UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 20, 2006
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CIRCUIT CITY STORES, INC.
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of
incorporation or organization)
001-05767 54-0493875
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(Commission (I.R.S. Employer
File No.) Identification No.)
9950 Mayland Drive, Richmond, Virginia 23233
(Address of principal executive offices) (Zip Code)
(804) 527-4000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01. Entry into a Material Definitive Agreement.
On February 20, 2006, the Compensation and Personnel Committee (the "Committee")
of the Board of Directors of Circuit City Stores, Inc. (the "Company") approved
compensation changes under the existing Employment Agreement between the Company
and Philip J. Schoonover. These changes are effective March 1, 2006 in
connection with the promotion of Mr. Schoonover to Chief Executive Officer and
President. The Committee made these changes in consultation with the
compensation consultant to the Committee, after a review of performance and
competitive market data.
Mr. Schoonover's base salary was increased from $725,000 to $900,000. Beginning
with fiscal year 2007, his target bonus was increased from 90% of base salary to
100% of base salary. The Committee also provided Mr. Schoonover with an increase
in relocation allowance up to $50,000, net of taxes.
Under the Circuit City Stores, Inc. 2003 Stock Incentive Plan (the "Plan"), the
Committee awarded the following stock option and restricted stock grants to Mr.
Schoonover: (1) a non-qualified stock option to purchase 1,000,000 shares of the
Company's common stock vesting one-third on each of the third, fourth and fifth
anniversaries of the grant date and expiring ten years from the grant date; (2)
a grant of 15,000 shares of time-based restricted stock vesting 100% on July 1,
2009; and (3) a grant of 15,000 shares of performance-accelerated restricted
stock that will vest on July 1, 2009 with a provision for accelerated vesting
based upon attainment of operating profit margin at the levels set for the
Company's current long-term incentive program. The effective date of grant of
the stock options, time-based restricted stock and performance-accelerated
restricted stock grants is March 1, 2006. The stock options will be
non-statutory stock options and the exercise price for the options shall be 100%
of the Fair Market Value (as defined in the Plan) on the date of grant.
The equity awards to Mr. Schoonover will be subject to the terms and conditions
under the Form of Performance Accelerated Restricted Stock Award letter, Form of
Time-Based Restricted Stock Award letter and Form of Non-Qualified Stock Option
Grant letter on file with the Securities and Exchange Commission as Exhibits
10.1, 10.2 and 10.3 to the Company's Form 8-K filed on June 23, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CIRCUIT CITY STORES, INC.
By: /s/ Reginald D. Hedgebeth
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Reginald D. Hedgebeth
Senior Vice President, General Counsel &
Secretary
Date: February 23, 2006