PPL Electric Utilities Corporation Form 8K 03-23-06
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, 2006
Commission
File
Number
|
Registrant;
State of Incorporation;
Address
and Telephone Number
|
IRS
Employer
Identification
No.
|
|
|
|
1-905
|
PPL
Electric Utilities Corporation
(Exact
name of Registrant as specified in its charter)
(Pennsylvania)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
|
23-0959590
|
|
|
|
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:
[ ]
|
|
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))
|
Section
1 - Registrant's Business and Operations
Item
1.01 Entry into a Material Definitive Agreement
On
March
17, 2006, the 2006 annual performance goals and business criteria for incentive
awards to the named executive officers (as defined in Item 402(a)(3) of
Regulation S-K) of PPL Electric Utilities Corporation (the "Company") were
established by the Compensation and Corporate Governance Committee (the
"C&CGC") of the Board of Directors of PPL Corporation, the Company’s parent
corporation. The achievement of the performance goals and business criteria
will
be measured, and any resulting incentive awards will be made to the named
executive officers, in 2007.
The
named
executive officers of the Company currently are the President, the Senior Vice
President-Financial and the Treasurer. The Company’s Vice President and
Controller, who was appointed effective January 30, 2006, is expected to become
a named executive officer based on his compensation in 2006.
Short-term
Incentive Cash Awards
For
the
annual incentive cash (i.e., bonus) awards to be made to the Company's named
executive officers, the following award targets as a percentage of base salary
have been established: President-50%; Senior Vice President-Financial-50%;
Vice
President and Controller-40%; and Treasurer-40%. The annual incentive cash
awards will be made by applying these target percentages to the percentage
of
goal attainment as determined by the C&CGC, in the case of the President and
Senior Vice President-Financial, and by PPL Corporation's Corporate Leadership
Council, in the case of the Vice President and Controller and the Treasurer.
The
goal
categories for 2006 for the President include specific financial and operational
measures for PPL Corporation and key subsidiaries, including specific
operational goals for the Company. The weightings for each of these categories
are allocated 40% to PPL Corporation's earnings per share and enhanced
shareowner value, 40% to the financial and operational performance of the
Company and 20% to certain operating subsidiaries of PPL Corporation.
In
the
case of the Senior Vice President-Financial, the goal categories for 2006
include specific financial and operational measures for PPL Corporation and
key
subsidiaries, including the Company. The weightings for each of these categories
are allocated 60% to PPL Corporation's earnings per share and enhanced
shareowner value, 10% to the financial and operational performance of the
Company and 30% to the financial and operational performance of certain other
operating subsidiaries of PPL Corporation.
In
the
case of the Vice President and Controller and the Treasurer, the goal categories
for 2006 include specific financial and operational measures for PPL Corporation
and key subsidiaries, and also consideration of individual performance. The
weightings for each of these categories are allocated 40% to PPL Corporation's
earnings per share and enhanced shareowner value, 10% to the financial and
operational performance of the Company, 30% to the financial and operational
performance of certain other operating subsidiaries and 20% to individual
performance.
Long-term
Incentive Equity Awards
The
long-term incentive equity awards to be made by the C&CGC to the named
executive officers pursuant to PPL Corporation's Incentive Compensation Plan
will consist of (i) two restricted stock unit awards that represent delivery
of
a specified number of shares of PPL Corporation common stock following a
three-year restriction period, and (ii) one stock option award that will become
exercisable for PPL Corporation common stock in equal installments over a
three-year period from the date of grant. One of the grants of restricted stock
units will be based on the achievement of sustained financial and operational
results, which will be determined by averaging the most recent three years
of
annual performance measures used for the annual short-term incentive cash
awards. The second grant of restricted stock units will be based on the
achievement of specific strategic objectives to increase shareowner value
through implementation of certain long-term corporate initiatives, including
actions to (i) influence the evolution of government policies toward more
competitive markets; (ii) structure PPL Corporation internally to enable it
to
respond to wholesale trading opportunities after 2009, when the existing
long-term energy sales contracts between the Company and PPL EnergyPlus, LLC
(the “PLR contracts”) expire, and develop and retain management and technical
skills necessary to permit continued growth of PPL Corporation; and (iii)
implement necessary actions to position PPL Corporation to successfully benefit
from the expiration of the PLR contracts. The exercise price of the stock option
awards will be the fair market value of PPL Corporation’s common stock on the
date of grant.
The
following long-term incentive equity award targets as a percentage of base
salary have been established for each named executive officer:
Long-term
Incentive Program
|
Restricted
Stock Units
|
Stock
Options
|
(Targets
as % of Salary)
|
Position
|
Sustained
Financial and Operational Results
|
Strategic
Objectives Results
|
Stock
Price Performance
|
President
|
40%
|
40%
|
80%
|
Senior
Vice President-Financial
|
40%
|
40%
|
80%
|
Vice
President and Controller
|
26.25%
|
26.25%
|
52.5%
|
Treasurer
|
26.25%
|
26.25%
|
52.5%
|
SIGNATURE
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.
|
PPL
ELECTRIC UTILITIES CORPORATION
|
|
|
|
|
By:
|
/s/
Matt
Simmons
Matt
Simmons
Vice
President and Controller
|
Dated: March
23,
2006