-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CYh4nGgzpod5f29QutOhpgwe6BprQzOa5m76lW/xfveM/Y0ie9jVNtV80B81R1CZ 3aqwycT1UHkz1FcgsvO28Q== 0000950144-08-002010.txt : 20080317 0000950144-08-002010.hdr.sgml : 20080317 20080317160446 ACCESSION NUMBER: 0000950144-08-002010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20080312 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers FILED AS OF DATE: 20080317 DATE AS OF CHANGE: 20080317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVOCAT INC CENTRAL INDEX KEY: 0000919956 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 621559667 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12996 FILM NUMBER: 08693018 BUSINESS ADDRESS: STREET 1: 1621 GALLERIA BLVD. CITY: BRENTWOOD STATE: TN ZIP: 37027 BUSINESS PHONE: 6157717575 MAIL ADDRESS: STREET 1: 1621 GALLERIA BLVD. CITY: BRENTWOOD STATE: TN ZIP: 37027 8-K 1 g12354e8vk.htm ADVOCAT INC. Advocat Inc.
 

 
 
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 17, 2008 (March 12, 2008)
ADVOCAT INC.
(Exact name of registrant as specified in its charter)
         
Delaware   001-12996   62-1559667
         
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (Employer Identification Number)
1621 Galleria Boulevard, Brentwood, TN 37027
(Address of principal executive offices)
(615) 771-7575
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
     Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
       
  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 5.02.   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory arrangements of Certain Officers.
(e)   Compensatory Arrangements of Certain Officers
2008 Annual Incentive Plan
     On March 12, 2008, the Compensation Committee of the Board of Directors of Advocat approved the 2008 Annual Incentive Plan for the Company’s Executive Officers. The 2008 Plan is similar to the 2007 plan. The 2008 Plan provides the following Target Bonus.
     
Named Executive Officer   Bonus Target
William R. Council, III
  50% of base salary
Raymond L. Tyler
  40% of base salary
L. Glynn Riddle
  35% of base salary
     As described in more detail below, the Bonus Target is based on achieving 100% of budget on the net operating income category. Therefore, if the Company achieves over 100% of budget in this category, the bonus percentage could be higher than the Bonus Target disclosed above.
     The following categories make up the potential bonus amount:
         
Net operating income (as defined)
     70 %
Discretionary/quality measures/individual performance
     30 %
 
      
Total
     100 %
     Net Operating Income. 70% of the bonus is based on operating income performance. This metric will be measured using budgeted operating income/loss, adjusted for the non-cash impact of professional liability expense. In addition, the Board will have the discretion to make other adjustments for unusual/unbudgeted items.
     The potential bonus available would be adjusted based on actual performance, as follows:
  •   80% (or less) of budget — executive would earn 0% of the target bonus for this category.
 
  •   81% to 100% of budget — executive would earn 5% of the target bonus for this category for each 1% of budget achieved above 80%.
 
  •   101% to 125% — 15% of the incremental earned net operating income would be placed into a pool, to be shared among the participants. Sharing of the pool can be discretionary and/or pro rata.
 
  •   Above 125% — additional amounts may be awarded at the discretion of the Board of Directors.
     Discretionary: 30% of the bonus would be based on subjective matters of performance to be awarded at the discretion of the board, including quality of care measures.

 

 

     In addition, the 2008 Plan allows the Compensation Committee, in its sole discretion, to pay all or part of the bonus earned under the 2008 Plan in shares of common stock of the Company. The number of shares that would be issued in the discretion of the Compensation Committee would be such number of shares with a fair market value on the date of award equal to the amount of the bonus being paid in common stock.
Long —Term Incentive Grants
     In connection with the Company’s 2007 performance, on March 14, 2008, the Compensation Committee granted stock-only stock appreciation rights (“SOSARs”). SOSARs are stock appreciation rights that are settled in shares of Company stock. The SOSARs have an exercise price equal to $10.88, the average of the high and low price of the stock on the date of grant and vest one-third on each of the 1st, 2nd and 3rd anniversaries of the date of grant. Since the value of the SOSAR to the recipient is dependent on the increase in the value of the underlying stock, an award of this nature is also aligned with the interests of the shareholders. The following table discloses the SOSARs granted to each of the Named Executive Officers.
         
Named Executive Officer   SOSAR Grant  
William R. Council, III
     25,000  
Raymond L. Tyler
     15,000  
L. Glynn Riddle
     10,000  
2007 Bonuses
The Compensation Committee approved the payment of bonuses for the Named Executive Officers based upon the Company’s and their individual performance in 2007, as follows:
         
Named Executive Officer   2007 Bonus  
William R. Council, III
     298,835  
Raymond L. Tyler
     156,923  
L. Glynn Riddle
     111,792  
2008 Base Salaries
The Compensation Committee has approved the following base salaries for the Named Executive Officers for 2008:
         
Named Executive Officer   2008 Base Salary  
William R. Council, III
     442,000  
Raymond L. Tyler
     308,148  
L. Glynn Riddle
     228,596  

 

 

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.
         
  ADVOCAT INC.
 		  
  By:   /s/ William R. Council, III    
    William R. Council, III   
    Chief Executive Officer   
 
Date: March 17, 2008

 

-----END PRIVACY-ENHANCED MESSAGE-----