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): May 26, 2005
REX STORES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-09097 31-1095548
(State or other jurisdiction (Commission File No.) (IRS Employer Identification No.)
of incorporation)
2875 Needmore Road, Dayton, Ohio 45414
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (937) 276-3931
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))
Item 1.01. Entry into a Material Definitive Agreement.
In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004),"Share-Based Payment"
(SFAS 123R). SFAS 123R will require that compensation cost related to
share-based payment transactions, including stock options, be recognized in the
financial statements. Currently, the Company accounts for its share-based
payment transactions under the provisions of APB 25, which does not necessarily
require the recognition of compensation cost in the consolidated statement of
income in the financial statements.
On May 26, 2005, in response to SFAS 123R, the Company's Board of Directors at
its annual meeting approved accelerating the vesting of out-of-the-money,
unvested stock options held by current employees, including non-director
executive officers. No options held by directors were subject to acceleration of
vesting. An option was considered out-of-the-money if the stated option exercise
price was greater than $13.82, which was the closing price of the Company's
common stock on May 26, 2005. The accelerated vesting was effective as of May
26, 2005. The following table summarizes the options subject to acceleration:
Aggregate Number of
Shares Issuable Weighted Average
Under Accelerated Exercise Price
Stock Options Per Share
------------- ---------
Executive Officers
Douglas L. Bruggeman 14,000 $14.745
David Fuchs 14,000 $14.745
Phillip Kellar 4,000 $14.745
Keith Magby 14,000 $14.745
Zafar Rizvi 14,000 $14.745
------
Total Executive Officers 60,000 $14.745
All other employees 58,000 $14.745
------
Total 118,000 $14.745
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The decision to accelerate vesting of these options was made to avoid
recognizing compensation cost in the statement of income in future financial
statements upon the adoption of SFAS 123R. The Company estimates that the
maximum future compensation expense that will be avoided, based on the Company's
implementation date for SFAS 123R of February 1, 2006, is approximately $547,000
(net of income tax expense of $356,000), of which approximately $278,000 is
related to options held by executive officers of the Company. The Company will
report the avoided future compensation expense in the 2005 financial statements
as pro forma footnote disclosures, as permitted under the transition guidance
provided by the Financial Accounting Standards Board.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REX STORES CORPORATION
Date: May 31, 2005 By: /s/ DOUGLAS L. BRUGGEMAN
--------------------------------
Name: Douglas L. Bruggeman
Title: Vice President - Finance,
Chief Financial Officer
and Treasurer