UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): September 19, 2006 (September 13, 2006)
FIRST ACCEPTANCE CORPORATION
(Exact Name of Registrant as Specified in Charter)
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| Delaware
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1-6802
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75-1328153 |
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| (State or Other Jurisdiction
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(Commission File Number)
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(I.R.S. Employer |
| of Incorporation)
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Identification No.) |
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| 3813 Green Hills Village Drive
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| Nashville, Tennessee
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37215 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
(615) 844-2800
(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 filing 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))
TABLE OF CONTENTS
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| Item 1.01 Entry Into a Material Definitive Agreement. |
| Item 3.02. Unregistered Sales of Equity Securities. |
| Item 9.01. Financial Statements and Exhibits. |
| SIGNATURE |
| INDEX TO EXHIBITS |
| Ex-99.1 Employment Agreement, dated September 13, 2006, by and between First Acceptance Corporation and Edward Pierce |
| Ex-99.2 Stock Purchase Agreement, dated September 13, 2006, by and between First Acceptance Corporation and Edward Pierce |
| Ex-99.3 Nonqualified Stock Option Agreement, dated September 13, 2006, between First Acceptance Corporation and Edward Pierce |
| Ex-99.4 Amendment to Employment Agreement, dated September 13, 2006, by and between First Acceptance Corporation and Stephen J. Harrison |
| Ex-99.5 Amendment to Employment Agreement, dated September 13 2006, by and between First Acceptance Corporation and Thomas M. Harrison, Jr. |
Item 1.01 Entry Into a Material Definitive Agreement.
On September 13, 2006, the Compensation Committee (the “Committee”) of the
Board of Directors of First Acceptance Corporation (the “Company”) approved the following bonuses
to certain executive officers of the Company with respect to such executive officers’ performance
during the fiscal year ended June 30, 2006, which bonuses will be paid during the fiscal year ended
June 30, 2007:
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| Name |
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Title |
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Bonus |
Stephen J. Harrison
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President and Chief Executive Officer
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225,000 |
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Thomas M. Harrison, Jr.
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Executive Vice President
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100,000 |
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Michael J. Bodayle
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Chief Financial Officer — Insurance
Company Operations
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31,667 |
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James R. Dickson
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Vice President — Claims
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40,000 |
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William R. Pentecost
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Chief Information Officer
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30,000 |
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Randy L. Reed
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Vice President — Sales and Marketing
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40,000 |
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Pursuant
to the terms of their respective employment agreements, the
Committee awarded Stephen J. Harrison a bonus equal to 45% of his base salary and Thomas M.
Harrison, Jr. a bonus equal to 25% of his base salary based upon the qualitative factors considered
by the Committee. The Committee also awarded Thomas M. Harrison, Jr. an additional discretionary
bonus equal to 8.33% of his base salary based upon additional responsibilities and duties
performed by Mr. Harrison during 2006. Bonuses for the other executive officers were awarded at the discretion
of the Committee.
The
Committee also approved the following increases in the base salaries of certain
executive officers of the Company:
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| Name |
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Title |
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Old Base Salary |
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New Base Salary |
Michael J. Bodayle
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Chief Financial Officer
— Insurance Company
Operations
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164,300 |
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$ |
175,000 |
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James R. Dickson
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Vice President —Claims
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160,000 |
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200,000 |
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William R. Pentecost
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Chief Information Officer
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$ |
191,650 |
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$ |
200,000 |
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Randy L. Reed
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Senior Vice President —
Sales and Marketing
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$ |
175,000 |
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$ |
205,000 |
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On
September 13, 2006, the Committee approved the Employment
Agreement, dated September 13, 2006, between the Company and Edward
Pierce, which is filed as Exhibit 99.1 to this report and
incorporated herein by reference. Mr. Pierce was appointed as an Executive Vice President of the Company on September 13,
2006. For the fiscal year ending June 30, 2007, Mr. Pierce’s initial base salary will be $300,000
and he will be eligible to receive an annual bonus of up to $200,000. Mr. Pierce’s annual bonus
will be no less than $100,000 for the fiscal year ending June 30, 2007 and $50,000 for the fiscal
year ending June 30, 2008. The Company will also reimburse Mr. Pierce for certain expenses
incurred in connection with his relocation to the Nashville, Tennessee area, and will reimburse Mr.
Pierce for any taxes associated with the relocation expenses
reimbursed by the Company. Mr. Pierce also received a special,
one-time payment of $185,838 in connection with the commencement of
his employment.
The Committee also approved a Stock Purchase Agreement pursuant to which Mr. Pierce purchased
50,000 shares of the Company’s common stock from the Company on September 13, 2006 for a purchase
price of $11.81 per share, the closing price of the Company’s common stock on the New York Stock
Exchange on September 13, 2006. The Committee also approved a Nonqualified Stock Option Agreement
pursuant to which the Company granted Mr. Pierce an option to purchase 250,000 shares of the
Company’s common stock at an exercise price of $11.81 per share, the closing price of the Company’s
common stock on the New York Stock Exchange on September 13, 2006. The Stock Purchase Agreement
and the Nonqualified Stock Option Agreement are filed as Exhibits
99.2 and 99.3, respectively, to
this report and incorporated herein by reference.
On September 13, 2006, the Committee approved an amendment to the Employment Agreements
between the Company and each of Stephen J. Harrison and Thomas M. Harrison, Jr. The Amendments to
Employment Agreement are filed as Exhibits 99.4 and 99.5 to this report and are incorporated herein
by reference.
Item 3.02. Unregistered Sales of Equity Securities.
On September 13, 2006, the Company sold 50,000 shares of its common stock to Edward Pierce
pursuant to the terms of a Stock Purchase Agreement. The purchase price for the shares was $11.81
per share, the closing price of the Company’s common stock on the New York Stock Exchange on
September 13, 2006. The shares were issued in a transaction not involving a public offering
pursuant to the exemption contained in Section 4(2) of the Securities Act of 1933, as amended.
The Stock Purchase Agreement is filed as Exhibit 99.2 to this report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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99.1 |
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Employment
Agreement, dated September 13, 2006, by and between First Acceptance
Corporation and Edward Pierce |
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99.2 |
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Stock Purchase Agreement, dated September 13, 2006, by and between
First Acceptance Corporation and Edward Pierce |
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99.3 |
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Nonqualified Stock Option Agreement, dated September 13, 2006,
between First Acceptance Corporation and Edward Pierce |
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99.4 |
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Amendment to Employment Agreement, dated September 13, 2006, by and
between First Acceptance Corporation and Stephen J. Harrison |
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99.5 |
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Amendment to Employment Agreement, dated September 13, 2006, by and
between First Acceptance Corporation and Thomas M. Harrison, Jr. |