Circuit City 2005 Annual Report Download - page 58

In August 2003 the Company settled litigation with a software developer and reversed a previously recorded
liability of $1.3 million which was no longer needed (see Note 11).
9.
SHAREHOLDERS' EQUITY
As required by law, certain foreign subsidiaries must retain a percentage of shareholders' capital in the respective
company. Accordingly, a portion of retained earnings is restricted and not available for distribution to
shareholders. Such amounts at December 31, 2005 and 2004 were not material.
Stock Option Plans - The Company has three fixed option plans which reserve shares of common stock for
issuance to key employees, directors, consultants and advisors to the Company. The following is a description of
these plans:
The 1995 Long-term Stock Incentive Plan - This plan, adopted in 1995, allows the Company to issue qualified,
non-qualified and deferred compensation stock options, stock appreciation rights, restricted stock and restricted
unit grants, performance unit grants and other stock based awards authorized by the Compensation Committee of
the Board of Directors. Options issued under this plan expire ten years after the options are granted and generally
become exercisable ratably on the third, fourth, and fifth anniversary of the grant date. A maximum total number
of 2.0 million shares may be granted under this plan of which a maximum of 800,000 shares may be of restricted
stock and restricted stock units. No award can be granted under this plan after December 31, 2005. A total of
1,331,190 options were outstanding under this plan as of December 31, 2005.
The 1995 Stock Option Plan for Non-Employee Directors - This plan, adopted in 1995, provides for automatic
awards of non-qualified options to directors of the Company who are not employees of the Company or its
affiliates. All options granted under this plan will have a ten year term from grant date and are immediately
exercisable. A maximum of 100,000 shares may be granted for awards under this plan. This plan will terminate
the day following the 2006 annual shareholders meeting. A total of 52,000 options were outstanding under this
plan as of December 31, 2005.
The 1999 Long-term Stock Incentive Plan, as amended ("1999 Plan") - This plan was adopted on October 25,
1999 with substantially the same terms and provisions as the 1995 Long-term Stock Incentive Plan. A maximum
of 5.0 million shares may be granted under this plan. The maximum number of shares granted per type of award
to any individual may not exceed 1,500,000 in any calendar year and 3,000,000 in total. No award shall be
granted under this plan after December 31, 2009. Restricted stock grants and common stock awards reduce stock
options otherwise available for future grant. A total of 1,274,229 options were outstanding under this plan as of
December 31, 2005.
The following table reflects the plan activity for the years ended December 31, 2005, 2004 and 2003:
For Shares
Option Prices
Outstanding, January 1, 2003
2,091,315
$ 1.95 to $39.06
Granted
1,072,700
$ 1.76 to $ 3.36
Exercised
(184,341
)
$ 1.76 to $ 3.05
Cancelled
(158,372
)
$ 1.76 to $39.06
Outstanding, December 31, 2003
2,821,302
$ 1.76 to $18.41
Granted
780,267
$ 5.30 to $ 6.34
Exercised
(144,168
)
$ 1.76 to $ 3.05
Cancelled
(216,150
)
$ 1.76 to $18.41
Outstanding, December 31, 2004
3,241,251
$ 1.76 to $18.41
Granted
75,000
$ 6.25
Exercised
(328,374
)
$ 1.76 to $ 5.30
Cancelled
(330,458
)
$ 1.76 to $18.41
Outstanding, December 31, 2005
2,657,419
$ 1.76 to $18.41