described below in the next to last paragraph of
this Section, an employee's participation in the Circuit City Plan shall also
terminate upon his or her ceasing to be employed by the Company or a Subsidiary,
whether by reason of death or otherwise, or upon the employee's otherwise
ceasing to meet the eligibility requirements set forth in Section 2 above or
becoming an independent contractor of the Company. In particular, and not by way
of limitation, employees of the CarMax Group Companies will no longer be
eligible to participate in the Circuit City Plan as of April 1, 1997.
With respect to each terminated participant, (i) payroll deductions
shall cease as of the first day of the next payroll period after receipt by the
personnel department of notification of withdrawal or other termination of
participation, whichever is applicable, and (ii) no purchases shall be made
after the Purchase Date for the calendar month in which the last payroll
deduction is made. A terminated participant shall elect:
(a) to obtain a certificate for the whole shares of Circuit City
Group Stock credited to his or her Purchase Account; or
(b) to direct that the Custodian sell the whole shares of Circuit
City Group Stock credited to his or her Purchase Account, and that the
proceeds, less selling expenses, be remitted to him or her.
In either event, the terminated participant shall receive a cash
payment for any fractional interests in a share of Circuit City Group Stock
credited to such terminated participant's Purchase Account. Such cash payment
shall be based on the market value of the Circuit City Group Stock on the next
date whole shares are sold for Participating Employees after the terminated
participant elects whether to obtain a certificate for or to direct the sale of
his or her whole shares. If the terminated participant fails to make an election
within 60 days following termination or otherwise becoming ineligible to
participate in the Circuit City Plan, he or she shall be deemed to have elected
to obtain certificates for the whole shares in his or her Purchase Account. In
the event a Participating Employee's participation in the Circuit City Plan is
terminated by death, delivery of any certificate and monies under this Section
shall be made to the employee's beneficiary as designated on a form prescribed
by the Circuit City Plan Administrator. Any beneficiary so designated shall be
bound by the terms of the Circuit City Plan. If no beneficiary has been
designated, such delivery shall be made to the legal representative of the
deceased employee's estate.
The foregoing provisions of this Section notwithstanding, if an
employee's termination results from the employee's transfer to employment with
the CarMax Group Companies or if the employee ceases to be eligible to
participate in the Circuit City Plan as of April 1, 1997 because he or she is
employed with the CarMax Group Companies, such a former employee may maintain
his or her Purchase Account (in which case dividends, if any, on the Circuit
City Group Stock shall continue to be reinvested through such Purchase Account
as for other Participating Employees), but the former employee shall not be
entitled to contribute additional payroll deductions under the Circuit City
Plan. Provided, however, if such former employee's Purchase Account contains
less than five whole shares of Circuit City Group Stock, the Circuit City Plan
Administrator, in his or her discretion, may determine to close such
individual's Purchase Account and, in such event the former employee involved
shall then have the same election alternatives as set forth in the third and
fourth paragraphs of this Section for other employees whose participation in the
Circuit City Plan is terminated. Once an individual is no longer employed with
the Company or any of its Subsidiaries, including the CarMax Group Companies,
the individual is not permitted to maintain a Purchase Account in the Circuit
City Plan and shall have the election alternatives set forth in the third and
fourth paragraphs of this Section.
An employee who has withdrawn from the Circuit City Plan or whose
participation in the Circuit City Plan has otherwise terminated may not
recommence participation in the Circuit City Plan during the 12-month period
next following the effective date of such withdrawal or termination; provided,
however, that this provision shall not apply to an individual whose
participation in the Circuit City Plan has terminated due to his or her transfer
to employment with the CarMax Group Companies and who subsequently is
transferred back to employment with the Company or a Subsidiary and is otherwise
eligible to participate in the Circuit City Plan. Such employees may recommence
participation in the Circuit City Plan as soon as practicable after their new
Authorization Form is received by personnel department.
13. Amendment of the Circuit City Plan. The Board of Directors may, at
any time, or from time to time, amend the Circuit City Plan in any respect.
14. Termination of the Circuit City Plan. The Circuit City Plan and all
rights of employees hereunder shall terminate:
(a) on the Purchase Date that Participating Employees become
entitled to purchase a number of shares of Circuit City Group Stock
greater than the number of shares remaining unpurchased out of the total
number of shares which may be purchased under the Circuit City Plan; or
(b) at any earlier date at the discretion of the Board of Directors.
In the event that the Circuit City Plan terminates under
circumstances described in (a) above, the Circuit City Group Stock remaining
unpurchased as of the termination date shall be allocated to Participating
Employees for purchase on a pro rata basis.
15. Effective Date of the Circuit City Plan. The Circuit City Plan
shall become effective as amended and restated herein on February 17, 1998.
16. Government and Other Regulations. The Circuit City Plan, and the
rights to purchase Circuit City Group Stock hereunder, and the Company's
obligation to sell and deliver Circuit City Group Stock hereunder, shall be
subject to all applicable federal, state and foreign laws, rules and
regulations, and to such approvals by any regulatory or government agency as
may, in the opinion of counsel for the Company, be required.
17. Indemnification of Committee. Service on the Committee shall
constitute service as a director of the Company so that members of the Committee
shall be entitled to indemnification and reimbursement as directors of the
Company pursuant to its Articles of Incorporation and Bylaws.