8K Entry into a Material Definitive Agreement
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)
March 6, 2006
Protective
Life Corporation
(Exact
name of registrant as specified in its charter)
Delaware
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001-11339
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95-2492236
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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2801
Highway 280 South
Birmingham,
Alabama 35223
(Address
of principal executive offices and zip code)
(205)
268-1000
(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 (see
General
Instruction A.2. below):
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CF
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement
Director
Compensation
The
form
and amount of compensation paid to the Company's non-management directors is
reviewed at least annually by the Corporate Governance and Nominating Committee
of the Company's Board of Directors. On March 6, 2006, upon the recommendation
of the Corporate Governance and Nominating Committee, the Company's Board of
Directors approved changes to the compensation policy for non-employee
directors. Effective as of the 2006 Annual Meeting of Share Owners, the
additional annual retainer for the Audit Committee chairperson will be increased
from $5,000 to $15,000. The remainder of the compensation policy remains
unchanged.
Executive
Compensation
At
its
March 3, 2006 meeting, the Compensation and Management Succession Committee
of the Board of Directors (the ‘‘Committee’’) of the Company reviewed and
approved certain compensation arrangements with the officers of the Company,
including its Chief Executive Officer and the four other most highly compensated
executive officers for the Company’s last completed fiscal year, as determined
pursuant to the rules of the Securities and Exchange Commission (the “Named
Executives”). The following summarizes certain actions taken by the
Committee at the meeting.
Base
Salaries
The
Committee approved the following annual base salaries for the Named Executives,
effective as of March 1, 2006: John D. Johns, Chairman of the Board,
President and Chief Executive Officer, $800,000; R. Stephen Briggs, Executive
Vice President, Life and Annuity Division, $425,000; Allen W. Ritchie, Executive
Vice President and Chief Financial Officer, $500,000; Richard J. Bielen, Senior
Vice President, Chief Investment Officer and Treasurer, $400,000; and Deborah
J.
Long, Senior Vice President and General Counsel, $365,000.
Bonus
Opportunities under Annual Incentive Plan for 2006
The
Committee established the cash bonus opportunities with respect to 2006
performance under the AIP. Each individual’s AIP bonus was expressed as a
percentage of base salary, as follows: Mr. Johns, 100%; Mr. Briggs,
50%; Mr. Ritchie, 80%; Mr. Bielen, 60%; and Ms. Long, 55%.
For Messrs. Johns, Ritchie and Bielen and Ms. Long, the AIP bonus
opportunity is based on the Company’s 2006 operating earnings per share
according to a range fixed by the Committee; for Mr. Briggs, one-third of
his AIP bonus opportunity is based upon the Company’s 2006 operating earnings
per share, and the remaining two-thirds is based on the achievement of pre-tax
operating earnings of the Company’s Life and Annuities Division and West Coast
Life Corporation. A bonus equal to a multiple of the Named Executive’s
target bonus percentage will be paid, depending on the level of goal achievement
as follows: less than threshold level, 0%; threshold level, 50%; target level,
100%; and maximum level, 200%.
Each
AIP
bonus opportunity is subject to the terms of the AIP (which is filed as
Exhibit 10(a) to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2004 and is incorporated herein by reference).
Performance
Share Awards for 2006
The
Committee granted performance shares under the Company’s Long-Term Incentive
Plan, which was most recently approved by the share owners in 2003. The
number of performance shares granted to the Named Executives was:
Mr. Johns, 32,500; Mr. Briggs, 5,700; Mr. Ritchie, 11,000;
Mr. Bielen, 7,200; and Ms. Long, 3,800. Payment of performance
share awards will be based upon a comparison of the Company’s average return on
average equity for a four-year award period to that of the companies in a
comparison group of forty insurance companies during the award period. If
the Company’s four-year results are below the 40th
percentile, no portion of the award will be earned. If the Company’s four-year
results are at the 40th
percentile, 33% of the award will be earned. If the Company’s four-year
results are at the median, 50% of the award will be earned. Company
results at target, or the top 25% of the comparison group, would result in
125%
of the award being earned for each Named Executive. Company results in the
top 10% would result in 170% of the award being earned for each Named Executive.
If the Company’s percentile ranking falls between the 40th
and
90th
percentile, the amount of the award earned will be determined by
interpolation. Earned awards are generally paid in shares of the Company’s
common stock and cash (with the amount of cash equal to the income tax
withholding obligation on the amount earned).
Each
performance share award to the Named Executives is subject to the terms of
the
Long-Term Incentive Plan (which is filed as Exhibit 10 to the Company’s
Form 10-Q Quarterly Report filed May 15, 2003 and is incorporated
herein by reference), as amended by an amendment effective as of December 31,
2005 (which is filed as Exhibit 10(b)(1) to this current report and is
incorporated herein by reference), and the related performance share award
letters (the forms of which are filed as Exhibit 10(a) to the
Company’s Quarterly Report on Form 10-Q filed November 9, 2004 and as Exhibit
10(b)(1) to the Company’s Current Report on Form 8-K filed March 10, 2005 and
are incorporated herein by reference).
Stock
Appreciation Rights Granted in 2006
The
Committee granted stock appreciation rights (“SARs”) under the Company’s
Long-Term Incentive Plan. The number of SARs granted to the Named
Executives was: Mr. Johns, 25,300; Mr. Briggs, 4,500;
Mr. Ritchie, 8,500; Mr. Bielen, 5,600; and Ms. Long, 3,000.
The SARs generally become exercisable in four equal annual installments,
beginning March 3, 2007, and will generally terminate on March 3,
2016. Upon exercise, each SAR will entitle the holder to the difference,
payable in stock (and an amount of cash approximately equal to the income tax
withholding obligation due upon exercise), between the value of the common
stock
at the time of exercise and the SAR’s base price of $48.60.
Each
SAR
is subject to the terms of the Long-Term Incentive Plan (which is filed as
Exhibit 10 to the Company’s Form 10-Q Quarterly Report filed
May 15, 2003 and is incorporated herein by reference), as amended by an
amendment effective as of December 31, 2005 (which is filed as Exhibit 10(b)(1)
to this current report and is incorporated herein by reference), and the related
award letter for senior officers (the form of which is filed as Exhibit 10(b)(2)
to the Company’s Current Report on Form 8-K filed on March 10, 2005 and is
incorporated herein by reference).
Item
9.01 Financial
Statements and Exhibits.
(c) Exhibits:
10.(b)(1)
- Amendment to the Protective Life Corporation Long Term Incentive
Plan
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 thereunto
duly authorized.
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PROTECTIVE
LIFE CORPORATION
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By/s/Steven
G. Walker
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Steven
G. Walker
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Senior
Vice President, Controller
and
Chief Accounting Officer
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Dated: March
9,
2006