EMPLOYMENT AGREEMENT
June 27, 1990
Xx. Xxxx Xxxxxx
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Dear Xxxx:
This letter will confirm the terms of your employment with Circuit City
Stores, Inc. (also referred to in this letter as the "Company"):
1. Salary and Bonus. Your current base salary as an Assistant
Vice President of the Company is $117,500 per year. You may also receive cash
bonuses under the Company's annual bonus programs.
2. Associate Benefits. You are entitled to participate in such
Associate benefit programs as the Company provides from time to time for
Associates in your position. In addition to your Associate benefits, the Company
will reimburse you in accordance with Company policy for travel and business
expenses.
3. Confidentiality. Your position with the Company is such that
you have access to Company trade secrets and other confidential information
about the Company's business. Examples include information about Circuit City's
business methods, expansion plans, merchandising and marketing techniques,
training techniques, supplier and pricing information, internal corporate
planning methods, systems and operating procedures.
This information is a valuable Company asset and, if known by
competitors of the Company, would cause irreparable harm to the Company. You
realize this and, therefore, agree that you will not use for your own benefit,
or disclose to or use for the benefit of anyone other than the Company, any of
this information, whether you learned the information before or after signing
this agreement and whether you leave employment with the Company.
4. Non-competition. You agree that during the time you are
employed by the Company and for a period of 12 (twelve) months following the
termination of your employment, you will not engage in material competition with
the Company by becoming an owner of, an employee of, or a consultant to any
business which is engaged in competition with the Company. A business will be
considered to be engaged in material competition with the Company if it (or the
operating unit in which you will be employed) has all of the following
characteristics:
a. it has as all or part of its business (i) the retail sale of
consumer electronics and appliances (with or without providing
after-sale service) or (ii) any other business engaged in by
Circuit City before the termination of your employment;
b. more than 5% of its revenues come from the part of its
business that is the same as Circuit City's; and
c. it operates in any Metropolitan Statistical Area ("MSA") in
which the Company is operating or in which the Company has
publicly announced that it will operate within 12 months after
the time you leave the Company.
5. Non-solicitation. You agree that while you are employed by
Circuit City and for a period of two (2) years following the termination of your
employment, you will not solicit, or help anyone else solicit, other Circuit
City Associates to leave the Company.
6. Change of Control. If your employment is terminated by the
Company without cause within six (6) months after a change of control, you will
not be required to comply with the non-compete provisions set forth in paragraph
4 above.
Attachment 1 to this letter contains the definition of "change of
control".
7. Remedies for Breach. If you breach the provisions of paragraph
3, 4, or 5, the Company will suffer irreparable harm and the remedies available
to it other than your compliance with the provisions will not be sufficient to
make the Company whole. You acknowledge that this is a true statement and agree
that if such a breach (or threatened breach) occurs, the Company will be
entitled to specific performance and injunctive relief in addition to any other
remedies to which a court may find the Company is entitled.
8. Termination with Cause. The Company may terminate an
Associate's employment at any time, without notice and without further
obligation, for "cause." "Cause" means any one of the following:
a. the Associate's continued and deliberate neglect of his/her
employment duties;
b. the Associate's use, possession, or distribution of illegal
drugs on Company property or time or evidence of habitual use
or distribution of such substances at any time;
c. deliberate misconduct of the Associate in connection with the
performance of his/her duties, including, for example,
misappropriation of funds or property of the Company or
accepting bribes or kick-backs in connection with any
transaction entered into on behalf of the Company;
d. the Associate's failure to disclose to the Company and
personal interest he/she has in a Company transaction;
e. violation of the confidentiality, non-competition, or
non-solicitation provisions contained in this agreement.
9. Termination Without Cause. Either the Associate or the Company
may terminate employment, without cause, by giving the other written notice. It
will be considered a "without cause" termination by the Company if the Associate
resigns within sixty (60) days after: (i) a reduction in pay which is not part
of a prorata reduction for all Associates at the same level, (ii) a significant
reduction in the Associate's responsibilities (with or without a reduction in
pay), or (iii) the Associate is offered a job transfer to another location not
within the same MSA as his/her only job option.
a. If the Company terminates the Associate's employment without
cause, the Associate's severance benefits and payments will
include and be limited to:
1) 12 (twelve) months of base salary after termination,
disbursed according to the Company's regular paycheck
schedule.
2) Continued participation, as if still employed, in the
Company's life insurance, medical/dental, and pension
benefit plans for the period of the payment in 9.a.1.
During the period of the payment in 9.a.1. above, it will be
the Associate's responsibility to seek alternative employment.
Any payments the Associate receives for the performance of
services during this period will be an offset to the Company's
obligation to pay up to one-half of the amount specified in
9.a.1. The Associate shall notify the Company immediately if
he/she secures employment.
b. If the Associate terminates his/her employment, the Associate
will not be entitled to any compensation under this agreement,
beyond the date of termination.
10. Death or Disability. If the Associate dies or becomes
permanently disabled, his/her employment will terminate as of the date of death
or the date of disability (which will be determined in accordance with the
provisions of the Company disability plan).
11. Term. The term of this agreement is for one year from the date
of its acceptance by the Associate. It will automatically be renewed annually
unless both parties agree, in writing, to terminate it at least 30 days prior to
its renewal date.
12. Notices. If the Company needs to give you any notices about
your employment, it will send them to the address shown on your most recent
paycheck. You should send any similar notices to the Company at: 0000 Xxxxxxx
Xxxxxx, Xxxxxxxx, XX 00000, Attention: Senior Vice President, Human Resources.
13. Change in Terms. This agreement supercedes any earlier
agreement between you and the Company concerning your employment and, together
with the Company's policies and procedures for Associates at your level,
contains all of the terms and conditions relating to your employment or its
termination. Except as provided in paragraph 14 below and except for changes in
your position with the Company, any changes in the terms of this agreement must
be in writing and signed by you and the Company. The fact that either you or the
Company does not require strict observance of the terms of this agreement on all
occasions does not mean that the terms have been changed or that strict
observance cannot be required at a later time.
14. Separate Provisions. A determination by a court that a
provision of this agreement is unenforceable will not affect the other
provisions. If the non-competition provisions of this agreement are found
unenforceable, you and the Company agree that the court will have the authority
to modify those provisions into ones it considers enforceable and to enforce
them as so modified.
15. Arbitration.
a. Any disagreement between the Associate and the Company
concerning anything covered by this agreement (other than
paragraphs 3, 4, or 5) will be settled by arbitration in
accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"). If there is a
difference between the AAA rules and this agreement, we will
go by this agreement. The decision of the arbitrator will be
final and binding on the Associate and the Company and may be
enforced in a court. The costs of arbitration will be shared
equally by the Associate and the Company. Both parties will
pay their own attorney, if any, and other expenses.
b. If the Associate wants to have a disagreement arbitrated, the
Associate must give a written notice saying so to the Company
within six months after the Associate knows or, if the
Associate had exerted reasonable efforts, would have known
that the disagreement existed. If the Company wants to have a
disagreement arbitrated, it will give the Associate the same
amount of notice.
c. Disagreements submitted to arbitration will be decided by one
arbitrator appointed by the AAA. The Company will let the AAA
know that an arbitrator is needed promptly after it gives or
receives a notice of arbitration.
16. Virginia Law. Any questions that arise concerning the
interpretation or enforcement of the terms of this agreement shall be decided
based on the law of the Commonwealth of Virginia.
To confirm that this letter states our agreement, please sign
the enclosed copy on the line above your name, date it, and return the copy to
me in the enclosed envelope. Please keep this letter for your records.
Sincerely yours,
/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Senior Vice President,
Human Resources
AGREED:
/s:/Xxxx X. Xxxxxx
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Xx. Xxxx X. Xxxxxx
###-##-####
7/13/90
---------------------
Date of Acceptance
Attachment
ATTACHMENT 1
The term "change of control" means the occurrence of either of the
following events: (i) a third person, including a "group" as defined in Section
13(d) (3) of the Securities Exchange Act of 1934, becomes or obtains the right
to become, the beneficial owner of Company securities having 20% or more of the
combined voting power of the then outstanding securities of Circuit City that
may be cast for the election of directors of Circuit City (other than as a
result of an issuance of securities initiated by Circuit City in the ordinary
course of business); or (ii) as the result of, or in connection with, any cash
tender or exchange offer, merger or other business combination, sales of assets,
or contested election, or any combination of the foregoing transactions, the
persons who were directors of Circuit City before such transactions shall cease
to constitute a majority of the Board of Directors of Circuit City or any
successor to Circuit City.
