Circuit City Stores, Inc. Employment Agreement for W. Austin Ligon

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(a)

Devote his full and best efforts to the fulfillment of his employment obligations; and

(b)

Exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties.

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a)

Any unvested stock options or any outstanding restricted stock, excluding restricted stock grants issued under a performance based plan, that would become vested (that is, transferable and nonforfeitable) if the Executive remained an employee through the Term of this Agreement will become vested as of the date of the Executive’s termination of employment. The Executive must satisfy the tax withholding requirements described in Section 10 with respect to the restricted stock.

(a)

Willful and continued failure to perform substantially the Executive’s duties with the Company after the Company delivers to the Executive written demand for substantial performance specifically identifying the manner in which the Executive has not substantially performed the Executive’s duties;

(b)

Conviction for a felony;

(c)

Willfully engaging in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company or

(d)

Failure of the Employee to disclose to the CEO a conflict of interest, of which he knew or, with reasonable diligence, would have known, in connection with any transaction entered into on behalf of the Company.

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(a)

Assigning to the Executive duties inconsistent with the Executive’s position (including status, offices, titles, and reporting requirements), authority, or responsibilities in effect on the Effective Date of this Agreement, or any other action by the Company which results in a diminution of the Executive’s position, authority, duties, or responsibilities as constituted as of the Effective Date of this Agreement (excluding an isolated, insubstantial, and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof if notice is given by Executive);

(b)

Reducing the Executive’s Base Salary;

(c)

Failing to maintain the Executive’s participation in the Company’s annual bonus and long-term incentive plan in a manner that is consistent with the Executive’s position, authority, or responsibilities;

(d)

Failing to maintain the Executive’s amount of benefits under, or relative level of participation in, the Company’s employee benefit or retirement plans, perquisites, policies, practices, or arrangements in which the Executive participates as of the Effective Date of this Agreement;

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(e)

Purportedly terminating the Executive’s employment otherwise than as expressly permitted by this Agreement; or

(f)

Failing to comply with and satisfy Section 9.1 hereof by requiring any successor to the Company to assume and agree to perform the Company’s obligations hereunder.

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(a)

The acquisition by any individual, entity, or group (a “Person”), including a “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but excluding an Affiliate (as defined below) of the Company, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 15 percent (15%) or more of either: (i) the then outstanding shares of common stock of the Circuit City Group (the “Outstanding Common Stock”); or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from the Company (excluding an acquisition resulting from the exercise of an option, conversion right, or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company); (B) any acquisition by the Company; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 8.2;

(b)

Individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to the Effective Date, whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board;

(c)

The consummation of a reorganization, merger or consolidation of the Company or sale or other disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which: (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Common Stock and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of,

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respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation, which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and the Outstanding Voting Securities, as the case may be; (ii) no Person (other than: the Company; any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Common Stock or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, twenty-five percent (25%) or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors; and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

(d)

The consummation of a plan of complete liquidation, dissolution, or sale of substantially all the assets of the Company.

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(a)

Base Salary and all other benefits due him as if he had remained an employee pursuant to Article 4 through the remainder of the month in which the termination occurs, less applicable withholding taxes and other authorized payroll deductions;

(b)

The amount equal to a pro rata share of target Annual Bonus for the calendar year in which the Effective Date of Termination occurs (the calculation by which the Annual Bonus is multiplied by a fraction, the numerator of which is the number of full completed days in the bonus plan year through the Effective Date of Termination, and the denominator of which is three hundred sixty-five (365);

(c)

A lump-sum severance allowance in an amount which is equal to the product of three (3) times both the Executive’s Base Salary at the rate in effect immediately prior to the termination and the Executive’s target Annual Bonus established for the fiscal year in which the Executive’s termination of employment occurs;

(d)

Continuation at the same cost to the Executive as existed as of the Effective Date, of all health, welfare, and benefit plan participation for three (3) full years following employment termination, provided that the applicable COBRA health insurance benefit continuation period shall begin as of the Effective Date of Termination;

(e)

Provision of outplacement services for the Executive not to exceed a cost of fifty thousand dollars ($50,000); and

(f)

A lump-sum payment equal to the three (3) year costs of perquisites outlined in Section 4.6 above.

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