EXHIBIT 3.1
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CERTIFICATE OF INCORPORATION
OF
TRIAD HOSPITALS, INC.
______________
DELAWARE
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EXHIBIT 3.1
Certificate of Incorporation
of
Triad Hospitals, Inc.
FIRST: The name of the Corporation is Triad Hospitals, Inc.
SECOND: The address of the Corporation's registered office in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware 19801. The name of its registered
agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is One Hundred Million
(100,000,000) shares, divided into two classes of which Ten Million (10,000,000)
shares, par value $.01 per share, shall be designated Preferred Stock, and
Ninety Million (90,000,000) shares, par value $.01 per share, shall be
designated Common Stock.
A. Preferred Stock
1. Issuance. The Board of Directors is expressly authorized,
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subject to limitations prescribed by law, to provide for the issuance
of shares of Preferred Stock in one or more series, to establish the
number of shares to be included in each such series, and to fix the
designations, powers, preferences, and rights of the shares of each
such series, and any qualifications, limitations or restrictions
thereof. The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of at least
80% of the voting power of all of the then outstanding shares of
capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, without a
separate vote of the holders of the Preferred Stock, unless a vote of
any such holders is required pursuant to the terms of any such series
of Preferred Stock.
2. Series A Junior Participating Preferred Stock.
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Section 1. Designation and Amount. Ninety Thousand
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(90,000) shares of the Preferred Stock of the Corporation shall
be designated as "Series A Junior Participating Preferred
Stock," par value $.01 per share (the "Series A Preferred
Stock"). The number of shares of such series of Preferred Stock
may be increased or decreased by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the
number of shares of such series of Preferred Stock to a number
less than the number of shares then outstanding plus the number
of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or
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upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
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(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
and of any other junior stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $10 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times
the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $10 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
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(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
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Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in a resolution or
resolutions adopted by the Board of Directors providing for the issuance of
a series of Preferred Stock or any similar stock (a "Certificate of
Designation"), or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock of
the Corporation entitled to vote generally in the election of directors
shall vote together as a single class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as otherwise provided herein, or by law, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall
not be
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required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
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(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 of
paragraph A of this Article Fourth are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in arrears, in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided, however, that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up) to the Series
A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
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purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of Preferred Stock and may be reissued as part of a
new series of Preferred Stock
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subject to the conditions and restrictions on issuance set forth herein or
in any Certificate of Designation providing for the issuance of a series of
Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
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liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $1,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided, however,
that the holders of shares of Series A Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount
to be distributed per share to holders of shares of Common Stock, or (2) to
the holders of shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock
and all such parity stock, in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case each share of Series A Preferred Stock shall at the
same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the
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exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
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shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
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respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. This Certificate of Incorporation shall not be
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amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
B. Common Stock.
Section 1. Dividends. Subject to the preferential rights, if any, of
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the holders of any series of Preferred Stock then outstanding, the holders
of the Common Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
dividends payable either in cash, in property or in shares of Common Stock
or other securities of the Corporation.
Section 2. Voting Rights. Subject to the rights, if any, of the
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holders of any series of Preferred Stock then outstanding, and except as
otherwise required by law, the holders of the Common Stock shall
exclusively possess all voting power, and at every annual or special
meeting of stockholders of the Corporation, each holder of Common Stock
shall be entitled to one vote, in person or by proxy, for each share of
Common Stock standing in such holder's name on the books of the
Corporation.
Section 3. Liquidation, Dissolution or Winding Up. Upon any
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voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, the holders of the Common Stock shall be
entitled to share ratably in all assets of the Corporation available for
distribution to its stockholders, subject to the preferential rights, if
any, of the holders of any series of Preferred Stock then outstanding.
FIFTH: The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. The Board of Directors may
exercise all such authority and powers of the Corporation and do all such lawful
acts and things as are not by statute or this Certificate of Incorporation
directed or required to be exercised or done by the stockholders.
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A. Number of Directors. The number of directors of the Corporation
(exclusive of directors to be elected by the holders of one or more series of
the Preferred Stock of the Corporation which may be outstanding, voting
separately as a series or class) shall be fixed from time to time by action of
not less than a majority of the members of the Board of Directors then in
office, but in no event shall such number of directors of the Corporation be
less than three nor more than fifteen.
B. Classes. The directors, other than those who may be elected by
the holders of any series of Preferred Stock under specified circumstances,
shall be divided with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as reasonably possible, with the
term of office of the first class to expire at the 2000 annual meeting of
stockholders, the term of office of the second class to expire at the 2001
annual meeting of stockholders and the term of office of the third class to
expire at the 2002 annual meeting of stockholders. At each annual meeting of
stockholders, commencing with the 2000 annual meeting, (i) directors shall be
elected to succeed those directors whose terms expire for a term of office to
expire at the third succeeding annual meeting of stockholders after their
election, and (ii) if authorized by a resolution of the Board of Directors,
directors may be elected to fill any vacancy in the Board of Directors,
regardless of how such vacancy was created. Directors need not be stockholders.
All directors shall hold office until the expiration of the term for which
elected and until their successors are elected, except in the case of the death,
resignation, disqualification or removal of any director.
C. Stockholder Nomination of Director Candidates and Introduction of
Business. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
By-Laws of the Corporation.
D. Vacancies. Subject to the rights, if any, of the holders of any
series of Preferred Stock then outstanding, and unless the Board of Directors
otherwise determines, newly created directorships resulting from any increase in
the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, disqualification or removal may be filled
only by a majority vote of the directors then in office, though less than a
quorum, and directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to which
they have been elected expires or, in the case of newly created directorships,
shall hold office until such time as determined by the directors electing such
new director (in a manner consistent with paragraph B of this Article Fifth). No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
E. Removal. Subject to the rights, if any, of the holders of any
series of Preferred Stock then outstanding, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 80% of the voting power of
all of the then outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class.
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SIXTH: Subject to the rights, if any, of the holders of any series of
Preferred Stock then outstanding, no action required to be taken or which may be
taken at any annual or special meeting of the stockholders of the Corporation
may be taken without a meeting, and the power of the stockholders to consent in
writing, without a meeting, to the taking of any action, including (without
limitation) the power of stockholders to adopt or amend the By-Laws of the
Corporation by written consent, is hereby specifically denied.
SEVENTH: Subject to the rights, if any, of the holders of any series of
Preferred Stock then outstanding, special meetings of the stockholders of the
Corporation may be called only by (a) the Chairman of the Board of Directors, if
one shall have been elected or (b) the Chief Executive Officer of the
Corporation, and, in addition, a special meeting shall be called by the Chairman
of the Board or the Chief Executive Officer at the request in writing of a
majority of the Board of Directors. The ability of the stockholders to call a
special meeting is hereby specifically denied.
EIGHTH: In furtherance and not in limitation of the powers conferred
upon it by the laws of the State of Delaware, the Board of Directors shall have
the power to adopt, amend, alter or repeal the By-Laws of the Corporation. The
Corporation's By-Laws may also be adopted, amended, altered or repealed by the
stockholders at any annual or special meeting by the affirmative vote of the
holders of at least 80% of the voting power of all shares of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class.
NINTH: Elections of directors need not be by written ballot unless
the By-Laws of the Corporation shall otherwise provide.
TENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to permit further elimination or limitation of the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law as so amended. Any repeal or modification of this Article Tenth
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
ELEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them or between this Corporation
and its stockholders or any class of them, any court of equitable jurisdiction
within the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
Section 291 of the Delaware General Corporation Law or on
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the application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of the
Delaware General Corporation Law, order a meeting of the creditors or class of
creditors, or of the stockholders or class of stockholders of this Corporation,
as the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors or
class of creditors, or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which said application has been made, be
binding on all the creditors or class of creditors, or on all of the
stockholders or class of stockholders, of this Corporation, as the case maybe,
and also on this Corporation.
TWELFTH:
A. As used in this Article Twelfth, the following terms shall
have the meanings set forth below:
"Business Combination" shall mean (a) any merger or consolidation of
the Corporation or a Subsidiary with a Related Person, (b) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition other than in the
ordinary course of business to or with a Related Person of any assets of
the Corporation or a Subsidiary having an aggregate fair market value of
$25,000,000 or more, (c) the issuance or transfer by the Corporation of any
shares of Voting Stock or securities convertible into or exercisable for
such shares (other than by way of pro rata distribution to all
stockholders) to a Related Person, (d) any recapitalization, merger or
consolidation that would have the effect of increasing the voting power of
a Related Person, (e) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation or a Subsidiary proposed,
directly or indirectly, by or on behalf of a Related Person, (f) any merger
or consolidation of the Corporation with another Person proposed, directly
or indirectly, by or on behalf of a Related Person unless the entity
surviving or resulting from such merger or consolidation has a provision in
its certificate or articles of incorporation, charter or similar governing
instrument which is substantially identical to this Article Twelfth or (g)
any agreement, contract or other arrangement or understanding providing,
directly or indirectly, for any of the transactions described in clauses
(a) through (f) above.
"Related Person" shall mean any individual, partnership, corporation,
trust or other Person which, together with its "affiliates" and
"associates," as defined in Rule 12b-2 under the Exchange Act as in effect
on April 23, 1999, and together with any other individual, partnership,
corporation, trust or other Person with which it or they have any
agreement, contract or other arrangement or understanding with respect to
acquiring, holding, voting or disposing of Voting Stock, "beneficially
owns" (within the meaning of Rule 13d-3 under the Exchange Act on said
date) an aggregate of 10% or more of the outstanding Voting Stock. A
Related Person, its affiliates and associates and all such other
individuals, partnerships, corporations and other Persons with whom it or
they have any such agreement, contract or other arrangement or
understanding, shall be deemed a single Related Person for purposes of this
Article Twelfth; provided, however, that the members of the Board of
Directors of the Corporation shall not be deemed to be
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associates or otherwise to constitute a Related Person solely by reason of
their board membership. A person who is a Related Person as of (i) the time
any definitive agreement relating to a Business Combination is entered
into, (ii) the record date for the determination of stockholders entitled
to notice of and to vote on a Business Combination or (iii) immediately
prior to the consummation of a Business Combination, shall be deemed a
Related Person for purposes of this Article Twelfth.
"Continuing Director" shall mean any member of the Board of Directors
of the Corporation who is not an "affiliate" or "associate" of the Related
Person and was a member of the Board of Directors prior to the time that
such Related Person became a Related Person, and any successor of a
Continuing Director who is unaffiliated with such Related Person and is
recommended to succeed a Continuing Director by a majority of the
Continuing Directors.
"Person" shall mean any individual, firm, corporation or other entity.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation in which such Person, directly or indirectly, owns or controls,
at the time of determination, at least a majority in interest of the
outstanding voting stock (having by the terms thereof voting power under
ordinary circumstances to elect a majority of the directors of such
corporation, irrespective of whether or not stock of any other class or
classes of such corporation shall have or might have voting power by reason
of the occurrence of a contingency); or (ii) any non-corporate entity in
which such Person either (a) directly or indirectly, at the time of
determination, has at least a majority ownership interest, or (b) at the
date of determination, is a general partner or an entity performing similar
functions (for example, manager of a limited liability company or a trustee
of a trust).
"Voting Stock" shall mean any shares of the Corporation entitled to
vote generally in the election of directors.
"Entire Board of Directors" shall mean the total number of directors
which the Corporation would have if there were no vacancies.
"Market Value" shall mean the average of the high- and low-quoted
sales price on the date in question (or, if there is no reported sale on
such date, on the last preceding date on which any reported sale occurred)
of a share on the Composite Tape for the New York Stock Exchange Listed
Stocks, or, if the shares are not listed or admitted to trading on such
exchange, on the principal United States securities exchange registered
under the Exchange Act on which the shares are listed or admitted to
trading, or, if the shares are not listed or admitted to trading on any
such exchange, the mean between the closing high-bid and low-asked
quotations with respect to a share on such date as quoted on the National
Association of Securities Dealers Automated Quotations System, or similar
system then in use, or, if no such quotations are available, the fair
market value on such date of a share as at least 66 2/3% of the Continuing
Directors shall determine.
B. In addition to any other vote required by this Certificate of
Incorporation or the Delaware General Corporation Law, the affirmative vote of
the holders of not less
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than 85% of the outstanding Voting Stock held by stockholders other than a
Related Person by or with whom or on whose behalf, directly or indirectly, a
Business Combination is proposed, voting as a single class, shall be required
for the approval or authorization of such Business Combination; provided,
however, that the 85% voting requirement shall not be applicable and such
Business Combination may be approved by the vote required by law or by any other
provision of this Certificate of Incorporation if either:
1. The Business Combination is approved by the Board of Directors of
the Corporation by the affirmative vote of at least 66 2/3% of the Continuing
Directors, or
2. All of the following conditions are satisfied:
(A) The aggregate amount of cash and the fair market value of the
property, securities or other consideration to be received per share of
capital stock of the Corporation in the Business Combination by the holders
of capital stock of the Corporation, other than the Related Person involved
in the Business Combination, shall not be less than the highest of (i) the
highest per share price (including brokerage commissions, soliciting
dealers' fees, and dealer-management compensation, and with appropriate
adjustments for recapitalizations, stock splits, stock dividends and like
transactions and distributions) paid by such Related Person in acquiring
any of its holdings of such class or series of capital stock, (ii) the
highest per share Market Value of such class or series of capital stock
within the twelve-month period immediately preceding the date the proposal
for such Business Combination was first publicly announced or (iii) the
book value per share of such class or series of capital stock, determined
in accordance with generally accepted accounting principles, as of the last
day of the month immediately preceding the date the proposal for such
Business Combination was first publicly announced;
(B) The consideration to be received in such Business Combination
by holders of capital stock other than the Related Person involved shall,
except to the extent that a stockholder agrees otherwise as to all or part
of the shares which he or she owns, be in the same form and of the same
kind as the consideration paid by the Related Person in acquiring capital
stock already owned by it, provided, however, that if the Related Person
has paid for capital stock with varying forms of consideration, the form of
consideration for shares of capital stock acquired in the Business
Combination by the Related Person shall either be cash or the form used to
acquire the largest number of shares of capital stock previously acquired
by it; and
(C) A proxy statement responsive to the requirements of the
Exchange Act and regulations promulgated thereunder, whether or not the
Corporation is then subject to such requirements, shall be mailed to the
stockholders of the Corporation for the purpose of soliciting stockholder
approval of such Business Combination and shall contain at the front
thereof, in a prominent place, (i) any recommendations as to the
advisability (or inadvisability) of the Business Combination which the
Continuing Directors may choose to state and (ii) the
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opinion of a reputable investment banking firm selected by the Continuing
Directors as to the fairness of the terms of such Business Combination,
from a financial point of view, to the stockholders (other than the Related
Person) of the Corporation.
C. A Related Person shall be deemed for purposes of this Article
Twelfth to have acquired a share of the Corporation at the time when such
Related Person became the beneficial owner thereof (as such term is defined in
paragraph A of this Article Twelfth). With respect to shares owned by
affiliates, associates and other Persons whose ownership is attributed to a
Related Person, if the price paid by such Related Person for such shares is not
determinable, the price so paid shall be deemed to be the higher of (i) the
price paid upon acquisition thereof by the affiliate, associate or other Person
or (ii) the Market Value of the shares in question at the time when the Related
Person became the beneficial owner thereof.
For purposes of this Article Twelfth, in the event of a Business
Combination upon consummation of which the Corporation would be the surviving
corporation or would continue to exist (unless it is provided, contemplated or
intended that as part of such Business Combination a plan of liquidation or
dissolution of the Corporation will be effected), the term "other consideration
to be received" in paragraph B.2.(A) of this Article Twelfth shall include
(without limitation) common stock or other capital stock of the Corporation
retained by stockholders of the Corporation (other than Related Persons who are
parties to such Business Combination).
Nothing contained in this Article Twelfth shall be construed to
relieve any Related Person from any fiduciary obligation imposed by law.
D. Notwithstanding any other provision of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be permitted by law), any amendment, addition,
alteration, change or repeal of this Article Twelfth, or any other amendment of
this Certificate of Incorporation or the By-Laws of the Corporation inconsistent
with or modifying or permitting circumvention of this Article Twelfth, must
first be proposed by the Board of Directors of the Corporation, upon the
affirmative vote of at least 66 2/3% of the directors then in office at a duly
constituted meeting of the Board of Directors called for such purpose, and
thereafter approved by the affirmative vote of the holders of not less than 85%
of the then outstanding Voting Stock held by stockholders other than a Related
Person by or with whom or on whose behalf, directly or indirectly, a Business
Combination is proposed, voting as a single class; provided, however, that this
paragraph D shall not apply to, and such 85% vote shall not be required for, any
such amendment, addition, alteration, change or repeal recommended to
stockholders of the Corporation by the affirmative vote of not less than 66 2/3%
of the Continuing Directors. For the purposes of this paragraph D only, if at
the time when any such amendment, addition, alteration, change or repeal is
under consideration there is no proposed Business Combination, the term
"Continuing Directors" shall mean the Entire Board of Directors.
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THIRTEENTH: The Board of Directors, each committee of the Board of
Directors and each individual director, in discharging their respective duties
under applicable law and this Certificate of Incorporation and in determining
what they each believe to be in the best interests of the Corporation and its
stockholders, may consider the effects, both short-term and long-term, of any
action or proposed action taken or to be taken by the Corporation, the Board of
Directors or any committee of the Board of Directors on the interests of (i) the
employees, associates, associated physicians, distributors, patients or other
customers, suppliers or creditors of the Corporation and its subsidiaries and
(ii) the communities in which the Corporation and its subsidiaries own or lease
property or conduct business, all to the extent that the Board of Directors, any
committee of the Board of Directors or any individual director deems pertinent
under the circumstances (including the possibility that the interests of the
Corporation may best be served by the continued independence of the
Corporation); provided, however, that the provisions of this Article Thirteenth
shall not limit in any way the right of the Board of Directors to consider any
other lawful factors in making its determinations, including, without
limitation, the effects, both short-term and long-term, of any action or
proposed action on the Corporation or its stockholders directly; and provided
further, that this Article Thirteenth shall be deemed solely to grant
discretionary authority to the Board of Directors, each committee of the Board
of Directors and each individual director and shall not be deemed to provide to
any specific constituency any right to be considered.
FOURTEENTH: Each person who was or is made a party or is threatened
to be made a party to or is involved (including, without limitation, as a
witness) in an actual or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director, officer, employee or
agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter an "Indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as
such a director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the full extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), or by other
applicable law as then in effect, against all expense, liability and loss
(including attorneys' fees, judgments, fines, excise taxes under the Employee
Retirement Income Security Act of 1974, as amended from time to time ("ERISA"),
penalties and amounts to be paid in settlement) actually and reasonably incurred
or suffered by such Indemnitee in connection therewith.
A. Procedure. Any indemnification under this Article Fourteenth
(unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification
of the Indemnitee is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the Delaware General
Corporation Law, as the same exists or hereafter may be amended (but, in
the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than
said law permitted the
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Corporation to provide prior to such amendment). Such determination shall be
made (a) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding (the
"Disinterested Directors"), or (b) if such a quorum of Disinterested Directors
is not obtainable, or, even if obtainable, a quorum of Disinterested Directors
so directs, by independent legal counsel in a written opinion, or (c) by the
stockholders.
B. Advances For Expenses. Costs, charges and expenses (including
attorneys' fees) incurred by a director or officer of the Corporation in
defending a civil or criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay all amounts so advanced in the event that it shall ultimately
be determined that such director or officer is not entitled to be indemnified by
the Corporation as authorized in this Article Fourteenth. Such costs, charges
and expenses incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the majority of the Disinterested Directors
deems appropriate. The majority of the Disinterested Directors may, in the
manner set forth above, and upon approval of such Indemnitee, authorize the
Corporation's counsel to represent such person, in any action, suit or
proceeding, whether or not the Corporation is a party to such action, suit or
proceeding.
C. Procedure for Indemnification. Any indemnification or advance of
costs, charges and expenses under this Article Fourteenth, shall be made
promptly, and in any event within 60 days upon the written request of the
Indemnitee. The right to indemnification or advances as granted by this Article
Fourteenth, shall be enforceable by the Indemnitee in any court of competent
jurisdiction, if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within 60 days. Such Indemnitee's costs and
expenses incurred in connection with successfully establishing his or her right
to indemnification, in whole or in part, in any such action shall also be
indemnified by the Corporation. It shall be a defense to any such action (other
than an action brought to enforce a claim for the advance of costs, charges and
expenses under this Article Fourteenth, where the required undertaking, if any,
has been received by the Corporation) that the Indemnitee has not met the
standard of conduct set forth in the Delaware General Corporation Law, as the
same exists or hereafter may be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment), but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, its independent legal counsel and its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the Indemnitee is proper in the circumstances because he or
she has met the applicable standard of conduct set forth in the Delaware General
Corporation Law, as the same exists or hereafter may be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights that said law permitted
the Corporation to provide prior to such amendment), nor the fact that there has
been an actual determination by the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) that the
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Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that the Indemnitee has not met the
applicable standard of conduct.
D. Other Rights; Continuation of Right to Indemnification. The
indemnification and advancement of expenses provided by this Article Fourteenth
shall not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any law, by-
law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his or her official capacity and as to action in another
capacity while holding office or while employed by or acting as agent for the
Corporation, and shall continue as to a person who has ceased to be a director,
officer, employee or agent, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person. All rights to indemnification
under this Article Fourteenth, shall be deemed to be a contract between the
Corporation and each director, officer, employee or agent of the Corporation who
serves or served in such capacity at any time while this Article Fourteenth, is
in effect. Any repeal or modification of this Article Fourteenth, or any repeal
or modification of relevant provisions of the Delaware General Corporation Law
or any other applicable laws shall not in any way diminish any rights to
indemnification of such director, officer, employee or agent or the obligations
of the Corporation arising hereunder with respect to any action, suit or
proceeding arising out of, or relating to, any actions, transactions or facts
occurring prior to the final adoption of such modification or repeal. For the
purposes of this Article Fourteenth, references to "the Corporation" include all
constituent corporations absorbed in a consolidation or merger as well as the
resulting or surviving corporation, so that any person who is or was a director,
officer, employee or agent of such a constituent corporation or is or was
serving at the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of this
Article Fourteenth, with respect to the resulting or surviving corporation, as
he would if he or she had served the resulting or surviving corporation in the
same capacity.
E. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was or has agreed to become
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him or her and incurred by him or her or
on his or her behalf in any such capacity, or arising out of his or her status
as such, whether or not the Corporation would have the power to indemnify him or
her against such liability under the provisions of this Article Fourteenth;
provided, however, that such insurance is available on acceptable terms, which
determination shall be made by a vote of a majority of the Board of Directors.
F. Savings Clause. If this Article Fourteenth, or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each person entitled to
indemnification under paragraph A of this Article Fourteenth, as to all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes, penalties and amounts to be paid in settlement)
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actually and reasonably incurred or suffered by such person and for
which indemnification is available to such person pursuant to this
Article Fourteenth, to the full extent permitted by any applicable
portion of this Article Fourteenth, that shall not have been invalidated
and to the full extent permitted by applicable law.
FIFTEENTH: In furtherance and not in limitation of the powers
conferred by law or in this Certificate of Incorporation, the Board of Directors
(and any committee of the Board of Directors) is expressly authorized, to the
extent permitted by law, to take such action or actions as the Board of
Directors or such committee may determine to be reasonably necessary or
desirable to (A) encourage any person to enter into negotiations with the Board
of Directors and management of the Corporation with respect to any transaction
which may result in a change in control of the Corporation which is proposed or
initiated by such person or (B) contest or oppose any such transaction which the
Board of Directors or such committee determines to be unfair, abusive or
otherwise undesirable with respect to the Corporation and its business, assets
or properties or the stockholders of the Corporation, including, without
limitation, the adoption of such plans or the issuance of such rights, options,
capital stock, notes, debentures or other evidences of indebtedness or other
securities of the Corporation, which rights, options, capital stock, notes,
debentures, evidences of indebtedness and other securities (i) may be
exchangeable for or convertible into cash or other securities on such terms and
conditions as may be determined by the Board of Directors or such committee and
(ii) may provide for the treatment of any holder or class of holders thereof
designated by the Board of Directors or any such committee in respect of the
terms, conditions, provisions and rights of such securities which is different
from, and unequal to, the terms, conditions, provisions and rights applicable to
all other holders thereof.
SIXTEENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
and to add or adopt new provisions, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation. In addition to any affirmative vote required by applicable
law or any other provision of this Certificate of Incorporation or specified in
any agreement, and in addition to any voting rights granted to or held by the
holders of any series of Preferred Stock, the affirmative vote of the holders of
not less than 80% of the voting power of all securities of the Corporation
entitled to vote generally in the election of directors shall be required to
amend, alter, change or repeal, or to add or adopt any provisions inconsistent
with, Articles Fifth, Sixth, Seventh, Eighth, Tenth, Eleventh, Thirteenth,
Fourteenth, Fifteenth and Sixteenth of this Certificate of Incorporation.
SEVENTEENTH: The name and mailing address of the incorporator is
Donald P. Fay, Triad Hospitals, Inc., 13455 Noel Road, 20th Floor, Dallas, Texas
75240.
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IN WITNESS WHEREOF, the undersigned incorporator hereby acknowledges
that the foregoing certificate of incorporation is his act and deed and that the
facts stated therein are true on this 27th day of April, 1999.
By: /s/ Donald P. Fay
-----------------
Donald P. Fay
Incorporator
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