UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended February 28, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________ to _________
Commission File No.: 1-5767
CIRCUIT CITY STORES, INC.
(Exact name of Registrant as specified in its charter)
VIRGINIA 54-0493875
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
9950 Mayland Drive
Richmond, Virginia 23233
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (804) 527-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Stock, Par Value $0.50 per share New York Stock Exchange
Rights to Purchase Preferred Stock,
Series E, Par Value $20.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [|X|].
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No ___
The aggregate market value of the Registrant's common shares held by
non-affiliates as of August 30, 2002, which was the last business day of the
Registrant's most recently computed second fiscal quarter, was $2,927,916,030
based upon the closing price of these shares as reported by the New York Stock
Exchange on that date.
On April 30, 2003, the company had outstanding 207,197,012 shares of
common stock.
Page 1 of 17
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference in Parts
I, II, III and IV of this Annual Report on Form 10-K: (1) pages 15 through 46 of
the company's Annual Report for the fiscal year ended February 28, 2003, (Parts
I, II and IV) and (2) "Item One-Election of Directors," "Beneficial Ownership of
Securities," "Compensation of Executive Officers," "Compensation of Directors,"
"Section 16(a) Beneficial Ownership Reporting Compliance" and "Equity
Compensation Plan Information" in the company's Definitive Proxy Statement dated
May 9, 2003, furnished to shareholders of the company in connection with the
2003 Annual Meeting of Shareholders (Part III).
TABLE OF CONTENTS
Item Page
PART I
1. Business ......................................................................................................... 3
2. Properties ....................................................................................................... 8
3. Legal Proceedings................................................................................................. 10
4. Submission of Matters to a Vote of Security Holders............................................................... 10
Executive Officers of the Company................................................................................. 10
PART II
5. Market for the Company's Common Equity and Related Shareholder Matters ........................................... 11
6. Selected Financial Data........................................................................................... 11
7. Management's Discussion and Analysis of Results of Operations and Financial Condition............................. 11
7A. Quantitative and Qualitative Disclosures about Market Risk ....................................................... 11
8. Financial Statements and Supplementary Data....................................................................... 12
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............................. 12
PART III
10. Directors and Executive Officers of the Company................................................................... 12
11. Executive Compensation............................................................................................ 12
12. Security Ownership of Certain Beneficial Owners and Management.................................................... 12
13. Certain Relationships and Related Transactions.................................................................... 12
14. Controls and Procedures........................................................................................... 12
PART IV
15. Exhibits, Financial Statement Schedules and Reports on Form 8-K................................................... 13
Signatures........................................................................................................ 14
Certifications.................................................................................................... 16
Schedule II....................................................................................................... S-1
Exhibit Index..................................................................................................... EI-1
Page 2 of 17
PART I
Item 1. Business.
Circuit City Stores, Inc. was incorporated under the laws of the
Commonwealth of Virginia in 1949. Its corporate headquarters are located at 9950
Mayland Drive, Richmond, Va. Its retail operations consist of Circuit City
Superstores and mall-based Circuit City Express stores. The Company has a
finance operation including a wholly owned credit card bank, First North
American National Bank, that provides consumer revolving credit.
The company's Web site address is www.circuitcity.com. The company
makes available, free of charge through its Web site, its Annual Report on Form
10-K, quarterly reports or Form 10-Q, current reports on Form 8-K and any
amendments to those reports as soon as practicable after filing or furnishing
the material with the Securities and Exchange Commission.
Capital Structure. From February 7, 1997, to October 1, 2002, the
common stock of Circuit City Stores, Inc. consisted of two common stock series
that were intended to reflect the performance of the company's two businesses.
The Circuit City Group common stock was intended to reflect the performance of
the Circuit City consumer electronics stores and related operations and the
shares of CarMax Group common stock reserved for the Circuit City Group or for
issuance to holders of Circuit City Group common stock. The CarMax Group common
stock was intended to reflect the performance of the CarMax auto superstores and
related operations.
Effective October 1, 2002, the CarMax auto superstore business was
separated from the Circuit City consumer electronics business through a tax-free
transaction in which CarMax, Inc., formerly a wholly owned subsidiary of Circuit
City Stores, Inc., became an independent, separately traded public company.
Following the separation, the Circuit City Group common stock was renamed
Circuit City common stock. See "Discontinued Operations" below for additional
information.
General. Circuit City is a leading national retailer of brand-name
consumer electronics, personal computers and entertainment software. It sells:
o video equipment, including televisions, digital satellite systems,
DVD players, video cassette recorders, camcorders and cameras;
o audio equipment, including home and portable audio systems;
o mobile electronics, including car audio, video and security
systems;
o home office products, including personal computers, printers,
peripherals, software and facsimile machines;
o entertainment software, including video games, DVD movies and
music; and
o other consumer electronics products,including wireless phones,
corded and cordless phones and accessories.
Merchandise lines vary by location based on store size and market
characteristics. Most merchandise is supplied directly to the stores by regional
warehouse distribution facilities.
Prior to fiscal year 2002, Circuit City sold major appliances. In
fiscal year 2001, the company exited the major appliance category and expanded
its selection of key consumer electronics and home office products in all
Circuit City Superstores. See "Appliance Exit" below for additional information.
Through Digital Video Express, 75 percent of which was owned by the
company, Circuit City developed a new digital video system for watching movies
at home. Divx was primarily engaged in the business of licensing this technology
and replicating and distributing specially encrypted DVDs at wholesale. Circuit
City was allocated 100 percent of Divx's losses from Divx's inception. The Divx
business was discontinued in fiscal 2000. See "Discontinued Operations" below
for additional information.
Expansion and Revitalization. At April 30, 2003, Circuit City operated
626 retail locations throughout the United States. Circuit City has established
its presence in virtually all of the nation's top 100 markets and, therefore,
contemplates only limited geographic expansion. However, the company expects to
add to the existing store base as attractive market opportunities arise. In
fiscal 2004, Circuit City expects to open approximately eight new Circuit City
Superstores.
Recognizing the continual evolution of consumer shopping preferences,
three years ago the company created a new store design in-step with today's
consumer, but also flexible enough to meet future demands. New stores have a
brighter, more contemporary look and an open, easily navigable floor plan
conducive to browsing. The company has improved product adjacencies so that
customers can not only better compare features and benefits across product
categories, but also can shop for related accessories and peripherals in
convenient proximity. Shopping carts, baskets and cash register checkouts at the
front of the store create a comfortable shopping environment for the growing
level of take-with products in the stores. Standardized
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fixtures accommodate more take-with selections and provide greater flexibility
to adapt to future changes in Circuit City's product categories.
At the same time, the company has focused on opportunities to upgrade
and improve the existing store base. In the last three years, the company
conducted several remodeling tests and developed a framework for evaluating
store sites and determining the optimal upgrade approach. In fiscal 2003, the
company conducted the first large-scale phase of the remodeling initiative with
a remodeled video department and full-store lighting upgrade installed in 299
Superstores, including 79 stores that had been newly constructed or fully
remodeled in the last three years. The video department remodel allows the
company to better showcase this category as consumer interest in digital
televisions and other new display technologies, including flat panel plasma and
LCD televisions, continues to rise. Based on the favorable returns on full-store
remodels, the company plans to continue the multi-year remodeling program,
adapting more locations to the buying patterns of consumers and supporting the
new store operating model. Full remodeling of approximately five stores and the
installation of new fixtures in approximately 200 stores is planned for fiscal
2004. The new fixtures will help make more products available on the sales floor
for customers, create better adjacencies and expand product assortments in some
stores. The new fixtures also should further support the company's simplified
store operating model and give the company greater flexibility to shift
merchandise displays within the store as new products and technologies are
introduced.
Where trade areas have shifted away from a store site, the company has
chosen to strategically relocate the store to a more vibrant and convenient
location. Circuit City relocated 11 Superstores in fiscal 2003. The company has
been especially pleased with the performance of relocated stores and intends to
accelerate the relocation activities, relocating 18 Superstores to 22
Superstores in fiscal 2004. The company expects to accelerate the relocation
pace with a target of 50 relocations, depending upon real estate availability,
in fiscal 2005.
At April 30, 2003, 103 Superstores, or 17 percent of the 611
Superstores had been fully remodeled, relocated or newly constructed within the
last three years.
Merchandising. Each Circuit City store location follows detailed
operating procedures and merchandising programs. Included are procedures for
inventory maintenance, customer relations, store administration, merchandise
display, store security and the demonstration and sale of products. Most
merchandise is supplied directly to the stores from one of Circuit City's seven
automated distribution centers, which are strategically located around the
country, and from a centrally located automated software entertainment
distribution center. Circuit City uses a centralized buying organization. The
central buying staff reduces costs by purchasing in large volumes and
structuring a sound basic merchandising program. To improve the company's
competitive position, Circuit City has initiated an effort to source more
product directly from overseas manufacturers. The primary purposes of direct
importing are to lower product acquisition costs and to increase product
differentiation. Circuit City's merchandising strategy emphasizes a broad
selection of products, including the industry's newest technologies, and a wide
range of prices. Merchandise mix and displays are controlled centrally to help
ensure a high level of consistency among the stores. Merchandise pricing can
vary by market to reflect local competitive conditions.
Suppliers. During fiscal 2003, Circuit City's 10 largest suppliers
accounted for approximately 59 percent of merchandise purchased. Circuit City's
major suppliers include Sony Corporation; Hewlett Packard; Panasonic; Thomson
Multimedia, Inc.; JVC Company of America; Toshiba; Hitachi America LTD; Apex
Digital, Inc.; eMachines, Inc. and Universal Music and Video Distribution.
Brand-name advertised products are sold by all Circuit City retail locations. In
fiscal 2003, the company created alliances with key manufacturers to provide
unique product offerings not available at other big-box retailers. For example,
Circuit City has teamed with Sharper Image Corporation to put the "best of
Sharper Image products" on the shelves and has partnered with Sharp Systems of
America to be the exclusive national retailer for their award-winning Actius
line of ultra-thin laptop computers. Circuit City has no significant long-term
contracts for the purchase of merchandise.
Advertising. Circuit City's business relies on considerable amounts of
advertising to maintain high levels of consumer awareness. Advertising
expenditures from continuing operations were 3.5 percent of net sales and
operating revenues in fiscal 2003, 3.8 percent in fiscal 2002 and 4.1 percent in
fiscal 2001. Circuit City uses multi-page newspaper advertisements, network and
cable television advertising, magazine advertising, direct mail and interactive
media. The multi-page newspaper advertisements provide an extensive presentation
of the range of consumer electronics products sold at Circuit City stores and
generally feature products at highly competitive prices. Circuit City is
generally one of the largest newspaper advertisers in markets that it serves.
Television and magazine advertising generally features the company's low price
guarantee, called Price Match Plus, but focuses on differentiating elements in
the service offer such as the "no-hassle" return policy, freedom from restocking
fees and the Web site's Express Pickup feature.
Competition. The consumer electronics industry is highly competitive.
Circuit City's competitors include large specialty, discount or warehouse
retailers as well as local, regional and Internet-based retailers. As part of
its competitive strategy, Circuit City offers what it believes to be highly
competitive prices on the merchandise stocked in its stores and offered on its
Web site. But the company also offers a low-price guarantee, called Price Match
Plus. Under this guarantee, for every product that Circuit City sells, with some
restrictions, the company will meet any advertised price from a local store
stocking
Page 4 of 17
the same new item. In most cases, if a customer finds a lower advertised price,
including Circuit City's own sale price, within 30 days, then Circuit City will
refund the difference plus 10 percent of the difference to the customer.
Customers who order on the Web, but pick up their product at the store using the
Express Pickup feature, automatically receive the lower of the Web price or the
in-store price.
Circuit City distinguishes its stores from the competition by offering
a broad merchandise assortment and delivering higher customer service levels.
For each major product category the company balances the assortment to include
opening and mid-level price points along with fully featured, high-end
technology items that carry higher prices. Product specialists, trained using
comprehensive online training courses; convenient credit options;
factory-authorized product repairs; home delivery and home installation; onsite
installation centers for automotive electronics; and no-hassle exchange,
no-lemon and no restocking fee policies all demonstrate Circuit City's strong
commitment to customer service. Every Circuit City purchase, whether made at a
store or on the company's Web site, can be returned or exchanged at any of the
company's 600 plus stores, and Circuit City is the only national consumer
electronics chain that does not charge restocking fees. The company also offers
a comprehensive CityadvantageSM Protection Plan that provides product protection
beyond the manufacturers' warranties. The Protection Plan options include a
Replacement Protection Plan, which reimburses the customer via check or gift
card for the original purchase price of defective electronics that are
uneconomical to repair.
Customer Satisfaction. Circuit City conducts market research to monitor
store operations and help ensure customer satisfaction. Market research
techniques used include focus groups, online customer satisfaction surveys from
BizRate.com, telephone interviews, exit interviews and "mystery shops," in which
a professional mystery shopper acts as a customer to evaluate customer service
performance. Quick feedback enables management to identify issues that need to
be addressed, ensuring that store and individual performance remain focused on
providing the highest possible level of customer service.
Employees/Training. At April 30, 2003, the company had 39,432 hourly
and salaried employees. In early February 2003, the company changed from a dual
pay structure, which included both commission and hourly pay, for the sales
force to a single hourly pay structure. Circuit City Superstores are staffed
with:
o sales support personnel such as customer service associates,
product specialists and stockpersons;
o a store director;
o two or more sales managers; and
o an operations manager or assistant store director.
None of these employees are subject to a collective bargaining agreement.
Additional personnel may be employed during peak selling seasons.
Store Associates receive periodic training delivered by customized
Web-based interactive courses, supported with in-store mentoring. Courses
include product knowledge with an emphasis on new technology, customer service
and store operations. Associates also receive online tutoring with links to
vendor Web sites for additional resources. In fiscal 2003, Circuit City adopted
a certification program for product specialists to establish minimum proficiency
levels and measure each product specialist's product knowledge and customer
service skills. Management training programs are designed to prepare future
leaders and include Web-based training, in-store activities, online tutoring and
classroom instruction.
Consumer Credit. The company's business is affected by consumer credit
availability, which varies with a number of factors, including the state of the
economy and the location of a particular store. In order to provide its
customers with more credit options, in fiscal 1991, the company established
FNANB, a federally chartered limited purpose credit card bank that is wholly
owned by the company.
From 1990 to June 2002, FNANB issued a private-label credit card, which
was a credit card that only could be used to purchase merchandise and services
from the company. In June 2002, in connection with the launch of a co-branded
Visa(R) credit card, FNANB stopped issuing new private-label credit accounts;
however, existing private-label accounts remain in place. The co-branded Visa
credit card, referred to as the Circuit City Plus(TM) card, bears both the
Circuit City and Visa names and is accepted not only at the company's stores and
www.circuitcity.com, but also worldwide wherever Visa credit cards are accepted.
FNANB also issues Visa credit cards that do not bear the Circuit City name.
These Visa credit cards and a small number of previously issued MasterCard(R)
accounts are serviced through the bankcard portfolio by FNANB. FNANB's credit
extension, customer service and collection operations are fully automated with
state-of-the-art technology to maintain a high level of profitability and
customer service. In fiscal 2003, approximately 18 percent of Circuit City's
total sales were made through its private-label and Circuit City Plus credit
cards and approximately 50 percent through third-party credit sources.
The receivables generated by FNANB's credit card programs are financed
through asset securitization programs. For additional discussion of these
programs, see "Off-Balance-Sheet Arrangements" on pages 26 and 27 and Note 6 to
the
Page 5 of 17
consolidated financial statements on pages 38 and 39 of the company's 2003
Annual Report, which is incorporated in this item by reference.
FNANB is regulated and supervised by the Office of the Comptroller of
the Currency. OCC regulations require, among other things, examination by the
OCC of FNANB's underwriting policies and procedures and compliance with certain
capital and earnings adequacy requirements. In addition, FNANB is required to
comply with both state and federal consumer protection laws including the Equal
Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection
Practices Act, Gramm-Leach-Bliley Act, Truth-in-Lending Act and USA PATRIOT Act.
Systems. Circuit City's in-store point-of-sale system maintains an
online record of all transactions and allows management to track performance by
region, store and individual sales counselor. The information gathered by the
system supports automatic replenishment of in-store inventory from the regional
distribution centers and is incorporated into product buying decisions. The POS
system is interfaced with FNANB's credit approval system. The in-store POS
system also is seamlessly integrated with the company's e-commerce Web site,
www.circuitcity.com. This integration provides the capability for in-store
pickup of merchandise ordered from the Internet and allows for in-store ordering
of merchandise for shipment directly to the customer's home. In the stores,
electronic signature capture for all credit card purchases, automatic printing
of manufacturers' rebates, bar-code scanning for product returns and repairs,
automatic price tag printing for price changes and computerized home delivery
scheduling enhance Circuit City's customer service. These enhancements eliminate
time-consuming administrative tasks for store Associates and reduce costs
through smoother store-level execution. The POS system also is directly
integrated with the registration systems of major Internet service providers
such as America Online, CompuServe and MSN, allowing in-store registration with
the interactive services to be completed in approximately five minutes. At
in-store kiosks, the POS system also allows customers to sign up for high speed
Internet service.
Circuit City's Customer Service Information System maintains an online
history of customer purchases and enables sales counselors to better assist
customers with purchases by ensuring that new products can be integrated with
existing products in the home. This system also facilitates product returns and
repairs.
The company also utilizes comprehensive, Web-based training systems to
enhance the product knowledge of in-store Associates.
Circuit City Direct. Circuit City's direct-to-consumer online business
continues to grow and provide:
o extensive product selection, including more than 300,000 music and
movie titles;
o in-depth product and technology information features, such as
convenient side-by-side comparisons; and
o more than 75,000 customer ratings and reviews.
Customers have a choice of placing their orders directly on www.circuitcity.com
or using 1-800-THE-CITY to place their orders over the phone. Internet customers
can check near-time inventory at any Circuit City store, in addition to the
in-stock availability for www.circuitcity.com. Delivery options include shipment
to anywhere in the United States, Express Pickup at any of the more than 600
Circuit City stores and newly added convenient home delivery of TVs 24 inches
and larger. Circuit City's customers also are able to order out-of-stock and
line extension products when shopping at any Circuit City store, giving them
access to a vastly expanded selection that can be shipped to anywhere in the
United States. Products purchased through the Web site can be serviced through,
exchanged at, or returned to any Circuit City Superstore location.
In addition to Circuit City's own Web site, the company has partnered
with Amazon.com to increase selection and convenience for Amazon's consumer
electronics shoppers by providing immediate in-store pickup at Circuit City
stores nationwide or shipping of thousands of electronics items to anywhere in
the United States. In cases where Amazon.com and Circuit City offer the same
electronics products, customers have the choice between traditional Amazon.com
shipping options and immediate pickup from a nearby Circuit City Superstore.
Items offered exclusively by Circuit City are available for either in-store
pickup or shipment from Circuit City's distribution channel; merchandise offered
exclusively by Amazon.com will be delivered from Amazon.com.
Distribution. As of April 30, 2003, Circuit City operated seven
automated regional electronics distribution centers, each designed to serve
stores within a 500-mile range. These centers use conveyor systems and laser
bar-code scanners to reduce labor requirements, prevent inventory damage and
maintain inventory control. Circuit City also operates one smaller distribution
center that primarily handles larger non-conveyable electronics products.
Circuit City believes that for most merchandise the use of the distribution
centers enables it to distribute efficiently a broad selection of merchandise to
its stores, reduce inventory requirements at individual stores, benefit from
volume purchasing and maintain accounting control. Circuit City also operates an
automated centralized entertainment software distribution center that serves all
stores and an import consolidation center that supports our distribution
network.
Page 6 of 17
Service. Circuit City offers service and repairs for most of the
merchandise it sells. The company also offers its comprehensive Cityadvantage
Protection Plan, which provides protection beyond the standard manufacturers'
warranties for computer products, home audio/video and mobile electronics. The
plan includes:
o terms up to five years,
o a nationwide service network,
o guaranteed repair or replacement,
o a no-lemon guarantee,
o in-home service options and
o unlimited power surge coverage.
For some electronics, such as portable stereo systems, VCRs, telephones, video
game systems, 35-mm cameras, fax machines and music keyboards, the Cityadvantage
options include a Replacement Protection Plan. If a customer purchases an RPP,
the customer can return defective merchandise during the plan period and receive
a check or Circuit City gift card for the original purchase price of the
merchandise.
Circuit City sells the Cityadvantage Protection Plan on behalf of
unaffiliated third parties that are the primary obligors. Under these
third-party warranty programs, Circuit City has no contractual liability to the
customer. Certain third-party warranty sales are not permitted in a few states
depending on the Protection Plan offered. In these states, Circuit City sells
the applicable Cityadvantage Protection Plan for which the company is the
primary obligor.
As of April 30, 2003, Circuit City had 15 regional factory-authorized
repair facilities. To meet customer needs, merchandise that requires service or
repair usually is moved by truck from the stores to the nearest regional service
facility and is returned to the store for customer pickup after repair. Circuit
City also has in-home technicians who service large items not conveniently
carried to the store.
Seasonality. Like many retail businesses, Circuit City's sales are
greater in the fourth quarter of the fiscal year than in other periods of the
fiscal year because of holiday buying patterns. A corresponding pre-season
inventory build-up is associated with this sales volume. This increased sales
volume results in a lower ratio of fixed costs to sales and a higher ratio of
net earnings to sales in the fourth fiscal quarter. Circuit City's net sales and
operating revenues from continuing operations for the fourth fiscal quarter,
which includes the holiday season, were $3.19 billion in fiscal 2003, $3.36
billion in fiscal 2002 and $3.15 billion in fiscal 2001. Fourth quarter sales
represented approximately 32 percent of net sales and operating revenues in
fiscal 2003, 35 percent in fiscal 2002 and 31 percent in fiscal 2001.
Appliance Exit. In the second quarter of fiscal 2001, the company began
to exit the major appliance category and expand its selection of key consumer
electronics and home office products in all Circuit City Superstores. This
process was completed in November 2000. To exit the appliance business, the
company closed eight distribution centers and eight service centers. The company
leases the majority of these closed properties. While the company has subleased
some of these properties, it continues the process of marketing the remaining
properties to be subleased.
In fiscal 2001, the company recorded appliance exit costs of $30.0
million. In the fourth quarter of fiscal 2002, the company recorded additional
lease termination costs of $10.0 million to reflect the changes in the rental
market for these leased properties. In fiscal 2003, the company made payments,
net of accretion expense, of $5.9 million for lease termination costs. The
appliance exit cost liability was $13.8 million at February 28, 2003, and $19.7
million at February 28, 2002.
Discontinued Operations. (A) CarMax: On September 10, 2002, the
company's shareholders approved the separation of the CarMax auto superstore
business from Circuit City Stores, Inc. and the company's board of directors
authorized the redemption of the company's CarMax Group common stock and the
distribution of CarMax, Inc. common stock to effect the separation. On October
1, 2002, the separation was effective and CarMax, Inc. became an independent,
separately traded public company. Each outstanding share of CarMax Group common
stock was redeemed in exchange for one share of CarMax, Inc. common stock. In
addition, each holder of Circuit City Group common stock received as a tax-free
distribution 0.313879 of a share of CarMax, Inc. common stock for each share of
Circuit City Group common stock owned as of September 16, 2002, the record date
for the distribution. Following the separation, the Circuit City Group common
stock was renamed Circuit City common stock. All CarMax results prior to the
separation date are presented as results from discontinued operations on the
consolidated statements of earnings. The company recorded no gain or loss as a
result of the separation.
With the separation, CarMax paid a special dividend of $28.4 million to
Circuit City Stores, Inc. in recognition of the company's continuing contingent
liability on leases related to 23 CarMax locations. Net earnings from the
discontinued CarMax operations were $64.5 million for fiscal 2003, representing
CarMax results for the seven months prior to the separation
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date. Net earnings from discontinued operations were $90.8 million in fiscal
2002 and $45.6 million in fiscal 2001. Reflected on the consolidated balance
sheet at February 28, 2002, were total assets of discontinued CarMax operations
of $720.2 million and total liabilities of discontinued CarMax operations of
$234.7 million. Discontinued operations related to CarMax have been segregated
on the consolidated statements of cash flows.
(B) DIVX: On June 16, 1999, Digital Video Express announced that it
would cease marketing the Divx home video system and discontinue operations. For
fiscal 2003, 2002 and 2001, the discontinued Divx operations had no impact on
the net earnings of the company. As of February 28, 2003, entities comprising
the discontinued Divx operations have been dissolved. The remaining Divx
liabilities, totaling $8.0 million, have been assumed by the company and are
included on the consolidated balance sheet at February 28, 2003.
Item 2. Properties.
At April 30, 2003, the company's Circuit City retail operations were
conducted in 626 locations, including 611 Superstores and 15 mall-based Circuit
City Express Stores.
Page 8 of 17
The following table summarizes the company's retail units as of April
30, 2003:
Express
Superstores Stores Total
Alabama 7 1 8
Arizona 10 - 10
Arkansas 4 - 4
California 83 - 83
Colorado 12 - 12
Connecticut 7 1 8
Delaware 2 - 2
Florida 45 - 45
Georgia 22 2 24
Hawaii 1 - 1
Idaho 2 - 2
Illinois 35 1 36
Indiana 15 - 15
Kansas 5 - 5
Kentucky 6 - 6
Louisiana 8 1 9
Maine 2 - 2
Maryland 17 - 17
Massachusetts 15 2 17
Michigan 23 1 24
Minnesota 9 1 10
Mississippi 3 - 3
Missouri 12 - 12
Nebraska 2 - 2
Nevada 5 - 5
New Hampshire 5 1 6
New Jersey 17 - 17
New Mexico 1 - 1
New York 29 1 30
North Carolina 18 1 19
Ohio 27 1 28
Oklahoma 4 - 4
Oregon 7 - 7
Pennsylvania 25 - 25
Rhode Island 1 - 1
South Carolina 8 - 8
Tennessee 13 - 13
Texas 48 - 48
Utah 5 - 5
Vermont 1 - 1
Virginia 25 1 26
Washington 12 - 12
West Virginia 4 - 4
Wisconsin 8 - 8
Wyoming 1 - 1
---------------------------------
611 15 626
=================================
Of the stores open at April 30, 2003, the company owns three stores and
leases the remaining stores.
Of the company's 10 distribution centers, nine are leased. The company
owns a 388,000-square-foot consumer electronics distribution center in Doswell,
Va., which has been financed with Industrial Development Revenue Bonds. For
information with respect to these bonds, see Note 9 to the consolidated
financial statements on page 40 of the company's 2003 Annual Report, which is
incorporated in this item by reference.
Page 9 of 17
The company owns one of its 15 service centers. In addition, the
company owns most of the land, but leases the three buildings, where its
corporate headquarters is located. The company leases space for all warehouse,
service and office facilities except for the aforementioned properties.
For information regarding the company's obligations under the leases
for its retail units, distribution centers, repair centers and other facilities,
see Note 12 to the consolidated financial statements on pages 41 and 42 of the
company's 2003 Annual Report, which is incorporated herein by reference.
Item 3. Legal Proceedings.
As previously reported in the Company's Annual Report on Form 10-K/A
for the fiscal year ended February 28, 2002, and the Company's Quarterly Reports
on Form 10-Q for the quarters ended May 31, August 31, and November 30, 2002, a
consolidated amended class action complaint, which alleged federal securities
law violations by the Company and its chief executive officer, chief financial
officer and principal accounting officer, was filed in the United States
District Court for the Eastern District of Virginia. The Company and the
individual Defendants filed a motion to dismiss the suit that was heard by the
Court in January of 2003. In February 2003 the Court granted the motion and
dismissed the consolidated amended complaint with prejudice. No appeal was taken
by the Plaintiffs.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year ended February 28, 2003.
Executive Officers of the Company.
The following table identifies the executive officers of the company.
The company is not aware of any family relationship between any executive
officers of the company or any executive officer and any director of the
company. The executive officers are generally elected annually and serve for one
year or until their successors are elected. The next general election of
officers is expected to occur in June 2003.
Name Age Office
W. Alan McCollough 53 Chairman,President and
Chief Executive Officer
John W. Froman 49 Executive Vice President
Chief Operating Officer
Michael T. Chalifoux 56 Executive Vice President
Chief Financial Officer
Kim D. Maguire 47 Executive Vice President
Chief Merchandising Officer
Ann-Marie Austin-Stephens 44 Senior Vice President Strategic
Business Planning and Development
Dennis J. Bowman 49 Senior Vice President
Chief Information Officer
W. Stephen Cannon 51 Senior Vice President,
General Counsel and Secretary
Fiona P. Dias 37 Senior Vice President
President, Circuit City Direct
Philip J. Dunn 50 Senior Vice President,
Treasurer and Controller
Gary M. Mierenfeld 51 Senior Vice President
Logistics, Product Service and Purchasing
Jeffrey S. Wells 57 Senior Vice President
Human Resources and Training
Mr. McCollough is a director and a member of the company's executive
committee. He joined the company in 1987 as general manager of corporate
operations. He was elected assistant vice president in 1989, vice president and
Central Division
Page 10 of 17
president in 1991, senior vice president - merchandising in 1994, president and
chief operating officer in 1997, chief executive officer in June 2000 and
chairman of the board in June 2002.
Mr. Froman joined the company in 1986 as a store manager and general
manager in training. In 1987, he was promoted to general manager and in 1989 was
named assistant vice president. He was promoted to director of corporate
operations in 1990 and in 1992 added the title of vice president. He was elected
Central Division president in 1994, named senior vice president - merchandising
in 1997 and was promoted to executive vice president in 2000. He was named chief
operating officer in 2001.
Mr. Chalifoux is a director and a member of the company's executive
committee. He joined the company in 1983 as corporate controller and was elected
vice president and chief financial officer in 1988. He became senior vice
president and chief financial officer in 1990. He was corporate secretary from
1993 to February 2003 and became executive vice president in 1998.
Mr. Maguire joined the company in 2001 as executive vice president -
merchandising. He was named chief merchandising officer in 2003. Prior to
joining the company, Mr. Maguire had been employed by Target Stores for 20
years, most recently as senior vice president - hardlines from 1995 to 2001.
Ms. Austin-Stephens joined the company in 1999 as vice president of
strategic planning. She was elected senior vice president in 2000. Before
joining the company, she had served more than three years as the director of
technology and brand marketing for The Frito-Lay Company and 13 years with The
Procter and Gamble Company in various marketing, strategy and product
development positions.
Mr. Bowman joined the company in 1996 as vice president and chief
information officer. He was elected senior vice president and chief information
officer in 1997.
Mr. Cannon joined the company in 1994 as senior vice president and
general counsel and was named secretary in February 2003.
Ms. Dias joined the company in 2000 as senior vice president -
marketing. She was named president of Circuit City Direct in 2003. Before
joining the company, she was chief marketing officer at Stick Networks, Inc.
during 2000; vice president - marketing and development for the Frito-Lay
Company from 1999 to 2000; and vice president of corporate development at
Pennzoil Quaker State Company from 1996 to 1999. Prior to 1996, she held various
brand management positions with The Procter and Gamble Company.
Mr. Dunn joined the company in 1984. He was named treasurer in 1990,
was promoted to vice president in 1992 and added the title of controller in
1996. In 1999, he was elected senior vice president.
Mr. Mierenfeld joined the company in 1993 as vice president -
distribution. He was elected senior vice president in 1999.
Mr. Wells joined the company in 1996 as senior vice president - human
resources and training. Prior to joining the company, he had served as a senior
vice president of Toys "R" Us, Inc., beginning in 1992.
Part II
Item 5. Market for the Company's Common Equity and Related Shareholder Matters.
The information appearing under the heading "Common Stock" on page 29
of the company's 2003 Annual Report is incorporated in this item by reference.
As of April 30, 2003, there were 8,319 shareholders of record of common
stock.
Item 6. Selected Financial Data.
The information appearing under the heading "Reported Historical
Information" on page 15 of the company's 2003 Annual Report is incorporated in
this item by reference.
Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition.
The information appearing under the heading "Management's Discussion
and Analysis of Results of Operations and Financial Condition" on pages 15
through 29 of the company's 2003 Annual Report is incorporated in this item by
reference.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
The information appearing under the sub-heading "Market Risk" on page
28 of the company's 2003 Annual Report is incorporated in this item by
reference.
Page 11 of 17
Item 8. Financial Statements and Supplementary Data.
The information appearing under the headings "Consolidated Statements
of Earnings," "Consolidated Balance Sheets," "Consolidated Statements of Cash
Flows," "Consolidated Statements of Stockholders' Equity," "Notes to
Consolidated Financial Statements," and "Independent Auditors' Report," on pages
30 through 46 of the company's 2003 Annual Report is incorporated in this item
by reference.
The information appearing under the heading "Quarterly Financial Data
(Unaudited)" on page 45 of the company's 2003 Annual Report is incorporated in
this item by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
Part III
With the exception of the information incorporated by reference from
the company's Proxy Statement in Items 10, 11 and 12 of Part III of this Annual
Report on Form 10-K, the company's Proxy Statement dated May 9, 2003, is not to
be deemed filed as a part of this Report.
Item 10. Directors and Executive Officers of the Company.
The information appearing under the heading "Item One-Election of
Directors" on pages 3 through 5 of the company's Proxy Statement dated May 9,
2003, is incorporated in this item by reference.
The information appearing under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" appearing on page 18 of the company's Proxy
Statement dated May 9, 2003, is incorporated in this item by reference.
Item 11. Executive Compensation.
The information appearing under the heading "Compensation of Executive
Officers" appearing on pages 10 through 18 of the company's Proxy Statement
dated May 9, 2003, is incorporated in this item by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information appearing under the heading "Beneficial Ownership of
Securities" appearing on pages 6 through 7 of the company's Proxy Statement
dated May 9, 2003, is incorporated in this item by reference.
The information appearing under the heading "Equity Compensation Plan
Information" appearing on page 13 of the company's Proxy Statement dated May 9,
2003, is incorporated in this item by reference.
Item 13. Certain Relationships and Related Transactions.
None.
Item 14. Controls and Procedures.
The company's principal executive officer and principal financial
officer have evaluated the effectiveness of the company's "disclosure controls
and procedures," as that term is defined in Rule 13a-14(c) of the Securities
Exchange Act of 1934, as amended, within 90 days of the filing date of this
Annual Report on Form 10-K. Based upon their evaluation, the principal executive
officer and principal financial officer concluded that the company's disclosure
controls and procedures are effective. There were no significant changes in the
company's internal controls or in other factors that could significantly affect
these controls, since the date the controls were evaluated.
Page 12 of 17
Part IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements.
Consolidated Statements of Earnings for the fiscal years ended
February 28, 2003, 2002 and 2001.
Consolidated Balance Sheets at February 28, 2003 and 2002.
Consolidated Statements of Cash Flows for the fiscal years ended
February 28, 2003, 2002 and 2001.
Consolidated Statements of Stockholder's Equity for the fiscal years
ended February 28, 2003, 2002 and 2001.
Notes to Consolidated Financial Statements.
Independent Auditors' Report.
2. Financial Statement Schedules. The following financial statement
schedules of Circuit City Stores, Inc. for the fiscal years ended
February 28, 2003, 2002, and 2001, are filed as part of this report
and should be read in conjunction with the financial statements of
Circuit City Stores, Inc.
Schedule II Valuation and Qualifying Accounts and Reserves S-1
Independent Auditors' Report on Financial Statement Schedule S-2
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set
forth therein is included in the consolidated financial statements
or notes thereto.
3. Exhibits. The exhibits listed on the accompanying Index to Exhibits
immediately following the financial statement schedules are filed as
part of, or incorporated by reference into, this report.
(b) Reports on Form 8-K.
The company filed a Form 8-K on March 3, 2003, announcing approval by
the Office of the Comptroller of the Currency of two special dividends
to the company from First North American National Bank.
The company filed a Form 8-K on March 10, 2003, announcing the
company's fourth quarter fiscal year 2003 sales.
The company filed a Form 8-K on March 18, 2003, announcing the
declaration of a quarterly dividend of 1.75 cents per share of Circuit
City Stores, Inc. common stock.
The company filed a Form 8-K on April 2, 2003, announcing the company's
fourth quarter and fiscal year 2003 results.
Page 13 of 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CIRCUIT CITY STORES, INC.
(Registrant)
By: /s/W. Alan McCollough
---------------------------
W. Alan McCollough
Chairman, President and Chief Executive Officer
By: /s/Michael T. Chalifoux
---------------------------
Michael T. Chalifoux
Executive Vice President and
Chief Financial Officer
By: /s/Philip J. Dunn
---------------------------
Philip J. Dunn
Senior Vice President, Treasurer,
Controller and Chief Accounting Officer
May 27, 2003
Page 14 of 17
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
Signature Title Date
Ronald M. Brill* Director May 27, 2003
- --------------------------
Ronald M. Brill
Carolyn H. Byrd* Director May 27, 2003
- --------------------------
Carolyn H. Byrd
Michael T. Chalifoux Director May 27, 2003
- --------------------------
Michael T. Chalifoux
Richard N. Cooper* Director May 27, 2003
- --------------------------
Richard N. Cooper
Barbara S. Feigin* Director May 27, 2003
- --------------------------
Barbara S. Feigin
James F. Hardymon* Director May 27, 2003
- --------------------------
James F. Hardymon
Robert S. Jepson Jr.* Director May 27, 2003
- --------------------------
Robert S. Jepson Jr.
/s/W. Alan McCollough Director May 27, 2003
- --------------------------
W. Alan McCollough
Paula G. Rosput* Director May 27, 2003
- --------------------------
Paula G. Rosput
Mikael Salovaara* Director May 27, 2003
- --------------------------
Mikael Salovaara
Carolyn Y. Woo* Director May 27, 2003
- --------------------------
Carolyn Y. Woo
*By: /s/W. Alan McCollough
- --------------------------
W. Alan McCollough,
Attorney-In-Fact
Page 15 of 17
Certifications
I, W. Alan McCollough, certify that:
1. I have reviewed this annual report on Form 10-K of Circuit City Stores, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 27, 2003
/s/W. Alan McCollough
------------------------
W. Alan McCollough
Chairman, President and
Chief Executive Officer
Page 16 of 17
Certifications
I, Michael T. Chalifoux, certify that:
1. I have reviewed this annual report on Form 10-K of Circuit City Stores, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 27, 2003
/s/Michael T. Chalifoux
----------------------------
Michael T. Chalifoux
Executive Vice President and
Chief Financial Officer
Page 17 of 17
S-1
Schedule II
CIRCUIT CITY STORES, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts and Reserves
(Amounts in thousands)
Balance at Charged Charge-offs Balance at
Beginning to less End of
Description of Year Income Recoveries Year
Year ended February 28, 2001:
Allowance for doubtful accounts $ 12,495 $ 5,171 $ (15,598) $ 2,068
======== ======= ========= =========
Year ended February 28, 2002:
Allowance for doubtful accounts $ 2,068 $ 3,485 $ (4,893) $ 660
======== ======= ========= =========
Year ended February 28, 2003:
Allowance for doubtful accounts $ 660 $ 4,790 $ (4,375) $ 1,075
======== ======= ========= =========
Page S-1
S-2
Independent Auditors' Report on Financial Statement Schedule
The Board of Directors
Circuit City Stores, Inc.:
Under date of April 2, 2003, we reported on the consolidated balance sheets of
Circuit City Stores, Inc. and subsidiaries (the Company) as of February 28, 2003
and 2002, and the related consolidated statements of earnings, stockholders'
equity and cash flows for each of the fiscal years in the three-year period
ended February 28, 2003, as incorporated by reference herein. In connection with
our audits of the aforementioned consolidated financial statements, we also have
audited the related Circuit City Stores, Inc. financial statement schedule as
listed in Item 15(a)2 of this Form 10-K. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/KPMG LLP
Richmond, Virginia
April 2, 2003
Page S-2
Circuit City Stores, Inc.
Annual Report on Form 10-K
EXHIBIT INDEX
(3) Articles of Incorporation and Bylaws
(a) Amended and Restated Articles of Incorporation of the
Company, effective February 3, 1997, as amended
through October 1, 2002, filed as Exhibit 3(i) to the
company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 2002 (File No. 1-5767),
are expressly incorporated herein by this reference.
(b) Bylaws of the Company, as amended and restated
February 18, 2003, filed herewith.
(4) Instruments Defining the Rights of Security Holders, Including Indentures
(a) Third Amended and Restated Rights Agreement dated as
of October 1, 2002, between the company and Wells
Fargo Bank Minnesota, N.A., as Rights Agent, filed as
Exhibit 1 to the company's Form 8-A/A filed on
October 1, 2002 (File No. 1-5767), is expressly
incorporated herein by this reference.
(10) Material Contracts*
(a) The company's 2000 Non-Employee Directors Stock
Incentive Plan, filed as Appendix A to the company's
Definitive Proxy Statement dated May 10, 2000, for
the Annual Meeting of Shareholders held on June 13,
2000 (File No. 1-5767), is expressly incorporated
herein by this reference.
(b) Amendments effective June 15, 2001, to the company's
2000 Non-Employee Directors Stock Incentive Plan,
filed as Exhibit 10 to the company's Quarterly Report
on Form 10-Q for the quarter ended May 31, 2001 (File
No. 1-5767), are expressly incorporated herein by
this reference.
(c) The company's Amended and Restated 1989 Non-Employee
Directors Stock Option Plan, filed as Exhibit A to
the company's Definitive Proxy Statement dated May 9,
1997, for the Annual Meeting of Shareholders held on
June 17, 1997 (File No. 1-5767), is expressly
incorporated herein by this reference.
(d) Amendments adopted June 17, 1997, to the company's
Amended and Restated 1989 Non-Employee Directors
Stock Option Plan filed as Exhibit 10(ii) to the
company's Quarterly Report on Form 10-Q for the
quarter ended May 31, 1997 (File No. 1-5767), are
expressly incorporated herein by this reference.
(e) The company's 1994 Stock Incentive Plan, as amended
as of January 24, 1997, filed as Annex III to the
company's Definitive Proxy Statement dated December
24, 1996, for a Special Meeting of Shareholders held
on January 24, 1997 (File No. 1-5767), is expressly
incorporated herein by this reference.
(f) Amendments effective June 13, 2000, to the company's
1994 Stock Incentive Plan as amended, filed as
Exhibit 10 to the company's Quarterly Report on form
10-Q for the quarter ended May 31, 2000 (File No.
1-5767), are expressly incorporated herein by this
reference.
(g) Amendment effective June 15, 1999, to the company's
1994 Stock Incentive Plan, as amended, filed as
Exhibit 10 to the company's Quarterly Report on Form
10-Q for the quarter ended May 31, 1999 (File No.
1-5767), is expressly incorporated herein by this
reference.
(h) Employee agreement between the company and W. Alan
McCollough effective March 1, 2002, filed as Exhibit
10(a) to the company's Quarterly Report on Form 10-Q
for the quarter ended May 31, 2002 (File No. 1-5767),
is expressly incorporated herein by this reference.
Page EI-1
(i) Employee agreement between the company and John W.
Froman effective March 1, 2002, filed as Exhibit
10(b) to the company's Quarterly Report on Form 10-Q
for the quarter ended May 31, 2002 (File No. 1-5767),
is expressly incorporated herein by this reference.
(j) Employee agreement between the company and Michael T.
Chalifoux effective March 1, 2002, filed as Exhibit
10(c) to the company's Quarterly Report on Form 10-Q
for the quarter ended May 31, 2002 (File No. 1-5767),
is expressly incorporated herein by this reference.
(k) Employee agreement between the company and Kim D.
Maguire effective March 1, 2002, filed herewith.
(l) Employee agreement between the company and Dennis J.
Bowman effective March 1, 2002, filed as Exhibit
10(d) to the company's Quarterly Report on Form 10-Q
for the quarter ended May 31, 2002 (File No. 1-5767),
is expressly incorporated herein by this reference.
(m) The company's Annual Performance-Based Bonus Plan, as
amended as of January 24, 1997, filed as Annex IV to
the company's Definitive Proxy Statement dated
December 24, 1996, for a Special Meeting of
Shareholders held on January 24, 1997 (File No.
1-5767), is expressly incorporated herein by this
reference.
(n) The company's Non-Employee Directors Deferred
Compensation Plan, filed as Exhibit 10 to the
company's Quarterly Report on Form 10-Q for the
quarter ended August 31, 2000 (File No. 1-5767), is
expressly incorporated herein by this reference.
(o) Program for deferral of director compensation
implemented October 1995 filed as Exhibit 10(i) to
the company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 1995 (File No. 1-5767), is
expressly incorporated herein by this reference.
(p) Benefit Restoration Plan, effective February 28,
1999, filed as Exhibit 10(m) to the company's Annual
Report on Form 10-K for the fiscal year ended
February 28, 1999 (File 1-5767), is expressly
incorporated herein by this reference.
(q) The 1984 Circuit City Stores, Inc. Employee Stock
Purchase Plan as Amended and Restated Effective
October 1, 2002, filed herewith.
(13) Annual Report
Pages 15 through 46 of the company's Annual Report for the fiscal year
ended February 28, 2003
(21) Subsidiaries of the Company
(23) Consent of Independent Auditors
(24) Powers of Attorney
(99) Additional Exhibits
(i) Certification of CEO under section 906 of the Sarbanes-Oxley Act of
2002.
(ii) Certification of CFO under section 906 of the Sarbanes-Oxley Act of
2002.
*All contracts listed under Exhibit 10 are management contracts, compensatory
plans or arrangements of the company required to be filed as an exhibit.
Page EI-2