Circuit City 2006 Annual Report Download - page 67

6. Deduction Changes. Except as may be determined by the Administrator in advance of an Offering, a Participant
may not increase or decrease his payroll deduction during any Offering, but may increase or decrease his payroll deduction
with respect to the next Offering (subject to the limitations of Section 5) by filing a new enrollment form at least one (1) week
before the next Offering Date (or by such other deadline as shall be established by the Administrator for the Offering). The
Administrator may, in advance of any Offering, establish rules permitting an employee to increase, decrease or terminate his
payroll deduction during an Offering.
7. Withdrawal. A Participant may withdraw from participation in the Plan by delivering a written notice of withdrawal
to the designated representative of the Company’s human resources department. The Participant’s withdrawal will be
effective as of the next business day. Following a Participant’s withdrawal, the Company will promptly refund to him his
entire account balance under the Plan (after payment for any Common Stock purchased before the effective date of
withdrawal). Partial withdrawals are not permitted. The employee may not begin participation again during the remainder of
the Offering, but may enroll in a subsequent Offering in accordance with Section 5.
8. Grant of Options. On each Offering Date, the Company will grant to each Participant an option (“Option”) to
purchase on the last day of such Offering (the “Exercise Date”), at the Option Price hereinafter provided for, (a) a number of
shares of Common Stock determined by dividing such employee’s accumulated payroll deductions on such Exercise Date by
the Applicable Percentage (as defined in Section 11) of the lesser of the Fair Market Value of the Common Stock on the
Grant Date or the Exercise Date; provided, however , that the Administrator may determine in advance of an Offering to use
solely the Grant Date or the Exercise Date for such determination, or (b) such other lesser maximum number of shares as
shall have been established by the Administrator in advance of the Offering; provided, however , that such Option shall be
subject to the limitations set forth below. Each employee’s Option shall be exercisable only to the extent of such employee’s
accumulated payroll deductions on the Exercise Date. The purchase price for each share purchased under each Option (the
“Option Price”) will be the Applicable Percentage of the lesser of the Fair Market Value of the Common Stock on the Grant
Date or the Exercise Date.
Notwithstanding the foregoing, no employee may be granted an Option hereunder if such employee, immediately after
the Option was granted, would be treated as owning stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or any Parent or Subsidiary (as defined in Section 11). For purposes of
the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply to determining the stock ownership of
an employee, and all stock which the employee has a contractual right to purchase shall be treated as stock owned by the
employee. In addition, no employee may be granted an Option which permits his rights to purchase stock under the Plan, and
any other employee stock purchase plan of the Company and its Parents and Subsidiaries, to accrue at a rate which exceeds
$25,000 of the fair market value of such stock (determined on the option grant date or dates) for each calendar year in which
the Option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423
(b)(8) of the Code and shall be applied by taking Options into account in the order in which they were granted. The
Administrator also has the right to impose an overall limit on the number of shares issued in any offering period.
9. Exercise of Option and Purchase of Shares. Each employee who continues to be a Participant in the Plan on the
Exercise Date shall be deemed to have exercised his Option on such date and shall acquire from the Company such number of
whole shares of Common Stock reserved for the purpose of the Plan as his accumulated payroll deductions on such date will
purchase at the Option Price, subject to any other limitations contained in the Plan. Any amount remaining in a Participant’s
account at the end of an Offering solely by reason of the inability to purchase a fractional share will be carried forward to the
next Offering; any other balance remaining in a Participant’s account at the end of an Offering will be refunded to the
employee promptly.
10. Issuance of Certificates; Transfer of Shares. Certificates representing shares of Common Stock purchased under
the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as
joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, or their, nominee for
such purpose. No Participant (or joint tenant or nominee) may sell, pledge or otherwise transfer the shares of Common Stock
acquired by the Participant under the Plan until the expiration of the applicable Holding Period, except as permitted under
Offering terms or rules adopted by the Administrator or for transfers to the estate or beneficiaries of deceased Participants (in
which case such transferees shall be bound by this restriction). Certificates representing shares of Common Stock purchased
under the Plan shall bear appropriate legends and be subject to appropriate stop transfer orders to reflect this restriction.
Shares purchased under the Plan are non-forfeitable.
11. Definitions.
(a) The term
“
Applicable Percentage
”
means 95% (or such other percentage, not below 85%, as may be determined by