8-K

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): August 29, 2008

Movie Gallery, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-24548	63-1120122
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

900 West Main Street, Dothan, Alabama 36301

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (334) 677-2108

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 (see General Instruction A.2. below):

¨ 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))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 29, 2008, Thomas D. Johnson, Jr. resigned from his position as Executive Vice President of Movie Gallery, Inc. (“Company”). Following his resignation, Mr. Johnson is no longer employed by the Company.

In connection with the resignation, the Company entered into a Confidential Separation Agreement and Release with Mr. Johnson, dated August 29, 2008, which provides in part for:

• a lump sum payment by the Company to Mr. Johnson of $751,062.62, which represents 18 months’ severance pay of $487,500.00 and $263,562.62 to pay all applicable taxes related to the severance pay;

• reimbursement of Mr. Johnson’s premium payments for continuation coverage under COBRA for twelve months;

• a mutual release of all claims by the Company and Mr. Johnson; and

• a confidentiality agreement by Mr. Johnson.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Press Release, dated August 29, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MOVIE GALLERY, INC.
Date: September 3, 2008	BY:	/s/ C. J. Gabriel, Jr.
		C. J. Gabriel, Jr. CEO and President

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated August 29, 2008.

EX-99.1

Exhibit 99.1

For Immediate Release

MOVIE GALLERY ANNOUNCES EXECUTIVE VICE PRESIDENT

WILL BE LEAVING THE COMPANY

DOTHAN, Ala., August 29, 2008 – Movie Gallery, Inc. (“Movie Gallery”) announced that Thomas D. Johnson, Jr. will be leaving the Company today. As previously announced on July 23, 2008, Lucinda (“Cindy”) M. Baier has been named Executive Vice President and Chief Financial Officer of Movie Gallery, reporting directly to C.J. (“Gabe”) Gabriel, Jr., the Company’s President and Chief Executive Officer.

Johnson joined Movie Gallery in April 2004 and served as the Company’s Chief Financial Officer from June 1, 2006 through July 27, 2008, and as the Company’s Executive Vice President from June 1, 2006 through August 29, 2008.

C.J. “Gabe” Gabriel, President and Chief Executive Officer of Movie Gallery, stated, “Thomas has been a valued member of our senior management team and we thank him for his significant contributions to the Company over the last four years. We wish him all the best in his future endeavors.”

Thomas Johnson stated, “I am proud to have been associated with Movie Gallery and continue to believe in its great potential. I have reached a point in my career where I have the unique opportunity to pursue new challenges and I am looking forward to doing so.”

About Movie Gallery

The Company is the second largest North American video rental company with approximately 3,300 stores located in all 50 U.S. states and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy. Since Movie Gallery’s initial public offering in August 1994, the Company has grown from 97 stores to its present size through acquisitions and new store openings. For more information about the Company, please visit our website: www.moviegallery.com.

Forward-looking Statements

This press release, as well as other statements made by Movie Gallery may contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, that reflect, when made, the Company’s current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company’s operations and business environment, which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: (i) the risks and uncertainties associated with the ability to successfully

implement Movie Gallery’s Second Amended Plan of Reorganization, as confirmed; (ii) the ability of the Company to operate subject to the terms of the Company’s existing financing obligations; (iii) the direct or indirect effects on our business of our impaired credit; (iv) the ability of the Company to obtain and maintain normal terms with vendors and service providers; (v) the Company’s ability to maintain contracts and leases that are critical to its operations; (vi) the ability of the Company to execute its business plans and strategy, including the operational restructuring initially announced in 2007, and to do so in a timely fashion; (vii) the ability of the Company to attract, motivate and/or retain key executives and associates; (viii) general economic or business conditions affecting the video and game rental and sale industry (which is dependent on consumer spending), either nationally or regionally, being less favorable than expected; (ix) increased competition in the video and game rental and sale industry; and (x) effects of the application of laws or regulations, including changes in laws or regulations or the interpretation thereof. Other risk factors are listed from time to time in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 and subsequent reports filed with the Securities and Exchange Commission. Movie Gallery disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise.

Contacts:

Analysts and Investors: Ted Ceglia, Movie Gallery, Inc., 503-570-1950

Media: Andrew B. Siegel of Joele Frank, Wilkinson Brimmer Katcher, 212-355-4449

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