Exhibit 10.2
Circuit City Stores, Inc.
Employment Agreement for James A. Marcum
This
EMPLOYMENT
AGREEMENT ("Agreement") is made, entered into, and is
effective as of the
18th day of August,
2008 (the "Effective
Date"), by and
between Circuit
City Stores,
Inc. (the "Company") and James A. Marcum (the
"Executive").
WHEREAS, the Company
desires to employ the
Executive as Vice
Chairman of
Circuit City Stores, Inc.;
WHEREAS, the Company
recognizes the
Executive's
intimate knowledge and
experience in the business of the Company, and desires to secure the
employment
of the Executive in the role of Vice Chairman of the Company;
WHEREAS, upon
execution of this Agreement, any prior employment agreement
by and between the Executive and the Company, whether oral or
written, will have
no force and effect with respect to the terms and conditions of the
Executive's
employment and will be
fully replaced and superseded by the terms of this
Agreement; and
WHEREAS, the
Executive will develop and/or come in contact with the
Company's proprietary
and confidential information which is not readily
available to the public, and which is of great importance
to the Company and is
treated by the Company as secret and confidential information.
NOW,
THEREFORE, in
consideration of the Executive's continued employment
and of the mutual
covenants and
agreements
of the parties set forth in this
Agreement, and of
other good
and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
Article 1. Term of
Employment
The
Company hereby agrees to employ the Executive and the Executive
hereby
accepts employment as
Vice Chairman in accordance with the terms and conditions
set forth herein, for
an initial period of
one (1) year,
commencing as of the
Effective Date of this
Agreement as indicated above (the "Initial Term");
subject, however, to earlier termination as expressly provided
herein.
The
Initial Term shall
automatically be renewed for additional periods of
one (1) year each at the end of the Initial Term, and then again after each
successive year thereafter (collectively, the "Renewal Periods,"
which, together
with the Initial Term, constitute the "Term" of this Agreement).
However, either
party may terminate this Agreement at the end of the Initial Term,
or at the end
of any Renewal Period, by giving the other party written notice of
intent not to
renew, delivered at
least forty-five (45)
days prior to the end of the Initial
Term or any Renewal Period.
Article 2. Position
and Responsibilities
During the Term of this Agreement, the Executive agrees to serve as Vice
Chairman of the Company. In his capacity as Vice Chairman,
the Executive
shall
report directly to the
Chief Executive
Officer, and shall
have the duties and
responsibilities of
Vice Chairman
of the Company and such other duties and
responsibilities not
inconsistent
with the performance of his duties as
Vice
Chairman of the Company.
Article 3. Standard of
Care
During the
term of this Agreement, the Executive agrees to devote
substantially his
full-time attention
and energies to the Company's business.
The Executive covenants, warrants, and represents that he
shall:
(a)
Devote his full and best efforts and talents full time to the
performance of his employment obligations and duties for the
Company;
(b)
Exercise the highest degree of loyalty and the highest
standards of
conduct in the performance of his duties;
(c)
Comply with all rules,
regulations, and policies established or issued
by the Company; and
(d)
Refrain from taking
advantage, for himself or others, of any corporate
opportunities of the Company.
Article 4. Other
Employment
The
Executive shall not, during the term hereof, be interested
directly or
indirectly, in any manner, as partner, officer, director, investor,
stockholder,
advisor, employee,
or in any other
capacity, in any other
business similar to
Company's business for the Executive's personal advantage or benefit or
that of
others. Any other
employment
or position which might reasonably be deemed
contrary to the best interests of the Company is prohibited.
During the term of
employment hereunder,
the Executive agrees to obtain the Company's written
consent prior to entering into any other occupation, even if dissimilar to that
of the Company.
Such consent may be granted or withheld, in the Company's
absolute discretion.
Nothing herein contained shall be deemed to prevent or
limit the right of the Executive to invest in the capital stock or other
securities of any corporation whose stock or securities are
regularly traded on
any public exchange,
nor shall anything
herein contained be
deemed to prevent
the Executive from investing in real estate for his own benefit (so
long as such
investment (a) is not
related to or in support of any entity engaged in a
business similar
to that of the
Company or (b) does not detract from the
Executive's performance of his duties and obligations
hereunder).
Article 5.
Compensation and Benefits
As
remuneration for all services to be rendered by the Executive
during his
employment, and as
consideration for complying with the covenants herein, the
Company shall pay and provide to the Executive the following:
5.1.
Base Salary. During the Term of this Agreement, the Company shall pay
the Executive a Base Salary in an amount which shall be established
and approved
by the Compensation and Personnel Committee of the Board of
Directors; provided,
however, that such
Base Salary shall be
established at a rate of not less than
$750,000.00 gross per year. This Base Salary shall be subject to
all appropriate
federal and state
withholding taxes and
payable in accordance
with the normal
payroll practices
of the Company. The Base Salary shall be reviewed
at least
annually following the Effective Date of this Agreement,
while the Term of
this
Agreement is in force, to ascertain whether, in the judgment of the
Compensation
and Personnel
Committee, such Base
Salary should be changed. If changed, the
Base Salary as stated above shall, likewise, be changed for all
purposes of this
Agreement.
5.2
Annual Incentive. In
addition to his Base Salary, the Executive shall
be entitled to participate in the Company's short-term incentive program, as
such program may exist from time to time during the Term of this
Agreement.
Under the Company's
short-term
incentive plan, the Executive has the
opportunity to earn an
incentive with respect to any fiscal year of the Company
("Annual Incentive").
The incentive will be payable in equity, cash, or a
combination thereof,
at the discretion of
the Chief Executive
Officer and the
Company's Compensation and Personnel Committee.
5.3.
Long-Term Incentives. During the Term of this Agreement, the
Executive
shall be eligible to participate in the Company's long-term incentive plan, to
the extent that the Board of Directors of the Company or the
Compensation
and
Personnel Committee, in their discretion, determines is
appropriate.
5.4.
Retirement Benefits.
During the Term of
this Agreement, the
Company
shall provide to the Executive the opportunity for participation in all Company
retirement, insurance,
fringe benefit,
and executive
compensation
plans and
programs, subject to
the eligibility
and participation requirements of such
plans.
5.5.
Employee Benefits. During the Term of this
Agreement,
the Company
shall provide
the Executive all benefits, subject to the eligibility
requirements and other
provisions
of such arrangements. Such benefits may
include group
term life insurance, comprehensive health and major medical
insurance, dental and life insurance, and short-term and long-term
disability.
5.6.
Perquisites.
During the Term of
this Agreement,
the Company
shall
provide to the Executive, at the Company's cost, all perquisites,
to the extent
that the Board of Directors of the Company or the Compensation and Personnel
Committee, in their discretion, determines is appropriate.
5.7.
Right to Change Plans.
By reason of Articles 5.5 and 5.6 herein, the
Company shall not be obligated to institute, maintain, or refrain
from changing,
amending, or discontinuing any benefit plan or perquisite.
Article 6.
Expenses
During the Term of this Agreement, the Company shall pay or reimburse
the
Executive for all ordinary and necessary expenses, in a reasonable
amount, which
the Executive incurs
in performing his duties under this Agreement including,
but not limited to, travel, entertainment, professional dues and
subscriptions,
and all dues, fees, and expenses associated with membership in various
professional,
business, and
civic associations and societies in which the
Company finds that the Executive's participation is in the best
interests of the
Company. The payment of reimbursement of expenses shall be subject
to such rules
concerning
documentation of expenses and the type or magnitude of such
expenses
as the Compensation
and Personnel Committee of the Board of Directors may
establish from time to time.
Article 7. Employment
Termination
7.1.
Termination
Due to Retirement or
Death. In the event the Executive's
employment ends
by reason of Retirement (defined as voluntary "Normal
Retirement" under the
then established
definitions and rules
of the Company's
tax-qualified
retirement plan) or the Executive's death during the term of
this
Agreement, the
Executive's benefits
shall be determined in accordance with the
Company's retirement,
survivor's benefits,
insurance, and/or
other applicable
programs of the
Company then in effect. In addition, in the case of the
Executive's death, all
stock grants will become immediately vested and may be
exercised by the Executive's personal representatives, distributees, legatees,
or estate at any time before the expiration date of the grant.
The
Effective Date of
Termination due to
Retirement or death shall be (a)
ninety (90) days
following the date the
Executive provides the Company with
written notice that
the Executive is ending employment by reason of
Retirement
or (b) on the Executive's date of death, as the case may be.
Upon the Effective
Date of Termination,
the Company shall be obligated to pay the Executive or, if
applicable, the Executive's estate; (a) any Base Salary or Annual
Incentive that
was accrued but not yet paid as of the Effective Date of Termination; and (b)
all other rights and benefits that the Executive is vested in,
pursuant to other
plans and programs of the Company.
7.2.
Termination
Due to Disability. The Company shall have the right
to
terminate the Executive's employment for disability. For the purposes of this
Agreement, disability
shall mean any
physical or mental illness or injury that
causes the Executive
to be unable to
substantially
perform the Executive's
normal duties;
provided however that the Executive shall not be considered
disabled until:
(i) the Executive has
been so disabled for 180 days during any
period of twelve (12) consecutive months; (ii) the Executive's attending
physician shall have furnished to the Company certification that the return of
the Executive to his normal duties is impossible or improbable; or (iii) the
Executive is determined to be totally disabled by the disability insurer then
insuring the Executive, if any.
The
Effective Date of Termination due to Disability shall be specified,
in
a written notice, by the Executive's immediate manager, and such
written notice
shall be delivered
to the Executive, but shall be no less than
thirty (30)
calendar days after the delivery of such written notice to the
Executive.
Upon
the Effective
Date of Termination, the Company shall be obligated to
pay the
Executive (or, if applicable, the Executive's estate): (a) any salary that
was
accrued but not yet paid as of the Effective Date of Termination;
(b) the unpaid
Annual Incentive,
if any, with respect to the fiscal year preceding the
Effective Date of Termination (such Annual Incentive, if any, to be determined
in the manner it would
have been determined
and payable at the time it would
have been payable
under Article 5.2 had there been no termination of the
Employment Period);
and (c) all other rights and benefits that the Executive is
vested in, pursuant to other plans and programs of the Company.
It
is expressly
understood that the
Disability
of the Executive for a
period of one hundred eighty (180) calendar days or less in the
aggregate during
any period of twelve (12) consecutive months, in the absence of any
reasonable
expectation that his
Disability will exist for more than such a period of time,
shall not constitute a failure by him to perform his duties
hereunder and
shall
not be deemed a
breach or default, and the Executive shall receive full
compensation for any
such period
of Disability or for any other temporary
illness or incapacity during the term of this Agreement.
If
the employment of the Executive terminates because of Disability,
all of
the Executive's
outstanding stock
grants, excluding
restricted
stock grants
issued under a performance based plan, will become immediately
vested, effective
as of the date of the Executive's Disability. Then, the Executive, the
Executive's personal representatives, distributees, or legatees may
exercise the
Executive's grants at any time before the expiration date of the
grant.
7.3.
Voluntary Termination by the Executive.
The Executive may
terminate
his employment
and this Agreement at any time by giving the Company
at least
forty-five (45) days written notice. The Company reserves the right to require
the Executive
not to work during the
notice period but shall pay the Executive
his full Base Salary,
at the rate then in
effect as provided
in Article
5.1
herein, through the notice period plus all other benefits to which
the Executive
has a vested
right on the last day of employment (for purposes of this
paragraph, the
Executive shall not be paid any Annual Incentive with respect
to
the fiscal year in which voluntary termination under this Article 7.3
occurs).
The Company thereafter shall have no further obligations under this
Agreement.
7.4
Involuntary
Termination by the Company Without Cause. The Company may
terminate the
Executive's
employment, at any
time, for any reason
other than
death, Disability,
Retirement, or for
"Cause", by providing the Executive with
at least forty-five
(45) days written notice; provided, however, that for
purposes of this
Article 7.4 (a), no variation, alteration, modification,
cancellation, change
or amendment made to
this Agreement
pursuant to
Article
12.3 or 12.4 shall be deemed an involuntary termination without
Cause.
(a)
Upon the Effective
Date of Termination specified by the Company for
termination by the Company without cause, the Company shall pay to
the
Executive, an amount
equal to one (1) year
of the Executive's
Base
Salary and the Executive's target Annual Incentive established for
the
fiscal year in which the Executive's Effective Date of Termination
occurs according the Company's regularly scheduled payroll
practices.
If, however, the
Company determines that such payments are subject to
Treasury Regulation Service 1.409A-3(g)(2), payment shall begin on
the
first day of the month following the six (6) month anniversary of the
Executive's Effective
Date of Termination, with 6/12 of the total
payment made on such
date and 1/12 of the
payment made on the
first
day of each month in the six (6) month period thereafter.
(b)
In addition, the Company shall continue, at the same cost to the
Executive as existed
as of the Effective
Date of Termination, all
health and welfare
benefit plan
participation, as
permitted by law,
for one (1)
full year following the Executive's termination of
employment; provided,
however, that the applicable COBRA "period
of
coverage" under any
plan subject
to Section
4980B of the
Internal
Revenue Code of 1986, as amended (the "Code"), or Sections 601
through
609 of the Employee
Retirement
Income Security Act of 1974 (ERISA)
shall begin as of the Effective Date of Termination.
(c)
The Company
shall also provide the
Executive with six (6) months of
outplacement services.
(d)
Any unvested stock options or any outstanding restricted stock,
excluding
performance-based restricted stock grants, as of the
Effective Date of
Termination,
that would
become vested (that is,
exercisable in
the case of stock options or transferable and
non-forfeitable in the
case of restricted
stock) if the Executive
remained an employee
through the
Initial Term or the then current
Renewal Period of this
Agreement will become vested as of the date of
the Effective Date of Termination. The Executive must satisfy the
tax
withholding requirements.
The
Company thereafter shall have no further obligations under this
Agreement.
7.5.
Termination For Cause. Nothing in this Agreement shall be construed
to
prevent the Company
from terminating
the Executive's employment under this
Agreement, without notice or liability for doing so, for
"Cause."
For
purposes of this Agreement, "Cause" means:
(a)
The Executive's
material breach of this Agreement, which breach is not
cured within
ten (10) days of
receipt by the
Executive of written
notice from the Company specifying the breach;
(b)
The Executive's gross negligence in the performance of
his material
duties
hereunder,
intentional
nonperformance
or
intentional
misperformance of such
duties, misconduct
or refusal to abide by
or
comply with the directives of the Board, his superior officers, or
the
Company's policies and procedures, which actions continue for a
period
of ten (10) days after receipt by the Executive of written notice of
the need to cure or cease;
(c)
Conviction of a felony
or any crime involving moral turpitude;
(d)
The Executive
engaging in illegal
conduct, dishonesty or fraud with
respect to the
business or affairs of the Company that in the
reasonable judgment of
the Company materially
and adversely
affects
the operations or reputation of the Company;
(e)
Failure of the
Executive to disclose to the Executive's manager a
conflict of interest,
of which the Executive knew or, with reasonable
diligence, would
have known, in connection with any transaction
entered into on behalf of the Company;
(f)
Failure of the
Executive to agree to a modification of this Agreement,
pursuant to paragraph 12.3 below, when the purpose of the
modification
is to comply with
applicable
federal, state and/or local laws or
regulations, or when
such modification is
designed to further define
the restrictions of Article 8 or otherwise enhance the enforcement of
Article 8 without
increasing the scope of the Article 8 restrictions;
or
(g)
The Executive engages in any act or omission which the Company
believes could injure or bring discredit upon the reputation and/or
goodwill of the Company and/or its respective officers, directors or
shareholders.
In
the event this Agreement is terminated for Cause, the Company shall pay
the Executive his Base
Salary through the
Effective Date of
Termination
for
cause and the
Executive shall
immediately
thereafter
forfeit all rights
and
benefits (other than
vested benefits) he
would otherwise have been entitled to
receive under this
Agreement.
The Company thereafter shall have no further
obligations under this Agreement.
7.6.
Termination
for Good Reason. At any time during the term of this
Agreement, the
Executive may terminate this Agreement for Good Reason (as
defined below) by giving the Company forty-five (45) days written
notice, which
notice sets
forth in detail the
facts and
circumstances claimed
to provide a
basis for such
termination. However,
the Company shall,
at its option,
have
thirty (30)
days from receipt of such written notice to cure any event or
circumstance that could constitute Good Reason.
If
the Company chooses
not to cure, the Effective Date of Termination for
Good Reason shall occur upon the expiration of the forty-five (45) days prior
notice period that is specified by the Executive in the written
notice, and the
Company shall pay and
provide to the
Executive the benefits
set forth in this
Article 7.6.
Subject to the last paragraph of this Article 7.6, and for purposes
of this
Agreement, Good Reason
shall mean,
without the
Executive's
express written
consent, the occurrence of any one (1) or more of the
following:
(a)
Failing to maintain
the Executive's
participation
in the Company's
annual incentive and long-term incentive plan in a manner
determined
by the Board of
Directors of the
Company or the Compensation and
Personnel Committee;
(b)
Failing to maintain
the Executive's
benefits under, or relative l
