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): October 17 , 2013

 

AdCare Health Systems, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Ohio

 

001-33135

 

31-1332119

(State or Other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

(I.R.S. Employer
Identification No.)

 

1145 Hembree Road

Roswell, GA 30076

(Address of Principal Executive Offices)

 

(678) 869-5116

(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:

 

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 5.03                                            Amendments to Articles of Incorporation.

 

On October 17, 2013, AdCare Health Systems, Inc. (the “Company”) filed a Certificate of Amendment (the “Certificate of Amendment”) to its Articles of Incorporation with the Ohio Secretary of State to designate 200,000 undesignated shares of the Company’s preferred stock, no par value per share, as shares of the Company’s 10.875% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”).  As a result of the Certificate of Amendment, the Company has the authority to issue up to 950,000 shares of Series A Preferred Stock.  The Certificate of Amendment does not otherwise affect the terms of the Series A Preferred Stock.

 

The foregoing description of the Certificate of Amendment is qualified in its entirety by reference thereto, a copy of which is attached hereto as Exhibit 3.1 and is incorporated by reference.

 

Item 8.01                                            Other Events.

 

As previously reported on the Company’s Current Report on Form 8-K on October 7, 2013, attached hereto as Exhibit 99.1 is a copy of that certain letter agreement, dated October 1, 2013, among the Company, Park City Capital, LLC and Michael J. Fox.

 

Item 9.01                                            Financial Statements and Exhibits.

 

(d)                              Exhibits .

 

3.1                                            Certificate of Amendment to AdCare Health Systems, Inc.’s Amended and Restated Articles of Incorporation, dated October 17, 2013.

 

99.1                                     Letter Agreement, dated October 1, 2013, among AdCare Health Systems, Inc., Park City Capital, LLC and Michael J. Fox.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:  October 17, 2013

ADCARE HEALTH SYSTEMS, INC.

 

 

 

 

 

/s/ Boyd P. Gentry

 

Boyd P. Gentry

 

Chief Executive Officer

 

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EXHIBIT INDEX

 

3.1

 

Certificate of Amendment to AdCare Health Systems, Inc.’s Amended and Restated Articles of Incorporation, dated October 17, 2013.

 

 

 

99.1

 

Letter Agreement, dated October 1, 2013, among AdCare Health Systems, Inc., Park City Capital, LLC and Michael J. Fox.

 

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Exhibit 3.1

 

Form 540 Prescribed by: Jon Husted Ohio Secretary of State Central Ohio: (614) 466-3910 Toll Free: (877) SOS-FILE (767-3453) Makes checks payable to Ohio Secretary of State Mail this form to one of the following: Regular Filing (non expedite) P.O. Box 1329 Columbus, OH 43216 www.OhioSecretaryofState.gov Busserv@OhioSecretaryofState.gov Expedite Filing (Two-business day processing time requires an additional $100.00). P.O. Box 1390 Columbus, OH 43216 Certificate of Amendment (For-Profit, Domestic Corporation) Filing Fee: $50 Check appropriate box: Amendment to existing Articles of Incorporation (125-AMDS) Amended and Restated Articles (122-AMAP) - The following articles supersede the existing articles and all amendments thereto. Complete the following information: Name of Corporation AdCare Health Systems, Inc. Charter Number 801461 Check one box below and provide information as required: The articles are hereby amended by the Incorporators. Pursuant to Ohio Revised Code section 1701.70(A), incorporators may adopt an amendment to the articles by a writing signed by them if initial directors are not named in the articles or elected and before subscriptions to shares have been received. The articles are hereby amended by the Directors. Pursuant to Ohio Revised Code section 1701.70(A), directors may adopt amendments if initial directors were named in articles or elected, but subscriptions to shares have not been received. Also, Ohio Revised Code section 1701.70(B) sets forth additional cases in which directors may adopt an amendment to the articles. The resolution was adopted pursuant to Ohio Revised Code section 1701.70(B) 1701.70(B)(1) (In this space insert the number 1 through 10 to provide basis for adoption.) The articles are hereby amended by the Shareholders pursuant to Ohio Revised Code section 1701.71. Form 540 Page 1 of 2 Last Revised: 3/16/12

 


A copy of the resolution of amendment is attached to this document. Note: If amended articles were adopted, they must set forth all provisions required in original articles except that articles amended by directors or shareholders need not contain any statement with respect to initial stated capital. See Ohio Revised Code section 1701.04 for required provisions. Required Must be signed by all Incorporators, if amended by Incorporators, or an authorized officer if amended by directors or shareholders, pursuant to Ohio Revised Code section 1701.73(B) and (C). If authorized representative is an individual, then they must sign in the “signature” box and print their name in the “Print Name” box. If authorized representative is a business entity, not an individual, then please print the business name in the “signature” box, an authorized representative of the business entity must sign in the “By” box and print their name in the “Print Name” box. Signature By (if applicable) Boyd P. Gentry Print Name Signature By (if applicable) Print Name

 

 


 

ADCARE HEALTH SYSTEMS, INC.

 

AMENDMENT NO. 1 TO

 

CERTIFICATE OF DESIGNATIONS, RIGHTS, NUMBER OF SHARES

 

AND PREFERENCES

 

10,875% SERIES A CUMULATIVE REDEEMABLE PREFERRED SHARES

 

(Pursuant to Section1701.70 of the General Corporation Law of the State of Ohio)

 

The undersigned Chief Executive Officer and President of ADCARE HEALTH SYSTEMS, INC., an Ohio corporation (the “ Corporation ”), hereby certifies that, pursuant to the authority granted to and vested in the Corporation’s board of directors (the “ Board of Directors ”) by the provisions of the Corporation’s Articles of Incorporation and in accordance with the provisions of Section1701.70 of the Revised Code of Ohio (the “ ORC ”), the Board of Directors has duly adopted the following amendment to the resolution creating the Series A Cumulative Redeemable Preferred Shares out of the 30,000,000 shares authorized to be issued by the Corporation (29,000,000 of which are common and 1,000,000 of which are serial preferred):

 

WHEREAS, pursuant to the Corporation’s Articles of Incorporation, as amended (the “ Articles ”), the Corporation has the authority to issue 1,000,000 shares of preferred stock, no par value per share, which may be issued in one or more series (the “ Preferred Stock ”);

 

WHEREAS, pursuant to the authority granted to, and vested in, the Board by the provisions of the Articles, and in accordance with the provisions of Section 1701.70 of the ORC, the Board previously established and designated out of the Preferred Stock 750,000 shares thereof as 10.875% Series A Cumulative Redeemable Preferred Stock (the “ Series A Preferred Stock ”), having the designations, rights and preferences set forth in that certain Certificate of Designations, Rights, Numbers of Shares and Preferences 10.875% Series A Cumulative Redeemable Preferred Shares, filed with the Secretary of State of the State of Ohio (the “ Certificate of Designations ”); and

 

WHEREAS, the Board has determined to establish and designate 200,000 shares (out of the remaining 250,000 shares) of undesignated Preferred Stock as Series A Preferred Stock;

 

RESOLVED, that, in accordance with the ORC and the Articles, the Board hereby establishes and designates 200,000 shares (out of the remaining 250,000 shares) of undesignated Preferred Stock as Series A Preferred Stock, which additional shares have all the designations, rights and preferences set forth in the Certificate of Designations,

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be duly executed and acknowledged by Boyd P. Gentry its Chief Executive Officer as of this 17th day of October , 2013.

 

 

ADCARE HEALTH SYSTEMS, INC.

 

 

 

 

 

By:

/s/ Boyd P. Gentry

 

Boyd P. Gentry, President and Chief Executive Officer

 

Exhibit 99.1

 

 

October 1, 2013

 

Park City Capital, LLC

200 Crescent Court

Suite 1575

Dallas, Texas 75201

Attn: Mr. Michael J. Fox, Manager

 

Gentlemen:

 

This letter agreement (the “ Letter Agreement ”) will confirm the understanding and agreement by and among the undersigned with respect to the subject matter hereof.

 

1.                                       Election to Board .   Upon the execution of this Letter Agreement, AdCare Health Systems, Inc. (the “ Company ”) shall increase the size of its board of directors (the “ Board ”) from nine to ten members and shall simultaneously cause its directors to fill the vacancy created thereby by electing Michael J. Fox (“ MJF ”) to the Board for a term that will expire at the Company’s next annual meeting of stockholders, which meeting is expected to be held in December 2013 (the “ 2013 Annual Meeting ”).  The Company agrees thereafter to include MJF in its slate of nominees for election as a Class I director at the 2013 Annual Meeting to hold office until the Company’s 2014 annual meeting of stockholders (a “ Class I Director ”), which meeting is expected to be held in June 2014, and to use its reasonable best efforts to cause the re-election of MJF to the Board as a Class I Director at the 2013 Annual Meeting (including, without limitation, recommending that the Company’s stockholders vote in favor of the re-election of MJF to the Board as a Class I Director in the Company’s proxy statement for the 2013 Annual Meeting).

 

2.                                       Covenants .   During such time as MJF serves on the Board as a nominee of the Board:

 

 


 

(a)                                  Park City Capital, LLC (“ Park City ”) shall take such action as may be required so that all Voting Securities beneficially owned by any member of the Park City Group are voted (whether by proxy or otherwise) in favor of each of the Board’s nominees to the Board at any and all meetings of the stockholders of the Company or at any adjournment or postponement thereof or in any other circumstance in connection with which a vote, consent or other approval of holders of Voting Securities is sought with respect to the election of any nominee to the Board.  Park City, as a holder of Voting Securities, shall also be present, in person or by proxy, and it shall also cause all other members of the Park City Group that hold any Voting Securities to be present, in person or by proxy, at all meetings of stockholders of the Company called with respect to the foregoing and of which the Park City has received due notice so that all Voting Securities beneficially owned by Park City and each other member of the Park City Group may be counted for the purpose of determining the presence of a quorum at any such meeting.

 

(b)                                  Park City will not do or agree or commit to do (or encourage any other person to do or agree or commit to do) and will not permit any other member of the Park City Group or any affiliate or associate of any such member to do or agree or commit to do (or encourage any other person to do or agree or commit to do) any of the following: (i) solicit proxies or written consents of stockholders with respect to any Voting Securities under any circumstances, or make, or in any way participate in, any “solicitation” of any “proxy” to vote any Voting Securities (other than conducted by the Company) or become a “participant” in any election contest with respect to the Company (as such terms are defined or used in Rules 14a-1 and 14a-11 under the Exchange Act); (ii) seek to call, or request the call of, a special meeting of the stockholders of the Company or seek to make, or make, a stockholder proposal at any meeting of the stockholders of the Company that has not first been approved in writing by the Board; (iii) make any request or otherwise seek to obtain, in any

 

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fashion that would require public disclosure by the Company, Park City or their respective affiliates, any waiver or amendment of any provision of this Letter Agreement or take any action restricted hereby; or (iv) make, or cause to be made, any statement or announcement that constitutes an ad hominem attack on the Company, its officers or its directors in any document or report filed with or furnished to the SEC or any other governmental agency or in any press release or other publicly available format, provided that nothing herein shall prohibit, or be construed to prohibit, any member of the Park City Group from commenting or presenting its views on any issue or matter publicly disclosed by the Company and making any filings with the SEC which any of the foregoing parties reasonably determines it is required by law to make in connection therewith.

 

(c)                                   MJF agrees to comply with all applicable policies and guidelines of the Company, including, without limitation, those relating to corporate governance, conflicts of interest, confidentiality and securities trading.  MJF further agrees, consistent with his fiduciary duties and his obligation of confidentiality as a member of the Board, to refrain from communicating to anyone any nonpublic information about the Company or its business that he learns in his capacity as a member of the Board, which agreement shall remain in effect after MJF leaves the Board.  Notwithstanding the foregoing, MJF may communicate such information to any other member of the Park City Group who agrees to be bound by the same confidentiality restrictions that are otherwise applicable to MJF, provided that MJF shall be liable for any breach of such agreement by any such member to the same extent as if such member were a party hereto.  In addition, MJF hereby confirms that each of the other members of the Park City Group has agreed not to trade in any securities of the Company while in possession of any nonpublic material information about the Company or its business if and to the extent doing so would be in violation of applicable law or, without the prior written approval of the Board, to trade in any securities of the Company during any blackout period imposed by the

 

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Company (it being understood that the Company shall not be responsible for Park City Group’s compliance with the securities laws).

 

3.                                       Certain Information .   MJF hereby represents and warrants to the Company that no event has occurred of the type described in 17 C.F.R. §229.401(f) with respect to MJF that would be required to be disclosed in a proxy statement in connection with the solicitation of proxies for the election of MJF to the Board pursuant to Section 14 of the Exchange Act.

 

4.                                       Certain Definitions .   For purposes of this Letter Agreement:

 

(a)                                  “ affiliate ” and “ associate ” shall each have the meaning set forth with respect thereto in Rule 12b-2 under the Exchange Act, provided that, for purposes of this Agreement, the Company shall not be deemed to be an affiliate or associate of the Park City Group and the Park City Group shall not be deemed to be an affiliate or associate of the Company;

 

(b)                                  “ beneficially own ”, “ beneficial ownership ” and “ beneficial owner ” with respect to any securities shall mean having “beneficial ownership” of such securities, as determined pursuant to Rule 13d-3 under the Exchange Act, without duplicative counting of the same securities by the same holder (it being understood that any securities owned by CCM Opportunistic Advisers, LLC (“ CCM Advisers ”) or by CCM Opportunistic Partners, LP (“ CCM Partners ”) shall be deemed not to be beneficially owned by Park City);

 

(c)                                   “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended;

 

(d)                                  “ Park City Group ” shall mean, individually and collectively, Park City and any person who, within the meaning of Rule 12b-2 under the Exchange Act, is “controlling,” is “controlled by” or is “under common control with” Park City, including, without limitation, each of the “reporting persons” identified in the Schedule 13D filed by Park City with the SEC on April 4,

 

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2013, as thereafter amended (it being understood, however, that neither CCM Advisers nor CCM Partners shall be considered to be a member of the Park City Group);

 

(e)                                   “ person ” shall mean any individual, partnership, corporation, limited liability company, trust or other entity or association;

 

(f)                                    “ SEC ” shall mean the United States Securities and Exchange Commission; and

 

(g)                                   “ Voting Securities ” shall mean all classes of capital stock of the Company entitled to vote generally in the election of directors.

 

5.                                       Choice of Law .   This Letter Agreement is to be governed by, and construed in accordance with, the internal law, and not the laws of conflicts, of the state in which the Company is incorporated at the time that any Action (as hereinafter defined) shall be commenced hereunder.

 

6.                                       Attorneys’ Fees .   If any party to this Letter Agreement shall bring any action, suit, proceeding, counterclaim or appeal for any relief against any other party hereto in connection with any dispute hereunder (collectively, an “ Action ”), the prevailing party shall be entitled to recover all attorneys’ fees, costs and disbursements incurred by the prevailing party in connection therewith.

 

7.                                       Injunctive Relief .   In addition to all other remedies provided at law or in equity, the Company may petition and obtain from a court of law or equity both temporary and permanent injunctive relief without the necessity of proving actual damages and without posting bond or other security to prevent a breach of this Letter Agreement and to enforce specifically the terms and provisions hereof.

 

8.                                       Submission to Jurisdiction; Waivers .   With respect to any Action, each party to this Letter Agreement irrevocably (a) consents and submits to the exclusive jurisdiction of the courts of the State of Georgia and any court of the United States located in Atlanta, Georgia; (b) waives any

 

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objection which such party may have at any time to the laying of venue in any such court, waives any claim that such Action has been brought in an inconvenient forum and further waives the right to object, with respect to such Action, that such court does not have jurisdiction over such party; (c) consents to the service of process at the address set forth below such party’s name on the signature page hereto, provided that such manner of service of process shall not preclude the service of process in any other manner permitted under applicable law; and (d) waives, to the fullest extent permitted by applicable law, any and all rights to trial by jury.

 

9.                                       Counterparts .   This Letter Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.  Executed counterparts may be delivered by facsimile or electronic transmission in portable document format.

 

10.                                Other; Further Assurances .   Promptly after the execution of this Letter Agreement, the Company will issue a press release relating to MJF’s appointment to the Board and the other matters addressed in this Letter Agreement in a form agreed upon between the Company and Park City. MJF, during his service as a director of the Company, will receive the benefit of the same indemnity, insurance, compensation and expense reimbursement agreements and programs for directors of the Company in effect from time to time, whether or not it shall be determined at any time that MJF is not a valid and lawful member of the Board.  The parties hereto shall not take any action to avoid or seek to avoid the observance or performance of any of the terms of this Letter Agreement but shall at all times in good faith take all actions that are necessary to carry out and perform all of the provisions, and the purposes and intent, of this Letter Agreement.

 

If the foregoing accurately sets forth our understanding and agreement, please so indicate in the space provided for that purpose below, whereupon this Letter Agreement shall constitute a

 

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binding and enforceable agreement between and among the undersigned as of the date first above written.

 

 

Very truly yours,

 

 

 

ADCARE HEALTH SYSTEMS, INC.

 

 

 

 

 

By:

/s/ Boyd P. Gentry

 

 

Its:

 

 

 

 

Address:

1145 Hembree Road

 

 

Roswell, GA 30076

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

PARK CITY CAPITAL, LLC

 

 

 

 

 

By:

/s/ Michael J. Fox

 

 

Its:

Managing Member

 

 

 

Address:

200 Crescent Court, Suite 1575

 

 

Dallas, Texas 75201

 

 

 

 

 

/s/ Michael J. Fox

 

MICHAEL J. FOX , Individually

 

 

 

Address:

200 Crescent Court, Suite 1575

 

 

Dallas, Texas 75201

 

 

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