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): June 26, 2006
CIRCUIT CITY STORES, INC.
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation)
001-05767 54-0493875
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(Commission File Number) (I.R.S. Employer
Identification Number)
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.
Non-Employee Director Compensation
On June 26, 2006, the Board of Directors of Circuit City Stores, Inc. (the
"Company") modified the Schedule of Non-Employee Director Compensation filed as
Exhibit 10.1 to this report. To be consistent with the annual practice of
granting of equity awards to non-employee directors, the Restricted Stock Units
awarded to non-employee directors will vest 100% on the first anniversary of the
grant date of the award. Previously, these awards vested ratably over a
three-year period. No other changes were made to Non-Employee Director
Compensation and the modification did not affect the number of Restricted Stock
Units awarded annually to non-employee directors. The form of Restricted Stock
Unit Award Agreement to be used for these awards is attached as Exhibit 10.2.
The changes are effective with the 2006 awards which were granted on June 27,
2006.
Letter Agreement with Fiona Dias
The Company announced on June 26, 2006 that Fiona P. Dias has decided to step
down as executive vice president, chief marketing officer for personal reasons
effective August 27, 2006. From August 28, 2006, through December 31, 2006, she
will assume a new role with the company as executive advisor of strategic
branding initiatives.
As executive advisor, Ms. Dias will assist in the transition of the chief
marketing officer role and assist with select projects, including the planned
launch of a new services brand later this year.
The Company and Ms. Dias entered into a Letter Agreement in connection with her
transition which is attached as Exhibit 10.3.
Form of Restricted Stock Award Agreement
Effective June 26, 2006, the Compensation and Personnel Committee (the
"Committee") approved a change to the form of performance accelerated restricted
stock award letter and the form of time-based restricted stock award letter to
be used under the Amended and Restated 2003 Stock Incentive Plan (the "Plan")
for equity awards to executive officers. The change relates to a provision
containing a stock price performance condition that applies if an executive is
one of the Named Executive Officers ("NEO") of the Company in the Proxy
Statement for the most recent fiscal year end on the final date of vesting.
Previously, the provision in the award letter required that the Company's stock
price must be at least $23 per share for any unvested shares of restricted stock
to vest for a NEO. However, following an increase in the Company's stock price
since adoption of the form of award letter in June 2005, the Committee decided
that this vesting threshold should be replaced in new awards by one that will
vary with the Company's stock price. Consequently, the Committee amended the
form of award letter to specify the stock price vesting condition as a price per
share which is 10% higher than the fair market value (as defined in the Plan) of
the Company's stock on the grant date, rounded to the nearest dollar. The new
form of performance accelerated restricted stock award letter is attached as
Exhibit 10.4 and the new form of time-based restricted stock award letter is
attached as Exhibit 10.5.
Item 1.02. Termination of a Material Definitive Agreement.
The employment agreement between Circuit City Stores, Inc. and Fiona P. Dias
dated December 4, 2003, was terminated on June 26, 2006 in connection with entry
into the Letter Agreement described above at Item 1.01.
SECTION 8 - OTHER EVENTS
Item 8.01. Other Events
On June 27, 2006, at the 2006 Annual Shareholder Meeting, the Company's
shareholders elected each of Ronald M. Brill, Michael E. Foss, Mikael Salovaara
and Philip J. Schoonover to a three year term on the Board of Directors. In
addition, the shareholders elected Barbara S. Feigin to a one-year term.
The Board of Directors elected Philip J. Schoonover as chairman, succeeding W.
Alan McCollough who retired as Chief Executive Officer in February 2006 and
retired from the Board following the annual meeting.
The Board of Directors appointed Mikael Salovaara, an independent director, to
serve as the lead director until the next Annual Meeting of Shareholders. Mr.
Salovaara will preside over executive sessions of the non-management directors
and will also serve as chair of the Nominating and Governance Committee. Ursula
O. Fairbairn was appointed as Chair of the Compensation and Personnel Committee
for the same term.
The Board committee assignments are as follows:
Audit Committee:
Ronald M. Brill, Chair
Carolyn H. Byrd
Allen B. King
J. Patrick Spainhour
Carolyn Y. Woo
Compensation and Personnel Committee:
Ursula O. Fairbairn, Chair
Barbara S. Feigin
James F. Hardymon
Alan Kane
Mikael Salovaara
Nominating and Governance Committee:
Mikael Salovaara, Chair
Ursula O. Fairbairn
Barbara S. Feigin
James F. Hardymon
Alan Kane
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
10.1 Schedule of Non-Employee Director Compensation
10.2 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors
10.3 Letter Agreement between Circuit City Stores, Inc. and Fiona P. Dias
10.4 Form of Performance Accelerated Restricted Stock Award letter
10.5 Form of Time-Based Restricted Stock Award letter
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.
By: /s/ Reginald D. Hedgebeth
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Reginald D. Hedgebeth
Senior Vice President, General Counsel and
Secretary
Dated: June 29, 2006
EXHIBIT INDEX
Exhibit No. Description of Exhibit
10.1 Schedule of Non-Employee Director Compensation
10.2 Form of Restricted Stock Unit Award Agreement for Non-Employee Directors
10.3 Letter Agreement between Circuit City Stores, Inc. and Fiona P. Dias
10.4 Form of Performance Accelerated Restricted Stock Award letter
10.5 Form of Time-Based Restricted Stock Award letter