Circuit City 2011 Annual Report Download - page 62

(e) Participation in Benefit Plans
. The Employee shall be entitled to participate in and receive benefits under all medical plans
or other employee insurance or benefit plans and arrangements that are made generally available to executive employees of the Company and on the
terms that such plans, insurance and arrangements are made generally available to executive employees of the Company. To the extent that any such
plan or arrangement generally permits the participation or coverage of dependents of the employees of the Company, the Employee’
s dependents may
participate in or be covered under such plan or program. Notwithstanding the foregoing, the Employee’s coverage under the Company’
s medical and
dental plans shall become effective immediately upon the date hereof. The Company agrees to pay you, as additional compensation, your share of any
healthcare contributions. Notwithstanding the foregoing, you shall not be entitled to participate in any Company severance plan other than as provided
specifically herein.
(f) Expenses
. During the Employment Period (except as limited by Section 2(j) and Section 2(k) hereof) the Employee shall be
entitled to receive reimbursement for all ordinary and necessary business expenses reasonably incurred by him in accordance with industry custom in
performing services hereunder, provided that the Employee provides the Company with written documentation, satisfactory to the Company,
evidencing such expenses.
(g) Vacations and Holidays
. The Employee shall be entitled to four (4) weeks of paid vacation in each calendar year, provided,
that your paid vacation for the portion of the first year of the Employment Period shall be prorated for the portion of the year in which the Employee
was employed. At no time, however, shall you take more than two (2) weeks of vacation consecutively unless approved by the Reporting Person. The
Employee shall have the holidays and sick days as determined by the Company’s policies in effect on the date hereof and as amended.
(h) Options. Upon execution of this Agreement, subject to approval by the Compensation Committee of the Company’
s Board of
Directors (the “Compensation Committee”), the Employee shall receive an option to purchase 100,000 shares of the Company’
s common stock (in
accordance with the Company’
s 2010 Long Term Incentive Plan) (a) exercisable at an exercise price per share equal to the fair market value of a share
of the Company’
s common stock as quoted on the NYSE at close of business on the date of grant, (b) vesting over a period of four years with 25% of
the options vesting on the first, second, third and fourth anniversary dates of the grant date, and (c) containing such other terms and conditions as may
be set forth in the Company’
s stock option agreement with you (attached as Exhibit A hereto). Any subsequent option grants to the Employee will be
considered annually and determined by the Company in its sole discretion, subject to approval by the Compensation Committee, and subject to an
annual target of options to acquire 100,000 shares for each of the first three years of your employment with the Company (300,000 shares in total) and
further subject to a maximum annual Black-
Scholes expense of One Million Dollars ($1,000,000). The stock option agreement with you shall provide
that if your employment with the Company (or its successor) shall be terminated by the Company (or its successor) without “Cause” (
as defined
below) or by the Employee for “Good Reason” (as defined below) within six (6) months following a “Change in Control” (
defined below), all of
Employee’s outstanding unvested stock options shall immediately vest and all Employee’
s outstanding options shall remain exercisable in accordance
with their terms, but in no event for less than 90 days after such termination. For purposes of this Agreement, “Change in Control”
shall mean: (i) the
sale or other disposition of all or substantially all of the assets of the Company; (ii) any sale or exchange of the capital stock of the Company by the
stockholders of the Company in one transaction or series of related transactions as a result of which more than fifty percent (50%) of the outstanding
voting securities of the Company is acquired by a person or entity or group of related persons or entities; (iii) any reorganization, consolidation or
merger of the Company where the outstanding voting securities of the Company immediately before the transaction represent or are converted into less
than fifty percent (50%) of the outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iv) the
consummation of the acquisition of fifty-
one percent (51%) or more of the outstanding stock of the Company pursuant to a tender offer validly made
under any federal or state law (other than a tender offer by the Company).
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