1
EXHIBIT 3.3
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES B PREFERRED STOCK
OF
IASIS HEALTHCARE CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, Frank A. Coyle, Secretary and General Counsel of
IASIS Healthcare Corporation (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, pursuant
to Section 151(g) thereof and in accordance with the provisions of Section 103
thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
of the Corporation (the "Board of Directors") by the Certificate of
Incorporation of the Corporation, the Board of Directors on October 15, 1999
adopted the following resolution creating a series of 50,000 shares of
preferred stock, par value $.01 per share, designated as Series B Preferred
Stock:
RESOLVED, that, pursuant to the authority vested in the Board of
Directors in accordance with the provisions of its Certificate of
Incorporation, a series of preferred stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
2
1. Liquidation Preference; Rank.
The maximum number of shares of Series B Preferred Stock shall be
50,000 and no more. The Series B Preferred Stock shall have a liquidation
preference of $1,000 per share (the "Series B Stated Amount"), plus any
dividends accrued but not paid on the Series B Preferred Stock pursuant to
Section 2 hereof, whether or not earned or declared, to the date fixed for
Liquidation (as hereinafter defined in Section 4(a) hereof) of the Corporation
(the "Series B Liquidation Preference").
The Series B Preferred Stock ranks, with respect to rights to receive
dividends and distributions upon Liquidation: (a) senior to the Corporation's
Common Stock and any class or series of preferred stock issued by the
Corporation whose terms provide specifically that such class or series will
rank junior to the Series B Preferred Stock with respect to rights to receive
payment of dividends and distributions upon Liquidation or fail to specify the
ranking of such class or series relative to the Series B Preferred Stock with
respect to rights to receive payment of dividends and distributions upon
Liquidation (together with the Common Stock, the "Junior Securities"); (b) on a
parity with any class or series of preferred stock issued by the Corporation,
including, without limitation, the Series A Preferred Stock, par value $.01 per
share of the Corporation (the "Series A Preferred Stock"), whose terms provide
specifically that such class or series shall rank on a parity with the Series B
Preferred Stock with respect to rights to receive payment of dividends and
distributions upon Liquidation (the "Parity Securities"); and (c) junior to any
class or series of preferred stock issued by the Corporation whose terms
provide specifically that such class or series shall rank senior to the Series
B Preferred Stock with respect to rights to receive payment of dividends and
distributions upon Liquidation (the "Senior Securities").
2. Dividends.
(a) Each holder of Series B Preferred Stock shall be
entitled to receive, out of the funds of the Corporation legally
available therefor, cumulative dividend payments, payable in accordance
with this Section 2.
2
3
(b) Dividends on each share of Series B Preferred Stock (the
"Series B Dividend") shall be payable in cash on October 15th and April 15th of
each year when, as and if declared by the Board of Directors of the
Corporation, commencing April 15, 2000 at a rate of 16% of the Series B Stated
Amount per annum. Series B Dividends payable on the Series B Preferred Stock
for any period less than a full year shall be computed on the basis of the
actual number of days elapsed and the actual number of days for such year.
(c) Series B Dividends shall accrue and be cumulative from
the date of original issuance of the Series B Preferred Stock whether or not
the Corporation has earnings or profits, whether or not there are funds legally
available for the payment of such Series B Dividends and whether or not Series
B dividends are declared or paid.
(d) Series B Dividends shall be paid to the holders of record
of shares of Series B Preferred Stock as each appears in the stock register of
the Corporation at the close of business on the record date therefor, which
record date shall be set by the Board of Directors of the Corporation, in its
sole discretion, subject to the requirements of applicable law.
(e) Notwithstanding the foregoing, no dividends shall be paid
on the shares of Series B Preferred Stock, unless an amount equal to the per
share dividend of the Series B Preferred Stock is concurrently paid on each
then outstanding share of Series A Preferred Stock.
3. Redemption.
(a) Redemption at the Option of the Corporation. The Series B
Preferred Stock may be redeemed at the option of the Corporation, in whole or
in part, at any time or from time to time, out of funds legally available
therefor. If less than all of the outstanding Series B Preferred Stock are to
be redeemed, the Corporation shall either (i) redeem a pro rata portion of the
shares of Series B Preferred Stock held by each holder, based on the number of
shares held by each holder or (ii) select the shares to be redeemed by lot. The
Corporation may redeem the Series B Preferred Stock by payment in cash, for
each share of Series B Preferred Stock to be redeemed, in an amount (the
3
4
"Series B Optional Redemption Payment") equal to the Series B Stated Amount,
together with an amount equal to all accrued and unpaid Series B Dividends on
such shares through the date upon which such shares are redeemed (the "Series B
Optional Redemption Date"). Any redemption pursuant to this Section 3(a) shall
be made upon not less than thirty (30) days' prior written notice (which notice
shall comply with the provisions of Section 3(c) hereof ) mailed to each holder
of Series B Preferred Stock at such holder's address as shown in the stock
register of the Corporation. Notwithstanding the foregoing, no redemption of
the Series B Preferred Stock may be made pursuant to this Section 3(a), unless
concurrently therewith an equal percentage of the then outstanding shares of
Series A Preferred Stock are redeemed.
(b) Mandatory Redemption. Except as may be, and solely to the
extent, prohibited by any instrument relating to indebtedness of the
Corporation then outstanding (a "Loan Agreement"), on October 15, 2020 or as
soon thereafter as not prohibited by any such Loan Agreement (the "Series B
Mandatory Redemption Date"), the Corporation shall redeem, out of funds legally
available therefor, all of the then outstanding shares of Series B Preferred
Stock. The redemption pursuant to this Section 3(b) shall be made upon not less
than thirty (30) days' prior notice (which notice shall comply with the
provisions of Section 3(c) hereof) mailed to each holder of Series B Preferred
Stock at such holder's address as shown in the stock register of the
Corporation; provided, however, that the Corporation's failure to give such
notice shall in no way affect its obligation to redeem the shares of Series B
Preferred Stock as provided in this Section 3(b). The redemption price for each
share of Series B Preferred Stock redeemed pursuant to this Section 3(b) shall
be equal to the Series B Stated Amount per share, together with an amount equal
to all accrued and unpaid Series B Dividends on such share through the Series B
Mandatory Redemption Date (the "Series B Mandatory Redemption Payment").
(c) Redemption Notices. Notice of redemption (a "Series B
Redemption Notice") of shares of Series B Preferred Stock pursuant to Section
3(a) or 3(b) hereof shall be given by the Corporation by mailing a copy of such
notice to each holder of record of the shares of Series B Preferred Stock to be
redeemed at such holder's address appearing in the stock register of the
Corporation.
4
5
The Series B Redemption Notice shall specify the amount of the Series B
Optional Redemption Payment or the Series B Mandatory Redemption
Payment, as the case may be, and the Series B Optional Redemption Date
or the Series B Mandatory Redemption Date, as the case may be, on which
the shares of Series B Preferred Stock to be redeemed will, upon
presentation and surrender of the certificates of stock evidencing such
shares, be redeemed. From and after the Series B Optional Redemption
Payment or the Series B Mandatory Redemption Date, as the case may be,
unless default shall be made by the Corporation in providing monies at
the time and place specified for the payment of the Series B Optional
Redemption Payment or the Series B Mandatory Redemption Payment, as the
case may be, pursuant to said notice, all Series B Dividends on the
shares of Series B Preferred Stock to be redeemed shall cease to accrue
and all rights of the holders thereof as stockholders of the
Corporation, except the right to receive the Series B Optional
Redemption Payment or the Series B Mandatory Redemption Payment, as the
case may be, shall cease and terminate. In addition, all Series B
Dividends shall be deemed to have ceased accruing or cumulating from
and after the Series B Optional Redemption Date or the Series B
Mandatory Redemption Date on any shares of Series B Preferred Stock to
be redeemed, unless default shall be made by the Corporation in
providing monies at the time and place specified for the payment of the
Series B Optional Redemption Payment or the Series B Mandatory
Redemption Payment pursuant to terms hereof and the Series B Redemption
Notice delivered in connection therewith. All shares of Series B
Preferred Stock redeemed by the Corporation shall be retired and
cancelled and shall not thereafter be reissued.
(d) Insufficient Funds for Redemption or Loan
Agreement Block. If the funds of the Corporation legally available (or
available pursuant to the terms of any Loan Agreement) for redemption
of the Series B Preferred Stock on the Series B Mandatory Redemption
Date in respect of its redemption obligations pursuant to Section 3(b)
hereof are insufficient to redeem the shares of Series B Preferred
Stock to be so redeemed pursuant to Section 3(b) hereof, each holder of
the Series B Preferred Stock shall share ratably in any funds legally
available (or available pursuant to the terms of any Loan Agreement)
for redemption of such shares according to the amount which would be
payable with respect to the number of shares owned
5
6
by such holder if the shares to be so redeemed on such Series B Mandatory
Redemption Date were redeemed in full. The shares of Series B Preferred Stock
not redeemed shall remain outstanding and entitled to all rights and
preferences provided herein. At any time thereafter, when additional funds of
the Corporation are legally available (or available under the terms of any Loan
Agreement) for the redemption of such shares of Series B Preferred Stock to be
redeemed, such funds will be used, as soon as practicable but no later than the
end of the next succeeding fiscal quarter, to redeem the balance of such
shares, or such portion thereof for which funds are then legally available (or
available under the terms of any Loan Agreement), on the basis set forth above.
4. Liquidation Rights; Priority.
(a) In the event of any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary (a
"Liquidation"), the holders of shares of Series B Preferred Stock shall be
entitled to receive, after payment or provision for payment of the debts and
other liabilities of the Corporation and after payment of the liquidation
preference of any Senior Securities, out of the remaining net assets of the
Corporation, whether such assets are capital or surplus and whether or not any
dividends as such are declared, the Series B Liquidation Preference per share
(and the pro rata portion thereof in the case of fractional shares), before any
distribution shall be made with respect to any Junior Securities. In the event
of any change in the Corporation's Series B Preferred Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations, exchanges of
shares or the like, the Series B Liquidation Preference per share of Series B
Preferred Stock shall be appropriately adjusted by the Board of Directors so as
to protect the rights of the holders of shares of Series B Preferred Stock.
(b) Except as otherwise provided in this Section 4, holders of
Series B Preferred Stock shall not be entitled to any participation in any
distribution of assets in the event of any Liquidation. For purposes of this
Section 4, neither the voluntary sale, lease, conveyance, exchange or transfer
(for cash, securities or other consideration) of all or substantially all of
the assets of the Corporation, nor the consolidation or merger of the
Corporation with one or more Persons
6
7
(as defined in Section 8 hereof), shall be deemed to be a voluntary or
involuntary Liquidation.
(c) If, upon any Liquidation, the Series B Liquidation
Preference is not paid in full, the holders of Series B Preferred Stock shall
share pro rata in such distribution with other Parity Securities. If, upon any
Liquidation, the amounts payable with respect to the Series B Preferred Stock
and any Parity Securities are not paid in full, holders of the Series B
Preferred Stock and holders of any Parity Securities will share ratably in any
distribution of the assets of the Corporation in proportion to the respective
amounts that would be payable per share if such assets were sufficient to
permit payment in full of such amounts.
(d) Written notice of any Liquidation stating a payment date and
the place where the Series B Liquidation Preference shall be payable, shall be
given by mail, postage prepaid, not less than 30 days prior to the payment date
stated therein, to each holder of record of the Series B Preferred Stock at his
address as the same shall appear in the stock register of the Corporation.
(e) The amount payable upon Liquidation with respect to each
fractional share of the Series B Preferred Stock outstanding shall be equal to
a ratably proportionate amount of the Series B Liquidation Preference.
5. Restricted Payments.
The Corporation may not directly or indirectly declare, pay or set
apart for payment dividends on, or make any payment on account of, or set apart
for payment money for a sinking or other similar fund for the purchase,
redemption or other acquisition of, or make any distribution in respect of,
whether in cash, obligations or shares of the Corporation or other property,
any Junior Securities (or options, rights or warrants to acquire shares of
Junior Securities) if at the time of such action, the Corporation is in arrears
in the payment of Series B Dividends, meaning that the amount of accrued and
cumulated dividends determined in accordance with Section 2(b) hereof on the
Series B Preferred Stock has not, in full, been declared and paid in cash. None
of the foregoing restrictions shall apply to: (i) the acquisition of Junior
7
8
Securities (or options, rights or warrants to acquire shares of Junior
Securities) in exchange for or upon conversion thereof into shares of Capital
Stock (as defined in Section 8 hereof) of the Corporation (other than Parity
Securities or Senior Securities) or upon the exercise of options, rights or
warrants to acquire such shares; (ii) the repurchase of Capital Stock of the
Corporation from employees or former employees of the Corporation pursuant to
employee benefit plans, employment agreements or securityholder agreements;
(iii) the acquisition of any shares of Capital Stock of the Corporation or
options, rights or warrants to acquire such shares in connection with a
purchase price adjustment arising out of acquisitions by the Corporation
pursuant to which such shares of Capital Stock or options, rights or warrants
to acquire such shares were issued; (iv) the rescission of any agreement by the
Corporation pursuant to which shares of Capital Stock of the Corporation or
options, rights or warrants to acquire such shares were issued; or (v) a
dividend on Junior Securities at any time in additional shares of the Junior
Security.
6. Business Combinations.
(a) Without the prior approval of the holders of at least a
majority of the then outstanding shares of Series B Preferred Stock and Series
A Preferred Stock, voting together as a single class, the Corporation will not
consummate a Business Combination or permit a Business Combination to occur
unless the Corporation shall have redeemed (a "Business Combination Purchase
Offer") all of the outstanding shares of (i) Series B Preferred Stock for cash
at a purchase price equal to the Series B Stated Amount per share (and the pro
rata portion thereof in the case of fractional shares), together with an amount
equal to accrued and unpaid Series B Dividends through the date of such
purchase (the "Series B Business Combination Amount") prior to or at the
closing of such Business Combination in accordance with the procedures set
forth in Section 6(b) hereof and (ii) all of the Series A Preferred Stock for
the Series A Business Combination Amount (as such term is defined in the
Certificate of Designations relating to the Series A Preferred Stock (the
"Series A Certificate") prior to or at the Closing of the Business Combination
in accordance with the procedures set forth in the Series A Certificate.
8
9
(b) At the commencement of a Business Combination Purchase, a
written notice (the "Business Combination Purchase Notice") of such Business
Combination Purchase shall be mailed to each holder of record of shares of
Series B Preferred Stock addressed to such holder at such holder's mailing
address as it appears in the stock register of the Corporation. Each such
Business Combination Purchase Notice shall contain all instructions and
materials necessary to enable such holder of Series B Preferred Stock to submit
such holder's shares for redemption pursuant to the Business Combination
Purchase and shall state:
(i) that the Business Combination Purchase is being made
pursuant to this Section 6 hereof and that all shares of Series B Preferred
Stock will be redeemed;
(ii) the parties to the Business Combination and the terms
and timing of the Business Combination;
(iii) the aggregate Series B Business Combination Amount of
all of the outstanding shares of Series B Preferred Stock;
(iv) the Series B Business Combination Amount per share
and the date (the "Business Combination Purchase Date") on which the
Corporation shall redeem shares pursuant to the Business Combination Purchase;
(v) that, unless the Corporation defaults in making the
payment pursuant to the Business Combination Purchase, all shares of Series B
Preferred Stock shall cease to accrue and cumulate Series B Dividends from and
after the Business Combination Purchase Date;
(vi) that holders of Series B Preferred Stock will be
required to surrender the certificate or certificates representing such shares,
together with a form entitled "Option of Stockholder to Elect Purchase" (or
other appropriate form letter of transmittal) to be mailed to the holders with
such Business Combination Purchase Notice, to the Corporation at the address
specified in the Business Combination Purchase Notice prior to the close of
business on the
9
10
Business Day next preceding the Business Combination Purchase Date; and
(vii) such other information as the Corporation, in its
sole discretion, deems appropriate.
(c) In the event of a change in the parties to, or any material
change in the terms or the timing of, any Business Combination, the Corporation
shall give the holders of the Series B Preferred Stock written notice in
accordance with Section 6(b) hereof describing such change at least ten (10)
Business Days prior to the Business Combination Purchase Date (subject, with
respect to such ten Business Day limitation, to any applicable law or
regulation requiring a longer notice or waiting period).
(d) The Business Combination Purchase Date shall be a date
occurring no earlier than ten (10) Business Days and no later than forty (40)
Business Days after the mailing of the Business Combination Purchase Notice
(subject, with respect to such limitations, to Section 6(c) hereof and any
applicable law or regulation requiring a longer notice or waiting period).
(e) On the Business Combination Purchase Date, the Corporation
shall (i) redeem shares of the Series B Preferred Stock pursuant to the
Business Combination Purchase Offer and (ii) set aside in a separate account,
for the benefit of holders of shares of Series B Preferred Stock, at a
federally insured bank or savings institution doing business in the Borough of
Manhattan in the City of New York and having consolidated capital and surplus
of not less than $100 million, money sufficient to pay the aggregate Series B
Business Combination Amount of all outstanding shares of Series B Preferred
Stock. The Corporation shall promptly mail or deliver to the holders of Series
B Preferred Stock so redeemed, payment in an amount equal to the purchase price
payable in respect of such shares owned by such holders.
10
11
7. Voting.
Except as required by the General Corporate Law of the State of
Delaware or as otherwise provided herein, the holders of shares of
Series B Preferred Stock shall not be entitled to any voting rights.
8. Recapitalization.
In the event of any recapitalization of the outstanding shares
of capital stock of the Corporation, whether by merger or otherwise
(including in a Business Combination) and subject to Section 6 hereof,
shares of Series B Preferred Stock and Series A Preferred Stock shall be
exchanged for or converted into the identical consideration, except that
the shares of Series B Preferred Stock and shares of Series A Preferred
Stock may each be converted into or exchanged for shares of the
surviving or resulting corporation having identical terms to the Series
B Preferred Stock and Series A Preferred Stock, respectively.
9. Certain Definitions.
For purposes of this Section 9 of this Article FIFTH, the
following terms shall have the meanings set forth below:
"Affiliate" means, when used with reference to any Person, any
Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with that Person. For the purposes of
this definition, "control," when used with respect to any specified
Person, means the power to direct or cause the direction of the
management or policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Business Combination" means any consolidation, merger, share
exchange or other similar transaction, involving the Corporation or any
Subsidiary of the Corporation, or the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and
assets of the Corporation, in a single transaction or through a series
of related transactions, to another Person or group of affiliated
Persons, or the entering into any such transaction or transactions by
the Corpora-
11
12
tion or any Subsidiary of the Corporation if such transaction or transactions
in the aggregate would result in a sale, transfer or other disposition of (i)
Capital Stock having more than 50% of the voting power of the Corporation or
(ii) all or substantially all of the assets of the Corporation and its
Subsidiaries on a consolidated basis.
"Business Day" means any day other than a Saturday, a Sunday, any day
on which the New York Stock Exchange is closed or any other day on which
banking institutions in New York, New York are authorized or required by law to
be closed.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock or any and all
equivalent ownership interests in a Person.
"Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Subsidiary" means, with respect to any Person, any corporation,
limited or general partnership, limited liability company, trust, association
or other business entity of which an aggregate of 50% or more of the
outstanding Capital Stock or other interests entitled to vote in the election
of the board of directors of such corporation (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency),
managers, trustees or other controlling Persons, or an equivalent controlling
interest therein, of such Person is, at the time, directly or indirectly, owned
by such Person and/or one or more Affiliates of such Person.
[SIGNATURE PAGE FOLLOWS]
12
13
IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true under the penalties of
perjury this 15th day of October, 1999.
By: /s/ Frank A. Coyle
--------------------------------------
Name: Frank A. Coyle
Title: Secretary
13