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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): December 13, 2007
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CIRCUIT CITY STORES, INC.
(Exact name of registrant as specified in its charter)
Virginia 1-5767 54-0493875
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
9950 Mayland Drive
Richmond, Virginia 23233
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 486-4000
Not Applicable
(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))
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(e) On December 13, 2007, the Board of Directors of Circuit City Stores,
Inc. (the "Company") approved a special cash retention award for each of its
executive vice presidents and senior vice presidents. The terms of each cash
retention award will be set forth in a letter agreement (the "Agreement")
between the Company and the officer. Under the Agreement, each award is
effective as of January 1, 2008 and vests over a three-year period from that
date. The total amount of the award for each executive vice president will be
$1,000,000, and the total amount of the award for each senior vice president
will be $600,000.
For all of these officers, the award vests on January 1, 2009 with respect
to 50% of the total amount, on January 1, 2010 with respect to 33% of the total
amount and on January 1, 2011 with respect to the remaining 17%. The right to
receive any amount that has vested is contingent on the officer's continuous
full-time employment with the Company through the respective vesting date. The
officer will forfeit any unvested amounts upon his or her termination of
employment, except for termination due to death or permanent disability. For
terminations for those reasons, the next amount of the award to vest following
such termination will vest effective as of the death or termination for
disability, and any remaining unvested amounts will be forfeited.
The officers who will receive the cash retention award include Bruce H.
Besanko, Executive Vice President and Chief Financial Officer, and George D.
Clark, Jr., Executive Vice President - Multi-Channel Sales, Reginald D.
Hedgebeth, Senior Vice President, General Counsel and Secretary, and Eric A.
Jonas, Jr., Senior Vice President - Human Resources, each of whom is a "named
executive officer" of the Company, as set forth in the Company's most recent
proxy statement. The Board of Directors also approved a special cash retention
award for each of the Company's employees at the vice president and director
levels. Philip J. Schoonover, the Company's Chairman, President and Chief
Executive Officer, will not be participating in this retention plan.
The cash retention award is an additional incentive award for the Company's
executive officers and other key employees on its leadership team. The purpose
of the award is to ensure the stability of the Company's leadership team by
providing an incentive for these individuals to remain with the Company during
the period that the award vests. The Company believes that the award is an
important component of its compensation package at a time when the Company is
seeking to successfully execute its business strategy.
The full text of the form of the Agreement for the awards described above
is attached as Exhibit 10.1 to this report and is incorporated by reference into
this Item 5.02.
In addition to the approval of the cash retention awards by the Board of
Directors, the Compensation and Personnel Committee approved long-term incentive
awards to the chief executive officer and each of its executive vice presidents
and senior vice presidents under the Company's 2003 Stock Incentive Plan. All of
the awards will be effective and valued as of January 1, 2008. The awards will
be in the form of options to acquire shares of the Company's common stock that
will vest equally over each of the first three anniversaries of the effective
date. The award for the chief executive officer will be valued at $2,925,000,
except that the maximum number of shares of the Company's common stock subject
to the option, once it is determined, will be 710,000. The award for each
executive vice president will be valued at $775,000, the award for each senior
vice president who is on the Company's executive management team, including
Messrs. Hedgebeth and Jonas, will be valued at $325,000 and the award for each
other senior vice president will be valued at $300,000. The exact number of
shares and the exercise price for each award will be fixed on the effective
date, using the fair market value of the Company's common stock at the close of
business on December 31, 2007.
The right to receive the full value of the option is contingent on the
officer's continuous full-time employment with the Company through each of the
vesting dates. The officer will forfeit any unvested amounts upon his or her
termination of employment, except for termination due to death or disability.
The option will become fully vested in the event of death or disability.
The Compensation and Personnel Committee also approved long-term incentive
awards for each of the Company's employees at the vice president, director,
store director and other comparable position levels. The Company has not granted
long-term incentive awards generally to its officers and other employees since
2005.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Form of Letter Agreement between Circuit City
Stores, Inc. and each of Bruce H. Besanko,
George D. Clark, Jr., Reginald D. Hedgebeth and
Eric A. Jonas, Jr.
SIGNATURES
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.
(Registrant)
Date: December 19, 2007 By: /s/ Reginald D. Hedgebeth
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Reginald D. Hedgebeth
Senior Vice President,
General Counsel and Secretary
EXHIBIT INDEX
Exhibit No. Description
10.1 Form of Letter Agreement between Circuit City Stores, Inc. and
each of Bruce H. Besanko, George D. Clark, Jr., Reginald D.
Hedgebeth and Eric A. Jonas, Jr.