Circuit City 2006 Annual Report Download - page 68

the Administrator in advance of an Offering).
(b) The term “Compensation” means the amount of base pay prior to salary reduction pursuant to Sections 125, 132(f)
or 401(k) of the Code, but excluding overtime, commissions, incentive or bonus awards, allowances and reimbursements for
expenses such as relocation allowances or travel expenses, income or gains on the exercise of Company stock options, and
similar items.
(c) The term “Designated Subsidiary” means any present or future Subsidiary (as defined below) that has been
designated by the Board to participate in the Plan. The Board may so designate any Subsidiary, or revoke any such
designation, at any time and from time to time, either before or after the Plan is approved by stockholders.
(d) The term “Effective Date” means January 1, 2006.
(e) The term “Fair Market Value of the Common Stock”
on any given date means the fair market value of the Common
Stock determined in good faith by the Administrator; provided, however, that if the Common Stock is traded on a national
securities exchange or other primary trading market, the Fair Market Value of the Common Stock will equal the closing sales
price as reported on the principal exchange or market for the Common Stock on such date. If there is no trading on such date,
the determination shall be made by reference to the last date preceding such date for which there was trading.
(f) The term “Holding Period” means one year, or such other period of time as may be established by the
Administrator, following the Exercise Date during which the Common Stock acquired pursuant to the Plan may not be sold,
pledged or otherwise transferred by the Participant. The Holding Period may be changed by the Administrator with respect to
any Offering and may apply to all or a designated portion of the shares of Common Stock purchased by each Participant in
the Offering, subject to Section 5.
(g) The term “Parent” means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the
Code.
(h) The term “Participant” means an Eligible Employee who has complied with the provisions of Section 5.
(i) The term “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f)
of the Code.
12. Rights on Termination of Employment. If a Participant’
s employment terminates for any reason before the Exercise
Date for any Offering, no payroll deduction will be taken from any pay due and owing to the employee and the balance in his
account will be paid to him or, in the case of his death, to his designated beneficiary as if he had withdrawn from the Plan
under Section 7. An employee will be deemed to have terminated employment, for this purpose, if the corporation that
employs him, having been a Designated Subsidiary, ceases to be a Designated Subsidiary or ceases to be a Subsidiary, or if
the employee is transferred to any corporation other than the Company or a Designated Subsidiary. An employee will not be
deemed to have terminated employment, for this purpose, if the employee is on an approved leave of absence for military
service or sickness, or for any other purpose approved by the Company, if the employee’s right to reemployment is
guaranteed either by a statute or by contract (including under the policy pursuant to which the leave of absence was granted)
or if the Administrator otherwise provides in writing.
13. Special Rules. Notwithstanding anything herein to the contrary, the Board or the Administrator may in its
discretion amend or vary the terms of the Plan, establish one or more sub-plans or adopt special rules applicable to the
employees of a particular Designated Subsidiary, whenever the Board or Administrator determines that such rules are
necessary or appropriate for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees
provided that such rules are consistent with the requirements of Section 423(b) of the Code. Such special rules may include
(by way of example, but not by way of limitation) the establishment of a method for employees of a given Designated
Subsidiary to fund the purchase of shares other than by payroll deduction, if the payroll deduction method is prohibited by
local law or is otherwise impracticable. Any special rules established pursuant to this Section 13 shall, to the extent possible,
result in the employees subject to such rules having substantially the same rights as other Participants in the Plan.
14. Optionees Not Stockholders. Neither the granting of an Option to an employee nor the deductions from his pay
shall constitute such employee a holder of the shares of Common Stock covered by an Option under the Plan until such shares
have been purchased by and issued to him.