UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No. )
Filed by
the Registrant ¨
Filed by
a Party other than the Registrant x
Check the
appropriate box:
¨ Preliminary
Proxy Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
¨ Definitive
Proxy Statement
¨ Definitive
Additional Materials
x Soliciting
Material Under Rule 14a-12
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CIRCUIT
CITY STORES, INC.
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(Name
of Registrant as Specified in Its Charter)
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WATTLES
CAPITAL MANAGEMENT, LLC
HKW
TRUST
MARK
J. WATTLES
JAMES
A. MARCUM
ELLIOTT
WAHLE
DON
R. KORNSTEIN
ANTHONY
BERGAMO
ALEXANDER
M. BOND
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|
(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
x No
fee required.
¨ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
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|
(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined):
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(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
¨ Fee
paid previously with preliminary materials:
¨ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount
previously paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
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Wattles
Capital Management, LLC (“WCM”), together with the other participants named
herein, is filing materials contained in this Schedule 14A with the Securities
and Exchange Commission (“SEC”) in connection with the solicitation of proxies
for the election of a slate of director nominees at the 2008 annual meeting of
shareholders (the “Annual Meeting”) of Circuit City Stores, Inc., a Virginia
corporation (“Circuit City”). WCM has not yet filed a proxy statement
with the SEC with regard to the Annual Meeting.
Item 1:
On February 26, 2008, The Wall Street Journal published the following news
story:
Wattles
Nominates Slate of 5 To
Circuit City Board
By
GARY MCWILLIAMS
February
26, 2008; Page A14
Investor
Mark J. Wattles disclosed plans to nominate his own slate of five directors at
Circuit City Stores
Inc., criticizing managers at the Richmond, Va., consumer-electronics retailer
for failing to deliver a turnaround.
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Circuit
City shares have lost 76% of their value in the last year as losses surged
after changes to store staffing and operations. The company had earlier
forecast a "modest loss" for the fiscal fourth quarter ending Friday after
reporting a $207 million third-quarter loss. It hasn't yet released
results for the final period or full year.
Mr.
Wattles, principal of Wattles Capital Management LLC and the founder of
video-rental chain Hollywood Entertainment, holds a 6.5% stake in Circuit
City, which has about $12 billion in annual sales. Yesterday was the last
day to nominate directors for the June 24 stockholders'
meeting.
In
a telephone interview, Mr. Wattles said he nominated the slate after being
rebuffed in recent attempts to meet with Circuit City executives, whom he
criticized for worsening the company's financial picture. He said
executives have "lost the faith" of employees and investors, and he
expects an election of his slate would help lead to a new management
team.
A
spokesman for Circuit City released a statement saying directors "will
consider these nominations in due course," but declined further
comment.
The
filing with the Securities and Exchange Commission was disclosed after the
end of regular trading. Circuit City shares rose 19 cents to $4.87 in 4
p.m. composite trading on the New York Stock Exchange, then lost one cent
in after-hours trading.
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Mr.
Wattles also described himself as "in complete disagreement" with Circuit City
Chief Executive Philip J. Schoonover's appraisal of the retailer's woes. He
blasted Mr. Schoonover for what he said was a history of blaming past management
and bad retail locations for the company's problems. "The solution is not in
changing real estate. The solution is changing the way they operate in existing
real estate," said Mr. Wattles.
Mr.
Wattles described his nominees as intended to improve shareholder results, and
denied interest in running Circuit City or combining his firm's 32-store
Ultimate Electronics chain with the retailer.
"The
current CEO has been the president or CEO for three years now," said Mr.
Wattles, noting that the company's annual pretax earnings, once as high as $400
million, are now estimated at a loss of $100 million to $200 million for the
fiscal year.
His
Colorado-based investment company acquired the Ultimate Electronics retail chain
nearly three years ago, and began acquiring its Circuit City stake, which now
totals about 11 million shares, in December. Mr. Wattles' slate includes two
executives who worked with him at Hollywood Entertainment: James A. Marcum,
former chief financial officer of the chain, and Alexander M. Bond, a former
senior vice president of finance and new-business development.
The
remaining Wattles Capital Management nominees are Elliott Wahle, chief executive
of Rustique Home Furnishings and a former Toys "R" Us executive in Canada; Don
R. Kornstein, former interim chairman of Bally Total Fitness and an investment
consultant; and Anthony Bergamo, former director of restaurant chain Lone Star
Steakhouse & Saloon Inc.
Write to Gary McWilliams at
gary.mcwilliams@wsj.com
CERTAIN
INFORMATION CONCERNING PARTICIPANTS
Wattles
Capital Management, LLC (“WCM”), together with the other Participants (as
defined below), intends to make a preliminary filing with the Securities and
Exchange Commission (“SEC”) of a proxy statement and accompanying proxy card to
be used to solicit votes for the election of its slate of director nominees at
the 2008 annual meeting of shareholders of Circuit City Stores, Inc.,
a Virginia corporation (the “Company”).
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WCM
STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT
WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY STATEMENT WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE
SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON
REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS'
PROXY SOLICITOR.
The
participants in the proxy solicitation are anticipated to be WCM, HKW Trust,
Mark J. Wattles, James A. Marcum, Elliott Wahle, Don R. Kornstein, Anthony
Bergamo and Alexander M. Bond (collectively, the “Participants”). As
of February 25, 2008, WCM beneficially owned 11,000,000 shares of common stock
of the Company (the “Shares”), consisting of 1,000,000 Shares owned by HKW
Trust. The 11,000,000 Shares beneficially owned by WCM
constitutes approximately 6.5% of the Shares
outstanding. Because Mr. Wattles owns all of the membership
interests of WCM and serves as sole trustee of HKW Trust, he may be deemed to
beneficially own the 11,000,000 Shares beneficially owned by WCM and HKW
Trust. Mr. Bond directly owns 10,000 Shares. Currently,
Messrs. Marcum, Wahle, Kornstein and Bergamo do not directly own any Shares of
the Company. As members of a “group” for the purposes of Rule 13d-5(b)(1) of the
Securities Exchange Act of 1934, as amended, each of Messrs. Marcum, Wahle,
Kornstein, Bergamo and Bond is deemed to beneficially own the 11,000,000 Shares
owned by WCM, constituting approximately 6.5% of the Shares
outstanding.
Contact:
Wattles
Capital Management, LLC
Mark
J. Wattles: (303) 801-4003
Alex
Bond: (503) 348-0933
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