SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 29, 1999
Balanced Care Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-13845 25-1761898
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5021 Louise Drive, Suite 200 Mechanicsburg, PA 17055
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 717-796-6100
Page 1 of 4 pages.
Exhibit Index begins on page 4.
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Item 5. Other Events.
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The registrant has entered into various change in control agreements
with certain of its officers. A copy of one of the change in control agreements
is filed herewith, together with a schedule identifying the omitted agreements
and setting forth the material details in which such agreements differ from the
filed agreement. The change in control agreement and the schedule are attached
hereto as Exhibits 99.1 and 99.2 and incorporated by reference herein in their
entirety.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits. The following Exhibits are filed with this Current
Report on Form 8-K:
Exhibit No. Description
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99.1 Form of Change in Control Agreement
99.2 Schedule to Form of Change in Control Agreement
Page 2 of 4 pages.
Exhibit Index begins on page 4.
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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.
Balanced Care Corporation
Date: March 29, 1999 By: /s/ Brad E. Hollinger
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Brad E. Hollinger
Chairman of the Board,
President and Chief Executive
Officer
Page 3 of 4 pages.
Exhibit Index begins on page 4.
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EXHIBIT INDEX
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Exhibit No. Description
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99.1 Form of Change in Control Agreement
99.2 Schedule to Form of Change in Control
Agreement
Page 4 of 4 pages.
Exhibit 99.1
FORM OF CHANGE IN CONTROL AGREEMENT
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THIS AGREEMENT, made as of the ____ day of ____________, 199_, by and
between Balanced Care Corporation, a Delaware corporation with a principal
office at 5021 Louise Drive, Suite 200, Mechanicsburg, PA, 17055 (the "Company")
and ___[Executive]___, an individual health care executive (the "Executive").
WITNESSETH:
WHEREAS, the Company presently employs the Executive, on an employee
at will basis, as ___[Position]___;
WHEREAS, the Company and the Executive mutually desire to provide
certain severance payment rights to the Executive under specified circumstances;
WHEREAS, in consideration of providing such severance payment rights to
the Executive, the Company desires that the Executive agree to certain
non-compete and non-solicitation restrictions; and
WHEREAS, the Executive is willing to be employed by the Company in the
foregoing capacity and to be subject to the non-compete and non-solicitation
restrictions upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound, the parties hereto agree as
follows:
1. Employment. The Company employs the Executive as an employee at will
and the Executive's employment by the Company is subject to all of the terms
and conditions set forth herein.
2. Termination Following a Change in Control. The Executive shall be
entitled to receive a Severance Payment if, within ___[Severance Payment Time
Period]___ following a Change in Control, there occurs any of the following
events:
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(A) any termination of the Executive except for Cause;
(B) any material reduction in the Executive's responsibilities
(including reporting responsibilities) or authority, including as such
responsibilities or authority may be increased from time to time;
(C) the assignment to the Executive of duties inconsistent with the
Executive's office on the date of a Change in Control or as the same may be
increased from time to time after a Change in Control;
(D) any material reduction (including, after a Change in Control,
proportional reductions affecting all employees or executive employees) in the
Executive's annual base salary in effect on the date of a Change in Control or
as the same may be increased from time to time after a Change in Control;
(E) any failure (including, after a Change in Control, proportional
failures affecting all executive employees) to continue the Executive's
participation on substantially similar terms in the Plan or any bonus plan in
which the Executive participated at the time of the Change in Control or any
change or amendment to any substantive provisions of any such plan which would
materially decrease the potential benefits to the Executive under any
of such plans;
(F) any failure (including, after a Change in Control, a proportional
failure affecting all executive employees) to provide the Executive with
benefits at least as favorable as those enjoyed by the Executive under any of
the Company's pension, life insurance, medical, health and accident or other
employee plans in which the Executive participated at the time of the Change in
Control, unless such reduction relates to a reduction in benefits applicable to
all employees generally;
(G) the reassignment of the Executive to a location greater than sixty
(60) miles from the principal executive offices of the Company before the Change
in Control; and
(H) in the event of any of the events described in (B) through (G)
above, the Executive voluntarily terminates his employment under this Agreement
as a result of such event(s).
3. Definitions: As used in this Agreement, the following terms shall have
the meanings set forth below:
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(A) "Cause" shall mean willful misconduct, intentional and material
failure to perform duties under this Agreement by the Executive or the
Executive's conviction of a felony. No termination for cause shall be effective
unless and until the Executive is given written notice that the act or omission
constitutes "Cause" under this Agreement and the Executive is given an
opportunity to correct or cure the particular act or omission within thirty (30)
days after receipt by the Executive of such written notice from the Company.
(B) A "Change in Control" shall be deemed to have taken place if: (i)
any person, including a group but not excluding the Company or any current
stockholder of the Company who beneficially owns five percent (5%) or more of
the Company's outstanding shares, becomes the beneficial owner of shares of the
Company having twenty percent (20%) or more of the total number of votes that
may be cast for the election of directors or (ii) there occurs any cash tender
or exchange offer for shares of the Company, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing transactions, and as a result of or in connection with any such event
persons who were directors of the Company before the event shall cease to
constitute a majority of the Board of Directors of the Company or any successor
to the Company. As used herein, the terms "person" and "beneficial owner" have
the same meaning as under Section 13(d) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
(C) A "Severance Payment" shall include the following: (i) all
outstanding stock options granted to the Executive, if any, under the Company's
1996 Stock Incentive Plan, as such plan may be amended from time to time (the
"Plan"), shall immediately become vested and shall be exercisable in accordance
with the provisions of the Plan and (ii) a lump sum cash payment, shall be
payable within 30 days of termination of employment, equal to the sum of (a) the
amount determined by multiplying by two (3) the Executive's annual base salary
then in effect on the date of termination and (b) the maximum amount of the
Executive's potential annual bonus percentage payable for the year in which the
termination took place.
4. Notice of Termination. Any notice of termination of employment of
the Executive shall be given by the Company in writing and delivered by hand
delivery or by registered or certified mail, return receipt requested, postage
prepaid, at such address as the Executive shall have furnished to the Company in
writing.
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5. Non-Competition and Non-Solicitation. As further consideration for
the Company's execution and delivery of this Agreement to the Executive, the
Executive agrees as follows:
(A) Restrictions on Competition. While employed by the Company and
for a period of one (1) year following termination of the Executive's
employment, the Executive agrees that he will not directly or indirectly own an
interest in, manage or control, or provide consulting services or services as an
employee or partner, to a business engaged in managing, leasing, owning or
operating assisted living facilities, nursing homes or sub-acute operations (the
"Business Activities") within a sixty (60) mile radius of any Company facility
existing or under active development at the time of such termination.
(B) Restriction on Solicitation. While employed by the Company and
for a period of one (1) year following termination of the Executive's
employment, the Executive agrees that he will not directly or indirectly: (i)
solicit or encourage any of the Company's customers to deal with the Executive
or any other third party other than the Company or (ii) solicit for the
Executive's benefit or for the benefit of any third party the employment or
services of any then current employee of the Company.
(C) Listed Stock Ownership Exception. Nothing in this Section 5 shall
prohibit the Executive from owning stock in a publicly traded company as a
passive investor provided that the Executive shall not own more than 5% of the
equity of a publicly traded competing enterprise of the Company's.
6. Successors.
(A) This Agreement is personal to the Executive and shall not be
assignable by the Executive otherwise than by his will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal heirs and representatives.
(B) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(C) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, the Company shall
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mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.
7. Entire Agreement. This writing represents the entire agreement
and understanding between the parties with respect to the subject matter
contained herein and may not be altered or amended except in a writing signed by
both parties.
8. Unenforceability. If any provision of this Agreement shall be adjudged
by any court of competent jurisdiction to be invalid or unenforceable for any
reason, such judgment shall not affect, impair or invalidate the remainder of
this Agreement.
9. Waiver. The failure of the parties to insist upon strict compliance
with any provision hereof or the failure to assert any right the parties may
have hereunder shall not be deemed to be a waiver of such provision or right or
any other provision or right thereof by the parties.
10. Counterparts. This Agreement may be executed by the parties in two or
more counterparts, each of which shall be deemed to be an original, but all such
counterparts shall constitute one and the same instrument.
11. Headings. The headings of the sections and subsections of this
Agreement are for convenience only and shall not control or affect the meaning
or construction or limit the scope or intent of any of the provisions of this
Agreement.
12. Governing Law. This Agreement has been negotiated and executed within
the Commonwealth of Pennsylvania and shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
have executed this Agreement as of the date first above written.
ATTEST: BALANCED CARE CORPORATION
By: /s/ Brad E. Hollinger
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Asst. Secretary Brad E. Hollinger
President and Chief Executive
Officer
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WITNESS: EXECUTIVE:
/s/ [Executive]
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individual health care executive
Exhibit 99.2
Schedule to Form of Change in Control Agreement
Filed Pursuant to Instruction 2 to Item 601(a) of Regulation S-K
SEVERANCE PAYMENT
EXECUTIVE POSITION TIME PERIOD DATE
David K. Barber Senior Vice 2 years 9/23/98
President--Project Management
Robin L. Barber Vice President and Senior 2 years 11/20/98
Counsel
Douglas L. Brewer Senior Vice 2 years 9/23/98
President--Mergers and
Acquisitions
Russell A. DiGilio Senior Vice 2 years 9/23/98
President--Outlook Pointe
Division
Alfred I. Lovitz* Vice President--Missouri 1 year 6/24/98
Division
Mark S. Moore Senior Vice 2 years 9/23/98
President--Financial
Operations
* Mr. Lovitz' change in control agreement also provides for his employment; the
other Executives were already employed at the time they entered into their
respective agreements. In addition, Mr. Lovitz is not subject to the geographic
reassignment provision described in Section 2(G).
