Attached files
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EX-99.2 - EX-99.2 - AMERICA SERVICE GROUP INC /DE | g26297exv99w2.htm |
EX-10.2 - EX-10.2 - AMERICA SERVICE GROUP INC /DE | g26297exv10w2.htm |
EX-99.1 - EX-99.1 - AMERICA SERVICE GROUP INC /DE | g26297exv99w1.htm |
EX-10.1 - EX-10.1 - AMERICA SERVICE GROUP INC /DE | g26297exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 1, 2011
March 1, 2011
America Service Group Inc.
(Exact name of registrant as specified in its charter)
Delaware | 0-19673 | 51-0332317 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
105 Westpark Drive, Suite 200, Brentwood, Tennessee | 37027 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (615) 373-3100
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
(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:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On
March 3, 2011, the Company issued a press release announcing its operating results for the
fourth quarter and year ended December 31, 2010. A copy of the press release is attached as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by this reference.
This information furnished pursuant to this Item 2.02 and Exhibit 99.1 shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
Exchange Act), or otherwise subject to the liabilities of that section and shall not be deemed to
be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act except as shall be expressly set forth by specific reference in such filing.
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Chief Risk Officer Employment Agreement
On
March 3, 2011 the Company announced that, effective
March 1, 2011, John McCauley has filled the newly created position
of chief risk officer of the Company and stepped down from the
Companys Board of Directors (the Board) on which he served since 2006.
Mr. McCauley has served in various positions in risk management, insurance and legal
within the healthcare and education industries for over
30 years. Prior to joining the Company, Mr. McCauley served
for nearly 15 years with Vanderbilt University, most recently as Assistant Vice Chancellor, Risk and Insurance Management and Associate General Counsel.
In connection with the appointment described above, the Company entered into a written
employment agreement with Mr. McCauley on March 1, 2011 (the Employment Agreement). The
Employment Agreement provides for Mr. McCauley to receive a base
salary of not less than $250,000,
plus additional compensation as the Chief Executive Officer and/or
the Incentive Stock and Compensation Committee (the
Committee) of the Board shall from time to
time determine.
The
Employment Agreement provides for (i) a non-competition covenant by Mr. McCauley and (ii) the
Companys right to terminate the Employment Agreement without cause upon 30 days advance written
notice.
The Employment Agreement also provides that if Mr. McCauleys employment is terminated by the
Company without cause or there is a change in control (as defined in the Employment Agreement), all
unexercised options granted to Mr. McCauley will accelerate and immediately vest.
Under the Employment Agreement, if Mr. McCauleys employment is terminated for any reason or
no reason, he will be entitled to payment of his full base salary through the termination date and
any bonuses, incentive compensation or other payments due which have been earned or vested prior to
the termination date. Further, if his employment is terminated by the Company without cause, due
to death or disability, or as a result of a change in control, Mr. McCauley will be entitled to a
continuation, on a monthly basis, of his monthly base salary for one year following the termination
date.
The foregoing description of the Employment Agreement in this Form 8-K does not purport to be
complete and is qualified in its entirety by reference to Mr. McCauleys Employment Agreement filed as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.
A
copy of the press release is attached as Exhibit 99.2 to this
Current Report on Form 8-K and is incorporated herein by this
reference.
2011 Incentive Compensation Plan
On
March 2, 2011, based on the recommendation of the Committee, the Board
approved the Companys 2011 Incentive Compensation Plan (the 2011 Plan), which is designed to
award lump-sum cash bonuses to the Companys executive officers, including the named executive
officers, and other eligible employees based on the financial performance of the Company.
The Companys 2011 Plan establishes the following 2011 targeted payouts as a percent of base
salary (Bonus Target as a Percent of Base Salary):
Bonus Target as a Percent | ||||
Named Executive Officer Positions | of Base Salary | |||
President and Chief Executive Officer |
70 | % | ||
Executive
Vice President and Chief Financial Officer |
60 | % | ||
Chief Legal
Officer, Chief Risk Officer, Chief Medical Officer and Chief Development Officer
|
50 | % |
The 2011 Plan is composed of an Adjusted EBITDA Based Bonus (the EBITDA Bonus) and Other Key
Company Goals Based Bonus (the Key Goals Bonus), each of which account for one-half of the total
Bonus Target as a Percent of Base Salary for all named executive officers except the Chief Medical
Officer. As set forth in the 2011 Plan, 100% of the Chief Medical Officers Bonus Target as a
Percent of Base Salary is composed of a non-financial Key Goals Bonus.
Under the EBITDA Bonus, the financial performance measure is adjusted EBITDA. The Company
defines adjusted EBITDA as earnings before interest expense, income taxes, depreciation,
amortization and share-based compensation expense. The Company includes in adjusted EBITDA the
results of discontinued operations under the same definition. The adjusted EBITDA target as
defined in the 2011 Plan is $26.0 million (the EBITDA Target).
Under the EBITDA Bonus, no bonus is paid if adjusted EBITDA is 100% or less of the EBITDA
Target. The EBITDA Bonus is funded with 50% of the earnings generated above the EBITDA Target
after the other Key Goals Bonuses have been accrued, subject to the maximums set forth in the 2011
Plan. Under the EBITDA Bonus portion of the 2011 Plan, for executive management, including named
executive officers, other than the Chief Medical Officer,
the maximum EBITDA Bonus award will be 150% of the Bonus Target as a Percent of Base Salary.
Payout is subject to Board confirmation of satisfactory balance sheet management.
The Key Goals Bonus uses pre-selected financial and non-financial objectives (the Key
Goals). Key Goals Bonuses are awarded at different levels of achievement, as described fully in
the 2011 Plan, up to a maximum award of 50% of the Bonus Target as a Percent of Base Salary. The
following are the Key Goals for executive management, including named executive officers, other
than the Chief Medical Officer:
Corporate net new revenue Company specific non-financial objectives |
30% of target award 20% of target award |
The Chief Medical Officer does not participate in the EBITDA Bonus portion of the 2011 Plan as
described above. As listed above, the Chief Medical Officers Bonus Target as a Percent of Base
Salary is 50%. The Key Goals Bonus for the Chief Medical Officer accounts for 100% of his Bonus
Target as a Percent of Base Salary awarded at different levels of achievement, as described fully
in the 2011 Plan, up to a maximum award of 200% of the Bonus Target as a Percent of Base Salary.
The following are the Key Goals for the Chief Medical Officer:
Company specific non-financial objectives Key individual non-financial objectives |
90% of target award 10% of target award |
Certain
provisions of the 2011 Plan also apply to designated corporate managers, corporate
employees, division vice presidents, regional vice presidents, regional directors, regional managers, and health
service administrators.
The foregoing description is a summary and is qualified in its entirety by reference to the
2011 Plan which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein
by reference.
Item 9.01. | Financial Statements and Exhibits. |
(a) | Not applicable. | ||
(b) | Not applicable. | ||
(c) | Not applicable. | ||
(d) | Exhibits: |
99.1 | Press Release of America Service Group Inc. dated
March 3, 2011. |
|||
99.2 | Press Release of America Service Group Inc. dated March 3, 2011. |
|||
10.1 | Employment Agreement, dated as of March 1, 2011,
between America Service Group Inc. and John McCauley. |
|||
10.2 | 2011 Incentive Compensation Plan of America Service Group Inc. |
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.
AMERICA SERVICE GROUP INC. |
||||
Date: March 3, 2011 | By: | /s/ Michael W. Taylor | ||
Michael W. Taylor | ||||
Executive Vice President and Chief Financial Officer | ||||
EXHIBIT INDEX
Exhibit | ||||
Number | Description of Exhibits | |||
99.1 | Press Release of America Service Group Inc. dated March 3, 2011. |
|||
99.2 | Press
Release of America Service Group Inc. dated March 3, 2011. |
|||
10.1 | Employment Agreement, dated as of March 1, 2011, between America Service Group Inc. and
John McCauley. |
|||
10.2 | 2011 Incentive Compensation Plan of America Service Group Inc. |